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to spend a considerable amount of time, and enormous sums of money, fighting over a side issue having nothing at all to do with the merits of the case. 2

Perhaps the most clear example of the confusion and injustice that can result under the current scheme of judicial review is in the area of “regulatory takings” of property. Ordinarily, because the Fifth Amendment prohibits only takings without “just compensation," injunctive relief designed to enjoin governmental action that amounts to a taking is not available under the APA, and an aggrieved person is limited to a suit for just compensation under the Tucker Act. Transohio Savings Bank v. Director, OTS, 967 F.2d 598, 613 (D.C. Cir. 1992); Ramirez de Arellano v. Weinberger, 745 F.2d 1500 (D.C. Cir. 1984) (en banc), vacated on other grounds, 471 U.S. 1113 (1985). Furthermore, there would ordinarily be no dispute regarding the Court of Federal Claims' jurisdiction, under the Tucker Act, over a claim seeking compensation for an alleged Fifth Amendment taking.

This otherwise clear jurisdictional picture is considerably clouded, however, by an exception to Tucker Act jurisdiction for taking claims involving unlawful action by a federal agency or officer. In the case of such “unauthorized takings, the courts have considered the action at issue to not be the action of the government, and so not triggering the Tucker Act waiver of sovereign immunity for claims founded upon the Constitution. See, e.g., Hooe v. United States, 218 U.S. 322, 336 (1910); Regional Rail Reorganization Act Cases, 419 U.S. 102, 127 n.16 (1974); Noel v. United States, 16 Cl. Ct. 166, 170 (1989); Golder v. United States, 15 Cl. Ct. 513, 518 (1988); Torres v. United States, 15 Cl. Čt. 212, 215–16 (1988); Florida Rock Indus., Inc. v. United States, 791 F.2d 893, 898 (Fed. Cir. 1986), cert. denied, 479 US. 1053 (1987); Armijo v. United States, 663 F.2d 90, 93 (Ct. Cl. 1981).

Accordingly, when agency action complained of is "unauthorized,” the plaintiff is apparently limited to a district court suit designed to stop the taking rather than to obtain compensation for it. See Ramirez, 745 F.2d at 1622–23. While the precise scope of the "authorization" necessary to invoke Tucker Act taking jurisdiction is somewhat unclear, it is fairly well settled that agency action taken without statutory authority is “unauthorized” and thus falls outside that grant of jurisdiction. Şee, Larson v. Domestic and Foreign Commerce Corp., 337 U.S. 682, 693–94, reh's denied, 338 U.S. 840 (1949); Ramirez, 745 F.2d at 1523; Florida Rock, 791 F.2d at 898. And because of the APA's limitations, a district court cannot give a complete remedy for the wrongful government action and compensate the injured person for the harm that was suffered during the time that the "taking" was allowed to continue.

The logical solution for the problem is to amend both the APA and the Tucker Act to allow those courts to grant complete relief. Thus, the APA should be amended to allow district courts, in addition to setting aside agency action that is found to be unlawful, to also enter an award for monetary relief where appropriate to compensate persons harmed by the unlawful agency action. In addition, the Tucker Act should be amended to allow the Court of Federal Claims, in addition to granting monetary relief in cases falling within its jurisdiction, to also enter injunctive or other prospective equitable relief where appropriate. Finally, 28 U.S.C. $ 1500 should be repealed. These steps form a comprehensive solution to the APA-Tucker Act jurisdictional mess that would not only allow aggrieved persons to obtain full and complete relief for the harm done them by their government, but would also allow such persons to choose the most appropriate forum in which to bring suit.

CONCLUSION In summary, I believe that S. 343 is an important, and overdue, step forward in regulatory reform, and I applaud Sen. Dole and his co-sponsors for this initiative. I encourage this Subcommittee, under your leadership, Chairman Grassley, to expand S. 373 as I have suggested, and to favorably act on it as soon as possible.

Senator GRASSLEY. Thank you.
Mr. Freeman?

STATEMENT OF GEORGE FREEMAN, JR. Mr. FREEMAN. It is a pleasure to be before you again. It has been several years, but in the course of those years many of the issues that we are talking about here are still the same.

2 Indeed, writing for the Court in Keene, Justice Souter acknowledged that there is a good ar. gument that this statute is “anachronistic," 113 S. Ct. at 2045, but noted that such arguments should be addressed to the Congress, not the courts. Id.

Peter Strauss' comments to you about his participation in our earlier ABA effort led me to remember that we had four very distinguished consultants working with us then. One was Professor Scalia, who is now Justice Scalia; Professor Clark Bice of Harvard, that great titan of administrative law; Professor Peter Strauss, who was here today testifying earlier; and Phil Harter, who is the current co-chair with me of the ABA Working Group.

