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Reining in the Administrative State?
This past week, the Supreme Court agreed to hear Loper Bright Enterprises v. Raimondo, a case that could curtail the extensive reach of the modern administrative state. Loper arose under the Magnuson-Stevens Fishery Conservation and Management Act of 1976 (MSA), which provides for the United States to enforce a comprehensive system of regulation to protect American fisheries from many perils, including the chronic danger of overfishing. It is agreed on all sides that herring boats (usually family-owned) must at their own expense make room on their cramped quarters for a government inspector on most of their extended fishing trips. But when its budget crunch hit, the agency decided to double-down by requiring boat owners to pay for their inspectors as well, which at over $700 per day could eat as much as 20 percent of the profit of any expedition. The MSA contained provisions that allowed the National Marine Fisheries Service (NMFS) to take “necessary and appropriate measures for the conservation of the fisheries,” but it did not contain any provision explicitly authorizing the kind of financial exactions that the NMFS unilaterally imposed.
The District Court held the MSA’s general statutory provision quoted above to be broad enough to authorize these expenditures. On appeal, the DC Circuit declined to follow that ruling, largely on the ground that the MSA also contained specific provisions that authorized such charges to be imposed solely on fishing boats in the North Pacific and those operated by foreign nations. Accordingly, Judge Judith Rogers for herself and Chief Judge Sri Srinivasan found sufficient tension between the general broad authorization and the specific cases where the MSA authorized fees to conclude that the statute contained a genuine ambiguity. At this point, they invoked the most influential administrative law case ever decided, Chevron v. NRDC (1984), which prescribes a two-part test to determine whether an agency’s interpretation of a statute is to be upheld. If a statute is clear, follow it to the letter. But if it is ambiguous, then allow the administrative agency to capitalize on its expertise to resolve the impasse. Judge Justin Walker, in dissent, argued that the statute unambiguously barred the exaction because the burden of proof was always on the government to find the explicit statutory authorization, not for the regulated party to negate that inference.
What is to be done? Issues like this arise all the time, and I think that in light of the full record, the dissenting view will probably prevail in the Supreme Court. Matters of raising revenue have a distinct constitutional pedigree insofar as they must normally be approved under Article I, Section 7 by legislation starting in the House of Representatives. In this instance, the DC Circuit’s majority position in Loper states no limiting principle of the agencies’ delegated power over the purse. If the NMFS could charge fishing boat owners fees when the government budget falls short, could it charge such fees all the time? And if it could do that, why could it not enlarge those fees so that they cover not only the cost of crews but some portion of the general overhead of the NMFS allocated to running the inspection program? Any such program looks like a crude circumvention of congressional powers.
Loper would have attracted relatively little attention if it were solely concerned with the nuances of the MSA. But the second part of the plaintiffs’ petition is an explicit demand that the Supreme Court jettison the entire Chevron framework, which would in effect require all courts to engage in the same practices of interpretation that they now apply to other statutes whose enforcement does not turn on regulations issued by some administrative body. Of course, any agency would still be able to present its own views to the court, and, if it had expertise on the topic, it should be able to fashion a persuasive brief for its position.
The use of administrative discretion has both strong and weak sides. Without discretion, an agency may find itself unable to respond to novel circumstances. But with too much discretion, that same administrative agency could act in an arbitrary and capricious manner that could easily endanger the lives and livelihoods of those subject to administrative review. There is no abstract way to reconcile these two forms of error, so it is at least helpful to look to the Administrative Procedure Act of 1946, which sought to control just this tension. Section 706, dealing with the scope of judicial review, states:
To the extent necessary to decision and when presented, the reviewing court shall decide all relevant questions of law, interpret constitutional and statutory provisions, and determine the meaning or applicability of the terms of an agency action. The reviewing court shall-
. . . (2) hold unlawful and set aside agency action, findings, and conclusions found to be- (A) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law; . . .
Inexplicably, the key Chevron decision neither cited nor discussed this statutory language, and the majority of the Court of Appeals left out the primary portion and cited only the “arbitrary and capricious” language of the section. In so doing, the Court of Appeals distorted the basic sense of a statute whose primary mission was to divide authority between an administrative agency and a reviewing court in a way similar to the division of authority between a trial court and an appellate court.
As I have elsewhere argued, central to that division is the idea, not found in Chevron, that all questions of law should be decided by the appellate court de novo—that is, without any special deference to the decision of the court below. On basic matters of fact, the agency should in principle be subject to lighter review, just like a trial court. Yet on the ultimate question of fact—whether those basic facts supported the agency views—i.e., was such targeted conduct unreasonably safe—the standard of appellate review should be ratcheted up.
