The Journal of Things We Like (Lots)
Select Page

Immigration Law’s “Shadow Dockets”

Shalini Bhargava Ray, Immigration Law’s Arbitrariness Problem, 121 Colum. L. Rev. 2049 (2021), available at SSRN.

The “law in books” is often not the same thing as the “law in action.” And in administrative law, the reason for that disjoint is often because some agency has decided to interpret, apply, or enforce the written law in a way that changes its on-the-ground meaning. In immigration law, the “law in books”—the Immigration and Nationality Act—takes a hard line on violators: it “specifies deportation as the sanction for nearly all transgressions of immigration law, no matter how minor, and regardless of the personal circumstances of the immigrant” (P. 3.) But when we look at how that law is applied, a different picture comes into view—“a system of shadow sanctions” (P. 4) that takes the place of deportation for vast numbers of noncitizens.

Shalini Bhargava Ray maps and critiques this “shadow”1 world of immigration law in an absorbing recent article, Immigration Law’s Arbitrariness Problem. In the article, Professor Ray sets out how the immigration bureaucracy stops, or indefinitely postpones, the issuance and execution of huge numbers of removal orders through the use of various administrative devices, including deferred action, administrative closure, and orders of supervision (P. 4.) She then explains the problematic feature of these discretionary tools as a rule-of-law matter: though these shadow sanctions mitigate the harshness of deportation, they are still doled out in an entirely opaque and often arbitrary way.

Ray’s article begins by describing a much-critiqued aspect of immigration law: that the punishment (deportation) often does not fit the crime. The INA imposes deportation as a blanket sanction for a slew of offenses that bear little in common—everything from overstaying a visa to engaging in terrorism (P. 6.) Immigration law’s formal lack of proportionality has elicited myriad calls for reform, but these have mostly fallen on deaf ears. Congress has not enacted statutory revisions to the INA that meaningfully distinguish between various types of deportable immigrants, and courts have rejected arguments that the Constitution requires removal orders to be proportional.

Given these dead ends, Ray turns instead to the executive branch and its extensive immigration bureaucracy as a “potential locus of proportionality” (P. 18.) The immigration bureaucracy, she explains, does more than simply deport. It also necessarily prioritizes some noncitizens for deportation, while using “discretionary tools of lenience” (P. 24) to defer or halt deportation against others. One of these tools (the DACA program) has drawn an overwhelming share of public attention and litigation in recent years. Yet other discretionary tools, though far more obscure, are nonetheless both ubiquitous and significant—among them, deferred enforced departure, extended voluntary departure, and a suite of reprieves that are granted in the course of removal proceedings, including administrative closure, stays of removal, and orders of supervision. Frequently, such reprieves are accompanied with “benefits such as work authorization” or, at times, “the ability to obtain a driver’s license” (P. 25.) Ray estimates that, taken collectively, these “shadow sanctions” mean that millions of deportable noncitizens have “received a punishment other than deportation”—a number that makes up a “sizeable share of the deportable population” (P. 35) presently in the United States.

Ray then turns to critique this regime on rule-of-law grounds. This system of shadow sanctions appropriately leavens the harshness of the INA’s scheme, she contends, but it does so in an arbitrary fashion. Noncitizens often lack lawyers, and therefore frequently do not know to ask for deferred action, orders of supervision, or other discretionary reprieves. Moreover, agency policy for granting some of these shadow sanctions “remains internal” to the agency and is not publicly available (P. 37.) Ray urges the immigration bureaucracy to become more transparent and consistent in its use of shadow sanctions, as well as to “create opportunities for reason-giving, to promote line-officers’ and adjudicators’ ability to draw meaningful distinctions among removable immigrants” (P. 48.) Once that foundation for public reason-giving is built, she contends, public scrutiny will follow (P. 51.) Drawing lessons from European law, she concludes that “even in the absence of a legal right to lenience, deportable noncitizens are entitled, under proportionality, to a fair procedure, more than a cursory analysis of their interests, and more than a conclusory decision” (Pp. 53-54.)

In this era of whiplash and litigation concerning immigration law’s enforcement priorities, the vast, uneven, and ill-understood system of sanctions and lenience examined by Ray will continue to play a major role, whether the public knows about it or not. Immigration law’s system of shadow sanctions, she shows, is both inevitable and imperfect—but the tools of administrative law may fruitfully be harnessed to improve it. In seeking to narrow the gap between immigration law and ordinary administrative law, Ray’s exploration and critique of these discretionary tools of immigration enforcement places a much-needed spotlight on the immigration bureaucracy’s own “shadow dockets.”

  1. Immigration law, it seems, is full of shadows. Jennifer Lee Koh used the term “shadow removals” to encompass removal proceedings that occur outside of immigration courts through summary proceedings at the border and elsewhere—a phenomenon that Shobha Sivaprasad Wadhia has called “speed deportation.”
Cite as: Mila Sohoni, Immigration Law’s “Shadow Dockets”, JOTWELL (November 29, 2021) (reviewing Shalini Bhargava Ray, Immigration Law’s Arbitrariness Problem, 121 Colum. L. Rev. 2049 (2021), available at SSRN), https://adlaw.jotwell.com/immigration-laws-shadow-dockets/.

Chevron Flip-Flops of a Different Sort — Understanding the Shifting Politics of Deference

Gregory A. Elinson & Jonathan S. Gould, The Politics of Deference, 75 Vand. L. Rev. ___ (forthcoming, 2022), available at SSRN.

Like vaccinations, voter fraud, guns, taking a knee, and, well, everything, views on Chevron deference have become not just ideologically tinged but ideologically determined. Progressives are Chevron enthusiasts; conservatives are Chevron skeptics. Chevron is under siege, and the battle lines are familiar. Yet, on its face, Chevron is politically neutral. It increases agency power at the expense of judicial power; whether that is politically helpful depends on whether your team controls the White House or if it controls the courts. Furthermore, the current ideological array has not always been the case. When Chevron was decided, the enthusiasts were on the right and the skeptics on the left. So what is going on?

In The Politics of Deference, Gregory Elinson and Jonathan Gould explain. They provide a richly documented descriptive account of the shifting politics of deference dating back to the 1970s. The shifts are what you would expect; the team that controls the White House likes deference, the team that controls the courts does not. Except . . . the pendulum did not swing when Donald Trump became president. Elinson and Gould describe why in fact deference does have a political valence and it makes sense that conservatives are skeptical and liberals supportive, regardless of who is in the White House.

Notably, “Chevron” does not appear in the article’s title. This is not one more Chevron article and, happily, it avoids all the nice questions about Chevron’s meaning and scope. It is an article about the broad idea of judicial deference to agencies, not the doctrinal particulars.

Accordingly it begins not in 1984 but earlier, with the fight over the Bumpers Amendment, first introduced in 1975. Senator Dale Bumpers (D-AR) sought to amend § 706 of the APA to provide that courts would decide all questions of law de novo, with no presumption of validity in favor of any agency regulation. The article provides a nice description of the political battle over the amendment, which almost became law. Pro-regulation liberals were horrified; supporters saw the amendment as part of a larger effort to save the country from over-regulation.

