Magazine May 18, 2020, Issue

Is Administrative Law Immoral?

From the cover of The Dubious Morality of Modern Administrative Law (Rowman & Littlefield/Manhattan Institute)
The Dubious Morality of Modern Administrative Law, by Richard A. Epstein (Rowman & Littlefield / Manhattan Institute, 240 pp., $35)

In 2014, Columbia Law School professor Philip Hamburger posed the question “Is administrative law unlawful?” in a book of that title. Now Hamburger’s New York neighbor Professor Richard Epstein, of New York University Law School, asks whether modern administrative law is immoral. Both answer in the affirmative.

Although framing their inquiries in different ways, both Hamburger and Epstein question whether contemporary administrative law is consistent with the rule of law. This is not an idle question. The laws that govern many individuals’ lives and livelihoods are the product not of the legislature but of administrative agencies exercising delegated power with inconsistent legal or political accountability. Early in The Dubious Morality of Modern Administrative Law, Epstein offers a bill of particulars:

Often, administrative agencies engage in ad hoc decision making; fail to give adequate notice of the applicable law; burden private parties with inordinate demands for information of, at best, tangential relevance to the agency’s statutory mission; and impose rules or commands that are often unclear, erratic, contradictory, or unduly burdensome.

Though ostensibly bound by constitutional and statutory constraints, agencies are often free to both write and enforce their own rules with inadequate judicial oversight.

The problem, Epstein explains, is not that we have an administrative state but that the administrative state we have is not adequately constrained by the proper legal rules. Those expecting a brief for “the wholesale abolition of the administrative state” will be disappointed, for that is not Epstein’s position. To the contrary, he accepts that “some degree of an administrative state” is “an indispensable part of any mature system of law.” The inclusion of “modern” in the title is no accident. Epstein’s complaints primarily center on the administrative state as it has evolved over the past 90 years — since the dawn of the New Deal — not the existence of administration. His claim is that many “practices deployed in the modern administrative state” are problematic and “should be sharply curtailed.” Put another way, the question Epstein seeks to answer is not whether administrative agencies pursue sound policies, or even whether reliance upon administrative agencies makes sound policy sense, but whether the legal rules governing agency behavior can satisfy the basic conditions for a sound legal system.

Drawing upon Lon Fuller’s classic treatise The Morality of Law, Epstein considers whether modern administrative law satisfies Fuller’s prescriptions for a moral legal order. And as Epstein’s title suggests, this is a dubious proposition: “Fuller’s steely insistence on legal coherence, clarity, and consistency, coupled with his strong condemnation of retroactive laws, does not mesh with modern administrative law.” This is quite a problem, for the features Fuller identified were not merely advisory, but “the minimum requisites for the rule of law.” Insofar as modern administrative law violates these principles, it is, in one sense, immoral and needs to be reformed.

As one would expect, Epstein would prefer a restoration of a more classical-liberal constitutional order in which the powers of the federal government were confined to the enumeration of Article I, section 8, and governments at all levels sought to reify and protect common-law principles. He is likely correct that a more constrained government would be more likely to comply with Fuller’s commandments. Indeed, Epstein suggests that, in this respect, pre–New Deal administrative law had much to recommend it.

Many of the problems Epstein identifies would be alleviated, if not eliminated, were agencies confined to administering the relatively small set of policy matters with which Epstein believes government should be concerned, such as those that can be defended as maximizing welfare by preserving property and voluntary exchange while overcoming coordination and collective-action problems. In effect, if administrative agencies were confined to identifying and implementing second-best alternatives to private ordering, there would not be much of a problem. Alas, that is not the administrative state we have, for it is not the administrative state Congress authorized, a point Epstein readily admits.

Unlike many of the administrative state’s contemporary critics, Epstein does not dwell on Congress’s habit of delegating broad swaths of authority to administrative agencies. Delegation of substantial responsibilities is not the problem, as Epstein sees it, nor is the existence of administrative agencies. Rather, the problem is that agencies are allowed — and in some cases required — to act in ways that undermine rule-of-law values, and that current doctrines of judicial review allow them to get away with it.

While Epstein trains most of his focus on the legal doctrines that have allowed for this state of affairs, it nonetheless seems much of his complaint is with the legislature that granted agencies this power and did little to constrain it. Some amount of delegation may be a practical necessity, but there is no question that many of the problems Epstein sees would be less severe if Congress legislated more and delegated less in the first place.

Epstein thinks it is a mistake to evaluate administrative law apart from the substance of particular policy questions, and he has strong policy views about the desirability of much government regulation. “It is always necessary to make a systematic effort to understand regulatory challenges, the appropriate statutory responses, and the applicable administrative implications,” he counsels. Perhaps, but the entire point of administrative-law doctrine, and of the Administrative Procedure Act (APA), was to establish a set of governing rules and procedures for all administrative actions, irrespective of the field. Congress remains free to depart from these default rules, and it often does (whether or not with good reason), but the idea of a common set of default rules is part of the point.

Like many contemporary critics of the administrative state, Epstein would like the Supreme Court to do away with Chevron deference. This doctrine, named for the Supreme Court’s 1984 Chevron v. Natural Resources Defense Council decision, provides that when a statute is ambiguous, federal courts are to defer to the interpretation of the federal agency charged with implementing it, provided the interpretation is “reasonable.”

