Professor Bruff Administrative Law Fall 2012 University of Colorado Law School Question 1. (30 minutes).

. The Fair Labor Standards Act (FLSA) imposes minimum wage and maximum hours requirements on employers, 29 U.S.C. 206207. Congress enacted the FLSA in 1938, as the nation struggled to emerge from the Great Depression. The FLSAs purposes section emphasizes the goal of protecting all covered workers from substandard wages and oppressive working hours. Among other requirements, the FLSA obligates employers to compensate employees for hours in excess of 40 per week at a rate of 1 times the employees' regular wages. The overtime compensation requirement, however, does not apply to workers employed ... in the capacity of outside salesman, 213. The statutes definitions in 202 say that outside salesman means any employee ... whose primary duty is ... making sales and who is customarily and regularly engaged away from the employer's place or places of business in performing such primary duty. The prescription drug industry is subject to extensive federal regulation, including the familiar requirement that prescription drugs be dispensed only upon a physician's prescription. In light of this requirement, pharmaceutical companies have long focused their direct marketing efforts not on the retail pharmacies that dispense prescription drugs, but rather on the doctors who possess the authority to prescribe the drugs in the first place. Pharmaceutical companies promote their prescription drugs to doctors through a process called detailing, whereby employees known as detailers provide information to physicians about the company's products in hopes of persuading them to write prescriptions for the products in appropriate cases. The normal duties of a detailer focus on calling on doctors in an assigned sales territory to discuss the features, benefits, and risks of an assigned portfolio of the companys prescription drugs. The primary objective is to obtain a nonbinding commitment from the physician to prescribe those drugs in appropriate cases. A typical detailer spends about 40 hours each week in the field calling on physicians. These visits occur during normal business hours, from about 8:30 a.m. to 5 p.m. Outside of normal business hours, a detailer might spend an additional 10 to 20 1

hours each week attending events, reviewing product information, returning phone calls, responding to e-mails, and suchlike. They are never required to punch a clock or report their hours, and they are subject to only minimal supervision. Recently, the average annual gross pay for a detailer was just over $72,000, including both a base salary and incentive pay. The amount of incentive pay is based on the sales volume or market share of the assigned drugs in the assigned sales territories exceeds 30% of gross pay. The federal Department of Labor (DOL) administers the FLSA. The Secretary has decided that detailers should no longer be regarded as outside salesmen under the Act, and should therefore be entitled to overtime pay. She has sent a memorandum to DOLs field agents providing guidance on the meaning of the statutory terms. The memo says: a sale for the purposes of the outside sales exemption requires a consummated transaction directly involving the employee for whom the exemption is sought. This means that an employee does not make a sale for purposes of the outside salesman exemption unless he or she actually transfers title to the property at issue. If a pharmaceutical company brings an appropriate lawsuit to force DOL to rescind this interpretation until it engages in valid notice and comment rulemaking, would you expect the company to prevail or not, and why? If DOL survives this procedural challenge, what effect would its interpretation have? , and this amount is uncapped. On average, incentive pay

Question 2 (50 minutes) Here are the facts in a recent federal lawsuit: The plaintiffs in this action, brought pursuant to 42 U.S.C. 1983, are the New York Taxi Workers Alliance and four New York City taxi drivers whose licenses to drive yellow cabs were automatically suspended when they were arrested on criminal charges. It is the policy of the City and its Taxi and Limousine Commission (TLC) immediately to suspend a taxi driver's license without a hearing if the charged offense is a felony or one of an enumerated list of misdemeanors, and to do so regardless of whether the offense occurred while the driver was on duty, in his cab, or somewhere else entirely. Once suspended, a driver is entitled to a post2

deprivation hearing, but in practice taxi licenses are never reinstated unless and until the driver secures favorable termination of the charges against him . The plaintiffs argue that

