develop- ment and scope of federal administrative law:
Delegations of legislative authority call on administrators to use discretion in formulating standards and policies. The weaker the intelligible principle in the statutory delegation, the greater the potential range of administra- tive discretion. However, administrative discretion also goes well beyond the rulemaking function. Agencies may exercise a great deal of it in imple- menting or enforcing laws, rules, other regulations, and policies. They of- ten lack the resources to do everything legally required of them. Universal enforcement may be impossible or impracticable. It is an uncomfortable fact that selective application of the law is often inevitable. Equally import- ant, the legal acceptability of many matters is determined by the discretion of “street-level” administrators, such as safety and health inspectors, or
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8 1. What Is Administrative Law?
weighed on a case-by-case basis through adjudication within administra- tive agencies.
The use of discretion by thoroughly trained, professional, expert ad- ministrators can be highly beneficial—society has come to depend on it. We have master’s programs in public administration or policy to provide public managers and policy analysts with the tools and ethical and legal grounding to exercise discretion soundly. We rely on merit systems and career civil services to reduce the likelihood that discretion will be abused for political gain. From a public administrative perspective, discretion is essential to the implementation of laws and the successful achievement of a government’s policy objectives.
There is also another view. The motto “Where law ends tyranny begins” is prominently engraved on the US Department of Justice’s headquarters building in Washington, DC. From the vantage of US democratic constitu- tionalism, then, discretion is often at war with the bedrock principle of the rule of law (Warren 1996, 365). The Supreme Court has even called uncon- strained discretion in law enforcement an “evil” (Delaware v. Prouse 1979).
Administrative law is a major means of checking the exercise of admin- istrative discretion to ensure that its use is rational and fair. It does this primarily in two ways: by structuring administrative decisionmaking pro- cesses and by providing for procedural and substantive review of admin- istrators’ decisions.
The federal Administrative Procedure Act (APA) of 1946 is representative of US administrative law statutes in trying to promote rationality and law- fulness in agency decisionmaking without imposing overly encumbering procedural requirements. It specifically seeks to prevent decisions that are
(A) arbitrary, capricious, an abuse of discretion, or otherwise not in accor- dance with law; (B) contrary to constitutional right, power, privilege, or immunity; (C) in excess of statutory jurisdiction, authority, or limitations, or short of statutory right; (D) without observance of procedure required by law; (E) unsupported by substantial evidence . . . ; (F) unwarranted by the facts. (sec. 706)2
Citations to codified statutes in the text are to their section number in the United States Code (U.S.C.). Rather than repeat the title number of the Code in which the statute is found in each citation, this information is provided in the References section at the end of the book. The full citation to this section of the APA is 5 U.S.C. 706.
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These objectives are often augmented by other statutes and executive orders that require agencies to use the best science available, engage in cost-benefit analysis, prepare environmental and other impact statements, or promote substantive values such as vibrant federalism and environmen- tal justice. (These matters are addressed in Chapter 3 on rulemaking.)
In administrative law, agency decisions may be either “formal” or “in- formal.” Although the distinction is imperfect, decisions resulting from activities whose procedures are substantially regulated by administrative law, such as rulemaking and adjudication, are considered formal. Informal decisions are more likely to involve questions such as which firm to inves- tigate or inspect, how carefully, when, and what enforcement actions, if any, to take. Except where constitutional law is involved (e.g., the Fourth Amendment’s protection against unreasonable searches and seizures), in- formal decisions are overwhelmingly regulated by individual agency pro- tocol rather than administrative law.
Administrative decisions can also be categorized as retrospective, pro- spective, or present tense. Administrative law uses a variety of processes to structure formal decisions of each type and to constrain the administra- tors making them. Retrospective decisions require assessing the past behav- ior of an individual, firm, group, governmental unit, or other entity. They involve questions such as whether a corporation has engaged in illegal false advertising or an unfair labor practice. Retrospective decisions are often made in an adjudicatory framework. The agency and the regulated party make their cases before a hearing examiner, an administrative law judge, or a commission or board of some kind. The process can take place in writing or involve the presentation of oral statements. It can range from an almost cursory review of the facts and issues by the decisionmaker to a full-fledged hearing that resembles courtroom procedure. It may also in- clude a right to appeal adverse decisions to a higher unit within the agency. In all cases, however, the objective is to establish the facts, including mo- tives where relevant, and to apply the law to them in an unbiased fashion. Consequently, administrative law may specify a great deal about the pro- cedures required, the kind of information that can be considered, and the credentials and neutrality of the decisionmaker. (Adjudication is discussed in Chapter 4.)
