Administrative Law Prof Blog

Interdisciplinary team from Cornell on "Rulemaking 2.0"

On SSRN: "Rulemaking 2.0" by Cynthia R. Farina (Cornell Law), Mary Newhart (Cornell Law), Claire Cardie (Cornell - Computing and Information Science), and Dan Cosley (Cornell - Computing and Information Science). Abstract:

In response to President Obama’s Memorandum on Transparency and Open Government, federal agencies are on the verge of a new generation in online rulemaking. However, unless we recognize the several barriers to making rulemaking a more broadly participatory process, and purposefully adapt Web 2.0 technologies and methods to lower those barriers, Rule-making 2.0 is likely to disappoint agencies and open government advocates alike.

This article describes the design, operation and initial results of Regulation Room, a pilot public rulemaking participation platform created by a cross-disciplinary group of Cornell researchers in collaboration with the Department of Transportation. (A companion article, Rulemaking in 140 Characters or Less: Social Networking and Public Participation in Rulemaking, is forthcoming in Pace Law Review.) Regulation Room uses selected live rulemakings to experiment with human and computer support for public comment. The ultimate project goal is to provide guidance on design, technological, and human intervention strategies, grounded in theory and tested in practice, for effective Rulemaking 2.0 systems. Early results give some cause for optimism about the open-government potential of Web 2.0 - supported rulemaking. But significant challenges remain. Broader, better public participation is hampered by 1) ignorance of the rulemaking process; 2) unawareness that rulemakings of interest are going on; and 3) information overload from the length and complexity of rulemaking materials. No existing, commonly used Web services or applications are good analogies for what a Rulemaking 2.0 system must do to lower these barriers. To be effective, the system must not only provide the right mix of technology, content, and human assistance to support users in the unfamiliar environment of complex government policy-making; it must also spur them to revise their expectations about how they engage information on the Web and also, perhaps, about what is required for civic participation.

EMM

Policy: What is the purpose of regulations?

From Rulemaking, the blog of the Administrative Codes and Registers Section of the National Association of Secretaries of State, "Utah Governor Charges Cabinet to Review Regulations":

On January 26, 2011, in his State of the State address, Utah Governor Gary R. Herbert said that “most important ways government can nurture a business-friendly environment” is to  “make regulation fair”.  Then, taking a measured approach, Governor Herbert  said:

    I understand that the purpose of government regulation is to maintain a level playing field. As a small business owner, I have also experienced the cost and frustration of over-reaching and irrational regulation. In order to separate regulations that serve an important purpose, from those regulations that serve no purpose at all, I have asked each member of my Cabinet to review existing business regulations and determine which could be kept, which should be modified, and which will be eliminated.

Is Governor Herbert correct as to the purpose of regulations? Often yes, when the real world cramps the invisible hand. I suggest, however, that there are other purposes. Sometimes the purpose is to protect customers, vendors, or bystanders. The legislature tells the executive to fight some evil or promote some good, the motivation for which may have nothing to do with business at all. For example, sales taxes are (mostly) intended to raise revenue for the jurisdiction. Sales tax regulations (forms, deposit requirements, deadlines, ...) are not intended to "maintain a level playing field". EMM

New administrative law articles

From the University of Washington's Current Index to Legal Periodicals:

• Brooks, Samuel G. Note. FCC v. Fox Television Stations and the role of logical error in hard look review. (FCC v. Fox Television Stations, 129 S. Ct. 1800, 2009.) 2010 BYU L. Rev. 687-717. [H]|[L]|[W]
• Gillen, Kevin. Student work. Taking out the context: a critical analysis of ... (Associated Press v. Canterbury, 688 S.E.2d 317, 2009.) 113 W. Va. L. Rev. 259-286 (2010). [H]|[L]|[W]
• Gilman, Michele E. Presidents, preemption, and the states. 26 Const. Comment. 339-384 (2010). [H]|[L]|[W]
• Spohr, David W. "What shall we do with the drunken sailor?": the intersection of the Takings Clause and the character, merit, or impropriety of regulatory action. 17 Southeastern Envtl. L.J. 1-93 (2008). [H]|[L]|[W]
• Stack, Kevin M. Obama's equivocal defense of agency independence. 26 Const. Comment. 583-601 (2010). [H]|[L]|[W]
• Strauss, Peter L. Legislation that isn't--attending to rulemaking's "democracy deficit". 98 Cal. L. Rev. 1351-1370 (2010). [H]|[L]|[W]
• Wessler, Nathan Freed. Note. "[We] can neither confirm nor deny the existence or nonexistence of records responsive to your request": reforming the Glomar response under FOIA. 85 N.Y.U. L. Rev. 1381-1415 (2010). [H]|[L]|[W]

