Margaret B. Kwoka, FOIA, Inc., Duke L.J.
(forthcoming 2016), available on SSRN
Congress may be gridlocked on many issues, but both parties are working hard to strengthen the Freedom of Information Act. Motivations differ, of course. According to the New York Times, Republicans are displeased with the State Department’s response to requests for then-Secretary of State Hillary Clinton’s emails while Democrats favor a stronger transparency statute.
Margaret B. Kwoka’s forthcoming article, FOIA, Inc., in the Duke Law Journal already has a place in the policy discussions (and in the NY Times). It should also have a place in research and teaching in Administrative Law. I am a strong proponent of teaching something about FOIA in the core Administrative Law class, focusing on its potential use as an oversight mechanism and as an information tool in the many cases that are excluded by the Federal Rules of Civil Procedure and the presumption of regularity from discovery. I warn students, however, that they should not be swayed by tales of disinfecting sunlight, mentioning briefly old studies about the use of FOIA by private parties to get information about other private parties.
My warning has not been strong enough. From considerable original empirical work, Kwoka supports three important points. First, commercial requesters dominate in FOIA practice. Second, some of these requesters are taking information obtained from FOIA and making a profit selling the information. Third, the fees agencies take in pay only a small fraction of the costs of processing FOIA requests. (Kwoka also argues that these realities have disconcertingly crowded out media requesters—that’s a more contested and less interesting (to me) point, so I do not spend time on it here.)
Empirical work takes time. It takes even more time if you collect your own data. Kwoka requested FOIA logs from nearly two dozen agencies, all of whom had reported more than 1,000 requests in FY 2013. Only six of those agencies provided “complete data in a usable form,” so Kwoka turned to an in-depth examination of the Defense Logistics Agency (4,420), the Environmental Protection Agency (9,737), the Federal Trade Commission (1,538), the Food and Drug Administration (10,167), the National Institutes of Health (1,198), and the Securities and Exchange Commission (12,091). The number of requests to each agency is in parentheses.
From her careful, detailed look at these logs, Kwoka unearths some fascinating insights. To name some important ones:
- Although a smaller FOIA operation, all but four percent of DLA’s requests were categorized as commercial. Day & Day, one information reseller, charges $1800 for an annual subscription to an online database of FOIA documents from DLA (specifically, procurements and contracts).
- Nearly eighty percent of EPA’s requests were submitted by commercial requesters. Compared to other agencies, frequent requesters were, well, less frequent. Only six sources made more than 100 requests and none put in more than 180.
- By contrast to four of the other agencies, only about one-third of FTC requests fell into the commercial category. Over half of those commercial requests (and twenty percent of all requests) came from law firms. Nearly half of the total requests were made by individuals, almost all of whom wanted information about their own consumer complaints to the agency.
- Three-quarters of FDA’s requests came from commercial sources. Contrary to what I had been teaching, the “most frequent requesters are not . . . pharmaceutical companies, but information resellers.” These resellers make good money. FDA News charges $997 for a one-year subscription for FDA Form 483s and $117 for a particular form. The only high-volume pharmaceutical requester, Merck & Co., overwhelmingly asked (more than 80 percent of its 373 requests) about others’ FOIA requests.
- Like the FTC, a little more than one-third of NIH’s requests were labeled commercial. Fifteen percent came from educational institutions.
- SECProbes accounted for 12 percent of all SEC requests. These 2498 requests from SECProbes were labeled as coming from news media but should have been placed in the commercial category (from impressive online sleuthing by Kwoka). If they are removed from the news media pile, only 309 requests remain in that category.
Agencies are not getting reimbursed for this work. For example, according to Kwoka, the cost of FDA’s FOIA operations came to $33.57 million but the agency collected only $327,075 from its commercial requesters, which make up three-quarters of the agency’s workload. It adds up, with the government paying “nearly half a billion dollars on FOIA.”
Kwoka suggests some possible reforms, mainly placing pressure on agencies to affirmatively disclose more information. The DLA, for instance, could run a fuller database of contracts, including bids and bid abstracts. When the NY Times asked Day & Day about this proposal, Vice President John Day was refreshingly honest: “If they did that, a good part of our business would go away. So I think it’s a bad idea.” In addition, the FDA could put Form 483s on-line.
Disclosure about disclosure has critical implications for our teaching and research as well as for public policy. Kwoka’s important study deservedly has already generated attention in the public sphere. It also deserves a close look by scholars. Along with a new study by David Lewis and (one of my former Ph.D. students) Abby Wood, we are benefitting from some very interesting empirical work on a powerful statute.
Dan R. Meagher, The Principle of Legality and a Common Law Bill of Rights—Clear Statement Rules Head Down Under
(2015), available on SSRN
I decided to think outside the box this year with my recommendation, or more accurately, outside of our Country’s academy. About a year ago, an Australian Law Professor Dan Meagher contacted me about presenting his paper to our faculty at Mercer University School of Law. I’m very grateful that he did. Professor Meagher ended up visiting with us for a week this past fall as a visiting scholar. During that time, he provided one of the best development presentations that I have seen. His topic was interesting yet completely outside of most of our expertise. His presentation style was relaxed and fostered the interaction of the entire faculty. Perhaps the relaxing part should not be surprising: Australians are not necessarily known for being uptight. I chose to recommend his article to Jotwell readers because I found the topic interesting, the paper well-written, and the application of the legal doctrine a bit contradictory to the way we do things here in the U.S.
The title of his paper is The Principle of Legality and a Common Law Bill of Rights—Clear Statement Rules Head Down Under. In his article, Professor Meagher traces the evolution of the Australian Courts’ approach to protecting fundamental rights. This evolution is fascinating, controversial, and directly connected to both our Constitution and statutory interpretation principles. This history lesson begins with a simple point: “the Australian Constitution is a redraft of the American Constitution of 1787 with modifications found suitable for the more characteristic British institutions and for Australian conditions.” Our system of a government with separated powers was adopted. Importantly, however, the Australian framers consciously rejected, even deleted from a draft version, the American Bill of Rights. The framers rejected the American approach, believing that common law and a parliamentary form of government offered a superior and more democratic way to protect these rights. Professor Meagher describes the Australian Constitution’s development and the strong role that our Constitution played in the drafting process. That part of the paper should be interesting enough to Administrative Law Scholars who teach this aspect of the Constitution. But the story is much more interesting.
Despite this deliberate rejection of a bill of rights, Australia’s High Court (the equivalent of our Supreme Court) has morphed an old friend, the clear statement rule, to temper and invalidate legislation openly hostile to fundamental rights. This judicial response has been both remarkable and controversial.
Let me provide just one example: immigration. Beginning in the early 2000s, the Australian Government sought to limit and even prevent immigrants arriving in Australia by boat from accessing the courts to seek asylum. The government intercepted the boats at sea, transported those on board to processing centers in small pacific nations, refused to resettle them in Australia, and enacted legislation specifically prohibited legal challenges by these individuals.
Despite the clear legislation, the asylum seekers flooded the Australian courts. The Australian Constitution contains a mandamus/original jurisdiction provision (that arose in response to the U.S. in Marbury v. Madison, 5 U.S. 137 (1803)). That provision provides: “[i]n all matters…in which a writ of mandamus or prohibition or an injunction is sought against an officer of the Commonwealth . . . the High Court shall have original jurisdiction.” The High Court concluded that Parliament could not restrict the Court’s jurisdiction in this area absent unmistakably clear statutory language (a super strong clear statement rule, if you will). Even though Parliament was relatively clear in the legislation that it intended to abrogate the Court’s jurisdiction, the Court required Parliament to be “crystal clear;” a standard that despite its best efforts, Parliament seems unable to reach.
