Administrative Law Prof Blog

Deference to agency interpretation at the state level

In Farrell v. Whiteman, 200 P.3d 1153 (Idaho, 2009) in footnote 2, the Idaho Supreme Court lays out a clear and concise summary of its position on judicial deference to agency interpretations of statutes:

The Idaho State Board of Architectural Examiners filed an amicus brief that focuses on whether or not Farrell violated the provisions of the architect's licensing statute. According to the Board, Farrell's arrangement with CDS was violative of former Idaho Code § 54-307(2). An agency's interpretation of its statutes is entitled to deference if a four-prong test is satisfied. Pearl v. Bd. of Prof'l Discipline of Idaho State Bd. of Med., 137 Idaho 107, 113, 44 P.3d 1162, 1168 (2002). First, the agency must have been entrusted with the responsibility to administer the statute at issue. Id. Second, the agency's statutory construction must be reasonable. Id. Third, the court must determine that the statutory language at issue does not treat the precise issue. Id. And finally, a court must ask whether any of the rationales underlying the rule of deference are present. Id. If the test is met, the court must give “considerable weight” to the agency's interpretation. Id. The rationales include: 1) public groups' reliance on the agency's interpretation over a period of time, 2) the agency's interpretation represents a “practical” interpretation of the statute, 3) the Legislature is charged with knowledge of how its statutes are interpreted, and thus when it does not alter the statute, it presumably sanctions the agency interpretation, 4) agency's interpretation is entitled to additional weight when it is formulated contemporaneously with the passage of the statute at issue, and 5) courts should recognize and defer to the agency's expertise. J.R. Simplot Co. v. Idaho State Tax Comm'n, 120 Idaho 849, 857-859, 820 P.2d 1206, 1214-16 (1991). In this case, the Board does not explain how the four-prong test is met. It states only that the amicus brief constitutes an “official position” of the Board. As to the third prong of the test, we find that the statutes speak clearly on the issues involved in this case and thus the test for deference is not met. Accordingly, the Board's conclusions are not entitled to deference.

Zap. 

Thanks to Lexology for the pointer.  EMM

Another route to 'arbitrary and capricious'

From the FDA Law Blog of Hyman, Phelps & McNamara, P.C., "New York District Court Rebukes FDA Over PLAN B OTC Switch Approval Decision; Vacates FDA Citizen Petition Decision and Remands to FDA". 

In a scathing 52-page opinion issued [March 23, 2009], the United States District Court for the Eastern District of New York takes FDA to task over the Agency’s August 24, 2006 approval of a supplemental NDA (“sNDA”) for Barr Pharmaceuticals, Inc.’s emergency contraceptive PLAN B (levonorgestrel) Tablets, 0.75mg and denial of a citizen petition requesting FDA to switch PLAN B (and all emergency contraceptives like it) from prescription-only to OTC status without age or point-of-sale restrictions.  ...  Today’s decision is filled with intimate details of the FDA PLAN B decision-making process.  Here are the exact words of the court's decision:

    Putting aside for the moment the specifics of the many claims brought by plaintiffs and the details of each of the FDA’s decisions, the gravamen of plaintiffs’ claims is that the FDA’s decisions regarding Plan B – on the Citizen Petition and the SNDAs – were arbitrary and capricious because they were not the result of reasoned and good faith agency decision-making.

    Plaintiffs are right.  The FDA repeatedly and unreasonably delayed issuing a decision on Plan B for suspect reasons and, on two occasions, only took action on Plan B to facilitate confirmation of Acting FDA Commissioners, whose confirmation hearings had been held up due to these repeated delays. ...

... These political considerations, delays, and implausible justifications for decision-making are not the only evidence of a lack of good faith and reasoned agency decision-making. Indeed, the record is clear that the FDA’s course of conduct regarding Plan B departed in significant ways from the agency’s normal procedures regarding similar applications to switch a drug product from prescription to non-prescription use, referred to as a “switch application” or an “over-the-counter switch.”  For example, FDA upper management, including the Commissioner, wrested control over the decision-making on Plan B from staff that normally would issue the final decision on an over-the-counter switch application; the FDA’s denial of non-prescription access without age restriction went against the recommendation of a committee of experts it had empaneled to advise it on Plan B; and the Commissioner – at the behest of political actors – decided to deny non-prescription access to women 16 and younger before FDA scientific review staff had completed their reviews. ...