To Epstein, this doctrine amounts to judicial abdication, because it allows agencies rather than courts to determine statutory meaning. Worse, as Chevron is applied and understood today, agencies are allowed to change their minds, altering their interpretations as circumstances, priorities, or political administrations change. This, in effect, allows for administrative agencies to change the legal requirements faced by regulated firms without legislative approval, and it imposes “heavy costs of uncertainty on private parties who are trying to organize their long-term investments and business strategies.”

Epstein is no doubt correct that Chevron gives judges too easy an excuse to green-light administrative excess. All too often, a “crude form of linguistic skepticism” renders all but the most crystalline text sufficiently ambiguous for an agency to exploit. But this is more a problem of Chevron’s implementation than its existence. As the late Justice Antonin Scalia’s jurisprudence showed, believing that agencies are entitled to resolve genuine statutory ambiguities does not have to mean deferring to agency interpretations all that often. Not every complex or difficult-to-parse statutory provision is actually ambiguous. Judges just need to do the interpretive work.

Epstein calls for federal courts to interpret statutory language de novo, without regard for what any federal agency thinks. This is well and good when the meaning of statutory text is readily discerned. As the Chevron doctrine itself commands, courts and agencies alike must follow the unambiguous meaning of the text. The problem is that not all statutes are clear. Some will contain gaps and ambiguities that are not readily resolvable by resort to interpretive methodology. Epstein’s solution to this is to have courts resolve the cases the way that he would, with an eye toward which interpretation is more likely to produce a rational or welfare-enhancing result. Were the federal courts filled with Epstein’s clones, this might well be an appealing option, but they’re not.

If one accepts that Congress may delegate discretionary policymaking authority to federal agencies, then one must also accept some degree of judicial deference to agency decisions. Legislative drafting is an imperfect science. Even the most carefully written and constructed federal regulatory statutes will contain ambiguities and omissions for the implementing agency to resolve. Agencies will resolve these issues in light of their policy preferences and this is often what Congress intends.

Take the facts of Chevron itself. The reason the EPA adopted a more flexible interpretation of the phrase “stationary source” in a Clean Air Act provision regulating pollution was not that some administration attorney had a new insight into the best semantic understanding of the phrase. Rather, the Reagan administration preferred an interpretation that would reduce the economic burdens of compliance on regulated firms while encouraging technological innovation. The new interpretation was driven by policy, not text, and that was part of the point. Courts do not defer to agencies because the latter are expected invariably to “act in the public interest and resist pleas for partisan outcomes,” as Epstein would have it. Rather, as Chevron itself made clear, certain questions cannot be resolved without resort to policy preferences, and it is better to leave such judgments to individuals within the elected branches of government than to life-tenured federal judges.

In calling for courts to abandon Chevron, Epstein seems to forget that administrative-law doctrines should be developed for the judiciary we have, not the best one we could imagine. One reason the Supreme Court developed the Chevron doctrine was to free up administrative agencies from excessive judicial oversight — oversight that inevitably led to federal courts embracing broad, purposive interpretations of federal statutes that effectively forced agencies to adopt more-stringent regulatory requirements. Chevron was one of a suite of cases in which the Supreme Court told lower courts to cut it out. Agency about-faces may be a concern, but this is less often the case in the regulatory arena than Epstein imagines, for the APA requires a lengthy rulemaking process, and current doctrine generally disallows the retroactive application of newly promulgated rules.

At the broadest level, much of Epstein’s argument is appealing and engaging, if not always convincing. His dissections of particular cases and elaborations of doctrinal inadequacies often reveal valuable insights. Epstein confesses that when he began the book he did not consider himself “a true expert on the many wrinkles and interstices” of federal administrative law, and at times it shows, as when he overlooks important nuances in case holdings or history, or makes cavalier statements about the operation of regulatory programs or specific facts on the ground.

Noting that “ordinary human beings exhale” enough carbon dioxide to be regulated under the Clean Air Act would be a fun rhetorical point if only it were true. It’s not. In making the claim Epstein simultaneously overstates individual emissions and understates the relevant legal threshold, either of which would have been quick and easy to check. Such careless episodes are unfortunate, for they mar what is often a powerfully provocative book containing insights that can enrich the debate over the role of the administrative state.

The ultimate challenge for authors such as Epstein is how to make peace with the administrative state without abandoning a commitment to the rule of law. As Epstein observes, “Fuller’s rule-of-law requirements are more easily satisfied under a classical liberal system of contract, property, tort, and eminent domain than under any modern progressive system.” That is true enough, but even if a wholesale deconstruction of the administrative state were desirable, it is not on the table. Instead the task before us is to maximize the benefits of administration while minimizing the costs, economic and ethical. In this regard, Epstein is to be commended for recognizing the need to consider the contours of an achievable reform agenda, even if he is not wholly successful in the ultimate execution.

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Jonathan H. Adler — Mr. Adler is an NRO contributing editor and the inaugural Johan Verheij Memorial Professor of Law at Case Western Reserve University School of Law. His latest book is Marijuana Federalism: Uncle Sam and Mary Jane.

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