PIN/EXAM NO.:                                                   

ADMINISTRATIVE LAW
Summer 1999
Prof. Mayo

July 15, 1999

8:30 - 11:30 a.m.

Instructions

1. Place your PIN/Exam Number on this page of the examination booklet.

2. This is an open-book exam. You may bring into the exam room the assigned casebook, class handouts, your class notes, and your outline, including any outline that may have been prepared jointly with other members of the class.

3. The exam consists entirely of multiple-choice questions. To answer the question fully, circle the best response and explain your answer in the space provided below the options. Please limit your explanations to the space provided. (The same amount of space has been provided for each question; that is not meant to imply that every question requires the same amount of explanation.)

4. Scoring:

a. The correct option (a., b., c., d., e.) is worth 4 points.

b. Every question includes space for a brief explanation of your answer. Generally, full credit (10 points) can be earned only by explaining what is right about the chosen answer and what is wrong about the rejected ones (unless you would simply be repeating yourself).

c. In an e-mail to the class earlier this week, I indicated that the questions would be scored 2 points for the right option and up to 5 points for the explanations. As you can see, I have doubled the points for each portion of the question. I did this to give me a few more grading options on the explanations without resorting to fractions. The ratio of points for each part, of course, remains the same.

5. Be explicit about any assumptions, additional facts, and the like that form the basis for your answers.

Facts for Parts I & II

Part I

Question 1

Representative Peach is convinced that the U.S. Congress could constitutionally create a lottery and direct the profits toward such purposes (i.e., you should therefore assume there is federal Article I power to create a federal lottery and to spend the profits for such purposes), but Peach is concerned with whether it is otherwise consistent with constitutional principles to permit a federal agency to exercise such authority.

The law would be:

a. unconstitutional because the Lottery Act would encroach upon the powers of the Executive.
b. constitutional because taxing, regulating interstate commerce, and spending are within the Congress' legislative power.
c. unconstitutional because spending decisions are a "core function" of the legislative branch.
d. constitutional because broad delegations are not necessarily unlawful.
e. More than one of the above.

[In original exam, 15 lines were provided for your explanation.  In the interest of saving paper, I am deleting those lines from all these questions.]

Part II

Representative Peach also wants to know the advisability and legality of providing one or more of the following safeguards in the legislation:

Question 1

(i) having two FLC members be appointed by the Speaker of the U.S. House of Representatives.

The provision would be:

a. constitutional if the FLC members were deemed to be "inferior officers."
b. constitutional regardless whether members were deemed to be "officers of the United States" or "inferior officers."
c. unconstitutional if members were deemed to be "officers."
d. unconstitutional regardless of whether members were deemed to be "officers of the United States" or "inferior officers."
e. More than one of the above.

Explanation:

Question 2

(ii) subjecting the remaining three Presidential appointments to the FLC to the approval of the U.S. Senate.

The provision would be:

a. constitutional if members of the FLC were deemed to be "officers of the United States."
b. constitutional regardless whether members were deemed to be "officers of the United States" or "inferior officers."
c. unconstitutional if members were deemed to be "inferior officers."
d. unconstitutional regardless whether members were deemed to be "officers of the United States" or "inferior officers."
e. More than one of the above.

Explanation:

Question 3

(iii) requiring that all FLC rules and regulations regarding the disposition of lottery profits be submitted to the U.S. House and Senate and not go into effect for four months or until either house votes down a resolution to overturn or revise the proposed regulation, whichever is earlier.

The provision would be:

a. constitutional, but only if both houses of Congress were required to vote down the resolution.
b. constitutional as proposed.
c. unconstitutional, unless the vehicle for disapproval were a "bill" rather than a resolution.
d. unconstitutional as proposed.
e. More than one of the above.

Explanation:

Question 4

(iv) providing for judicial review of profit allocation regulations by "any person aggrieved or affected" by such regulation.

a. Any person who disagreed with the allocation of profits would have standing to sue under this provision.
b. An environmental group would have standing under this provision to challenge the FLC's failure to allocate profits for environmental purposes.
c. If plaintiffs satisfied § 702 of the APA and the requirements for Article III standing, they would not lack standing simply because the potential number of plaintiffs in the country was vast.
d. This would be an unconstitutional attempt to expand standing beyond the limits imposed by Article III.
e. More than one of the above.

Explanation:

Question 5

(v) providing for court suits by "any citizen" to challenge the legality of lottery profit allocation regulations, and awarding a "bounty" of $1000 plus attorney's fees to successful suitors under the citizen suit provision.

a. The "bounty" would satisfy the Article III requirement of injury in fact.
b. Plaintiffs would have standing because the right to have FLC profits allocated in accordance with statutory requirements can be deemed to be a "procedural right."
c. The "bounty" would not satisfy the Article III requirement of injury in fact.
d. More than one of the above.