... The FDA’s justification for this age restriction, that pharmacists would be unable to enforce the prescription requirement if the cutoff were age 17, rather than 18, lacks all credibility.

Ouch.  EMM

A quick route to 'arbitrary and capricious'

In her Law of the Land blog, Patty Salkin (Albany) reviews a New York zoning case in "Board’s Failure to Follow its Own Precedent Results in Reversal".  The building department said the builder didn't meet requirements, then it did, then it didn't, with a rezoning in the middle of the process.

On appeal, both the trial court and the appeals court concluded that the Board of Standards and Appeals acted in an arbitrary and capricious fashion when they failed to follow their prior precedent and failed to indicate any reason for reaching a different result on essentially the same facts.  Furthermore, the Court found that the petitioner established that it was entitled to an extension under the Zoning Resolution and that it had acquired vested rights.

Once an agency approves a regulated entity's action, it can't claim "Oops, we goofed" without statutory or regulatory authority to do so.  Even with such authority, once the rights "vest", it's a whole new ball game.  This could be a fun exam or discussion scenario.  EMM

Where do you find the law?

Lawrence Friedman (Barnes/Richardson, Chicago) discusses an interesting case in the first person on his Customs Law blog, "CAFC Rules on Soybean Residue".  The Court of Appeals for the Federal Circuit had to interpret the Harmonized Tariff Schedule (HTSUS), a Federal statute that describes what import tariffs are paid for what classes of stuff, in Archer Daniels Midland v. U.S., No. 2008-1342, March 26, 2009.  (Mr. Friedman argued the case for the plaintiff.)  The problem was that the "Explanatory Notes" for the particular class that the Government wished to apply appeared to be inconsistent with the statutory language.  Given the ambiguity, the Court of Appeals set aside the Notes and interpreted the statute without them. 

Mr. Friedman has two important points that apply to regulation in general.

The tariff must be interpreted in a way that maximizes the predictability and uniformity of classifications. I think that if Jane and Joe Importer are expected to be able to classify merchandise in the ordinary course of business, then the primary focus must be on the plain language of the HTSUS. Any interpretation that moves limitations or meaning into the tariff from the Explanatory Notes should be disfavored in the absence of a showing of ambiguity in the HTSUS.

I think this is particularly true because there is an inherent lack of transparency in that the Explanatory Notes are not publicly available without a paid subscription. If the Explanatory Notes are even remotely required for legal compliance, they should be made available to the public free of charge. [Are you with me? Do we storm Brussels with pitchforks and torches?] Reasonable care should not require an outlay of money just to know the rules.

Amen.  EMM

New administrative law articles

From the University of Washington's Current Index to Legal Periodicals:

