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.
Anne Joseph O’Connell, Actings
, 120 Colum. L. Rev.
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.
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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.
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.
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.
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.”
Janet Freilich, Ignoring Information Quality
, __ Fordham L.R.
__ (forthcoming 2021), available at SSRN
Complaints about the patent system are legion. Critics complain that it is too easy to get a patent, that it is too easy to challenge an existing patent, that many patent denials are rationally inexplicable, that aggressive enforcement of patents stifles innovation, that patent trolls abuse the system to extort money from innocent users of widespread technology, and that inventors leverage modest modifications of existing patents to extend the patent period beyond intended legislative limits. While Janet Freilich’s forthcoming article, Ignoring Information Quality, may not reveal the root of all patent evil, it illuminates an important problem in the U.S. patent system, namely that patent examiners rely on low quality information to make their ever-important decisions on patentability. This, according to Professor Freilich, leads examiners to grant patents based on dubious claims that undercut, rather than further, patent law’s purpose of encouraging useful innovation and to reject deserving patents based on an incorrect understanding of background information.
The attentive reader may wonder why this is an administrative law jot rather than an intellectual property one. The answer is simple—the Patent and Trademark Office (PTO), the agency that grants patents, is an administrative agency, and thus Professor Freilich’s article is a case study in the importance of high quality information across the spectrum of administrative law. Information quality problems like those that plague the patent system exist in many corners of administrative law where sensible policy decisions and predictions are possible only in light of high quality information. Professor Freilich’s paper shines a light on a problem in the patent system that is similar to problems that have been noticed in administrative rulemaking, where mountains of comments may overwhelm the capacity of agencies to separate the wheat from the chaff and in adjudications where subjects of administrative action in areas such as immigration enforcement may lack the capacity or knowledge to gather and present the facts relevant to their cases.
Through careful examination of numerous patent files and caselaw on patent validity, Professor Freilich illustrates that patent examiners are not “digging” (her word) into the quality of evidence that is key to whether an invention is patentable. This is because, as courts have acknowledged, examiners lack the capacity to do the scientific work that would be necessary to evaluate the information. Patents may be granted or denied based on a cursory look at information that, with appropriate inquiry, would be revealed to support the opposite conclusion. Freilich contends, quite persuasively, that examiners’ “failure to evaluate evidence . . . permeates every aspect of examiner behavior.” If true, and Freilich’s article seems to establish that it is true, what we have is an unreliable administrative system for making highly consequential determinations, something administrative law should not tolerate.
Even more startling, in my view, is Professor Freilich’s analysis of the PTO’s policies which seem to guarantee that patent awards will be based on low quality, biased information. One key element of patentability is that an invention must be “useful.” PTO rules tell examiners that ordinarily they should accept an applicant’s assertion that their invention is useful and should only “rarely” request additional evidence. Even further, the PTO’s rules specify that the claim that an invention is useful should be rejected mainly only when the claim violates a scientific principle. Professor Freilich summarizes this as a requirement that examiners “accept the applicant’s stated utility unless it is utterly impossible.” This extreme standard does not inspire confidence in the accuracy of patent determinations.
Professor Freilich supports her claim that examiners rarely inquire into the quality of the information contained in the patent application with research that indicates that when examiners reject patent applications, it is always because a required piece of information is absent, not because the information provided is of insufficient quality. This is a disturbing finding because patentability depends on the accuracy of the information provided by the applicant, not merely whether the applicant has completed all of the required sections of the application.
Professor Freilich proposes to address the pervasive problem of low quality information in the patent system in a number of ways, all of which could be applied across a wide spectrum of information-dependent administrative proceedings. Professor Freilich’s first, quite simple, proposal is to require applicants to provide scientific corroboration for their conclusory statements on the elements of patentability, such as lab notebooks, copies of scientific analyses and physical models, or detailed drawings. She also suggests that all parties to patent applications, including inventors and their attorneys, should be held rigorously to a duty of disclosure to the PTO, with penalties such as additional scrutiny applied to applicants and their agents who do not disclose all relevant information in a useful format. Finally, she observes briefly that automation in the form of artificial intelligence may be useful tools for improving PTO performance.
Another of Professor Freilich’s proposals raises a central issue in administrative law—deference. In light of the generally low quality of information underlying many patents, she proposes that courts should no longer presume that patents are valid, at least not with regard to those elements that are fact-dependent. In her view, the patent process should be viewed more like a registration system than an examination system. In this light, courts would presume only that the PTO’s formal requirements have been satisfied, while leaving the substantive question of patentability open to non-deferential judicial determination. Professor Freilich recognizes that post hoc judicial determination is far from ideal, preferring her proposed internal reforms, but she recognizes that until the PTO starts performing more reliably, it may be the only alternative.
