I. The Place of Agencies in American Government
The Constitutional Position of Administrative Agencies:
General Overview of Delegation
i. Query: Why delegate to an administrative agency? [terrorism, DHS hypo, notes pg. 1] ii. Rationales:
1. Quick and flexible agency action. Agencies can move faster than Congress.
2. Specialized Expertise:
a. Agencies are composed of specialists in the particular field that are more familiar with the material, challenges, etc.
b. Critique: Agency tunnel-vision. Agency is concerned only with fulfilling its own mandate, and in pursuing its own (specialized) worldview, and it can’t see the broader picture. Congress has broader goals, and is charged with engaging that difficult political balancing process.
c. Counter: If Congress weren’t allowed to delegate it would have to create a committee or a commission of its own to acquire the necessary expertise to promulgate rules and regulations. But the point remains that delegation isn’t necessary to acquire specialized expertise.
3. Political Accountability and Insulation:
a. Even if Congress could acquire specialized expertise itself, we want this to be used in a sensible way. Congress is under substantial political pressure that influences its decision-making. So delegate decisions to a more neutral body that can use its expertise more freely.
b. Rationale: A certain amount of freedom from political accountability, and a certain amount of subject area focus, is a good thing.
i. Agency tunnel-vision, again. The point of political accountability is to consider all of the populace’s priorities and needs, not just the one you are most familiar with. Congress is compelled to consider this more so than an agency.
ii. Democratic Legitimacy: does administrative insulation from politics “cut out the democracy”?
1. There is something anti-democratic by delegating the decision-making to technocrats on the grounds that you want them to be insulated from the desires and the political pressures of the populace.
2. Seems to suggest that the more democracy there is, the worse decision-making becomes, which is anathema to our system.
iii. Agency Capture:
1. Administrative agency insulation from the political process might infuse politics and insulation into the decision-making process, but do so beyond the public’s view.
2. The non-transparent application of political power – as compared to Congresses much more public (and accountable) actions – is arguably even worse.
iv. Rule of Law: (Overbroad or vague delegation) If the delegation to an agency is too broad, there may be no effective way to determine whether the agency is abiding by the statute.
1. Counter: That’s why there are constitutional doctrines on delegation which require, inter alia, an intelligible principle.
d. Counter: Executive Accountability
i. The argument is that administrative agencies aren’t politically unaccountable, but they are now being held accountable via the executive branch and the president. National accountability.
ii. Critique: how much do voters think about an individual administrative agency’s decisions when voting in a national presidential election?
iii. Counter: This is still important because it means that, at least for executive agencies, the administrative discretion is never completely unfettered. There is still responsibility to the president who is, ultimately, responsible to the people.
4. “Filling in the Details”
a. Sometimes Congress knows, more or less, what it wants to happen but it is looking for somebody else to provide the specifics. No legislative statute can ever specify all the details, so there must always be some delegation.
b. See Wayman v. Southard (1826) [pg. 67]: Held: there are certain, less important, subjects of Congressional regulation “in which a general provision may be made, and power given to those who are to act under such general provisions, to fill up the details.” (67).
5. Political Cover
a. From the legislator’s perspective, delegating authority to an agency to carry out a Congressional decision (especially when it is likely to be a rather unpopular decision) can provide some amount of political cover.
i. It is the agency, not the Congress, which is actually making the specific decisions, passing rules and regulations, and enforcing them.
ii. This allows Congressman plausible deniability – later on, if special interests are upset, he can say that the agency misused the delegation, or took it too far. Critique: The delegation to an agency is somewhat unpredictable, which leaves the Congressman on the hook for (potentially) being blamed for unexpected decisions or outcomes.
b. Critique: But, at the same time, this also robs the Congressman of some amount of political capital (credit) if/when the agency does things that the public values.
iii. Rationales (Industry Perspective)
1. Query: Why might a (potentially) regulated industry like Congressional delegations to administrative agencies?
2. Inevitable Regulation: If some regulation is inevitable (e.g., CO2 controls now) then industry might favor delegation (which might be more nuanced, take longer, and be more susceptible to their political influence [“agency capture” argument]) over direct Congressional regulation.
3. Justification for Price Increases: Agency regulation provides a justification for increased prices or fees (“our hands are tied”), as, for example, the 9/11 security fee the airlines started charging.
4. Barriers to Entry: Existing players, especially large ones, might favor agency regulation insofar as it imposes monetary and administrative barriers to entry for potential competitors. Within a given industry, more regulation might make existing companies more competitive or profitable.
The Non-Delegation Doctrine
i. Issue: Under what conditions are Congressional delegations of power to administrative agencies constitutional?
ii. Constitutional Provisions:
1. Article I: Powers of Congress
a. Section 1: “All legislative Powers granted shall be vested in a Congress…” [Vesting Clause] b. Section 8.18: “To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States…” (pg. 1307).
2. Article II: Powers of the Executive Branch
a. Section 1.1: “The executive Power shall be vested in a President…” [Vesting Clause] b. Section 3: “…he shall take Care that the Laws be faithfully executed, and shall Commission all the Officers of the United States.” (pg. 1310).
iii. Important Nondelegation Themes and Considerations:
1. Formalist vs. Functionalist Methodologies and Interpretations:
i. Certain powers are inherently legislative or executive; the two powers are qualitatively distinction things and never the twain shall meet.
ii. Critiques: It is difficult to define “legislative power” and “executive power” in a complete but yet non-overlapping way. Rationale: Most executive power involves some degree of discretion, which will look a lot like lawmaking (legislative power).
i. The Constitution establishes a system of separated powers and checks and balances in order to produce political accountability and good governance. The proper division of legislative and executive power should be determined with reference to those ends.