EMM

Should judicial deference be different in state courts?

New on SSRN: "A Case for Varying Interpretive Deference at the State Level" by D. Zacary Hudson, 119 YALE L.J. 373 (2009). Abstract:

The rules governing a court’s interpretation of a statute should depend heavily on where that court is situated within the judicial institutional framework. The varying degrees of interpretive deference that should be shown to federal agencies by federal courts and state agencies by state courts is demonstrative of this proposition. In Chevron, the Supreme Court mandated that a federal agency’s interpretation of a statute be shown judicial deference when Congress had not spoken directly on the issue and the agency interpretation was based on a reasonable construction of the statute. Among the many factors the Court cited in justifying this allocation of interpretive power were the comparative political accountability of executive branch entities, the formal distinction between the role of the courts and agencies in the legislative process, and the technical expertise of agencies as compared to courts. These justifications, however, are much less convincing in defining the optimal relationship between state courts and state agencies with respect to interpretive deference. As such, while in many cases some level of deference may be appropriate, state agencies should not be shown Chevron-like deference by state courts when interpreting state statutes.

Recommended by Larry Solum on his Legal Theory Blog. EMM

Policy: Hostility to rules

From Rulemaking, the blog of the Administrative Codes and Registers Section of the National Association of Secretaries of State, "Florida Governor Suspends Rulemaking and Establishes Office of Fiscal Accountability and Regulatory Reform":

On January 4, 2011, Florida Governor Rick Scott issued Executive Order Number 11-01 “Suspending Rulemaking and Establishing the Office of Fiscal Accountability and Regulatory Reform.”  According to a posting on the Governor’s web site, this action is intended to “freeze job-killing regulations”. ...

Executive Order No. 11-01 ...

• Immediately suspends rulemaking for all agencies under the direction of the Governor.
• Establishes the Office of Fiscal Accountability and Regulatory Reform to review all rules (including those suspended by the Order) prior to promulgation and to review agency practices and contracts.
• Imposes 90-day suspension on execution of any contracts with a value in excess of $1 million, without prior approval from the Office.
• Prohibits agencies from promulgating rules unless they obtain prior approval from the Office.

A class might discuss the intended and unintended consequences of this order, as well as whether the Governor has the authority to promulgate it at all. The suspension of contract execution alone is an invitation to litigation. Not as crazy limiting as the Arizona proposal below. "Laboratories of democracy" indeed. EMM

Substantial evidence

A common standard of review for administrative decisions is the substantial evidence test - was the agency's decision supported by substantial evidence. But what is "substantial" evidence as distinguished from other kinds or quanta of evidence? A recent post on Patty Salkin's Law of the Land blog, "Federal District Court Finds Town Failed to Comply with Substantial Evidence Requirement of TCA in Denying Wireless Facility", describes a recent case where the agency (a town zoning board) did not have substantial evidence for its decision.

... The Court, upon reviewing the record as a whole, overturned the board’s decision criticizing its position that the decision was based on substantial evidence as “preposterous”.

Verizon had presented ample testimony from planning, zoning and visual impact experts and introduced several photo stimulations comparing the property before and after the facility would be built. The simulations showed that the facility would look just like a part of the roof of the existed building and the antennas would be barely discernable or entirely concealed, and outweighed unsupported speculation from opposing residents. ...

