How the Supreme Court Blocked Congress’s Effort to Redeem the Administrative State - The American Spectator | USA News and Politics
How the Supreme Court Blocked Congress’s Effort to Redeem the Administrative State
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The Capitol, as seen from the Supreme Court (Mark Van Scyoc/Shutterstock.com)

Two Harvard Law School professors, Cass Sunstein and Adrian Vermeule, recently published a book with the intriguing title Law and Leviathan: Redeeming the Administrative State. Far from “redeeming” anything, their book actually recounts why administrative law in general and the Administrative Procedure Act in particular have failed to date to redeem the administrative state from being its own worst enemy. As a result, today the administrative state is under unrelenting attack. Eminent legal scholars like Richard Epstein of the University of Chicago law school and New York University, Philip Hamburger of Columbia University, and Gary Lawson of Boston University keep writing books and articles with titles like Is Administrative Law Unlawful? or Why the Modern Administrative State Is Inconsistent with the Rule of Law. Their answer is a resounding “yes, it is unlawful” and their solution is that the experiment in American government implemented since the New Deal should be abandoned.

Why would the Supreme Court, which is generally regarded as “conservative,” thwart numerous attempts by Congress and the courts to rein in the growing powers of unelected bureaucrats in the administrative state?

Their ideas, once considered marginal, are winning increasing acceptance in the courts. For example, this summer the Supreme Court ruled that certain “major questions” have to be decided by Congress and not by administrators. And, earlier this year, the Fifth Circuit Court of Appeals held that the internal adjudication system of the Securities and Exchange Commission is unconstitutional because it deprives those subject to financial penalties of their right to trial by jury. This ruling adopts a long-standing staple of Hamburger’s argument that the administrative state deprives ordinary citizens not only of our rights under the U.S. Constitution but of our common-law rights going back to the Glorious Revolution of 1688.

For those not familiar with it, “the administrative state” is a term with pejorative connotations that describes the shift in governmental power at the federal level away from Congress and the president to professional government officials in administrative agencies and departments. This self-perpetuating unelected “ruling class” makes most of the policy decisions in our federal government today, with only the thinnest of supervision by Congress and the president.

Despite all the loose political talk by both parties about “threats to democracy,” the elected branches of our government are becoming increasingly irrelevant under our noses, but only a few cognoscenti seem to notice. For example, “regular order,” in which elected members of Congress are permitted to read and amend proposed legislation, is increasingly a thing of the past as complex bills are written in the offices of the majority leaders of the House and Senate and then merely rubber-stamped by majorities in Congress. For example, the 755-page text of the outrageously misnamed Inflation Reduction Act was only made available a few hours before members of Congress voted on it, and large portions of that legislation “delegate” to unelected bureaucrats the decisions about how the $369 billion in new spending for various programs is actually to be spent. That is actually what President Woodrow Wilson, the prophet of the administrative state, intended. In an (in)famous 1887 article, Wilson argued in favor of “administration” rather than democratic lawmaking because we were letting all those unqualified immigrants vote and, therefore, we needed, in his view, to be governed by good college-educated administrators of sound judgment.

To their credit, Sunstein and Vermeule, a moderate liberal and a moderate conservative respectively — at least by the standards of academia today — do note that “this isn’t your grandfather’s government anymore” and that the administrative state requires “redeeming,” the project that their subtitle envisions for their book. Their “solution” is an old one, the Administrative Procedure Act (APA) of 1946. That statute, passed when the Republicans took back control of Congress after the New Deal and rarely amended since, was intended to redress the worst abuses of administrative agencies conducted during the New Deal. Congress’ basic strategy was to task the courts with supervising the administrative state by providing for broad judicial review of “final agency action.” Consequently, the APA speaks in broad, general terms and empowers courts to “hold unlawful and set aside” administrative actions that are “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.”