1. What ends? There is not universal agreement over the legitimate functions (i.e., ends) that the Constitution aims at.
2. Do courts know what works? This methodology also requires empirical or predictive judgments about the likely effect of a particular legal rule on the functioning of the government. Arguably, courts are not the best-equipped body for making such judgments.
c. Note on overlaps
i. (Stephenson): these two schools of thought interact in interesting ways. For instance, it is possible to defend formalism using a functionalist argument (stick to the text because it serves certain desirable ends).
ii. See Scalia dissent in Morrison for an example of this (using functionalism to defend formalism).
iii. See also White dissent in Chadha which defends functionalism using a formalistic rationale.
2. Scope or Breadth of Delegation:
a. When considering the delegation a court might be considered with the scope of authority delegated (i.e., the range of outcomes that the agency can reach, as in Hampton where tariffs for a number of goods could be set, in theory, at any price)
b. OR the court might worry about the breadth of the delegation (i.e., the constraints, or lack there of, placed on the agency’s decision-making, as in Panama where the president was unconstrained in his decision to proscribe Hot Oil shipments).
3. Substantive Importance of delegation:
a. When the delegation is on a narrow matter the court seems to be marginally more comfortable with a delegation that is broader or larger in scope.
b. When it is a delegation respecting an area of critical importance to the country (e.g., essentially the entire economy in Schechter), the court will be less reluctant to approve of the delegation.
c. (Stephenson): It’s not at all clear where this distinction fits in doctrinally, but it is clearly an important atmospheric concern (See Benzene).
4. Contemporary Status of the Nondelegation Doctrine:
a. Outcomein Panama: This was the first time a federal statute had been struck down on nondelegation grounds, so this case was signific
i. Common Sense: Even if this represents an exercise of some amount of legislative power, common sense dictates that the president must have some limited “legislative power” in order to run the nation.
1. “common sense requires that…Congress may provide a Commission…to fix those rates….in accord with a general rule that Congress first lays down.” (67, and above).
2. This is required otherwise the executive branch would be paralyzed, which is not a sensible reading of the Constitution.
3. Critique: [Limited Powers] a. The flexibility in the Constitution wasn’t intended to create a Fourth Branch of government. The Constitution envisioned a federal government of limited powers, and the fact that it would be difficult for the executive to operate without the use of some legislative power should not concern us.
b. The Constitution explicitly limits the scope of Congress’s powers, and it makes the carrying out of certain tasks intentionally difficult. It is supposed to be difficult for Congress to legislate broadly.
c. Note: This critique turns the functionalist argument (“common sense”) on its head and argues there are practical, functionalist reasons for disapproving of delegations of legislative power.
4. Counter: [Living Constitution] The Constitution was written broadly and with the expectation that it would be a flexible document to adapt to changing exigencies in the country and in the world.
a. The Constitution should be adaptable to modern circumstances, and there is a difference between making legislation difficult to accomplish and making it practically impossible.
b. For instance, in this case we would not want to require a new piece of Congressional legislation every time the tariffs for any product needed to be altered.
c. Note: The limited powers approach would not necessarily result in no tariff statute, it might just lead to a bad or ill-conceived tariff statute.
5. Counter: [Internal Delegation] a. The response to this is why doesn’t Congress simply create a legislative agency or sub-committee, rather than an executive agency?
b. Response: See “Political Accountability and Insulation” section, above.
ii. “Necessary and Proper”:
1. It is “necessary and proper” (Article I, Section 8, Clause 19) that Congress delegate some amount of legislative authority to the executive to fill in the details, and carry out its mandate.
2. Note: this acts as a Constitutional hook for the “common sense” argument above.
iii. Appropriate Safeguards: The relevant safeguards were satisfied when Congress followed the legislative procedure in making the initial delegation of legislative power. There Congress followed the provisions of the Constitution, and now the president is merely implementing that delegation and carrying out Congress’s will. Congress retains ultimate authority.
v. Panama Refining Company v. Ryan (1935) [pg. 69] 1. Facts:
a. In between Hampton and Panama we had the Great Depression and the New Deal. While administrative agencies predated the New Deal, they expanded greatly, in number, scope, and power, after it.
b. NIRA (National Industrial Recovery Act) is at issue in this case. The specific provisoin at issue empowered the president to prohibit the interstate transport of “Hot Oil” (oil produced in excess of state limits).
i. These shipments were already prohibited by states, but the statute gave the president authority to make it illegal under federal law as well.
ii. Roosevelt exercised this authority (under §9 of NIRA) in 1933, and NIRA then issued implementing regulations.
2. Issue: Unconstitutional delegation of power to the president?
3. Held: Yes. The court “found no standard for the President to follow in deciding whether to close interstate commerce to ‘hot oil.’”(69, quoting casebook).
4. Note on outcome: This was the first time a federal statute had been struck down on nondelegation grounds, so this case was significant at the time.
a. Unconstitutional because there is no intelligible principle:
Unlike in Hampton, there are no identified set of circumstances