Professor Freilich’s article should be of interest to two groups of scholars, most obviously patent scholars but more broadly administrative law scholars looking to broaden their perspective into agencies that are rarely considered in the general study of administrative law. We have seen in recent decades a judicial broadening of the scope of general principles of administrative law to agencies that previously seemed to function in their own, isolated, spheres. Perhaps the PTO will be next.
Cite as: Jack Beermann, Patent Fake News
(February 22, 2021) (reviewing Janet Freilich, Ignoring Information Quality
, __ Fordham L.R.
__ (forthcoming 2021), available at
The nationwide injunction has seized the imagination of courts and law professors in recent years. Not surprisingly, JOTWELL’s pages screens have given it extensive attention. Recent jots have described important work by Samuel Bray (twice), Amanda Frost (also twice), Russell Weaver, and Alan Trammell that attacks, defends, or theorizes nationwide (or “universal”) injunctions. Jack Beermann, in praising Bray and Frost, did have one complaint: “As an administrative law nut, I wish they both grappled more with the meaning of the APA’s instruction that reviewing courts should ‘hold unlawful and set aside’ unlawful agency action.” Mila Sohoni has now filled that void. Sohoni convincingly shows that there just can be no question that in the Administrative Procedure Act Congress authorized—indeed, indicated a preference for and established a presumption in favor of—nationwide relief when a court finds a regulation defective. When APA § 706(2) authorizes a reviewing court to “set aside” an agency rule, it means exactly that.
In 2018, Attorney General Jeff Sessions distributed Litigation Guidelines instructing civil litigators in the Department of Justice (DOJ) to oppose universal injunctions always and everywhere. The memo’s seven sections gave seven reasons why such relief was beyond the pale, including the assertion that it was unconstitutional. Section VII was headed: “In APA Cases: Universal Vacatur is not Contemplated by the APA.” Sohoni’s article resoundingly contradicts this assertion.
The term “universal vacatur,” used by DOJ and adopted by Sohoni, is a neologism. No court has ever used it, and a Westlaw search of the secondary legal literature reveals only two usages: one in the current article and the other an article by . . . Mila Sohoni. When a court finds an agency regulation unlawful, the order typically “vacates” the rule; that action is “vacatur.” There is some dispute about whether and when a court can or should remand a defective rule to an agency without vacating it—a practice the Administrative Conference of the U.S. has endorsed though only in limited circumstances—which is known as “remand without vacatur.” But there has not been any disagreement about what “vacate” means in this setting: to “vacate” a rule or portion thereof means to set it aside or to invalidate it, period. Therefore “universal vacatur” at least borders on redundancy. Still, Sohoni adopts the term, explaining that while it “is relatively unfamiliar (and perhaps a bit loaded), it does crisply capture the concept of setting aside a rule not just as to the plaintiffs, but as to anyone.” Let it be some solace to DOJ that it has won the (terminological) battle even though it has lost the (substantive) war.
Sohoni begins by situating universal vacatur within the administrative law context. Challenges to statutes often arise in the context of the application of the statute to a particular person; to grant the litigating party relief does not require “setting aside” the statute universally. Challenges to regulations can arise in that setting, as, for example, when an entity challenges the validity of a regulation as a defense in an enforcement action. When that happens, the obvious and often sufficient relief is to block application of the regulation to the party. But the APA also authorizes a direct challenge to a regulation. Post Abbott Labs, that is the norm. And it does so through language that directly authorizes courts to consider the validity of the rule itself, not the validity of its application in particular circumstances. Accordingly, preconceptions about universal relief appropriate to challenges to statutes have to be left at the door.
With that groundwork laid, the article is a familiar and convincing exercise in statutory interpretation.
With regard to text, the APA’s grant of authority to “set aside” a regulation reads naturally as authorizing universal vacatur. The obvious synonym, or definition, Sohoni says, is “invalidate.” What else could “set aside” mean? DOJ does not deny that “set aside” means “set aside.” Instead, it contends that the thing that courts are authorized to set aside is not the regulation itself but only its application to the party challenging it. As Sohoni explains, that is a bizarre way of understanding the standard pre-enforcement challenge to an agency regulation.