• Cowart, Richard. Carbon caps and efficiency resources: how climate legislation can mobilize efficiency and lower the cost of greenhouse emission reduction. 33 Vt. L. Rev. 201-223 (2008). [L]|[W]
• Evans, Barbara J. Congress' new infrastructural model of medical privacy. 84 Notre Dame L. Rev. 585-654 (2009). [L]|[W]
• Gershonowitz, Aaron. Environmental regulation: fitting the pieces together. 32 Environs 99-129 (2008). [L]|[W]
• Gilmore, Brian C. Comment. ERISA's full and fair review: access to appeal-level documents during the course of an administrative appeal. 43 U.S.F.L. Rev. 383-416 (2008). [L]|[W]
• Harmon, Roy F. III. The debate over deference in the ERISA setting-- judicial review of decisions by conflicted fiduciaries. 54 S.D. L. Rev. 1- 32 (2009). [L]|[W]
• Johnsen, D. Bruce. The SEC's mistaken ban on directed brokerage: a transaction cost analysis. 40 Ariz. St. L.J. 1241-1295 (2008). [L]|[W]
• Klass, Alexandra B. and Elizabeth J. Wilson. Climate change and carbon sequestration: assessing a liability regime for long-term storage of carbon dioxide. 58 Emory L.J. 103-179 (2008). [L]|[W]
• Puckett, Alissa. Comment. The proper focus for FDA regulations: why the fundamental right to self-preservation should allow terminally ill patients with no treatment options to attempt to save their lives. 60 SMU L. Rev. 635-665 (2007). [L]|[W]
• Sovacool, Benjamin K. A game of cat and fish: how to restore the balance in sustainable fisheries management. 40 Ocean Dev. & Int'l L. 97-125 (2009). [L]|[W]
• Wessendorf, Erin M. Note. Regulating the credit rating agencies. 3 Entrepren. Bus. L.J. 155-175 (2008). [L]|[W]
• Yee, Krista. "A period of consequences": global warming legislation, cooperative federalism, and the fight between th EPA and the State of California. 32 Environs 183-213 (2008). [L]|[W]
• Young, Adam R. Note. Generic pharmaceutical regulation in the United States with comparison to Europe: innovation and competition. 8 Wash. U. Global Stud. L. Rev. 165-185 (2009). [L]|[W]
• Breaking the Logjam: Environmental Reform for the New Congress and Administration. Introduction by Carol A. Casazza Herman, David Shoenbrod, Richard B. Stewart and Katrina M. Wyman; panels with Lawrence S. Huntington and Leslie Carothers, chairs; E. Donald Elliott, keynote speaker; David T. Buente, Jr., Richard Lazarus, Felicia Marcus, Paul Portney and Marcia Bystryn, participants; papers by Cary Coglianese, Bradley C. Karkkainen, Michael A. Livermore, Angus Macbeth, Gary Marchant, Beth S. Noveck, David R. Johnson, Jonathan B. Wiener, William F. Pedersen, David Schoenbrod, Joel Schwartz, Ross Sandler, Andrew P. Morriss, John D. Leshy, Molly S. McUsic, Kai S. Anderson, Deborah Paulis-Jagric, J. B. Ruhl, Barton H. Thompson, Jr., Katrina M. Wyman, Harry W. Richardson, Peter Gordon, Chang-Hee Christine Bae, Sam Schwartz, Gerard Soffian, Jee Mee Kim, Annie Weinstock, Jonathan Cannon, G. Tracy Mehan III, Josh Eagle, James N. Sanchirico, James L. Huffman, Kate Adams, Brian D. Israel, Jonathan H. Adler, John S. Applegate, Richard B. Stewart and Daniel C. Esty; luncheon address by Peter Lehner. 17 N.Y.U. Envtl. L.J. 1-853 (2008). [L]|[W]
  • Herman, Carol A. Casazza, David Shoenbrod, Richard B. Stewart and Katrina M. Wyman. Introduction. 17 N.Y.U. Envtl. L.J. 1-17 (2008). [L]|[W]
  • Panel I--How Did We Get Into the Logjam, and How Do We Get Out of It?
    • Panel Summary. Lawrence S. Huntington, chair; E. Donald Elliott, keynote speaker; David T. Buente, Jr., participant. 17 N.Y.U. Envtl. L.J. 18-23 (2008). [L]|[W]
    • Elliott, E. Donald. Portage strategies for adapting environmental law and policy during a logjam era. 17 N.Y.U. Envtl. L.J. 24-53 (2008). [L]|[W]
  • Panel II--Setting Priorities.
    • Coglianese, Cary. The managerial turn in environmental policy. 17 N.Y.U. Envtl. L.J. 54-74 (2008). [L]|[W]
    • Karkkainen, Bradley C. Framing rules: breaking the information bottleneck. 17 N.Y.U. Envtl. L.J. 75-106 (2008). [L]|[W]
    • Livermore, Michael A. Cause or cure? Cost-benefit analysis and regulatory gridlock. 17 N.Y.U. Envtl. L.J. 107-133 (2008). [L]|[W]