Benchslap. EMM

A "Please don't embarrass me any more" moment

From Rulemaking, the blog of the Administrative Codes and Registers Section of the National Association of Secretaries of State, "SB 1339 – relating to administrative rules":

"Any agency final rule that has an impact on the private sector in this state is repealed from and after December 31, 2012"

See bill: http://www.azleg.gov/FormatDocument.asp?inDoc=/legtext/50leg/1r/bills/sb1339p.htm

Tagged: Arizona

Why does this have to happen in my state? Haven't we humiliated ourselves enough? EMM

Policy: Regulation v. disclosure

A short post on the Pay to Play Law Blog reviews some of the advantages and disadvantages of punitive regulations versus disclosure requirements for one particular area of administration in "A Thoughtful Response to a Past Blog Exchange: Is the 'Stick' of Regulation Preferable to a Disclosure Scheme?". It has links to a more extensive discussion of the subject on some other blogs. Thanks to Lexology for the pointer. EMM

New administrative law articles

From the University of Washington's Current Index to Legal Periodicals:

• Burke, Kyle. Comment. The National Mediation Board's rule proposal for representation elections: if it ain't broke. 75 J. Air L. & Com. 669-703 (2010). [H]|[L]|[W]
• Ridgway, James D. The Veterans' Judicial Review Act twenty years later: confronting the new complexities of the veterans benefits system. 66 N.Y.U. Ann. Surv. Am. L. 251-298 (2010). [H]|[L]|[W]
• Struwe, David Robert. Casenote. Muddying the waters of the Clean Water Act: applying Chevron deference to the CWA pollutant permit regulatory scheme in ... (Coeur Alaska, Inc. v. Southeast Alaska Conservation Council, 129 S. Ct. 2458, 2009.) 29 Temp. J. Sci. Tech. & Envtl. L. 171-204 (2010). [H]|[L]|[W]

EMM

More on deference from SCOTUS

We talked recently about increasing deference to agency interpretations of statutes and regulations by the Supreme Court. Another case decided today reinforces this: Chase Bank v. McCoy (09-329), deciding a split between the First and Ninth Circuits. Justice Sotomayor wrote the opinion for a unanimous Court reversing the Ninth Circuit. I have no complaint about the result. From the end of Note 10: "... Chase's action in setting a new rate was most likely a 'specific change' that the Agreement itself contemplated, and subsequent [prior?] disclosure was not clearly required." The credit card issuer's action in bumping up the interest rate on the cardholder's default was invoking a term of the card agreement, not changing a term - which would require prior notice. However, there is more strong language about deference which I suspect reflects the current SCOTUS position.

The opinion begins with some history about Regulation Z and Truth In Lending, both before and after this cause of action arose, Slip Op. 2 - 10, followed by the Court's determination that the regulation is ambiguous, Slip Op. 10 - 15.

In short, Regulation Z is unclear with respect to the crucial interpretive question: whether the interest-rate increase at issue in this case constitutes a "change in terms" requiring notice. We need not decide which party's interpretation is more persuasive, however; both are plausible, and the text alone does not permit a more definitive reading. Accordingly, we find Regulation Z to be ambiguous as to the question presented, and must therefore look to the Board's own interpretation of the regulation for guidance in deciding this case.

Emphasis added. Slip Op. at 15.

Under Auer v. Robbins, 519 U. S. 452 (1997), we defer to an agency's interpretation of its own regulation, advanced in a legal brief, unless that interpretation is "plainly erroneous or inconsistent with the regulation." Id., at 461 (internal quotation marks omitted). Because the interpretation the Board presents in its brief is consistent with the regulatory text, we need look no further in deciding this case. ... As in Auer, there is no reason to believe that the interpretation advanced by the Board is a "post hoc rationalization" taken as a litigation position. The Board is not a party to this case. And as is evident from our discussion of Regulation Z itself, see Part II–A, supra, the Board's interpretation is neither "plainly erroneous" nor "inconsistent with" the indeterminate text of the regulation. In short, there is no reason to suspectthat the position the Board takes in its amicus brief reflects anything other than the agency's fair and considered judgment as to what the regulation required at the time this dispute arose.

