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We’re the Government. Trust Us.

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Earlier this week the Supreme Court heard oral argument in Mach Mining LLC v. Equal Employment Opportunity Commission (transcript and briefs).  It’s a fairly big deal for employers, and another small window in the administration’s quaint views of administrative law.

The case concerns the EEOC’s enforcement practices. After the agency files a notice against an employer, conducts its investigation, and finds “reasonable cause” to proceed, it “shall endeavor to eliminate any such alleged unlawful employment practice by informal methods of conference, conciliation, and persuasion.” 42 U.S.C. 20002-5(b). What happens if they don’t do that prior to filing suit, or do a snow job on the employer? Nothing, says EEOC. The provision is unreviewable.

The Administrative Procedure Act (APA) instructs courts to review agency actions for “abuse of discretion.” It specifically does not make review available for actions “committed to agency discretion by law.” Over the decades the Supreme Court has addressed that perplexity by identifying a handful of unreviewable classes of agency actions, such as spending decisions and (individual) enforcement choices. All other final agency actions are subject to a “presumption of reviewability.”  By and large Congress has to preclude review explicitly. Implied preclusion—in cases where there is “no law to apply”—is exceptionally rare.

But that’s what the EEOC is arguing for here.  The provision, it says, oozes discretion, and so there. Besides if you allow any review of whether the agency has “endeavor[ed]” to engage in conciliation, employers will start behaving strategically and, when a case goes to court, insist on a mini-trial on whether the agency tried hard enough.

That’s a real argument and difficulty, and the employer’s attorney (Tom Goldstein) did not have an easy time of it. But as Justice Scalia observed in the course of the argument, the EEOC also has incentives to behave strategically and in bad faith—for example, when it would prefer to hang a high-profile defendant in public. So what you’re looking for is a standard of review and some rules of the road that minimize strategic behavior on both sides. The answer cannot be, no review and no rules. But that’s what the government’s attorney insisted on.

The rules can come from only two places: the courts (a kind of federal common law of employment conciliation), or the agency. Court-made rules are bound to be intrusive and messy, the government’s attorney noted, and again she has a point. So why doesn’t the agency write some rules that it can live with, while also providing some guidance to enforcement targets? (The EEOC has the authority, and they’d get all the deference in the world on writing and interpreting the rules.) Absolutely not, came their response. That would mean judicial review, and any review is too much review.

That did not go over well (the transcript is fun stuff). Justices Sotomayor and Breyer wondered whether the government really meant what it seemed to be saying (answer, yes). The Chief Justice was “troubled” by the feds’ no-review, “just trust us” position (his characterization). Justice Kennedy could not think of “any other context where the court has essentially declined to review a statutory precondition to suit at all.” Justice Scalia had “you’re kidding” questions of his own:  “You want to be exempt from any litigation over whether a particular standard has been met or not? … That’s extraordinary. That does not exist in this world.” So it went for thirty minutes.

The government here showed up with an argument it knew to be over the top, and it is categorically refusing to establish an administrative procedure that would create a minimum of regularity and order to a freewheeling enforcement process. Unfortunately, this kind of m.o. seems to be habit-forming.

Reader Discussion

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on January 16, 2015 at 10:30:36 am

Interesting question!

The statute says “shall,” which generally means the directive is mandatory. But it also says “informal,” which generally means discretionary. And “abuse of discretion” generally refers to proactive behavior; I can’t recall seeing it applied to restraint or forbearance. After all, the choice to refrain from initiating an enforcement action is the archetypical example of the executive’s “prosecutorial discretion.”

The statute certainly looks as if Congress wanted to minimize formal prosecutions. In this sense, it’s arguably akin to requirements for Maranda Warnings and warrants – limits on the power of the prosecutor, strengthening the hand of the prosecuted. And the candid acknowledgement that “we structure our behavior to avoid judicial review” is quite understandable – and reminiscent of W’s rationale for putting detainees in Guantanamo. As a strategy for avoiding judicial review, it was not entirely successful. Arguably the same result to arise here.

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nobody.really
on January 16, 2015 at 10:31:25 am

Where is Kafka when he is really needed?

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gabe
on January 16, 2015 at 10:37:29 am

Yet even if we conclude that the EEOC is in the wrong, what remedy? If the court imposes some minimum steps that must be taken to demonstrate compliance with “informal” requirements, can they really be deemed informal anymore? Wouldn’t this contradict Congress’s express intention?

Compare: The federal Telecommunications Act of 1996 was designed to bring competition to the local telecommunications market. It required rival firms to interconnect their networks to permit people on any network to reach people on any other network. And it required these firms to agree on the terms under which they would exchange telecommunications traffic or, if they could not agree, it granted competitors the discretion to compel incumbents into arbitration over the terms. (Incumbents, having market power, were deemed not to require the power to compel arbitration.) In short, my company could not route its calls over your company’s network without either your permission, or compulsion from an arbitrator (as later adopted or modified by a state or federal utility commission).