Professor Meagher concludes that as a result of this morphed clear statement rule, the High Court has turned “an historically loose collection of rebuttable presumptions [regarding fundamental rights] . . . into a common law bill of rights that is strongly resistant to legislative encroachment, maybe defiantly so.” The fight between Parliament and the High Court reminds me of a wonderful statutory interpretation piece Professor Hillel Y. Levin wrote. The fictional piece begins with the Supreme Lawmaker, MOTHER, proclaiming that “I am tired of finding popcorn kernels, pretzel crumbs, and pieces of cereal all over the family room. From now on, no food may be eaten outside the kitchen.” Litigation then arose, and the “courts” issue a series of cases culminating in a number of exceptions; to which, MOTHER once again decries:
Over the past few months, I have found empty cups, orange juice stains, milkshake spills, slimy spots of unknown origin, all manner of crumbs, melted chocolate, and icing from cake in the family room. I thought I was clear the first time! And you’ve all had a chance to show me that you could use your common sense and clean up after yourselves. So now let me be clearer: No food, gum, or drink of any kind, on any occasion or in any form, is permitted in the family room. Ever. Seriously. I mean it!
Hillel Y. Levin, Everything I Needed to Know About Statutory Interpretation I Learned by the Time I was Nine, 12 The Green Bag 357 (2009). In the case, Parliament has tried to be clear; the High Court ignores the clarity.
Professor Meagher argues that the Australian courts have applied the clear statement canon not to discern congressional intent, as that canon is arguably used in the U.S., but rather to thwart legislative intent. Reminiscent of Justice Scalia, the High Court has concluded that “legislative intention . . . is a fiction which serves no useful purpose.” Lacey, 242 CLR 573, 592 (2011). But the Court then does something that would surprise even Justice Scalia. The Court suggests that legislative intent is not something that exists independently of judicial interpretation, but rather is the product of the court’s process of construction. The High Court reconceptualized the interpretive duty of judges as one of determining legislative intent as the product of rather than the goal of statutory interpretation.
Professor Meagher concludes his paper by noting that the High Court has transformed the clear statement canon into a principle of legality that acts as a protector of fundamental rights and grounded its new principle in that Country’s constitution. In so doing, the Court has constructed (and then robustly protected from legislative encroachment) a quasi-constitutional common law bill of rights. While he may support the idea that fundamental rights are important, the High Court’s approach “has shaken the very foundations of—and the principles that attend to—the proper judicial role in the construction and application of statutes in a constitutional system of separated powers.”
Ever since courts have recognized the legitimacy of political influence on agency policymaking, scholars have struggled to formulate a model of Administrative Law that describes an appropriate balance between such influence and agency expertise. The current reigning consensus – the Presidential Control Model – fails to satisfy many critics, especially in light of recent Presidential assertions of greater and greater power over the apparatus of administrative government. More recently, the heightened partisanship of federal government has added to concerns that presidential control does not assure that the administrative state is sufficiently responsive to the general polity and the public interest. Thus, it is surprising that up until now few scholars have explicitly analyzed the role of political parties in the operation of the federal administrative state, and none have tried to use the workings of contemporary parties to formulate a normative account of how politics should inform agency policymaking. Political Parties and Presidential Oversight by Michael Livermore takes a large and impressive first step to fill that analytic vacuum.
Livermore begins by reviewing the replacement of the local, patronage-driven party system that existed prior to the Kennedy Administration, with the modern national, professional and programmatically driven party system. He then summarizes arguments that the modern party system, along with candidate-centered politics, will drive Presidential elections towards candidates that implement the policy preferences of the majority or, more precisely, the median voter. Livermore rejects the candidate-centered model because Presidents do not seem to implement unifying policy agendas that reflect the position of the median voter. He therefore reinvigorates a theory of “responsible party government.”
This theory posits that parties provide programmatic platforms that distinguish between their respective presidential candidates. Federal elections become a competition for each program to attract voters. The Party that wins the White House gets four years to implement its programs. The party out of the White House uses its position in Congress and more generally its party platform to criticize current administration programs, with the ultimate goal of convincing the polity to reject the incumbent party’s presidential candidate in the next election. In essence, parties provide competing programs, and help those elected to implement the programs on which they run.
Applying responsible party government to the administrative state, Livermore notes that the President can personally participate in a very small percentage of decisions made by the executive branch, and hence the President depends on loyal and capable appointees. Livermore notes that choosing officials from those active in programmatically driven parties helps assure that the appointee will share the party’s and hence the President’s policy vision. He also notes that party connection with issue networks can help the President choose effective officials. More importantly, the theory of responsible party government provides a sounder justification for the presidential control model than does the median voter hypothesis. Even though the President’s party’s programs usually will not represent the preferences of the median voter, the party whose candidate wins the White House must be given the opportunity to implement its programs, and this is best accomplished by close White House supervision of the apparatus of the administrative state.
Livermore, however, recognizes that the theory of responsible party government can also lead to problems with administrative governance depending on the role parties play in Congress, and the power of the out-of-White-House party in the legislature. One role of parties in Congress is to solve collective action problems created by intraparty disputes among members of Congress. For the out-of-White-House party, leadership limits the party’s legislatively proposed programs to those consistent with the party’s programmatic vision that competes with that of the President. But Livermore notes that such mechanisms work less effectively for administrative oversight, which is more decentralized than the process of enacting legislation. For oversight activities, party dominance will obtain only when there is “sufficiently homogenous party membership together with institutional context that places power in the hands of a leader who is responsive to the median-party member.” When such conditions are not present, the nonincumbent party cannot propose a coherent programmatic alternative to that of the President, making the theory of responsible party governance a less persuasive justification for presidential control.
Livermore also addresses a problem that can arise even when the nonincumbent party does adopt a coherent alternative to the President’s programs. Essentially, partisanship in Congress can lead the out-of-White-House party to do everything in its power to sabotage the President’s programs, even if sabotage is against the best interests of the nation or even of the constituents of the opposition party members of Congress. The nonincumbent party’s proposed programs will look better if the President’s programs are made to fail. Thus, without an alternative positive vision of party influence in Congress, Livermore concludes that “the best that can be done is to limit congressional influence [over agencies] to the absolute minimum.”
Finally, Livermore proposes an alternative normative project, which he calls “responsible party administration,” that “seeks to integrate party government with traditional administrative values [of coherence and vigor, representativeness, and legality].” Livermore’s project is pragmatic: it does not provide an overarching set of principles to implement responsible party administration. Rather, his project seeks to highlight and clarify tradeoffs that must be balanced between competing priorities for the administrative state. He proposes doing so both by improving party responsibility and explicitly vindicating administrative values in the context of particular questions of administrative law, such as structuring judicial review and executive review.