I have long thought that this division of authority made sense in dealing with both the uses and dangers of administrative discretion. Courts are experts in reading statutes, and their skills of constitutional, statutory, and contractual interpretation are all of a piece. They must fit together the explicit terms of the relevant document and coordinate their use with a broad set of implied terms that are frequently relevant to successful interpretation. Thus notions like the “police power” are read into the literal commands in each of these domains, so that even documents that explicitly acknowledge various forms of individual liberty are never read to exclude regulations that sensibly limit the holders of those rights in cases of force, fraud, necessity, and incapacity.
In contrast, courts have relatively less expertise in fact-bound technical issues such as the effective design of nuclear power plants. So, as a first cut, the statutory allocation of responsibility under Section 706 makes sense, even if we put aside the constant theme, pressed most notably by Justice Neil Gorsuch, that separation-of-powers principles require overturning Chevron because otherwise Congress and the president could encroach on the judicial domain.
The potential changes to administrative law doctrine have brought forth, unsurprisingly, howls of anguish from such stalwarts on the left as Dahlia Lithwick and Mark Joseph Stern, both of whom fear a judicial usurpation of executive authority. Of course, a lot depends on how many liberties administrative agencies take with statutory provisions. Here, it is all too clear that executive abuse of discretion poses a far greater risk than the inability of government to respond to some unanticipated crisis.
The recent decision in West Virginia v. EPA (2022) used the major-questions doctrine to stop the EPA from interpreting a provision about the best systems of emissions control to foster a “system” of energy use that is intended to cut out all fossil fuels; courts usually interpret the statutory provision in question to merely require changes in existing equipment, such as an upgrade in safety equipment. But why tolerate abuses of discretion in less cosmic cases, which abound? Earlier this term, the Supreme Court, in Sackett v. EPA, for the second time reviewed the EPA’s unwise sixteen-year crusade to block the construction of a private home on an ordinary plot three hundred yards from the nearest lake. The agency had deemed the property part of the navigable waters of the United States. These and countless similar cases show that the perils from administrative abuse far outweigh any fears of governmental paralysis.
Indeed, reining in Chevron is only part of curtailing any systematic abuse of government power. The endless procession of executive orders from the Biden administration reveal the same excesses on everything from pipeline closures to forgiveness of student loans to phasing out the internal combustion engine. Sadly, executive overreach is fast becoming the new normal for political power. How ironic it is that the courts must come to the rescue of Congress, whose legislative powers have been degraded by the executive branch’s systematic abuses.
© 2023 by the Board of Trustees of Leland Stanford Junior University.Published in Law
Hope this case will lead to a ruling that reins in rogue administrative agencies, and will be in time to thwart the EPA’s pending rules announced this week, clearly designed to shut down most conventional power plants in the nation. These EPA people are demonstrably insane!
I doubt they are insane. Dealing with the agency would be easier if they were.
Without discretion, an agency may find itself unable to respond to novel circumstances. But with too much discretion, that same administrative agency could act in an arbitrary and capricious manner that could easily endanger the lives and livelihoods of those subject to administrative review.
The Administrative State is an abomination.
Section 1 Article 1 in no way anticipated the arbitrary and capricious monster the Administrative State has become.
Any powers to decide anything by a government agency really is in very plain language not granted in the Constitution. Only Congress was given the power to legislate, with no asterisk for some Administrative State agency.
Furthermore, these so-called “expert” agencies rarely as I see it “equally protect” both sides of the issues before them, but rather side with the Big Government Neo-Marxist argument time and again. For example, as Richard has pointed out in the past, on the issue of “climate change” there is no rational argument or evidence for anything anywhere close to the “global warming” argument that is constantly imposed on America as the rationale for punitive regulations and taxes that have ripped a whole in the middle class. As an architect, I work with government regulation all the time, and rarely is it in any way “expert”; it generally as the Administrative State does sides with an Authoritarian argument granting unconstitutional powers to the government with little of any rational argument taken into consideration.
To my way of thinking, the vast majority of these arbitrary and one sided regulations by the Federal Administrative State constitute a ” Taking” from those who are being regulated and thus really enormous amounts of “just compensation” are due those in the public affected by those regulations. These regulators are simply criminals hiding behind a bureaucratic desk and should be prosecuted to the fullest extent of the law. The Administrative State simply practices political theft.
