The Constitutional Position of Administrative Agencies:
Analysis: In order to be a valid delegation of legislative authority
i. The essential legislative functions must be reserved for the legislature
ii. Congress (not courts) must have provided an intelligible principal to guide agency
The Non-Delegation Doctrine:
i. 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…”
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.”
3. Article III: Powers of the Judicial Branch
a. Section 1: “The judicial Power of the United States, shall be vested in one supreme Court, and in such inferior Courts as the Congress may from time to time ordain and establish. The Judges, both of the supreme and inferior Courts, shall hold their Offices during good Behaviour, and shall, at stated Times, receive for their Services, a Compensation, which shall not be diminished during their Continuance in Office.”
ii. A.L.A Schechter Poultry Corp v. U.S. (1935) [pg. 69] 1. Facts: §3 of the NIRA allowed different industry groups to organize into guilds and promulgate “codes of fair competition.” Before the President could approve the codes he had to find that the guilds were representative of the industry, and that the codes were not designed to promote monopolies. One of these codes was certified for the poultry industry, and was challenged.
2. Issue: Unconstitutional delegation of legislative power?
3. Hold (Hughes; unanimous): Yes. Because “fair competition” can mean almost anything under the statute, Congress has delegated the regulation of virtually the entire economy to the president and to industry groups. If anything violates the nondelegation statute, this is it.
iii. Yakus v. U.S. (1944)
1. Facts: The Emergency Price Control Act (EPCA) of 1942, a wartime measure designed to help ease turmoil in the domestic economy, allowed the price administrator to set prices that were “fair and equitable and will effectuate the purposes of this Act.” Yakus was charged and convicted of selling beef at more than the regulated price, as set by the EPCA, and he brought a nondelegaton challenge.
2. Hold (C.J. Stone, for eight member majority): No unconstitutional delegation.
3. Analysis: Functionalism: Stone upholds the EPCA using functionalist rhetoric. The Constitution does not demand the impossible or the impracticable. Rationale: As long as a Court can discern what Congress meant to accomplish, that is sufficient to satisfy the “intelligible principle” standard. Here the clear purpose is to avoid price gouging in the midst of a world war.
Contemporary Non-Delegation Arguments
i. Mistretta v. U.S. (1989)
1. Facts: In 1984, responding to the perception that criminal sentences were highly variable, Congress establishes a sentence commission. Designed to set precise sentencing guidelines, the commission is organized as an independent commission within the judiciary.
2. Hold (8-1, Blackmun majority, Scalia dissent): the commission is Constitutional.
3. Rule: Mistretta makes it clear, that the “intelligible principle” standard can usually be satisfied with a clear legislative purpose. It emphasizes a functionalist, rather than a formalist, justification.
4. Analysis: The functionalist opinion emphasizes the need for Congress to delegate on this topic, as the sentencing problems are too complex for the basic legislative process.
5. Dissent (Scalia): Formalist: Argues that the “setting of sentencing guidelines is fundamentally an exercise of legislative power,” and that “…a pure delegation of legislative power is precisely what we have before us.” Scalia thinks that the Court needs to be more aggressive in enforcing the line between pure legislative and pure executive power. Ultimately: looking for some other way to beef up the nondelegation principle without falling back to “intelligible principle.”
ii. American Trucking Litigation:
1. American Trucking Associations, Inc. v. E.P.A. (D.C. Cir. 1989) [pg. 33] a. Facts: CAA instructs EPA to set NAAQSs at whatever standards are requisite to protect public health with an adequate margin of safety. Both Ozone and Particulate Matter 9PM) are non-threshold pollutants (i.e., no known safe level of exposure), but when EPA revised their NAAQSs to make them tougher there were a number of challenges, including an unconstitutional delegation challenge.
b. Hold: The CAA, as currently interpreted by the EPA, posed a nondelegation problem. But the D.C. Circuit remanded the case to the EPA in order to provide an intelligible principle for setting the NAAQSs in question.
c. Conclusions from American Trucking Litigation: The Supreme Court decisively rejects that the intelligible principle will be rejected or revised in any serious way.