However, an unforeseen circumstance arose. Competitors stopped connecting with small incumbent’s networks (e.g., Petticoat Junction Telephone Company), and instead connected solely with the Bell Operating Company networks (e.g., NYMEX). In effect, the Bell companies became the central clearing houses for connecting all calls. But now, a competitor that negotiated/arbitrated terms for connecting with the Bell network could also get those calls routed to all the small incumbent networks that were connected to the Bell network, no permission required. And the small incumbents had no authority to compel these competitors into arbitration.

When these matters ended up in litigation, the tribunals faced a conundrum: Imposing terms on the parties would be inconsistent with Congress’s intent that terms would be arrived at voluntarily or in arbitration as set forth by the Act. But refraining from imposing terms would leave the small companies in the situation of providing services for free against their will – again in violation of the Congressional desire that terms would be arrived at voluntarily or by arbitration. Whatever the tribunal did would result in circumstances contrary to Congressional intent.

Some tribunals reasoned that, confronted with this situation, thjey should err on the side of inaction: Congress created the problem; Congress must fix it. Others, however, resolved to side with the small incumbents and impose whatever terms the incumbents liked against the competitors. How could such an action be deemed consistent with the statutory design? If the competitors didn’t like the terms, they were free to petition for arbitration. If the competitors didn’t petition for arbitration, then by implication they consented to the terms. Either way, this remedy would honor Congress's intent, if not its exact statutory scheme.

Eventually the competitors appealed the decisions of the proactive tribunals to the Federal Communications Commission. After years of delay, the FCC found that the proactive tribunals had overstepped their jurisdiction: only the FCC could grant the kind of remedy these tribunals provided. But the FCC then promptly granted the same remedies as the tribunals, retroactively.

(Query: If a party wanted to seek cert from this decision, which party could claim to have been “aggrieved” by the decision: The party that prevailed as a matter of law? Or the party that lost the point of law, but gained all the practical remedies? If a lawyer were working on contingency, to be paid only if he "won" the case, which lawyer could claim to have prevailed?)

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nobody.really
on January 16, 2015 at 10:48:48 am

Informal ( a definition)
1. without formality or ceremony; casual:
"an informal visit." 2 not according to the prescribed, official, or customary way or manner; irregular; unofficial:
"informal proceedings."

Is it correct to say that informal in this case means discretionary or optional?

"Shall", (as I was taught) is the *command imperative" - means, you damn well better do it!

How does the use of the word *informal* in this context eliminate the imperative for action from the rest of the phrase. An average reader (that being me) would interpret *informal* to mean that rather than a *court* proceeding, try a little negotiation, a little suasion (not that such suasion is all that legitimate anyway) - do something other than go to court / commence suit.

If anything it seems to be saying "You damn well better do these informal things." Not that we leave it up to you.
How have I misunderstood this, my friend?

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Image of gabe
gabe
on January 16, 2015 at 11:44:03 am

I am certain that both lawyers would make claim for payment. wouldn't you?

Seriously, though. You raise a very interesting point(s). And aslo provide an intermediate answer - let the Congress fix it as it appears that they really muddied things up.

But to my mind, the ultimate answer is to get the Congress and the Executive to refrain from interfering with the workings of the market (except in those clear cases where an imminent danger to health or safety may so warrant action).
Once we mess things up - our *fixes* seem only to compound the problem. Perhaps, we could recognize that our appointed (anointed?) experts are not quite so adept at managing what is at root a system which operates under a system of transactional resolution.

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gabe
on January 16, 2015 at 18:13:43 pm

thanks for the thoughtful, informative replies. yes, the difficulties here are genuine; and the FCC analogy is apt in the "what's a court supposed to do with this" dimension. (And the treatment in the appellate courts has been equally messy.)The risk of unduly formalizing a process Congress wanted to be informal is why the petitioners here won't get remotely what they're asking for.

There aren't any direct analogies because the statute has a funky structure: there's no corresponding duty on the part of the employer to conciliate, conference, or bargain either with the agency or the complainant. That's due to the statutory history. Initially Congress didn't want EEOC to have any coercive enforcement authority at all, so the "shall endeavor..." provision was it. In 1972 (I believe) Congress conferred enforcement authority on the EEOC--with the result that the provision became a precondition to suit. That doesn't solve the conundrum but helps to explain it.

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Mike Greve
on January 16, 2015 at 18:38:18 pm

And one can understand why a respondent would not be willing to subject one self to these *informal* adjudications as to do so subjects the respondent to the somewhat whimsical interpretation / application of due process as defined by the Administrative agency.

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Image of gabe
gabe
on March 10, 2015 at 09:19:04 am

[…] We’re the Government. Trust Us. […]

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Image of Supreme Court to Administrative State: Enough is Enough | Freedom's Floodgates
Supreme Court to Administrative State: Enough is Enough | Freedom's Floodgates

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.