Slip Op. 15 - 17. When SCOTUSblog reviews this case we should all take another look, but combined with the unanimous decision in Mayo we are looking at more and more deference to agency interpretations. EMM

Policy: Short on the last three decades of regulatory change

New on SSRN: "The paranoid style in regulatory reform" by Jodi L. Short (Georgetown). Abstract:

The U.S. administrative state has been involved in a decades-long regulatory reform project encompassing both a shift away from what have been characterized as “command-and-control” approaches to regulation and toward approaches that are more market-oriented, managerial, participatory and self-regulatory in their orientation. Through a content analysis of the nearly 1,400 law review articles that comprise the legal critique of regulation between 1980 and 2005, I show that the most salient critiques of regulation concern neither its cost nor its inefficiency, as many have assumed. Instead, they express a deep-seated anxiety about the fundamentally coercive nature of administrative government. In addition, I demonstrate that “voluntary” or “self-regulation” approaches that enlist regulated entities and citizens to perform core governmental functions like standard-setting, monitoring and enforcement emerged from the reform debate with particular prominence. Using both statistical and interpretive inference, I argue that framing regulation as a problem of coercive state power created a logic of governance uniquely suited to self-regulatory solutions that promised non-coercive ways of governing. After presenting my empirical analysis, I situate the coercive state rhetoric of late-twentieth-century regulatory reform in broader historical context, highlighting its continuities and discontinuities with the coercive state rhetoric that has infused debates about expanded federal governance throughout U.S. history: at the founding, during the New Deal, and in the postwar period. I argue that proponents of government regulation must recognize and engage this deep-seated anxiety about state coercion. Before a convincing and durable case can be made for any particular regulatory policy, a case must be made for the state.

I haven't read the paper yet, and I will try to comment more when I do, but the abstract suggests that the author (or perhaps those about whom the author is writing) may have missed two important points. First, shifting regulation from the government to private entities does not mean less coercion - it just moves the coercion from the government to others even less accountable. Second, people do not have a "deep-seated anxiety about state coercion" - they have a deep-seated anxiety about coercion. Isn't it intuitively obvious that shifting regulation from government agencies (that are ultimately - sort of - accountable to democratic processes) to private entities dominated by their own interests leads to less responsible regulation? Just sayin'. EMM

Policy: President’s Executive Order Improving Regulation and Regulatory Review

Commentary on RegBlog, "New Executive Order Promotes Public Participation". EMM

Policy: President’s Executive Order Improving Regulation and Regulatory Review

Posted today on Rulemaking, "President’s Executive Order Improving Regulation and Regulatory Review". The text is available at http://www.whitehouse.gov/the-press-office/2011/01/18/improving-regulation-and-regulatory-review-executive-order. Not yet published in the Federal Register.

If you are not already doing so, I strongly recommend monitoring Rulemaking, the blog of Administrative Codes and Registers, a section of the National Association of Secretaries of State. EMM

New administrative law articles

From the University of Washington's Current Index to Legal Periodicals:

• Cameron, Catherine J. Fixing FOIA: pushing Congress to amend FOIA section b(3) to require Congress to explicitly indicate an intent to exempt records from FOIA in new legislation. 28 Quinnipiac L. Rev. 855-884 (2010). [H]|[L]|[W]
• Gervais, Daniel. The regulation of inchoate technologies. 47 Hous. L. Rev. 665-705 (2010). [H]|[L]|[W]

EMM

An important administrative law opinion from SCOTUS

But it may not be indexed as such because it concerns employment taxes. Mayo Foundation for Medical Education and Research v. U.S., No. 09-837, argued November 8, 2010, and decided January 11, 2011. The vote was 8 to zip, Kagan not participating.

