Beef with the Administrative State

On February 24, 1943, a grand jury in Boston returned a criminal indictment against Albert Yakus, the President of the Brighton Packing Company, for selling cuts of beef in violation of the Emergency Price Control Act of 1942 and price orders issued by the Office of Price Administration (OPA). Mr. Yakus, and many others like him, never had a chance to contest the legality of the rule under which he was convicted. They just went to jail. And the Supreme Court, in Yakus v. United States (1944), said: no problem. That’s just the administrative state and its judicial partners at work.

James R. Conde, a former GMU Law student (now an attorney with Boyden Gray & Associates), tells the story of this largely forgotten case in a bracing article on “Yakus and the Administrative State.” I appear as a co-author and the piece sounds a bit like me because I suggested the topic for an Advanced ConLaw seminar; because Mr. Conde suffered through that and three other courses I teach; and because I edited this magnum opus down to manageable size. But it’s mostly his impressive work.

And a harrowing story it is. Under the statute, the OPA controlled the prices of practically everything. But Congress did not regulate agricultural products, for fear of messing with the farm bloc. So as cattle prices rose during the war and beef prices remained controlled, marginal meat processors like Mr. Yakus had only two choices: go out of business, or sell on the black market. Grim stuff. Can you challenge it, on constitutional or other grounds?

How about an Ex Parte Young action (meaning an anticipatory suit based on a defense you would have in an enforcement proceeding)? Well recognized at the time but not available here: Congress had channeled all review into an Emergency Court of Appeals. (The Supreme Court upheld that arrangement.) How about an appeal to that court, following an administrative protest and process? Good luck with that: there is no administrative record (only a conclusory statement from OPA). OPA can drag out the protest forever and then supplement the “record” during the appeal, even as the petitioner is trying to show that there’s no conceivable world in which the regulation is not arbitrary and unlawful. And the most you can get is a remand, while the price order remains in effect. No one ever won a case of any consequence in front of that court.

Surely, though, you ought to be able to contest the order in a criminal enforcement proceeding, no? No. That’s the holding of Yakus. Yikes.

The AdLaw and FedCourts profession’s reassuring story is that all this is ancient history. In the textbooks, Yakus appears as a wartime embarrassment or a marginal case about the exhaustion of administrative procedures. In any event, we’re told, the Administrative Procedure Act put the administrative state on a solid footing of legal process and procedure.

This article argues that the common, comforting view is quite wrong. You’d think that citizens who are deprived of their livelihood must have access to an independent court; government can’t just “sport away the vested rights of individuals,” to quote one famous case (Marbury).  But that’s what happened here. It is Yakus, not Chevron or some such distraction, that stands as the real “counter-Marbury” of the administrative state. Under a thin veneer of judicial deference,  the Court cast aside the interconnected, then-still-operative doctrines that were meant to subject administrators to legal checks and controls—the delegation doctrine of Schechter; the Ex Parte Young doctrine; the constitutional fact doctrine of Crowell v. Benson; due process protections of Ben Avon fame.  And not one Supreme Court opinion and not one word in the APA casts doubt on that accomplishment.

The Yakus lessons that we have forgotten are the ones that we want to forget.

Michael S. Greve

Michael S. Greve is a professor at George Mason University School of Law. From 2000 to August, 2012, Professor Greve was the John G. Searle Scholar at the American Enterprise Institute, where he remains a visiting scholar. His most recent book is The Upside-Down Constitution (Harvard University Press, 2012).

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  1. gabe says

    Awwhhh, c’mon man!!!!

    Haven’t you heard the Court provides us with scrutiny, strict scrutiny and coming to a judicial theater in the very near future – super-duper decoder ring scrutiny. (oops, forgot – already did that in Obamacare cases).
    What could go wrong here.

    Would love to see Prof. Greve and Phillip Hamburger collaborate on this topic – could be quite interesting!

  2. R Richard Schweizter says

    While only part way into reading the GMU Legal Studies Paper LS 15-43, which is linked above, it is obvious that it turns attention to the basic concern of Liberty Fund – Individual Liberty- with this example of the grounding (good German term) of the effect in the actions to establish the Federal Administrative State upon Individual Liberty.

    Perhaps Professor Greve will grant permission the quote some phrases from the study paper for purposes of comment here, since the link was provided.