The ABA Working Group is staffed up; it has a lot of very good people, judges, lawyers, representing all facets of the ABA. Essentially, the ABA is still coming from where it came from back when S. 1080 passed this Senate by 94 to 0. We supported that bill in its entirety, except for the legislative veto provision, where we had doubts about its constitutionality. Those doubts were subsequently resolved by the Supreme Court and that issue is not before you now.

As far as where we stand today, we believe that S. 343 is a major piece of legislation in the right direction and we generally support

There are several issues, several points, where we think it can be improved, particularly in light of the criticisms that have been made about it.

We know that there are some things not in S. 343 that were in S. 1080, mainly long-needed revisions of the Administrative Procedure Act; there are about eight or nine of them. They are not here. I think the decision not to include them here may be tactical, on the theory that might bog things down, but some of those things would answer and resolve the criticisms that have been proposed by opponents or critics of the bill in its present form and we would ask you to reconsider them as possible answers.

Having said that, let me go briefly to some of the key points that we have heard witnesses here and in the earlier hearing-points of criticism, and see if there is an answer there. I will say from the ABA point of view we were very proud that the ABA was part of that consensus-making process that brought together people from both sides of the aisle in total support of this legislation.

Senator you know if it hadn't been for Speaker O'Neill keeping this from the floor of the House there was overwhelming support for S. 1080 in the House and S. 1080 would be the law of the land, and we would be here talking about one or two instead of 9 or 10 of the points that we are talking about here today.

Let's go to the point that critics make that this is going to swamp government and make it impossible for agencies to get on with making the right kind of decisions. A focal point of that is the definition of "major rule." There are two components in the definition of “major rule.” One is the dollar amount. The second is are there to be additional safeguards in the form of more unavoidably subjective criteria for rules that are under $100 million a year that can trigger reg reform.

In the Reagan executive order, there were two criteria which were omitted in the Clinton revision. One was effects on consumers and costs. The other was what we would call anticompetitive effects on American business. S. 343 puts them back in. We support that.

We also note, however, that the Clinton order, in reformulating to suit itself and the present administration's idea, adds four additional criteria which we think are very helpful, and we would urge

that you add them to the bill. The reason we ask that you add them to the bill is they are just additional safety net provisions for sticking by a large number. We happen to think the $100 million has worked very well. We think if you only had a dollar test, a strong case can be made, and Bob Cynkar has made it, for lowering that amount.

But we think if you keep that amount and you put the two Reagan safeguards back in and you put the four new Clinton ideas in, and then you think through, do you need one more for small business or something like that, you defuse that debate. We are practically near consensus on that basis, but that is for you to decide. That is just our suggestion.

Let's go to the decisional criteria in section 623. The ABA supports that provision. We do note, however, that there have been questions-Boyden alluded to them here earlier-about the exact wording of it. It is our understanding that on Wednesday one of the witnesses from the Administrative Conference urged you to delete some language in 628(c), saying that that would solve the problem. I don't think it would solve the problem, but let's see what the problem is supposed to be.

I think the problem is that in 623, the first part of your decisional criteria seems to focus on major rules. It wants the major rule alternatives thoroughly considered and the best one chosen. 623(b) says, however—and this is a very important "however," and Turner Smith made this point earlier. You don't attempt to amend all of these environmental, workplace safety, and all these other laws that are out there to protect health and safety. You expressly don't do that.

What you do in the wording here is to supplement the statutes that are vague, and there are a lot of vague statutes. Ms. Katzen, I think, is terribly wrong when she says Congress carefully crafted and considered all those wonderful environmental and health laws, and they don't have any doubts about them and you are undermining them.

Senator you have been here when these laws have been passed and amended, and you and I know that we can cite examples like Superfund which are a total example of how people just threw up their hands and left things vague as the devil.

What this law does very simply is it says that where an agency's organic statute the Clean Air Act, the Clean Water Act, OSHAclearly precludes consideration of the costs of a proposed rule, then this provision is not intended to amend the statute or to require a consideration of cost. At the same time, where the statute is silent or ambiguous, the provision would operate to supplement the decisional criteria.

Now, what are we talking about here? I was thinking driving in the cab coming up here today that I came to this town 39 years ago to clerk for Hugo Black on the Supreme Court, and I was thinking about him as I was riding up on the Hill. He used to tell us all, start with the Constitution; George, whenever you have a problem, don't go start reading the fine print and the footnotes; look at the Constitution. He used to give each of us a little copy of the Constitution to carry around with us.

I was thinking today that we have had a lot of confusion in this whole debate about executive oversight, Congressional oversight, and judicial oversight. They are totally different things. Under the Constitution, the President has the constitutional duty and responsibility to see that the laws are faithfully enacted. He uses the executive order as a means to help him get control of the executive agencies and to carry out that duty.

