Administrative Law

Stephen Hylas

Under section 704 of the Administrative Procedure Act, courts can only review agency actions when they are “final.” In Bennett v. Spear, the Supreme Court put forth a seemingly simple two-part test for assessing final agency action. However, the second prong of that test—which requires agency actions to “create rights or obligations from which legal consequences flow” to be final—poses several problems. Most importantly, because it overlaps with the legal tests for whether a rule is a legislative rule or a nonbinding guidance document, it seems to effectively bar courts from reviewing nonlegislative rules before agencies have taken enforcement action. Because of this overlap, the Bennett test conflicts with—and thus undercuts—other principles of administrative law that seem to promote a pragmatic, flexible approach for courts to use in determining whether, when, and how to review agency rules. The result is a confusing standard of review that can prevent plaintiffs from challenging agency rules in court, especially when those plaintiffs are beneficiaries of regulation who will never be subject to enforcement action down the road. At the same time, however, courts should not be able to review every single agency rule before it is enforced. Agencies should be able to experiment, but should not be permitted to indefinitely shield potentially dangerous deregulatory programs from judicial review, as Bennett seems to allow. Accordingly, this Note argues that to be faithful to the Court’s commitment to “pragmatic” interpretation of the finality requirement, lower courts should follow a two-pronged approach to analyzing questions of final agency action. When courts can compel an agency to finalize its allegedly temporary action because of “unreasonable delay,” they should interpret Bennett’s second prong formally, holding that only truly legally binding action can be final. If this bars some plaintiffs from suing now, they will be able to challenge the rule later when the agency’s process is finished. But when courts cannot force agencies to finalize their rules, they should construe Bennett functionally, conceptualizing the agency’s allegedly temporary action under a “practically binding” standard. Under this framework, if the agency’s “temporary” action in practice consistently follows certain criteria, it should be viewed as binding and final under Bennett, and thus subject to judicial review, regardless of what the agency or its employees are legally required to do. This two-pronged approach would help to strike the right balance between the private party and the agency in a practical manner that depends upon the context.

 

Zachary D. Clopton

Decisions about class certification and arbitration have depressed private enforcement class actions, reducing deterrence and enforcement of important substantive rights. Until now, the consequences of these procedural decisions for the separation of powers have not been well explored. An aggressive Supreme Court and an inactive Congress have increased the importance of federal administrative law—for example, administrative attempts to regulate arbitration. Moreover, a reduction in private enforcement compounds the importance of public enforcement. State and federal enforcers may piggyback on (successful or unsuccessful) private suits, and they may employ new tactics to maintain deterrence. While proponents of a robust regulatory state may take solace in these executive rejoinders, they are not without costs. Specifically, executive action may be less transparent, less durable, and more susceptible to political pressures than its alternatives.

Patrick M. Corrigan & Richard L. Revesz

This Article sheds light on significant doctrinal and policy issues that are central to the proper understanding of the administrative state. It grapples with a core question of administrative law: When are agencies established with features that insulate them from direct presidential control? Because of its constitutional significance, the legal literature focuses on removal protection for agency heads, and posits that agencies are more likely to be accorded such protection when the presidency and at least one of the chambers of Congress are controlled by different parties. The empirical support for this claim comes from a single political science study, which suffers from significant design flaws and has been widely misinterpreted. In fact, it shows that under almost all plausible scenarios Congress is less likely to vest agencies with indicia of independence under divided government.

To properly study the factors that affect the probability that agencies will be accorded indicia of independence we constructed and analyzed a new dataset. Three principal variables have a statistically significant impact: the approval rating of the President, the size of the Senate majority, and the alignment of the political party of the Senate majority and the President. The latter two variables had never been tested prior to our study. We find that Congress is less likely to establish agencies with indicia of independence when the President is popular. Moreover, when the Senate majority is not aligned with the President, an increase in the majority makes it more likely that Congress will establish an agency with indicia of independence. And, for a given size of Senate majority, alignment with the President makes it more likely that Congress will establish an agency with indicia of independence. Changes in the composition of the House do not produce comparable effects, suggesting that the Senate’s filibuster rule or the Senate’s role in confirming presidential appointees might play a role in this regard. Noting that the empirical results explain relatively little of the variation observed in the dataset related to when Congress establishes agencies with indicia of independence, this Article also explores the limitations of the quantitative empirical findings and the benefits of performing detailed case studies. 