Explanation:

Question 6

(vi) providing for 10-year terms of office for FLC members, and precluding the President from removing any member except for "malfeasance, fraud, or criminal activity."

a. The "for cause" requirement is constitutional; the 10-year limit is not.
b. The "for cause" requirement is unconstitutional; the 10-year limit is constitutional.
c. The "for cause" requirement and the 10-year limit are both constitutional.
d. The "for cause" requirement and the 10-year limit are both unconstitutional.

Explanation:

Facts for Parts III-V

Assume that the lottery legislation was passed, with all profits simply going into the federal treasury. The Federal Lottery Act ("the Act") provided for a Federal Lottery Agency ("FLA") with a single Administrator to be appointed by the President with the consent of the Senate. The Administrator was given the responsibilities of:

• devising a federal lottery plan;
• conducting a federal lottery through employees or contractors, or both;
• promulgating rules and regulations consistent with the Act for the conduct of the lottery; and
• adjudicating disputes regarding the administration and conduct of the lottery.

The Act provides that the Administrator may "contract with private and state-owned retailers, as determined by the Administrator, to sell Federal lottery tickets to the public," and permits the Administrator to allow "some percentage of the ticket price to private sellers as a commission." The Administrator is to determine the qualifications of private retail sellers of federal lottery tickets. The Act also provides: "The Administrator may, after hearing, establish reasonable rules, regulations, and practices with respect to the Federal Lottery Program." Violations of FLA regulations may be punished by debarment from the lottery program, fines, or both. The Act also provides that neither fines nor debarment can be imposed without an opportunity for a hearing. Under the Act, "findings of fact by the Administrator, if supported by substantial evidence, shall be conclusive."

Part III

Following passage of the Act, the Administrator began entering into standard agreements with grocery stores and gas stations. The agreements provided that the private seller could sell federal lottery tickets for a two-year period, as long as the seller complied with FLA regulations. Renewal was subject to renegotiation of commission terms and the discretion of the agency.

In July 2001, at the time of renewal of its agreement, GoodFoods, a large grocery store, sought renewal of the agreement to sell federal lottery tickets. FLA denied renewal in a letter from the FLA regional administrator, stating that GoodFoods had sold less than $100 in federal lottery tickets during the initial two-year period. GoodFoods' lawyer wrote back, submitting written records showing that GoodFoods had sold over $400 worth of tickets, and requesting an oral hearing before a final determination was made. The FLA regional administrator wrote back, saying that a review of records showed less than $500 in ticket sales, and that it was "against our general practice" to renew agreements with grocery stores that had sold less than $500 worth of lottery tickets in two years. The letter concluded that the decision was a final decision by the FLA, but that GoodFoods could reapply in two years.

GoodFoods' lawyer now seeks judicial review of the agency decision, and the agency has moved for summary judgment.

Question 1

GoodFoods also moves for summary judgment on numerous grounds. The first of these is that GoodFoods was statutorily entitled to a hearing.

How should the court rule on this argument?

a. GoodFoods was entitled to a hearing under the APA.
b. GoodFoods was entitled to a hearing under the Federal Lottery Act.
c. GoodFoods was not entitled to a hearing.
d. More than one of the above.

Explanation:

Question 2

A second ground urged by GoodFoods in support of its motion for summary judgment is that it was constitutionally entitled to a hearing.

How should the court rule on this argument?

a. GoodFoods has a liberty interest that requires a hearing before it can be infringed.
b. GoodFoods has a property interest that requires a hearing before it can be infringed.
c. GoodFoods does not have a constitutionally protected interest that requires a hearing before the FLA can decide not to renew its contract.
d. More than one of the above.

Explanation:

Question 3

A third ground for GoodFoods' motion for summary judgment was that the regional Administrator's decision not to renew was not based on a properly adopted rule or regulation.

Which of the following arguments would support a ruling in GoodFoods' favor?

a. The FLA's "$500 minimum sales" rule is a nonlegislative rule that had to be promulgated pursuant to APA rulemaking procedures.
b. The FLA announced its "$500 minimum sales" rule in an adjudication that applied the rule retroactively.
c. The "$500 minimum sales" rule had to be promulgated pursuant to the APA's formal rulemaking procedures.
d. The FLA had to publish its "$500 minimum sales" rule in the Federal Register.
e. None of the above.
f. More than one of the above.

Explanation:

Part IV

In October 2001, the Administrator proposed regulations that would disqualify retail sellers of federal lottery tickets who "sell, at the same locations as lottery ticket sales, firecrackers, fireworks, or other dangerous combustibles." The Administrator's NPRM suggested that the agency wanted to disassociate the highly regarded federal lottery from the seasonal sale of dangerous fireworks. Several of the public comments filed with the FLA questioned the need of such a regulation; others said "the words 'dangerous combustibles' were ambiguous." Finally, several anti-smoking groups commented that "cigarettes and cigars" be specifically included in the list of items that could not be sold in the same location as federal lottery tickets. After the close of the comment period, without any oral hearing, the federal administrator promulgated final regulations that rendered "retail sellers unqualified for federal lottery purposes who sell firecrackers, fireworks, cigarettes or cigars in the same location as they sell federal lottery tickets."