  3. djf says

    I agree, what happened to Yakus sounds like a lawless disgrace. But I don’t think the Democrats of today – who include most of the legal profession – would be bothered by the prospect of administrative railroading of that kind coming back.

  4. z9z99 says

    Every year the National Federation of High School Associations releases a football rule book containing the rules of play for the sport. It also publishes a “football casebook,” giving detailed examples of exactly how the rules are to be interpreted and anticipating scenarios that may be confusing. Those that create the governing laws for the sport give guidance as to how they are to be interpreted by those charged with enforcing them. Consider how the game of football might have evolved if individual official’s interpretations were allowed to create precedents for future games, rather than sticking with the guidance of rule-makers. Imagine if every time an official made a close call, or a non-call, he had to explain the basis and thus potentially affect not only the game where the call occurs, but future games as well. Imagine the exceptions, the split hairs, the unforeseen fixes made up on the spot in the interests of “fairness.” Football officials cannot make precedents; their bad call may influence a game, or even a season for some hapless team, but they do not fundamentally transform the game in ways that are not approved by those who write the rule book.

    The administrative state, through its ability to interpret delegations of authority to it can create precedents. Rather than having the legislature provide a priori guidance as to the the specific intent and extent of delegations of power to the executive, the lawmakers in this case are dependent on bureaucrats and judges to the determine the effect of their laws. Obviously, this subjects the legislative branch, and the people it represents, to the venality and stupidity of the executive and the caprice and stupidity of the judicial branch, to the detriment of good governance and good policy. But it is not only venality and caprice that corrupt this system.

    Bureaucracies are by unalterable nature degenerative. Their utility is inherently subject to logarithmic decay brought about by turf guarding, risk aversion, mission creep, inertia, self interest and ideological corruption. One would think that this state of affairs would be ameliorated by judicial and legislative oversight, but this is frustrated by a quirk, neatly illustrated by the travails of Albert Yakus. In our system of government, at least in theory, authorizations to use force should come from the legislative (the representatives of the people who have to bear the burdens of such) and the ability to use force is vested the executive. The executive should not be able to unilaterally impose burdens on the people. However, people will make exceptions for exigencies. We defer to police officers who use deadly force without due process if they reasonably feel threatened. We can at least sympathize with war time measures, even if they are ultimately over-reactions or outright folly, if they are perceived to be responses to exigencies. But our cultural ethos is that use of force is itself evidence of an exigency; that all force must be justified because it is inherently unjust. As a result the judicial branch is predisposed to defer to the executive whenever the latter resorts to force, even if unjustified, because of the perception that force implies exigency. The government can lock Mr. Yukas up because, well, there’s a war on. The legislative branch, being unable or unwilling, or simply uninterested in guiding and restraining authorizations of force does little more than wring its hands.

    The venality, lack of principles and ideological blindness of the bureaucrats, politicians and judges can certainly make a mess of the best intentions (or perhaps incompetence) of the legislature, but the evil does not begin there. The threat to liberty arises from the cheap and promiscuous availability of use of force by the executive, whether it be to enforce taxes on cigarettes, seize private property for commercial use, regulate the sex lives of college students, seize cash because it was involved in a transaction that the government thought “suspicious,” banning just about anything, or mandating just about anything else, growing wheat for one’s own use, etc., etc,……etc. There are few things as detrimental to freedom as letting bureaucracies decide when they can use violence to accomplish their ends.

      • z9z99 says

        Public Choice Theory?

        Perhaps, but not by design. My intent was to make an observation regarding phenomena, rather than establish first principles or propound a general theory. The thoughts on football referees was just a thought experiment concerning how rules evolve when those charged with enforcing them are allowed to change them. The thoughts regarding force refer to how a legislative authorization for use of force in furtherance of some policy or other creates an inference that an exigency exists, which the judicial branch then uses as justification to defer to the executive.

        One of the benefits of this site is that the commenters here have different perspectives, or if you will, different hobby horses they like to ride. I like to analyze the posts here from the perspective of the role and consequences of government force; I note in your thoughtful comments a common thread of the role of obligations; nobodyreally tends to comment from an economic perspective, gabe with a sensitivity to government over-reach, etc. All of these contributions are quite useful, because of the depth of perspective. Some people may seek for first principles in psychology, or behavioral economics. or like Kevin Hardwick, history. Without these perspectives, many of the discussions would be limited to legal mumbo jumbo that begins and ends with analysis of abstract principles, rather than the variety of more practical concerns that affect each of us in our daily lives.