    • Macbeth, Angus and Gary Marchant. Improving the government's environmental science. 17 N.Y.U. Envtl. L.J. 134-169 (2008). [L]|[W]
    • Noveck, Beth S. and David R. Johnson. A complex(ity) strategy for breaking the logjam. 17 N.Y.U. Envtl. L.J. 170-193 (2008). [L]|[W]
    • Lehner, Peter. The logjam: are our environmental laws failing us or are we failing them? 17 N.Y.U. Envtl. L.J. 194-209 (2008). [L]|[W]
  • Panel III--Climate Change, U.S. Domestic Regulation, and the Future of the Car.
    • Wiener, Jonathan B. Radiative forcing: climate policy to break the logjam in environmental law. 17 N.Y.U. Envtl. L.J. 210-255 (2008). [L]|[W]
    • Pedersen, William F. Adapting environmental law to global warming controls. 17 N.Y.U. Envtl. L.J. 256-283 (2008). [L]|[W]
    • Schoenbrod, David, Joel Schwartz and Ross Sandler. Air pollution: building on the successes. 17 N.Y.U. Envtl. L.J. 284-324 (2008). [L]|[W]
    • Morriss, Andrew P. The next generation of mobile source regulation. 17 N.Y.U. Envtl. L.J. 325-367 (2008). [L]|[W]
  • Panel IV--Protecting Ecosystems on Land
    • Leshy, John D. and Molly S. McUsic. Where's the beef? Facilitating voluntary retirement of federal lands from livestock grazing. 17 N.Y.U. Envtl. L.J. 368-397 (2008). [L]|[W]
    • Anderson, Kai S. and Deborah Paulis-Jagric. A new land initiative in Nevada. 17 N.Y.U. Envtl. L.J. 398-423 (2008). [L]|[W]
    • Ruhl, J. B. Agriculture and ecosystem services: strategies for state and local governments. 17 N.Y.U. Envtl. L.J. 424-459 (2008). [L]|[W]
    • Thompson, Barton H., Jr. Ecosystem services & natural capital: reconceiving environmental management. 17 N.Y.U. Envtl. L.J. 460-489 (2008). [L]|[W]
    • Wyman, Katrina M. Rethinking the ESA to reflect human dominion over nature. 17 N.Y.U. Envtl. L.J. 490-528 (2008). [L]|[W]
  • Panel V--Urban Issues.
    • Richardson, Harry W. and Peter Gordon. The implications of the Breaking the Logjam project for smart growth and urban land use. 17 N.Y.U. Envtl. L.J. 529-558 (2008). [L]|[W]
    • Bae, Chang-Hee Christine. Salmon protection in the Pacific Northwest: can it succeed? 17 N.Y.U. Envtl. L.J. 559-579 (2008). [L]|[W]
    • Schwartz, Sam, Gerard Soffian, Jee Mee Kim and Annie Weinstock. A comprehensive transportation policy for the 21st century: a case study of congestion pricing in New York City. 17 N.Y.U. Envtl. L.J. 580-607 (2008). [L]|[W]
  • Panel VI--Protecting Aquatic Ecosystems.
    • Cannon, Jonathan. A bargain for clean water. 17 N.Y.U. Envtl. L.J. 608-637 (2008). [L]|[W]
    • Mehan, C. Tracy III. Establishing markets for ecological services: beyond water quality to a complete portfolio. 17 N.Y.U. Envtl. L.J. 638-645 (2008). [L]|[W]
    • Eagle, Josh, James N. Sanchirico and Barton H. Thompson, Jr. Ocean zoning and spatial access privileges: rewriting the tragedy of the regulated ocean. 17 N.Y.U. Envtl. L.J. 646-668 (2008). [L]|[W]
    • Huffman, James L. The federal role in water resource management. 17 N.Y.U. Envtl. L.J. 669-702 (2008). [L]|[W]
  • Panel VII--Managing Waste.
    • Adams, Kate and Brian D. Israel. Waste in the 21st century: a framework for wiser management. 17 N.Y.U. Envtl. L.J. 703-723 (2008). [L]|[W]
    • Adler, Jonathan H. Reforming our wasteful hazardous waste policy. 17 N.Y.U. Envtl. L.J. 724-756 (2008). [L]|[W]
    • Applegate, John S. The temporal dimension of land pollution: another perspective on applying the Breaking the Logjam principles to waste management. 17 N.Y.U. Envtl. L.J. 757-782 (2008). [L]|[W]
    • Stewart, Richard B. U.S. nuclear waste law and policy: fixing a bankrupt system. 17 N.Y.U. Envtl. L.J. 783-825 (2008). [L]|[W]
  • Panel VII--Change Going Forward: Institutions and Politics.
    • Panel Summary. Leslie Carothers, Chair; Richard Lazarus, Felicia Marcus, Paul Portney and Marcia Bystryn, participants. 17 N.Y.U. Envtl. L.J. 826-835 (2008). [L]|[W]
    • Esty, Daniel C. Breaking the environmental law logjam: the international dimension. 17 N.Y.U. Envtl. L.J. 836-853 (2008). [L]|[W]

