Posted: August 14, 2019
he assault on the administrative state proceeds apace. Law schools and think tanks abound with seminars and conferences with titles such as “Whatever Shall We Do About the Administrative State?,” “Deregulation and the Administrative State,” and “Congress and the Administrative State: Delegation, Non-Delegation, and Un-Delegation.” Vigorous critiques like Philip Hamburger’s Is Administrative Law Unlawful? (2014), Joseph Postell’s Bureaucracy in America (2017), and John Marini’s new Unmasking the Administrative State receive thoughtful attention. Law reviews and public policy journals, not to mention numerous legal blogs, fairly bristle with commentary questioning virtually every conventional assumption of the once quiet and uncontroversial field of administrative law. Such developments will not instill confidence among those who believe public administration has yet to achieve its greatest glory.
Many mansions may be found in the house of the critics, but the differences among them pale compared with the shared conviction that the premises on which administrative law has rested for the better part of a century should be radically revised or abandoned. To be sure, numerous scholars who disagree with this indictment return the critics’ volleys with books and articles of their own. But the critics—at least at the present juncture—hold the stronger hand. This is a new and significant phenomenon, unthinkable a short time ago. For most of the past century, the literature on the administrative state was altogether too comfortable with itself—and with the institutions whose activities it chronicled. Most commentators celebrated or sympathized with the progressive agenda, and in some cases helped design the regulatory machinery inspired by it. Few academic tears were shed during the 20th century as important structural features of the founders’ Constitution gave way to Woodrow Wilson’s “living” constitutionalism.
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This generally sympathetic support for the progressive agenda began to crumble in the 1970s across a wide range of disciplines. Economists as early as the 1960s had begun to contrast the ostensible purposes of many regulatory programs with their actual achievements and found numerous gaps between rhetoric and reality. Not long thereafter, a group of young political philosophers, most of them denizens of Claremont, began to re-examine the works of progressive theoreticians with particular care. Progressivism, they showed, was marked not merely by economic and political reform at the retail level (e.g., railroad regulation, food and drug safety legislation, or the initiative, referendum, and recall), but by a deep-seated desire to alter or abolish the founders’ constitutional regime—especially their dedication to natural rights, limited government, and the separation of powers. This new understanding made its way into the literature of constitutional lawyers.
These cross-disciplinary forays have grown by now into an impressive library of commentary that has inspired significant reform projects at think tanks, law schools, and even in Congress. They have also borne fruit in constitutional litigation, including cases docketed by the Supreme Court. In the recently concluded term of the Court, for example, the justices entertained two significant challenges against longstanding administrative law doctrines and opened the door for more challenges in the future. (See the discussion of the Gundy and Kisor cases below.) The larger and more important part of the reformist agenda seeks to reinvigorate the original understanding of and appreciation for the separation of powers, a perspective that with rare exceptions has all but disappeared from academic instruction about the Constitution. Reviving the separation of powers necessarily entails reassessing constitutional assumptions that have not been seriously questioned since the New Deal. Peter Wallison’s Judicial Fortitude: The Last Chance to Rein in the Administrative State is an admirable contribution to this enterprise. The book is an analytically rigorous, well-informed, and compelling brief for the proposition that the judiciary has irresponsibly aided and abetted the administrative state’s growth by undermining the separation of powers. The restoration of any reasonable kind of limited government, Wallison argues, will require the Supreme Court to alter or reverse important precedents that have encouraged congressional abdication and invited rule by unaccountable bureaucrats.
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It wasn’t so long ago that Congress took pains to master the details of public policy and to police agencies charged with the duty of carrying out its legislative prescriptions. Federal legislators today seem much less interested in performing either task. Most congressional work today appears to consist of two things, both by-products of the administrative state. First, members busy themselves as ombudsmen for the distribution of goods and services provided by big government. Second, rather than creating or fine-tuning guidance on policy for those who administer it, members delegate that responsibility to the bureaucracy of executive and independent agencies. Having done so, they thereafter poke and prod agencies to help causes or constituencies important to their re-election. As Professor (now D.C. Circuit Judge) Neomi Rao has brilliantly shown, rather than legislate collectively in an effort to enhance the common good, members hone their skills as individual policy entrepreneurs, an activity that privileges and enhances the mischiefs of faction. In short, Congress has converted its end of the administrative state’s machinery into a formula that seeks to enhance incumbent safety. The traditional idea of lawmaking has taken a back seat to tweaking the administrative system for personal political benefit. This disposition has become a well-entrenched habit, and it will not change unless acted upon by an outside force. Wallison believes, and credibly demonstrates, that in the first instance the federal judiciary must become that outside force.