  5. R Richard Schweitzer says

    While not yet done, one thing that sort of stands out so far in reading this study is a “sense” that we may be observing an element of the equivalent of “Originalism” in the formation of the Federal Administrative State.

    We are looking at intent in the then current context; but, can comprehend an intent to achieve something more than the then current function.

    None comes to mind immediately; but, some scholarship on the topic of “Originalism” in the Rules of *Policy* (vis a vis Rule of Law) which delineate the Administrative State might not only be enlightening, but possibly offer some clues for its deconstruction.

  6. R Richard Schweitzer says

    Time is running on these comments; and while there is much more to be gleaned from the Study (and its fabulous footnote commentaries) let us begin with the diagram offered of the Administrative State fortifications and how it may be deconstructed.

    From Page 6 of the Study:

    “THE PRACTICAL OPERATION OF THE ADMINISTRATIVE STATE HANGS ON COMBINING LEGISLATIVE, EXECUTIVE AND JUDICIAL POWERS IN ADMINISTRATIVE AGENCIES. Its constitutional legitimation, in contrast, hangs on splicing and dicing constitutional doctrines: the separation of powers and delegation; due process; judicial review and reviewability. The legal canons that sustain the administrative state provide separate and distinct answers to those concerns: an “intelligible principle” of delegation; legal process; a “presumption of reviewability,” coupled with judicial deference canons. Recent scholarship, in contrast, has argued that by constitutional logic and design, all those issues really belong together.24 Some judicial opinions have struck a similar chord.25″
    [CAPS ADDED; fn. omitted]

    The deconstruction clues suggested by the capitalized sentence quoted have appeared before. One has some precedent in State (not Federal) legislation.

    Judicial modifications, such as return to prior principles, would probably be sporadic (even disregarded) and excruciatingly slow.

    Legislators seem more inclined to “add” new conditions or facilities as remedies rather than correct previous errors or deficiencies.

    Thus, as has been suggested before, we might begin (at once) to constrain the LEGISLATIVE POWER of agencies by the creation of a NEW regulatory body charged with exclusive authority to write and promulgate ** any and all ** regulations or rulings deemed necessary by *any* agency or regulatory authority, which would be required to make application to that body for such promulgation. The procedural constraints of the APA on promulgation would apply.
    Applications for regulations would be published and require supporting documentation, etc.

    Next, the JUDICIAL POWERS of the agencies and other such authorities would be superseded by a NEW COURT which has been described in a previous comment to Professor Greve’s posts back in August 2015. The jurisdiction of that Court would constrain the legislative and judicial effects of “rulings and interpretations” ( and other side bars) by regulators. The Rule of Law over the Law of Rules would be re-established in that NEW Court.

    Perhaps it really should not have to be done in those fashions; but this is our milieu of a dysfunctional legislature, a core group of self-perpetuating totalitarians, and a legal system now perverted to use as a means to ends.

    Again, if action is not to be shaped and taken – Quo Vadis?

    • gabe says

      Richard:

      Thanks for reading that paper for us – I don’t know when i will ever get around to reading it.

      I take it that your comments are to be viewed as an explanation of the author’s study or thesis and that you would be amenable to this “solution” given that a) we are currently experiencing the effects of a dysfunctional (non-virtuous in Madisonian terms) Legislative, b) the corrective for the defect in the Legislative is not on the horizon and c) while this solution may serve as another “corrective” appendage to FAS structure / function, it is, at least to some extent, workable AND *possible* – as you say, if not – Quo vadis?
      .

      As you know my answer to Quo vadis would be – Back to the Future as envisioned in 1789. Yet my observations do not convince me that, barring any tumultuous event or cultural transformation, this journey to our hope filled beginnings is not going to happen.
      I suppose the question may be: Do we pursue windmills, if only for the sheer joy of the endeavor and the moral sustenance it may bring admitting that it is not likely to succeed. Where we are going then is of great significance. without repudiating our stance / belief, ought we to then seek to control the speed of the blades, its expanse, etc.

      The impression I have taken from Professor Greve’s writings is that he is fully cognizant of the current defects (as well, perhaps, as he is of some foundational ones) and he seeks to deal with the facts on the ground, i.e.; the enormous growth, expanse and sheer staying power of the FAS. In this sense his proposal is both noteworthy and useful; all the better if he and others can deploy the FAS own “constitutional”(?) underpinnings in an effort to limit its effects.