So the politics of the Bumpers Amendment battles were roughly aligned with those of present-day Chevron battles. Then Ronald Reagan became president, and “conservatives came to see that deference could be harnessed toward deregulatory ends.” Writing for the American Enterprise Institute, Professor Antonin Scalia lamented that congressional Republicans “seem perversely unaware that the accursed ‘unelected officials’ downtown are now their unelected officials, presumably seeking to move things in their direction” and pointed out that the Bumpers Amendment would, disastrously, transfer authority from the Reagan Administration to a judiciary dominated by liberal Democrats.

One of the impressive aspects of this article is that the authors have uncovered a great deal of interesting historical material. This includes memos from one John G. Roberts, then a young attorney in the White House Counsel’s Office. In several 1983 memos to Fred Fielding, Roberts acknowledged broad conservative support for the Bumpers Amendment, but cautioned that it “would shift power from the agencies to the judiciary” and “giving the courts added review power could jeopardize deregulatory efforts.”

The point was well-taken. As a result, when Chevron was decided, support was overwhelmingly from the right and doubts on the left. I acknowledge I was one of the doubters. In 1985, I became a staff attorney at the Environmental Defense Fund, and it seemed quite clear that Chevron was bad for us and bad for the environment. By the mid-1980s, the “EPA” no longer stood for Every Polluter’s Ally, but the overall structure was that the 1970s had seen passage of really ferocious environmental laws, and the 1980s saw meaningful backing away. For us, deference meant losing victories that had already been won in Congress. And I think inescapably my own skepticism about Chevron—at least, about a strong reading of Chevron—arose in part from that experience.

So inescapably part of what is going on is that, as in so many questions of structure, principle yields before the appeal of preferred outcomes. Or there is a principle, and the principle is “I want the decisionmaker to be the one who agrees with me.” Federalism is Exhibit A of a “principle” that is almost always wielded instrumentally, but deference has a place on the list.

Part IV of the article, entitled “Depoliticized Deference,” covers the period 1989-2009. Among professors of administrative law, of course, Chevron has never been in eclipse, but this was a period in which it “fell nearly entirely out of mainstream political discourse.” The authors suggest a few explanations. In part, the traditional deference opponents in the right “had made their peace” with Chevron. In addition, neither the Bush I nor Clinton Administrations had a firm deregulatory or pro-regulatory approach, so neither side had a strong reason to embrace or reject deference; it was a mixed bag for each. Third, with the development of “step zero” in Christenson and Mead, the Supreme Court “lowered the political temperature around the doctrine.”

Then along came Barak Obama. Part V, “Repoliticized Deference,” recounts the new political salience of deference. Energetic and controversial agency decisions prompted a broad conservative backlash. Gillian Metzger has described the larger hostility to the administrative state of which objections to Chevron are a central piece. And, correspondingly, liberals were now Chevron enthusiasts. For both, the fight about Chevron was a thinly veiled fight about regulation.

This article recounts the story of political flip-flopping on Chevron exceedingly well. It is an important story. But what is more interesting is that it is not the whole story.

For something unexpected happens. Donald Trump becomes president, and both sides hold to their positions. In contrast to the election of Ronald Reagan or Barak Obama, the election of Donald Trump had very little impact on the political battles over deference. Recall, for example, debates over Supreme Court nominee Neil Gorsuch’s Chevron skepticism.

Part VI speculates why it is that both sides have dug in their heels. The first explanation is that the phenomenon is not quite as striking as it looks. If both parties anticipate future Democratic presidents and/or a conservative judiciary, and both have just a modicum of maturity and ability to take the long view, then the politics of deference should not shift because of one Republican (electoral college) presidential victory. Everyone may still be urging the approach that will place decisionmaking authority in those who are on their side.

Second, and most importantly, the authors conclude that deference is not ideologically symmetrical, despite common assertions to the contrary. Over time and in the aggregate, it will favor regulatory initiatives over deregulatory ones. Deference is more likely to be called into service for significant new regulatory initiatives, for updating, and not for leaving things alone. Deregulation can be achieved through measures – nonenforcement, defunding, layers of internal procedure – that are not subject to judicial review or at least will not trigger deference if they are. Chevron applies most prominently in areas such as environmental protection, where conservatives are most wary of agency activity; it applies more haphazardly in areas where they support robust executive power, such as immigration. And Chevron empowers, if only indirectly, career bureaucrats who, as a generalization, are more likely to be pro-regulation.

Third, the partisan divide is also about symbolism. Taking a strong stand on deference, despite the many studies showing that its real-world impacts do not justify the heated debate, is a way for both sides to signal their overall views regarding the administrative state.

If all of this is right, it means that political debates about Chevron have reached a kind of maturity. What politicians say about deference is still largely nonsense. But the broad shape of the debate has a kind of coherence, which one might even call reassuring.

Cite as: Michael E Herz, Chevron Flip-Flops of a Different Sort — Understanding the Shifting Politics of Deference, JOTWELL (October 29, 2021) (reviewing Gregory A. Elinson & Jonathan S. Gould, The Politics of Deference, 75 Vand. L. Rev. ___ (forthcoming, 2022), available at SSRN), https://adlaw.jotwell.com/chevron-flip-flops-of-a-different-sort-understanding-the-shifting-politics-of-deference/.

A Second Look at the Administrative State: Deconstruction as Reassessment

Aaron L. Nielson, Deconstruction (Not Destruction), 150(3) Dædalus 143 (Spring 2021).

This summer, Dædalus, the Journal of the American Academy of the Arts and Sciences, turned its focus to public administration and the regulatory state. Mark Tushnet served as the Summer 2021 Dædalus Issue’s Guest Editor, compiling essays from leading lights of administrative law like Cass Sunstein, Aaron Nielson, and Judge Neomi Rao. Professor Nielson’s piece, Deconstruction (Not Destruction), is the latest work in a line of scholarly literature that acknowledges the growing libertarian discomfort with perceived excesses of administrative governance (perhaps best embodied in the scholarship of Professor Philip Hamburger and the jurisprudence of Justice Neil Gorsuch) and proposes an alternative path forward for regulatory state skeptics. Some other such works include Professor Jeff Pojanowski’s 2020 Harvard Law Review article Neoclassical Administrative Law and Professors Sunstein and Adrian Vermeule’s new book Law and Leviathan.

Conceding at the beginning of the essay that “[t]he Supreme Court is not about to declare most of the federal government unconstitutional,” Professor Nielson is nevertheless sympathetic to the idea that today’s administrative-centric federal model presents serious issues. Professor Nielson’s thesis proceeds from the premise that, in the context of administrative law, commentators typically associate the word “deconstruction” with former White House Chief Strategist Stephen Bannon’s assertion that the Trump Administration sought to “deconstruct”—read: destroy—the administrative state. Professor Nielson takes a step back and reinterprets deconstruction in the “more technical sense of examining the administrative state to identify where theory and reality diverge and what can be done to fix it.” This reconsideration, Professor Nielson argues, is long overdue; to the extent that the federal government has constructed the administrative state over the last century or so, Professor Nielson proposes deconstruction as a way of rigorously interrogating the theories and assumptions underlying said efforts.