Under the Internal Revenue Code, employers and employees have to pay social security (FICA) taxes on "all remuneration for employment". 26 U.S.C. §§3101(a), 3111(a), 3121(a), and 3121(b). There is an exception for "service performed in the employ of ... a school, college, or university ... if such service is performed by a student who is enrolled and regularly attending classes at [the school]," §3121(b)(10). In 2004, the Treasury Department issued regulations providing that "[t]he services of a full-time employee" — an employee normally scheduled to work 40 hours or more per week — "are not incident to and for the purpose of pursuing a course of study." 26 CFR §31.3121(b)(10)- 2(d)(3)(iii). The Department explained that this analysis "is not affected by the fact that the services ... may have an educational, instructional, or training aspect." Id..

Mayo and the other hospitals have medical residency programs (think Grey's Anatomy). The residents spend 50 to 80 hours per week caring for patients and learning to be surgeons and other specialists. Mayo pays its residents "stipends", health insurance, malpractice insurance, and paid vacation time, and argues it should not have to pay FICA taxes on its residents because they fall under the statutory student exception. Note that the rule offers as an example a medical resident whose normal schedule requires him to perform services 40 or more hours per week, concluding that the resident is not a student. The issue is pretty clear.

Mayo argued - and the trial court agreed - that the full-time employee rule was inconsistent with the "unambiguous text" of the statutory student exception of 26 U.S.C. §3121. [Quare: How can a statute be "unambiguous" if arguably intelligent people disagree as to its meaning?] The District Court accepted Mayo's argument that "an employee is a 'student' so long as the educational aspect of his service predominates over the service aspect of the relationship with his employer." 503 F. Supp. 2d at 1175. Further, the trial court applied the factors set out in National Muffler Dealers Assn., Inc. v. U.S., 440 U.S. 472 (1979), and found it invalid under that framework for analysis as well.

The Eighth Circuit disagreed, finding the statute silent as to whether a medical resident working for the school full-time is a 'student', applying Chevron deference rather than the National Muffler standards, and concluding that the regulation was a permissible interpretation of the statute.

For this tax case, then, the Supreme Court had a statutory construction and several administrative law questions to answer, and an opportunity to make some new law.

1. Does 26 U.S.C. §3121 say who is a "student" exempt from FICA tax? Mayo argued that the dictionary definition of "student" — one "who engages in 'study' by applying the mind 'to the acquisition of learning, whether by means of books, observation, or experiment'" — plainly encompasses residents. Slip Op. at 6. But Mayo apparently admitted that this could apply to a college professor unless you answer the additional question of whether the educational aspect predominates over the service aspect of the employment. Id. So the dictionary definition alone does not disambiguate the statute. "In sum, neither the plain text of the statute nor the District Court's interpretation of the exemption speaks with the precision necessary to say definitively whether the statute]applies to medical residents." Slip Op. at 7, citing to U.S. v. Eurodif S.A., 555 U.S. ___ (No. 07–1059, Jan. 26, 2009) (other citations and quotations omitted).

2. Should National Muffler be applied to tax regulations? The Mayo Court shoots down each factor in National Muffler:

• Whether the agency interpretation is consistent over time or not. "We have repeatedly held that agency inconsistency is not a basis for declining to analyze the agency’s interpretation under the Chevron framework." Slip Op. at 9 (citations and quotations omitted).
  
  
• How long after the relevant statute was enacted the regulation promulgated. "We have instructed that neither antiquity nor contemporaneity with a statute is a condition of a regulation's validity." Slip Op. at 9 (citations and quotations omitted).
  
  
• Whether the regulation evolved in response to the results of litigation or not. "[W]e have found it immaterial to our analysis that a regulation was prompted by litigation. ... Indeed, in United Dominion Industries ... we expressly invited the Treasury Department to amend its regulations if troubled by the consequences of our resolution of the case." Slip Op. at 9 (citations and quotations omitted).