      Thus, my confession of pessimism and a reluctant nod to realities on the ground and the recognition that, at this point, the undoing of the thing is to, and for, far too many inconceivable – not least of all the Legislative.
      We, as a people, have proven ourselves far too *clever* and resourceful to bind ourselves to our foundational principles and documents.

      What the heck, I think I will go and watch the Holy War between BYU and Utah and vicariously enjoy the spirit of battle!!!!

      • R Richard Schweitzer says

        Gabe,

        “I take it that your comments are to be viewed as an **explanation** of the author’s study or thesis ”
        [**added]

        No, absolutely NOT.

        What I was looking for in this extensively researched study were **clues,** possibly lurking in this study (which covers the origins of the consolidation of the Administrative State) for plausible modes of deconstruction by feasible steps, somewhat similar to the steps taken by “Progressives” to obviate the strictures from the “originalisms” of Constitutional delineations upon centralization of powers.

        This quest began in earnest with Charles Murray’s “By The People,” suggesting forms of civil disobedience to choke parts of the administrative system down via judicial process overloads. His idea would have effects of pressures, but uncertain as to the nature or adequacy of changes.

        There is more to be derived from the study’s insights into the formulations of the Administrative Procedures Act,; giving a “clue” that amendments to the APA could provide the “centralization” of regulation promulgations.

        But, Greve, himself, gave the account of their intents.

  7. R Richard Schweitzer says

    “Back to the Future as envisioned in 1789. ”

    This brings to mind “You Can’t Go Home Again” which I read at 15. In the time that passes, “home” changes, the “you” changes. People whose experiences in their departures from the sets of conditions and relationships in which they envisioned the future, have changed; and in attempting to go back to those sets of conditions and relationships find those have long since changed.

    The experiences of impacts of absolute sovereignty on individuality and its expressions formed the vision in 1789 of dangers to be avoided in the future from adverse impacts on individuality (“Liberty”).

    While the dangers from the centralization of powers (sovereignty) we experience in the Administrative State will, and do, impact “Liberty,” they occur in and upon sets of conditions and relationships that time and experiences have changed.

    Perhaps the “nature” of “people” has not changed so very much, some motivations seem constant; but, conditions and relationships have changed, bringing some impacts on the formation, or absence of formation, of motivations.

    Just as those in 1789, responding to dangers perceived from the conditions and relationships of their experience (which included a lot of history) envisioned the future to deal with *those* dangers, based on their understandings of how those dangers arose, so too might we be well advised from studies like this to understand how the dangers, now and envisioned for the future, arise and coalesce.

    From that understanding, if attained, we may likely envision a very different future from that envisioned in 1789.

    • gabe says

      Richard:

      And I was 16 when i read it as well. With age comes an entirely new understanding of it (as everything else).

      You are, of course, correct. Motivations, as well as those *spurs* to motivation have changed. No, let me add to that: Not only the spurs to motivation but the *impediments” to the attainment of those motivations have changed – perhaps, in a nutshell, that is the definition of the Administrative State. It is more than a simple “nudge” as our leftist friends would profess. I perceive a phenomenological change in the temperament of the citizenry – the effect of all the impediments and spurs to motivations provided “gratis” by the Administrative State.

      You are correct again, home may no longer exist – and, sadly, perhaps, that is the point of the whole exercise by our “betters” – home is to be the State – that coalescence of various individual motivations which has arrogated to itself / themselves the role “motivators” for the citizenry. Why take on any new obligations, least of all the obligation to be informed and active in furtherance of liberty, when our betters cleverly create new impediments to success.

      Perhaps, you are correct – we can not go home again, partially because we may not recall or even envision what home was; It may be that the only thing to do is to seek to ameliorate the effects of the new reality by using the tools / constructs and functions of the FAS against it.

      Will have to read the paper.

      take care and
      Merry Christmas / Happy New Year (and slip in a bit of *cheer*)

      gabe

  8. says

    Sean, there is a difference between saying something and doing it. Obama is great at saying things, not so much at following through. His social agenda is one thing, but it seems to me he is firmly on the side of the financial firms and whatever happens will not cause problems for them. it strikes me he uses social issues to cloud wh81&#a2t7;s important.

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