Professor Nielson deconstructs administrative law down to its foundation and lodges structural critiques that call important aspects of the whole enterprise into question. While Professor Nielson allows that “the ‘expertise’ theory of administrative law contains much truth,” he points out that the “theory is not always true,” explaining the many shortcomings of expert-driven governance and evincing skepticism about “the theory of policy-making as an objective science.” He also describes how modern presidents have taken control of the administrative state to achieve policies they could not get passed through Congress, calling out as “problematic” the bypassing of the bicameralism and presentment process enshrined in the Constitution, a process meant to “produc[e] higher-quality, more legitimate laws.” Furthermore, Professor Nielson showcases how the increased reliance on agency rulemaking to effectuate certain administrative goals has led to regulatory uncertainty, as different administrations quickly change directions on important policies, like net neutrality and environmental protection. As Professor Nielson puts it, “It is difficult to encourage the private sector to invest in, say, new forms of energy when policy changes every four to eight years.”

Taking stock of these criticisms, Professor Nielson makes clear that “[d]econstruction . . . does not have to mean destruction. It is possible to reform the administrative state without tossing it out.” And looking at the current composition of the Court, as well as the path of the law, Professor Nielson opines that good reform is forthcoming. He points to recent cases like Kisor v. Wilkie as examples of how the Court can balance its respect for stability with the imposition of safeguards in the administrative process. In Kisor, the Supreme Court reaffirmed the rule that courts must defer to agencies’ interpretations of their own ambiguous regulations. But Justice Elena Kagan, writing for the Court, cabined the universe of situations in which such deference applies—regulations must be genuinely ambiguous, and certain other conditions must apply. Justice Gorsuch wrote a sharp dissent, seeking to “overrul[e] this species of deference altogether.” The Court split 5-4 in Kisor, but both Justice Kagan and Justice Gorsuch did agree on a baseline principle: unchecked judicial deference to agencies’ interpretations of their own regulations is inappropriate. Justice Kagan significantly narrowed the circumstances in which deference applies, while Justice Gorsuch would have ended deference altogether. These two approaches, Chief Justice John Roberts pointed out in his decisive concurrence, are not so far apart.

Compared to some of the other scholarly works mentioned above, Professor Nielson’s ideal solution diverges from that of Professor Pojanowski, as well as that of Professors Sunstein and Vermeule. To be sure, Professor Pojanowski’s “neoclassical approach” to administrative law would restore the judicial role in answering questions of law, resolving the brouhaha over so-called Chevron deference through a shift back to a system in which judges, not bureaucrats (and their “political masters”), interpret seemingly ambiguous laws. But Professor Pojanowski advocates that courts respect agency policy choices made within “the discretionary space Congress has given them.” Meanwhile, in their book, Professors Sunstein and Vermeule take a more enthusiastic view of the administrative state. The two argue that administrative law has a kind of internal morality that flows from judicial enforcement of certain principles, like the longstanding rule that courts should not defer to the government’s after-the-fact rationalizations of agency actions.

At bottom, Professor Nielson argues for administrative safeguards. So does Professor Pojanowski. Professors Sunstein and Vermeule do, too; they just believe that the safeguards—adapted from the philosopher Lon Fuller’s principles—are already in place and simply require continued judicial enforcement. To borrow a phrase from Chief Justice Roberts’s Kisor concurrence, the distance between and among the works of Professor Nielson, Professor Pojanowski, and Professors Sunstein and Vermeule “is not as great as it may initially appear.” All agree that safeguards are necessary in administrative law. Yet all agree—perhaps contrary to the hopes of some libertarian critics of the administrative state—that the Court should not declare that “most of Government is unconstitutional.”

Now, as the Court reconsiders its approach in various areas of administrative law, scholars are working to understand what the Court is doing, while advocating what they think are the best solutions. Professor Nielson’s solution—deconstruction—has more teeth than does Professor Pojanowski’s neoclassical vision or Professors Sunstein and Vermeule’s internal morality, but it is another middle course charted between ripping the administrative state down to the studs and allowing it to operate without any guardrails. Professor Nielson’s essay, however, takes most serious account of the libertarian critiques of the administrative state, channeling them into the beginnings of a thoughtful way forward for those with serious misgivings about the structure and practice of modern government. His piece, along with the rest of this latest issue of Dædalus, is a worthwhile read.

Cite as: Eli Nachmany, A Second Look at the Administrative State: Deconstruction as Reassessment, JOTWELL (September 30, 2021) (reviewing Aaron L. Nielson, Deconstruction (Not Destruction), 150(3) Dædalus 143 (Spring 2021)), https://adlaw.jotwell.com/a-second-look-at-the-administrative-state-deconstruction-as-reassessment/.

Unearthing the Lost World of APA Adjudication

Emily S. Bremer, The Rediscovered Stages of Agency Adjudication, 99 Wash. U. L. Rev. __ (forthcoming), available at SSRN.

A couple years ago, Melissa Wasserman and I charted the new and old worlds of formal agency adjudication. The old world, we explained, consisted of the traditional formal adjudication framework under the Administrative Procedure Act (APA), with a trial-like hearing before an administrative law judge (ALJ). Drawing on the work of Michael Asimow, Kent Barnett, and others, we explained that the new world is more diverse and varied. Hearings do not take place just before the nearly 2,000 ALJs in the federal system, but also before more than 10,000 administrative judges, hearing officers, and examiners who are not governed by the APA’s formal provisions. We argued that, in both the old and new world, agency head final-decisionmaking authority remains the standard (and preferred) model—something the Supreme Court in United States v. Arthrex seemed to suggest may be constitutionally required earlier this year.

Another way to conceptualize the old and new worlds is that there is a type—or mode—of agency adjudication (Type B) between the APA’s “formal” (Type A) and “informal” (Type C) modes. In recent years, much scholarly inquiry has focused on the distinctions between Type A and Type B, including an entire issue of the Duke Law Journal. Despite this sustained attention, it turns out that our understanding of adjudication under the APA may be based on a historical misunderstanding. In The Rediscovered Stages of Agency Adjudication, Emily Bremer examines the historical record and concludes that, at the APA’s founding, “informal and formal adjudication were not viewed as alternative modes, but rather as consecutive stages.” It is not often that an article requires a field to fundamentally reconsider its foundations. Yet, Bremer’s Rediscovered Stages is such an article for administrative law (and agency adjudication in particular).

There is so much to like (lots) about this article. I’ll focus on four highlights in this Jot.

First, after Part I provides a helpful blackletter statement of the current understanding of federal agency adjudication, Part II conducts an exhaustive historical examination of the APA’s founding documents. Many have previously examined the Attorney General’s final report to Congress (as well as the ABA’s work) that influenced the passage of the APA. But few, if any, have examined in detail the 27 subject-matter/agency-specific monographs the Attorney General’s Committee staff (chaired by Walter Gellhorn and including Kenneth Culp Davis, among others) compiled to support the final report. Based on numerous interviews, site visits, and public and less-public sources, these monographs document the pre-APA administrative statutes, regulations, procedures, and practices at numerous independent and executive agencies.

