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Dismantling the Administrative State

A remarkable movement is underway in the legal world, unlike any other during my lifetime. Growing skepticism regarding the conceptual underpinnings of the “administrative state”—the alphabet soup of powerful administrative agencies that dominate Beltway policymaking—portends imminent retrenchment of well-established understandings (and judicial precedents) that enabled the federal Leviathan. Doctrinal reversals of a significant nature are rare, particularly when they reflect conservative initiatives and overturn the foundations of Progressive governance. Yet we are on the verge of such a dramatic shift.

For half a century—dating to New Deal-era reliance on administrative agencies to “fix” the ostensibly broken machinery of democracy and free markets—it was assumed that “administrative law” is an essential feature of modern life. Specialized expertise by unelected bureaucrats was the “secret sauce” that would remedy the purportedly sclerotic—and old-fashioned—system of checks and balances contemplated by the Constitution. Justice Felix Frankfurter expressed the consensus view when he described administrative law as an essential form of “governmental supervision” that could not be effectively exercised through “self-executing legislation” or the judicial process. [1]

Indeed, there was widespread bipartisan consensus among both politicians and legal scholars that what we now call the administrative state was a good thing—or at least necessary and inevitable. Chevron v. NRDC, the 1984 Supreme Court decision establishing judicial deference to administrative agency interpretation of federal statutes, was the high-water mark of our infatuation with administrative law.

Stanford University law professor Michael McConnell has described Chevron as “a central pillar of the modern administrative state. It is a systemic thumb-on-the-scales in favor of the government’s view of the meaning of the statute, even if that view changes with political winds and even if it contradicts earlier judicial interpretation.” Chevron is important, McConnell explains, because:

In the modern administrative state, Congress delegates vast swathes of policy-making power to the regulatory agencies, and the courts no longer even attempt to ensure that the key policy choices are made by the legislative branch. The only practical limitation on excessive delegation is to construe delegations of power strictly, to ensure that the agencies exercise only the quantum of power Congress explicitly delegated to them. Chevron goes the opposite way: it green-lights agency assertions of power, even when it is fairly obvious from the context that Congress had no such intention, so long as the words of the statute can be reasonably stretched to accommodate them.

Notwithstanding this perverse dynamic, and the concomitant lack of political accountability on the part of administrative lawmakers, conventional wisdom initially treated Chevron as routine and non-controversial—a logical extension of the progressive totem of presumed “agency expertise.” Even Justice Antonin Scalia was a longtime Chevron enthusiast.

In recent decades, however, the tide of opinion has turned. Some Supreme Court justices (led by Clarence Thomas) have begun to question the reasoning—and even the validity—of once-settled administrative law precedents on originalist grounds. Instead of arguing over divisive issues such as “judicial engagement,” conservative and libertarian legal scholars have united to criticize Chevron and to point out that many features of modern administrative law contravene the separation of powers enshrined in the Constitution (not to mention the plain language of the 1946 Administrative Procedure Act).

An increasing tempo of anti-Chevron sentiment has become evident in lower federal court decisions (attracting the attention of President Trump’s judicial talent scouts), and a growing body of books, articles, and think tank commentary. Complementary themes such as taming the Imperial Presidency and reversing congressional abdication (such as Sen. Mike Lee’s Article I Project) give added momentum to the drive to curb the excessive powers currently being exercised by administrative agencies. Columbia University law professor Philip Hamburger’s 2014 book Is Administrative Law Lawful? was particularly influential.

A forthcoming addition to the burgeoning literature is Peter J. Wallison’s easily-digestible monograph Judicial Fortitude: The Last Chance to Rein in the Administrative State, due out on September 18. Wallison is a knowledgeable Washington, D.C. insider, having served as White House counsel to President Ronald Reagan and general counsel to the U.S. Treasury Department in the Reagan administration.  He now serves as co-director of the American Enterprise Institute’s program on financial policy studies. In Judicial Fortitude, Wallison trods a path previously explored by other scholars, but he manages to find some fresh insights. What makes Wallison’s book notable—and valuable—is that it is relatively brief (166 pages of text), well-written, and accessible to readers who are not administrative law nerds.

Wallison takes the originalist critique of the administrative state beyond merely questioning Chevron; he argues (in chapter 6) that the moribund “nondelegation doctrine” needs to be revived. This compelling analysis is the highlight of the book, a clear demonstration that resuscitating lost wisdom is just as important as trail-blazing scholarship. It is one thing to trim the sails of administrative agencies by making their interpretations (of both statutes and regulations) subject to meaningful judicial review. Article I of the Constitution expressly grants “all legislative powers” to the Congress. Therefore, the threshold question is whether it is constitutional for administrative agencies that are part of the executive branch to promulgate an extraordinary volume of regulations (numbering in the thousands each year) that represent major policy decisions and are the functional equivalent of legislation.

