Biestek v. Berryhill and Judicial Review of Agency Factfinding

Recently, the Supreme Court issued a decision in Biestek v. Berryhill, which construed the meaning of the substantial evidence standard in Administrative Law. While this sounds like a technical issue, it can be quite important. It involves the power of the courts to reverse administrative agency findings of facts. If there is a less deferential standard, then the agencies have less power and are more subject to review by the courts. If there is a more deferential standard of review, then administrative agencies have more power.

Thus, it seemed to be no surprise that in Biestek, the majority decision written by Justice Kagan appeared to favor more deference and the dissenting decision, written by Justice Gorsuch, appeared to favor less deference. While the case itself is interesting, it involves a relatively narrow issue. But the case may actually involve a wider and more important issue. Understanding that issue requires a bit of background.

The Administrative Procedure Act (APA) was passed in 1946 in part as reform legislation to address what were regarded as administrative excesses. One key provision was the standard of review of administrative fact findings in formal hearings (formal hearings being one of the most common forms of administrative action, especially at the time). The APA provided that findings of fact should be reviewed under a substantial evidence standard. The question is: What did this mean?

One answer—the one I believe is favored by textualists such as Justice Scalia—was that it had the same meaning as it did in the jury standard. In other words, a decision by the agency would be overturned by a court only if it would justify a directed verdict of a jury. The Supreme Court appeared to have adopted that in earlier cases prior to the APA, such as Consolidated Edison v. NLRB (1938). If that was the traditional meaning of substantial evidence, then one might argue that the APA’s use of that term indicates it should have the same meaning in the APA.

But that answer did not appear to win the day when the Supreme Court interpreted the standard in the Universal Camera case in 1951. In an opinion written by Justice Frankfurter, the Court seemed to acknowledge that the meaning of substantial evidence was the traditional jury standard. But Frankfurter believed that the “mood” of the Congress, as evidenced by legislative history, demonstrated a purpose to adopt a less deferential standard.

Frankfurter was cagey in the opinion, and he left himself some room to deny he was arguing that Congress had changed the traditional rule (as opposed to merely changing prior judicial misunderstanding of the traditional rule). But I think the better interpretation of his opinion is that he was claiming that the traditional rule should be changed and that something different than the jury standard should be applied to administrative agencies. Certainly, the courts have not applied as deferential a standard to administrative agencies as they have traditionally applied to juries.

What is interesting is that neither Justice Kagan nor Justice Gorsuch cited to Universal Camera. Instead, they both cited to Consolidated Edison. Thus, one might believe Justice Kagan was embracing a more deferential standard for judicial review of agency factfinding and Justice Gorsuch was adopting the more textualist approach that Scalia appeared to champion in this area.

If that is true, then the Supreme Court may be signaling that there should be less vigorous judicial review of agency factfinding. And that would mean more agency autonomy.

Reader Discussion

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on April 10, 2019 at 12:23:22 pm

No doubt Kagan intended more deference, very likely even more than she was able to bring to consensus in her decision.

Permitting "phoned-in" expert testimony is always a spurious practice in my opinion, even as disallowing it would be disastrous to the administrative-judicial economy.

In that sense, (i.e. phoned in testimony), agency fact-finding already applies a diluted avenue of due process to admitting, obtaining, and cross-examining evidence. This practice from the outset, only seems to further dilute the quality of the adjudication, notwithstanding, whether the evaluation of substantial evidence is held to an equal or lessor degree of the jury standard.

The tendering by Article III judges of deferance to agency substantial evidence fact-finding, (whether more or less strict), only further compounds the diluted quality of the adjudication.

"Administrative" justice makes for efficient administration of justice, but one that definitely tips the scales in the agencies favor - is this what the framers envisioned, and what the Constitution entitles?

Divesting of regulation is the better way of reducing burgening adjudication caseloads, ("Social Security Administration’s disability adjudication process, with roughly 2,500 hearings being held each day.")*, rather than diluting due process guarantees.

* https://www.scotusblog.com/2018/12/argument-analysis-justices-wrestle-with-scope-of-cross-examination-of-social-security-experts/

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Paul C Binotto
on April 10, 2019 at 18:48:46 pm

"...is this what the framers envisioned, and what the Constitution entitles?"

Odd isn't it, how the Black robes have turned things so topsy-turvy wherein we find that the Black robes are all too willing to defer to the newly minted Fourth Branch of government, the Fed Admin state, as this new Branch promulgates a new category of Law, without the benefit of a constitutional grant WHILE simultaneously restricting, overriding, or voiding the constitutionally chartered Legislative Branch in the exercise of its delegated grant - and the SOLE such delegation - to enact Laws.

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on April 10, 2019 at 19:42:46 pm

It is odd.

I guess once the Robes, "simultaneously restrict[ed], over[rode], or void[ed] the constitutionally chartered... exercise of [the] delegated grant", of their own Branch, by deciding to settle differences with deference's, it was only a matter of time before doing the same for the two other original branches would seem within the realm of reasonable discretion.

How long before the Legislative and Judicial become obsolete and succumb to the efficiencies of a two branch system: the Executive Branch, solely figurehead of the Republic, and the Administrative Branch, sole fountainhead of regulation?

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Paul C Binotto
on April 13, 2019 at 16:45:20 pm

Justice Frankfurter and Justice Kagan would probably have become fast friends. He came to the court with a 'conservative' background and became a very liberal Justice. He is an example of my desire to look to the history and words of the Constitution and Law first and foremost to understand what was written and intended.
Reality is that Power draws those intent on using that power to their own advantage. Businesses hire lobbyists to write laws that help them. They then bring these laws to politicians who appreciate all the hard work has already been done as well as the wine, cheese, and flattery.
Bureaucrats typically come a pool of applicants seeking to save the world through their involvement in Government. One individual said to me if she worked for an Oil company everything she did would be discounted but if she works for the Government her work will never be questioned. These people need information with which to make their decisions and often they would rather listen to the naysayers than the business that will be affected.
So in the end, why is the testimony of the bureaucratic agency any more important than that of the organization being regulated? Congress is supposed to pass the legislation and if they don't have time to pass hundreds of bills with tens of thousands of pages of information then maybe we need a smaller government that does less and allows a free people more opportunity to work out their own problems.
ConEd clearly, to me, required a high level of information to be considered. The bureaucrats could not simply rubber stamp the Union position without listening to important information from other parties. Any regulation that affects lives and businesses needs a clear hearing. Just deferring to a government agency is never adequate.

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