Curing the Administrative State

With much gratitude, this essay responds to contributions to this forum on the Administrative State by Michael Greve, Shep Melnick, Christopher Walker, and Adam White. It first summarizes broad themes and essential points for which I find support from at least one other contributor. It then answers, to the extent space allows, observations, objections, and predictions offered by these distinguished analysts. It concludes on a note of optimism.

Constitutional Reformation

Administrative law is characterized today by a lack of substance opening a door for pure power relations between administrators and those subject to their rules. Per the teachings of modern economics, power relations run in two directions. Powerful regulated parties can and do pressure executive officials. Executive officials in turn make it their business to bribe and bully private persons and entities, especially those who are out of political favor or who stand in the way of accomplishing cherished objectives.

The void that has opened in the space designated for constitutionally derived laws of administration manifests itself in persisting maladies. I call the most serious of these executive unilateralism and regulated parties’ fears of retaliation. Those maladies afflict us more or less acutely across all presidential administrations, most of the main administrative agencies, many areas of law.

Focusing on enforcement of civil-rights laws by the Department of Education in the Obama Administration, Professor Melnick forcefully describes, in this forum and elsewhere, the appearance of executive unilateralism, and “gullible” faculty members’ fears of agency retaliation. If a talent like Professor Melnick were to delve equally deep into other programs in other agencies at other times, he or she would find similar dynamics at work.

The contributions to the forum point a collective finger at an array of doctrinal culprits. Professor Greve mentions non-remedial administrative remedies. Professor Melnick spotlights the ballooning of requirements for engaging in agency rulemaking in light of the arbitrary-and-capricious standard of judicial review. Professor Walker suggests better regulation of agency adjudications. Adam White discourses at length on the problem of broad delegations of legislative power. And beyond the bounds of the immediate discussion, Professor Greve questions why “exceedingly generous” “constitutional and statutory doctrines” permit practically anyone to take administrative agencies to court. We see today a kaleidoscopic onslaught of legally serious opposition to practically every branch of received administrative doctrine.

The upshot, for some of us, is a qualified “yes, please,” as in: Yes, please do reform the doctrines; do conform them to the Constitution. Our culture of fair administration is now in such desperate shape, and the connection between the Constitution and administrative law has become so attenuated, that the conservative case for standing pat is decidedly outweighed by the meliorist case for action.

A qualified yes, please, however, because the reforms we need must reflect constitutional synthesis, not political compromise. No amalgamated and negotiated reform package can cure what really ails us. We need coherent, liberal reforms—what Ashley Parrish and I call a liberal reformation. Our ultimate target must be the mindset that gives rise to antinomian administrative law and its maladies.

Doctrinaire Originalism?

Professor Greve opens by provocatively spotlighting what he calls my “subtle but unmistakable critique of a doctrinaire and intellectually lazy originalism.” The comment brings to mind a similar critique now making rounds in legal circles.

In fact, I embrace hidebound originalism; I just don’t practice it. Take our core contention: “Administrative law in our tradition is not a mechanism for achieving political ends or constraining the size of government. It is, rather, a tool for improving government at any scale by furthering both administrative efficiency and administrative integrity.” Originalist counterarguments might conceivably show we’re mistaken. If so, we should yield. I would hope to have the grace to thank our critics, however doctrinaire, for advancing a common project.

Some of us tried mightily to promote a full constitutionalism under a banner of originalism. As a reform advocate, I coined catch-phrases—Originalism 2.0, structural originalism. As a lawyer, colleagues and I showed that the advocacy the Court finds most helpful involves not narrow literalism but textually grounded structural analysis. None of this gained traction. Originalism at the bar remains harmfully doctrinaire; inhibits success in consequential cases; repels otherwise anti-leftist lawyers and law students.

My new charge is this: Esteem originalism as an indispensable analytical technique. But avoid the fatal mistake of conflating that technique—an essential methodology for analyzing, criticizing, honing, and culling doctrine—with the whole of our high national enterprise in liberal constitutionalism.

