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.