3. Does it matter if Congress's delegation of authority was general or specific? "We have held that Chevron deference is appropriate when it appears that Congress delegated authority to the agency generally to make rules carrying the force of law, and that the agency interpretation claiming deference was promulgated in the exercise of that authority. Our inquiry in that regard does not turn on whether Congress’s delegation of authority was general or specific." (Slip Op. at 11, quoting U.S. v. Mead Corp., 533 U.S. 218, 227 (2001) and implicitly overruling Rowan Cos. v. U.S., 452 U.S. 247 (1981). Other citations and quotations omitted).

4. Should Chevron deference be applied to tax regulations?

The principles underlying our decision in Chevron apply with full force in the tax context. Chevron recognized that the power of an administrative agency to administer acongressionally created program necessarily requires the formulation of policy and the making of rules to fill any gap left, implicitly or explicitly, by Congress. It acknowledged that the formulation of that policy might require more than ordinary knowledge respecting the matters subjected to agency regulations. Filling gaps in the Internal Revenue Code plainly requires the Treasury Department to make interpretive choices for statutory implementation at least as complex as the ones other agencies must make in administering their statutes. ... We see no reason why our review of tax regulations should not be guided by agency expertise pursuant to Chevron to the same extent as our review of other regulations.

Slip Op. at 10 (citations and quotations omitted).

We believe Chevron and Mead, rather than National Muffler and Rowan, provide the appropriate framework for evaluating the full-time employee rule. The Department issued the full-time employee rule pursuant to the explicit authorization to prescribe all needful rules and regulations for the enforcement of the Internal Revenue Code. We have found such express congressional authorizations to engage in the process of rulemaking to be a very good indicator of delegation meriting Chevron treatment.

Slip Op. at 11-12 (citations and quotations omitted). "The Department issued the full-time employee rule only after notice-and-comment procedures, again a consideration identified in our precedents as a significant sign that a rule merits Chevron deference." Slip Op. at 12(citations and quotations omitted).

We have explained that the ultimate question iswhether Congress would have intended, and expected,courts to treat the regulation as within, or outside, its delegation to the agency of gap-filling authority. ... [W]e found that Chevron provided the appropriate standard of review where an agency rule sets forth important individual rights and duties, where the agency focuses fully and directly upon the issue, where the agency uses full notice-and-comment procedures to promulgate a rule, and where the resulting rule falls within the statutory grant of authority. These same considerations point to the same result here. This case falls squarely within the bounds of, and is properly analyzed under, Chevron and Mead.

Slip Op. at 12 (citations and quotations omitted).

"[W]e are not inclined to carve out an approach to administrative review good for tax law only. To the contrary, we have expressly recognized the importance of maintaining a uniform approach to judicial review of administrative action." Slip Op. at 9 (citations and quotations omitted).

5. When can an agency dodge particularized determinations in individual cases? In the second step of Chevron deference - whether the regulation is a "reasonable interpretation" of the enacted statute - Mayo argued that it was unreasonable to decide if a resident was a "student" for FICA purposes without a case-by-case inquiry into what each resident did and why. I have not looked at the briefs in this case, but the lack of any authority cited in the opinion in support of this argument suggests that this was not the focus of Mayo's case. Mayo accepted that in order to qualify for the excemption the educational aspect of the employment relationship had to be predominant over the service aspect. Slip Op. at 12-13. What Mayo objected to was the conclusion as set out in the regulation that a medical resident working more than 40 hours per week could not possibly satisfy that requirement. After all, the resident's work itself was educational so more hours meant the resident was more of a student. The regulation seemed to make an arbitrary distinction between classroom and experiential instruction. Slip Op. at 13. The Court responded:

We disagree. Regulation, like legislation, often requires drawing lines. Mayo does not dispute that the Treasury Department reasonably sought a way to distinguish between workers who study and students who work. Focusing on the hours an individual works and the hours he spends in studies is a perfectly sensible way of accomplishing that goal. The Department explained that an individual's service and his course of study are separate and distinct activities in the vast majority of cases, and reasoned that employees who are working enough hours to be considered full-time employees have filled the conventional measure of available time with work, and not study.