Prospective decisions apply to events in the future. Rulemaking is the clear- est example. Administrative law requirements are generally based on the assumption that prospective decisionmaking on complex matters will be more rational when it is open to public scrutiny and participation. Ideally, open rulemaking and related decisionmaking will bring a greater range of
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10 1. What Is Administrative Law?
perspectives and information to the administrators’ attention. Administra- tive law can require that the decisionmakers respond to public input, which often comes from stakeholders, and explain their evaluation of it. Upon ju- dicial review, rules may also be subjected to a rationality standard, such as whether they are supported by substantial evidence (reasonableness).
Present tense decisions often involve questions of eligibility or immediate compliance with a regulatory requirement. Many licensing decisions are present tense and strongly regulated by administrative law statutes. How- ever, much present tense decisionmaking is informal, and some is largely regulated by constitutional law decisions as opposed to administrative procedure acts. For example, the denial or termination of a welfare or other benefit may raise equal protection, due process, or other constitutional con- cerns. Many law enforcement decisions by police and health, safety, and housing inspectors are also present tense. Their discretion as to whether to issue citations is generally not regulated by administrative law and is constrained by constitutional law only within broad parameters (Lipsky 1980; Bardach and Kagan 1982).
It is often difficult to establish or maintain the balance that adminis- trative law seeks to secure between constraining discretion and allowing administrators enough flexibility to carry out their legislative mandates cost-effectively. Administrators may complain that the procedural require- ments for rulemaking and adjudication are counterproductive and too complex, whereas regulated entities may want even more elaborate pro- cedures to protect their interests. The compromises reached in administra- tive law statutes upon their enactment can also become outdated or upset by future legislation. Finding and keeping a satisfactory balance between under- and overregulation of administrative decisionmaking is part of the challenge and vibrancy of administrative law.
Procedural and Substantive Review of Administrative Decisions
Administrative law provisions regarding the procedural and substantive review of agency decisions also seek a balance of competing concerns. On the one hand, the political system relies on administrators to bring a high level of specialized expertise to the formulation and implementation of public policies. Subjecting their decisions to review by generalists who know less about the specifics of these policy areas and enforcement can result in delay, expense, and poor decisions. On the other hand, admin- istrators’ judgments can be distorted by self-interest, untoward internal
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11Procedural and Substantive Review of Administrative Decisions
or external influences, a failure to recognize competing priorities, over- or underconfidence, and many other factors that negatively affect individual and group decisionmaking. It is easy to find excellent as well as shockingly bad examples of administrative decisionmaking. Administrators have sent astronauts to the moon and back; they have also allowed American chil- dren to play in highly toxic radioactive fallout (H. Ball 1986). The trick is to protect against the bad decisions while not upsetting the good ones or wasting time, effort, and money reviewing them.
Administrative law focuses on four venues for review of agency deci- sions. First, review may be available within the agency itself. For instance, decisions by administrative law judges (ALJs) in the federal government can be overturned by agency heads, boards, or commissions on procedural and substantive grounds. This allows political appointees, who are often generalists, to substitute their judgment for that of more specialized ALJs in the career civil service. They can correct decisions for failure to see pub- lic policies from a big picture perspective, as well as for simple errors of judgment. Of course, political appointees’ decisions themselves may be subject to review by the courts, and so, before making them, appointees normally consult with agency attorneys and experts.
Second, administrative law may provide for review by specific units within the executive branch. Currently, the OMB plays this role with re- gard to aspects of rulemaking and information gathering by many federal agencies. Its Office of Information and Regulatory Affairs (OIRA) reviews agency proposals to engage in major rulemaking—that is, the creation of rules that will have an annual economic impact of $100 million or more. Agencies are also required to obtain OIRA’s clearance to use forms and other instruments for collecting information from individuals and organi- zations outside the federal government (see Chapter 3). The primary pur- poses of executive review of this kind are to coordinate agency activity and to ensure that it is in keeping with the goals of a president, governor, or other elected executive.
Third, administrative law statutes can establish the scope of judicial re- view of agency decisions, though the courts retain independent authority under the federal and state constitutions to hear cases alleging violations of constitutional rights and powers. Judicial review has become so common at the federal level that for some agencies (e.g., the EPA), it can be con- sidered part of the administrative process (Coglianese 1997, 1296–1309). (Judicial review is discussed in Chapter 6.)
Finally, there are procedures in Congress and some state legislatures for reviewing agency rulemaking decisions. Their logic is clear enough. The
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12 1. What Is Administrative Law?
agencies’ use of delegated legislative power ought to be reviewed by the legislature, which empowered them, in order to ensure conformance with legislative intent. (Legislative review is further discussed in Chapter 6.)
