ADMINISTRATIVE LAW

Professor Light

Fall 1991

 

Instructions: This is a three-hour, closed-book examination. Good luck!

 

I. Grant Gear and the Norwood Site (20 pts.) - 40 minutes

The Norwood site is a 25-acre parcel in Norwood, Massachusetts on which was located a plant formerly used for manufacturing electrical equipment and components. In 1979, Grant Gear ("Gear") purchased the Norwood site. At the time it purchased the site, it did not know that PCBs had been disposed of there. In 1980, however, Gear found two abandoned transformers containing PCBs on an unfenced portion of the property adjacent to an interstate highway. In April 1983, an investigation of soil samples revealed the presence of PCBs on the top of and within the soil of the Norwood site as well as of adjacent properties. The United States Environmental Protection Agency ("EPA") funded an immediate remedial action to remove 518 tons of PCB-contaminated soil from the Norwood site. In 1987, EPA began a long-term remedial investigation and feasibility study ("RI/FS") to determine whether there was remaining contamination, especially with respect to the ground water underlying the Norwood site. In March 1989, EPA filed a notice of lien on the Norwood site, pursuant to Section 102(c) of the statute found on the following pages, to secure Gear's potential liability for the funds already expended by EPA in the cleanup. Concurrently, EPA notified Gear of the filing by certified mail. In September 1989, EPA selected a long-term remedial action for the entire Norwood property which EPA estimates will cost $16 million. Gear has been unable to obtain financing for its business operations at the Norwood site since EPA's filing of its notice of lien.

 

In October 1989, Gear filed suit for declaratory and injunctive relief. Its complaint alleged that (1) Gear is an "innocent landowner" under Section 102(b) of the relevant statute, and consequently, is not liable for any remedial action costs; and (2) the imposition of the lien deprived Gear of property without procedural due process under the Fifth Amendment. In lieu of an Answer, the United States filed a motion to dismiss under Rule 12(b)(1)

 

 

(1) Government's Motion to Dismiss:

 

(a) On what grounds has the Government moved to dismiss? In other words, explain why the Government believes it may have the case dismissed under Rule 12(b)(1).

 

(b) How should the court rule on this motion by the United States? Why?

 

 

(2) Merits: Assuming that the motion by the United States is denied, how should the court rule on the merits? Why?

 

 

(a) Innocent landowner claim

(b) Fifth Amendment claim

 

The statute provides, in relevant part:

 

Remedial Actions: Federal Liability

 

101. Definitions

 

(1) "Enforcement activities" means any administrative or legal action to recover the costs of remedial action, including the issuance of an administrative order to compel cleanup, the filing of a lien to secure recovery, and the commencement of a civil action in a district court of the United States.

 

(2) "Environment" means any surface water, ground water, land surface or subsurface strata, or ambient air within the United States.

 

(3) "Facility" means any site or area where a hazardous substance has been deposited, stored, disposed of, or placed, or otherwise come to be located.

 

(4) "Hazardous substance" means any element, compound, mixture, solution, or substance, including polychlorinated biphenyls, commonly known as PCBs.

 

(5) "Owner" means any person owning or operating a facility.

 

(6) "Remedial action" means those actions in the event or a release of hazardous substances to prevent or minimize the release so that they do not migrate to cause substantial danger to present or future public health or welfare or the environment, including enforcement activities related thereto and any remedial investigation and feasibility study.

 

102. Liability

 

(a) Notwithstanding any other provision or rule of law, and subject only to the defense set forth in subsection (b) of this section, the owner of a facility from which there is a release of hazardous substances into the environment shall be strictly liable for all costs of remedial action incurred by the United States Environmental Protection Agency in response to the release.

 

(b) There shall be no liability under subsection (a) of this section for an owner otherwise liable who can establish by a preponderance of the evidence that the release of hazardous substances was caused solely by an act or omission of a third party other than an employee or agent of the defendant.

 

(c) All costs for which a person is liable to the United States under subsection (a) of this section shall constitute a lien in favor of the United States Environmental Protection Agency upon all real property and rights to such property which (i) belong to such person and (ii) are subject to or affected by a remedial action. The lien shall arise at the time the person is provided written notice of potential liability. Such lien shall continue until the liability for the costs is satisfied. The lien shall be subject to the rights of any purchaser, holder of an interest, or judgment lien creditor before notice of the lien has been filed.

 

103. Jurisdiction

 

(a) Except as provided in subsection (b), the United States district courts shall have exclusive original jurisdiction over all controversies arising under this chapter, without regard to the citizenship of the parties or the amount in controversy.

