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F O R D H A M U N I V E R S I T Y S C H O O L O F L A W

FINAL EXAMINATION IN LEGISLATION & REGULATION (Sections 1 & 2) MAY 14, 2015

THIS EXAMINATION IS 7 PAGES STUDENT EXAMINATION # __________

THIS IS A 3 HOUR EXAMINATION

THIS IS AN OPEN BOOK EXAMINATION PROFESSOR SAIGER

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EXAMINATION CHECKLIST:

BE SURE your student examination number is on your exam.

MATERIALS ALLOWED AT YOUR DESK: Any written noninteractive materials (open book exam).

MATERIALS TO BE TURNED IN: Exam questions, exam books, scrap paper.

INSTRUCTIONS:

There are 3 questions on this examination. Answer all 3 questions. When a question has subparts, answer all subparts. Read the questions, and their associated instructions, carefully.

I suggest that you budget your time in accordance with the time allotments indicated at the beginning of each question. I will weight each question in proportion to those time allotments.

Should you find that in order to answer a question you need to know a fact or legal principle that has not been established in the reading, in class, or by the examination question, you should make clear what unknowns must be known, and why. Then discuss various alternatives in light of the range of plausible unknowns. Similarly, if your answer to any question depends on the judicial philosophy of a deciding court, discuss various alternatives in light of the range of judicial approaches that have any substantial traction in the courts of the United States as currently constituted. In general, if you identify competing rules or results, discuss which is preferable and why.

I have condensed and altered actual statutory language and real-life facts for the purposes of these examination questions. Therefore, you should not use any special outside knowledge you may have about particular statutes or policy areas when writing the examination. Rely upon materials we have studied and materials provided in the examination.

Students typing their examination: To the extent your examination software permits: Use a standard font and standard margins. Make sure your exam number (not your Fordham ID number or your Social Security number) is on the top of every page.

Students handwriting their examination: Start each question in a new bluebook. Write on only one side of each page. Do not write in the margin. Please write legibly. Number your bluebooks consecutively (e.g., “book 3 of 5”). Write your exam number (not your Fordham ID number or your Social Security number) on each bluebook.

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QUESTION 1 (40 minutes)

When Ms. Peggy Mastroianni of the Office of Legal Counsel at the Equal Opportunity Employment Commission (EEOC) spoke to the class at our second plenary session, she indicated that the EEOC lacks authority to issue notice-and-comment rules under Title VII of the Civil Rights Act. Title VII only gives the EEOC authority to adjudicate, “on or off the record,” whether employers have violated the statute. Ms. Mastroianni further indicated that, although the EEOC is not authorized to issue notice-and-comment rules under Title VII, it sometimes does so nevertheless, as a way of eliciting comment from the public and communicating with regulated employers.

Ms. Mastroianni noted that the EEOC does have authority to issue notice-and-comment rulemaking pursuant to other statutes for which it is the implementing agency. One such statute is the Americans with Disabilities Act Amendments Act (ADAAA).

Assume the following facts about the following three hypothetical actions taken by the EEOC:

Proceeding 1. On January 1, 2014, the EEOC publishes what it styles a “notice of proposed rulemaking” in the Federal Register. The notice announces that the agency proposes to interpret Title VII’s prohibition on employment discrimination “because of sex” to include discrimination against an individual because that individual is transgender. (The notice calls this practice “gender identity discrimination.”) The notice requests comment from the public no later than March 15, 2014.

On August 1, 2014, the EEOC publishes a document entitled “final rule” in the Federal Register. That document states, “Gender identity discrimination is discrimination ‘because of sex’ under Title VII.” The document states that this rule is an important one, and may have an impact of as much as $200 million annually on the American economy. The “final rule” document does not, however, respond to several comments that were timely submitted and that offer serious and sophisticated legal and policy arguments for the proposition that gender identity discrimination should not be considered discrimination “because of sex.” The “final rule” document does not even acknowledge those comments.

Proceeding 2. After the conclusion of proceeding 1, on January 1, 2015, the EEOC announces that it is fining the ABC Corporation $25,000 for firing a transgender employee. The firing, the EEOC says, constitutes discrimination “because of sex.” (Fines are authorized by Title VII.) The EEOC holds no formal hearing and informs the ABC Corporation of its decision by letter. The letter cites the “final rule” issued in proceeding 1. The letter does not respond to any of the comments submitted during proceeding 1 arguing that gender identity discrimination should not be considered discrimination “because of sex.” One such comment had been filed by the ABC Corporation.

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Proceeding 3. Contemporaneously with proceeding 1, on January 1, 2014, the EEOC publishes a second document in the Federal Register, which it styles “notice of proposed rulemaking.” This notice, unlike the notice in proceeding 1, cites the agency’s notice-and- comment authority under the ADAAA. It proposes that gender dysphoria1 be treated as a disability under the ADAAA. The notice requests comment from the public no later than March 15, 2014.

