Administrative Law

Peter Shane

In July, 2012, the Obama administration invited states, which administer the Temporary Assistance for Needy Families (TANF) program, to apply for waivers from some federal requirements for that program.  The states would have to have alternative programs in place for increasing employment among the poor.  In short order, the presidential campaign of Republican candidate Mitt Romney charged the President with gutting federal law.  Campaign commercials alleged that Obama was illegally ending the work requirements that had been a centerpiece of federal welfare reform in the 1990s.

Although the commercials had little political impact, they did bring to public attention a little-noticed feature of a surprising number of federal statutes – a feature that Professors David Barron and Todd D. Rakoff call “big waiver.”  In their superb paper, “In Defense of Big Waiver,” they analyze a fascinating phenomenon.  Congress sometimes will enact “a fully reticulated, legislatively defined regulatory framework” that contains within it a delegation of “broad, discretionary power to determine whether the rule or rules that Congress has established should be dispensed with.”

The waiver authority that the Obama Administration implemented in connection with the Temporary Assistance to Needy Families (TANF) Program is but one illustration.  Other prominent examples appear in the No Child Left Behind Act, the Patient Protection and Affordable Care Act, and the National Defense Authorization Act for FY 2012.  Such statutes, the authors point out, “share a basic feature that has significant implications for both regulatory design and administrative law:  They confer broad policymaking discretion so that an agency may choose to displace a regulatory baseline that Congress itself has established.”

The Barron and Rakoff paper sets out to accomplish four ambitious goals.  The first – and of no small importance by itself – entails identifying “big waiver” as a form of legislative innovation that is distinguishable from both “little waiver” and ordinary nonenforcement discretion, and documenting its widespread appearance.  “Little waiver” is statutory authority to waive otherwise applicable legal requirements in extraordinary individual cases. “Big waiver” allows an agency to substantially supplant otherwise applicable legal requirements with an alternative regulatory regime it believes better serves Congress’s purposes.  Nonenforcement decisions, which do not actually absolve anyone of legal liability, are usually “discrete, informal and wholly revisable” exercises of an agency’s implicit general administrative discretion. “Big waiver,” where it exists, rests on explicit statutory authority that permits agencies to change the legal rights and responsibilities of regulated parties.

The second is to set forth a somewhat speculative argument as to the conditions of the modern administrative state that have given rise to “big waiver.”  The third is to demonstrate its lawfulness as a constitutional matter, and to set forth the conditions under which the exercise of “big waiver” ought to be deemed lawful under applicable administrative law doctrines.  The fourth is to provide a normative defense of “big waiver” as a legislative innovation.

So much of the authors’ discussion is interesting and provocative that I will comment here only on a few highlights.  One is the authors’ persuasive argument that courts ought to be as deferential to Congress’s judgments in conferring “big waiver” authority as they are in assessing the permissibility of broadly worded conventional delegations.  Indeed, Barron and Rakoff point out, “big waivers” might be thought less vulnerable to the kinds of pathologies sometimes attributed to more conventional delegations.  That conclusion may seem surprising if one thinks of waiver authority as permission to simply ignore an enacted statute.  In reality, however, Congress’s delineation within the authorizing statute of a detailed regulatory regime – the regime that an agency is then allowed to waive – actually gives courts a much more concrete sense of congressional purpose.  Congress’s regulatory specifics provide the court a far stronger baseline against which to measure whether an agency has acted in a non-arbitrary, legally permissible way in interpreting both the scope of its waiver authority and the conditions regulated parties must satisfy in order to obtain waiver.  Judicial review thus promises to be a stronger tool of regulatory accountability as a result of “big waiver” than in the more conventional delegation case.

Another interesting point is the authors’ astute handling of Clinton v. City of New York, 524 U.S. 417 (1998), in which the Supreme Court invalidated the Line-Item Veto Act, and which thus might be thought to cast doubt on the constitutionality of “big waiver.”  Giving the President a line-item veto is precisely to give him a kind of waiver authority, and the Court rejected the line-item veto as too creative a reworking of the constitutionally prescribed legislative process.  Barron and Rakoff respond, however, with a convincing distinction.  “Big waiver” authority must be exercised pursuant to statutory conditions and in a way that agencies may well have to justify in court based on reasoned elaboration and a factual record.  In contrast, line-item veto authority was not exercised as a result of changing conditions or based upon discretion-limiting statutory criteria.  The President could not plausibly have learned anything in the five days allowed for a line-item veto that would justify changing the law Congress enacted based on circumstances of which Congress was unaware.  In that sense, the President’s “waiver” of an expenditure item really was a veto, not a friendly amendment in the name of accomplishing Congress’s objectives more effectively.  “Big waivers” should not be thought of as vetoing Congress’s handiwork in the same way.

Of great interest also is the authors’ normative case for “big waiver.”  In essence, they argue that, under conditions of divided government, “the delegation of an administrative veto affords Congress regulatory flexibility that enables it to codify fundamental policy choices that it otherwise might be unwilling (or unable) to specify, thereby making legislative policymaking viable—precisely because it can be monitored and altered through the administrative process.”  “Big waiver” also provides a tool through which Congress can express fairly specific regulatory imperatives while reducing the risk of statutory inflexibility that can render regulatory programs dysfunctional in fairly short order.

The authors recognize, of course, that “big waiver” authority may be drafted well or badly.  The Real ID Act, which authorized the Secretary of Homeland Security to waive the requirements of all other federal statutes in order to get a border fence built, is a glaring example of the latter.  (I like to ask my administrative law students if the Secretary could legally have built the fence with undocumented immigrant labor.)  On the whole, however, Barron and Rakoff are convincing that Congress should be allowed this newly prominent tool of regulatory authorization.  Theirs is a paper likely to fuel much discussion and further scholarship in the years ahead.