 

(b) No court shall have jurisdiction to review any challenges to remedial action conducted by the United States Environmental Protection Agency in any action except an action brought by the United States to recover the costs of the remedial action.

 

 

II. Washington National Airport (20 pts.) - 40 minutes

 

 

In 1940, Congress authorized the Executive Branch to acquire a tract of land a few miles from the Capitol and to construct what is now Washington National Airport (National). From the time it opened until 1987, National was owned and operated by the Federal Government. The airport was first managed by the Civil Aeronautics Agency, a division of the Commerce Department. In 1959, control of National shifted to the newly-created Federal Aviation Administration (FAA). A few years after National opened, the Truman Administration proposed that a federal corporation be formed to operate the airport. The proposal was endorsed by the Hoover Commission in 1949 but never adopted by Congress. Instead, when Congress authorized construction of a second major airport to serve the Washington area, it again provided for federal ownership and operation. Dulles International Airport (Dulles) was opened in 1962 under the direct control of the FAA. National and Dulles are the only two major commercial airports owned by the Federal Government.

 

Throughout its history, National has been the subject of controversy. Its location at the center of the Metropolitan area is a great convenience for air travelers, but flight paths over densely populated areas have generated concern among local residents about safety, noise, and pollution. Those living closest to the airport have provided the strongest support for proposals to close National or to transfer some of its operations to Dulles.

 

A study Commission established by the FAA recommended that a proposed authority (the Metropolitan Washington Airport Authority or "MWAA") be created by a congressionally approved compact between Virginia and the District to run the two airports, and that its Board of Directors be composed of 11 members serving staggered 6-year terms, with five members to be appointed by the Governor of Virginia, three by the Mayor of the District, two by the Governor of Maryland, and one by the President, with the advice and consent of the Senate. Emphasizing the importance of a "non-political, independent authority," the Commission recommended that members of the board "should not hold elective or appointive political office." To allay concerns that local interests would not be adequately represented, the Commission recommended a requirement that all board members except the presidential appointee reside in the Washington metropolitan area.

 

In 1985, Virginia and the District both passed legislation authorizing the establishment of the recommended regional authority. A bill embodying the advisory commission's recommendations passed the Senate. In the House of Representatives, however, the legislation encountered strong opposition from Members who expressed concern that the surrender of federal control of the airports might result in the transfer of a significant amount of traffic from National to Dulles. Substitute bills were therefore drafted to provide for the establishment of a review board with veto power over major actions of MWAA's Board of Directors. Under two of the proposals, the board of review would clearly have acted as an agent of the Congress. After Congress received an opinion from the Department of Justice that a veto of MWAA action by such a board of review "would plainly be legislative action that must conform to the requirements of Article 1, ? 7 of the Constitution," the Senate adopted a version of the review board that required Members of Congress to serve in their individual capacities as representatives of users of the airports. The provision was further amended in the House, and the Senate concurred. Ultimately, ? 2456(f) of the Transfer Act as enacted defined the composition and powers of the Board of Review in much greater detail than the Board of Directors.

 

Subparagraph (1) of ? 2456(f) specifies that the Board of Review "shall consist" of nine Members of the Congress, eight of whom serve on committees with jurisdiction over transportation issues and none of whom may be a Member from Maryland, Virginia, or the District of Columbia. Subparagraph 4(B) details the actions that must be submitted to the Board of Review for approval, which include adoption of a budget, authorization of bonds, promulgation of regulations, endorsement of a master plan, and appointment of the chief executive officer of the Authority. Subparagraph 4(D) explains that disapproval by the Board will prevent submitted actions from taking effect.

 

On March 2, 1987, the Secretary of Transportation and the MWAA entered into a long-term lease complying with all of the conditions specified in the then recently enacted Transfer Act. The lease provided for a 50-year term and annual rental payments of three million dollars "in 1987 dollars." After the lease was executed, MWAA's Board of Directors adopted bylaws providing for the Board of Review, and Virginia and the District of Columbia amended their legislation to give MWAA power to establish the Board of Review. On September 2, 1987, the directors appointed the nine members of the Board of Review from lists that had been submitted by the Speaker of the House of Representatives and the President pro tempore of the Senate. On March 16, 1988, MWAA's Board of Directors adopted a master plan providing for the construction of a new terminal at National with gates capable of handling larger aircraft, an additional taxiway turnoff to reduce aircraft time on the runway and thereby improve airport capacity, a new dual-level roadway system, and new parking facilities. On April 13, the Board of Review met and voted not to disapprove the master plan.