 

Wendy Wagner, William West, Thomas McGarity, and Lisa Peters

In administrative law, it is generally assumed that once an agency promulgates a final rule, its work on that project—provided the rule is not litigated—has come to an end. In order to ensure that these static rules adjust to the times, therefore, both Congress and the White House have imposed a growing number of formal requirements on agencies to “look back” at their rules and revise or repeal ones that are ineffective.

Our empirical study of the rulemaking process in three agencies (N = 462 revised rules to 183 parent rules) reveals that—contrary to conventional wisdom—agencies face a variety of incentives to revise and update their rules outside of such formal requirements. Not the least of these is pressure from those groups that are affected by their regulations. There is in fact a vibrant world of informal rule revision that occurs voluntarily and through a variety of techniques. We label this phenomenon “dynamic rulemaking.” In this Article, we share our empirical findings, provide a conceptual map of this unexplored world of rule revisions, and offer some preliminary thoughts about the normative implications of dynamic rulemaking for regulatory reform.

Shelley Welton

Many scholars and policy makers celebrate cities as loci for addressing climate change. In addition to being significant sources of carbon pollution, cities prove to be dynamic sites of experimentation and ambition on climate policy. However, as U.S. cities set climate change goals far above those of their federal and state counterparts, they are butting up against the limits of their existing legal authority, most notably with regard to control over energy supplies. In response, many U.S. cities are exercising their legal rights to reclaim public ownership or control over private electric utilities as a method of achieving their climate change goals.

Although there is widespread desire for cities to act within their legal authority to reduce carbon pollution, it is a different question entirely whether they should be encouraged to expand this authority by reclaiming ownership or control over tasks previously outsourced to private companies. On this question, energy law has much to learn from administrative law’s robust attention to outsourcing theory. This Article draws from the outsourcing literature to argue that climate change complicates traditional theories regarding whether cities should prefer publicly or privately owned electricity systems. By transposing these theories into energy law, it constructs a theoretical defense of why more public forms of energy ownership or control may be effective governance tools for the climate change era. In the last century, providing electricity was a task well suited to government oversight of private companies, as regulators primarily aimed to incentivize low prices and adequate supply. This century, however, climate change creates the need for more deliberative, experimental management of electricity to meet the additional aim of decarbonization while maintaining affordability and reliability. In this situation, outsourcing theory widely counsels against utilizing a private contractor model, and illustrates the difficulties inherent in using regulation to manage private companies. Instead, it is time for broader reconsideration of more public forms of energy control and ownership, of just the sort that leading U.S. cities are pioneering.

 

Wendy Wagner, William West, Thomas McGarity & Lisa Peters

In administrative law, it is generally assumed that once an agency promulgates a final rule, its work on that project—provided the rule is not litigated—has come to an end. In order to ensure that these static rules adjust to the times, therefore, both Congress and the White House have imposed a growing number of formal requirements on agencies to “look back” at their rules and revise or repeal ones that are ineffective.

Our empirical study of the rulemaking process in three agencies (N = 462 revised rules to 183 parent rules) reveals that—contrary to conventional wisdom—agencies face a variety of incentives to revise and update their rules outside of such formal requirements. Not the least of these is pressure from those groups that are affected by their regulations. There is in fact a vibrant world of informal rule revision that occurs voluntarily and through a variety of techniques. We label this phenomenon “dynamic rulemaking.” In this Article, we share our empirical findings, provide a conceptual map of this unexplored world of rule revisions, and offer some preliminary thoughts about the normative implications of dynamic rulemaking for regulatory reform.

Susan Navarro Smelcer
In response to widespread concerns about the extent to which “trolls” distort the patent process and other deficiencies in the patent system, Congress created two new administrative trial processes by which a third party may challenge the validity of a patent in a more streamlined and less costly way than through a civil trial. Unfortunately, the very features that made these administrative quasi-judicial proceedings efficient also make them ripe for anticompetitive abuse. This behavior is especially problematic when it comes to bargaining over licenses for patents recognized as a “standard” or deemed to be “essential” to a particular industry. In this context, instituting administrative trials to determine patent validity may actually create an inequality in bargaining strength that allows the potential licensee to extract rents from the patent holder—especially if that licensee possesses market power.
 