Bremer’s major finding—that the formal-informal distinction for agency adjudication eventually codified by the APA is a matter of stages, not modes of agency action—can actually be found in the introduction (P. 5) to the Attorney General’s final report:

Administrative adjudication has two more or less distinct phases. The first…is the phase which we have called “informal adjudication,” where, in place of formal hearings, decisions are made after inspections, conferences, and negotiations. In most agencies, there is opportunity for these informal methods of considering issues which arise, and in all but a surprisingly small percentage of cases, these methods finally dispose of the matters at hand…

If informal methods do not succeed in ending a matter, or if they have not been utilized at all, the second phase, which we have called “formal adjudication” is reached. This phase is marked by hearings in which testimony is taken, subject to cross-examination, and embodied into a record. These relatively formal hearings are available in all but a handful of situations where special circumstances prevail. When formal hearings are held, the record is normally considered by officers of the agency and, after opportunity for oral argument before them, the agency heads themselves.

It is somewhat shocking that Bremer’s discovery was hiding in plain sight. But it is a field-shifting discovery nonetheless. And more importantly, Bremer documents how this informal/formal-stages framework is evident throughout the 27 monographs she reviewed. Part II exhaustively surveys the entrenched staged adjudication systems that predated the APA at federal agencies. It also confronts the potential exceptions to the staged framework. As she concludes in Part II.C, “What may appear at first to be deviations from the staged structure of adjudication are better understood as nuances that prove the overarching concept.”

Second, Bremer’s historical review does not just uncover the staged (as opposed to modal) framework for agency adjudication; it also sheds light on the contours of the hearing stage. In Part II.D, she documents how the Attorney General’s Committee found an overwhelmingly singular hearing model that predated the APA. Bremer identifies six key features of that model: (1) notice of hearing; (2) detailed powers of trial examiner; (3) detailed procedures for hearing; (4) hearing conducted on the record; (5) written decision; and (6) post-decisions procedures (noting more inter-agency variation on this sixth component). If these features sound familiar, that’s because they track the APA’s formal adjudication procedures.

Third, Bremer’s findings have important implications for administrative law, which she begins to explore in Parts III and IV. Most importantly, Bremer’s unearthing of the APA’s staged adjudication model underscores that the default for agency adjudication should include a formal, on-the-record hearing for aggrieved parties. Put differently, Congress’s failure to include detailed procedural protections for informal adjudication in the APA was not to write a blank check for agencies to adjudicate without a hearing or other procedural protections. The formal, on-the-record hearing was supposed to be the procedural backstop if a regulated entity was not satisfied with the outcome of the informal adjudication.

Congress can of course depart from this APA default in an agency’s governing statute. But if the APA’s staged default were fully appreciated, how sticky would it be in the legislative process? For instance, as Jennifer Koh has explored, the vast majority of noncitizens removed from the United States each year never get a hearing before an immigration judge. Instead, they are removed in the “shadows of immigration court,” through informal adjudications at the border and elsewhere. To be sure, this is by congressional design. But consider what Congress would have done if it had understood that the default required a second-stage formal hearing—if, as the Attorney General’s final report underscores, a formal hearing should be “available in all but a handful of situations where special circumstances prevail.”

Would Congress have so easily embraced a shadow removals process? Would it have narrowed the subset of noncitizens who could be subject to these shadow removals? Would it have considered enacting additional procedural safeguards short of a formal, on-the-record hearing? As Bremer observes, “What administrative law has lost over the decades is not the operational reality of adjudicatory stages, but rather the conscious recognition of those stages as an important element of the APA’s statutory design.”

Finally, although not fully developed in this article (which is already 74 pages long!), Bremer suggests that rediscovering the staged framework may help us better appreciate the executive-judicial divide in agency adjudication. As illustrated in Figure 2 in Part IV, the informal adjudication stage would be reconceived as executive action, with the formal stage continuing to be perceived as quasi-judicial. As reconceptualized, it is much easier to understand why the APA’s formal adjudication provisions normatively should govern any agency adjudication where a hearing is required by statute or regulation (so Type A and Type B). The much-less-formal, first-stage agency adjudications, by contrast, do not require all that quasi-judicial process, as they are purely executive in nature and, in any event, eventually would be subject to the formal adjudication stage for aggrieved parties.

Much more could be said about this landmark article. Indeed, Bremer’s article itself only begins the conversation regarding the implications of her findings. I look forward to reading the subsequent scholarship by Bremer and others on what this unearthing of the lost world of agency adjudication means for the future of administrative law and regulatory practice.

Cite as: Christopher Walker, Unearthing the Lost World of APA Adjudication, JOTWELL (August 30, 2021) (reviewing Emily S. Bremer, The Rediscovered Stages of Agency Adjudication, 99 Wash. U. L. Rev. __ (forthcoming), available at SSRN), https://adlaw.jotwell.com/unearthing-the-lost-world-of-apa-adjudication/.

A Definitive Work on Temporary Political Leadership

Anne Joseph O’Connell, Actings, 120 Colum. L. Rev. 613 (2020).

President Trump relied heavily on temporary leadership to run his branch. According to critics, the tenuousness of Trump’s cabinet positions—and their high turnover rate—was both a cause and reflection of an amateur and unreliable presidency. And yet, while the extent to which Trump depended on acting officials was anomalous, he was not the only president to do so; indeed, presidents have utilized temporary officials for quite some time. In addition to demonstrating that temporary officials have been fairly common across both Republican and Democratic administrations since the turn of the century, Anne Joseph O’Connell argues in Actings that these officials stabilize the government in times of crisis and transition.

Professor O’Connell, along with Nina Mendelson, is one of today’s preeminent legal experts on the Federal Vacancies Reform Act (Vacancies Act). Professor O’Connell’s prior scholarship and testimony on this topic is both detailed and accessible, and makes clear the stakes of the relevant debates. Actings, published recently in the Columbia Law Review, is no exception. This comprehensive work offers a nuanced and evocative account of the history, constitutional and legal frameworks, and problems that attach to temporary leadership in the top positions of the executive branch. It also marks a departure from Professor O’Connell’s previous writing, in that it is relatively accepting of temporary political appointees.

Professor O’Connell begins by clarifying the ins and outs of the Vacancies Act and presenting rich data illustrating that presidents from Reagan onward, and particularly during the last twenty years or so, have relied extensively on temporary officials. Next, she discusses constitutional and statutory concerns associated with acting officials, with an emphasis on cutting-edge issues. Finally, she offers a rich set of prescriptions to improve the legitimacy and value of temporary officials. Ultimately, she concludes, “actings” are in important part of how modern presidents control the administrative state, and thus deserving of more and continued attention.

The constitutionality of acting officials is uncertain. “Because principal officers must be confirmed by the Senate (if not recess appointed), the constitutional status of acting officials in principal offices presents an important legal question.” (P. 660.) “All but the strictest formalists, however, would permit a person confirmed to a ‘germane’ position to serve temporarily in a different, principal office—the classic example being a confirmed deputy secretary who serves as acting secretary.” (P. 663.) In my view, germane, confirmed officials are also the ideal pool of actings, for both constitutional and practical purposes.