drivers are entitled to hearings before their licenses are suspended, and, in the alternative, that the post-suspension hearings currently afforded are inadequate. The TLC is established by the New York City Charter to regulate taxicabs in New York City. The TLC may issue, revoke, and suspend drivers' taxi licenses. The Citys Administrative Code provides that the TLC may for good cause shown relating to a direct and substantial threat to the public health or safety and prior to giving notice and an opportunity for a hearing, suspend a taxicab license issued pursuant to this chapter and, after notice and an opportunity for a hearing, suspend or revoke such license. The Code adds that at the post-deprivation hearing, the issue shall be whether the charges underlying the licensee's arrest, if true, demonstrate that the licensee's continued licensure during the pendency of the criminal charges would pose a threat to the health or safety of the public. Once a driver's taxi license is summarily suspended, the TLC must notify the driver of the suspension within five calendar days, and the licensee may request a hearing before an administrative law judge (ALJ). The TLC must provide this postdeprivation hearing to the driver within 10 calendar days of receiving the request. The ALJ issues a written recommendation that the TLC may accept, modify or reject, and the TLCs decision represents the final determination with respect to the suspension. When a driver is arrested, the New York City Police Department (NYPD) notifies the TLC of the driver's identifying information, the date and location of the arrest, the arrest charges, and the section of the penal code under which the licensee was arrested. The police do not, however, provide the TLC with any of the factual bases or allegations underlying the arrest. The TLC maintains a list of offenses, including all felonies and numerous misdemeanors, for which it will summarily suspend a driver upon arrest. This list includes some misdemeanors that involve violence, such as third-degree assault, but many others that do not, such as false advertising, giving unlawful gratuities, and unlawful assembly. The TLC states that offenses are added to the list if, presuming the truth of the charges, continued licensure during the pendency of the criminal charges woul
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d pose a risk to public health or safety. When the TLC

receives an arrest notification from NYPD, a TLC lawyer decides whether to suspend the driver based solely on whether the offense is included on the aforementioned list. The lawyer does not 3

consider the underlying factual allegations, nor the licensee's driving record or prior criminal record. At the post-suspension hearing, the ALJ considers the materials considered by the TLC lawyer. According to an affidavit supplied by the Commissioner for Adjudications for the TLC, the likelihood of a licensee's innocence or guilt as to the subject charges is not at issue, and [t]he hearing provides a licensee with the opportunity to, inter alia, deny that s/he was arrested; deny that s/he was charged with the particular offense(s) in the notice of summary suspension; or to argue or establish that the pending charge(s), even if true, does not demonstrate that the licensee's continued licensure would pose a threat to public health or safety. It is undisputed that the ALJs nearly always recommend continuing the suspensions during the pendency of criminal proceedings and that the TLC usually accepts the ALJ's recommendation. A TLC lawyer testified at his deposition that the percentage of suspended drivers who are ultimately convicted is very low, and certainly not more than one quarte r.

The plaintiffs also adduced evidence that tends to show that ALJs lack adequate decisional independence. On three occasions within a short span of time in 2010, ALJ Eric Gottlieb recommended that three drivers' licenses be reinstated because, in each case, he found an overwhelming likelihood that the drivers' cases would end in a non-criminal disposition. ALJ Gottlieb's action prompted the following response in an e-mail from the chief ALJ a few weeks later: Eric, [Name redacted] was arrested and issued a citation for leaving the scene of an accident that involved his taxi. Your recommendation that the suspension be lifted because you speculate that he will receive a non-criminal disposition was improper. Re-read the ALJ manual regarding summary suspension proceedings and the standard we are required to use. In the future if you believe a summary suspension should be lifted please call me and discuss the matter with me before mailing it out. Please call me; I want to discuss this matter with you. Thanks, Tom ALJ Gottlieb wrote the following e-mail in response:

Tom

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, I just wanted to apologize once again for the mishap regarding the

Summary Suspension cases. I value greatly the trust you have shown me in the past and I want to assure you that this will not happen again. I accept full responsibility for not handling this properly. If there is anything I can do to mitigate the fallout for you, please let me know. Thanks, Eric ALJ Gottlieb testified at his deposition that he was worried that his improper recommendations would lead to his duties being modified or his transfer from Manhattan back to the TLC's Long Island City office, which he called a very depressing environment. Each of the four named plaintiffs is a taxi driver whose license was suspended in 2005 or 2006 after an arrest. Two were charged with third-degree assault with intent to cause physical injury, one with first-degree criminal contempt and second-degree criminal trespass, and one with second-degree menacing with a weapon. Each of the four was summarily suspended upon arrest, and each received a hearing in front of an ALJ. The outcome was in each case the same the ALJ recommended the continued suspension of the driver's license pending resolution of criminal proceedings, and TLC accepted the recommendation. All four drivers eventually secured the reinstatement of their licenses when the relevant district attorneys' offices dropped the charges or the charges were otherwise dismissed. The total period of suspension for each driver proved to be approximately three to four months. TLC defends its practices by arguing that requiring the TLC to prove that each driver engaged in the charged conduct would unacceptably interfere with the parallel criminal proceeding and by expressing doubt that it could compel prosecutorial cooperation in such a hearing. TLC also objected that a mini-trial on the charged conduct would impose too great a burden on the City's resources. A former general counsel for the TLC testified that he has never heard of an instance of an ALJ making a recommendation to end a suspension. Several attorneys whose practices include representing taxi drivers corroborate this, and one states that he now declines to represent drivers at summary suspension hearings because he feels it is improper to accept money for a proceeding wher e the result is not in doubt. TLC has not