In an article I wrote in 1984, I called the APA part of “the administrative constitution” with a small “c,” pointing out that we had used statutory language to perform the quasi-constitutional function of setting up the organs of government and defining the power relationships among them. I recall that one of my older colleagues on the Yale Law School faculty drew me aside and confided that he thought that portion of the article was “crazy,” a technical term that we use in the academy to refer to new ideas with which we do not agree. However, despite his fatherly advice, the term caught on, as Harold Koh, later dean of the law school and legal adviser to the State Department, picked up the concept and wrote a fine book on The National Security Constitution: Sharing Power after the Iran-Contra Affair. Today, there is even a review article by Mila Sohoni, a professor at the University of San Diego’s law school, tracing the provenance of the term “the administrative constitution” and explaining how it has evolved over time. Sunstein and Vermeule even use it themselves on page 42, although without attribution.

Anyway, the aspiration that judicial review by the courts under the APA would discipline the worst abuses of the administrative state is revealed by the title of one of the leading administrative law books of the 1960s, Judicial Control of Administrative Action, by Harvard Law School professor Louis Jaffe. What an anachronism that title is; no one writing today would possibly imagine that the courts could somehow “control” administrative action.

Sunstein and Vermeule build their book around eight general principles, which they describe as reflecting the “law’s internal morality” (page 40). That phrase is a neologism that they invent to avoid admitting that some rights have their foundations in tradition or in “natural law,” a concept that they apparently consider antiquated and only fit for archconservatives such as Supreme Court Justice Clarence Thomas, and, oh yes, Thomas Jefferson in the Declaration of Independence. Instead, they draw their principles of “law’s internal morality” from legal scholar Lon Fuller. Following Fuller, they contend that administrative agencies may violate the “law’s internal morality” in the following ways:

(1) a failure to make rules in the first place, ensuring that all issues are decided on a case-by-case basis;

(2) a failure of transparency, in the sense that affected parties are not made aware of the rules with which they must comply;

(3) an abuse of retroactivity, in the sense that people cannot rely on current rules, and are under threat of change;

(4) a failure to make rules understandable;

(5) issuance of rules that contradict each other;

(6) rules that require people to do things that they lack the power to do;

(7) frequent changes in rules, so that people cannot orient their action in accordance with them; and

(8) a mismatch between rules as announced and rules as administered.

The rest of the book explains how the lower courts have repeatedly invoked fundamental norms of procedural fairness drawn from the Anglo-American common-law tradition to halt these abuses by the administrative state, only to be slapped down by the Supreme Court.

Sunstein and Vermeule call the tendency of the Supreme Court to strike down attempts by the lower courts to interpret the words of the APA in accordance with the fundamental procedural rights in the Anglo-American legal tradition “positivist textualism,” a fancy way of saying the Supreme Court has not recognized the quasi-constitutional nature of the APA and instead has given it a niggardly, literal interpretation.

A good example is Pension Benefit Guaranty Corp. v. LTV Corp., a case decided by the Supreme Court in 1990. That case is on my list of the 10 dumbest Supreme Court decisions ever. (That is the title of a book that I intend to write someday, although I may have to expand it to the 25 or 30 dumbest decisions ever.) In any event, in the PBGC case, an opinion by Justice Harry Blackmun, one of the least talented Supreme Court justices of the 20th century, held that §555 of the APA does not require an agency to identify the issues that are going to be decided in a proceeding. That is odd because that section explicitly gives any “interested person” the right to “appear before an agency or its responsible employees for the presentation, adjustment, or determination of an issue, request, or controversy.” Thus, according to the Supreme Court, the right to appear and be heard does not mean that someone is entitled to know what the issues are that they are supposed to address! Really? Even Kafka couldn’t make that up. Any first-year law student, even one of the less gifted ones, would see that a right to be heard is meaningless if the decision-maker doesn’t have to identify what the issues are that a person is entitled to be heard about. And to add insult to injury, in order to reach that truly inane result, Blackmun had to distinguish a 1974 Supreme Court precedent that had held, “A party is entitled, of course, to know the issues on which decision will turn and to be apprised of the factual material on which the agency relies for decision so that he may rebut it.” Blackmun tried to distinguish that prior precedent by saying, in essence, “Oh, but that was a formal adjudication, but this case involves an informal adjudication.” That is what we lawyers call a distinction without a difference, as nary a word was devoted as to why one should be entitled to know the issues in one type of procedure for adjudicating someone’s rights but not the other.