That is a tall order, but Wallison’s credentials are well suited to its execution. He specialized in complex regulatory matters for 30 years with law firms in New York and Washington, D.C., and served as general counsel of the Treasury Department from 1981 to 1985 and as White House counsel in 1986-87. For the past 20 years he has been a senior fellow at the American Enterprise Institute, where he directs a major program dealing with various aspects of financial regulation. He has written widely and well about regulatory matters, including what is arguably the best book on the financial crisis of 2007-08, Hidden in Plain Sight: What Really Caused the World’s Worst Financial Crisis and Why It Could Happen Again (2015).
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Wallison focuses on two features of the contemporary administrative state that, taken together, make it almost impossible to restrain government growth and regulatory overkill. Both features are inextricably intertwined with longstanding judicial doctrines that impede meaningful reform. The first concerns the demise of the so-called non-delegation doctrine—the proposition that since Article I vests Congress, and Congress alone, with legislative powers, those powers may not be sub-delegated. The rationale for the doctrine was comprehensively laid out by John Locke in his Second Treatise of Civil Government:
The Legislative cannot transfer the Power of Making Laws to any other hands. For it being but a delegated Power from the People, they, who have it, cannot pass it over to others…. And when the People have said, We will submit to rules, and be govern’d by Laws made by such Men, and in such Forms, no Body else can say other Men shall make Laws for them; nor can the people be bound by any Laws but such as are Enacted by those, whom they have Chosen, and Authorised to make Laws for them. The power of the Legislative being derived from the People by a positive voluntary Grant and Institution, can be no other, than what the positive Grant conveyed, which being only to make Laws, and not to make Legislators, the Legislative can have no power to transfer their Authority of making laws, and place it in other hands.
For the American framers, and for most public officials until roughly the New Deal, this rationale was widely accepted as a necessary adjunct of limited, accountable government. On rare occasions (dealing with episodic minor matters) when Congress looked the other way for reasons of political convenience, legislators understood that maintenance of the non-delegation principle was essential to the preservation of its political leverage vis-à-vis the executive. By degrees—like the proverbial pot of gradually warming water that boils the frog—the growth of government during the early 20th century tempted Congress toward acts of constitutional impiety as members struggled to control an ever-expanding policy agenda. Rather than hammer out details as it had routinely done in the past, Congress found it easier to vest more and more discretionary authority in administrative agents. Legislators comforted themselves with the myth that the recipients of discretionary legislative largesse could still be held accountable.
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A key turning point in this transformation occurred in 1928, in the otherwise obscure case of J.W. Hampton, Jr. & Co. v. United States, where Chief Justice William Howard Taft opined that at least some legislative powers might be constitutionally delegated after all. Congress might seek another branch’s assistance to execute its intent, Taft wrote, but “the extent and character of that assistance must be fixed according to common sense and the inherent necessities of the governmental co-ordination.” So long as Congress lays down “by legislative act an intelligible principle to which the person or body authorized to [exercise the delegated authority] is directed to conform, such legislative action is not a forbidden delegation of legislative power.”