EMM

Ultra vires - not

(I confess that I like Law Latin - it creates sufficient confusion to force readers to actually think about what one is writing about.)  Law.com has a story from Legal Times, "Federal Circuit Sides With PTO in Dispute Over Rules".  This case turns on the wording of 35 U.S.C. § 2(b)(2)’s grant of rulemaking authority to the Patent and Trademark Office (PTO) - it is settled law that the PTO only has the authority to promulgate rules governing procedure and not rules over substantial rights.

The U.S. Court of Appeals for the Federal Circuit ruled Friday in a split decision that the Patent and Trademark Office did not overstep its authority in adopting a set of new rules that some intellectual property lawyers say fundamentally alter patent practice and threaten innovation.

Lawyers for the PTO say the four new PTO rules, issued in 2007, were constructed to reduce a backlog of unexamined patent applications by, among other things, limiting the number of claims per application, as well as the number of continuing applications and requests for continued examination. Critics of the rules say multiple claims are essential in protecting inventions.

... A federal district judge in the Eastern District of Virginia found the rules were substantive, and not procedural, and blocked the PTO from implementing the changes. The PTO appealed. ...

And the Federal Circuit disagreed.  Tafas v. Doll, Fed. Cir. No. 2008-1352, March 23, 2009.

Simply because an applicant needs to put more effort into an application to comply with a rule does not make the rule substantive, Judge Sharon Prost wrote in the opinion for the court. Prost also said there is no absolute limit to the number of claims an applicant can file. But Prost acknowledged that the PTO "may in some cases attempt to apply the rules in a way that makes compliance essentially impossible and substantively deprives applicants of their rights." In those cases, Prost wrote, judicial review is available.

... [The dissenting judge] said the rules "drastically change" existing law, altering an inventor's rights and obligations under the Patent Act.

This case has been remanded to the District Court for consideration of other challenges to the rules, so we can expect to see it again.  Worth reading and possibly an interesting class discussion.  EMM

Interpreting Medicaid regs

Law.com has an article from today's Fulton County Daily Report on the oral argument in an 11th Circuit case, "Medicaid Suit Could Determine Who Decides Care: Doctor or State".  The case is Moore v. Medows, No. 08-13926 (District Court opinion at 563 F.Supp.2d 1354).  The article's subtitle is "Federal appeals court hears arguments in case that Medicaid managers say could impact states' flexibility and discretion in allocating resources". 

[The plaintiff's] mother filed suit in 2007 after the state told her it was reducing Callie's number of paid nursing hours from 94 hours a week to 84.

The Moores' lawyers convinced U.S. District Judge Thomas W. Thrash Jr. that the reduction was improper. The judge concluded the state must provide for the amount of skilled nursing care that Callie's treating physician deems necessary.

Thrash's June 4, 2008, ruling has states and Medicaid plan managers up in arms. They say that Thrash's order means that states won't have the flexibility they need and the discretion the law allows to allocate Medicaid resources fairly.

Federal law requires states participating in the Medicaid program to provide care that's necessary to "correct or ameliorate defects and physical and mental illnesses" in lower-income children under the age of 21. The state points to a federal regulation that says Medicaid agencies may place limits on service based on "medical necessity."

The state Department of Community Health operates a program to administer Medicaid-funded nursing services for several hundred children who need nursing care. It delegates the decisions about approval of such services to an organization called the Georgia Medical Care Foundation. That organization made the decision to reduce Callie's hours of nursing care, contrary to the recommendation of Callie's primary care physician.

The state says in its briefs that nursing hours can be reduced when the patient's medical condition stabilizes, positing that a goal of its program is to teach parents and other caregivers to care for the child on their own. The Moores' lawyers at the Georgia Advocacy Office, a nonprofit that advocates for disabled people, contend that the state's system of "weaning" patients off their nursing services as long as they're staying out of the hospital and not getting worse follows a different standard than that set by federal law.

I suggest that this is going to be an interesting case to watch, and that it will turn on the 11th Circuit's interpretation of the Medicaid statute and regulations.  EMM

Request for comments

On the Conglomerate Blog, David Zaring (Wharton) asks "Is the PPIP legal?"