Last invoked by the Court in 1935 [2], the nondelegation doctrine enforced the Constitution’s separation of powers by preventing Congress from granting unlimited discretion to the executive branch to enact policy via regulation or orders. Open-ended authority to determine policy—the gravamen of legislation—is the exclusive province of Congress and cannot be “delegated” to the executive, administrative agencies, or (as in Schechter) private groups.  Not all administrative regulations run afoul of this doctrine. As Chief Justice John Marshall noted in 1825, [3] the critical distinction is whether the delegation involves “minor” or ministerial matters and whether Congress has provided sufficient direction regarding the policy to be implemented, leaving only “details” to be worked out by a subordinate agency.

The vice of the modern administrative state is that Congress often “punts” on the policy direction—proclaiming amorphous goals, such as achieving “clean air” or “clean water”—and then gives administrative agencies virtually unchecked authority to “fix” the problem. Agencies become de facto lawmakers, determining policy matters of national consequence. This allows Congress to take credit for any successes while denying responsibility for the inevitable failures, a corruption of the Constitution’s design. Political accountability requires that each branch stay within the role assigned to it by the Framers. The solution is for the judiciary (in particular the Supreme Court) to rein in the administrative state by limiting the degree to which Congress may delegate power to administrative agencies.

Wallison laments the decline of the nondelegation doctrine—unused for over 80 years but never formally abandoned—which has allowed Congress to cede “more and more authority to administrative agencies since the New Deal.” Even requiring Congress to specify a “great outline” of the policy decisions to be implemented by the agencies, as contemplated by Marshall in Wayman, would correct the major doctrinal error that occurred in 1928, when the Court adopted the “intelligible principle” test for impermissible delegations. [4]  (Justice Thomas has questioned the legitimacy of this test.) The deferential standard used by the Court since being bullied into submission by President Franklin D. Roosevelt in 1936 amounts to no constraint at all.

Wallison contends that the Court’s abandonment of the constitutional function intended by the Framers represents a lack of the judicial “fortitude” that Alexander Hamilton felt was necessary for courts to serve as “faithful guardians of the Constitution.” [5] The Court’s relinquishment of its proper role, Wallison argues, has empowered the administrative state and allowed Congress to cede an unwarranted amount of power to the executive branch.  Notwithstanding a general lack of scholarly enthusiasm for reviving the nondelegation doctrine, Wallison detects “stirrings” at the Supreme Court, counting Chief Justice Roberts and Justices Thomas and Alito as possibly supporting a return to pre-New Deal precedents.

This would not constitute “judicial activism” because preserving the structure of the Constitution is, as Marshall wrote in Marbury v. Madison, “emphatically the province and duty” of the judiciary. The Court’s failure to enforce the nondelegation doctrine constitutes abdication, not restraint.

With President Trump’s appointment of Justice Neil Gorsuch and the nomination of Judge Brett Kavanaugh, the Supreme Court may soon have the votes necessary to change directions. Judicial Fortitude boldly points the way.

[1] FCC v. Pottsville Broadcasting Co., 309 U.S. 134, 142 (1940).

[2] Panama Refining Co. v. Ryan, 293 U.S. 388 (1935); and A.L.A. Schechter Poultry Corp. v. United States, 295 U.S. 495 (1935).

[3] Wayman v. Southard, 23 U.S. 1 (1825).

[4] J.W. Hampton, Jr. & Co.  v. United States, 276 U.S. 394 (1928).

[5] Federalist 78.

Reader Discussion

Law & Liberty welcomes civil and lively discussion of its articles. Abusive comments will not be tolerated. We reserve the right to delete comments - or ban users - without notification or explanation.

on September 12, 2018 at 07:51:05 am

Your right, it isn't "judicial activism," but it sure sounds like “judicial engagement" to me to reinvigorate the nondelegation doctrine. Not that is bad, in fact I think it is good for the Court to start enforcing the Constitutional requirements again. In fact, I am hoping that it will happen very soon starting in less than three weeks. On October 2nd, the Court will be hearing the case of Gundy v. United States where the Court has agreed to consider striking down a federal statute on nondelegation grounds for the first time since 1935. You can read the brief I submitted to the Court on that case here: https://www.supremecourt.gov/DocketPDF/17/17-6086/48696/20180530154406207_Gundy%20v.%20United%20States%20final.pdf

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Devin Watkins
on September 12, 2018 at 08:04:37 am

Enforcing the Constitution is neither “activism” nor “engagement”; it is simply judges performing their intended function, per Marbury v. Madison and Federalist 78. Failing to enforce the Constitution is abdication—judicial dereliction.