pointed to any evidence showing how a driver could prevail at a suspension hearing after an

arrest for one of the offenses listed on the summary suspension chart. Thus it is unclear that the TLC binds itself to the standard it says is in place. Assume you are a clerk to the District Judge who must decide this case, and that no threshold issues bar a decision on the merits. Write a draft opinion for the Judge deciding the case.

Question 3 (90 minutes) If you have been following the news, presumably you pity the polar bear. The Federal Government shares your concern, as demonstrated by a pending litigation titled In re Polar Bear. Here is the factual background. In May 2011, the U.S. Interior Departments Fish and Wildlife Service (FWS) issued its final rule listing the polar bear (ursus maritimus) as a threatened species under the Endangered Species Act of 1973 (ESA). The Service concluded that the polar bear is likely to become endangered within the foreseeable future because of anticipated impacts to its sea ice habitat from increasing Arctic temperatures, which have been attributed to global greenhouse gas emissions and related atmospheric changes . Numerous plaintiffs have challenged

the rule under the ESA and the Administrative Procedure Act, claiming that the Service's decision to list the polar bear as a threatened species was unlawful. Some plaintiffs claim that the bear is not threatened and should not have been listed, because climate science is too uncertain to support any reliable predictions about the future of polar bears. Others claim that it is actually endangered and should have been given that designation, because climate science shows that the polar bear is already irretrievably headed toward extinction throughout its range. Pending before the court are the parties' cross-motions for summary judgment. The question of whether, when, and how to list the polar bear under the ESA is a uniquely challenging one. The three-year effort by FWS to resolve this question required agency decision-makers and experts not only to evaluate a body of science that is both exceedingly complex and rapidl
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y developing, but also to apply that science in a way that

enabled them to make reasonable predictions about potential impacts over the next century to a 6

species that spans international boundaries. In this process, the Service considered over 160,000 pages of documents and approximately 670,000 comment submissions from state and federal agencies, foreign governments, Alaska Native Tribes, federal commissions, local governments, commercial and trade organizations, conservation organizations, nongovernmental organizations, and private citizens. In addition to relying on its own experts, the agency also consulted a number of experts in a variety of fields, including climate scientists and polar bear biologists. Congress enacted the ESA to provide a means whereby the ecosystems upon which endangered species and threatened species depend may be conserved, [and] to provide a program for the conservation of such endangered species and threatened species. 16 U.S.C. 1531(b). The ESA requires the Interior Department to publish and maintain a list of all species that have been designated as threatened or endangered. Id. 1533(c). Species are added to and removed from this list after notice and an opportunity for public comment. An endangered species is any species which is in danger of extinction throughout all or a significant portion of its range. 1532(6). A threatened species is any species which is likely to become an endangered species within the foreseeable future throughout all or a significant portion of its range. The Act does not define the foreseeable future; the final rule issued by FWS adopted a 45-year period as the best horizon that the current state of the science will support. The Act forbids any taking (killing) of endangered species, which would end all hunting of the bears by U.S. citizens. For a threatened species, however, the Act does not forbid all takings. Instead, it commands federal agencies to engage in active monitoring and conservation efforts of various kinds. In 2008, the Center for Biological Diversity (CBD) submitted a petition to the Secretary of the Interior to list the polar bear as an endangered species under the ESA due to observed and anticipated declines in the Arctic sea ice upon which the polar bear relies for survival. Polar bears depend upon sea ice for critical functions such as hunting ice-dependent seals (their primary source of food), migrating between feeding areas and land-based maternity dens, and traveling long distances in search of mates or food. Over most of their range, polar bears remain on the ice year-round. FWS responded by proposing to list the bears as a threatened not endangered species. During the rulemaking, CBD and others continued to press unsuccessfully for endangered status.