I asked my administrative law students today whether Treasury will get Chevron deference or Skidmore deference when it is sued over its new public-private toxic asset protection plan, and I'd love to hear your thoughts.

OK, gentle readers - time to start your engines!  EMM

Agencies have to follow their own rules

The New York Law Journal reports that Judge Edward R. Korman of the E.D.N.Y.

... has ordered the Food and Drug Administration to allow the manufacturers of Plan B to make the emergency contraceptive available to 17-year-olds without a prescription. ...

"Plaintiffs have presented unrebutted evidence of the FDA's lack of good faith," he said in his 52-page decision, Tummino v. Torti, 05-CV-366.  "This lack of good faith is evidenced by, among other things, (1) repeated and unreasonable delays, pressure emanating from the White House, and the obvious connection between the confirmation process of two FDA Commissioners and the timing of the FDA's decisions; and (2) significant departures from the FDA's normal procedures and policies in the review of the Plan B switch applications."

"N.Y. Federal Judge Overturns FDA Regulation on Sales of Plan B Contraceptive".  EMM

New administrative law articles

From the University of Washington's Current Index to Legal Periodicals:

• Bruner, Christopher M. States, markets, and gatekeepers: public-private regulatory regimes in an era of economic globalization. 30 Mich. J. Int'l L. 125-176 (2008). [L]|[W]
• Fisher, Stephen M. Note. Reforming interconnection queue management under FERC Order No. 2003. 26 Yale J. on Reg. 117-142 (2009). [L]|[W]
• Kahn, Jeffrey H. Hedging the IRS--a policy justification for excluding liability and insurance proceeds. 26 Yale J. on Reg. 1-36 (2009). [L]|[W]
• Kersten, Charles M. Note. Rethinking transboundary environmental impact assessment. 34 Yale J. Int'l L. 173-206 (2009). [L]|[W]
• Levine, Michael E. Airport congestion: when theory meets reality. 26 Yale J. on Reg. 37-88 (2009). [L]|[W]
• Macey, Jonathan R. and Maureen O'Hara. Regulation and scholarship: constant companions or occasional bedfellows? 26 Yale J. on Reg. 89-116 (2009). [L]|[W]
• Neuerburg, Michael. Recent development. Testing the limits of procedural rulemaking: how the Federal Circuit can use Tafas v. Dudas to clarify the authority of the Patent Office. (Tafas v. Dudas, 541 F. Supp. 2d 805, 2008.) 10 N.C. J.L. & Tech. 203-232 (2008). [L]|[W]
• Proctor, Gray. Ngo excuses: proving, rebutting, and excusing failure to exhaust administrative remedies in prisoner suits after Woodford v. Ngo and Jones v. Bock. 31 Hamline L. Rev. 471-504 (2008). [L]|[W]
• Verdier, Pierre-Hugues. Transnational regulatory networks and their limits. 34 Yale J. Int'l L. 113-172 (2009). [L]|[W]

EMM

Enforcement teaching example

For a case that might make a good discussion or exam question, see Prince & Princess Enterprises, LLC v. State ex rel. Arizona Dept. of Health Services, --- P.3d ----, 2008 WL 4405177 (Ariz.App. Div. 1), 540 Ariz. Adv. Rep. 3, No. CA-CV 08-0151A, Sept. 30, 2008, rev. den. No. CV-08-0360-PR/A, Mar. 17, 2009, Minutes No. 2366, page 5, item 15.

From "AZ Supreme Court refuses to hear cigar shop case" in the Arizona Capitol Times (March 20, 2009): 

A Phoenix cigar shop has won a battle against the state Department of Health Services that will allow it to continue to allow smoking on the premises even though the shop also sells liquor.

The Arizona Supreme Court on March 17 refused to hear the Arizona Department of Health Services' appeal of a previous court ruling that gave immunity from the 2006 voter-approved statewide smoking ban to Magnum's Cigar, Wine and Liquor Emporium.

The decision appears to bring an ending to a clash between the department and the owners of Magnum's, a north Phoenix cigar shop that opened a bar last year to allow customers to drink and smoke on the premises.