That duty is quite different from your duty here in Congress with legislative oversight. You have delegated legislative authority to government agencies, and your responsibility is to give them appropriate guidance in the exercise of that authority. There is a doctrine out there called standardless delegation, and it says if you give them too much power and you are not too clear about how they do it, that is unconstitutional.

What you are doing here is you are responding to the delegation doctrine. You are saying, where in those statutes we drop the ball or where there is doubt, you, agency, ought to read the laws this way to make sense out of them, and in those instances where we have clearly told you not to consider costs, come back to us, where the consequences are going to be very grave, so that we can have another shot to use our legislative oversight authority, and that is to amend the statutes and to change them so that we can get the right results.

So I think that the criticism that the decisional criteria here will turn the world upside down is not a valid one. I think there are some small technical problems that need to be resolved and we need further guidance from you, and if we get that guidance, I think we could give you and the staff, and a lot of other people could, the statutory language which would solve the minor little things that are troubling Boyden and some of these other people.

Let's go to the petition for a cost-benefit analysis, which one of the witnesses in the preceding panel told us was going to just wreak havoc with the agencies. Right now, under the Administrative Procedure Act, any person with standing has a right under the APA to petition an agency to amend, repeal, or rescind a rule. It doesn't have to be a major rule; it could be any kind of rule.

We focused on this in S. 1080 and we saw that there was a major problem with the way the APA works now. The agency is under no deadline to respond to those petitions. The fix you considered and put into S. 1080 was to put a deadline and to say that when those petitions come in, the agency has to act on the petition and their appeal to the court. You also looked at the standard of review that the denial would have when it gets into the court.

Right now, and I have just been reading a lot of these cases, there is a virtually impossible standard of review where an agency decides not to amend an existing rule. It is virtual, absolute deference. Of course, the Bumpers amendment, and you were a main supporter of that, would have resolved that problem by changing the standards, as you know.

The legislation here, therefore, that recognizes the right to petition for cost-benefit analysis is specially created. If you had the S. 1080 fix, you wouldn't need this provision. People would have the right anyway, and I urge you to consider simply out of defusing the politics and heat over this issue, which I think is unfair, to simply go back and put the S. 1080 fix on, and then everybody can petition to reopen these rules for whatever reason. They clearly have that right here, and what you would really do is just confirm an existing right and put some teeth. If you put a deadline in it and you put a decent standard of judicial review that backs that extreme deference, you would solve that problem, and you would also deprive the critics of that criticism.

Let's go to section 628, the standard for judicial review of agency interpretation. In our prepared testimony, we say this section essentially codifies the hardline look of the Chevron case and the Association supports it. I have before me five or six opinions which came down within the last year in the District of Columbia Court of Appeals on Chevron, applying the hard look. The previous witnesses to the contrary, the courts know how to do it. They are doing it and it doesn't wreck the process. So it is an eminently practical thing, and I will, as a supplement to our testimony, cite those cases to you.

Having said that, I think you have got a good bill. We would like to see you also look at some of those other APA 1080, not wholesale. We don't want to bog things down. We want to speed things up, but just like the provision I cited to you on petitions could meet and solve the criticism you have got here, we also think the antievasion provision that was in S. 1080 would do an awful lot to solve a lot of these problems here, too.

What the antievasion provision was designed to do was to prevent an agency from resorting to rulemaking in order to avoid regulatory analysis, and the fix there was to go look at the APA exceptions in section 553 for guidance statements, statements of administrative interpretation, all those little devices that agencies have used to put on things that will really rule because they would have substantive or future effect on a lot of people and affect people's lives. And they would say, oh, we are not resorting to rulemaking, we are just giving guidance. If you did that here, if you put that back in here, you would also strengthen this and solve some of these other problems.

Having said that, we stand ready to answer your questions. [The prepared statement of Mr. Freeman follows:)


Summary The American Bar Association has long supported major efforts for regulatory reform. The last such effort at the federal legislative level was S. 1080, which passed the Senate overwhelmingly in 1982, only to die in the House by being blocked from coming to the floor. The ABA supported all of the provisions of S. 1080 except for legislative veto, which the Association believed to be constitutionally defective.

S. 343 is a new major legislative effort for regulatory reform and we support it generally. We believe that it could be improved in several respects and offer suggestions on how that could be done. The more important areas are: (1) the definition of major rule, (2) judicial review of an agency's decision on whether or not to designate a proposed

new rule as a major rule, (3) the effective date of a major rule and (4) how to handle the relatively new concept of market-based mechanism.

Finally, we observe that there are longstanding problems under the APA, and equivalent procedural provisions in other federal acts, relating to rulemaking that

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