More Modern Logic

On a more discrete plane, Adam White says he “fundamentally” disagrees with our definition of “administration” and “struggle[s] to see” how what we call “core” administration can involve, at one and the same time, “government conferring benefits on private parties” and “faithful execution of regulatory laws—such as the first Congress’s laws for the regulation of coastal trade, which were administered by the Treasury Department.”

Part of this disagreement may be a quibble about terminology. But beyond mere labels lie matters of logic and substance. Law & Liberty readers will recall that the distinction between first-and third-party perspectives is a foundational element of modern thought. It was drawn by Adam Smith. It can be observed in psychiatric interventions, a possible solution for Moore’s paradox, the difference between the custom of property and the law of property rights, and many areas of law and legal practice. Relevant here, the first-party/third-party distinction lies near the heart of our proof that “regulatory licensing involves the same logical and legal phases or moments as does civil enforcement of the law by the judiciary.”

Take those “coasting” licenses, which were issued to ship owners by Secretary Alexander Hamilton at the Treasury Department. From a congressional, should-we-or-shouldn’t-we-have-the-program perspective, the so-called “third-party” perspective, the program appears regulatory. But now change the point of view. See things instead from the executive (or administrative) should-we-or-shouldn’t-we-issue-the-license perspective. The program now appears beneficial to licensees. Because the prohibition on trading sans license is a given, the relevant question from the standpoint of first-party dialogue—the conversation between a ship’s master and Secretary Hamilton—is whether a pure benefit will be bestowed by the Secretary. That conversation differs in substance, not dynamics, from one about whether the master should get his pension for service in the Revolutionary War.

Why does this matter so much? Because regulatory licensing is the primary constitutional vehicle, likely the sole constitutional vehicle, that allows coercive administrative authority to be brought to bear on private individuals to the full extent of the federal government’s enumerated powers. The constitutional availability of regulatory licensing allows for a real, effective, coercive administrative state. But exactly because regulatory licensing involves coercion, principles of due process—in particular, the equal protection aspect of due process—allow less leeway for favoritism in licensing than in granting proprietary interests. Disappointed applicants for coasting licenses should receive more searching judicial review than disappointed applicants for permission to build a fire at a national-park campsite.

Common-Law Bedrock

This sort of logical and constitutional typology prompts Professor Greve to comment, astutely,

What really anchors the legal categories Rob wants to (re-)articulate isn’t some disembodied conceptualism. It is a coherent notion of private right—life, liberty, property. The natural-law, pre-Constitution constitutionalism backdrop is the only way, for example, to make sense of the distinctions Rob wants to draw among various kinds of government permits and licenses.

Thankfully, such category-anchoring notions, while temporarily out of favor, are hidden in plain sight. All we need to do is word-search the Constitution; find “the common law”; determine when the phrase appeared; interpret it along lines of original meaning. We need not, in my view, turn to John Locke or other pre-Constitution philosophy. We do better to rely on the ecological rationality of the centuries-long development of Anglo-American common law. After all, it’s embedded in the Constitution.

Common-Law Displacement

But what of Professor Greve’s Delphic prediction that, once lawyers fully appreciate the claim that law-bound administration rests on common-law baselines, “‘tis only a matter of time until somebody—like, well-nigh the entire legal establishment—yaps, ‘this is Lochner in drag’”?

For the uninitiated, Lochner v. New York is the 1905 Supreme Court decision that spooked a generation of jurists by partially—and wrongly—constitutionalizing Anglo-American common law. Lochner so distressed New Dealers that even after it was overturned (in 1937), the Court proceeded the following year to displace the common law from its constitutional role as our system’s adjudicatory baseline. The common-law displacement decision, written by Justice Louis Brandeis and styled Erie Railroad v. Tompkins, rested on, among other things, faulty paraphrases, questionable history, and not a little underhandedness. Ashley Parrish and I explain more of this in “In Praise of Erie and It’s Eventual Demise,” a piece offered on the occasion of Erie Railroad’s 75th anniversary.

Antinomian administrative law did not emerge by accident. It emerged from fallacious theory; coalesced around jurisprudential naïveté; and is now sustained by cold calculation.

