New and often overlapping cost/benefit requirements have cluttered up the federal administrative process
By Randolph J. May
Legal Times, January 10, 2000
Now, here's a challenging undertaking for the new millennium-chart the future of administrative law.
The American Bar Association has begun an ambitious initiative to assess the federal regulatory process and determine how it could be reformed to ensure better government.
Given the stakes, regulatory lawyers, both in and out of government, should keep a close eye on the ABA's effort-which may take three or four years.
The ABA's principal focus will be the Administrative Procedure Act-essentially the constitution for the regulatory state. The APA, which was enacted in 1946 and has not been revised significantly since, categorizes governmental actions, sets forth the framework for rulemaking and adjudication proceedings, creates rights of judicial review of agency actions, and establishes standards for the scope of review.
As the fundamental charter affecting much of the interaction between private citizens, business, and the government, the statute has become even more important as the number of federal agencies-and their reach-have expanded. Actions as varied as an administrative hearing on a individual Social Security claim to a rulemaking establishing new industry-wide ergonomics standards are all governed by the APA's procedural requirements.
Indicative of the significance of the project, the ABA's Administrative Law and Regulatory Practice Section has assembled a veritable "Who's Who" to do the initial drafting. Paul Verkuil, dean of the Benjamin Cardozo School of Law, is chief reporter, with Michael Asimow of the University of California at Los Angeles School of Law, Glen Robinson of the University of Virginia School of Law, Thomas McGarity of the University of Texas School of Law, Peter Strauss of Columbia University School of Law, Ernest Gellhorn of the George Mason University School of Law, Richard Revesz of New York University School of Law, Cynthia Farina of Cornell Law School, Harold Bruff of the University of Colorado School of Law, Thomas Susman of Ropes & Gray, David Vladeck of Public Citizen Litigation Group, William Funk of Lewis and Clark Northwestern School of Law, and Cass Sunstein of the University of Chicago Law School serving as co-reporters. This is a stellar and balanced group that includes liberals and conservatives, practitioners and academics, and proponents and opponents of greater agency discretion.
Even with such distinguished drafters, it will not be easy to accomplish meaningful reform. Procedural rules may affect substantive outcomes, substantive outcomes affect politics, and politics ain't beanbag. As the ABA's effort gets under way, it's useful to remember the APA's history as a warning of what may lie ahead.
When the statute was finally passed in 1946, the vote in Congress was unanimous. But this unanimity belied the fierceness of the 15-year battle that preceded enactment. Early on, legislation proponents saw it as a means to rein in the New Deal by enhancing the authority of the courts to overturn the regulations of President Franklin Roosevelt's new alphabet agencies. The ABA played a leading role in these early "reform" efforts, with Roscoe Pound, dean of the Harvard Law School, chairing the ABA's Committee on Administrative Law. In 1938, Pound's committee issued a scathing report attacking the "Administrative Absolutism" of the New Deal agencies.
Congress passed an APA precursor bill in 1940, but it was vetoed by Roosevelt, who warned that it would unduly curtail the discretion of the agencies. In his veto message, Roosevelt said: "[A] large part of the legal profession has never reconciled itself to the existence of the administrative tribunal. . . . For years, such lawyers have led a persistent fight against the administrative tribunal. . . . Many of them prefer the stately ritual of the courts, in which lawyers play all the speaking parts."
Pound shot back that Roosevelt's veto was "so thoroughly in keeping with the Marxian idea of the disappearance of law, now so much in fashion, and so much in the spirit of the absolute ideas which have been making headway all over the world."
Rough stuff. (Anyone relishing a blow-by-blow description of this fight might enjoy Emory University School of Law Professor George Shepherd's 1996 article in the Northwestern University Law Review, "Fierce Compromise: The Administrative Procedure Act Emerges from New Deal Politics.")
Eventually, in 1946, with the memories of Roosevelt's court-packing plan fading, the war over, and legislators wearying of the fight, the APA as we know it was passed. In Wong Yang Sun v. McGrath (1950), Justice Robert Jackson gave this understated summary of the battle: "The Act thus represents a long period of study and strife; it settles long-continued and hard-fought contentions, and enacts a formula upon which opposing social and political forces have come to rest."
Given this contentious history, it's unclear what might ultimately emerge from the ABA's new effort. Though cautious not to get ahead of the process, John Hardin Young, the current chair of the Ad Law Section, is willing to offer some suggestions for the drafters: codify the Chevron deference doctrine so it can be more consistently applied to reviews of agency action; distinguish among various types of adjudications (so that benefits claims are handled differently than the Federal Trade Commission's hearing on a major merger); and refine the definition of interpretive vs. legislative rules so the public understands when it is bound by agency policies. Jeff Lubbers, longtime research director of the now defunct Administrative Conference of the United States, also puts distinguishing between formal and informal adjudication high on his list of potential APA revisions.
All worthy candidates. But in my view, the most pressing priority should be to streamline the various "impact analyses" that agencies are required to perform before they issue final rules. Because of these requirements, it takes longer than ever today for agencies to issue rules, because they must jump through so many hoops beyond the minimum standards in the APA.
The statute established an open and participatory rulemaking process under which agencies would be accountable to the public-and to the courts-for the rationality of the regulations they issue. But Congress also recognized the value of keeping procedural requirements relatively simple. After all, the APA requires only that the agency issue a "concise general statement of [the] basis and purpose" of the new rule.
But in recent years, Congress has piled on new, often overlapping analytical requirements in the name of minimizing the regulatory impact on small business, local governments, or-get this-the entire "private sector." These statutes, to one degree or another, require agencies to weigh the costs and benefits and assess the regulatory burdens of their actions. They include the Regulatory Flexibility Act, the Paperwork Reduction Act, the Unfunded Mandates Reform Act of 1995, and the Small Business Regulatory Enforcement Fairness Act of 1996.
And presidents have piled on similar requirements. Recent examples include Executive Orders 12606 (family values), 12988 (civil justice reform), and 16212 (federalism).
The impulse behind most of these various "cost/benefit" requirements may be meritorious. In fact, much of what they mandate is already part of the rationality standard in the APA's judicial review provisions. If Congress wants to impose additional analytical hurdles, it should minimize the burden on agencies by consolidating truly worthwhile requirements into one integrated "impacts provision." This could eliminate the unnecessary time spent by agency lawyers trying to determine whether the agency has met all the cost/benefit requirements in the various statutes.
So here's wishing the Ad Law Section well as it begins what's sure to be a long journey, with plenty of bumps along the way. It's an effort worth watching by all those interested in the "fourth branch."
And, finally, here's hoping that the ABA will make rationalizing impact requirements a top priority. If it can persuade Congress to consolidate these analytical hurdles, the ABA will accomplish some real administrative law reform at century's turn.
Randolph J. May is a senior fellow and director of communications policy studies at the Progress & Freedom Foundation in Washington, D.C. The views expressed are his own and do not necessarily reflect the views of the foundation.
© 2000 Legal Times. All rights reserved. This article is reprinted with permission from Legal Times.