Sohoni also offers a lengthy examination of equitable remedies against agencies in the pre-APA period, demonstrating that what we would today call a nationwide or universal injunction was well-established by 1946, so there is no reason not to take the text to mean what it says. The provenance of the phrase “set aside” is not completely clear, but she offers one compelling nugget from the 1941 Attorney General’s Report, which noted that a “judgment adverse to a regulation results in setting it aside” (emphasis added). That sure sounds like it is the regulation, not its application, that is invalidated. The direct legislative history from Congress’s drafting and consideration of the Act five years later is thin on this point, so Sohoni has little to say about it, but she does draw some supportive inferences from the history of § 705, regarding stays during litigation. (Sections 705 and 706 are mutually supportive; if a court can grant universal vacatur under the latter, it surely can grant a nationwide injunction against the enforcement pending litigation under the former, and vice versa.)
Finally, Sohoni describes the consistent post-1946 understanding (at least consistent until the recent brouhaha) that courts that set aside a regulation under § 706 have authority to grant relief in the form of universal vacatur.
This article is not and does not purport to be the last word on the nationwide injunction debate. (Of course, the last word is unlikely ever to be uttered, though the Supreme Court may weigh in this Term.) Larger constitutional issues loom in the background, and Sohoni perhaps brushes them off a little quickly. But The Power to Vacate a Rule is the definitive statement on the statutory issue of the legitimacy of universal relief in challenges to regulations under the APA.
Nicholas R. Parrillo, A Critical Assessment of the Originalist Case Against Administrative Regulatory Power: New Evidence from the Federal Tax on Private Real Estate in the 1790s
, 131 Yale L.J.
(forthcoming 2021), available at SSRN
Not so long ago, teaching the nondelegation doctrine in Administrative Law class was straightforward. Assign students an excerpt from Whitman v. American Trucking Association. Maybe add a bit of Justice Scalia’s dissent in Mistretta. Discuss the emptiness of the intelligible-principle principle. Everyone in class agrees that, whether you like it or not, a nondelegation doctrine that can accommodate delegations to act in the “public interest” or set “fair and equitable” prices does not do very much to limit the scope of the modern regulatory state.
But change has been in the air for several years—as most clearly demonstrated by Gundy v. United States (2019). As readers of this website will likely recall, the Court in Gundy addressed a nondelegation challenge to the Sex Offender Registration and Notification Act (SORNA), which requires sex offenders to register before completing their sentences of imprisonment. Barring time travel, this requirement would have been hard to apply to persons who had completed their sentences before SORNA’s enactment. To deal with them, SORNA delegated to the Attorney General the authority to “specify the applicability” of registration requirements and to “prescribe rules for registration.” Justice Kagan, writing for a controlling plurality, found sufficient constraints in SORNA’s text, purpose, and history to reject the nondelegation challenge. Just as about a century’s worth of the Court’s precedents might lead one to expect.
Justice Alito, concurring, expressed willingness to reexamine the nondelegation doctrine in a future case if a majority proves willing to do so, but thought singling out SORNA would otherwise be a bit “freakish.”
Justice Gorsuch, in a dissent joined by the Chief Justice and Justice Thomas, condemned the intelligible-principle principle as a liberty-destroying “misadventure” that “has no basis in the original meaning of the Constitution, in history, or even in the decision from which it was plucked.” He explained that delegations of rulemaking authority to agencies to govern private conduct are permissible in just three circumstances. First, if Congress makes the policy decisions, agencies can “fill up the details.” Second, Congress can impose conditional rules that come into force only if an agency later finds some triggering fact to be true. Third, Congress does no harm when it “delegates” authority to the other branches that they already possess under the Constitution.
Take Gundy, mix in Justice Kavanaugh and maybe Justice Barrett, and we appear to have a solid majority of the Court interested in overhauling the nondelegation doctrine in a way that is at least consistent with the conclusion that much agency regulation of private conduct is unconstitutional.
In response to this prospect, three leading scholars of administrative law have recently produced two major law review articles that deploy originalist arguments to debunk the nondelegation doctrine. Professors Julian Mortenson and Nicholas Bagley, based on a wide-ranging survey of Anglo-American legal thought before and after 1789, conclude that “the overwhelming majority of Founders didn’t see anything wrong with delegations as a matter of legal theory.” (Delegation at the Founding, 121 Columbia L. Rev. (forthcoming 2021)) Turning to practice, they identify numerous delegations of generous grants of discretionary rulemaking authority to administrative authorities from the very early years of the Republic. In their view, squaring this history with a meaningful nondelegation doctrine requires too many gerrymandered exceptions to be remotely persuasive. Delegation at the Founding, which does not pull any punches, has already generated a great deal of discussion in law reviews and the blogosphere. For one of several rejoinders, you might check out, Ilan Wurman’s Nondelegation at the Founding, forthcoming in the Yale Law Journal.
