Administrative law scholarship comes in many shapes and sizes. One distinctive type is the law review article that began life as a consultant’s report for the Administrative Conference of the United States (ACUS) and then was published in revised (read: more compulsively footnoted and obsessively bluebooked) form in a law review. The ACUS lineage is always visible in the final product: these articles are grounded on and often provide an overview of current practice, they are even-handed, and they contain real-world proposals for reform. On the other hand, they tend not to be wildly abstract, coin new terms (“I call this approach neo-tripartite hyper-realism”), or end up in the Yale Law Journal (with the occasional impressive exception or two as to the last).
Michael Asimow’s recent article on greenlighting—”the process whereby the heads of a combined-function federal regulatory agency determine whether to accept the staff’s decision to charge or not charge a target with a violation of law” (P. 227)—began life as an ACUS report, and it shows. It describes the practices of five different agencies, reviews the value and the risks of looking to agency heads to approve enforcement actions, and assesses a suite of possible structural arrangements that might preserve the former and minimize the latter.
Suppose you are unfortunate enough to be the target of an FTC enforcement action. After a significant period of investigation, the agency decides to proceed, and you are served with a complaint. Disconcertingly, you notice that the complaint includes a proposed final order, all ready to go. More disconcertingly, the complaint has been issued by the very FTC commissioners who will make a final determination as to whether to issue that order. Their names are at the top of the complaint, which states that “the Commission has caused this complaint to be” issued and the complaint is “by the Commission.” In short, judge and prosecutor are combined. Things do not look promising.
Of course, this combination of functions is longstanding, is implicitly authorized by § 554(d)(C) of the Administrative Procedure Act (APA) (which exempts agency heads from its separation of functions requirements), and, as per the unanimous opinion in Withrow v. Larkin, ordinarily does not violate the Due Process Clause (even though a judge cannot sit in a case in which he had participated as district attorney). And yet, a certain unease about this arrangement never disappears, and proposals for restricting or eliminating the role of agency heads in approving enforcement actions are common.
Asimow begins with an informative review, based in part on extensive interviews, of the charging process at the SEC, FTC, FCC, FERC, and NLRB. The details vary, and can’t be summarized here, but in each an investigation begins at the staff level. At some agencies and for some cases, the staff can issue a charge and even settle the case without approval from the agency heads. But most of the time, and for more significant cases, if and when staff concludes that a charge is warranted, the case cannot proceed without a green light from the full Commission. Often, staff and the target have already worked out a settlement, but in general the agency heads must approve the agreement. The outlier is the NLRB, with its independent General Counsel, authorized to pursue enforcement actions without Board approval.
In Part II, Asimow reviews the merits and shortcomings of this arrangement. One justification is that a charging decision belongs with the agency heads because it implicates how agency resources are allocated. But, more importantly, “combined-function agencies use adjudication for policymaking, and choosing which cases to prosecute is an essential element of the policymaking process.” (P. 246.) Moreover, both the track record and Asimow’s interviews indicate that in practice greenlighting often functions to protect targets; enforcement would be more ferocious if the charging decision was simply left to the prosecutorial staff.
On the flip side, Asimow identifies two concerns. One is efficiency. Agency heads can spend a lot of time on enforcement matters, time that is not spent on other arguably more important tasks. Estimates vary; apparently time spent on enforcement matters (including settlement approvals) consumes only 10% of FERC Commissioners’ time but as much as 50% for SEC and FTC Commissioners.
The other major concern with greenlighting is the obvious one: confirmation bias. Having decided that a case is worth pursuing, that “there is a there there,” won’t agency heads always discover that—what do you know?—their judgment was correct and a violation has occurred? This concern must be taken seriously, but on Asimow’s account it may be more theoretical than real. The huge majority of cases settle, and so are not resolved by the agency heads; enforcement takes a long time, so the agency heads who make a final decision may not have been those who greenlit the prosecution; agency heads must decide the matter exclusively on the record; the actual hearing is presided over by an ALJ; most agency heads acknowledge the possibility but do not perceive themselves as biased (no surprise); empirical research is inconclusive.
Asimow’s bottom line is that the benefits of greenlighting outweigh the costs, but that some checks and balances would be useful to mitigate the latter.
A brief Part III reviews the purely legal issues. Asimow accepts the mainstream view that greenlighting violates neither the Due Process Clause (pace Andrew Volmer, a former Deputy General Counsel at the SEC) nor the APA.
In the final section, Asimow reviews existing or possible structural arrangements aimed at preserving the benefits of greenlighting while diluting its dangers. In brief, he is in favor of:
- giving targets notice of and an opportunity to comment on a proposed charge before it is brought (though only once, not twice (as occurs at FERC));
- delegating the authority to issue complaints to staff in routine cases (though most of Asimow’s interviewees were opposed to this practice);
- adopting, and regularly updating, enforcement guidelines; and
- establishing a system of peer review, under which staff prosecutors and investigators conduct an ex post review of charging decisions.
On the other hand, he is agnostic regarding, or wholly opposed to:
- allowing targets to meet directly with agency heads prior to their decision (as happens at the FCC and FTC);
- adopting strict separation of functions rules and bans on ex parte contacts with ultimate decisionmakers from the beginning of an investigation (as proposed by William Scherman et al.);
- disqualifying automatically any agency head who participated in the charging decision;
- placing the charging decision with the agency General Counsel (as Congress has done with NLRB unfair labor practice cases (except as to the decision to seek a temporary injunction, which is the Board’s to make)); or
- making major structural reforms, such as placing (or allowing targets to move) all enforcement actions to federal court or replacing the agency heads with an internal agency appellate tribunal in enforcement adjudications.
One comes away from reading this article not only better informed, but also reassured. The system ain’t broke. ACUS commissioned the report as a standalone study rather than as the basis for action by the Assembly. Perhaps that is because ACUS leadership thinks things are working sufficiently well that it need not weigh in. In any event, though Michael Asimow’s valuable report thus was denied the glory (what other word can there be?) of being the basis of an ACUS Recommendation, it at least now has the JOTWELL imprimatur.
