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Limiting the Judicial Power of Agencies

In two prior posts (here and here), I have been discussing the ideas in my new paper, “Classical Liberal Administrative Law in a Progressive World.”  This post continues the series by discussing how agency adjudication should be changed.

Under current arrangements, agencies often adjudicate cases that really should be adjudicated in Article III courts.  Most of the time, these adjudications are called formal adjudications since they are accompanied by a formal hearing that provides significant procedural protections.  The initial decision is made by an administrative law judge (ALJ) but, if the agency does not agree with the ALJ’s decision, the agency can appeal that decision to itself and reverse the ALJ. Thus, agency adjudications are ultimately controlled by the agency.

My proposal is to eliminate this system and to replace it with a system of Article III administrative courts that would adjudicate administrative cases. The judges of these courts would be appointed by the President with the advice and consent of the Senate and could only be removed through impeachment.  As a result, the judges would be genuinely independent.

The judges, however, would need expertise to adjudicate these cases, but that could be accomplished.  The judges should be divided into three different groups – those with expertise in medicine, in science, and in economics.  In addition, the judges should not be assigned to decide cases exclusively from one agency, as ALJs currently are, which narrows their focus and gives them tunnel vision.  Instead, they should be assigned cases based on the issues involved, with for example economics judges adjudicating economics cases.

The most important feature of this system of Article III administrative courts is that adjudications would not be subject to reversal by the agency, which they currently are.  Consequently, Article III administrative judges would have the final decision (subject to appeal to other Article III judges) on these adjudications.  This would deprive agencies of much of their quasi-judicial power.

How then would adjudications be conducted?  This is complicated, but some aspects of the adjudications can be described.  First, agencies at present can use adjudications to announce and institute policy decisions.  When such policy decisions are made in a rule-making, the version of the REINS Act that I recommend would place significant limits on them, but the REINS Act would not operate well as to adjudications.  Thus, I propose that agencies not be allowed to exercise policy-making authority in adjudications.  Instead, policy should be made either by Congress in legislation or by agencies through legislative rules.  (For some, this will seem too radical and therefore my paper discusses more moderate restrictions on adjudicative policy-making.)

Second, the adjudications would be conducted initially by Article III administrative judges who would provide deference to the agency decisions on some issues and no deference on others, such as legal questions.  The decisions of these article III administrative judges would then be subject to judicial review by the federal circuit courts, which would again provide deference to the administrative judges on some issues and not on others.

Finally, while the adjudications would be conducted by Article III judges, it is not necessary that the ordinary rules of civil procedure govern their adjudications.  Some, perhaps most, of the streamlined procedures that are currently employed in administrative adjudication could be employed by the independent administrative courts.  In this way, these courts could better handle the large number of administrative adjudications that are currently anticipated by our big government programs.

Reader Discussion

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on December 27, 2017 at 09:43:15 am

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Limiting the Judicial Power of Agencies – Top 100 Blog Review
on December 27, 2017 at 10:01:48 am

Off the top of my head, the idea of appointing still more Article III judges is quite wrong. Magistrates are a better choice simply because they are appointed for a term of years; presently 8 years full time or 4 years part-time. But I would not want to leave nominating these hearing officers to either the federal courts or to the executive and the Senate.

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EK
on December 27, 2017 at 11:04:20 am

Why afford the Agencies any deference at all?
It appears to me that the Courts afford little, if any deference to the Legislative. Upon what basis is a mechanism, the FAS, with a rather "questionable" constitutional basis for Law / rule making to be afforded greater deference than the one mechanism, Congress, that has the *exclusive* grant of Legislative power.

Also, why limit these Art III ALJ's to one sphere, i.e., economics expert to handle only economic issues? Would not all Admin Law cases arising out of FAS mandates include an economic component? Is there not some value to be had in cross fertilization of the Jurists on these Courts? Take WOTUS or Clean Air Act litigation - would it not be helpful to have some measure of economic, medical and physics expertise to counter the purported *expertise* of the Agency?

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gabe
on December 27, 2017 at 11:13:47 am

You make some very interesting (and good) recommendations, however, if keeping pace with the volume of administrative cases is an objective, the weakest link to that end, would seem to be the back-log-jamming of the Senate confirmation approval process, under our current bitterly partisan political system.

Too, as Prof. Hamburger has argued*, Article III Judges have a Constitutional duty to render independent decisions, not only on the law, but on the substance, which is one of his reservations about Chevron & Auers Deference, and Meade-Skidmore respect. And, the deference you ascribe to the A-III Admin. Judge may still run-up against this constitutional issue.

Just a minor observation, probably attributable to my incorrect reading and under-schooled eye, and while I agree, out of due process concerns, independent judicial review is a vital component, the essay seems to ascribe final decision jurisdiction to A-III admin. judges in paragraph 5, and then subjects them to federal circuit court judicial review two paragraphs later.

*"Chevron Bias", by Philip Hamburger: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2477641

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Paul Binotto
on December 27, 2017 at 12:01:36 pm

Yes, moving over to actual full Art. III judges is a big huge step forward, and would naturally require that the agency cannot overrule them and that an agency (like the NLRB), cannot use adjudication to do policy making (that is also suspect on due process of law grounds with people being held liable for rules that were created after their actions).

But there are a TON of very abusive evidentiary rules and procedures currently used by agencies that must get changed. They determine conclusions of fact for common law actions without petit juries, in conflict with the Seventh Amendment. They admit hearsay evidence (which has long been recognized as inadmissible outside of some exceptions). They refuse discovery by private parties, a basic part of any civil trial. And these are just in formal adjudications, informal adjudications don't even try.

As the Supreme Court recently held in Kokesh v. SEC: "disgorgement orders represent a penalty" "because they 'go beyond compensation, are intended to punish, and label defendants wrongdoers' as a consequence of violating public laws." So why can the agency refuse to let defendants face their accusers, in conflict with the Sixth Amendment, or not have counsel provided, or have proof beyond a reasonable doubt as determined by a jury?

We should start with the ordinary rules of civil procedure (except for things like long term bans from an industry or disgorgement orders which should use criminal procedure) unless there is some really good reason not to.

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Devin Watkins
on January 02, 2018 at 00:30:14 am

[…] Limiting the Judicial Power of Agencies Mike Rappaport, Library of Law and Liberty […]

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PowerLinks 01.02.17 – Acton Institute PowerBlog

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.