On January 1, 2015, the EEOC publishes a document entitled “final rule” in the Federal Register. This document states, “Gender dysphoria will be treated as a disability under the ADAAA.” The document includes language to that effect for incorporation into the Code of Federal Regulations. The document states that this rule is an important one, and may have an impact of as much as $200 million annually on the American economy. The document also includes a thorough analysis of all relevant comments received.

EEOC did not communicate with OIRA about any of these three proceedings at any point during their planning or pendency.

You are an associate in a Washington law firm that represents the ABC Corporation. Your supervisor asks you to prepare a memorandum assessing the likelihood that each of these three proceedings could be held unlawful and set aside for procedural deficiency on judicial review pursuant to APA § 706(2)(D).2 When your supervisor makes the assignment, she reminds you that she is asking you only to address procedural deficiencies in the EEOC’s work, not substantive ones. As she is leaving the room after giving you your assignment, your supervisor comments, “Talk about procedural deficiency — it’s flabbergasting that EEOC thought it could get away with not even submitting their NPRMs and final rules to OIRA!”

Write the requested memorandum.

1 “People who have gender dysphoria feel strongly that they are not the gender they physically appear to be.” Source: Webmd.com. 2 5 U.S.C. §706(D): “The reviewing court shall * * * hold unlawful and set aside agency action, findings, and conclusions found to be * * * without observance of procedure required by law.” (APA § 706 is reproduced at p. 1231 of your casebook.)

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QUESTION 2 (40 minutes)

Fordham is an American state. In 2003, the Fordham legislature enacted a statute designed to stem a recent wave of insurance fraud. As passed in 2003, the act entitled “An Act to Eliminate the Use of Fraudulently Obtained Personal Information in Commercial Transactions,” states that it is a crime

for a person or persons to (i) obtain personal identifying information of another person, whether that person is alive or deceased; and (ii) knowingly or intentionally use, or attempt to use, that information to obtain, or attempt to obtain, credit, goods, services, or any other thing of value. Fordham Code Ann. § 76-1102(2)(a).

According to the Fordham Senate’s final conference committee report on the bill on which that chamber voted, “this law would put an end to the growing practice of stealing personal identifying information like date-of-birth, mother’s maiden name, and social security number, opening medical insurance accounts with that information, and submitting false insurance claims.” The state and local district attorneys have since successfully used this provision to prosecute defendants in cases involving insurance, as well as credit card and bank loan applications.

In 2012, after an uptick in the number of health-insurance fraud cases, the legislature passed a bill that stated “Section § 76-1102(2)(a) is amended by replacing the phrase ‘or any other thing of value’ at the end of the paragraph with the phrase ‘any other thing of value, or medical information.’” The Fordham Governor signed this bill.

Oliver Odious moved to Fordham last fall. He started looking for employment as soon as he arrived. In response to employer requests, Odious fabricated a random nine-digit number and represented it as his Social Security number. Employers used this number to generate credit reports on Odious.

The number Odious made up was, by random chance, the Social Security number of Ira Innocent, a Fordham resident. When credit-reporting firms reported Odious’s request to Innocent, Innocent followed up and called the Fordham police. The police traced the requests to Odious and charged him with violating § 76-1102(2)(a).

At trial, Odious plans to claim that his behavior is not covered by the Fordham statute. Identify the arguments that Odious should make in support of this argument, and the best responses to those arguments that the State could raise. Then, on the basis of these arguments, explain how a decisionmaker should rule in the case.

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QUESTION 3 (100 minutes)

Federal law currently provides for a national minimum wage of $7.25 per hour. The law does not provide for increases over time. Today, this wage is earned by about 3.6 million American workers, or about 4.7 percent of all hourly paid workers.

States are allowed to set minimum wages higher than the federal maximum. Twenty-three states, including New York State, and the District of Columbia do so. The 3.6 million figure quoted above does not include any workers in any jurisdiction whose minimum wage exceeds the federal standard. In New York State, roughly 300,000 people, about 3 percent of the state’s full-time working population, earn the state minimum wage.

Recently, wages in the fast food industry have garnered political attention. Of the 200,000 fast food workers in New York State, 73 percent are women, 70 percent are over the age of 20, 25 percent are raising a child, and two-thirds are the primary wage earners in their family.

The New York State Labor Code contains the following provisions:

§ 652. Minimum wage. (1) Every employer shall pay to each of its employees for each hour worked a wage of not less than: * * * $7.25 on and after January 1, 2007, $8.00 on and after December 31, 2013, $8.75 on and after December 31, 2014, $9.00 on and after December 31, 2015, or, if greater, such other wage as may be established * * * in accordance with the provisions of this article. * * *

§ 653. Investigation of adequacy of wages.

(1) The [state] commissioner [of labor] shall have power on his own motion to cause an investigation to be made of the wages being paid to persons employed in any occupation or occupations to ascertain whether the minimum wages established in accordance with the provisions of this article are sufficient to provide adequate maintenance and to protect the health of the persons employed in such occupation or occupations. * * * If, on the basis of information in his possession with or without such an investigation, the commissioner is of the opinion that any substantial number of persons employed in any occupation or occupations are receiving wages insufficient to provide adequate maintenance and to protect their health, he shall appoint a wage board to inquire into and report and recommend adequate minimum wages and regulations for employees in such occupation or occupations.