Slip Op. at 13 (citations and quotations omitted). The logic here is weak, but I don't know who to blame. It looks like if you are getting paid for full-time experiential learning it is deemed to be "work" and not "study" for FICA purposes. The finding that "an individual's service and his course of study are separate and distinct activities in the vast majority of cases" concerns me. The statement that the regulation "did not distinguish classroom education from clinical training but rather education from service" is sophistry.

The next argument for the regulation is that it "would improve administrability, and it thereby has avoided the wasteful litigation and continuing uncertainty that would inevitably accompany any purely case-by-case approach like the one Mayo advocates." Slip Op. at 13, citing U.S. v. Correll, 389 U.S. 299 at 302 (1967). Even the Court calls this "administrative convenience". Slip Op. at 14. This is followed by some policy arguments specific to FICA and the Social Security system that are beyond the scope of this review. Id.

Chief Justice Roberts, writing for a unanimous Supreme Court, concludes with this:

We do not doubt that Mayo's residents are engaged in avaluable educational pursuit or that they are students of their craft. The question whether they are "students" for purposes of §3121, however, is a different matter. Because it is one to which Congress has not directly spoken, and because the Treasury Department's rule is a reasonable construction of what Congress has said, the judgment of the Court of Appeals must be affirmed.

Slip Op. at 15. So, from an administrative law perspective, National Muffler and Rowan are overturned; Chevron and Mead apply to judicial review of just about any regulation, especially if it was adopted by notice-and-comment procedures; and just about any excuse, including the convenience of the government, is adequate for agencies to avoid case-by-case review (unless required by statute).

For a better review of the decision, see SCOTUSblog, "Court: Medical residents not students". EMM

Policy: Two on agency capture

Rachel E. Barkow (NYU), "Insulating Agencies: Avoiding Capture Through Institutional Design". Abstract:

So-called independent agencies are created for a reason, and often that reason is a concern with agency capture. Agency designers hope that a more insulated agency will better protect the general public interest against interest group pressure. But the conventional approach to independent agencies in administrative law largely ignores why agencies are insulated. Instead, discussions about independent agencies in administrative law have focused on three features that have defined independent agencies: whether their heads are removable at will or for cause by the President, whether they must submit regulations to the President's Office of Information and Regulatory Affairs for cost-benefit analysis, and whether the agencies have a multi-member structure or a single head at the top.

But these traditional metrics for an independent agency are not the only, or necessarily even the most effective, ways in which insulation from interest groups and partisan pressure can be achieved. In fact, under modern conditions of political oversight, other design elements and mechanisms are often just as important if the goal is to create an agency that is best suited to achieve a long-term public interest mission free from capture. This is particularly true of agencies tasked with protecting the general public in the face of one-sided and intense political pressure. This kind of lopsided pressure can be seen in a range of areas, including banking, criminal justice, and consumer protection.

The goal of this Article is to move the conversation about insulation beyond the traditional hallmarks of independence and identify overlooked elements of agency design, deemed “equalizing factors,” that are particularly well-suited to addressing the problem of capture. The Article identifies five such equalizing factors that have received little or no attention in the legal literature on independent agencies, but that are critically important to insulation against one-sided interest group dominance. The Article then compares the importance of traditional and equalizing factors in the context of consumer protection, an area with the kind of one-sided interest group pressure that is a breeding ground for capture. The creation this year of the Bureau of Consumer Financial Protection, the most significant new federal agency created in decades, showcases both the continuing danger of capture and the critical importance of institutional design in policing it.

Nicholas Bagley (Michigan), "Agency Hygiene" . 8 Texas Law Review See Also 1 (2010). Abstract:

Rachel Barkow's important article on structuring agencies to insulate them from interest-group capture leaves largely unanswered the problem of what to do with an agency that has already been captured. Although nothing in principle prevents Congress from reshaping existing agencies along the lines she suggests, experience suggests that we might wait a very long time for Congress to enact structural reforms.

