Coequal Federalism and Federal-state Agencies

• Publication year: 2020

Coequal Federalism and Federal-State Agencies

Dave Owen
University of California, Hastings College of Law

Hannah J. Wiseman
Penn State University, Penn State Law

COEQUAL FEDERALISM AND FEDERAL-STATE AGENCIES

Dave Owen^* & Hannah J. Wiseman^†

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Dividing authority between the federal government and the states is central to the theory and practice of federalism. Division is the defining feature of dual federalism, which dominates the U.S. Supreme Court's federalism jurisprudence. Recent academic theories of federalism emphasize overlap and interaction but still assume that federal and state actors will work within separate institutions. Each approach can be problematic, yet assumptions of separation remain the bedrock of federalism. This Article discusses a different form of federalism: coequal federalism. Under coequal federalism, federal- and state-appointed officials collaborate within a single agency that makes decisions binding on the federal government and the states. This form of federalism exists only within obscure niches of American governance, and it is largely absent from theoretical discussions. We argue that it should receive more extensive attention and use. We also explain how coequal federalism can function in practice, when it will offer a desirable alternative to more traditional approaches, and why it is constitutional.

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Table of Contents

I. Introduction....................................................................290

II. A Blueprint for Joint Federal-State Governance.. 298

A. THE GENERAL STRUCTURE OF FEDERAL-STATE GOVERNANCE...........................................................298
B. THE MECHANICS OF FEDERAL-STATE GOVERNANCE .. 299

1. Participation.....................................................299
2. Legislative Creation..........................................300
3. Membership.......................................................301
4. Staffing and Funding.......................................304
5. Powers...............................................................304
6. Judicial Review................................................305

III. A Normative Justification for Joint Federal-State Governance..................................................................307

A. DIVIDE AND SEPARATE..............................................307
B. THE CHALLENGES OF DIVISION.................................310
C. OVERLAP AND COORDINATE......................................313
D. THE CHALLENGES OF OVERLAP.................................318
E. THE ADVANTAGES OF JOINT GOVERNANCE................320
F. THE CIRCUMSTANCES FOR JOINT GOVERNANCE........323

1. Siting Transmission Lines for Electricity Generation ....................................................... 324
2. Interstate Water Quantity and Quality...........326

IV. The Constitutionality of Joint Federal-State Governance..................................................................330

A. DORMANT COMMERCE CLAUSE .................................334
B. ANTI-COMMANDEERING............................................337
C. DELEGATION, APPOINTMENT, AND REMOVAL............340

1. Delegation.........................................................340
2. Appointment...................................................... 344

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3. Removal.............................................................346

D. ARGUMENTS FROM CONSTITUTIONAL STRUCTURE AND PURPOSE..................................................................349

1. Diminishing the States?...................................350
2. Diminishing the People?...................................353

V. Conclusion......................................................................358

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I. Introduction

Dividing authority between the federal government and states presents, in the U.S. Supreme Court's apt words, "perhaps our oldest question of constitutional law."¹ As both federal and state governments have grown, that question also has become centrally important to administrative law.² In fields ranging from health care to energy, deciding how to allocate power among federal and state agencies is a pervasive and exceedingly contentious challenge.³

Broadly speaking, the traditional responses to that challenge, both in practice and in the literature, fit into two categories of federalism. One approach—dual federalism—assigns exclusive authority to federal or state agencies.⁴ The other approach gives federal and state agencies overlapping authority, which they may exercise either in coordination—an approach often called

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cooperative federalism—or independently.⁵ Both independent and overlapping authority systems are common and have been extensively theorized.⁶ Both have achieved some success, but they have also created deep-seated problems. Dual federalism offers simplicity and preserves some values associated with federal or state primacy, but it also often subordinates important national or state interests.⁷ Drawing sensible lines between federal and state zones of authority can be extraordinarily difficult, particularly in a nation where complex policy issues rarely align neatly with one level of governance.⁸ Overlapping governance only partially

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resolves these issues and presents its own challenges. While overlap brings more interests into decisionmaking processes and avoids stripping one governmental level of authority, it can result in confusion, delay, and conflicting decisions.⁹

Many potential examples of these challenges exist, but we start with just one. A successful energy and climate policy likely will depend on developing new electric transmission lines, which would deliver electricity—largely renewable—from the Great Plains and the southwest to population centers further east and west.¹⁰ A dual federalism approach, in which either the federal government or states have exclusive authority, would not be ideal for siting these lines because it would ignore either state interests in managing major land uses or federal interests in managing an international electrical grid. Cooperative federalism also would not be ideal because it envisions separate state-by-state decisionmaking, and transmission lines would have little value if adjacent states failed to ensure that transmission aligned at state borders. A system of uncoordinated overlap also would not make sense because it would involve serial, and potentially conflicting, approval processes for each transmission line. Consequently, here, and in other policy realms with similar characteristics, a different governance approach is needed.¹¹

Because of the limitations of cooperative federalism and independent approaches, this Article discusses a third, distinct form of federalism: coequal federal-state authority exercised through joint agencies. Rather than relegating governance to one

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level or envisioning separate and semi-coordinated federal and state decisionmaking, this approach involves joint federal and state action within a single administrative agency. This federal-state agency would be created—and its responsibilities defined—by federal and state legislation, with at least one state participating. A multi-member commission with federal and state appointees would oversee the agency's affairs, with that commission supported by a dedicated agency staff. Participation in the agency would be voluntary: neither the states nor the federal government could order one another to join, and either could withdraw from participation. But so long as the agency continued to be active, it could issue rules and orders that bound federal and participating-state officials and private actors.

Versions of coequal federalism exist, but only in obscure niches of American governance—none of which have demonstrated the full potential of this governance form.¹² The Compact Clause of the U.S. Constitution authorizes Congress to approve interstate compacts, and some interstate compacts create agencies, a few of which have federal participation.¹³ But only a few of these entities currently operate—they handle tasks like governing water management in a few interstate rivers¹⁴ and managing the Reagan

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National and Dulles airports¹⁵ —and none of them are particularly prominent. Aside from these limited examples, giving federal-state agencies significant authority to regulate and bind the federal government and participating states would be new to American governance.¹⁶

Discussion of coequal federalism is largely new to the literature.¹⁷ Even the dynamic federalism¹⁸ and nationalist

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federalism literatures,¹⁹ which move the federalism debate far beyond the confines of traditional dual or even cooperative federalism, lack an account of coequal federal-state governance.

This Article constructs that account. It explains what coequal federalism is and why it deserves more theoretical exploration and real-world use. The primary arguments for coequal federalism are straightforward: it limits the line-drawing and subordination problems associated with federalism theories grounded in separation of power, and it reduces the coordination challenges that arise from overlapping federalism. More generally, coequal federalism addresses a problem largely glossed over by recent federalism theory, which often celebrates federal-state overlap without explaining the governance structures that will generate successful collaborations instead of disorganization, conflict, and delay. Joint federal-state administration would not make sense in all circumstances, so we frame conditions under which it could be most effective.²⁰ Forming a new joint federal-state agency also could be politically difficult, particularly at a time when state and federal officials often seem to relish separation and disagreement.²¹ But even with these caveats, coequal federalism deserves more attention.

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Nevertheless, even in contexts where it otherwise makes policy sense, joint...