What is most impressive about “Political Parties and Presidential Oversight” is its endeavor to incorporate the structure and role of current political parties into the debate on fundamental questions of administrative law. Livermore does not have all the answers, and the answers he provides are often contingent on current party practices. But, this Article provides an excellent start to this endeavor first by cogently reviewing and analyzing various theories of political parties in government, and then carefully identifying ways in which the theory of responsible party government can illuminate tradeoffs inherent in the administrative state. It is a must read for those who think about how to incorporate politics into the current administrative
Cynthia Barmore, Auer in Action: Deference After Talk America
, 76 Ohio St. L.J.
813 (2015), available at SSRN
Administrative law geeks know that Auer deference has been in trouble. This doctrine, which used to go by the much better name of Seminole Rock deference, instructs courts to defer to an agency’s interpretation of its own rule so long as the interpretation is not plainly erroneous. Its primary supporting intuition is that an agency should be better than anyone else at interpreting a rule that it drafted and implements. During the last five years of his life, Justice Scalia mounted a strong campaign to eliminate this doctrine, which he had come to regard as a terrible affront to separation of powers. Although Justice Scalia is now gone, his critique of Auer retains substantial support on the Court. Justice Thomas agrees with it; Justice Alito has expressed strong sympathy; and the Chief Justice might be on board, too.
But, before rushing off to dump Auer in the ashbin of administrative law history, those who prefer to take their separation of powers with a dash of functionalism might like to know: Just how are courts applying this deference doctrine these days, anyway? Fortunately, Cynthia Barmore has shed considerable light on this question in her article, Auer in Action: Deference after Talk America, which was just published in the Ohio State Law Journal. Her hard work reveals that affirmance rates under Auer have declined in recent years and are in line with the rates for other so-called “deference” doctrines. Courts do not, in short, seem to treat Auer as granting agencies free rein to abuse regulated parties with aggressive (mis)interpretations of their regulations.
Justice Scalia first expressed doubts concerning the validity of Auer deference in his brief concurrence in Talk America, Inc. v. Michigan Bell Telephone Co., 131 S. Ct. 2254, 2266 (2011). The core problem is that it allows an agency both to promulgate and interpret law, and “[w]hen the legislative and executive powers are united in the same person, or in the same body of magistrates, there can be no liberty; because apprehensions may arise, lest the same monarch or senate should enact tyrannical laws, to execute them in a tyrannical manner.” Id. (quoting Montesquieu, Spirit of the Laws bk. XI, ch. 6, pp. 151–152 (O. Piest ed., T. Nugent transl.1949)).
A couple of years later, in Decker v. Northwest Environmental Ctr., Justice Scalia thundered, “[e]nough is enough. For decades, and for no good reason, we have been giving agencies the authority to say what their rules mean, under the harmless-sounding banner of deferring to an agency’s interpretation of its own regulations.” 133 S. Ct. 1326, 1339 (2013) (quotation marks omitted) (concurring in part and dissenting in part). The Chief Justice and Justice Alito conceded that Justice Scalia “raise[d] serious questions” about the validity of Auer deference and that “[i]t may be appropriate to reconsider that principle in an appropriate case.” Id. at 1338 (Roberts, C.J., concurring).
The campaign continued in Perez v. Mortgage Bankers Ass’n, in which Justice Scalia argued that Auer deference violates the APA by giving agencies the power to imbue their interpretations with the force of law. 135 S. Ct. 1199, 1212 (2015) (concurring). Justice Thomas concurred separately and at some length, praising John Locke and Baron de Montesquieu while condemning Auer deference for eroding judicial power and transferring it to the executive. Id. at 1217 (Thomas, J. concurring).
Notably absent from these condemnations of Auer is any empirical discussion of its practical effects. This gap is especially striking given that various empirical studies suggest that deference doctrines in administrative law may not have much impact on the rates at which courts affirm agencies. The affirmance rates for arbitrariness review, substantial evidence review, Chevron deference, and Skidmore deference all hover around 60-70%. David Zaring, Reasonable Agencies, 96 Va. L. Rev. 135, 169 (2009). Admittedly, one study did find that agencies win at a 91% rate under the Auer doctrine at the Supreme Court. William N. Eskridge, Jr. & Lauren E. Baer, The Continuum of Deference: Supreme Court Treatment of Agency Statutory Interpretations from Chevron to Hamdan, 96 Geo. L.J. 1083, 1142 & tbl.15 (2008). This result has lent Auer something of a reputation as a super-potent form of deference. A 2011 study of Auer in the lower courts, however, found affirmance rates of about 76% during 1999-2001 and 2005-2007. Richard J. Pierce, Jr. & Joshua Weiss, An Empirical Study of Judicial Review of Agency Interpretations of Agency Rules, 63 Admin. L. Rev. 515, 519 (2011).
Another notable gap in the conservative justices’ condemnations is any recognition that the Court in recent years has tightened Auer deference, hemming it in with new limits. For instance, in Gonzales v. Oregon the Court declared an “anti-parroting” canon that blocks application of Auer to rules “that do little more than restate the terms of the statute itself.” 546 U.S. 243, 257 (2006). In Christopher v. SmithKline Beecham Corp. the Court held that Auer deference should not apply in cases where the new interpretation would sandbag regulated parties by “unfair surprise.” 132 S. Ct. 2156, 2167 (2012).
The imposition of these new limits made it all the more important to look again at how lower courts are applying Auer. To this end, Cynthia Barmore collected and reviewed 190 opinions in which circuit courts applied Auer deference since issuance of Talk America in 2011. She found, consistent with the Pierce & Weiss study, an overall affirmance rate of about 75%. More intriguingly, she also found that this affirmance rate declined over time as the Court turned the screws on Auer. Between Talk America (2011) and SmithKline (2012), the affirmance rate was 82.3%; between SmithKline (2012) and Decker (2013), the affirmance rate was 74.4%; and between Decker (2013) and the end of 2014, the affirmance rate was 70.6%.
Shucks, that last number looks an awful lot like the affirmance rate that other deference doctrines typically yield, doesn’t it?
Of course, all this data does not interpret itself. On its face, it does, however, suggest that agencies are not, armed with Auer deference, roaming the land abusing regulated parties with unreasonable interpretations of regulations. It also suggests that the lower courts are getting the Supreme Court’s message to be a bit more careful when applying Auer. One should think that data like this should inform the Supreme Court’s decision in whatever test case it takes to determine whether to get rid of Auer based on centuries-old abstractions concerning separation of powers. Cynthia Barmore is to be applauded for gathering and analyzing this data.
Ms. Barmore has lots more to say both descriptively and prescriptively based on her study. To pique your interest, here are a few of her observations: The court that knows agencies and administrative law the best, the D.C. Circuit, has one of the lowest affirmance rates among the circuits when applying Auer—65%. Practice may not make perfect—the Department of Labor and the Bureau of Immigration Affairs were among the agencies that invoked Auer most often, but their affirmance rates were among the lowest at 62% and 61%. And, although the good Baron de Montesquieu, were he still with us, might not care for Auer, lower courts do not seem to mind applying it. In only one case out of the 190 did a court suggest that Auer deference compelled it to accept an interpretation that the court would otherwise reject.
To find out more, by all means check out Cynthia Barmore’s article at the link provided above.