This Note explores the source and nature of these anticompetitive harms and recognizes that, as currently applied by the courts, antitrust law cannot be used to reach these abuses. Noerr-Pennington immunity shields firms from exposure to antitrust liability with respect to most government interactions, with only narrow exceptions for sham petitioning and litigating activity. In the patent context, these exceptions are far too narrow and make antitrust liability functionally unobtainable. In particular, this Note argues that the “sham litigation” exception to Noerr-Pennington should be expanded to encompass a wider range of litigation tactics—including instituting an administrative proceeding—to deter anticompetitive behavior that distorts both bargaining over patent licenses and the market more broadly.

 

Jessica M. Wilkins

In June 2013, President Obama issued a memorandum directing the Environmental Protection Agency (EPA) to use its authority under Sections 111(b) and 111(d) of the Clean Air Act to address carbon pollution from new and existing power plants. Over two years later, the EPA issued the final rule, known as the Clean Power Plan, and a proposed federal plan that will be implemented in states that do not submit their own plan under the Clean Power Plan. Both the Clean Power Plan and the EPA’s proposed federal plan rely heavily on emissions trading programs to reduce carbon emissions in a cost-effective manner. Emissions trading programs set a cap on the total amount of a pollutant permitted and allow sources to buy and sell allowances based on how much of the pollutant each source is reducing or emitting. Opponents of the Clean Power Plan and its trading provisions are challenging the rule on the grounds that it is beyond the EPA’s authority under the Act.

This Note suggests that these emissions trading provisions are valid for two related reasons: first, the EPA has successfully implemented emissions trading programs under Section 110 of the Act in the past that demonstrate the agency’s longstanding history of using these programs; and second, emissions trading has been upheld by the Supreme Court as permissible under Section 110, and Section 111(d)—under which the Clean Power Plan was promulgated—contains two substantive references to Section 110. Taken together, the EPA’s past use of emissions trading programs and the statutory references in Section 111 suggest that the trading provisions in the Clean Power Plan and the proposed federal plan are a permissible exercise of the EPA’s authority.

Caleb A. Seeley

With the rise of the internet and computer storage, the loss and theft of individuals’ private information has become commonplace. Data breaches occur with increasing regularity, leading some to question if the current statutory and regulatory schemes properly incentivize the maintenance of adequate security measures amongst federal agencies. This Note argues that inadequate data security practices by government agencies implicate the constitutional right to informational privacy. While the Court has previously upheld intrusive personal information collection programs, the Privacy Act, which plays an essential role in the Court’s decisions, has been weakened significantly by recent interpretation of its damages provision. Given this change in the effectiveness of the statutory protection of private data, lawsuits alleging a violation of the constitutional right to informational privacy might succeed and could help incentivize optimal levels of data security amongst government agencies.

Elizabeth G. Porter & Kathryn A. Watts

Federal rulemaking has traditionally been understood as a text-bound, technocratic process. However, as this Article is the first to uncover, rulemaking stakeholders—including agencies, the President, and members of the public—are now deploying politically tinged visuals to push their agendas at every stage of high-stakes, often virulently controversial, rulemakings. Rarely do these visual contributions appear in the official rulemaking record, which remains defined by dense text, lengthy cost-benefit analyses, and expert reports. Perhaps as a result, scholars have overlooked the phenomenon we identify here: the emergence of a visual rulemaking universe that is splashing images, GIFs, and videos across social media channels. While this new universe, which we call “visual rulemaking,” might appear to be wholly distinct from the textual rulemaking universe on which administrative law has long focused, the two are not in fact separate. Visual politics are seeping into the technocracy.

This Article argues that visual rulemaking is a good thing. It furthers fundamental regulatory values, including transparency and political accountability. It may also facilitate participation by more diverse stakeholders—not merely regulatory insiders who are well-equipped to navigate dense text. Yet we recognize that visual rulemaking poses risks. Visual appeals may undermine the expert-driven foundation of the regulatory state, and some uses may threaten or outright violate key legal doctrines, including the Administrative Procedure Act and longstanding prohibitions on agency lobbying and propaganda. Nonetheless, we conclude that administrative law theory and doctrine ultimately can and should welcome this robust new visual rulemaking culture.

Pages