Linda Jellum

When I returned from the 2013 AALS Annual Meeting, I discovered Professor Kevin M. Stack’s latest article, Interpreting Regulations, 111 Mich. L. Rev. 355 (2012), waiting patiently for me. As someone who teaches both Administrative Law and Statutory Interpretation/Legislation, I picked it up with interest; although, given all that has been written about statutory interpretation, I must confess that I really couldn’t imagine that there would be anything new to say about interpreting regulations. Yet, I remembered that each year, around the time my students realize that they will certainly be tested with a Chevron-like hypothetical on their final exam, I’m asked how to approach the analysis. After they’ve determined that Chevron applies (Chevron step zero), that Congress did not have an intent as to the precise issue before the court (Chevron step one), and that the agency’s interpretation of the statute is reasonable (Chevron step two), I have always told them that the final step is simply to apply the regulation to the fact pattern using the traditional tools of statutory interpretation. Was my direction wrong? I wondered.

Lest I hold you in suspense, let me explain Professor Stack’s thesis immediately. He believes that courts should use regulatory purposivism to interpret regulations. He defines regulatory purposivism in this way: a court should ask whether an interpretation of a regulation is (1) permitted by the regulation’s text, and (2) consistent with the purposes as stated in the regulation’s statement of basis and purpose (and/or text). If a court answers yes to both questions, then the interpretation is “reasonable,” “permissible,” “plainly” right, at essence, controlling. (If I may digress, I wondered, was he advocating a new two-step deference approach? God forbid!) He suggests that courts should not give meaning to a regulation that the text will not bear, but he adds that neither should courts give a regulation a meaning that the written statement of basis and purpose will not bear. In essence then, he advocates for a text-based approach to purposivism!

To support his approach, Professor Stack initially examines several well-known doctrines that require regulatory interpretation: Chevron, Auer, and Accardi. He concludes that, at least when using these doctrines, courts do not approach regulatory interpretation consistently: sometimes courts use a textualist approach; sometimes they use a purposivist approach; sometimes they turn to the statement of basis and purpose, and sometimes they do not; sometimes they use linguistic canons, and sometimes they do not. One might say that “[t]he hard truth of the matter is that American courts have no intelligible, generally accepted, and consistently applied theory of [regulatory interpretation].”¹

To support regulatory purposivism, Professor Stack argues that text alone does not sufficiently constrain the interpreter (whether it be the agency or a court), and that text alone fails to provide adequate notice to those regulated. Notably, these are arguments that might apply equally well to statutory interpretation. In any event, Professor Stack notes that regulations are different from statutes in three important ways that support his proffered approach. First, unlike statutes, regulations always contain statements of basis and purpose because APA section 553(c) so requires. The U.S. Constitution has no similar requirement. Second, agencies are required to act rationally under hard look review. Congress can act irrationally should it choose, in part, because hard look review is more demanding than rationality review. Third, agencies cannot explain their actions post-hoc, pursuant to the Chenery doctrine. Congress has no such timing limitation. These three distinctions are relevant to the role of purpose statements in interpretation: The two “form an intertwined couplet: the text without the statement is invalid, and the text is valid only so far as it is justified by the statement.”²

Professor Stack likens regulatory purposivism to Hart and Sacks’s style of purposivism. He explains that his approach reaps all the benefits of this latter approach, while avoiding the criticisms. The most notable criticism is directed at Hart and Sacks’s suggestion that judges should presume that legislatures are comprised of “reasonable persons pursuing reasonable purposes reasonable.”³ Many have noted that legislatures do not always act reasonably. Further, many reject the imbedded idea that judges should independently determine the reason, or purpose, for legislation. But Professor Stack rejects these criticisms, explaining that they are not the defining element of Hart and Sacks’s purposivism. He reminds his reader that Hart and Sacks first direct interpreters to consider any “formally enacted statement of purpose.”⁴ Only when a court determines that such a statement is not useful or is unavailable should a court infer purpose. This step is the one that sends textualists screaming. But as Professor Stack notes, this inferring is to be done with the text and the specific provisions within it in mind. In other words, even purposivists want to understand the meaning of a statute within its whole statutory context, in light of the legal system as a whole. Finally, Professor Stack notes that Hart and Sacks’s criticized direction applies only when statutes do not include a formally enacted statement of purpose. Regulations always include such statements.

At bottom, Professor Stack’s article offers a new, but familiar, method for interpreting regulations; one that purposivists will certainly embrace, but one that textualists will likely rebuff.

1. Id. at 366 (quoting Henry M. Hart & Albert M. Sacks, The Legal Process 1169 (William N. Eskridge, Jr. & Philip P. Frickey eds., 1994). [↩]
2. Id. at 380. [↩]
3. Id. at 362 (quoting Hart &   Sacks, supra at 1378). [↩]
4. Id. at 385 (quoting Hart &   Sacks, supra at 1377). [↩]

Mark Seidenfeld

Perhaps the hottest topic in administrative law of late is the propriety of presidential influence on agency action.  To its credit, that literature distinguishes between the agencies and the White House as two distinct institutions that may not agree on particular regulatory outcomes.  But, the literature does not go much beyond this simple distinction in its picture of the executive branch, treating both White House and agencies as black boxes, each of which acts with a consistent purpose. At the same time, scholarship has focused on agencies as strategic actors vis-à-vis the judiciary, choosing methods of policymaking to minimize the potential for courts to interfere with that endeavor.  In “Self-Insulation under Presidential Review,” Jennifer Nou investigates the extent to which agencies might act strategically amidst resource constraints as a means of minimizing White House influence on their policymaking discretion.  In so doing, Nou considers the internal structure and decisionmaking processes of both agencies and the “institutional presidency” to paint a sophisticated picture of their interaction.  The result is an article that provides insight into the decisionmaking of both these institutions, and provokes much thought about how their interaction might affect administrative law.

Nou explicitly limits her investigation of White House influence to its formal review of agency rules, as mandated by various executive orders, which she dubs “presidential review.”  She makes clear that while the Office of Information and Regulatory Affairs (OIRA) coordinates such review, it can involve many entities, including those within the Executive Office of the President (EOP) and other agencies.  She begins by explaining why agency staff and in many cases agency heads can disagree with the preferences of the institutional President on many regulatory policy issues.  She next explains that, from an agency’s perspective, presidential review poses constraints similar to judicial review in that, generally, both require the agency to invest precious resources to avoid reversal of its decision.  But, she notes that presidential review is also costly for the executive branch reviewers; this cost allows agencies some strategic latitude to minimize its chances of policy reversal by increasing the White House’s costs of review, rather than by investing in more comprehensive and higher quality decision-making.  For example, agencies can avoid review altogether by simply abandoning a policy change, by making policy through adjudication and perhaps even by guidance document.¹ They may be able to avoid review or minimize the level of scrutiny to which a rule is exposed by designating the rule as not economically significant or not significant at all, or by providing only opaque and general information about costs and benefits.  Finally, they may be able to parlay statutory deadlines or the end of a President’s term effectively to shorten the period for OIRA review, thereby decreasing the level of scrutiny.

Nou’s article becomes even more informative when she considers how agencies can use the structure and timing of White House oversight to help run the gauntlet of presidential review.  She provides perhaps one of the clearest and most detailed descriptions in the legal literature of how OIRA forwards rules to other agencies and offices in the Executive Office of the President (EOP), and the dynamics of resulting consideration as part of presidential review.  This description is not only valuable as support for her assertion that agencies can form coalitions with various entities within the Office of Management and Budget, EOP, and other agencies, but perhaps even more for those who write about the ability of the President to control White House influence on rulemaking and the extent to which the influence represents the President’s own policy preferences.  Nou uses this description to evaluate the extent to which such agency choices as midnight rulemaking and poor quality CBAs might reflect agency self-insulation from presidential review.

Despite Nou’s interest in focusing administrative law scholarship on constraints other than judicial review, for those like me who focus their writing on this traditional administrative law constraint, the most interesting part of Nou’s paper may well be her discussion of the implications of agency self-insulation for judicial review.   If one believes that courts should calibrate their level of scrutiny under hard look review to correspond with presidential influence, this paper identifies some interesting complexities in how courts might do so.   For example, Nou notes that agency attempts at self-insulation may reflect efforts to prevent the President from dictating policy outcomes that cannot be justified under statutorily relevant criteria.  I would add that it might also reflect agency reaction to the White House attempting to use the agency rulemaking as a means of obfuscating impacts that might generate a negative public reaction to a “raw” political choice by the President.  Contrary to the recent recommendation by Kathryn Watts,² Nou’s recognition that self-insulation might signal inappropriate presidential influence suggests that courts should actually increase their level of scrutiny in the face of failed attempts by the agency to insulate a rule from significant White House influence.

All in all, “Agency Self-Insulation under Presidential Review” is a well-executed piece of scholarship that provides a bounty of information as well as both insightful and inciteful ideas about presidential influence on agency policymaking and agency reactions to such influence.

1. Although current executive orders do not explicitly mention review of guidance documents, Nou cites a memo from OMB Director Peter Orszag indicating that “significant policy and guidance documents,” are subject to OIRA review. She notes, however, that review of such documents has been “much more limited and non-systematic in practice.” Jennifer Nou, Agency Self-Insulation under Presidential Review, ___ Harv. L. Rev. ___ (forthcoming 2013) (manuscript of 01-07-2013 at page 28). [↩]
2. Kathryn A. Watts, Proposing a Place for Politics in Arbitrary and Capricious Review, 119 Yale L.J. 2 (2009). [↩]

Michael E Herz

A happy account of judicial review of agency action holds that courts and agencies enjoy a “partnership.” Judge Leventhal provided a classic statement:

[A]gencies and courts together constitute a “partnership” in furtherance of the public interest, and are “collaborative instrumentalities of justice.” The court is in a real sense part of the total administrative process, and not a hostile stranger to the office of first instance.

Greater Boston Television Corp. v. FCC, 444 F.2d 841, 851-52 (D.C. Cir. 1970).

Judge Leventhal was writing just when the pre-Vermont Yankee D.C. Circuit was gathering steam, and agencies might be forgiven for wondering “with partners like that, who needs competitors?” Four decades later, the agency that likely most views the D.C. Circuit as a “hostile stranger” rather than a partner is the SEC, which has had a series of spectacular losses in which the court’s look has been hard indeed. The losses are sufficiently striking that articles have appeared in the popular press with titles like “The judicial jihad against the regulatory state” and “Circuit Court Needs to Let the S.E.C. Do its Job”.

The tone is more measured, but the general point the same, in an interesting new article by Bruce Kraus (former Co-Chief Counsel of the SEC’s Division of Risk, Strategy, and Financial Innovation) and Connor Raso. The authors provide an illuminating discussion of the “devastating” 2011 decision in Business Roundtable v. SEC, which held that the cost-benefit analysis underlying the SEC’s 2009 proxy access rule was so flawed as to be arbitrary and capricious, and also explore its consequences for the SEC and judicial review of cost-benefit analysis (CBA) generally.

Figuring prominently in the clash between the SEC and the D.C. Circuit is a 1996 statutory provision that requires the agency to consider the effect of any new rule upon “efficiency, competition, and capital formation.” The Commission has taken this as a prod to do a sort of “CBA lite”; the D.C. Circuit has read it to require something far more rigorous. The authors usefully describe the series of decisions finding that the agency had failed adequately to analyze impacts on “ECCF.” They then summarize the history of the proxy-access rule and critique the opinion in Business Roundtable. They concede that some of the errors identified by the court are indeed problematic, but on the central issue – whether the SEC had adequately shown that increasing the potential for election of directors nominated by shareholders would result in improved board performance and shareholder value – the authors convincingly argue that the court held the agency to a standard above what either the ECCF provision or traditional understandings of the arbitrary and capricious test require.

This sets the stage for a general discussion of what Kraus and Raso would like to see from both the agency and the court going forward. There’s lots of interesting stuff here; I’ll mention three issues in particular.

First, Kraus and Raso have their doubts about whether CBA can or should play the same central role in developing financial regulations that it does in developing health, safety, or environmental regulations. Here they take issue not just with CBA enthusiasts and the D.C. Circuit, but with Senator Shelby, sponsor of the proposed Financial Regulatory Responsibility Act. That bill, which can be seen as the codification of Business Roundtable, would mandate that any SEC rule-making could proceed only if a CBA — one that made twelve sweeping findings, after consideration of “all available alternatives” — demonstrated that the quantified benefits of the regulation exceed its quantified costs. Proposed rules with unquantifiable benefits would be recommendations, effective only if Congress waives the quantification requirements and directs the agency to publish the rule. The authors suggest that the bill’s analytic requirements would be impossible to meet. That assessment sounds right.

Second, the authors’ doubts are compounded by concerns about judicial review of agency CBA. Business Roundtable raises the question whether the art/science/voodoo of CBA is ready for judicial prime time. Kraus and Raso see SEC CBAs as especially vulnerable because of a pernicious synergy between (a) the challenge of quantifying regulatory impacts in the financial arena and (b) judges’ excessive confidence in their own expertise in financial economics. But the question whether and how searchingly judges should be reviewing CBAs goes back at least to Corrosion Proof Fittings (1991), which hobbled the Toxic Substances Control Act.

Finally, the authors stress that the independent commissions are “quasi-legislative.” They do not use this familiar label in the sense that the Supreme Court did in Humphrey’s Executor. Rather, their point is group decisionmakers necessarily compromise, logroll, and defer to their members’ pet projects. The result will sometimes be incoherence or internal contradiction; therefore, it is unrealistic for courts to insist on logical purity. The idea that courts should be more forgiving when reviewing multi-member bodies runs counter to another recent suggestion for adjusting the intensity of judicial review of independent agencies. Dissenting in FCC v. Fox Television Stations,Justice Breyer suggested that the relatively milder presidential control over independent agencies might justify more searching review of their decisions than of those from executive agencies. The majority rejected this trial balloon, but it has received some support from what might be seen as an unlikely quarter. Concurring in In re Aiken County (2011), Judge Brett Kavanaugh argued that concerns over “accountability, liberty, and government effectiveness” might be ameliorated through applying a more intensive arbitrary-and-capricious test to the independent commissions than is applied to executive branch agencies.

Kraus and Raso’s article is not the final word on any of this. As Congress considers not just Senator Shelby’s bill, but also proposals to require CBA in rulemakings generally and subject it to judicial review, see the Regulatory Accountability Act, or subject independent agencies to OIRA review, see the Independent Agency Regulatory Analysis Act, this is a helpful, thought-provoking, and timely contribution.

Richard Murphy

President Obama is a Nobel Peace Prize winner. He also orders missile strikes from drones against targeted individuals in Pakistan, Yemen, and Somalia. According to some vocal critics, such extra-judicial killing makes President Obama a murderer.

This conclusion rests in large part on the premise that the United States is not, properly speaking, in an armed conflict with al Qaeda, the Taliban, and associated forces. As such, the laws and norms of international human rights law (IHRL) and civil law enforcement should apply. Absent exigent circumstances, this legal regime expects judicial authorization of the use of lethal force.  President Obama is not a judge, so, when he authorizes a killing, he commits murder. The picture looks different if we concede that the laws of armed conflict (LOAC) apply to the drone strikes. This legal regime requires an attacker to take feasible precautions to ensure that a target is legitimate but does not require judicial authorization for attacks.

So, do President Obama’s decisions to authorize targeted killings make him a murderer or perhaps an especially careful military commander? As Professors Pildes and Issacharoff ably demonstrate in Targeted Warfare: Individuating Enemy Responsibility, this question rests on a false dichotomy and unhelpful abstraction.

Neither the IHRL nor the LOAC models provide quite the right tools, yet, for guiding the use of lethal force in the current conflict.  In al Qaeda, the United States confronts a criminal conspiracy that has committed devastating terrorist attacks and seems intent on committing more. Its members blend into civilian populations in remote areas subject to little or no state control. Reasonable people can conclude that the legal regime for civil law enforcement, broadly construed to include the criminal justice system, is not suited for dealing with the continuing threat posed by this organization.

But it is also the case that “there is a great deal about the laws of war that seems poorly addressed to the current circumstances.”¹ Broadly speaking, this legal regime authorizes the use of force based on an opponent’s status as a member of an enemy armed force.² The nature of the conflict with a terrorist group that eschews the laws of war, however, heightens focus on individualized facts concerning conduct. To determine whether a person is a proper target of a “personality strike,” the United States must gather specific information about that particular person’s actions.

Putting this point in the language of administrative law, both because of the nature of the enemy and the nature of the United States’ technological tools, decisions to use force against particular individuals will turn on issues of contestable adjudicative fact.  ((See id. at 7.))  And, as readers of a blog devoted to administrative law will recall, the famous Londoner/BiMetallic distinction teaches that fair resolution of contested matters of adjudicative fact implicates procedural due process.

The key insight of Targeted Warfare is to recognize that reliance on adjudicative facts about particular people to justify targeting will (and should) create a hydraulic force that causes the laws and practices of war to evolve suitable procedures for determining such facts.³

Targeted Warfare discusses this evolution both in the context of detentions and targeted killings.  Regarding detentions, the Article provides an informative survey of relevant international law, Supreme Court case law, and developing military practice. The authors also provide a preliminary assessment of six questions they submit must be answered by governments attempting to develop a detention policy suited for asymmetric warfare against non-state combatants (e.g., justifying initial detentions, determining the length of detentions, determining the role of judicial review, etc.).⁴

Turning to targeted killing, the authors note that the focus on adjudicative facts naturally “fuels the demand in some quarters that the criminal justice system, rather than unilateral executive direction of military force, should be used.” Id. at 60. This demand is likely to go unsatisfied for some time as none of the three branches, notably including the courts themselves, seems to have much appetite for heavy judicial involvement in the process or substance of targeted killing in the current conflict—at least not yet. The executive branch is not, however, waiting for judicial review before developing procedures designed to determine individuated enemy responsibility.⁵

Pildes and Issacharoff foresee that as such procedures evolve, “[m]ilitary forces will inevitably have to develop analogues appropriate to the military context for the procedural protections (hearings, evidence-based assessments, and the like) designed to ensure accuracy of adjudicative-like judgments of individual responsibility when coercive state power is deployed domestically.”  ((Id. at 69.)) In other words, the military will adopt the tools of administrative law. Eventually, as “the justification for force becomes more closely tied to ascriptions of individualized responsibility,” they foresee courts, too, “play[ing] a somewhat more significant role” in “assess[ing] the use of at least certain exercises of military force.”⁶ Of course, limited judicial review, too, is a familiar tool of administrative law.

The United States’ conduct of its “war on terror” has evoked intense controversy —as any quick Google search of “war crime” and “drone” can confirm. Some part of this controversy has arisen from legal uncertainty connected with combating an enemy that does not fit either the “war” or “crime” models very well. In Targeted Warfare, Professors Pildes and Issacharoff, through their detailed and thoughtful analysis, demonstrate how the impulses and tools of administrative law may provide a promising path forward. In the nature of things, the path they describe will not satisfy everyone, but everyone with an interest in this important subject should consider it.

1. Targeted Warfare at 11. [↩]
2. See id. at 23. [↩]
3. See, e.g., id. at 69 (foreseeing military development of increased procedural protections and an enhanced but limited role for judicial review). [↩]
4. Id. at 35-48. [↩]
5. See id. at 65-68. [↩]
6. Id. [↩]

Kathryn Watts

Proponents of administrative agencies have long touted the expertise that specialized agencies enjoy. Indeed, perceived agency expertise helps to explain Congress’s willingness to delegate to agencies the authority to set policy through rulemaking, to render adjudicatory decisions, and to conduct other activities. Yet, as Joshua D. Wright and Angela M. Diveley point out in a study posted this past January to SSRN, the so-called “expertise hypothesis”—which posits that expert agencies will consistently produce higher quality outputs than generalists—lacks empirical support. In their recent study, Wright and Diveley seek to fill the void by conducting an empirical study that examines whether the Federal Trade Commission (FTC) performs as well as generalist judges in its adjudicatory antitrust decision-making role.

Specifically, Wright and Diveley’s study tests the expertise hypothesis by comparing antitrust decisions before the FTC with those issued by Article III courts. They use “appeal” as their primary measure of quality performance—comparing the appeal rates of federal district court judges and FTC Commissioners. They explain that appeals are a “useful indicator for whether the initial court made an error” because “a higher appeal rate implies the decision-maker has issued more opinions that leave at least one party feeling strongly enough to invest in the opportunity for another decision-maker to decide that he has committed reversible error.” (P. 12) Nonetheless, because they acknowledge that reversal rates also can contain some information on the quality of the underlying decision, Wright and Diveley also report their results about the differences between the FTC and generalist judges using reversal rates. 

In terms of the study’s conclusions, Wright and Diveley ultimately find evidence that suggests—contrary to the expertise hypothesis—that the FTC’s decisions are more likely to be appealed and reversed than those of Article III judges and that the FTC does not perform as well as generalist judges in its adjudicatory antitrust decision-making role. Wright and Diveley acknowledge that these differences in appeal rates may be the result of various factors that could influence the decision to appeal from an FTC decision differently than from a district court judgment. For example, an overwhelming majority of Commission decisions favor the plaintiff (i.e., the FTC) and thus Wright and Diveley note that “appeals from Commission decisions may be systematically different in quality or other dimensions from the distribution of cases from which appeals from district court opinions are drawn.” (P. 21) Yet after Wright and Diveley attempt to control for such factors, they consistently observe higher appeal and reversal rates for the Commission. Hence, they claim that their basic results remain unchanged.

In terms of its overall contribution to the literature, the study—as the authors acknowledge—is fairly narrow in scope. It analyzes just one agency (the FTC), it examines only one aspect of the agency’s activities (agency decision-making in administrative litigation), and it presents what is described as merely “preliminary evidence” on the question studied. Nonetheless, despite its limits, the study is quite notable for the dialogue that it seeks to open on some very important questions of institutional competency and design. Specifically, the study is well worth a read because it highlights the need for more research on the relationship between institutional design and agency expertise, and for more analysis of the “expertise” hypothesis. This additional research is needed not just in the antitrust context where Wright and Diveley focus their attention, but also in many other areas that involve a choice of delegating to courts or agencies, such as bankruptcy administration, which Professor Rafael Pardo and I recently argued is in need of more careful study and attention.

In short, Wright and Diveley’s preliminary study gives some much-needed attention to the performance of courts versus agencies. Hopefully more scholars—inspired by Wright and Diveley’s work—will engage in additional empirical research about the relationship between institutional design and agency expertise. Such future research is needed to shed more light on the optimal roles of courts and agencies and on whether Congress should delegate certain powers to generalist courts or to specialized agencies. Scholars, such as Margaret Lemos, have recently focused on some of the theoretical and doctrinal implications of Congress’s decision to delegate to agencies versus courts in the policymaking context, and additional empirical work along the lines of what Wright and Diveley have produced would help to inform these broader theoretical and doctrinal discussions.

Richard Pierce

In Rulemaking vs. Democracy: Judging and Nudging Public Participation that Counts, Cynthia Farina, Mary Newhart, and Josiah Heidt explain why the initial efforts to encourage use of electronic media to broaden participation in rulemaking have not, and can not, work. The opening paragraph of the article describes and criticizes the reasoning process that has inspired the initial efforts:

Open government enthusiasts (among which we certainly count ourselves) seem prone to magical thinking—i.e., the building of if-then links that are not objectively justifiable. Open government magical thinking has several strands. If we give people the opportunity to participate, they will participate. If we alert people that government is making decisions important to them, they will engage with the decisionmaking process. If we make relevant information available, they will use that information to engage meaningfully. If we build it, they will come. If they come, we will get better government. (P. 1.)

The authors describe the initiatives that are designed to broaden participation in the rulemaking process based on the magical belief that, since “participation is good, … more participation is necessarily better.” (P.5) They then describe the results of their extensive empirical analysis of the magnitude and nature of the increased public participation in the rulemaking process that has resulted from the efforts to date to encourage broader participation in rulemaking through use of electronic media.

The authors found that the efforts to obtain broader participation in rulemakings have produced primarily mass electronic submissions of tens of thousands or hundreds of thousands of virtually identical comments filed in response to electronic initiatives by advocacy groups. The authors contrast the democratic process with the rulemaking process by referring to the large body of case law that has developed to describe the process:

[D]ecades of judicial elaboration have constructed rulemaking as a process in which outcome legitimacy depends on a formally-transparent process of reasoned deliberation.  .  .  . In rulemaking, the formal legal requirements of data-driven analysis, reason-giving, and consideration of alternatives reduce the risk of outcomes that are “wrong” because of low-information, low-thought decision making. (P.9.)

By contrast, the thousands of virtually identical comments that are submitted as a result of the efforts of advocacy organizations are thoughtless, uninformed and devoid of facts, analysis or reasoning. Thus, they are worthless to the agency decision makers who are expected to base their decisions on fact-intensive analysis. As the authors put it:

A reasonable agency, in short, would assume that mass comments suffer from the kinds of fundamental defects in information quality and deliberative judgment that would (justifiably) prompt judicial reversal were such flaws found in its own decisionmaking. Why would we want government decisionmakers to attend to such flawed preferences? (P.16.)

The mass comments submitted by members of the public are also worthless as evidence of public opinion on an issue. The authors found many cases in which mass comments reflected use of “the Chicago model of civic participation: Vote early and often.” (P. 16.) In some cases, 300 comments were submitted by the same individual. Even if 200,000 separate people submitted comments expressing the same view of an issue, the decision maker would have no way of knowing whether the other 300,000,000 members of the public agreed or disagreed with the views expressed in the comments. As the authors point out:

There are many recognized methods of sampling (i.e., selecting a subset of individuals) to estimate characteristics of the whole population. Persuasive solicitation of members by a limited range of advocacy groups does not satisfy any of them. (P. 15.)

The authors conclude by describing steps that might be taken to encourage submission of comments that would have potential value to decisionmakers, but they are highly critical of the efforts government has made so far. In their words: “A democratic government should not actively facilitate public participation that it does not value.” (P. 22.)

I found this article informative and persuasive. It may be that the electronic revolution will enhance the value of the rulemaking process through some means in the future. It is apparent, however, that the advocates of such beneficial changes must rethink their approach.

Peter Shane

Jotwell prefers that its contributors “like” one piece of scholarship at a time.  But (a) I have to atone for submitting my contribution late, and (b) the two manuscripts that have caught my fancy most recently are wonderfully complementary and deserve to be attended to jointly.

Literally from Day One, a welcome mantra of the Obama Administration has been “open government,” to which the Administration has variously linked the adjectives, “transparent,” “participatory,” and “collaborative.”  As both conceptualized and practiced, however, the very idea of “open government” is highly ambiguous.  Even its arguably most straightforward aspiration – transparency – is rife with uncertainties.  Two important steps forward in understanding the Obama open government “moment” are The New Ambiguity of “Open Government”, by Princeton doctoral student Harlan Yu and Yale law student David G. Robinson, forthcoming in Discourse, the online journal of the UCLA Law Review, and Transparency With(out) Accountability: The Effects of the Internet on the Administrative State, by Jennifer Shkabatur, an SJD candidate at Harvard Law School, forthcoming in Vol. 31, No. 1, of the Yale Law & Policy Review.  Each is a significant contribution to a much undertheorized domain.

The Yu-Robinson paper traces the conceptual history of “open government,” pointing out the rhetorical and political slippage between the demand for institutionally significant disclosures that would make government more accountable for its decision making (think, “FOIA”) and the movement towards government provision of valuable data in machine-readable structured formats that would support various forms of public knowledge and entrepreneurship (think, “U.S. Census”).  As documented by the authors:

Public policy has increasingly blurred the boundaries between the technologies of open data and the politics of open government. This blurring paves the way for frustration and disappointment. Open government and open data can each exist without the other: A government can be an “open government,” in the sense of being transparent, even if it does not embrace new technology (the key question is whether stakeholders end up knowing what they need to know to keep the system honest). And a government can provide “open data” on politically neutral topics even as it remains deeply opaque and unaccountable. The Hungarian cities of Budapest and Szeged, for example, both provide online, machine-readable transit schedules, allowing Google Maps to route users on local trips. Such data is both open and governmental, but has no bearing on the Hungarian government’s troubling lack of transparency. The data may be opening up, but the country itself is “sliding into authoritarianism.”

The authors’ point that “open data” may or may not support actual accountability has been made by others, e.g., Steven Waldman and the Working Group on Information Needs of Communities, The Information Needs Of Communities: The Changing Media Landscape In A Broadband Age 202-211 (FCC 2011), but the independent sources and eventual tangling of the intellectual roots undergirding the “open government” and “open data” movements have never, as far as I know, been elaborated with such care.

This is not to say, of course, that open data are irrelevant to government accountability.  Congressional members’ votes, government officials’ financial records, and the geographic distribution of public spending are all potentially critical to improving public accountability.  Yet, as Yu and Robinson detail how the 2008 Obama campaign and then the Obama Administration conflated “open data” with “freedom of information,” it becomes clear how rhetorical slippage poses a risk that government claims for increased “openness” may be unaccompanied by matching levels of improved transparency.  The authors likewise relate how “the ambiguity of open government remains alive and well in the international sphere,” with governments abroad launching splashy new data portals while simultaneously deprioritizing genuine open government reforms.

A final contribution by Yu and Robinson is a suggestive schematic of how the “open data” and freedom of information movements intersect both normatively and in operation.  The “open data” movement is, at its core, really about taking data in the hands of government and making it more adaptable.  The freedom of information movement is really about securing access to data, adaptable or not, that increases accountability.  Governments maximize joint value for both movements when they release adaptable data that relate to government performance.  FOI champions, however, are inevitably disappointed if government releases data, adaptable or not, that has more to do with service delivery than transparency; open data champions are equally disappointed when government releases its information in “inert” forms that are difficult to analyze or reorganize for public value.

Jennifer Shkabatur’s paper springs from very much the same motivating insight, but she attacks it from a different angle.  Transparency, Shkabatur notes, is arguably the central device through which U.S. administrative law seeks to foster accountability for the regulatory bureaucracy.  She outlines what she calls the “architecture” of government transparency, which comprises mandatory components (e.g., notices of proposed rulemaking; required statements of regulatory basis and purpose), discretionary transparency (wherein she places the open data movement), and “involuntary transparency,” i.e., government openness through leaks.  In each sector, she regards public policy as having the capacity to marry transparency with accountability, but, in each sector, she sees the U.S. government falling short.  She believes our rules of mandatory transparency are not well-tailored to “offer the public a meaningful explanation and justification of agencies’ decisions and activities.”  Voluntary transparency gives agencies too much discretion to disclose information that puts them in a positive light to an undeserved degree.  Our policies on “involuntary transparency,” in Shkabatur’s judgment, undervalue the positive contributions of leakers and thus under-protect whistleblowers.

Unlike Yu and Robinson, Shkabatur accompanies her diagnosis with a series of suggested improvements in policy and institutional practice that go beyond the call for more precise rhetoric and analysis.  In general, these suggestions have three aims:  to focus government disclosure efforts on “the decision-making processes of agencies and their performance”; to ” lower[] access and participation barriers for individual citizens or diffuse social groups” and to toughen up the enforcement of transparency obligations.  As much as I like some of these suggestions, readers may well feel, in canvassing the concluding sections of both Shkabatur, and Yu and Robinson, that we are simply “not there yet” in terms of identifying all that could or should be expected from efforts of governments to hold their own feet to the fire.  But you will also come away from these papers with a far clearer sense of how we got to where we are, the multiple dimensions to both our challenges and opportunities, and why a lot of frustration still accompanies so much of what appears to be a sincere and, to some extent, consequential effort on the part of the Obama White House to make government more open.

Gillian Metzger

In Deference and Dialogue in Administrative Law, Emily Meazell takes up the topic of serial administrative law litigation.  These repeated rounds of challenges and remands, which Meazell finds are particularly prevalent in contexts of risk regulation, provide a new lens on court-agency relationships.  Meazell closely reviews several instances of such litigation, spanning topics as diverse as endangered species, potential workplace carcinogens, and financial qualifications of nuclear plant operators.  She argues that such close examination reveals a process of dialogue, with agencies ultimately (if not immediately) responding to judicial concerns and courts in turn acknowledging administrative responses.

According to Meazell, serial litigation merits attention because it demonstrates that judicial review may not function as we think it does.  In particular, Meazell flags two features of serial litigation that deserve particular note.  The first is that agencies frequently considered new information and evidence on remand, even though that might entail greater effort and new rounds of notice and comment.  She argues that serial litigation thus can provide an opportunity for agencies to refine their analyses and gain greater expertise over time.   The second is that, despite their initial sometimes stern rejections of agency determinations, courts often ultimately took quite a deferential stance. From this Meazell concludes that, when viewed over the long lifetime of some of this litigation, hard look review resembles more the soft look of constitutional rationality review than the more searching scrutiny administrative law cases and scholarship claim it to be.

I agree with Meazell that the serial character of administrative law litigation merits greater scrutiny, and her careful case studies offer a great start.  At a minimum, Meazell underscores (along with Wendy Wagner’s recent investigation of the impact of judicial review on EPA rulemaking, Rulemaking in the Shade:  An Empirical Study of EPA’s Air Toxic  Emission Standards, 63 Admin. L. Rev. 99 (2011)), the need to take into account what happens after a court reverses and remands in our assessments of the value and function of judicial review.   I also appreciate Meazell’s effort to examine the extent to which agencies and courts are responsive to each other’s concerns and arguments, and the pattern she reveals—that it often takes repeated tries before agencies directly engage the issues flagged by courts—is striking. That pattern seems somewhat in tension with the standard ossification thesis, which argues that the substantial agency resources and time on the line in rulemakings means that agencies are too attentive to possible judicial concerns.

Still, I think it remains open whether the instances of serial litigation Meazell identifies actually demonstrate court-agency dialogue, in the sense of a meaningful “conversation in which the participants strive towards learning and understanding to promote more effective deliberation and outcomes.” (111 Colum. L. Rev. 1722, 1773). To be sure, Meazell shows how agencies eventually often speak directly to the issues courts raise, and how courts frequently turn deferential when agencies do so. But the cynic in me was left wondering whether a more accurate description than court-agency dialogue is straightforward compromise, with both agencies and courts deviating from their real views of the best answer, perhaps significantly, in order to put an end to litigation that clearly has gone on way too long.

William Funk

The Social Security Administration’s administrative appeals system is touted as one of largest administrative judicial systems in the world.  No one claims it is one of the best.  Professor Richard Pierce, writing in the Cato Institute’s Regulation magazine, proclaims that it is seriously broken, and he has suggestions for how to fix it.  One might say radical suggestions.  Dubin and Rains, writing an Issue Brief for the American Constitution Society, take issue with Pierce, rebutting his assertions and defending the basic system as it is, warts and all.  One might believe that publications of the Cato Institute and the American Constitution Society would be hopelessly biased, and of course they do represent different views of the American polity, but to read these two pieces, whatever your political inclinations, will inform you about one of the most important issues in administrative law – how to deal with a mass administrative justice system that seems to be running amok.

To establish that the system is broken, Pierce provides statistics on the increase in disability determinations, the total cost involved in paying for disabled workers, and the role that pain and other non-objective causes of disability play in the increase in disability findings.  Pierce’s theme is that the use of administrative law judges and formal adjudication to re-decide what professionals determined on the basis of paper records is responsible for the breakdown, because their use is needlessly inefficient, results in non-uniform determinations, is skewed in favor of granting benefits, and is unconstitutional to boot.  Why use formal hearing adjudication for what is basically a medical determination?  Pierce suggests that the justification is to allow ALJs to assess the credibility of the claimants on the basis of their demeanor, but he then cites to an important law review article, Olin Wellborn, Demeanor, 76 Cornell L. Rev. 1075 (1991), that concludes that empirical evidence suggests that one cannot determine truthfulness (or falsity) on the basis of demeanor.  Ipso Facto: we don’t need formal adjudications for disability determinations.  The fact that there are wide disparities between ALJs in the outcomes of cases suggests that the hearings are not accurate determinations of the truth.  Moreover, under the current system, the claimant, usually represented by counsel, appears before an ALJ who, according to judicial decisions, is supposed to aid the claimant in making his case, but there is no one to represent the “other side.”  This hopelessly skews the system.  Finally, Pierce argues from the recent case of Free Enterprise Fund v. Public Company Accounting Oversight Board, 130 S.Ct. 3138 (2010) that having ALJs decide these cases is unconstitutional because they can only be removed for cause by persons who also can only be removed for cause, violating the prohibition announced in that case on limiting the President’s ability to remove an officer by creating a double for-cause removal system.  Although he provides several possible responses to the problem, his apparently preferred suggestion is simply to eliminate the ALJ review altogether, using the funds saved to review the continued eligibility of current beneficiaries.

Dubin and Rains first take on Pierce’s statistics, and while many of their critiques seem on the mark, such as the fact that as the population ages we would expect more people to become disabled, they cannot hide the fact that the number of disability beneficiaries has grown tremendously.  They then argue that the ALJ adjudicatory hearing has nothing to do with the growth in beneficiaries.  The hearings are not primarily about demeanor, nor are they merely repeats of what was in the paper files.  As a de novo determination, there is often new evidence; the claimant’s counsel is able to present the facts in a better way than the unassisted forms considered by the bureaucrats before; and the claimant himself can explain and answer questions left open in the paper file.  In short, the ALJ hearing does provide greater accuracy in outcomes than the paper review.  The disparity between ALJs in outcomes is simply the bell curve in operation with the vast majority of ALJs having rates of finding disability around the agency decisional norm.  Finally, Dubin and Rains attack Pierce’s claim of unconstitutionality.  ALJs, they maintain, are simply not “officers” for constitutional purposes and therefore are not subject to the double for-cause prohibition found in Free Enterprise Fund, noting that in that case the Court referred to ALJs as “agency employees.”  Pierce had argued that the Social Security ALJs were officers because they made final decisions for the agency; that is, their finding of disability was not subject to any further review.  However, as Dubin and Rains point out, that is not really true.  The Social Security Appeals Council can, and occasionally does, review on its own motion findings of disability, and any denial of disability by an ALJ can be appealed to the Council, so ALJs do not actually make the final decision for the agency either for or against disability.  Professor Pierce would respond, I am sure, that technically that may be true, but as a practical matter ALJ decisions almost invariably are the final decision of the agency at least with respect to findings of disability.

Dubin and Rains’ article is more heavily footnoted, and it is the (currently) last word, but despite their often convincing argumentation and authorities, its impact really is to rebut Pierce’s suggestion to eliminate the ALJ review altogether, a suggestion as likely to be adopted as a suggestion to eliminate the filibuster.  What is valuable about these articles, which really need to be read together, is to portray the difficulty of improving a system that involves millions of people and billions of dollars and yet is badly backlogged with a high variation in decisions by different ALJs.  In addition, the discussion of the constitutionality of ALJs is academically valuable, for sooner or later some court will have to address the issue, as Justice Breyer in his dissent in Free Enterprise Fund predicted.