Notwithstanding constitutional concerns, actings help ensure that agencies continue to function. The fact that the Vacancies Act does not cover most independent regulatory commissions serves, to my mind, as a foil for this position. Indeed, these bodies “may be paralyzed if they lose their mandated quorum as they typically both lack access to acting officials and cannot rely on delegation.” (P. 623.) While acting officials might head off agency paralysis, Professor O’Connell notes that they tend to be more caretaker than agent of change. Moreover, she concedes, “[o]n accountability, acting officials are hard to defend” (P. 701.) I imagine that when an acting is a germane and confirmed official, she is more likely to have the expertise and motivation to engage in productive and accountable policymaking. That having been said, the legislative buy-in necessary to ensure high level administrative performance may be lacking for any acting official, no matter how competent she is.

Furthermore, as Professor O’Connell explains, a lack of clarity in the Vacancies Act continues to serve as a temptation for presidents to rely on unconfirmed officials in a “temporary” capacity for too long, potentially both in violation of the Constitution and to the detriment of the executive branch. Beneficial reform could include, among Professor O’Connell’s many terrific suggestions: 1) specifying who may be a “first assistant” (the default acting official for a particular vacant position)—Professor O’Connell suggests, for instance, that the Vacancies Act make plain whether the Act itself or other statutory or regulatory agency-specific designations take precedence, and that the category of first assistant generally exclude anyone who was hired into the first assistant position after the vacancy came to be unless the vacancy occurs at the start of a new administration; 2) ensuring that the same qualification requirements, but not the removal restrictions, that apply to Senate-confirmed appointees apply to acting officials as well; 3) shortening the time period for which an acting official can serve; and 4) allowing a nominee to act in the role for which she is nominated, to minimize leadership disruptions, provided the nominee has been confirmed already to a different position.

That is not to say that, even with these statutory changes, presidents couldn’t continue to circumvent constitutional and legislative requirements if they wanted. In particular, delegation is a powerful workaround. For example, Professor O’Connell recounts that by delegating leadership duties, President Obama managed to keep a temporary director of the Bureau of Alcohol, Tobacco, Firearms and Explosives in the same role, effectively, even after the official’s formal stint as an acting had ended. Furthermore, Obama never nominated anyone for the position. The official, while no longer technically an acting, continued to perform the same duties for the first two years of the Trump administration as well. On the heels of this case study, Professor O’Connell notes that “[u]nderstandably, the media and even members of Congress often fail to distinguish acting officials from officials performing delegated functions.” (P. 635.) President Biden has filled many Cabinet and other leadership positions, but others remain open, and he continues to employ actings too. It seems to me that delegation is a sleight of hand that Biden (and future presidents) could continue to exploit in order to rely, in fact, on unconfirmed and/or temporary officials in a manner that offends the separation of powers as well as the expectations of the Vacancies Act, regardless of legislative reform.

Furthermore, one of Professor O’Connell’s suggestions (which is reflected in proposed legislation that Professor O’Connell supports)—namely, that the Vacancies Act should apply to gaps in leadership resulting from the presidential removal (firing) of an officer—gives me pause. After all, a president could take advantage of this provision to quickly replace his predecessor’s staff with unconfirmed, potentially under- or unqualified politicos, as Trump did to great consequence, instead of rightfully and humbly acceding to the requirements of the Senate confirmation process. However onerous this process may be, it is a constitutional requirement, and one that ensures (at least, in theory) that individuals in top leadership positions have garnered the support of both political branches, which is required to run an agency smoothly and effectively. Nonetheless, congressional efforts to close loopholes in the Vacancies Act just as Professor O’Connell advises could render the use of temporary leaders more legitimate, at least while they remain in their official capacities as actings, and moreover, allow for better fulfillment of their potential to promote a stable and responsive government.

Cite as: Bijal Shah, A Definitive Work on Temporary Political Leadership, JOTWELL (July 16, 2021) (reviewing Anne Joseph O’Connell, Actings, 120 Colum. L. Rev. 613 (2020)), https://adlaw.jotwell.com/a-definitive-work-on-temporary-political-leadership/.

Update of Jotwell Mailing Lists

Many Jotwell readers choose to subscribe to Jotwell either by RSS or by email.

For a long time Jotwell has run two parallel sets of email mailing lists, one of which serves only long-time subscribers. The provider of that legacy service is closing its email portal next week, so we are going to merge the lists. We hope and intend that this will be a seamless process, but if, after July 1, you find you are not receiving the Jotwell email updates you expect, then you may need to resubscribe via the subscribe to Jotwell portal. This change to email delivery should not affect subscribers to the RSS feed.

The links at the subscription portal already point to the new email delivery system. It is open to all readers whether or not they previously subscribed for email delivery. From there you can choose to subscribe to all Jotwell content, or only the sections that most interest you.

National Parks, Inc.

Sarah Light, National Parks, Incorporated, 169 U. Pa. L. Rev. 33 (2020).

Any law review article that name-checks the Doritos Locos Taco warrants a read. But National Parks, Incorporated, by Sarah Light, does much more. The article presents a grounded inquiry into the nature of publicness that is fascinating in its own right and that tackles timely questions about the boundaries of the state at a time when they are being vigorously contested. Specifically, this article: presents a history of private enterprise on public lands to illustrate the tension between public interests and commercial interests that has been present since the inception of the national park system; describes how this tension has evolved and expanded in the modern political and economic context; and presents a framework for thinking about the value of publicness and where boundaries around private enterprise should be drawn to preserve it.

Light begins with an account of the political and legal history of the national parks, which was a pure delight for someone whose pandemic travel has consisted entirely of road trips to parks across the Western United States. More importantly, this part of the article reveals how the legislators, administrators, and activists instrumental in founding these institutions thought about the value of publicness in the parks and the threat posed to it by private, commercial interests. For them, in a nutshell, publicness was necessary to guard against two key harms associated with private property: exclusion and destruction. Publicness meant that any individual, of any means, could enjoy the natural splendor of the parks. And it meant that this natural beauty could not be consumed or defaced by profit-making enterprise. On top of these benefits to individuals, publicness also provided collective benefits. Committing public resources to park lands expressed the nation’s shared commitment to the values of preservation, equal access, and democracy through civic interaction among Americans from all different walks of life.

The founders of the parks believed that these values could be preserved only if public lands were separate from private enterprise. Yet they recognized that private enterprise could be leveraged to support the public values embodied in the parks. For example, transportation and accommodations were necessary to bring visitors to the parks. The parks could realize their public ideals only if members of the public visited them. Thus, from the very beginning, federal legislation governing the parks authorized the leasing of land to private parties to erect accommodations and other amenities for visitors. However, Congress carefully limited the terms of these leases to ensure that park spaces would be preserved for the public’s enjoyment and would not be transformed into private property.