 

In November 1988, Citizens for the Abatement of Aircraft Noise, Inc., and two individuals who reside under flight paths of aircraft departing from and arriving at National (collectively CAAN) brought this action. CAAN sought a declaration that the Board of Review's power to veto actions of MWAA's Board of Directors is unconstitutional and an injunction against any action by the Board of Review as well as any action by the Board of Directors that is subject to Board of Review approval. The complaint alleged that most of the members of CAAN live under flight paths to and from National and that CAAN's primary purpose is to develop and implement a transportation policy for the Washington area that would include balanced service among its major airports, thus reducing the operations at National and alleviating noise, safety, and air pollution problems associated with such operations. The complaint named MWAA and its Board of Review as defendants.

 

(1) On what grounds may the Board seek to have the complaint dismissed without reaching the merits? Should such a motion succeed? Why or why not?

 

(2) What is (are) CAAN's constitutional argument(s)? Should CAAN prevail on the merits? Why or why not?

 

III. Rulemaking vs. Adjudication (20 pts.) - 40 minutes

 

 

Administrative processes mimic the legislative process (through rulemaking) and the judicial process (through adjudication). With respect to the legislative process, one member of the Supreme Court recently wrote:

The principle that the legal effect of conduct should ordinarily be assessed under the law that existed when the conduct took place has timeless and universal human appeal. . . The United States Constitution itself so far reflects these sentiments that it proscribes all retroactive application of punitive law, and prohibits (or requires compensation for) all retroactive laws that destroy vested rights. . .The presumption of nonretroactivity, in short, gives effect to enduring notions of what is fair, and thus accords with what legislators almost always intend.

 

With respect to the judicial process, this same Justice recently wrote:

 

So also, I think, "[t]he judicial power of the United States" conferred upon this Court and such inferior courts as Congress may establish must be deemed to be the judicial power as understood by our common-law tradition. That is the power "to say what the law is," not the power to change it. I am not so naive (nor do I think our forebears were) as to be unaware that judges in a real sense "make" law. But they make it as judges make it, which is to say as though they were "finding" it-- discerning what the law is, rather than decreeing what it is today changed to, or what it will tomorrow be. Of course this mode of action poses "difficulties of a . . . practical sort" when courts decide to overrule prior precedent. But those difficulties are one of the understood checks upon judicial law making; to eliminate them is to render courts substantially more free to "make new law," and thus to alter in a fundamental way the assigned balance of responsibility and power among the three Branches.

 

Are these two statements consistent? Explain.

 

 

(2) What are the implications, if any, of the legal philosophy reflected in the statements for --

(a) retroactive rulemaking?

(b) prospective only application of agency orders?

(c) agency power to choose to make policy decisions either through rulemaking or adjudication?

 

IV. Supreme Court Tests (40 pts.) - 60 minutes

 

State the following legal tests:

 

(1) To determine whether a case or controversy is ripe for adjudication, under Abbott Laboratories v. Gardner.

 

(2) To determine whether a statutory procedure violates procedural due process under the Fifth or Fourteenth Amendments, under Mathews

 

v. Eldridqe.

 

(3) To determine whether an agency's interpretation of a statutory term is valid, under Chevron v. NRDC.

 

(4) To determine whether a rule of law set forth in a legislative regulation should be applied prospectively only, under Bowen v. Georgetown University Hospital.

 

(5) To determine whether a decision is committed to agency discretion by law under 5 U.S.C. ? 701(a)(2)(A), under Heckler v. Chaney.

 

(6) To determine whether a statute of the United States establishing duties or obligations violates substantive due process under the Fifth Amendment, under Usery v. Turner Elkhorn Mining Co. and Pension Benefit Guaranty Corp. v. R.A. Gray & Co..

 

(7) To determine whether the courts may impose additional administrative procedures on a federal agency, under Vermont Yankee Nuclear Power v. NRDC.

 

(8) To determine whether an administrative official is immune from suit, under Butz v. Economou and Hafer v. Melo.

 

 

Have you answered all the questions?

 

I. Grant Gear and the Norwood Site (20 pts.) - 40 minutes

1. a. ______1.b.______2.a.______2.b.______

 

II. Washington National Airport (20 pts.) - 40 minutes

1.______ 2.______

 

III. Rulemaking vs. Adjudication (20 pts.) - 40 minutes

1.______ 2.a.______ 2.b.______ 2.c.______

 

IV. Supreme Court Tests (40 pts.) - 60 minutes

1._____2._____3._____4._____5._____6.______ 7.______ 8.______