Taft, it seems reasonably clear, did not intend to eviscerate the non-delegation doctrine, nor encourage undisciplined legislative behavior. Whatever his purpose, his “intelligible principle” became an instrument through which all but the most egregious delegations were able to pass judicial muster. It is hard to see how it might serve as a guide for Congress, and for that reason equally hard to see how a reviewing court could find fault once the relevant legislative judgment has been made. In the crisis of the Great Depression and the resultant political pressures energized by the New Deal, a new constitutional order was born, one that no longer constrained legislative delegation, but actively abetted its expansion. The last gasp of the old order occurred in 1935 when the Supreme Court handed down its decisions in Panama Refining Co. v. Ryan and A.L.A. Schechter Poultry Corp v. United States. Both involved successful constitutional challenges to the National Industrial Recovery Act (NIRA) on the ground that no intelligible principle could be ascertained that might guide or limit recipients of the Act’s legislative authority. The Supreme Court agreed with the plaintiffs’ argument and struck down the relevant provisions of the NIRA, much to Franklin Roosevelt’s consternation. He took his revenge in February 1937, following his 1936 landslide victory, when he proposed his Court-packing plan. Although his scheme failed of enactment, he got what he wanted in the long run as judicial retirements allowed him to fill the high court with New Deal enthusiasts, for whom the idea of non-delegation was just another relic of an outmoded constitutional order. The non-delegation doctrine was effectively interred, and with minor exceptions has remained entombed since. As Professor Cass Sunstein is fond of pointing out, the doctrine really only had one good day at the Supreme Court.
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But have we not learned a thing or two since the 1930s about both legislative cowardice and regulatory excess? The New Deal world was small beer compared to the size and reach of government today, which regulates details of citizens’ lives in ways unthinkable only a few years ago. It is able to do so in no small part because, when people complain, Congress blames the bureaucrats who write the offending regulation, not the legislators who authorized them to do so. Is there no limit on the policymaking powers Congress may delegate to agencies, boards, and commissions? The “intelligible principle” standard, as it has been applied, limits almost nothing Congress wishes to do by way of delegating legislative power. When Congress is allowed to delegate without effective constraints—which is very close to what now prevails—three things happen at once: Congress becomes indolent, ignorant, and flabby in establishing policy standards; agencies that receive vaguely defined or open-ended grants of policy-making authority are more inclined to become capricious in the exercise of their rule-making powers; and it is much more difficult to hold either donor or recipient politically accountable. The result is the establishment of government on auto-pilot, moving inexorably toward ever-more arbitrary assertions of its power. The non-delegation doctrine is often mocked by academics and political scriveners who tend to favor big government, but there was much wisdom to its teaching, as Wallison reminds us. He understands that it’s impossible to return in some simple-minded way to 18th-century legislative standards. But he is absolutely correct that allowing Congress to evade its responsibility to the electorate by abandoning its constitutional duty is a recipe for tyranny. And he is also correct in urging the judiciary to apply more rigorous non-delegation standards against the lazy whimsies of the legislature.
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The second major prong of Wallison’s reform agenda concerns the so-called “Chevron rule,” which takes its name from a rule laid down by the Supreme Court in Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc. (1984). The rule holds that when reviewing federal agency action, a court must defer to the agency’s interpretation of a statute Congress authorized the agency to administer. Technically speaking, Chevron deference entails a two-step process. In step one, the court must decide whether congressional intent is clearly expressed in the statute; if so, the agency must obey that intent. If intent is unclear or ambiguous, the court must determine whether the agency’s interpretation is permissible. The relevant consideration is whether the congressional ambiguity was explicit or implicit. If explicit, the agency’s construction must be upheld unless that interpretation runs afoul of other administrative rules. If implicit, a reviewing court may not substitute its own judgment for the agency’s as long as the agency’s interpretation is reasonable.
This is the kind of a rule that only lawyers could love, especially those with time on their hands. Justice John Paul Stevens provided its rationale in his opinion for the Court in Chevron:
Judges are not experts in the field, and are not part of either political branch of the government. Courts must, in some cases, reconcile competing political interests, but not on the basis of the judges’ personal policy preferences. In contrast, an agency to which Congress has delegated policymaking responsibilities may, within the limits of that delegation, properly rely upon the incumbent administration’s views of wise policy to inform its judgments. While agencies are not directly accountable to the people, the chief executive is, and it is entirely appropriate for this political branch of the Government to make such policy choices—resolving the competing interests which Congress itself either inadvertently did not resolve, or intentionally left to be resolved by the agency charged with the administration of the statute in light of everyday realities.
