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Administrative Law
University of Pennsylvania School of Law
Coglianese, Cary

Cary Coglianese for Administrative Law in Spring of 2017

I. INTRODUCTION

A. Administrative Law: An Introduction

Reasons for administrative intervention/Why have agency regulation?:

Agencies have greater degree of expertise
Market-failure justifications  need to correct market failures

Correct for externalities/spillover effects (air pollution; the market isn’t capturing those costs of production)
Overcome collective action problems
Make up/compensate for information asymmetry (asymmetry of access to info)
Avoid monopolies (markets don’t work well when there’s a concentration of power; markets work well b/c of competition)

Paternalism  Govt should protect individuals from their own confusion and irresponsibility

Themes:

(1) Administrative state is an important venue for govt today

Most lawmakers are in the practice of statutory law

(2) Agency discretion

Both an important opportunity for agencies but also thought to a problem for administrative law to solved
Worry that administrative discretion will be abused
Notion of shirking; worry that when you give an agency discretion, you’ll get a lot of shirking

(3) Many different visions of good govt

Agencies’ visions, courts’ visions, legislature’s visions, and our vision of good govt
Technocratic visions vs. democratic/accountability visions

(4) Problem of regulatory capture

Worry that those who w/ better resources will shape action and policymakers more than others

(5) What’s the role of the courts in all of this?

How much deference should courts give?

Criteria for assessing administrative action

(1) Cost-effectiveness vs. efficiency

Cost-effectiveness: how much is the problem per unit of cost

That’s different from efficiency, which is a balancing of costs and benefits (are net benefits positive or maximized?)

(2) Equity

How are costs and benefits balancing b/t different parts of society, different individuals throughout society

(3) Difference b/t public choice and public interest definitions of the administrative state

Public Interest v. Public Choice

Public interest  advancing good ideals; what is good for the American people; tracks what the world ought to be; focuses on importance of promoting public welfare, getting efficiency, equity, and expertise
Public choice  self-interested actors; focusing on what the world is (not what it ought to be)

Examples:

Public choice assumption for Congressmen  they want to get re-elected
Public choice assumption for heads of agencies  they want to expand their power, budgets, and regulatory reach (it is in the self-interest of an agency to expand its power)

Why does delegation occur at all?

Public interest explanation

(1) There is a lot that decision-makers need to know to intervene effectively and efficiently in the marketplace. Legislatures are busy and generalists, so they don’t always have the right expertise. To solve that informational problem, legislatures set up administrative agencies and delegated the finer grain problems to them

That’s more of a public-interest explanation  legislatures really want to do well and so they’re going to bring in the experts

Public choice accounts for why we have delegation

(2) It is easier to broker deals if can have some agreement on general principles and then delegate to someone else to define those principles; helps coalition building
(3) Delegation occurs for symbolic reasons; legislatures want to look like they’re doing something and want the public to think they’ve solved the problem w/o actually having solved it

Principal-Agent Relationship

Principal gives authority over to the agent; agent serves the interest of the principal
Congress setting up a principal-agent relationship when setting up agencies

Agencies carrying out commands from the legislature (statutes drive what administrative agencies do)
Delegation of authority to an administrative agency is setting up a principal-agent relationship

Shirking = agent might not be as diligent as the principal would be in protecting the principal’s interests; shirking is the key problem to the principal-agent relationship

Concern that the agent won’t faithfully serve the interests of the principal (shirking)

4 ways to manage the principal-agent relationship

(1) Delineation
(2) Sharing
(3) Monitoring
(4) Reversibility

What is administrative law?

No single body of administrative law
Sources

Constitution

Separation of powers
Due process of law, particularly procedural due process

Statutes

Substantive/“organic” statutes (Dodd Frank Act, Clean Air Act, etc.)
Procedure/trans-substantive statutes (Administrative Procedure Act (APA))

Agency’s own rules and procedures
Court decisions (common law)

What do administrative agencies do?

Implement (legislative power), enforce (executive power), adjudicate (judicial power)
An agency may have

(1) The quasi-legislative power to adopt regulations that control people’s everyday conduct
(2) The executive power to enforce those regulations and other laws that the agency is responsible for administering, and
(

by folks who are elected but also that the legislative process arguably is more transparent and more deliberative than the administrative process
Much of the deliberation that takes place in rulemaking takes place behind closed doors, whereas there are opinion legislative debates at least when legislation is being considered

(3) Safeguarding liberty

If you can constrain agencies, narrow the scope of their delegation, canalize their decision-making, then maybe you can promote liberty protecting individuals and businesses from runaway bureaucrats out to regulate us

(4) Robust nondelegation doctrine really central to the rule of law

Particularly if talking about forcing clear and concrete delineations of authority; that kind of authority puts the public on notice as to what the agency is allowed to do/charged w/ doing and also provides a basis for others to review and assess how well that agency is doing, including the courts

When it comes to the law of the nondelegation doctrine, the central issue is w/ a delegation that occurs whenever an agency is given authority  that can be when the agency is first set up BUT it also can occur ANY other time Congress passes a statute and then gives some authority over to an administrative agency

Four factors to consider:

Nature of authority now authorized by the delegation

How much does it look like legislation? Making rules? The more it looks like a legislative delegation, the more problematic it might be all other things being equal
Other types of actions, like implementation or execution, less problematic

(2) Basis/“intelligible principle” (often the one that gets the most play)

Is there some limitation on the use of the delegated authority/does the statute give some guidance for the agency to follow for using its delegated authority?
What is the basis upon which the agency is permitted to act? What is that should guide or provide the basis for an administrative agency to make a decision, to take an action w/ the authority that has been delegated to the agency?
How much discretion does the agency have?
But it doesn’t have to be all that intelligible to count (American Trucking)