The other major salvo, and the subject of the remainder of this jot, is Professor Nicholas Parrillo’s splendid article with the really long title, A Critical Assessment of the Originalist Case Against Administrative Regulatory Power: New Evidence from the Federal Tax on Private Real Estate in the 1790s, which will be published next year in the Yale Law Journal. This article, too, examines early congressional legislation to shed light on whether the original understanding of the Constitution demands a nondelegation doctrine with sharp teeth. Rather than go for the magisterial sweep in the fashion of Mortensen and Bagley, however, Parrillo instead goes for the deep dive, exploring for over one hundred pages the discretionary powers that Congress granted to administrators to implement a tax on real estate that Congress imposed in 1798.
To explain why this 1798 tax is so important, Professor Parrillo notes that proponents of a strong nondelegation doctrine often try to explain away early congressional delegations by arguing that they fall into exceptions that allow more constitutional room for rulemaking. For instance, greater administrative discretion is permissible for foreign and military affairs because they fall within the natural domain of the executive in any event. Also, Congress can grant rulemaking discretion to administrative authorities to determine how to allocate benefits, services, and privileges. On this view, the nondelegation doctrine does, however, bar Congress from delegating to administrative authorities the power to promulgate “coercive regulation[s] of private rights and private conduct.” (P. 9.)
One way to combat the nondelegation doctrine in this limited form is to contend, as Mortensen and Bagley do, that the exceptions represent an implausible effort to save the doctrine from the evidence of history. Another way is to find early congressional delegations that in point of fact did grant agencies coercive power over private rights. And, in the form of the 1798 federal real estate tax, Professor Parrillo has found just such a delegation.
He explains that, in its first decade, Congress relied on import duties and excise taxes to fund the federal government. In 1798, however, Congress needed another revenue stream to help pay for a military buildup. In the Lay and Collect Act, Congress therefore imposed a direct tax of 2 million dollars, which it apportioned across the states according to their populations. (P. 22.) This tax fell, in the first instance, on slaveowners, who were to pay a tax of 50 cents per slave. The remainder of the states’ quotas were to be covered first by a progressive tax on houses and then, if necessary, by a flat tax on land. (Pp. 22-23.)
The Lay and Collect Act instructed that taxes on real estate should be calculated according to the terms of the Valuation Act. This statute, which Congress had enacted just a week earlier, provided that real estate should be valued at its “worth in money.” (P. 22.) As Professor Parrillo deftly explains, the extreme vagueness of this standard was intentional.
The Valuation Act divvied up states into tax districts. Each district got a federal tax commissioner who had been nominated by the President and confirmed by the Senate. Together, the commissioners of a given state formed its federal tax board. There were 94 commissioners in all. They appointed, on a conservative estimate, over 2100 principal and assistant assessors to aid them in their work. For those keeping score at home, that’s a bigger administrative apparatus than the Post Office had at the time. (P. 27.)
To enable the boards to carry out their functions, Congress delegated significant rulemaking powers to them. For instance, the Valuation Act gave each board authority to “establish all such regulations, as to them, or a majority of them, shall appear suitable and necessary, for carrying this act into effect; which regulations shall be binding on each commissioner and assessor, in the performance of the duties enjoined by, or under this act.” (P. 27 (quoting Valuation Act).) The boards’ “greatest” rulemaking power, however, enabled them to ensure fair allocation of the tax burden across districts by revising all the valuations in a district at once by rule. To this end, boards “had the power to raise or lower the tax assessments of thousands of property owners all at once, by any percentage amount, so long as the change ‘shall appear to be just and equitable.’” (P. 30 (quoting Valuation Act).)
“Just and equitable.” That sure sounds like a lot of regulatory discretion.
After explaining the structure, operation, and powers of the federal tax boards, Professor Parrillo explores:
- The informational and methodological difficulties of real estate valuation in the 1790s—and the wide discretion that the boards necessarily had in carrying out mass-revision rulemakings as a result;
- The political and contentious nature of the boards’ authority to allocate tax burdens across different geographic areas with different economic interests (e.g., determining assessments for coastal areas versus backcountry);
- The binding nature of the boards’ mass revisions, which were “final and absolutely binding on taxpayers” with no avenue for judicial review (P. 15); and
- The wide and bipartisan acceptance of the boards’ powers—and the notable absence of constitutional objections to them in connection with the 1798 tax or to similar taxes that Congress imposed in later decades.
Professor Parrillo has, by poring over centuries-old records of an almost forgotten tax and placing them in historical context, produced a truly impressive piece of legal scholarship. His Critical Assessment should play an indispensable role in the post-Gundy evolution of the nondelegation doctrine.
(Also, did I mention it has 695 footnotes?)