Some readers value an article for logical rigor, some for sound judgment, some for immediate utility, some for originality, and so on into N dimensions. (We may value more than one dimension, of course, but not “all of the above,” because the desirable traits may trade off against one another, at a frontier; no one piece can display all of them simultaneously and to a maximum degree). The peculiar excellence of richness is on display in Administrative War by Tino Cuellar, formerly of Stanford, now molted into a higher form of life as Justice Cuellar of the California Supreme Court. Cuellar recounts the history of the administrative state during the Second World War, and connects it to the surrounding political conflicts and developments in legal theory. There is no single thesis, no one-sentence nugget. Rather we are treated to a kind of legal-historical cornucopia. Cuellar’s story undermines conventional wisdom on a number of critical issues in administrative law. Let me attempt to lay out some of the wealth of interesting points that emerge.
1. The New Deal and the War. Cuellar’s basic narrative recounts the arc of the administrative state just before and during the Second World War. Administrative lawyers, particularly critics of the administrative state, still talk about “the New Deal” as though it were the moment when the Rule of Law gave way to the administrative state (and as though “the New Deal” were all one thing or era, as opposed to a pastiche of movements and developments). Distilling, synthesizing and translating-for-lawyers a library of background literature, Cuellar explains that the war, rather than the New Deal, represented the key “inflection point” in the growth of the administrative state. Furthermore, unlike World War I, which gave rise to a number of more or less temporary bureaucracies, the burgeoning administrative state was cemented into place during and by World War II, and by the odd political consensus that created the Administrative Procedure Act of 1946—a key legitimating mechanism for Leviathan. The pedagogical implication of all this is that the constitutional conflicts of the 1930s, which occupy so much space in public law courses, should at a minimum be supplemented and probably partly displaced by a study of the bureaucratic developments of the war years. Less time on the National Industrial Recovery Act (NIRA), which did not provide an enduring model for the American administrative state; more time on (entities like) the War Production Board (WPB) and the Office of Price Administration (OPA), which did.
2. Ratchets are Contingent. The contrast with World War I finally lays to a peaceful rest that exhausted old meme, the “ratchet effect,” according to which agencies, once created, are immortal. Cuellar persuasively explains that the inflection point around World War II stuck, whereas the earlier one didn’t (at least to the same degree), because of the differing contingencies of the political situation at the two moments, including the imperatives of veteran’s benefits and continued geopolitical competition in the late 1940s. This is not to say that the administrative state is only as sticky as the current political consensus at any given moment; institutions are more resistant than that. But it is also true that institutions created on the spur of the moment need not attain stickiness, just in virtue of their existence. Whether they will do so depends on whether political contingencies set into motion a further process that cements them into place.
3. Flexible Bureaucracy, Sclerotic Markets. There is another trope, according to which bureaucracies are sclerotic and markets adjust rapidly, thanks to the decentralized nature of the price system. In fact private industry was incapable of organizing sufficient war production with sufficient speed, incapable of generating a rational allocation of resources in rapidly changing circumstances. Hence the WPB, OPA and their kin. The American state created and deployed complex new bureaucracies with astonishing rapidity in the war years. Those bureaucracies organized an unprecedented surge in industrial and military production and in logistical capacity, and generated an unprecedented ability to deliver a given quantity of force to a given area at a given time—unprecedented not only for the United States, but in all of human history. (This is also a standing problem for glib claims about the relative efficiency of European bureaucracies). The British economic historian Alan Steele Milward observed that in World War II, political regimes of different types—democratic, fascist, communist—reached consensus on a fundamental proposition of political economy: the ordinary operation of market capitalism was too sclerotic in wartime conditions. Wrote Milward, “[e]verywhere the price mechanism came to be regarded as a method of allocating resources which was too slow and too risky.” (War, Economy and Society 1939-1945 (1977), at 99). Leviathan had such a good war in part because markets couldn’t keep up.
4. Self-imposed Administrative Procedure. Cuellar shows that, well before the Administrative Procedure Act went into force, agencies were subject to a range of legal and procedural constraints. Interestingly, these were self-imposed in many cases. Agencies themselves wrote procedural constraints, and were subject to judicial review on that ground. The threat of review, although constraining ex post in particular cases, only came into being because agencies had bound themselves to a procedural system ex ante. Agencies were willing to impose constraints on themselves because “for senior agency administrators, there was always more at stake than the outcome of any individual case” (1429). Agencies used procedures to obtain information from participating actors, very much including regulated entities and interested groups as well as the public at large. Agencies would self-impose procedures in order to more effectively carry out their missions. Bureaucracy was not only flexible, but adept at generating or acquiring information.
5. The Great Charter of the Administrative State. Cuellar lays out with clarity and subtlety the political dynamics that led to the enactment of the Administrative Procedure Act in 1946. Like other framework statutes, the Act was in effect a plausible second choice for each side, fearing that the alternative would be worse—the first choice of the other side. In Justice Jackson’s formulation, it was in effect a treaty of peace, a compromise “upon which opposing social and political forces have come to rest.” (Wong Yang Sung v. McGrath, 339 U.S. 33 (1950)). That point is broadly familiar, but Cuellar excels at sketching the fine grain of the political calculations and bargaining dynamics. The relevant actors had to consider not only the immediate proposal before them, but the risks of all relevant alternatives as well, and the dynamic risks that success in one period might produce a backlash in a future period that would result in a worse outcome overall. For business for and defenders of free markets, the war reframed the space of alternatives, suggesting that if regulation were blocked, the alternative might not be noninterference, but instead outright government ownership of industry. While “supporters of a robust federal administrative state could see in the APA relatively limited constraints on agencies, as well as a chance to head off more draconian procedural limits on agency power … Republicans and Southern Democrats skeptical of the administrative state could see the bill as a step in the right direction, even if they might have preferred a more drastic change” (1432).
6. An Unstable Equilibrium. Cuellar, whose story more or less ends in the later 1940s, is hardly to be faulted for not continuing the story farther still. If he had, he might perhaps have qualified his account of the constraints placed on agencies by the Administrative Procedure Act. As detailed by an insightful student of the APA’s shifting hydraulics, Antonin Scalia (see especially his “Vermont Yankee: The APA, The D.C. Circuit, and the Supreme Court,” 1978 Supreme Court Review 345), many of the assumptions underpinning the APA, and many of the constraints it assumed would govern agencies, have given way over time. Perhaps the most fundamental constraint—stemming from Crowell v. Benson (1932)—was that courts would declare what the law meant. So when the Court later began to defer to reasonable agency decisions even on questions of law, law’s self-abnegation gathered headway. Vermont Yankee itself squelched judicial development of administrative procedures as a matter of common law; a recent decision, Perez v. Mortgage Bankers (2015), emphatically reaffirms that position. As for the putative constraint of “hard look” review, developed in the 1960s in part to shape and constrain agency rulemaking, there is much less there than meets the eye, as Jacob Gersen and I have detailed.
Thus Cuellar’s conclusion that the procedural constraints of the APA legitimated the newly cemented administrative state, like Dan Ernst’s similar conclusion, is more timebound and placebound than the reader might gather from the four corners of his narrative. But this is an ungrateful and intemperate demand for even more richness than Cuellar already gives us.
Jacob E. Gersen & Matthew C. Stephenson, Over-Accountability
, 6 Journal of Legal Analysis
185 (2014), available at SSRN
Many an administrative law article ends with a simple and appealing recommendation: “just add accountability!” Accountability, along with institutional expertise and democratic legitimacy, is one of the key yardsticks that frames evaluations of the legal rules and institutions of the regulatory state. Why might judicial deference to agency interpretations of statutes be desirable? Because agencies are more politically accountable than courts. Why might privatization be worrisome? Because corporations are less accountable than agencies. Accountability, like motherhood and apple pie, is something we can all safely get behind.