Historically, Congress and conservation activists were most concerned about the threat to public lands posed by consumptive, extractive, and exclusionary private activities. Private activities such as mining, grazing, and construction of private structures raise obvious concerns that public spaces might be destroyed or withdrawn from public use. Light’s key insight is that relationships between parks and private actors have evolved to include an array of non-consumptive, non-extractive, non-exclusive private activities that likewise threaten publicness. These relationships raise complicated questions about the appropriate line between public and private.

Light identifies three types of activity in this category: attempts by private business firms to own intellectual property in the parks and their attractions; corporate philanthropy; and cause-related marketing. For example, in recent years, private corporations have: trademarked the names of historic landmarked properties within Yosemite National Park; made (and marketed) sizeable donations to the national parks; and entered into cause-related co-marketing arrangements that allow companies to leverage their association with the parks to sell products that yield a portion of their proceeds back to the parks. (In this last category, State Park Blonde Ale, made by a Tennessee brewery under an agreement with the Tennessee State Park Conservancy, is the public-private co-branding analog to the Doritos Locos Taco.)

These activities impose no physical harm on the parks and do not exclude members of the public. And those in the latter two categories yield obvious benefits for the parks in the form of revenue. Yet they raise serious questions about the appropriate boundary between the public parks and the private enterprises with which they affiliate. Light raises four potential concerns about these non-extractive, non-exclusive corporate activities. First, large donations might lead to co-optation of the National Park Service (NPS) by private donors. There is some evidence for this. Coca-Cola, which had donated more than $13 million to the National Parks Foundation, objected to the NPS’s proposed ban of plastic water bottle sales at the Grand Canyon, and the NPS initially scrapped the ban (before public outrage caused it to reverse course). Second, associating with corporate sponsors risks reputational spillovers to the parks if the sponsor’s reputation is compromised. Many studies in the management literature document reputational spillovers from one business partner to another. Government entities subject themselves to such risks if they involve themselves in business relationships with private entities. Third, private sponsorship of the parks might erode support for public funding of parks, further increasing reliance on private funding and exacerbating the first two problems. Finally, in extreme cases corporate sponsorships can result in outright exclusion of the public from park lands, as it did when Pepsi and the National Football League erected physical barriers around the National Mall to commandeer it for a private event.

Light suggests that some of these problems can be addressed by maintaining autonomous decision-making for the NPS and encouraging democratic public participation in decisions about how private funding is used. I am not so sanguine. The problems she identifies are not only about resources and incentives and power, as in traditional public choice accounts of political and regulatory decision making. They go to much more fundamental issues about how decision-makers’ preferences are shaped by their roles and relationships and about what the determinative decision-making criteria should be. People approach decision-making differently when they stand in the role of consumer than when they stand in the role of citizen. Consumer behavior, while sometimes influenced by values, tends to turn on cost-benefit calculations. Citizen behavior, while sometimes influenced by cost-benefit calculations, tends to be motivated by values. The donor and co-marketing arrangements Light describes seem to pull decision-making—even by the agency and by the public—from the terrain of shared values to the terrain of value maximization. Indeed, the sole aim of corporate marketing is to shape preferences. Thus, “preserving” decision-making primacy to populations whose identities and cognition have been shaped by corporate marketing provides cold comfort.

If the values embodied in public lands are to be preserved, along with the land itself, we need to consider more critically the way that government relationships with private enterprise shape us as citizens. Light makes a significant contribution by surfacing the new ways private interests are impacting the publicness of the national parks. She acknowledges at the end of the article that what might ultimately be at stake in these entanglements between parks and private enterprise is the expression of a set of core national commitments to preserving places of wonder and awe and to civic nation-building through equal access and shared experiences. This invites more thought about how these values—and the myriad other values implicated by administrative decision-making—can be preserved in the face of both long-standing and still-evolving pressures to calculate costs and benefits.

Cite as: Jodi Short, National Parks, Inc., JOTWELL (June 14, 2021) (reviewing Sarah Light, National Parks, Incorporated, 169 U. Pa. L. Rev. 33 (2020)), https://adlaw.jotwell.com/national-parks-inc/.

Third Party Standing Is Not for Sissies

Curtis Bradley & Ernest Young, Unpacking Third Party Standing, __ Yale L. J. __ (forthcoming), available at SSRN.

Justice Scalia once famously said: “Administrative Law is not for sissies.” His colorful rhetoric undoubtedly was based on the combination of opacity, complexity, ambiguity, and internal inconsistency that characterizes the field of administrative law. The law governing third party standing has similar characteristics. Curtis Bradley and Ernest Young do an excellent job of “unpacking” third party standing in Unpacking Third Party Standing, but it too would not be a good candidate for casual reading by “sissies.” I have read it twice now, and I am far short of having a complete understanding of the intricate analysis in the article. The quality of the analysis is so good, however, that I plan to read it several more times.

The article is extremely ambitious. It is an attempt to “unpack” and explain a doctrine that many fine scholars have been unable to explain in a coherent manner. The reasoning the Supreme Court has used when it has addressed the doctrine is often inconsistent, unhelpful, and incomplete. The authors attribute the failure of the Court and scholars to describe and explain the doctrine in a coherent manner to their attempt to describe it as a single doctrine.

The authors use the general patterns of the Court’s decisions and one test that the Court has long used for a particular narrow purpose—the zone of interests test—in their effort to explain third party standing doctrine. In their view, the doctrine should be understood to refer to three discrete circumstances in which third parties should or should not have standing—parties that are directly regulated, parties that are collaterally injured, and parties that are representing other parties. Before they can complete that ambitious project, however, the authors must first “unpack” first party standing and identify the existence and scope of many of the substantive rights that are frequently invoked in third party standing cases. After taking those two preliminary steps, the authors use the results as inputs in the process of identifying the three circumstances in which a party should or should not have standing to assert the rights of another and the prerequisites to standing that a party should be required to establish to qualify for third party standing in each of the three classes of cases.

The authors argue that standing should be relatively easy to demonstrate in cases in which the party that is asserting the rights of a third party is directly regulated by the rule that is being challenged. In such cases, the only possible limit on standing is prudential rather than constitutional. The petitioner should have standing to assert the third party’s rights if the challenged rule could plausibly violate the rights of the third party. The traditional requirements to establish third party standing—demonstrating that the petitioner has an adequate relationship with the third party and that the third party confronts obstacles to its participation—should not be prerequisites to standing in this category of cases.

By contrast, in the second category of cases, a party that is only collaterally injured by the challenged rule should be denied standing except in the rare cases in which the party can satisfy the relationship plus obstacle test.

The third category of cases—where a party is representing a third party—raises serious Article III questions. In that category of cases, the court must decide whether the party can invoke the injuries to the third party caused by the challenged rule as the basis for standing. The authors argue that courts should apply agency law rigorously to determine whether the relationship between the representing party and the third party is sufficient to allow the representing party to rely on injuries to the third party as the basis for its standing to assert the rights of the third party.

