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Beef with the Administrative State

On February 24, 1943, a grand jury in Boston returned a criminal indictment against Albert Yakus, the President of the Brighton Packing Company, for selling cuts of beef in violation of the Emergency Price Control Act of 1942 and price orders issued by the Office of Price Administration (OPA). Mr. Yakus, and many others like him, never had a chance to contest the legality of the rule under which he was convicted. They just went to jail. And the Supreme Court, in Yakus v. United States (1944), said: no problem. That’s just the administrative state and its judicial partners at work.

James R. Conde, a former GMU Law student (now an attorney with Boyden Gray & Associates), tells the story of this largely forgotten case in a bracing article on “Yakus and the Administrative State.” I appear as a co-author and the piece sounds a bit like me because I suggested the topic for an Advanced ConLaw seminar; because Mr. Conde suffered through that and three other courses I teach; and because I edited this magnum opus down to manageable size. But it’s mostly his impressive work.

And a harrowing story it is. Under the statute, the OPA controlled the prices of practically everything. But Congress did not regulate agricultural products, for fear of messing with the farm bloc. So as cattle prices rose during the war and beef prices remained controlled, marginal meat processors like Mr. Yakus had only two choices: go out of business, or sell on the black market. Grim stuff. Can you challenge it, on constitutional or other grounds?

How about an Ex Parte Young action (meaning an anticipatory suit based on a defense you would have in an enforcement proceeding)? Well recognized at the time but not available here: Congress had channeled all review into an Emergency Court of Appeals. (The Supreme Court upheld that arrangement.) How about an appeal to that court, following an administrative protest and process? Good luck with that: there is no administrative record (only a conclusory statement from OPA). OPA can drag out the protest forever and then supplement the “record” during the appeal, even as the petitioner is trying to show that there’s no conceivable world in which the regulation is not arbitrary and unlawful. And the most you can get is a remand, while the price order remains in effect. No one ever won a case of any consequence in front of that court.

Surely, though, you ought to be able to contest the order in a criminal enforcement proceeding, no? No. That’s the holding of Yakus. Yikes.

The AdLaw and FedCourts profession’s reassuring story is that all this is ancient history. In the textbooks, Yakus appears as a wartime embarrassment or a marginal case about the exhaustion of administrative procedures. In any event, we’re told, the Administrative Procedure Act put the administrative state on a solid footing of legal process and procedure.

This article argues that the common, comforting view is quite wrong. You’d think that citizens who are deprived of their livelihood must have access to an independent court; government can’t just “sport away the vested rights of individuals,” to quote one famous case (Marbury).  But that’s what happened here. It is Yakus, not Chevron or some such distraction, that stands as the real “counter-Marbury” of the administrative state. Under a thin veneer of judicial deference,  the Court cast aside the interconnected, then-still-operative doctrines that were meant to subject administrators to legal checks and controls—the delegation doctrine of Schechter; the Ex Parte Young doctrine; the constitutional fact doctrine of Crowell v. Benson; due process protections of Ben Avon fame.  And not one Supreme Court opinion and not one word in the APA casts doubt on that accomplishment.

The Yakus lessons that we have forgotten are the ones that we want to forget.

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