When FWS ultimately issued a final rule listing the polar bear as a threatened species, there were estimated to be approximately 20,000 to 25,000 polar bears worldwide. The FWS found that sea ice conditions across the Arctic had changed over the past several decades. The agency cited data indicating that the ice melt season in the Arctic lengthened by approximately two weeks per decade between 1979 and 2005. FWS further noted that scientists had observed significant recent declines in winter sea ice extent, cumulative annual sea ice extent, and overall sea ice age and thickness. Relying on complex climate models and related data from the International Panel on Climate Change (IPCC)which FWS considered to be the leading international body in climate change scienceFWS attributed these changes in sea ice to increased Arctic temperatures caused by greenhouse gas emissions and related changes in atmospheric and oceanic circulation. As FWS described, due to a reported lag time in response between when greenhouse gases are emitted into the atmosphere and when the impacts of those emissions are felt on the ground, the IPCC concluded that the global climate system is committed to
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a continued warming trend through the end of the 21st century. FWS looked

also to IPCC models of Arctic sea ice, which similarly projected declines in ice extent through the end of the 21st century. On the basis of these IPCC models and associated analysis, FWS concluded that it could confidently predict a significant decline in the polar bear's sea ice habitat over the next 40 to 50 years. FWS further concluded that the extent of anticipated declines in sea ice will significantly impact polar bear population health. As FWS described, sea ice losses have been tied to nutritional stress in polar bears because of lower overall numbers of ice-dependent prey, decreased access to the prey that remain, shorter hunting seasons and longer seasonal fasting periods, and higher energetic demands from traveling farther and swimming longer distances across open water to reach sea ice. FWS determined that this nutritional stress and other related factors will likely result in a decline in the physical condition of polar bears, leading to lower overall body weights and reduced cub survival rates. FWS further found that consistent declines in physical condition and reproductive success will ultimately lead to population-level declines. As the FWS neared completion of its rulemaking process, the Director received a telephone call from Senator Tom Coburn of Oklahoma, who is not impressed by the evidence for global warming. He objected strenuously to the completion of any rulemaking basing either 8

threatened or endangered designations of any animal on the junk science of global warming. The Director listened politely, disagreed that he was relying on any junk science, and placed a memorandum in the file summarizing the conversation with Coburn (although omitting some of his more colorful phrases). Hearing of Coburns attempt to intimidate the FWS, President Obama placed a telephone call to the Director and had a brief conversation with him. The Director noted the fact of this conversation in the record, but not its contents. Then he went back to work on the rule. Based on the administrative record, FWS eventually concluded that the polar bear was threatened throughout its range at the time of listing, within the meaning of the ESA. Specifically, FWS determined that all polar bear populations will be affected by substantial losses of sea ice within the foreseeable future (which it had defined as 45 years). FWS further found that polar bears are unlikely to adapt to these anticipated habitat changes. However, notwithstanding these findings, FWS concluded that the polar bear was not endangered in any portion of its range at the time of listing. The agency determined that at the time of listing the species was generally abundant throughout its range, the species continue
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d to

occupy the full extent of its historical range, and it had yet to experience precipitous population declines in any portion of its range. According to FWS, the record demonstrated that the polar bear was not in danger of extinction at the time it made its listing decision, although the agency reiterated that the species would likely become an endangered species by mid-century. The publication of the rule triggered this legal challenge. The State of Alaska and an association of its professional hunters claim that the bear is not even threatened, and that its listing as threatened will inevitably lead to a listing as endangered, causing a ban on all hunting in the State. Moreover, the State and the hunters object that the federal monitoring and conservation activities that attend threatened status would invade the States prerogatives to tend its own wildlife and the hunters free access to the bears. The CBD and other environmental groups contend that immediate listing of the bear as endangered is mandatory under the Act. Otherwise, hunting will continue and the efforts of CBD and the other groups to study and observe the bears in their wild habitat will suffer interference and ultimately extinction along with the bears.

The Judge wants a memorandum from you as her law clerk, answering the two principal questions that will attend disposition of the summary judgment motions: a) Should the court reach the merits of the challenges to the listing rule? (45 minutes) b) If the court does decide the merits, should it uphold the rule? (45 minutes)

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