In other words, if Congress is too busy, too confused, too conflicted, or too lazy to perform its constitutional duties, the Court has no problem letting others do the relevant legislative work. The business of government, after all, must go on, and someone’s got to do the heavy lifting. That may make sense from a strictly utilitarian perspective, but it disregards the Constitution at least twice over: it allows Congress to abandon its legislative duties and abdicates the judicial duty to say what the law means. As Justice Neil Gorsuch remarked in a Tenth Circuit case a year before he was confirmed for the Supreme Court,
Chevron seems no less than a judge-made doctrine for the abdication of the judicial duty…. At Chevron step one, judges decide whether the statute is “ambiguous,” and at step two they decide whether the agency’s view is “reasonable.” But where in all this does a court interpret the law and say what it is?
Making matters worse, a second rule of deference has arisen—“Seminole Rock” or “Auer deference,” named after the two leading cases that birthed and sustained it (in 1945 and 1997, respectively). This rule applies Chevron-like deference to an agency’s interpretation of its own regulations. As numerous critics have pointed out, this entails a fundamental violation of what ought to be a bedrock separation of powers principle: the power to make and to execute law should not lie in the same hands. Even so, the Supreme Court for more than half a century has applied this second rule of deference and ensconced it as an important part of administrative law. This deference creates a perverse incentive for agencies to craft relatively vague regulations, knowing they are likely to be upheld, and thereafter to apply those regulations through even harder to control forms of “guidance.”
All this roughly summarizes the most important ways by which the judiciary has helped to validate and perpetuate the operations of the administrative state. The reason for Wallison’s well-chosen title, Judicial Fortitude, now becomes apparent. It is taken from Alexander Hamilton’s defense in Federalist No. 78 of lifetime tenure; it was necessary, he said, because judges must be “guardians” of the Constitution, a duty whose exercise will require them to oppose the political branches. Wallison has made a compelling case for reinstating a workable version of the non-delegation doctrine, and for reducing if not eliminating judicial deference to agency interpretations of agency authority. He is a practical man, though he is generally familiar with, and certainly has been instructed by, the major philosophical and jurisprudential principles that undergird his argument. He surely recognizes that formal re-establishment of the non-delegation doctrine is unlikely in the short term; his primary interest lies in redefining the terms of debate, in getting us back to the spirit that animated the founders when they endorsed the separation of powers as essential to the preservation of liberty. Some will no doubt dismiss this effort as a feckless romantic gesture on behalf of a world long gone, or as a reactionary effort to un-do the New Deal.
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The New Deal is not going to be undone in any radical way—but where is it written that we must accept as permanent arrangements put in place nearly a century ago? Who are the real reactionaries, those who wish to preserve in amber the ideas of Woodrow Wilson, Herbert Croly, and FDR, for example, or those who, based on experience, see the flaws in those ideas and wish to present a better way forward? One can have energetic government that addresses the concerns of 21st-century Americans without the high-fallutin’ intellectual baggage of progressive theorizing about man and nature. One doesn’t need Teddy Roosevelt’s rhetorical bombast or his stewardship theory of the executive to legislate on food and drug safety, for example. Nor does energetic government require government agencies that can, with only limited supervision by Congress and the courts, set the metes and bounds of their own authority. To the contrary, you need to control them if you value liberty and the institutions that preserve it. You do need a Congress that understands its deliberative, law-making, and oversight duties. You do need an executive that understands the rule of law as something broader, deeper, and more important than the ability to wield a pen and a phone. And you do need a judiciary that will teach the public, not to mention public officials, about the founders’ Constitution and force government agents to take their oaths of office seriously.
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A sizeable task, but not impossible, especially if one takes into account the Supreme Court as currently constituted. Chief Justice John Roberts and Justices Clarence Thomas, Samuel Alito, Neil Gorsuch, and Brett Kavanaugh have all expressed, at one time or another (and especially in Justice Thomas’s case, repeatedly), strong reservations about the dangers of ill-defined legislative delegations and undue deference to bureaucrats’ interpretations of their own authority. If one is looking for a constitutional moment at which some of the administrative state’s operative premises are likely to be questioned, the current Court offers greater hope for reasonable change than has been seen in the lifetime of anyone now living. Diverse opinions of these five justices clearly show that they have absorbed lessons from the revisionist literature. How far they are willing to go to restore the old order remains to be seen. But we may get a taste of what could lie ahead from two cases handed down in the just-completed term of court.
