The 'Misguided' War Against the Administrative State

      Federalist Society members were in high spirits at their annual convention in Washington this month, genuinely giddy after a keynote speech by the self-identified "committed originalist and textualist" justice Neil Gorscuh they helped install on the Supreme Court. Thirty-five years after its founding, the conservative-libertarian assemblage of law students, lawyers, and judges was also celebrating its quasi-official role in vetting nominees for President Trump for federal judgeships and its increased influence among Republican lawmakers on Capitol Hill.
      Thus energized, the society decided to use three days of programs to renew and reinvigorate the war that the group's political and intellectual forbears fought and lost to the New Deal 80 years ago. Speaker after speaker echoed the theme that the federal appeals court judge Edith Jones struck in introducing the opening panel [Nov. 16] by attacking the so-called administrative state as a "nonelected, nonaccountable branch of government."
      To its credit, the Federalist Society typically includes one liberal to speak for the opposing side in its four-person panels. That role fell in the opening panel to Gilliam Metzger, a professor at Columbia Law School, who had just published a widely noted article in the Harvard Law Review warning that the administrative state was "under siege." The attacks, she told the audience, are "misguided."
      The judicial underpinnings of federal regulatory agencies are well established, but completely illegitimate, to hear Federalist Society members tell it. Independent agencies such as the Federal Trade Commission (FTC), founded in 1914, can be created by Congress to combine three kinds of power: rulemaking, enforcement, and adjudication. And the members of those multimember commissions can be given fixed terms, subject to removal by the president only for cause.
      In a paradoxical footnote, that principle comes from the Supreme Court's decision in a case called Humphrey's Executor that rebuffed President Franklin D. Roosevelt's decision to fire FTC commissioner William Humphrey for not supporting FDR's policies. The 1936 ruling was unanimous, but former federal appeals court judge Michael McConnell was warmly received when he called for overruling it.
      Under a more recent pair of cases, all federal agencies, including those in the executive branch such as the Environmental Protection Agency (EPA), get the benefit of a generous amount of judicial deference for their rulemaking powers. The Supreme Court's unanimous decision in Chevron U.S.A. v. Natural Resources Defense Council (1984) held —  in upholding a deregulatory move by the EPA —   that agencies are entitled to deference if they adopt "a permissible construction" of a statute that vests discretion in the agency.
      A decade later, the Court held —  in another unanimous opinion, this one written by Justice Antonin Scalia —  that federal agencies are also entitled to deference when they interpret their own regulations. Before his death, Scalia publicly voiced doubts about his opinion in Auer v. Robbins (1997). Those doubts have been picked up by, among others, Scalia's colleague, Clarence Thomas, and his successor, Gorsuch.
      The legal doctrines are far removed from the real political issue: efforts by business interests and committed small-government conservatives to undo regulations designed to protect, among other things, the environment, public health, consumers, workers, and investors. Gorsuch mocked Metzger's article in his black-tie dinner speech and warned against what he saw as the risk under the administrative state of "moving from liberty to tyranny."
      Metzger labored, to no apparent effect, to rebut the depiction of federal bureaucracies as either undemocratic or tyrannical. The administrative state "performs some very important constitutional functions," she explained. In her article — the Foreword for the  Harvard Law Review's annual Supreme Court edition — she wrote more forcefully of what she called "the administrative state's essential place in our constitutional order."
      Administrative agencies are far from unaccountable, Metzger argued in her article." Anti-administrativists fail to recognize that the key administrative state features that they condemn, such as bureaucracy with its internal oversight mechanisms and expert civil service, are essential for the accountable, constrained, and effective exercise of executive power," she wrote.
      In place of the accountability built into bureaucratic structures, the Federalists want to strengthen the power of the president and/or Congress to override regulatory decisions. President Trump's chief spear carrier in the so-called deconstruction of the administrative state drew raucous cheers when she described the administration's policies. Neomi Rao, administrator of the White House's Office of Regulatory and Information Affaires (ORIA), promised that the administration will do better than Trump's executive order to eliminate two regulations for every new regulation put in place.
      Sen. Tom Cotton, an Arkansas Republican, was similarly well received when he noted that Congress has used the previously obscure Congressional Review Act to repeal more than a dozen so-called "midnight regulations" that the Obama administration adopted in its final months. The law had been invoked only once before.
      Presidential or congressional overrides are poor substitutes for administrative accountability, however, according to dissenting speakers. Lisa Heinzerling, an environmental law expert at Georgetown Law School, cited President Obama's decision to overturn an EPA decision on ozone as an example. Obama provided little by way of justification for his action, she said. In like vein, Peter Strauss, a professor at Ohio State's Columbus School of Law, said that Congress had failed to justify its recent action to override a regulation issued by the Consumer Financial Protection Bureau (CFPB) to prevent banks and other financial institutions from using mandatory arbitration clauses to block lawsuits by disgruntled customers.
      Metzger concedes that the anti-administarativists are gaining traction with their arguments — not just in the Trump administration and in Congress but also at the Supreme Court. She counts Chief Justice John G. Roberts Jr. and Justice Samuel A. Alito Jr. as sympathetic to the critique, along with the committed critics Thomas and Gorsuch. Are we one justice away from a fundamental transformation of administrative law? Metzger thinks not, but Federalist Society members seem to think their goals within reach.