Insane in the sense of rabid delusional devotion, e.g., the definition of a fanatic:
“A fanatic is one who can’t change his mind and won’t change the subject.”
― Winston S. Churchill
It also made me laugh, especially the Churchill quote.
There should be no regulation written that is not written by Congress.
Nowhere in the Constitution does the Executive have the ability to write laws.
There should be no difference no discretion nothing. If Congress chooses to regulate something then Congress should regulate it. One solution would be to increase the House of Representatives to a size commiserate with the founding of the Republic. That way you could have committees that are able to study and make recommendations on these things.
Or what we could do is simply regulate only about 10% of the things we regulate.
The legislative powers of Congress have also been degraded by Congress not legislating as it should. They are too afraid of losing donor money.
The fundamental problem of our government is we have a Legislative branch that refuses to Legislate.
I don’t think any country is going to have a modern, prosperous technological society without a separate administrative bureaucracy. I don’t think they need to be quite like the ones we have, though. You could have a House of Representatives of ten thousand members, and I doubt it would be capable of regulating fishing any better than what’s happening now. I’d like to see reforms go well beyond the one that the SC could do with its upcoming ruling in Loper Bright Enterprises v. Raimondo, but that’s the one in play right now. People who can’t get themselves interested enough to understand what’s at stake in that one won’t get involved in bigger ones, either. And the SC needs to know that we’re paying attention. In a day when Biden has practically declared open season on members of the Supreme Court, and not just metaphorically, it would be good for it to know that there are people who care.
Would it be possible to split every agency into rule-making and rule-enforcing parts, and return control of the former to Congress?
Too many things are regulated in too many ways. And it does not work anyway, since all regulatory agencies are captured by their industries.
Let the states do it. Roll back the expansion of the Commerce Clause
Good question. I’ve been wondering that since I was a teenager (which is a long time ago). My own idea is that no rule done by the rule-making body goes into effect until ratified by Congress. And both the rule-making body and Congress can lump them into batches or split them as desired.
But what we have in front of us right now is this Loper case. Maybe if we can pay a lot of public attention to it, it will get people interested enough to think about other reforms, too.
Over the years, I have formed the distinct impression that Congress is happy to craft statutes with ambiguity and a lot of room for agency discretion precisely to avoid voting on the record for provisions that will be onerous for particular industries or consumers. Golly, we never thought EPA would do that. If SCOTUS really does reign in the administrative state I wonder if Congress will start doing a better job crafting legislation.
How weird is it that the US Federal government always suggests there is money aplenty to take in 2/3rd’s of a million new immigrants, house and feed them, process them, and then bus and fly them off to places other than the border towns where they arrived, yet has not the money to cover the $700 a day expense of herring boat inspectors.
Thank you, for kindly pointing me here to this discussion.
I mean, what the heck is a herring boat inspector?
Not that long ago, I would walk along the Sausalito shore and watch signs that the herring were abundant and that the boats would be out in force in a day or two. (The signs would be huge numbers of sea guls out in some locations across Richardson Bay.)
It puzzles me that these kinds of charges would hit these boat owners. What has endangered sea life have been the humongous fishing boats – some the size of a small town – that rape the ocean.
Herring boats are just boats.
If SCOTUS does not rule in the herring boat owners’ favor, it could be the end of that industry. Because forcing small time ventures to pay 700 bucks a day when the herring season is not all that long and often not dependable, is nuts.
Meanwhile the marine life-ending behemoths out on the ocean most likely do not at all have any inspectors ever examining them.
Congress benefits from doing it, because incumbents gain reelection by helping people with the problems thus created. Take away the legality of constituent services and the incentives then change.
And why does one cost $700/day? A typical American worker doing bridge inspection, vehicle safety inspection, or the like earns roughly $280-320/day. Why are these people costing more than twice that of people in positions of similar skill and ability in the private sector? Sure, there should be some compensation for travel/risk of being on the ocean, but I strongly doubt that $700/day is really justified.
So we have the agency levying a tax by “passing on the cost” to the fishing boat operators when they should be paid from the agency budget appropriated by Congress. Then we have the agency charging double the actual cost to expand its own budget beyond what Congress appropriated. All of this is operating a Federal Agency for profit, separated from the control of Congressional oversight because it is self funded.
The answer is they have nearly unchecked power to make the rules. How much would you charge a day if you could issue mandates that people hire you, and there was nothing to stop you?