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Gundy v. United States placed the non-delegation question squarely in issue. Under a 2006 statute, Congress required certain convicted sex offenders to register in the state of their residence. The law imposed automatic registration on offenders convicted after the date of enactment, but allowed the Attorney General to specify whether those convicted before enactment must also register. The question before the Court was whether the latter provision violated the non-delegation doctrine. Because the case had been argued before Justice Kavanaugh joined the Court, only eight justices participated. Justice Elena Kagan (joined by Justices Ruth Bader Ginsburg, Stephen Breyer, and Sonia Sotomayor) said no, arguing that the discretion granted to the Attorney General was “distinctly small bore.” She added pointedly that if the grant here were deemed unconstitutional, “then most of Government is unconstitutional.”
Justice Alito, in a clever strategic move, wrote a brief concurring opinion that joined only the judgment of the Kagan group but not its rationale, adding that he would be willing to join a majority that decided to seriously reconsider the non-delegation rule. The opening paragraphs of Justice Gorsuch’s dissent (joined by the Chief Justice and Justice Thomas) pull the curtain back on a new drama that may soon unfold:
The Constitution promises that only the people’s elected representatives may adopt new federal laws restricting liberty. Yet the statute before us scrambles that design. It purports to endow the nation’s chief prosecutor with the power to write his own criminal code governing the lives of a half-million citizens. Yes, those affected are some of the least popular among us. But if a single executive branch official can write laws restricting the liberty of this group of persons, what does that mean for the next?
Today, a plurality of an eight-member Court endorses this extraconstitutional arrangement but resolves nothing. Working from an understanding of the Constitution at war with its text and history, the plurality reimagines the terms of the statute before us and insists there is nothing wrong with Congress handing off so much power to the Attorney General. But Justice Alito supplies the fifth vote for today’s judgment and he does not join either the plurality’s constitutional or statutory analysis, indicating instead that he remains willing, in a future case with a full Court, to revisit these matters. Respectfully, I would not wait.
We may not have to wait long before Justice Kavanaugh provides the necessary fifth vote for a wholesale reconsideration of the non-delegation principle. Many progressive legal commentators are already in a swivet about that prospect. Good.
Some observers hoped that the Court would use this term’s Kisor v. Wilkie to strike down the Auer deference rule. That did not materialize. Instead of constitutional clarity (announcing that it was the judiciary’s job to say what the law is), what we got was a constructively modified but still muddled status quo. None of the nine justices was quite ready to overrule Auer, but all agreed, for varying reasons, that agencies should not have carte blanche to interpret their own rules. Not surprisingly, Justice Kagan and her three liberal colleagues had fewer objections to the status quo than the Court’s conservative block. Chief Justice Roberts provided a fifth vote to uphold Auer while rejecting much of Kagan’s rationale for its retention. For the time being at least, he argued, the Auer rule deserved the benefit of stare decisis. Roberts’s move had the effect of forcing Kagan and Co. to add various qualifications to the prior Auer rule. The revised rule now appears to entail no less than a five-step process, which will usefully narrow agency discretion, do wonders for the billable hours of administrative lawyers, and postpone important constitutional questions about deference to another day. With the current Court, agencies will be a bit less generous when interpreting their own rules, and judges will exercise a bit more scrutiny.
Although this term’s results were less than reformers hoped, the good news is that the Court is at least beginning to address constitutional reservations about the administrative state, and that it is very close to having a solid majority to ensure a constitutionally desirable result. In short, those who admire the separation of powers and wish to see it revived should be much happier than they were only a few years ago. This is a great tribute to those scholars and practitioners who have labored so long to restore constitutional limitations on officious government action. It might be too much to ask, but as the justices sharpen their quills, they could do worse than to have an open copy of Peter Wallison’s book at hand.