The Development of US Administrative Law
The United States began to develop a substantial administrative compo- nent in the 1870s and 1880s. In time, administrative agencies engaged in so much policy formulation and implementation that the term “administra- tive state” was adopted to convey their centrality to modern government. Against the background of industrialization, urbanization, and population growth, governments became increasingly involved in the economy and society and came to rely more heavily on administrative agencies to do much of their work. As noted earlier, the Congress and state legislatures were unable to keep up with the continual need for new legislation, often involving complex health, scientific, or technological issues. The courts, which once engaged in a good deal of regulation of economic practices un- der common law doctrines, were overwhelmed by the changes industrial- ization caused in production, employment, transportation, and marketing. Vesting rulemaking and adjudicatory functions in administrative agencies was the nation’s response to the ever-expanding scope and complexity of governing. More government activity also meant more enforcement by the executive branch.
A key feature of the administrative state is that agencies perform legis- lative, judicial, and executive functions. In other words, the constitutional separation of powers, which largely places these functions in different branches, collapses in administrative agencies. Administrators make rules, adjudicate alleged violations of laws and rules, and execute and implement public policy. After the massive federal administrative growth during the New Deal (1933–1938) and US involvement in World War II (1941–1945), it was fair to say, along with Supreme Court Justice Robert Jackson, that the agencies “have become a veritable fourth branch of the Government, which has deranged our three-branch legal theories as much as the concept of a fourth dimension unsettles our three-dimensional thinking” (Federal Trade Commission v. Ruberoid 1952, 487). By 1946, Congress viewed the power and independence of administrative agencies as a threat to its own role in gov- ernment and to the overall constitutional scheme (Rosenbloom 2000). In response, it enacted the APA, which still frames federal administrative law.
Several basic premises underlie the APA and state administrative law. One is that when agencies engage in legislative functions, they should be
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13The Development of US Administrative Law
informed by legislative values; when they adjudicate, they should follow judicial procedure; and enforcement should be fair, relatively nonintrusive, and subject to review. Importantly, Congress was willing to sacrifice some administrative cost-effectiveness to promote these values. As the APA’s chief sponsor in the Senate approvingly noted, the Senate Judiciary Com- mittee had “taken the position that the bill must reasonably protect private parties even at the risk of some incidental or possible inconvenience to, or change in, present administrative operations” (US Congress 1946, 2150).
In terms of rulemaking, as another APA supporter explained, “day by day Congress takes account of the interests and desires of the people in framing legislation; and there is no reason why administrative agencies should not do so when they exercise legislative functions which the Congress has del- egated to them” (US Congress 1946, 5756). Prior to the APA, administrative rulings might be made “in the form of letters, and nothing in the way of even an informal hearing [was] required. If the citizen [had] a hearing it [was] at the grace of the administrator or bureau chief” (US Congress 1940, 13668). From this perspective, the act could be seen as “a bill of rights for the hun- dreds of thousands of Americans whose affairs are controlled or regulated in one way or another by agencies of the Federal Government” (US Congress 1946, 2190). Its provisions for administrative adjudication model judicial procedure and constitutional procedural due process.
The APA did not provide for legislative or executive review, but it ad- opted a strong presumption of judicial review of enforcement and other actions: “Any person suffering legal wrong because of agency action, or adversely affected or aggrieved by agency action within the meaning of a relevant statute, is entitled to judicial review thereof” (sec. 702). The act also contained a number of transparency provisions, including the general expectation that agencies would publish information about their organi- zation, rules, adjudicatory decisions, and methods of operation, as well as make their public records available to “persons properly and directly con- cerned” (sec. 3). (Transparency is the subject of Chapter 5.)
The APA continues to serve as a platform for requiring federal admin- istrative processes to embrace the basic democratic-constitutional values of openness for accountability, representativeness and public participation in policy formulation, reviewability for adherence to the rule of law, pro- cedural due process for the fair treatment of individuals, and rationality and limited intrusiveness when regulating private parties and other enti- ties. Over the years the APA has been amended and augmented by several additional statutes. The following list provides a snapshot of the develop- ment and scope of federal administrative law:
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14 1. What Is Administrative Law?
The Freedom of Information Act (1966; significantly amended in 1974, 1986, 1996, and 2007) vastly expanded the provisions for trans- parency contained in the APA.The Federal Advisory Committee Act (FACA; 1972) promotes repre- sentativeness and transparency in the agencies’ use of advisory com- mittees in policymaking.The Privacy Act (1974) protects against unwarranted administrative invasions of personal privacy and the release of information on pri- vate individuals without their consent.The Government in the Sunshine Act (1976) requires multiheaded federal boards and commissions to hold open meetings.
develop- ment and scope of federal administrative law: