Jan 23, 2012 Michael E Herz
Administrative agencies are often said to possess (a) expertise and (b) accountability. These are the attributes that Justice Stevens relied on in Chevron, for example, to justify judicial deference to agency “interpretation” that is really policymaking. Both of these admirable characteristics are exaggerated, but neither is mythical. What is to be done, however, when they conflict?
This is a recurrent question. Whether and when agencies should be set up as independent commissions, the disagreement between the majority and the dissent in State Farm, much of the battle over regulatory review – all involved at least in part the question whether the president’s preferences, or “political” considerations, should trump the agency’s (expert) judgment. One doctrinal locus of this dispute is the arbitrary and capricious test. Is it “reasoned decisionmaking” if an agency does something simply because the White House told it to? State Farm and Massachusetts v. EPA suggest the answer is no. Four, and arguably five, Justices in FCC v. Fox Televisions Stations imply the answer may be yes, and a number of commentators – most recently, Kathryn Watts – have argued for judicial acceptance of political justifications for agency action.
One standard move by administrative lawyers – common in but not unique to the field – is to seek procedural responses to substantive problems. We don’t know what the right answer is, but we can figure out a procedure that will resolve most of the concerns so we don’t have to figure out the right answer.
In a superb recent article,Disclosing “Political” Oversight of Agency Decision Making, which was selected by the ABA’s Section of Administrative Law and Regulatory Practice as the best article in administrative law last year, Professor Nina Mendelson has taken the procedural approach to the substantive problem of White House influence on agency decisionmaking. She argues against regulation, limitation, or special judicial deference and in favor of disclosure of political reasons for a particular decision. (Importantly, by “political” she means not a particular type of reason – such as a reason that will appease important constituencies and advance the President’s chances of re-election – but rather reasons that have their source in the White House.)
Mendelson begins with two important but often overlooked points. First, we know remarkably little about the content and scope of presidential oversight of rulemaking. Second, there’s presidential oversight and there’s presidential oversight; that is, some presidential influence is almost indisputably appropriate and enhances the legitimacy of agency decisionmaking, and some (e.g. leaning on the agency to ignore scientific fact or to do something inconsistent with statutory constraints) is not.
Although presidents have long exerted significant influence on agency rulemaking, and although that influence has been regularized and concentrated in OIRA for three decades, it remains quite invisible. The OIRA review process is fairly opaque (though less so than it once was), influence by other parts of the White House even more so, and official explanations of agency action almost always are silent about political considerations. As a result, the democratic responsiveness and accountability that, in theory, presidential oversight provides goes unrealized. Presidents take credit when it suits them, but keep their distance from controversy. (Although Mendelson does not make the connection explicit, her account resonates with critiques by supporters of a nondelegation doctrine with teeth who are dismayed by Congress’s desire to take credit but not blame.)
Mendelson proposes that agencies be required, ideally by statute, to summarize the content of regulatory review in issuing rulemaking documents. (She offers a relatively transparent recent fuel economy rulemaking as a possible model.) First, this would allow the public to see the president’s hand in the final decision and, for better or worse, hold him accountable. Second, it would enhance our understanding of executive review and, in a sunlight-is-the-best-disinfectant sort of way, discourage inappropriate interference. Third, this information would be useful to Congress, which might respond legislatively.
The thorniest problems raised by this proposal involve judicial review. How should this newly available information affect courts? Here, as she acknowledges, Mendelson edges somewhat closer to Watts, calling for courts to be deferential to “value preferences or policy calls,” as long as they are consistent with statutory factors relevant to the decision and do not reflect a skewing of the factual analysis. She acknowledges, and warns against, the possibility of courts being too deferential, and insists on the importance of their scrutinizing with some care agency determinations of legal or technical issues as opposed to “value-laden policy questions.” This analysis raises some larger questions about what, exactly, the legitimate bases of agency decisions are, which are explored, though not fully resolved, in the final section.
Mendelson’s turn to disclosure – to procedure rather than substance – does not completely escape the underlying conundrum regarding the appropriate scope of presidential influence over agency decisionmaking. Nonetheless, among her proposal’s many benefits would be that it would place us (Congress, or the courts, or the voters) in a far better position to answer that question.
Jan 13, 2012 Edward Rubin
Rachel Barkow, Insulating Agencies: Avoiding Capture Through Institutional Design, available at SSRN.