After they identify the three classes of cases in which courts should or should not grant third party standing, the authors apply the prerequisites to the availability of third party standing in each of those three classes of cases to four types of actions that courts have long entertained without seriously considering the propriety of allowing third party standing—class actions, actions by organizations on behalf of their members, multi-district litigation, and attempts to obtain injunctions with nationwide scope. They argue that the Court should reconsider the permissibility and scope of each of those common practices to ensure that it is applying the normatively defensible prerequisites to the availability of third party standing in each of the four contexts in which the Court has routinely allowed third parties to assert the rights of others.

I don’t know whether I agree with the authors. I would have to reread the article with care several more times and reread some of the many authorities they cite to decide whether I agree with them. I plan to undertake that daunting task, however. The article is well-written, well-reasoned and well-researched. The authors have cited every important scholarly article that is relevant to their project. Their discussion of the sources they cite provides solid evidence that they understand each. This is a must-read article for any scholar, judge, or practitioner who wants to try to understand third party standing.

Cite as: Richard Pierce, Third Party Standing Is Not for Sissies, JOTWELL (May 18, 2021) (reviewing Curtis Bradley & Ernest Young, Unpacking Third Party Standing, __ Yale L. J. __ (forthcoming), available at SSRN), https://adlaw.jotwell.com/third-party-standing-is-not-for-sissies/.

Artificial Intelligence Meets Simplexity

Joshua D. Blank & Leigh Osofsky, Automated Legal Guidance, 106 Cornell L. Rev. 179 (2020).

Agency reliance on subregulatory guidance to advise the public is a perennial topic of discussion among regulatory practitioners and administrative law scholars. We want agencies to be forthcoming in sharing their thoughts regarding the laws that they administer, yet we fret that they rely inappropriately on subregulatory guidance to avoid their procedural responsibilities, and we struggle to balance the two.

The use of artificial intelligence in the administration of government statutes and programs is another hot topic these days, and rightly so. Optimism abounds that agencies will be able to harness the machines to make administration fairer and more efficient, yet of course we should think critically as well about the problems that relying on computer algorithms to achieve administrative ends may raise. In Automated Legal Guidance, Joshua Blank and Leigh Osofsky extend their wonderful work on “simplexity” in tax administration to put these concepts together and offer a critique of government reliance on artificial intelligence to provide guidance to the public.

As Blank and Osofsky explained a few years ago in another article, Simplexity: Plain Language and the Tax Law, “simplexity occurs when the government presents clear and simple explanations of the law without highlighting its underlying complexity or reducing this complexity through formal legal changes.” As they documented, IRS publications routinely translate complicated tax concepts into plain language to make those concepts more accessible to the general public. The problem with this exercise is that it “(1) present[s] contested tax law as clear tax rules, (2) add[s] administrative gloss to the tax law, and (3) fail[s] to fully explain the tax law, including possible exceptions.” In short, there is a trade-off between linguistic simplicity and accuracy. That trade-off does not always favor taxpayers, and it can result in inequitable treatment of different types of taxpayers.

The simplexity concept is by no means unique to tax. Many agencies publish guidance that aims to simplify complicated statutory and regulatory concepts for general audiences. In Automated Legal Guidance, Blank and Osofsky extend their simplexity critique to guidance from other agencies, and particularly guidance that is automated. Their examples include the U.S. Citizenship and Immigration Services virtual assistant “Emma” as well as the “MISSI” system used by the Mississippi state government to help people determine which state agency or service might be able to help them with particular problems. Their primary focus, however, is the IRS’s Interactive Tax Assistant (ITA), described by the IRS as “a tax law resource that takes you through a series of questions and provides you with responses to tax law questions” and that “can determine if a type of income is taxable, if you’re eligible to claim certain credits, and if you can deduct expenses on your tax return.” Suffering from deep budget cuts, the IRS has cut back on access to human beings to provide the public with tax assistance in favor of steering them to ITA.

Using a series of basic tax hypotheticals, Blank and Osofsky tested the accuracy and biases of ITA’s answers. Some answers were consistent with a more sophisticated reading of the tax laws. Other answers deviated from tax law requirements and were taxpayer-favorable in doing so, which at first blush might seem like a good thing but also could subject taxpayers who followed ITA’s advice to IRS enforcement. Still other answers were inconsistent with tax law requirements in ways that would deprive taxpayers of benefits to which they were entitled.

Blank and Osofsky acknowledge that ITA is superior to static written guidance in many ways. ITA is more personalized than written guidance and provides answers to questions that are at least clear, if infected by simplexity. ITA often is a quicker way to get answers than reading through written guidance. Nevertheless, ITA—and other automated guidance—can be improved, and those who promote the use of artificial intelligence in government administration would be wise to heed the suggestions that Blank and Osofsky advocate. The most obvious is simply to be cognizant of the tradeoffs inherent in simplexity. With that, government officials also should be aware of their audience and ensure that they “more accurately target the right legal dictates to the right people in the right situations” by adjusting the programming accordingly.

Blank and Osofsky also approach the issue of simplexity in automated guidance from the perspective of administrative law doctrine. They conclude, probably rightly, that the guidance provided by ITA is not legislative but interpretative in character, and thus not subject to notice-and-comment rulemaking procedures. On the other hand, they note that “the automated nature of systems like ITA seem to exacerbate problems already endemic to the administrative guidance.” Accordingly, they suggest “some form of centralized oversight, review, and public comment, regardless of whether such automated guidance is classified as a legislative rule.” Recognizing that noncompliance with subregulatory guidance in the tax context can lead to the assessment of penalties for tax underpayments, they argue that taxpayers ought to be able to rely on guidance from ITA as a defense against such penalties. Finally, they suggest that, as automated legal guidance evolves, agencies ought to figure out how to reduce its reliance on simplexity.

In a world in which government agencies are expected to do more and more with less and less, artificial intelligence holds great promise for the efficient administration of complicated statutory and regulatory schemes. Optimism in this regard should not blind us, however, to the tradeoffs and drawbacks of this turn to automation. Drawing from the tax system, with which millions of ordinary people interact regularly, Blank and Osofsky tell an important cautionary tale for those of us who care about the efficacy and legitimacy of administrative governance.

Cite as: Kristin Hickman, Artificial Intelligence Meets Simplexity, JOTWELL (April 20, 2021) (reviewing Joshua D. Blank & Leigh Osofsky, Automated Legal Guidance, 106 Cornell L. Rev. 179 (2020)), https://adlaw.jotwell.com/artificial-intelligence-meets-simplexity/.

Illuminating The Problems of Electricity Regulation

Shelley Welton, Rethinking Grid Governance for the Climate Change Era, Calif. L. Rev. (forthcoming 2021), available at SSRN.

Energy law today should be everyone’s concern, and especially the concern of administrative law scholars. Scientists report that we are in a climate emergency. Policymakers agree that the electricity sector will be vital to the clean energy transition. A functional electric grid is also a public good that cannot be taken for granted, as the recent disaster in Texas underscores. State and federal agencies, in partnership with their sibling branches, will play a pivotal role in administering the energy solutions the nation adopts. It is an administrative law problem for the ages.