From the Court of Appeals opinion:

¶2  Appellant Prince and Princess Enterprises, LLC (“Magnum’s”) is the owner and operator of Magnum’s Cigar, Wine & Liquor Emporium.  Magnum’s has a tobacco distributor license, which permits it to sell tobacco products and accessories. Magnum’s also holds a series 6 alcoholic-beverages license, which permits Magnum’s to sell alcohol to its customers for consumption both on and off premises.  Magnum’s allows smoking on its premises, including in a lounge area where it serves alcoholic beverages.

¶3  In the November 2006 general election, the people of Arizona enacted the Smoke-Free Arizona Act pursuant to Proposition 201, a voter initiative measure.  The Act provides, in pertinent part:

  Smoking is prohibited in all public places and places of employment within the state of Arizona, except the following: 
   . . . .
 
  3. Retail tobacco stores that are physically separated so that smoke from retail tobacco stores does not infiltrate into areas where smoking is prohibited under the provisions of this section.

A.R.S. § 36-601.01(B)(3).  The Act defines a “retail tobacco store” as “a retail store that derives the majority of its sales from tobacco products and accessories.”  A.R.S. § 36-601.01(A)(10).

¶4  In February 2008, Magnum’s filed a verified complaint seeking declaratory relief that it qualifies as a “retail tobacco store” for purposes of the Smoke-Free Arizona Act plus injunctive relief precluding the Arizona Department of Health Services (“Department”) from enforcing the Act against Magnum’s. The trial court decided that Magnum’s is a “liquor bar” -- not a retail tobacco store within the meaning of the Act -- and therefore Magnum’s is not exempted  from the smoke-free requirements of the Act.  Magnum’s timely appeals and we have jurisdiction pursuant to A.R.S. § 12-2101(B), (F)(2) (2003).

In addition to the Capitol Times article above, you can find more backstory at "Smoke and mirrors: Phoenix cigar and liquor store sues state of Arizona over smoking ban." Arizona Capitol Times (Feb 29, 2008), and "Arizona Court of Appeals reverses smoking ban on Phoenix cigar shop." Arizona Capitol Times (Sept 30, 2008).  EMM

An empirical study on judicial review of agency decisions

Peter A. Appel (Georgia) has posted "Wilderness and the Judiciary" on SSRN.  Abstract:    

This Article examines how the decisions of four land management agencies governing wilderness areas under the Wilderness Act fare in the federal courts. Agencies normally prevail in the majority of their cases before the federal courts because courts employ doctrines of deference to agencies' decisions. In the context of wilderness management, however, the success rates of the agencies varies drastically depending on the type of challenge brought. The Article provides a historical overview of different schemes for wilderness protection, from administrative regulatory schemes to the adoption of the 1964 Wilderness Act and subsequent enactments. It then examines specific case studies and numeric information from all of the cases decided under the 1964 Wilderness Act. The numbers reveal three striking facts. First, a two-fold gap exists between agency success rates in litigation depending on who brings the challenge and the type of challenge it is. Second, the agencies tend to lose in challenges brought by environmentalists more often than not. Third, the party of appointment for the judges does not appear to affect overall distribution of their votes as measured on a simple "pro-wilderness"/ "anti-wilderness" axis. After providing some possible explanations for this apparent one-way judicial ratchet favoring wilderness protection-some of which will be examined more thoroughly in future work-the Article offer some observations about whether such a one-way ratchet will always benefit wilderness restoration and protection.

Thanks to the PropertyProf Blog for the pointer.  EMM

You've got to give them some evidence

A zoning case reviewed by Patty Salkin (Albany) in her Law of the Land blog highlights what it takes for judicial review to find executive or legislative action is actually arbitrary and capricious.  "Rezoning Amounted to Illegal Spot Zoning for Failure to Comply with Master Plan".

The developer, owner of a parcel of undeveloped land located in a C-1 Neighborhood Commercial Zone, filed a site plan application to construct a professional and two retail buildings on its site.  ... [R]esidents asked the township council to rezone the property to Office Professional arguing that since the surrounding area was already largely developed, the current designation would create additional traffic, noise, dust, and pollution.  The Council ultimately adopted an ordinance rezoning the parcel ... [because] professional offices tended to have less “noise, lights and odors” and less traffic.