Question 1

How should the court rule on M&L's argument that the regulation constitutes an abuse of discretion?

a. Against M&L, because "abuse of discretion" is not the proper standard of review.
b. Against M&L, because the qualifications of retailers is a matter committed to agency discretion.
c. For M&L, if the court concludes that the FLA lacks adequate reasons for banning sales of tickets in the same location as cigarettes or cigars are sold.
d. For M&L, because firecrackers and fireworks are not of the same class as cigarettes and cigars.
e. More than one of the above.
f. None of the above.

Explanation:

Question 2

How should the court rule on M&L's argument that the regulation was procedurally invalid?

a. In favor of M&L, because there was no oral hearing.
b. In favor of M&L, because the NPRM violated the APA.
c. Against M&L, because no oral hearing was required.
d. Against M&L, because the NPRM satisfied the APA.
e. More than one of the above.
f. None of the above.

Explanation:

Question 3

The FLA moves to dismiss M&L's challenge on the ground that the case is not ripe. How should the court rule?

a. Against the FLA, because pre-enforcement judicial review is presumptively available.
b. In favor of the FLA, because regardless whether Article III has been satisfied, the prudential part of the ripeness doctrine has not.
c. In favor of the FLA, because pre-enforcement review should not be available in this case.
d. Against the FLA, because the APA does not require exhaustion before a court challenge can be ripe for adjudication.
e. More than one of the above.

Explanation:

Question 4

The FLA also moves to dismiss M&L's challenge on the ground that M&L lacks standing. How should the court rule?

a. For the FLA, because M&L has not suffered injury in fact.
b. For the FLA, because M&L is not within the zone of interests sought to be protected by the statute.
c. Against the FLA, because M&L has suffered injury in fact.
d. Against the FLA, because M&L is within the zone of interests sought to be protected by the statute.
e. More than one of the above.

Explanation:

Part V

Assume that Congress now amends the organic Lottery Act to provide that "Federal lottery tickets shall not be sold by retailers who also sell state lottery tickets in the same location." Some members of Congress voted for this provision to protect state lottery proceeds. Others voted for it because they generally were against gambling. Others voted for it because their colleagues said it was a good amendment. The Administrator had opposed the amendment on the ground that it would hurt federal lottery sales.

Question 1

The Administrator has now promulgated a regulation prohibiting the sale of federal and state lottery tickets in the same room, but permitting the sale of federal lottery tickets in an outdoor booth or vending machine at least 40 feet from any entrance to a room in which state lottery tickets are sold.

A's Gas Stations, a chain of gas stations, set up automatic vending booths for federal lottery tickets at a distance of over 50 feet from the little grocery shop appurtenant to each A's Gas Station. After the Administrator approved the renewal of A's license to sell federal lottery tickets, the state lottery commission sued the Federal Lottery Administrator to obtain an injunction against the licensing of any A's Gas Station to sell federal lottery tickets where a customer could also purchase state lottery tickets easily without driving to a different location. You should assume the state lottery commissioner had standing.

a. In favor of the FLA, because the regulation correctly interprets the amended statute.
b. In favor of the FLA, because its findings are conclusive on reviewing courts.
c. Against the FLA, because the regulation correctly interprets the amended statute.
d. More than one of the above.
e. None of the above.

Explanation:

Question 2

B operated two gas stations 10 miles apart. The Administrator proposed to debar B from selling Federal lottery tickets at either location on the ground that B had sold both state and federal lottery tickets at each location, in violation of Federal statute and regulation. B requested and was granted a hearing before an Administrative Law Judge.

B testified that since June 2000 (when the statutory amendment went into effect) B had never sold federal lottery tickets at First Street B's nor had B ever sold state lottery tickets at Eleventh Street B's. Two of B's employee clerks testified to the same effect. A local resident testified that his teenage sons had often complained of having bought losing state and federal lottery tickets when they went to get gas. And a member of a local anti-gambling league testified that he had seen both types of lottery tickets sold at First Street B's.

The ALJ determined that B had not violated the statute or regulation and issued a recommended opinion to that effect. The Administrator, using discretionary power provided for in previously promulgated regulations, reconsidered the case. Following the submission of extensive written briefs for both sides, the Administrator found the agency's witnesses (Q and R) more believable, and ordered the three-year debarment of B from the sale of federal lottery tickets.

Assume there are no further administrative remedies for B to exhaust, and that B seeks judicial review. How should the court rule?

a. Against B because the Administrator's decision is entitled to substantial deference.
b. In favor of B, based on the court's review of the entire record.
c. Against B, applying the abuse of discretion standard of review.
d. Against B, unless demeanor evidence alone supported the ALJ's credibility findings.
e. More than one of the above.
f. None of the above.

Explanation:

EXAMINATION ENDS HERE