The poster child for interpreting the APA narrowly rather than construing administrative processes in accordance with our legal traditions is Vermont Yankee Nuclear Power Corp. v. Natural Resources Defense Council Inc (NRDC). In that 1978 Supreme Court case, the Nuclear Regulatory Commission (NRC) had issued a rule prohibiting anyone from raising the issue of nuclear waste disposal in any future proceeding to license additional nuclear reactors. The sole basis for that rule was the testimony of a single NRC employee, Mr. Pittman, who was responsible for designing a permanent repository for nuclear waste. Despite several previous attempts to establish one that had been unsuccessful and abandoned, Mr. Pittman testified, in essence, that “[b]y God, this time it will work.” On that basis alone, the NRC ruled that no one would ever be allowed to raise the issue again. (Perhaps it is worth noting with 20/20 hindsight that no such repository actually exists to this day — and, as a result, 45 years later, high-level nuclear waste from spent fuel rods is still stored “temporarily” in swimming pool–like structures at nuclear reactors around the country that some fear may be attractive targets for terrorists.)

That was too much for the D.C. Circuit, which ruled that the agency had an obligation to compile a record that reflected both sides of the controversy before cutting off debate so that the court could judge whether it had acted rationally in foreclosing the issue permanently. The Supreme Court unanimously reversed this decision, holding that the lower courts were not empowered to require procedures in addition to those specifically prescribed by Congress in the text of the APA. Mind you, this was under a statute that authorized courts to decide whether agencies had to follow the “procedure required by law,” which is commodious general language that could have accommodated the courts’ interpreting “by law” to incorporate the Anglo-American procedural tradition and not just the procedures specified in so many words in the APA itself. Kenneth Culp Davis, the most prominent administrative-law expert of that era, made precisely that point in an article critical of the Supreme Court’s Vermont Yankee decision shortly after the opinion came down. But no matter, for, whether they knew any administrative law or not, the justices were on the Supreme Court and K.C. Davis was not. Vermont Yankee has come to stand for the proposition that the broad language of the APA is not to be interpreted broadly in accordance with the Anglo-American common-law tradition but only allows courts to rule in accordance with the narrow, literal meaning of its terms. (In the interest of full disclosure, I was a law clerk to the D.C. Circuit chief judge, David L. Bazelon, who wrote the lower-court opinion that was reversed in Vermont Yankee.)

And that is not to mention two more of the Supreme Court’s outrageous decisions that also removed important checks on burgeoning administrative power, INS v. Chadha and Chevron v. NRDC. In the former, the Supreme Court struck down the legislative veto, an important congressional check on broad delegations of lawmaking power to administrative agencies. In the latter, the courts abdicated their obligation to “say what the law is,” instead deferring to administrative interpretations of statutes if they were “reasonable,” even if they were not the most natural reading of the statute that the courts would have adopted if they were free to interpret the statute for themselves. This may make the work of judging easier, but it flaunts the specific direction from Congress in the APA for “the reviewing court,” not the agency, to “decide all relevant questions of law, interpret constitutional and statutory provisions, and determine the meaning or applicability of the terms of an agency action.”