Yet the field of energy law can be an impenetrable slog (I say this as a once and future teacher of the class). Really grappling with energy administration requires excavating dense layers of complex science and technology, unusual regulatory structures, and endless insiders’ terminology to reveal the important problems that lie beneath. Professor Shelley Welton is here to help. In a series of articles, she has elegantly translated the core dilemmas of the clean energy transition. Problems that seemed hyper-technical emerge as familiar administrative law issues of accountability, institutional design, and allocations of power among public and private entities. I’ll focus on one article, Rethinking Grid Governance for the Climate Change Era, but I recommend the entire series, available on SSRN.

If you’re new to the administrative law of energy, here’s something you might not know: for roughly 2/3 of the country’s population, key decisions regarding electric power rest not with a state or federal agency, but with privatized administrators known as Regional Transmission Organizations or Independent System Operators (RTOs for short). As Welton describes them, RTOs are “private membership clubs in which incumbent industry members make the rules for electricity markets and the electricity grid through private mini-democracies—with voting privileges reserved for RTO members.” They also have an important public dimension: FERC incentivized and guided their creation, effectively bestowing them with power to file “tariffs” (energy law speak for rate schedules and related rules and policies), subject only to deferential FERC review pursuant to the Federal Power Act.

Welton’s core argument is that to make needed climate progress, it’s time to rethink RTOs’ structure and role in our electricity system. States around the country are increasingly adopting bold clean-energy mandates, but RTOs are standing in the way—yet escaping public scrutiny. Once brought to light, she argues, RTOs’ shortcomings are best understood as a product of their flawed design. Their structure and incentives enable protectionism by powerful fossil-fuel incumbents in energy markets, and that’s what has happened. We need a new model.

Administrative law scholars will find much to admire in Welton’s reconstruction of how RTOs came about. She traces their emergence as a product of the late 1990s intellectual milieu in regulatory governance: a focus on “new governance” and privatized strategies that would allow government to run more “like a business.” Early on in their existence, RTOs did very technical work akin to traffic direction, such that privatization seemed sensible. But over time, RTOs have gained responsibilities and real clout, transforming from “policy takers” to “policy makers.” Every RTO now runs (and sets the rules of) a set of electricity markets—markets where generators sell and utilities buy electricity for a region before eventually selling it to end users. RTOs have also expanded into transmission planning and transmission cost allocation. Still more, several RTOs now control “resource adequacy,” the question whether a region has enough capacity to meet projected demand; through capacity auctions, RTOs determine which energy resources will be financed in that region. In short, in much of the country, RTOs can shape the electric grid’s sources (renewable or not), capacity (how much), and payment (to whom and how much). Given this influence, Welton explains that “if the United States is to have any chance at decarbonizing at the rate necessary to avoid catastrophic climate change, then RTOs must play a pivotal role.”

The problem is that RTOs haven’t been cooperative in aiding decarbonization. Welton describes them as “inveterate stallers when it comes to integrating new resources that would improve their markets but threaten incumbents’ bottom line,” and “aggressive and misguided” in impeding market competition by renewables. These delays and obstructions are highly consequential, effectively blocking the clean energy transition. Yet RTOs have escaped sustained criticism, much less reform. Welton suspects this is partly because “these topics are so complicated that they confound efforts at media attention or civic engagement.” Read a few of the documents and filings that she brings to life in this article, and I’m confident you’ll agree.

Welton’s intervention is a direct response to this problem of unaccountability-through-complexity. She makes the underlying energy concepts clear and accessible. Take her explanation of how some RTOs have resisted the integration of renewable resources in their markets. One would be forgiven for staring blankly when an RTO asserts that “the market participation of resources that receive ‘state support’ results in ‘price suppression and thus negatively impact[s] the market’s ability to retain and justly compensate needed existing resources and to attract new, competitively compensated resources.’” But Welton breaks it down. “In plainer speak, natural gas generators are worried that the entry of substantial renewable resources into the market might lower prices enough to drive fossil fuel competitors out of business, or halt future construction of fossil fuel-fired generation.” And “[c]uriously,” she observes, these RTOs define “state support” to include only state policies that promote clean energy, not longstanding subsidies for fossil fuels. Yet these RTOs explain their renewables-resistance only using “vague worries about ‘market integrity’ or ‘investor confidence.’” (To those excuses, Welton chides: “there is no reason that fossil fuel generators should be confident when building new, polluting generation for states that do not want it or need it.”) The narrative of incumbent protectionism becomes easy to grasp. It turns out that energy law is full of familiar administrative law stories once we can see the field clearly.

So what went wrong, in terms of regulatory design? Welton takes this up in Part IV of the article. Here she goes further than many commentators on privatized governance structures, who cast privatization as offering the benefits of increased efficacy and efficiency, to be weighed against the costs of decreased accountability. That’s too generous here, Welton opines. “RTOs’ membership-club format has not led to entrepreneurial efficiency,” she argues—it has done the opposite, allowing the energy haves to “block cost-reducing reforms.” Most impressively, Welton dissects internal RTO governance (famous for its opacity) to show why these failures shouldn’t be that surprising. For example, RTOs supposedly use a sort of internal checks-and-balances model of weighted voting, in which the demand and supply sectors of the market have voting power that could offset the other. But that’s no check at all because, as Welton explains, both of those sectors prefer to build more traditional electricity infrastructure rather than support a shift to renewables. Only consumers and their designated advocates are “natural watchdog[s] against overbuilding,” but they have negligible voting power. As a result, reforms that would help consumers (and the planet) “often wither and die in committee.”

Welton concludes by proposing four solutions that might contribute to a new model of administering the electricity system. First, FERC could pare back RTOs’ authority, reverting them “to a more basic set of functions.” Second, FERC might accept RTOs’ expansive duties but increase public oversight and control accordingly. For example, FERC might require RTOs to give greater say (or even veto power) to the states in which they operate; FERC itself might use what power it has left (after judicial rulings narrowly construing its authority) to step in; or Congress might increase FERC’s oversight authority. Third, either FERC or Congress could take steps to alter underlying power dynamics by limiting utility power or scrutinizing the effect of corporate mergers on the electricity system. Finally, and most radically, FERC or Congress might drive a transition to either public ownership or public control of the grid, a model used in other nations.

In the end, Welton’s article is a twofold achievement. It is an expertly told excavation of a pressing policy problem—to which solutions “must be calculated, swift, and decisive if the United States is to achieve anything close to the clean energy transition demanded by atmospheric physics.” It is also an ingenious analysis of how institutional design choices, and especially choices regarding the structure of privatization, drive administrative performance. Welton connects the history of RTOs to trends in regulatory thought and links RTOs’ future to efforts to reclaim the concept of “public utility”—the storied and reemerging idea that concentrated corporate power might be steered toward the public interest. That effort may be promising in a variety of sectors today. But Welton’s closing pitch is that none is more important than the electricity sector, “which will either embrace the existential challenge of climate change or take us all down with it.”

Cite as: Miriam Seifter, Illuminating The Problems of Electricity Regulation, JOTWELL (March 30, 2021) (reviewing Shelley Welton, Rethinking Grid Governance for the Climate Change Era, Calif. L. Rev. (forthcoming 2021), available at SSRN), https://adlaw.jotwell.com/illuminating-the-problems-of-electricity-regulation/.