Agency Adjudication and Article III
i. Analysis: Determining a constitutional delegation of judicial power Crowell two step
1. Step One: “Private Right” vs. “Public Right”
a. If a public right there is no delegation problem.
b. If a private right, go to step two.
2. Step Two: Are the essential judicial attributes left to the Article III Courts?
a. Essential attributes
i. The finality of the decision
ii. Ability to review questions of law
iii. Ability to make factual determinations is not dispositive
b. If yes, then there is no problem.
c. If no, there is a potential nondelegation problem.
3. Then N. Pipeline, Union Carbide, and Schor to emerge with a three factor balancing test:
a. How much adjudicative power has been transferred from the judiciary to the agency?
b. What is the origin and the importance of the right to be adjudicated? Complexity?
c. How strong is Congress’ interest in using a non-Article III forum to adjudicate the dispute?
ii. Crowell v. Benson (1932) [pg. 127] 1. Facts: The Longshoremen’s and Harbor Workers’ Act allowed the commission to make awards for injuries to maritime employees. Review was provided for in Article III courts, but while there was plenary power to review findings of law, there was only “clear error” review for findings of fact. An employee (Knudsen) was injured on a barge owned by Benson and brought a claim. Benson argued that he was not liable because he had loaned the barge to Knudsen for personal activity, and hence the injury did not occur during the course of employment.
2. Hold: The Supreme Court agrees with Benson – that fact-finding authority cannot be vested in an agency instead of an Article III court – but only for narrowly drawn “jurisdiction issues.”
3. Analysis: “Public Rights” vs. “Private Rights”
a. Public Rights: When the government is a party or when the governme
s not a purely ‘private’ right, but bears many of the characteristics of a ‘public’ right…” Congress “may create a seemingly ‘private’ right that is so closely integrated into a public regulatory scheme as to be a matter appropriate for agency resolution with limited involvement by the Article III judiciary.”
v. Commodity Futures Trading Commission v. Schor (1986) [pg. 121] 1. Facts: Schor traded money through Conti, and owed money to Conti on his account. Schor files a complaint with the CFTC, alleging violations of the act on Conti’s behalf. Meanwhile, Conti independently files a contract law claim in the District Court. Schor counterclaims in the Disctrict Court under the Act, then moves the court to stay its action there until the CFTC action is completed. The District Court denies Schor’s motion, but Conti agrees to resolve the case before the CFTC.
2. Hold (O’Connor, functionalist): The CFTC scheme is constitutional.
3. Analysis: There are obvious efficiency gains to be had by adjudicating all the issues in a single forum. Splitting up the claims – in these commodity cases there are typically state law claims as well – destroys legitimate adjudication under the CEA.
a. Public Rights: N. Pipeline and Union Carbide have already begun the movement away from the notion that a dispute between two private parties is necessarily a private action. The question to ask here is whether the claim in question is so bound up with a larger regulatory scheme that adjudication is part of the larger field of commodities regulation? Here, Congress has occupied the commodities field just like it occupied the pesticides regulation field in Union Carbide.
b. Private Right: (Functionalist Perspective) O’Connor admits that this is a private right, and doesn’t try to twist it into the public rights bin. But she takes a highly functionalist approach. While private rights vs. public rights is not irrelevant, it is not dispositive either. In private right situations the court will be more concerned about Article III violations, but there are some situations, as here, where the Article III concerns are not too serious.
4. Dissent: Brennan: Highly formalist dissent, Brennan argues that the Court is putting itself on a slippery slope by deciding these judicial delegation cases on a case-by-case basis. The line must be drawn somewhere, otherwise there will be no check on the aggrandizement of the legislative and executive branches at the expense of the judicial. Rationale: The efficiency and administrative gains from delegating judicial authority to specialized administrative agencies will always be palpable and immediate. Functionalism will always be more immediately compelling than formalism (i.e., checks and balances between the three branches). “Article III’s prophylactic protections were intended to prevent…abdication to claims of legislative convenience…the benefits of [Article III] are almost entirely prophylactic, and thus often seem remote and not worth the cost in any single case…The danger of the Court’s balancing approach is, of course, that as individual cases accumulate in which the Court finds that the short-term benefits of efficiency outweigh the long-term benefits of judicial independence, the protections of Article III will be eviscerated.”