Or is it? In Over-Accountability, Jacob Gersen and Matthew Stephenson look at the downsides of augmenting the accountability of political institutions. Lots of ways exist to add accountability to governmental decision-making: one could have more elections, or concentrate power in a “unitary” executive, or reduce the power of politically unaccountable Article III courts. As the authors point out, these and other such accountability-enhancing moves might actually have a surprising and perverse consequence: they might exacerbate bad behavior by the government.
The basic problem, as Professors Gersen and Stephenson explain it, is a consequence of a simple principal-agent dynamic. Agents (say, the Mayor of New York or the head of the FDA) want to look like good agents to their principals (say, the citizens of New York or the President), because the agents want the principals to retain them as their agents in the future. Under certain conditions, the agent’s desire to appear good may cause the agent to adopt a course of action that will convince the principal that it is a good agent, even if the agent knows that that course of action is not actually in the principal’s best interest. Put another way, an agent will sometimes have the perverse incentive to make decisions that it knows to be contrary to the principal’s best interests in order to avoid resembling a bad agent; because the principal is relatively less informed than the agent, the principal can’t tell the difference.
The authors explain that this basic overaccountability dynamic can manifest in a variety of ways. To signal their competence, agents can pander (take action that “cater[s] excessively” to the public); they can posture (take bold action to look good to the public); or they can be persistent (act stubbornly, so that the public doesn’t perceive them to have made a mistake). To signal their lack of capture, agents can act in way that is populist (in a way that unduly burdens a minority or interest group); conversely, to signal their lack of bias, agents can act in way that is politically correct (in way that markedly illustrates an absence of animus towards some given group). In a lively and clear fashion, the article marries its analysis of formal models of such behavior with concrete examinations of how these varieties of overaccountability might emerge in different legal contexts, from debates over affirmative action to the sentencing behavior of elected state court judges.
The article’s second part, on mitigating overaccountability, is equally interesting. In it, the authors point out that there are three strategies for coping with the phenomenon of overaccountability: (1) do nothing; (2) reduce or eliminate accountability; and (3) add oversight from other agents who might be able to monitor or constrain the primary agent for overaccountability problems. Some of the potential responses they analyze—e.g., relying on judicial review by politically insulated courts—will be familiar moves. But other potential responses—randomly timing elections, for example, or reducing the principal’s ability to know which agent was responsible for a particular choice, or “altering the laws and institutional structures that govern the media and other watchdog organizations” so as to weaken their ability to report on government action—are so facially dystopian (at least to me) that it was delightful to see them drily catalogued as among the potential avenues for getting to a system that has the right quantity of accountability “on net.”
This is one of the great rewards of this paper—it forces one to see what was once familiar in an entirely new way. If you are someone who has made use of the “workhorse concept” (p.186) of accountability (as I have done), Professors Gersen and Stephenson will make you want to look that “workhorse” in the mouth.
Cite as: Mila Sohoni, Too Much of a Good Thing
(February 1, 2016) (reviewing Jacob E. Gersen & Matthew C. Stephenson, Over-Accountability
, 6 Journal of Legal Analysis
185 (2014), available at SSRN), https://adlaw.jotwell.com/too-much-of-a-good-thing/
Connor Raso, Agency Avoidance of Rulemaking Procedures
, 67 Admin. L. Rev.
1 (2015), available at SSRN
It is puzzling. Administrative agencies continue to produce thousands of rules each year in the face of an accumulation of procedural requirements that administrative law scholars say have ossified rulemaking and even led some agencies to retreat from rulemaking altogether.
How can this be? How can federal regulatory output be “rising steadily for decades” notwithstanding procedures that have created a supposedly “confusing labyrinth through which agencies seeking to adopt rules must grope”? As someone who has long been puzzled by the seeming contradiction between expectations and reality, I liked reading Connor Raso’s recent article, Agency Avoidance of Rulemaking Procedures, because it offers a persuasive, even if partial, answer to a core conundrum about rulemaking, along with thoughtfully-analyzed, supportive empirical evidence.
To see how much there is to like about Raso’s study, the reader will need to be familiar with the concept known as rulemaking ossification. For decades, administrative law scholars have lamented ossification and the corresponding loss of an earlier era of simple rulemaking. They have believed that agencies, besieged by procedural steps and intrusive, uncertain judicial review, have come to be nearly as burdened by so-called informal rulemaking as they had previously been with its more formal adjudicatory counterparts.
Rulemaking has purportedly grown slow and cumbersome. And yet, despite the nearly universal acceptance of the view of an ossified regulatory process, empirically-oriented scholars such as Anne Joseph O’Connell, Susan Yackee and Jason Yackee, and me have shown quite clearly that agencies continue to produce a large number of rules even in a supposed era of rulemaking retreat.
Again, how can this be? If agencies have retreated from rulemaking, or even if rulemaking has just slowed down substantially, then this should mean fewer rules, not a continued outpouring. Rulemaking’s puzzle persists. How do we solve it? This is where Raso’s interesting new study comes in. He shows that rulemaking procedures in practice are not as burdensome as they seem because agencies are able to avoid certain procedural steps. In other words, what looks to be layer upon layer of procedures on the books does not equate to heavy procedural burdens in action.
Consider that Raso finds that:
- In more than 92% of federal rulemakings from 1996-2012, agencies did not produce the analyses that the Regulatory Flexibility Act (RFA) requires for rules that will have a “significant economic impact on a substantial number of small entities.” Sixty-two percent of “major rules”—those that by definition should have the most substantial impacts—also lacked these analyses.
- In more than 99% of rulemakings during the same period, agencies did not produce written statements that the Unfunded Mandates Reform Act (UMRA) requires for rules that would impose annual private sector costs greater than $100 million. Even about 80% of all major rules lacked these statements. (“Major rules” are defined as those that would have $100 million in annual economic impacts, which encompass both benefits as well as costs.)
- Agencies even avoided the defining feature of informal rulemaking—its notice and comment requirements under the Administrative Procedure Act (APA)—in nearly 52% of the proceedings completed during this same period.
Such seemingly widespread avoidance behavior arises, according to Raso, because of exceptions and ambiguities in the procedural “requirements” themselves. It is not necessarily the case that agencies are violating the law. On the contrary, by their very terms administrative law statutes often contain exceptions; they are not intended to apply to each and every rule. As already noted, RFA and UMRA only apply to rules with certain kinds of expected impacts (although Raso suggests that agency avoidance occurs even with high-impact rules). The APA also contains express exceptions to its notice-and-comment requirements, such as a catch-all exception for “good cause.” Especially with vague terms like “good cause,” procedural standards and exceptions sometimes admit room for interpretation. Raso suggests that agencies at times exploit ambiguities to claim that they have no obligation to follow a procedure they would rather not follow.
Raso is certainly not the first to call attention to agency avoidance of rulemaking requirements. But with this latest study of his, and with another study of his, he has clearly done more than anyone else to document systematically the extent to which procedural requirements are not applying to—or are at least not being applied to—a substantial number of agency rulemakings.