The Supreme Court of New Jersey held that the Council’s action was (1) arbitrary, capricious, and unreasonable; and (2) impermissible inverse spot zoning.  The court noted that the ordinance was inconsistent with the Master Plan, was not adequately explained and arbitrarily imposed a burden on the property owner. The court explained that the state’s Municipal Land Use Law (“MLUL”) requires a municipality to, in adopting a zoning ordinance, either: (1) adopt an ordinance that was “substantially consistent” with the municipality’s Master Plan; or (2) explain its reasons for adopting an ordinance that was inconsistent with the Master Plan.  That statutory directive, said the court, precluded a municipality from making its decision to adopt a zoning ordinance [arbitrarily].

 ...  Neither the Residents nor the Council provided any evidence that a commercial facility would actually generate greater traffic congestion than an office building.  Even more striking, found the court, was the Council’s failure to explain why or how it “suddenly became appropriate” to apply the Office Professional designation to this parcel, which was zoned a C-1 and located along a corridor dotted with other areas so zoned.  That lack of explanation “suggest[ed] that the choice was entirely arbitrary.” 

EMM

New Jersey: Non-bidder held to have standing to challenge bid specifications

Usually I am reluctant to post about government contracting because many of the cases are fact-specific or turn on peculiarities of government contracting law.  However, the recent New Jersey Supreme Court opinion described in "New Jersey Supreme Court issues landmark bidding decision: non-bidder held to have standing to challenge bid specifications" from Lowenstein Sandler is of broader interest.  It turns on a careful reading of New Jersey's contracting statute, which is the lesson here.  The plaintiff was not a bidder and would not have been a bidder on the contract as specified.

Only taxpayers, bidders and prospective bidders may challenge the award of a contract to the successful bidder, because "all interested parties have accepted the specifications as drawn, have bid on those specifications, and, at least as far as the successful bidder is concerned, have a vested interest in the contract award itself." By contrast, the Court reasoned, the right to challenge bid specifications should be viewed under settled rules governing standing, which provide that "[e]ntitlement to sue requires a sufficient stake and real adverseness with respect to the subject matter of the litigation subject matter of the litigation [and a] substantial likelihood of some harm visited upon the plaintiff in the event of an unfavorable decision …." (quoting In re Adoption of Baby T, 160 N.J. 332, 340 (1999)). Although the Court did not discuss the point, it is well-settled that taxpayers also have standing to challenge bid specifications, even post-bid.

(Emphasis in the original.)  The case is Jen Elec., Inc. v. County of Essex, No. A-23-08, --- A.2d ----, 2009 WL 529154 (N.J. March 4, 2009).  Thanks to Lexology for the pointer.  EMM

Distinguishing between an appeal and a collateral challenge?

Patty Salkin (Albany) in her Law of the Land blog discusses a recent state court case in "RI Supreme Court Allows Allegation of Irregularities in Adoption of Zoning Amendments to Proceed".  

Following the purchase of a 65 acre parcel of land in 2005, the Plaintiff sought to subdivide it and discovered that that in 1998 the Town had adopted new zoning ordinance ... [decreasing] the number of buildable lots within the Plaintiff's property. The Plaintiff alleged that when the town adopted these amendments, they failed to follow the required procedural requirement for adopting zoning ordinances pursuant to the town’s Home Rule Charter.  The Plaintiff also claimed that its predecessor-in-title had never received notice of the proposed amendments which was required pursuant to state law.

At issue is the appropriate method of challenging the action for purposes of determining whether or not the claim is timely approximately 8 years after the zoning amendments.  The Plaintiff ... [sought] a declaration that the amendment was void ab initio since it was adopted in contravention of both the Town Charter and the notice requirements set forth in state statute.  The Town moved to dismiss the complaint on the grounds that the claims were time-barred by a 30-day statute of limitations on the enactment of a zoning ordinance.

The Rhode Island Supreme Court concluded that the action was not an appeal of the town council’s actions, which would be subject to the 30-day limitation period.  Rather, the Court found that although there may have been other avenues of relief, the Plaintiff is not precluded from bringing an action under the Uniform Declaratory Judgment Act seeking a determination as to whether the town exceeded its authority in enacting the ordinance.

I'm not sure this would work in other jurisdictions, but it is a good reminder that there are often alternate routes to the same goal.  EMM