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Mark Pulliam
on September 12, 2018 at 08:11:47 am

We agree that enforcing the Constitution is not "activism" and failing to do so is "abdication." But here is the definition of "Judicial Engagement" from the Institute for Justice (who coined the term): "The act of properly judging, by focusing on the facts of every case, remaining impartial, and requiring the government to justify its actions with reliable evidence." https://ij.org/center-for-judicial-engagement/

Sounds like that would apply to me.... What is the definition of "judicial engagement" that you are using to say it doesn't apply?

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Devin Watkins
on September 12, 2018 at 09:12:17 am

Let’s not resume that debate. I was trying to find common ground. Clark Neily wrote a whole book on judicial engagement, and Randy Barnett and Roger Pilon have commented on the concept at length. I addressed their arguments in my article in the Texas Review of Law and Politics. https://drive.google.com/file/d/1bcO6eAWIUe6A5CHR7m2b-mxp2eaiionR/view

Don’t try to sanitize the term by redefining it.

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Mark Pulliam
on September 12, 2018 at 10:24:58 am

There are several valuable implications in Mark Pulliam's text which are tempting to come back to.

Nevertheless, the concentrations on the "how" and extent of "Administration," may not be meaningful steps toward anything like the "Dismantling" which seems to be a rising social and political objective. Then, again, it may not be an "objective" at all, simply a phase of various disgruntlements.

The requirements (and excuses) for "Administration" arise not from "delegation of powers" but from legislatively (via Rules of Policy) assumed or arrogated functions to be conducted through the facilities (and enforced by the coercions) of the mechanisms of the Federal Government.
Add a function, like the Department of Agriculture (was that not the first?) and voila - Administration appears (and from the relationships within it begins its own arrogations).

Correcting and sanitizing administration of functions should proceed, of course, but "dismantling" closer attention to the functions and their proper place in our social and political system.

"Normative Libertarianism is framed by the impacts of the functions of governments on Liberty and thus to limit those impacts by limiting those functions."

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R Richard Schweitzer
on September 12, 2018 at 10:47:15 am

This is a welcome development. I wonder if the enforcement of non-delegation will also by necessity force questions about our abandonment of federalism. Well done, Mark.

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Forrest Nabors
on September 12, 2018 at 14:32:20 pm

I’m not trying to pick a fight, but I really do think there has been a misunderstanding of terms. I looked up the article you linked to and was a bit surprised to find you cite me for the definition of “judicial engagement” when that is not my definition of that term. You state in the article “The theory of judicial engagement posits that all nonharmful conduct is a protected liberty, so courts should safeguard these individual ‘rights’ from ‘majoritarian’ interference.” You do accurately describe my opinion of the meaning of the Due Process Clause (and specifically the word liberty in the Due Process Clause), and I have no problem with you disagreeing with that concept (which I personally believe is the proper interpretation of that clause), but that is different than the term “judicial engagement.”

Judicial restraint is the mirror of “legislating from the bench,” it posits that judges should not do that. In a similar manner “judicial engagement” is the opposite of “judicial abdication.” The only extra added is it rejects deference to the government on facts or law. If the government has a legal or factual claim it wishes to make, it must prove that without deference. If the government posits that statute X was enacted to benefit the health of people (and so fall within the police powers of the state), it must supply evidence for that. In doing so it rejects rational basis review as not requiring such evidence. It is not mutually exclusive with judicial restraint, you can have a judge that is properly restrained from creating law, and practicing judicial engagement . It is also not mutually exclusive with my interpretation of the Due Process Clause (people can believe in judicial engagement without supporting that interpretation of the Due Process Clause).

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Devin Watkins
on September 12, 2018 at 15:11:06 pm

I have a lot of respect for Peter Wallison. He also served as a member of the Financial Crisis Inquiry Commission and authored the commission's official Minority Report in which he describes what really caused the 2008 financial collapse over and against the white-washed Majority report which presupposed the cause and then went out to find the "evidence" to support the presupposition. I look forward to reading his forthcoming monograph.