In this respect, Raso’s contribution may well be viewed as compatible with a recent defense Richard Pierce has made of the ossification thesis. In contrast with earlier scholarship, Pierce argues there is no general ossification of rulemaking; rather, he argues, there exists only an ossification of a subset rulemakings that “raise controversial issues where the stakes are high.”
Pierce’s qualification marks an important shift in nearly twenty years of legal scholarship about rulemaking’s ossification, which from the earliest days appeared to have been about rulemaking generally and not just a subsample of the most difficult rulemakings. For example, Jerry Mashaw and David Harfst, in their widely admired research on rulemaking at the National Highway Traffic Safety Administration (NHTSA), compared NHTSA’s “total rulemaking output” before and after the agency’s loss in the courts.
But we need not dwell on how much of a retreat or concession Pierce appears to have made because, even on its face, it is not clear what a narrowing of ossification’s domain accomplishes in terms of solving the basic puzzle. Agencies, after all, continue not just to produce a large number of rules, but also to produce many rules with great economic impact. The rules adopted in the Obama Administration, for example, have been estimated to generate notably greater costs and benefits than those adopted in the preceding Bush Administration. In the absence of evidence that the economic impacts of regulation have systematically declined, skepticism about ossification, even in its qualified sense, would seem to be justified.
Moreover, if procedurally-induced ossification applies only to rules that, in Pierce’s words, “raise controversial issues where the stakes are high,” then we have to struggle mightily to accept that the “long time” and “extensive commitment of agency resources” that these rules appear to demand—in other words, their ossification—stems from procedural hurdles and judicial review rather than their controversial, high-stakes nature. Heightened controversy and high stakes, after all, matter greatly in slowing down or impeding decisions in any institutional setting, even those lacking in rulemaking’s procedural hurdles and judicial oversight.
Of course, Raso does not sort out how much rulemaking may be delayed by controversy, by procedures, or by an interaction of both—nor does he pretend to. Rather he argues, appropriately, for “a more nuanced empirical analysis of how rulemaking procedures may plausibly contribute to ossification.” This means scholars should not be too quick to overstate the extent to which adding new procedures will seriously impede agencies from regulating.
A central part of Raso’s nuanced account centers on litigation risk, so in this respect his work may seem to resonate well with proponents of the ossification hypothesis. Raso argues that agency avoidance decreases as the threat increases of successful litigation against agencies on procedural grounds. For each of the statutes under examination—the APA, RFA, and UMRA—Raso admirably seeks to go beyond anecdotes and identify the number of reported cases raising issues of procedural compliance as well as tally up the percentage of agency losses in these cases. He concludes that the litigation risk associated with procedural compliance with the APA is “moderate,” while the litigation risks under RFA and UMRA are “little.” These characterizations seem to correspond in roughly inverse fashion to the levels of avoidance Raso reports: 52% of rules do not follow notice and comment under the APA, compared with 92% and 99% of rules lacking analyses called for under the RFA and UMRA, respectively.
Raso’s conclusions are intuitively appealing and his evidence suggestive. Of course, the precise relationship between litigation and avoidance is not necessarily so easy to nail down. Despite data on tens of thousands of rules and hundreds of lawsuits, Raso’s litigation risk theory is essentially tested with only a “sample” size of three, the cases of the APA, RFA, UMRA. Moreover, his characterization of litigation risk as “little” or “moderate” is highly qualitative. Raso does report that courts entertained claims of procedural noncompliance with RFA in 72 cases, which “constituted less than one-third of 1% of the 24,787 finalized rules listed in the Unified Agenda during this period” (.002). But then, the 156 APA procedural avoidance cases in this same period seem extremely “little” too, amounting to less than two-thirds of one percent of all the rules (.006). Raso also tells us that, among this tiny fraction of APA cases, the agency prevailed 67% of the time. Even though qualitatively the courts’ reasoning in the APA cases may have seemed somewhat less predictable, the line separating “little” litigation risks and “moderate” ones appears to be a very fine one indeed.
Virtually any thoughtful and innovative empirical study, like Raso’s is, will raise questions and invite further analysis. Some more puzzles await further exploration. For example, even though Raso refers to a study showing that the EPA and FCC face the highest litigation risk, he reports that these agencies have surprisingly different APA avoidance rates: 15% for the FCC and 45% for EPA. (His treatment of litigation risk also never controls for the underlying potential number of lawsuits, a limiting factor in understanding actual risk, and it relies on those cases that resulted in reported decisions, not also those resulting in settlements.) Moreover, despite the adoption of amendments to the RFA in 1996 that authorized judicial review of agency avoidance of the statute’s procedural requirements, the rate at which most agencies conducted “reg-flex” analyses basically remained constant over time.
Still, what is refreshing about Raso’s approach is the careful, dispassionate way he marshals data to tackle an important question. We could benefit from more research like this throughout the field of administrative law. Raso also offers a valuable lesson about the power of procedures: as with a metal chain, they will only be as strong as their weakest link—or their most flexible exception. In addition to his empirical findings, Raso provides his readers with an especially thoughtful account of the jurisprudential and political challenges in achieving legal precision in procedural exemptions, and he further explains how the ambiguities in many procedural statutes contribute to inconsistent judicial outcomes.
If Raso is right that litigation risk is key to explaining compliance with rulemaking procedures, this should matter greatly in contemporary debates over regulatory reform. Most critics of the House-passed Regulatory Accountability Act (RAA) have fixated on its benefit-cost requirements and the ways it would impose still more formal procedures on an already procedurally-burdened regulatory state. Yet following Raso’s focus on litigation risk, critics of the RAA might instead wish to call more attention to the provision it contains which would impose both the opportunity for immediate judicial review as well as additional procedural obligations whenever an agency invokes an exception to notice-and-comment requirements to issue an interim rule. That provision in the RAA, perhaps more than any other one, could well be what most determines whether the bill, if ever signed into law, would deliver the benefits its advocates promise—or would result in the costs its opponents fear.
Then again, the relationship between procedural change and administrative behavior remains far from well understood. After all, as I already noted, the addition of a statutory provision authorizing judicial review of exceptions to RFA requirements apparently made very little difference in decreasing agency avoidance under that statute. Raso suggests that part of the explanation may stem from case law under the RFA that remains, after nearly two decades, still “lenient, undeveloped, and ambiguous.” We cannot be sure that the RAA, if it ever became law, would not succumb to similar slippage. Political scientist Stuart Shapiro’s research even suggests that procedural regulatory reforms never work as intended.
Overall, Raso’s recent article serves as another reminder that administrative law operates in a highly complex, dynamic organizational and political environment. It really shouldn’t be surprising that things are not always as they should seem, at least not if expectations are based on simplistic conceptions of the behavioral effects of administrative procedures. Perhaps in the end, the real puzzle to be solved is why so many lawmakers, advocates, and scholars continue to place so much confidence in their beliefs about how rulemaking procedures will affect regulatory outcomes, whether for good or for ill.
Cite as: Cary Coglianese, Rulemaking’s Puzzles
(December 16, 2015) (reviewing Connor Raso, Agency Avoidance of Rulemaking Procedures
, 67 Admin. L. Rev.
1 (2015), available at SSRN), https://adlaw.jotwell.com/rulemakings-puzzles/
Agencies routinely interpret statutes while drafting rules. Yet very little is known about how agency rule drafters approach statutory interpretation when writing rules. In a fascinating article that was recently published in the Stanford Law Review, Professor Christopher J. Walker shines some much needed light into this area.
