When Law Is a Second-Hand Emotion

As we noodle over administrative law’s foundations, we should also think carefully about its mechanics, and how these could better shape its compliance with the rule of law. Herewith an example: preliminary relief. (I’ll run together a bunch of doctrines that are technically different. But they all go to the timing of effective judicial relief.)

In an exceptionally well-written and economically literate op-ed, Mrs. Rhea Lana Riner describes her unpleasant interactions with the U.S. Department of Labor. She operates clothing consignment shops. Her business model, which she has franchised with great success, allows consignors to volunteer at sales events. The Labor Department says the volunteers are actually employees and must be paid minimum wage, plus overtime. So the Department went to town on Rhea Lana’s: it urged the volunteers to sue for back pay (none did) and then sent a demand letter: pay them or else. Mrs. Riner explains that

[t]he Labor Department’s years long and still-unofficial crusade has placed Rhea Lana’s into regulatory purgatory. The department is ordering me to conduct business to my detriment, and threatening hundreds of thousands of dollars in civil penalties if I fail to comply. Yet a federal court has ruled that I lack any meaningful recourse until the agency files an official complaint, which it has not done.

And may never do, Mrs. Riner. Because then, they’d have to defend their position in court. Nor would I put too much hope in the pending appeal. In a notorious case the EPA told the Sackett family that their property—dry, and situated quite a ways from water—might be a wetland. EPA threatened millions of dollars in fines, should they fail to “restore” the property (they had moved some dirt and gravel). And it said that the Sacketts had no business seeking judicial relief: no final agency action. The U.S. Supreme Court told the agency to cut it out. That was in 2012. Over three years later, the Sacketts still aren’t building; they’re litigating. And the Supreme Court’s unanimous decision in Sackett v. EPA racks up eleven “negative treatment” cites on Westlaw. Among those cites is (drumroll) Rhea Lana’s v. Department of Labor.

The timing of judicial relief matters not only in enforcement proceedings but also in rulemaking challenges. In the litigation over the feds’ “deferred action” for some millions of undocumented citizens, for example, the district court’s preliminary injunction against the feds—pending a decision on the merits—was the only meaningful form of relief: without it, the feds would have created an expansive benefit program that would no longer be reversible by any court or future administration. The same is true of a pending demand for a stay of the administration’s “clean power plan”: deny that relief, and the clean power ship will have sailed. EPA doesn’t seriously believe it has a legal basis for that plan. What it does believe in is its ability to induce anticipatory compliance by regulated, risk-averse firms and states who must apprehend that something like the government’s plan might some day go into effect. What’s law got to do with it? It’s a second-hand emotion.

Preliminary relief is very hard to get. There are good reasons for that arrangement: judicial economy, and a fear of inviting frivolous and opportunistic claims. Plus, a presumption of regularity attaches to government action.

The time has come to abandon that presumption and to think about government incentives instead. Government’s incentive is to get its way with minimal friction. The way to do that is not to drop the hammer on private parties; it’s to put their conduct under a dark cloud and play a game of attrition. EPA and DoL will be around forever, in business 24/7. You won’t be.

There are two ways of curbing such conduct. At the back end you could hold the officers personally liable for unlawful conduct (and believe it or not, that used to be our system). At the front end, you could extend a presumption of regularity to private conduct and private property: it’s yours unless and until the government shows a good reason to reverse the presumption. That might mean a requirement of judicial pre-approval for administrative demand letters and compliance orders, as for search warrants. It might mean interlocutory appeals of proposed (as distinct from final) agency rules. It might mean negative deference for certain kinds of agency action: if a guidance document looks like an evasion of more formal legal requirements, we the courts will treat it as presumptively unlawful. (Sounds crazy but it’s actually the law in areas such as equal protection, where it’s called “strict scrutiny.”)

To the AdLaw profession, ideas of this sort sound radical. To normal people, they sound esoteric—until you come face-to-face with the administrative state. Go ask Mrs. Riner.