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David Reich
on September 12, 2018 at 15:38:33 pm

The really bad thing is not just delegation to the Executive, but that even the Executive isn’t really in control of these agencies. The media view them, and they view themselves, as an independent and permanent fourth branch of government. It does not serve the Executive, the Legisalture, or the People. The Administrative state Thrives on serving itself and its favored causes, while impeding all opposition.

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Bob Rivard
on September 12, 2018 at 16:50:38 pm

As another commenter (R. Richard Scweitzer) has often noted, "Functions, i.e. Dept of Agriculture / Justice / Education, etc., in time become *INSTITUTIONS" and assume a life and purpose of their own oftentimes in contradistinction to their originating purpose." One of those purposes may very well be to serve the ambitions of those employed by the INSTITUTION.

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gabe
on September 12, 2018 at 16:54:39 pm

BTW: Loved Guelzo's take on your book at CRB current issue. will have to obtain it.

Agreed, one would (OK, could?) expect the debate over non-delegation to ultimately compel a re-consideration of our "Lost" Federalism.

Being perhaps a tad bit more radical than you may be, I would hope that it would also lead to a re-consideration of the 17th Amendment - now that would have an equally salient impact upon our "Lost" Federalism.

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gabe
on September 12, 2018 at 18:22:48 pm

I want to note one more thing as to why judicial engagement is relevant to this post (even if you hadn’t mentioned it). Overturning Chevron and reinvigorating the nondelegation doctrine are two huge parts of judicial engagement. With the elimination of deferral to the executive branch as to law creation (nondelegation) and statutory interpretation (Chevron), and regulatory interpretation (Auer), that only leaves the question of deferral on questions of fact and constitutional interpretation (rational basis test). Some deferral on questions of fact about the world by Congress to the executive must be the original meaning due to the historical record of such conditional legislation by Congress (see my brief above), but questions of fact as to a particular individual’s actions without a jury (such as agency adjudication) could still be suspect. Additionally, there are questions as to if rational basis review is itself a deferral on a questions of law. But eliminating Cheveron/Auer and prohibiting executive law creation (reinvigorating nondelegation), would be two huge steps towards judicial engagement by reducing blind deference.

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Devin Watkins
on September 12, 2018 at 22:54:19 pm

The Congress shall make all laws, that's "all laws."

Nothing more nothing less.

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Jay Joseph
on September 13, 2018 at 07:57:46 am

[…] attorney, Mark Pulliam, has an important essay posted to the Law & Liberty site about how we can retake control of our federal government and begin to demolish the enormous […]

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Thursday Open Comments | Hambone
on September 13, 2018 at 08:52:35 am

For one thing, continued framing of these choices in esoteric doctrinal fashion is why we have the problems we have, not their solution. "Engagement," "restraint," "activism"--forcing the argument into such narrow sacerdotal channels is precisely the wrong way to go about it. Homoousion, homoiousion. Yes I know this is how one gets one's ideas published in legal journals and maintains a career in the field; this kind of exegesis of the legal scriptures calls itself "legal reasoning" and its prerogatives are jealously guarded by the legal academic caste. Yes many of us here (including yours truly) are attorneys conditioned to believe that this kind of doctrinal parsing of terms that would make the Schoolmen proud is just how this most essential Constitutional question ought to be answered. But we are wrong. This fundamental political matter in our country is the base from which the superstructure of tortured legal doctrine and scriptural exegesis must develop; it cannot itself be determined by those methods.

This shouldn't be this hard. It is obvious and should at all times have remained obvious that the principal function of our federal judiciary is to enforce the limitations of federal legislative and executive power set out in the Constitution, to prevent transgression of the boundaries separating the federal government from (i) state governments, and (ii) individuals. In all cases where the matter is in doubt, the judicial decision must always be against the federal government. That is how a government of limited powers is made operational and preserved. Of course I am under no illusions that such an easy to understand and apply principle will ever in fact be applied. Sometimes shrapnel penetrates a body and to remove it would risk greater damage than to just leave it there and suffer its debilitating effects. So with our administrative regime. These agencies ought never to have been established. But they could not have been prevented by doctrine, only by decision.