The focus of our piece, and the important point for contemporary debates over what to retain and discard from the New Deal, is the shared fallacy of generations of New Deal-minded jurists, including Oliver Wendell Holmes, John Chipman Gray, Louis Brandeis, Felix Frankfurter, James Landis, and many others. To our minds, the jurisprudential approach of these men, together with the Erie doctrine, is undermined by the fallacious notion “that human law must either be positively laid down by a lawmaker” or else be “normatively binding from some point in the wide beyond.” Put differently, the New Dealers overlooked the non-deontological natural laws of human sociality. These include, among many examples, Adam Smith’s invisible hand, the principle that divisions of labor are limited by the size of markets, and the experimental finding that perfect knowledge among market participants is not necessary to achieve efficient resource-allocations. The great, although frequently misunderstood, significance of the so-called “Law and Economics” movement is that it de-moralizes the common law by introducing concepts of efficiency and inefficiency as criteria for judging legal rules; that it transforms the common law into history’s most illustrious example of the non-deontological natural laws of human sociality.

The idea that the common law might represent a coherent—but in no sense morally binding—body of efficient rules was unknown to the New Dealer. As things looked back then, the common law was either judicial legerdemain masquerading as time-honored custom, or else part of C.S. Lewis’s Tao. To those minds, there was no middle ground. One had to choose between legal positivism and an omnipresent and morally suffused faux-natural-law baseline that, if not absolutely obligatory, was at a minimum morally persuasive. Erie Railroad summarily dismissed the common law from its posting in constitutional bedrock without so much as notice to the parties. It is history’s most consequential instance of the fallacy of the false dilemma.

Constitutional Morality

“But wait,” says Mr. Hidebound. “Administrative agencies litigate exclusively in federal court and overwhelmingly under federal law.” “They often are accorded special status under something called ‘new common law.’” “Erie Railroad has attenuated effects on such litigation.” “Why the jurisprudential hemming”? “Why the theoretical hawing”?

Since this forum opened, the Centers for Disease Control and Prevention (re-)imposed a nationwide regulatory moratorium on evicting tenants for non-payment of rent. The moratorium purportedly made violators subject to invented-from-whole-cloth criminal penalties, including jail terms of up to one year. On August 26, the Supreme Court struck down the moratorium, calling the government’s statutory arguments “a wafer-thin reed on which to rest such sweeping power.” The Court remarked that landlords challenging the regulation “not only have a substantial likelihood of success on the merits—it is difficult to imagine them losing.”

Which brings us to the decisive point of constitutional morality. Adam White “could not agree more” that “the ultimate challenge we face today is the need to restore America’s traditional constitutional morality.” And Professor Walker stresses closing the gap between the orderly logic found in other legal contexts and the “jarring” world of Administrative Procedure Act. Mr. White and Professor Walker are on board with our project of building a better law of administration out of the comparative disorder we see today.

And yet, their proposals would have done nothing to prevent the CDC charade. The essence of that travesty was a gaming of the legal system by successive administrations that, it must be said, succeeded in pushing policies on the ground in an intended direction. That is executive unilateralism. It’s a persisting problem that will be solved only by reforming the minds of lawyers. And however much Mr. Hidebound may protest, those internal reforms will take considerable jurisprudential hemming and some extensive theoretical hawing.

Hopeful Outlook

Antinomian administrative law did not emerge by accident. It emerged from fallacious theory; coalesced around jurisprudential naïveté; and is now sustained by cold calculation. It cannot be treated with homespun remedies. To find a solution, we must look above the heads of Messrs. Hidebound and Lawless, to modern theory they have not yet found, and down below their gaze, to ground-level experiences that can be absorbed only by sympathetic witnesses.

Our project’s success will turn, most fundamentally, on whether we vindicate our assumption that lawyers can be persuaded to see their way clear of fallacies. By going long on logic and accepting every side’s valid criticism of others, we expect to bring together what may now be warring points of view. In our opinion, the fundamental commitments of every jurisprudential body of thought committed to government by consent of the governed—from anti-leftist progressivism to common-law universalism to anti-positivist moral-substantivism to mainstream originalism—can be logically synthesized into one broad jurisprudence as unknown to New Dealers as DNA was to Darwin. Evidence of disintegration is everywhere. But antinomian legal disorder is curable.