One of the most interesting areas of current administrative law and political science scholarship is the attention being devoted to the design of administrative agencies. Some of this work is empirical, and much of it is interdisciplinary, the two buzz words for contemporary cutting edge scholarship in this area, and so many other areas as well. But the real source of this work’s value and promise –and an underlying source of both its empirical and interdisciplinary character– is that it takes law seriously without viewing it from the judicial perspective. The political science scholarship, such as David Epstein & Sharyn O’Halloran, Delegating Powers (1999) and David Lewis, Presidents and the Politics of Agency Design (2003), has begun to free itself from the idea that only politics matters, and looks at the way that legal structures, having been generated by politics, affect the governmental process. The legal scholarship, such as Lisa Schultz Bressman & Robert Thompson, The Future of Agency Independence, 63 Vand. L. Rev. 599 (2010) and Jacob Gersen, Designing Agencies: Public Choice and Public Law, in Daniel Farber & Joseph O’Connell, eds., Research Handbook on Public Choice and Public Law (2010), has begun to free itself from the idea that law is to be defined, or at least perceived, through judicial decisions, and looks at the way that it shapes, and is shaped by, executive and legislative actors.
Rachel Barkow’s Insulating Agencies: Avoiding Capture Through Institutional Design, exemplifies this approach. Barkow’s topic is agency independence, but she does not address the tired question of whether such independence offends the Constitution, either in its entirety or in its details. Not only does she ignore the old chestnuts of judicial doctrine in this area, such as Myers v. U.S., 272 U.S. 52 (1926) and Humphrey’s Executor v. U.S., 295 U.S. 602 (1935) but she resolutely resists having anything to say about the recently decided bit of Roberts Court weirdness, Free Enterprise Fund v. PCAOB, 561 U.S. ____(2010) (the aptly nicknamed Peekaboo case). Instead of the children’s game of discussing constitutional limits on the administrative apparatus, her concern is the basic, and extremely serious question of why we want agencies to be independent of political control and how we achieve that goal.
There are several major reasons to structure agencies in a way that makes them partially independent of control by elected officials, Barkow argues. These include expertise, non-partisanship and stability, but the one she is concerned with is insulation from capture. Many agencies are created to regulate sectors of the economy in the public interest. The difficulty is that these sectors are often inhabited by powerful private entities that either do not want to be regulated or want to use the regulatory process for purposes of their own. In order for the agency to achieve its intended goals in the face of this resistance, it must be insulated from the political pressure that such powerful entities exert. The classic ways of doing so are to place a multi-member commission, rather than a single individual, at its head, to restrict the President’s power to remove the agency’s leaders, whether commissioners or individual directors (the defining feature of independence), and to exempt the agency from supervision by OMB and OIRA. Long experience has taught us, as Barkow notes, that the effectiveness of these devices is limited. Many agencies headed by commissions whose members can only be dismissed for cause, and that are not subject to OIRA’s cost-benefit analysis, nonetheless succumb to industry group pressure.
Barkow proceeds to discuss other, less familiar design features that can contribute to the insulation of an agency from industry pressure, and thus assist it in achieving its intended purposes. The agency can be authorized to submit its budget requests directly to Congress, rather than through OMB. Its leaders can not only be protected from presidential removal, but also required to possess certain types of expertise. They can be restricted from accepting employment by the entities they regulate upon departure from the agency. Regulatory authority can be granted simultaneously to several different federal agencies or shared among these agencies. Similarly, it can be shared with state agencies whose political environment may differ from the one the federal agency experiences. Even if the agency has sole authority to enact regulations in a given area, authority to enforce these regulations can be divided among different federal or state agencies. The agency can be authorized to provide information directly to the public, thereby enlisting private enforcement or recruiting political allies. It can also be authorized or encouraged to obtain allies directly, either by establishing relations with public advocacy groups or by giving such groups a role within the agency. Barkow concludes her discussion with a brief case study of the Consumer Products Safety Commission (CSPC), and Consumer Finance Protection Bureau (CFPB), newly established under Dodd-Frank. The CSPC, which relied on traditional means of insulation from regulated entities, has been notoriously ineffective; CFBB employs several of the additional devices Barkow discusses, and will, it is hoped, experience more success.
The great virtue of Barkow’s article is that it addresses the question of agency independence from a new and much more significant perspective than either pure politics (why did interest groups permit or oppose independence?) or pure law (is the result constitutional?). Rather, the question is how agencies should be designed in order to implement certain social goals, a major one being the regulation of powerful business entities. Framing the inquiry in this fashion opens up an extensive range of possibilities that we, as a society, have only begun to explore. The ones we use, such as restrictions on removal power, are relatively minor variations on a single theme. That theme is the one identified, and to some extent entrenched, by Weber. It is a product of the transition from government agencies as extensions of the king’s household to agencies modeled largely on the hierarchical military organizations of the Early Modern Era that reflect a rationalized, professionalized modern state. Now that this type of governance is securely established, we should be thinking about ways to go beyond the Weberian model. As Barkow suggests, we can think about designing agencies that have their own funding sources, that actively promote their mission by forming alliances with private groups, that provide public information and proselytize in favor of their mission, that redesign themselves based on such interactions with their constituents, that make use of flexible employment policies to change the type of people they recruit and the incentives of those whom they employ. Barkow’s article points us toward the next stage in the development of administrative governance, which is why I like it a lot.