Why would the Supreme Court, which is generally regarded as “conservative,” thwart numerous attempts by Congress and the courts to rein in the growing powers of unelected bureaucrats in the administrative state? That perverse result was principally the result of what philosophers call “a category mistake,” applying a principle that is proper in one domain to another to which it does not apply. In its zeal to prevent “judicial activism” in inventing new constitutional rights, which was “widely viewed” to have occurred during the Warren Court era from 1953 to 1969, over the next three decades the Supreme Court overreacted and applied the judicial methods of “originalism” in constitutional law to interpreting the APA where that judicial style is inappropriate. The court apparently failed to realize that Congress wrote the APA in broad generalities precisely in order to give the courts flexibility to rein in the unimaginable variety of abuses and deprivations of basic procedural fairness that might be committed by the administrative state in the future. This mistake in judicial method gradually frittered away the promise of the APA to redeem the administrative state by ameliorating its abuses through judicial review.

The greatest chief justice, John Marshall, once wrote, “We must never forget that it is a constitution we are expounding … intended to endure for ages to come, and consequently, to be adapted to the various crises of human affairs.” Because the APA was a statutory constitution (small “c”) for the administrative state, rather than the Constitution (capital “C”), the Supreme Court did not recognize that these principles should apply to construing it as well.

Admittedly, Supreme Court justices have a really hard job. They are supposed to make wise decisions about the law in every area of its enormous reach, a task that is more than any mortal human brain can realistically hope to master. That’s why most of us lawyers are experts in specific areas of law, such as antitrust, real-estate, or environmental law. The judges on lower courts, particularly the D.C. Circuit, who see administrative law cases day in and day out, actually know more about the field than do most of the justices of the Supreme Court. As one of the wisest of Supreme Court justices, Robert Jackson, once observed: “We [the members of the Supreme Court] are not final because we are infallible, but we are infallible only because we are final.” Sometimes the Supreme Court gets it really wrong, perhaps solving one problem but in the process creating a worse one, and that is exactly what has happened because misplaced originalism in interpreting the APA has prevented it from achieving the goal of reining in the administrative state that Congress intended it to serve.

Sunstein and Vermeule would have written an even more consequential book if they had written it shortly after the APA was enacted and if the courts had listened to them. Perhaps it is never too late to correct a mistake, and maybe the courts will listen to them now and overrule 50 years of misguided precedents that do not reflect what Sunstein and Vermeule call the “law’s internal morality” and what those who wish to abolish the administrative state, such as Philip Hamburger, call the fundamental rights in the Anglo-American tradition that can be traced back to correcting the abuses of dictatorial English kings.

Even Sunstein and Vermeule shy away from claiming that the Supreme Court is suddenly going to come to its senses, reverse course, and uphold the attempts by lower-court judges to make administrative law consistent with the Anglo-American tradition of common-law procedural rights. The most that they claim is that their principles might form the basis for a “kind of macro-settlement” between supporters of the administrative state and its critics (page 42).

However, perhaps there is hope. In a carefully crafted sentence in a recent decision about the administrative state, West Virginia v. Environmental Protection Agency, Chief Justice John Roberts wrote, “A decision of such magnitude and consequence rests with Congress itself, or an agency acting pursuant to a clear delegation from that representative body” (emphasis added). The italicized portion of that sentence captures the reality that sometimes Congress intends to give a broad delegation of authority to administrative agencies in order to deal with unforeseen problems that may arise in the future. A classic example of such an intentionally broad delegation is the authority given by statute to the Federal Trade Commission to prohibit “unfair trade practices.” In deciding to delegate broad, flexible authority rather than trying to anticipate and proscribe all specific abuses itself, Congress wisely realized that it could not fully anticipate all the defrauding schemes that future hucksters might invent. Similarly, Congress understood that it could not anticipate and prohibit every abuse that might later be committed by the administrative state, so in the APA it gave courts broad authority to strike down “arbitrary and capricious” decisions, and to require agencies to follow “the procedures required by law,” not merely those prescribed in so many words by the APA itself.

Maybe someday the court will wise up and figure out that, in the APA, Congress did not try to prescribe all the details for future administrative proceedings but instead meant to delegate broad powers to the courts to correct a wide range of administrative abuses in accordance with our common-law traditions and norms of procedural fairness.

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