Walker’s article is modeled off of important empirical work Lisa Bressman and Abbe Gluck previously conducted that studied congressional drafters’ knowledge of and use of different administrative law doctrines and interpretive tools. Rather than focusing on congressional drafters as Bressman and Gluck already have done, Walker’s article focuses on how agency rule drafters approach statutory interpretation when writing rules. Walker’s article reports the findings of a detailed 195-question survey that he administered online over a five-month period to agency rule drafters who work at seven executive agencies (Agriculture, Commerce, Energy, Homeland Security, Health & Human Services, Housing & Urban Development, and Transportation) and two independent agencies (the Federal Communications Commission and the Federal Reserve). Walker sent the survey to 411 agency officials within these agencies, and 128 responded, resulting in a 31 percent response rate. All of the survey respondents were career civil servants rather than political appointees.
As Walker himself admits (pp. 1014-15), the generalizability of his survey results may be limited for a variety of reasons, including the mix of agencies included in the survey. Yet, even if Walker’s findings merely present a descriptive picture of how the 128 survey respondents approach agency rule drafting, Walker’s detailed findings are well worth a close read. They provide an illuminating look into the agency rule drafters’ knowledge of and use of different interpretive tools, including substantive and semantic canons of construction, legislative history, and administrative law doctrines. Walker’s findings, for example, reveal the following: 94% of the agency rule drafters who responded to the survey reported knowledge of Chevron and 90% reported using Chevron as an interpretive tool; 62% reported knowledge of the canon of constitutional avoidance and 28% reported using constitutional avoidance as a tool of statutory interpretation; and only 19% reported using dictionaries as a drafting tool.
Of all of Walker’s findings, I was most interested by his findings relating to agencies’ involvement in the legislative process—largely because his findings in this arena are useful in assessing longstanding application of principal-agent theory to the regulatory state. In the context of studying federal agencies’ involvement in the legislative process, Walker found significant involvement by agencies: “Nearly eight in ten [of the rule drafters who responded to the survey] (78%) indicated that their agency always or often participates in a technical drafting role for the statutes it administers (with another 15% indicating sometimes).” (p. 1037) Yet Walker found that personal participation rates in the legislative process by agency rule drafters themselves were much lower; only “29% always or often participate in technical [legislative] drafting with 29% more saying sometimes.” (p. 1037) As Walker notes, this difference between agency participation and agency rule drafter participation in the legislative process may well have to do with agencies’ organizational choices that call on different staffs to do legislative versus regulatory work.
Notably, any legislative-regulatory separation within agencies’ organizational structures did not prevent the agency rule drafters from recognizing the relevance of legislative history: 76% of survey respondents agreed that, “in general, legislative history is a useful tool for interpreting statutes.” (p. 1038). Yet, when viewed through the lens of the principal-agent theory, this kind of structural separation between agencies’ legislative and regulatory staffs would seem to make it difficult for agencies to draw on their expert insights about legislative meaning and legislative purpose when drafting rules. Walker quite astutely points this out (p. 1047), inviting future scholarly investigation in this area. Hopefully other scholars’ will accept Walker’s invitation and will explore whether structural choices within agencies might either help or hinder an agency’s ability to act as a faithful agent of Congress when drafting rules. These kinds of structural questions need additional scholarly attention moving forward, and Walker is to be thanked for beginning to shine some light into this previously dark corner of the regulatory world.
Last Term the Court gave administrative law scholars a lot to digest. Writing for the Court, the Chief Justice in King v. Burwell reinvigorated the major questions doctrine as a Chevron Step Zero inquiry, Justice Scalia in Michigan v. EPA ruled that the EPA must consider costs when a statute says to take action that is “appropriate and necessary,” and Justice Sotomayor in Perez v. Mortgage Bankers abolished the D.C. Circuit’s Paralyzed Veterans doctrine. The separate writings were perhaps even more intriguing. In Mortgage Bankers, Justices Alito, Scalia, and Thomas all indicated some appetite to revisit Auer deference. In Mortgage Bankers and the Amtrak case, Justice Thomas questioned the modern administrative state on separation of powers and nondelegation grounds, and then wrapped up the Term in Michigan v. EPA arguing that Chevron deference itself raises serious separation of powers concerns (and Justice Scalia may have suggested something similar in Mortgage Bankers).
These decisions all deal with foundational principles in administrative law. One decision, however, also grapples with the fringe: Department of Transportation v. Association of Railroads. At issue there was a congressionally created corporation—Amtrak—and its congressionally delegated authority to engage in joint rulemaking with a more traditional federal agency, the Federal Railroad Administration. The D.C. Circuit had held that Congress could not delegate regulatory power to Amtrak because it was a private corporation (at least for rulemaking purposes). The Supreme Court reversed, holding that Amtrak is a government entity for constitutional rulemaking delegation purposes.
The Amtrak case reminds us that our classic conception of administrative law often ignores the fringes. As Anne O’Connell details in Bureaucracy at the Boundary, which was published last year in the University of Pennsylvania Law Review, the fringes of administrative law are oft neglected in the literature and in the classroom. These government entities vary in form and function, ranging from Amtrak and the U.S. Postal Service (USPS), to Freddie Mac and Fannie Mae, to the Government Accountability Office and the U.S. Sentencing Commission. They differ substantially from classic executive agencies or even the somewhat more modern “independent” regulatory commissions and boards over which the Executive exercises far less control. Yet, as Professor O’Connell exhaustively documents, they play an important and substantial role in the modern regulatory state.
There is so much to like about this article. For example, Professor O’Connell notes that these boundary agencies are not necessarily a modern invention, as the USPS is the second oldest agency of the federal government—though it wasn’t transformed from an executive agency to an “independent establishment” until 1970. Similarly, some agencies are created at the center and drift to the boundaries, and vice versa; agency structure can be quite dynamic over time. (Indeed, if Mehrsa Baradaran had her way, the USPS would adopt its Inspector General’s proposal to provide financial services to the unbanked or underbanked populations in the United States.) In this short review, I’ll focus on two of the article’s main contributions to our understanding of fringe administrative law.
First, Professor O’Connell takes a fresh look at how agencies are created, in light of the “boundary agency” phenomenon yet with the traditional focus on political control and agency competence. Her two-dimensional model (Figure 1 below, click for a larger copy), reproduced with permission below, does a lot of work to help us take into account the fringes of administrative law:
Professor O’Connell then maps onto this control-competence model the normative values of social welfare and democratic legitimacy to illustrate the trade-offs at play when governing via boundary agencies. To be sure, her contribution to the theory of boundary agencies lies predominantly in the positive arena—the focus on control and competence—but her brief foray into the normative theories should spark further discussion and research.
Second, the article provides a terrific survey of the legal implications of boundary agencies, ranging from the constitutional concerns of separation of powers, nondelegation, and appointment and removal to the statutory concerns under the Administrative Procedure Act and Freedom of Information Act, and finally to the “governance mechanisms” such as Presidential oversight, the budget process, and agency litigation authority. Part of her conclusion, which the Court also reinforced in the Amtrak case this Term, is that the boundary agencies can be considered federal agencies for certain constitutional or statutory provisions and not federal agencies for others.
