Chapter 24 in Philip Hamburger’s brilliant book on—or rather against—administrative law is entitled “The German Connection.” The Progressive architects of administrative law—Frank Goodnow; Ernst Freund; John Burgess and apparently the rest of Columbia Law School; Woodrow Wilson—all admired the Germans’ post-Hegelian, “scientific” approach to administration. Many had studied at German universities. And so America acquired what she’d never had before: administration. The rule of “experts,” outside constitutional channels and constraints.
Herewith, as promised in Part I, a few additional thoughts on Halbig’s lessons. My humble observations aren’t intended as nuanced legal analysis; there’ll be time enough for that as the cases progress. Today’s subject is the broader context of how the doctrines and institutions that have sustained administrative law are coming apart at the seams.
Two-plus weeks have passed since the D.C. Circuit’s panel decision in Halbig v. Burwell and the Fourth Circuit’s opposite decision in King v. Burwell, a substantially identical case. The King plaintiffs have filed their cert petition; and the government has asked for rehearing en banc in the D.C. Circuit; and the initial agitation has subsided. It’s a fine time to highlight a few lessons that, in my estimation, we have already learned. I offer three sets of observations: today, I’ll focus on the interplay between constitutional and administrative law and on the advocacy network that produced Halbig and its companion cases; tomorrow, I’ll analyze the institutional pathologies and ideological derangements that account for the contretemps.
These are interesting times, constitutionally speaking. In the past two weeks, federal courts have ruled both ways on Obamacare. In the D.C. Circuit, a panel ruled that the law allows for subsidized health insurance in exchanges created by state governments, but not in the “backstop” exchange created by the federal government. Meanwhile, the Fourth Circuit says that the statute allows subsidies in both.
Who is right?
The standard narrative used to justify the existence of the administrative state and thus legitimate its powers is that America in the late 19th and early 20th centuries entered into a realm of industrialization, corporate power and concentration, density and urbanization, among other causes, that entailed the need for expert rule in executive agencies. Necessity of government action required courts and rule-making agencies that could adjust the social order to rapidly arising needs not anticipated in the 'horse and buggy' Constitution. However, what if there really is nothing new under the sun about administrative power? Instead, what if its call…
Having been a tad remiss in my blogging obligations, I’ll try to compensate by letting patient readers in on an elaborate political joke, involving the planet and the U.S. economy. Getting the joke demands familiarity with messy statutes and a keen appreciation of institutional incentives. That’s why we Washingtonians are rich and you people are a laugh a minute.
Finally! After a mere two years, the SEC has managed to propose a long-awaited rule to implement Section 953(b) of the Dodd-Frank Act. If you have the patience to wade through it, you’ll get a small but powerful illustration of the stupendous idiocy of the entire enterprise, and of the inability of our legal system to handle it.
Last week’s Liberty Forum exchange between Joe Postell, Gary Lawson, and Mark Seidenfeld on courts and the administrative state is an early, thought-provoking contribution to a large-ish debate that we should and, I hope, will have. It raises a basic question especially for those who (like Joe) argue for a more muscular, less deferential judicial role in the administrative state: what exactly do we want courts to do?
Joe Postell, Mark Seidenfeld writes, wants to mobilize courts for libertarian values—a smaller, more limited government. To the extent that this is in fact Joe’s position, Mark’s central objection is right: that can’t be the role of the courts, either as a normative matter (the size of government is, presumably, a political decision, within constitutional bounds) nor even as a conceptual matter. Joe celebrates F.A. Hayek’s embrace of the German Rechtsstaat and its independent administrative courts as a model. There is indeed much to like about that model (more in a sec). But it has nothing to do with small government. It has to do with lawful government—which can be very, very big. For proof, see Germany.
As it turns out, even the idea of lawful government is deeply ambiguous so far as the role of courts is concerned—far more ambiguous than Hayek, for one, lets on in his Rechtsstaat ruminations.
City of Arlington v. Federal Communications Commission, a big and hugely interesting AdLaw case, was decided last week. I still haven’t fully digested it. (I’ve been busy grading exams and assuring my disconsolate econ grad daughter, of whom I am immensely fond and proud, that there is life after Boston College.) Still: while a conservative-libertarian meme-in-the-making says that Arlington marks yet another triumph for a headless and heedless Fourth Branch, my preliminary noodling has led me to suspect that this may actually be wrong. There’s far more good news here than bad.
There is a strong argument that the Constitution’s original meaning employs a strict separation of powers approach. But many people argue that it would be too difficult to go back to this arrangement after the New Deal combined the powers in administrative agencies. Previously, I wrote about how the separation of judicial and executive power could be effected without incurring too much in terms of adjustment costs. See here and here.
Now, I want to move on to the separation of legislative and executive powers. During the New Deal, the Supreme Court greatly relaxed the nondelegation doctrine and this separation so that now there is no real judicial check on delegations. It is this change, more than any other, that has made the administrative state possible. So, it might seem that it cannot be reversed without undermining the administrative state.
But not so. Administrative law professors have for some time been aware of the following alternative arrangement. The agencies could formulate significant legislative rules as they do now. But instead of simply promulgating them, the agencies would send them over to the Congress. Then, congressional rules would employ a kind of fast track procedure that would require each house to vote up or down on the proposed rule with very limited debate. If passed, the rule would then be presented to the President. In this way, the agencies could propose the rules, but the Congress and the President would have to decide whether to enact them. There would be little delegation of legislative power to the agencies.