Pulliam is (I believe) quoted thus: “The theory of judicial engagement posits that all nonharmful conduct is a protected liberty, so courts should safeguard these individual ‘rights’ from ‘majoritarian’ interference.” I submit that this Millian standard--harmfulness--is specious, all form and no substance, and therefore cannot (nor could ever) serve as a test or standard or principle for policing the state-individual boundary. It simply displaces the political contest onto a different word. No, a society committed to the idea and (more importantly) the practice of limited government must be prepared to permit without flinching or remorse the occurrence of harm inflicted by citizens against one another. To a certain extent, such a society must remain lawless, which does not thereby negate that such a society is one of a rule of law. Unfortunately, the embedding of African slavery in our land prior to its constitutional metamorphosis meant that from the very start it would be necessary that the boundary be violated in order to liberate slaves and their posterity. Slavery being something that is completely incommensurable with any analytic of "harm." Pretty much every Constitutional contradiction, conundrum and inconsistency that has undermined our ability to practice limited government flows from that original sin.

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QET
on September 13, 2018 at 10:22:32 am

Are you saying?

The remedy to Original sin, i.e., the civil War amendments, 13 -14 (especially) and 15, is the generative cause of the conundrum? or are you implying that the Court's "construction" of those amendments is the precipitate cause?

Another way of looking at it is to say, perhaps: The Courts construction of the 14th has engendered a far more radical *re-construction* of the regime than even the Radical Republicans of the era could have imagined.

In truth, it matters not what names we apply to the past century of Judicial arrogance as all, engagement, restraint and activism may all corrupt the structure and theory of the regime in any particular instance.

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gabe
on September 13, 2018 at 10:24:07 am

Oops - bad phrasing:

In the above the 13-15 A's are the supposed remedy; they do not qualify the Original Sin.

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gabe
on September 13, 2018 at 11:51:14 am

I am saying that the only way to effectively practice the limited national government the Framers intended is for the citizenry to demand it, for the citizenry to continue to have a greater fear/anxiety over the consequences of an all-comprehensive and all-powerful national government than they have hopes from it. In my estimation, the recalcitrance of the Southern states (and I say this as a Southerner) in treating the emancipated slaves and their posterity with even the slightest shred of human dignity, which led directly to federal enlargement necessary to force those states to stop, begat a general mood/state of mind among a critical mass of the national population that more federal government = better, and it is that mood/mindset, as much as if not more than anything else, that has politically sustained federal enlargement (even as to admin agencies which is what the post is about). Had the federal courts honored their mission to prevent federal enlargement, they would have been very unpopular (for a time) but ultimately would have prevented the rot from spreading, or such judicial fortitude would have led to Constitutional amendments that clearly (like the 16th) conferred the greater authority on the federal government, which would have been equally ruinous but at least legitimate, unlike the abuse of the 14th amendment.

Yes, this is a simplistic, reductive account. But I believe the origin of the problem must be sought in the attitude of the population and not in esoteric legal doctrinal evolution. And I also believe that it is in the confrontation of the federal government (all 3 branches) with the Southern states over the treatment of blacks that the origin of federal judges deciding, as Pukka L. so artfully described it once, that their mission is to "do justice" rather than interpret the law (especially according to the original principles of the founding of the national government) is to be found. And I think it is pretty clear that whatever sophisticated doctrinal points can be developed to explain/justify/oppose judicial deference to administrative agencies, the ultimate source of that deference is in that self-conferred justice mission.

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QET
on September 13, 2018 at 12:04:28 pm

BTW:

I did not mean to imply that your original post was simplistic in any manner whatsoever. And agreed as to "The people ASKING for it"

Now here is a counterfactual:

Suppose US Grant had been able to implement his solution to the recalcitrant South, i.e. a military occupation of the south for forty years.
One wonders, could we have accomplished a truer and better "reconstruction" of the South without the accompanying disability of the overly large, overly involved Federal Government under which we labor today?

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gabe
on September 13, 2018 at 12:49:48 pm

Thanks, but I didn't take you to be doing that. I merely acknowledge it because it's the truth. As for Grant, I don't believe that would have avoided the fundamental Southern malice, and it may even have hastened the institutional enlargement of the national government. No, I think there was no avoiding what happened; the only real alternative was whether it happened legitimately, by expansion of the federal power via Constitutional amendments, or illegitimately, by federal judges discovering emanations from penumbras and a forced reading of "equal protection of the laws" as "the protection of equal laws." It is just another of Fate's cruel ironies that is was the States most insistent on preserving federalism whose actions destroyed that very federalism.

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QET
on September 13, 2018 at 13:05:02 pm

" It is just another of Fate’s cruel ironies that is was the States most insistent on preserving federalism whose actions destroyed that very federalism."

Yep! and then there is this:

"Fate is not an eagle, it creeps like a rat." - Elizabeth Bowen.

It would appear that the rats have had their way!

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gabe

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