Agencies as litigation gatekeepers.

Author:Engstrom, David Freeman
Position:III. The Optimal Design of Agency Gatekeeper Regimes B. Deviations from the Gatekeeper Ideal through Conclusion, with footnotes, p. 663-712
  1. Deviations from the Gatekeeper Ideal

    The analysis above paints a rosy portrait of the myriad ways an ideal agency vested with a full set of wholesale or retail gatekeeper powers can rationalize and optimize private enforcement efforts. But there is also good reason to be skeptical about the ability or willingness of agencies to perform these tasks. Consider three broad classes of problems that may generate deviations from the ideal gatekeeper role.

    1. Institutional Competence and Capacity

      A threshold question raised by calls to vest agencies with expansive gatekeeper powers is whether agencies have the technical competence and capacity to regulate private enforcement efforts in welfare-maximizing ways.

      Turning first to the wholesale gatekeeper context helps lay bare a key aspect of the inquiry: any assessment of the institutional competence and capacity of agencies to perform gatekeeper tasks will necessarily be comparative. (151) The question is not whether agencies can make socially optimal decisions about, say, whether private rights of action should lie at all. In fact, one should be skeptical about the ability of any institutional actor to generate a perfectly accurate bottom-line social-welfare accounting of competing modes of enforcement in a complex regulatory regime. Instead, the question is whether agencies can by and large make better judgments along those lines, or do so more quickly or cheaply, than other institutional actors. (152)

      Framed this way, the question in the wholesale gatekeeper context is an easy one, as there is little reason to believe that agencies are less capable or efficient than legislators or courts at making regime-wide judgments about the optimal scope of private enforcement--and plenty of reason to believe they are more so. Part of this flows from the usual observations about the superior expertise, synopticism, and fact-finding capacity of agencies. (153) Along these dimensions, agencies plainly dominate generalist courts passively adjudicating a stream of atomized and often idiosyncratic disputes. (154)

      The same is likely true of legislatures as well, though the proliferation of legislative committees at the federal and state levels makes the institutional comparison a closer one. (155) In particular, wholesale gatekeeper decision-making will often involve an interconnected mix of ground-level factual questions about the enforcement landscape and higher-level, synthetic questions about the overall "coherence" of the regulatory regime. How costly is private enforcement relative to public enforcement? Do private enforcers tend to target misconduct that public enforcers miss, or are they more likely to piggyback on public enforcement initiatives? What combination of enforcement modes will best achieve long-term regulatory goals by, for instance, facilitating collaborative problem-solving between regulators and regulated? Agencies operating within their assigned regulatory bailiwicks are not just likely to have defter command of these high- and low-level issues than legislators. They will also be better suited to perform ongoing monitoring, ensuring timelier updating of prior wholesale gatekeeper decisions about whether and which claims should be private-enforcement-eligible. (156)

      While the superior competence and capacity of agencies are thus mostly settled in the wholesale context, this is plainly less true in the retail context. The difference lies in the nature of retail gatekeeping: the principal retail-level gatekeeper task is not forming broad-scale, "legislative" judgments about the net social costs or benefits of competing regulatory approaches but rather a far more quotidian, "adjudicative" sorting of more and less meritorious cases. One implication is that the nature of retail gatekeeping shifts the primary institutional comparison to be performed. The competence and capacity inquiry in the wholesale gatekeeper context mostly distills to a comparison of agencies and legislatures. In the retail context, however, the primary comparison is between agencies and courts.