Another conclusion she reaches, which the current Court has arguably not reached, is that the existence of boundary agencies supports a more functionalist approach to structural constitutional interpretation. In Professor O’Connell’s words (at page 900), “The prevalence of boundary organizations therefore suggests that formalist jurisprudence, if adopted more extensively, could radically transform the administrative state.” Indeed, we may see these issues emerge in the Amtrak case itself, as the Court remanded the case to the D.C. Circuit noting that “substantial questions respecting the lawfulness of [Amtrak’s regulatory efforts]—including questions implicating the Constitution’s structural separation of powers and the Appointments Clause, U. S. Const., Art. II, §2, cl. 2—may still remain in the case.” (Slip op. at 2.)
This article is part of Professor O’Connell’s larger, ambitious project to encourage administrative law scholars (and students) to look at how administrative law actually operates in practice. For instance, as I blogged about here over at the Yale Journal on Regulation, Professor O’Connell has another terrific article, entitled The Lost World of Administrative Law, which she coauthored with Dan Farber and which the Texas Law Review published last year. In that article, Farber and O’Connell argue that we must look beyond the APA and the classic Supreme Court decisions; we must study presidential review of proposed agency action, multi-agency coordination, and agency action that is effectively insulated from judicial review—to name just a few examples.
In her response to their article, Lisa Heinzerling noted that “Farber and O’Connell have opened up a valuable conversation about how much of classical administrative law we should keep—and how much we have already lost.” The same praise applies to O’Connell’s Bureaucracy at the Boundaries: this is a must-read piece for all administrative law scholars to better understand the boundaries of the modern regulatory state. Indeed, I’m not alone in giving such high praise as just last week the American Bar Association recognized Bureaucracy at the Boundary as the best work of administrative law scholarship published in 2014. Now if only we could better incorporate this fringe administrative law in administrative law scholarship and curricula.
Sharon Jacobs, The Administrative State's Passive Virtues, 66 Admin. L. Rev. 565
(2014), available at SSRN
The federal bureaucracy has long been accused of torpor. Administrative agencies, we are oft told, take years to do much of anything. Whether this supposed-sluggishness is because of intentional institutional design, judicial review, administrative preference, or the inherent conservativeness of bureaucracy is unclear. In recent years, moreover, the core descriptive claim that agencies are too slow and do too little has been significantly undermined. Nevertheless, positive accounts of administrative delay are rare and under-theorized. Sharon Jacobs’s The Administrative State’s Passive Virtues is a long overdue updating and application of Bickel’s notion of the passive virtues in the context of courts, as applied and developed for the Administrative State.
To oversimplify a bit, Bickel argued that given the counter-majoritarian nature of courts in the United States, judicial actors can, do, and should utilize justiciability doctrines to avoid or defer deciding certain difficult or politically controversial cases. This practice of avoiding certain decisions was said to be desirable because it avoided potential attacks from the other branches or citizens and allowed the other branches with a better democratic pedigree to decide difficult political issues. Though well-known and rhetorically powerful, Bickel’s passive virtues suffered a mix of acute and chronic intellectual beatings. But Bickel’s ghost remains a powerful trope in modern constitutional law and Jacobs’s point is not that Bickel was right about courts. Rather, it is that agencies have similar structural characteristics to courts in the ways that motivate Bickel and that we lack a theory or really even a concept of administrative passive virtues. Until now.
To wit, agencies have a significantly discretionary docket; agencies lack the democratic pedigree of Congress or the President; agencies often suffer political backlash from their policies; and perhaps more than courts, agencies risk funding loss if they stray too far from the preferences of their political principals. Through a series of administrative passivity case studies on the Environmental Protection Agency, the Fish and Wildlife Service, and the Federal Energy Regulatory Commission, Jacobs argues that agencies can, do, and should rely on passive tools. Agencies utilize the timing and extent of regulation to preserve their institutional power and legitimacy.
Analytically, Jacobs identifies three subsets of passivity: (1) decisions not to decide, like the EPA’s decision before Mass. v. EPA not to decide whether GHG emissions from motor vehicles endanger public health and welfare; (2) step-by-step regulation in which agencies resolve some issues in a Rule but leave others that could have been decided for another day; (3) administrative minimalism, which involves a constellation of practices guided by the lodestar of choosing less ambitious solutions to avoid decisions with more problematic practical consequences (e.g., FWS’s avoidance of listing decisions for potentially endangered species in the face of a hostile Congress in the mid-1990’s). The case studies are chock full of useful insights; identifying the issue and constructing a vocabulary and framework for analyzing them are significant contributions on their own.
As the paper notes, sometimes agencies utilize passivity for undesirable or nefarious reasons, what is often called agency shirking. Suppose Jacobs is right that sometimes agency passivity—what we might call shrugging is grounded in desirable institutional reasons that might enhance social welfare.
An initial puzzle is why shrugging works as a strategy for agencies. The benefit of strategic shrugging to an agency depends on deferral having a different political meaning or resonance than declining or deciding. That is, when an agency says “we will defer a decision” that is less politically costly, generating less social opposition, then when an agency says “yes” or “no.” Off-hand, this could be right, but is not clear why a mobilized interest group who desires administrative action would not be just as upset by “not-right-now” as “no.” In those cases, deciding not to act does not avoid political controversy, just as deciding to act would not avoid political controversy.
For a different set of agency decisions, the political costs of action (to the agency) are surely asymmetric. That is, one policy choice risks generating lots of political opposition, while the other policy choice risks generating less or no opposition. An implicit assumption of the Jacobs article is that the asymmetric political costs case is relatively common and that the asymmetries map onto the “action/activity” vs. “inaction/passivity” categories, such that action risks political opposition and inaction does not. This seems possible, but I am left uncertain as to whether or why this is so.
Nevertheless, suppose it is true. For a reviewing court, or indeed for legislators, or the President, or the public, the problem is how to distinguish good shrugging from bad shirking. Although one often finds articles trailing off a bit when it comes to how to address a challenge like this, Jacobs displays keen instincts and sharp insights. Her discussion of recent arbitrary and capricious review, as applied to agency passivity, is very useful and I learned enormously from it.
Jacobs urges, in short, that agencies should be more forthright about their reasons for passivity and courts should be deferential when reviewing them. This does not really solve the shirking v. shrugging problem, but perhaps the problem is no more severe in the passivity context than in the activity context. That is, the task of judicial review is always to try to distinguish good reasons for agency action from bad reasons for agency action, and there is no reason to think courts will be less good at it when evaluating passivity than when evaluating activity.
But the real question is not whether courts can do so, but whether courts will do so. Bickel’s positive account was that courts defer difficult decisions because it is in their institutional interest to do so. Jacobs urges that agencies will behave in this way because it is in their institutional interest to do so. But is it in the courts institutional interest to review passively administrative agency passivity? And without being too cutesy about it, what are the systemic effects of passive judicial review of passive agency action?
If judicial review is a corrective to agency bias, whether in the direction of overreach or underreach, then a somewhat more active doctrine of judicial review might be desirable even if agency passivity is often laudable. More to the point, the very reasons that Bickel suggested courts would use the discretionary docket to protect their institution do not suggest courts will passively review agency passivity. The political costs to the courts of insisting an agency “do something” are often lower than the political costs of saying “you must do this” or “you may not do that.” If so, then one is left wondering if it is in the judicial review of agency passivity that it is least likely courts will themselves embrace the passive virtues.