Yearly Archives: 2021
Jun 26, 2021 Jotwell
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Jun 14, 2021 Jodi Short
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.
May 18, 2021 Richard Pierce
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.
Apr 20, 2021 Kristin Hickman
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.
Mar 30, 2021 Miriam Seifter
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.”