      A second implication is that our judgment as to which of these institutions-agencies or courts-is better situated to assess case merit will turn, at least in part, on how merit is conceptualized in the first instance. American legal culture trades in at least three distinct conceptions of case merit. The first is probabilistic and comparative: a case is more meritorious than another if the defendant is more likely to be held liable for some remedy. (157) A second is pegged to social value: a case is meritorious if its successful prosecution would, on balance, enhance social welfare. (158) A third is legalistic: a case has merit if it is true that the defendant has violated a valid legal injunction. (159)

      At one level, this menu of options offers little analytic traction. After all, a gatekeeper agency will likely make judgments tracking all three merit conceptions in performing the full slate of ideal retail gatekeeper tasks. As concrete examples, an ideal retail gatekeeper agency might terminate a case based on its determination that the social cost of enforcement would outstrip its social benefit (the second conception) or, alternatively, that the plaintiffs factual allegations, even if true, do not add up to a violation of a legal prohibition or injunction (the third conception). Similarly, an ideal retail gatekeeper agency deciding whether to allocate scarce public enforcement resources toward a case that features an under-resourced or overmatched private enforcer will almost certainly consider both the case's social value (the second conception) and also its probability of success with and without the benefit of government participation (the first conception). Judges, too, make similar assessments in adjudicating pretrial motions. (160)

      Given that agencies and courts will deploy multiple and competing conceptions of merit in making gatekeeper decisions, it does not make sense to commit to one or another conception in rendering a comparative judgment about institutional capacity. Even so, it should be clear that systematic judgments about the relative competence and capacity of agencies and courts to perform retail gatekeeping will heavily depend on the weight accorded to particular gatekeeper tasks. Thus, where an agency is mainly using its retail, case-by-case gatekeeper powers to implement broad-scale judgments about which types of cases are welfare-enhancing and which welfare-decreasing, or where the agency is using those same powers to solve coordination problems or police fidelity to legislative purpose, its panoramic view of the regulatory landscape confers a clear advantage in the same way it does in the wholesale gatekeeper context. (161) But this advantage narrows and may even disappear entirely when the task at hand is merits-screening of the narrow, probabilistic sort. Indeed, both institutional actors have at their disposal substantial evidentiary tools-subpoenas and civil investigative demands on the one hand and civil discovery tools, as wielded by litigant-adversaries, on the other--that are unlikely to differ substantially in their probability--estimating utility. (162) As a result, there is little reason to believe that agencies wielding gatekeeper powers or courts will systematically vary in their capacity to judge a claim's factual sufficiency based on collected evidence or the weight to be accorded specific evidentiary showings, except perhaps in the most technical of areas. (163)

      The inquiry's comparative nature and the contingency introduced by competing definitions of merit are not just important for deciding who decides in the retail context; they also expose critical tensions in the gatekeeper idea itself. If "merit" is understood in narrow probabilistic terms as the likelihood that a court will find liability, then retail gatekeeper authority will merely duplicate--though possibly more efficiently--the outcomes the judicial system would produce absent gatekeeper intervention. Here, the ideal agency gatekeeper is at best an efficiency-enhancing, adjudicatory "adjunct" to the courts that is not so different in concept from the "specialized" courts that dot the American regulatory landscape. (164) If, however, "merit" is understood more broadly to include a social welfare or legislative fidelity component, then agency gatekeeping takes on a fundamentally different and more "regulatory" character. Rather than serving as an adjudicatory adjunct, the agency is interposed between private enforcers and the courts to implement a conception of merit that is different from what judges or juries would otherwise deliver. (165)

      Given these complexities, rigorous empirical evidence on agencies' merits-screening capacities is hard to come by. One approach would be to isolate a particular type of regulatory regime and compare all litigation outcomes--including voluntary dismissals, litigated judgments, and settlements--before and after a jurisdiction installed a gatekeeper regime to those same outcomes in a second, similarly situated jurisdiction that lacked gatekeeper structures throughout the study period. (166) The resulting "differences-in-differences" estimate would meaningfully isolate the systemic effect of an agency's gatekeeper actions on the volume and character of litigation efforts by washing (or "differencing") out other possible explanations for observed variance along these measures. (167)

      However, even this ideal research design would fall considerably short of establishing agencies' superior merits-screening capacity. It could not, for instance, tell us how much of any observed change in litigation outcomes was attributable to actual agency gatekeeper decisions (and, thus, to an agency's actual ability to screen cases on merit grounds) as against litigants' perceptions (accurate or not) about the agency's merits-screening capacity or proclivity to use it...

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