To eliminate capture that has already taken hold, the political branches need two things: good information and political will. They need information in order to identify capture where it occurs, to understand the contours of the relevant capture dynamic, and to suggest agency-specific strategies for ameliorating capture. More significantly, the political branches also need the will to implement those strategies even in the face of stiff resistance from well-funded groups with a potent interest in perpetuating the status quo. Although information and political will are in short supply, they need not be. Congress can and should establish a body housed within the Executive Branch and vested with the authority to investigate allegations of capture and document the existence of capture dynamics where they arise. Adequately funded and appropriately staffed, this body would coordinate with offices of inspectors general across the federal bureaucracy to identify capture where it occurs. At the same time, Congress should create legislative mechanisms to spur action on the recommendations of this newly instituted body.

Thanks to Lawrence B. Solum's Legal Theory Blog. EMM

Theory: Solum defines "public" and "private" goods

Lawrence B. Solum (Illinois) has a thorough and useful discussion of public and private goods on his Legal Theory Blog, "Legal Theory Lexicon: Public and Private Goods". Introduction:

One of the most powerful ideas that legal theory borrows from economics is the idea of a "public good." Sooner or later law students learn that within the framework of contemporary neoclassical economics, the standard line is that public goods (e.g. national security) should be provided by government whereas private goods (e.g., automobiles) ought to be provided by markets. For legal theorists, the line between public and private goods tracks one of the important fault lines in the law--between the private law fields of property, contract, tort, and so forth and public law fields such as environmental law, administrative law, and constitutional law. This post provides a basic introduction to the economic distinction between public and private goods ...

EMM

New administrative law articles

From the University of Washington's Current Index to Legal Periodicals:

• Allen, Edward. Justice delayed: tenants' quest for administrative redress in the District of Columbia. 13 U.D.C. L. Rev. 179-217 (2010). [H]|[L]|[W]
• Farley, Jessica L. Comment. Wisconsin open records law after WIREdata: still viable to protect public access to information? (WIREdata, Inc. v. Vill. of Sussex, 751 N.W.2d 736, 2008; Assessment Technologies of WI, LLC v. WIREdata, Inc., 350 F.3d 640, 2003. ) 93 Marq. L. Rev. 1189-1215 (2010). [H]|[L]|[W]
• Picard, Nicole. Comment. A treasured institution, a troubled identity, and the threat of detonation: whether the Smithsonian Institution is an executive agency under Section 5 U.S.C. 105 and why it matters. 59 Cath. U. L. Rev. 1139-1169 (2010). [H]|[L]|[W]

EMM

Where to sue - federal or state court?

When challenging a state or local administrative decision, it is tempting to leap into federal court and raise your federal constitutional claims. However, there are a number of doctrines that say that federal court is the wrong place to start, e.g. exhaustion of administrative remedies. Another is the Pullman abstention doctrine (from Railroad Commission v. Pullman Co., 312 U.S. 496 (1941)), identified in "Federal District Court finds Challenge Ordinance Regulating Sale of Alcohol Should be Brought in State Court" by Patty Salkin (Albany) on her Law of the Land blog.

... Plaintiff was granted a special exception to become a “Supper Club” and was allowed to serve alcohol between the hours of 7:00 pm and 5:00 am.  But the City later enacted an ordinance which required alcohol sales to end at 3:00 am.  ...

The court remanded the case, however, based on the Pullman abstention doctrine because this case was not appropriate in federal court.  The question in the case concerned what effect the City ordinance had on Plaintiff’s business and as such, this would be more appropriate to be heard in state court. ...

Straightforward application of the doctrine to an administrative law claim. EMM

Superheroes and flying - regulatory issues

Administrative law fun from Law and the Multiverse: "Superheroes and Flying II: Flight Plans and Air Traffic Control".

This week, we’re looking at some of the legal mechanics involved in actually flying. Specifically, the issues of flight planning and dealing with air traffic control. ...

There are a veritable host of regulations that apply to actually flying an aircraft, but the most important ones are perhaps the most intuitive. In essence, flying anywhere but where you have told air traffic control (ATC) that you’re going is illegal. ...

Read the comments as well. EMM