(2) The commissioner shall, within six months after enactment of any change in the statutory minimum wage set forth in subdivision one of section six hundred fifty-two of this article, appoint a wage board to inquire and report and recommend any changes to wage orders governing wages payable to food service workers. * * *

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§ 655. Wage board; procedure; report. * * * Within forty-five days of the appointment of the wage board to inquire into wages in any occupation or occupations, the board shall * * * submit to the commissioner a report, including its recommendations as to minimum wages and regulations for the employees in such occupation or occupations. * * * The minimum wage recommended by the wage board shall not be in excess of an amount sufficient to provide adequate maintenance and to protect the health of the employees.

§ 656. Action by commissioner upon wage board report. When the wage board submits its report and recommendations to the commissioner, * * * the commissioner shall publish a notice of such filing in at least ten newspapers of general circulation in the state. Any objections to the report and recommendations shall be filed with the commissioner within fifteen days after such publication. * * * [T]he commissioner shall by order accept or reject the board’s report and recommendations within forty-five days after filing with the * * * department. The commissioner may by such order modify the regulations recommended by the board. Such order of the commissioner shall become effective thirty days after publication * * * of such order.

On May 6, 2015, New York State Governor Andrew Cuomo published an editorial on the op-ed page of The New York Times. He wrote:

INCOME inequality is a national problem that leaders at all levels of government are grappling with. * * * Some argue that we can close the income gap by pulling down the top. I believe we should do it by lifting up the bottom. We can begin by raising labor standards, starting with the minimum wage.

* * * New York State’s minimum wage * * * is now $8.75, up from $7.25 (and will rise to $9 at the end of the year). In my latest budget, I proposed raising it again, to $11.50 in New York City and $10.50 elsewhere in the state. But the Legislature rejected that proposal. So I am continuing the fight. While lawmakers delay, I am taking action.

State law empowers the labor commissioner to investigate whether wages paid in a specific industry or job classification are sufficient to provide for the life and health of those workers — and, if not, to impanel a Wage Board to recommend what adequate wages should be.

On Thursday, I am directing the commissioner to impanel such a board, to examine the minimum wage in the fast-food industry. The board will return in about three months with its recommendations, which do not require legislative approval. * * * Through the Wage Board, New York can set fast-food workers on a path out of poverty, ease the burden on taxpayers and create a new national standard.

Meanwhile, Hillary Rodham Clinton, former Senator from New York, is running for President in the Democratic primaries. She is contacted by the Progressive Workers’ Alliance, a nationwide advocacy and lobbying group with 250,000 members. The Alliance advocates the adoption of a federal statute modeled upon the New York Labor Code. The statute backed by the Alliance has the same language as the statute above, except that references to the New York Commissioner of Labor are altered to

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refer to the United States Secretary of Labor, and the words “at least ten newspapers of general circulation in the state” in § 656 are changed to “the Federal Register.”

The Alliance asks Candidate Clinton to promise that, if elected, she will advocate for the passage of its proposed statute, and to promise that she will sign that statute if Congress passes it. The Alliance also asks Clinton to promise that should the statute be enacted, she will direct her Secretary of Labor to use the powers granted thereunder to institute a minimum wage for fast food workers nationwide of $11.50 per hour, irrespective of Congressional approval. The Alliance communicates to the campaign that if Clinton makes these three promises (to advocate for the statute, to sign it if Congress passes it, and to use it if enacted to benefit fast food workers), the Alliance will throw its political, logistical, and financial support behind Clinton’s candidacy.

*

Imagine that Governor Cuomo directs his Commissioner of Labor to appoint a wage board for fast food workers. The commissioner does so. Upon the board’s report, Cuomo directs the commissioner to order a minimum wage for fast food workers of $11.50 in New York City and $10.50 in the rest of the state. The commissioner does so. No legislative approval is sought or granted.

Imagine as well that Candidate Clinton makes all three promises the Alliance requests. She is subsequently elected to the Presidency. Upon taking office, she supports the Alliance’s draft bill when it is introduced in Congress. The bill passes. She signs it. A federal wage board convened under the statute by the new Secretary of Labor recommends that fast food workers nationwide be paid $10.00 per hour. The board’s report states that this wage is “sufficient to provide adequate maintenance and to protect the health of fast food workers.” President H.R. Clinton then directs the Secretary to order, pursuant to the new statute’s provisions, a minimum wage of $11.50 for fast-food workers nationwide. The Secretary does so. No Congressional approval is sought or granted.

Answer the following questions, being sure to explain your reasoning:

(a) Will the order of the New York State commissioner survive judicial review in the courts of New York State?

(b) Have H.R. Clinton and her Secretary of Labor acted lawfully? Will the Secretary’s order survive judicial review in the federal courts?

E N D O F E X A M I N A T I O N

It has been a pleasure and a privilege to teach you this year. Have a great summer!