Enterpreting agency enabling acts: misplaced metaphors in administrative law.

Author:Noah, Lars
 
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INTRODUCTION

Metaphors in law are to be narrowly watched, for starting as devices to liberate thought, they end often by enslaving it.

Benjamin N. Cardozo(1)

The rapid growth of the administrative state represents one of the most significant, and some would add alarming, political developments of the twentieth century. Federal regulatory agencies have proliferated, first as a centerpiece of the New Deal and then again during the 1960s, and their powers have expanded as well. Initially greeted with some suspicion, few today question their legitimacy or centrality as legal institutions.(2) More so than do the courts, federal agencies exercise pervasive control over economic and other activities in this country. Whatever their failings and accompanying calls for reform or more sweeping deregulation, these entities inevitably will continue to do the work of government.

Although many scholars have emphasized procedural rights and opportunities for judicial review as mechanisms for supervising and legitimizing agency actions, the initial delegation of authority from Congress must remain as the focal point for any such effort. Recently, however, it seems that enabling statutes have received insufficient attention as imposing limits on agency power. Once regarded as akin to corporate charters, some commentators now regard these delegations more fluidly, analogizing an agency's organic act either to a constitution or to an even looser source of authority to fashion common law on a subject.

Actually, Professor James Landis captured this pragmatic spirit more than sixty years ago when he defended the growing reliance on administrative agencies during the New Deal:

One of the ablest administrators that it was my good fortune to know, I believe, never read, at least more than casually, the statutes that he translated into reality. He assumed that they gave him power to deal with the broad problems of an industry and, upon that understanding, he sought his own solutions. Limitations upon his powers that counsel brought to his attention, naturally, he respected; but there is an enormous difference between the legalistic form of approach that from the negative vantage of statutory limitations looks to see what it must do, and the approach that considers a problem from the standpoint of finding out what it can do.(3) In this respect, agency officials arguably resemble members of Congress who may pay little heed to constitutional constraints on their powers.(4) The imperative to find solutions to pressing problems of the day cannot, however, divert attention from questions about who if anyone within the federal government properly shoulders that task. Justice Cardozo offered a more skeptical perspective on the New Deal revolution, cautioning against the creation of "roving commission[s] to inquire into evils and upon discovery correct them."(5)

Are agencies' enabling statutes best understood as charters, constitutions, or sources of common law norms? Each of these conceptions carries its own interpretive baggage,(6) and each finds apparent support in the Supreme Court's much cited and analyzed decision in Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc.(7) This Article does not seek to add to the wealth of literature evaluating Chevron and its aftermath,(8) except to suggest that the judiciary's rush to defer to reasonable agency interpretations of ambiguous statutory language has emboldened agencies to push the outer limits of their jurisdiction. In just the last year, for example, the Food and Drug Administration (FDA) confidently announced that it already enjoyed the power to restrict human cloning experiments, and the equally entrepreneurial Federal Communications Commission (FCC) floated a proposal to require that licensed television broadcasters provide free air time to candidates for public office.(9) Instead, this Article suggests that the nature of "jurisdictional" questions, in administrative law as elsewhere, demands special attention from the courts. By granting the government's petition for certiorari to review the lower court's invalidation of the tobacco regulations promulgated by the FDA,(10) the Supreme Court appears poised to tackle the question directly this Term.

Part I summarizes the three competing metaphors. First, it develops the classic analogy between agency enabling statutes and corporate charters. From this perspective, a court reviewing a regulatory action not explicitly authorized by the statute would invalidate it as ultra vires. Next, Part I introduces the constitutional metaphor sometimes used to describe enabling statutes, coupled with a preference for a dynamic rather than textualist approach to their interpretation. From this perspective, organic acts are just that, living instruments that can adapt to new circumstances. Finally, Part I discusses the recently suggested common law metaphor for understanding the operation of enabling statutes, an even looser conception of how legislation operates to limit the range of permissible agency actions.

Part II attempts a synthesis of these competing metaphors, asking whether and to what extent courts should condone bureaucratic tendencies toward the expansion of delegated powers. In short, should concerns about "judicial activism" lead us to embrace administrative activism instead? Part II argues that judicial scrutiny of agency behavior remains necessary to ensure fidelity to the enabling statutes; that the same flaws inherent in recognizing the federal courts' power to make common law based on nothing more than the grant of subject matter jurisdiction apply with equal force to agencies; and that Chevron deference should not extend to the review of jurisdictional questions. Although formalism in law has become decidedly declasse,(11) this Article concludes that the more conventional corporate charter metaphor strikes the most defensible balance in this context.

  1. COMPARING THE COMPETING METAPHORS

    The charter, constitutional, and common law metaphors --considered in turn below--reflect historical developments as much as they represent competing conceptions about regulatory statutes. Although they share important features as well as significant limitations, this Part attempts to tease apart these three approaches and highlight their differences as a prelude to the normative discussion reserved for Part II. Each metaphor suggests a distinct relationship between administrative agencies and the courts, accompanied by different expectations about the degree of fidelity government officials must accord to their delegations of legislative authority from Congress. As one moves from the charter to the constitutional and then to the common law metaphor, the permissible range of administrative initiative and creativity increases dramatically.

    1. Enabling Acts as Corporate Charters

      The very term "agency" implies some sort of principal-agent relationship. In 1819, Chief Justice John Marshall commented: "It is the plain dictate of common sense, and the whole political system is founded on the idea, that the departments of government are the agents of the nation, and will perform, within their respective spheres, the duties assigned to them."(12) John Locke provided the foundation for the notion that government officials act as agents constrained by their delegated authority,(13) and the Framers of the Constitution enshrined it in their own "charter" for the federal government.(14) Although courts may imply powers reasonably incidental to those granted explicitly, empowering an agent to act on the principal's behalf typically does not make the agent the sole judge of whether an act falls within the scope of the agency: the agent still must abide by the principal's commands.(15)

      Although the principal-agent model may be overly simplistic,(16) the more traditional notion regarding the place of administrative agencies usefully drew attention to their subordinate role to the enumerated branches of government.(17) Because the Constitution does not specifically provide for such agencies, Congress must first create them.(18) Thus, the enabling legislation essentially represents an agency's charter, and courts continue to describe actions taken beyond the scope of that delegated power as ultra vires,(19) a direct reference to the classical corporate law and principal-agency doctrines.(20) In England, the doctrine retains vitality as the primary basis for judicial review of agency action, with one leading treatise calling it "the central principle of administrative law."(21)

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      rations could only exercise those powers and pursue those purposes specified in a grant of authority from a legislature. Any actions taken beyond such authority were void as ultra vires.(22) Moreover, courts narrowly construed corporate charters. One treatise writer explained at the end of that century: "[G]rants to private corporations shall be construed strictly against the grantees; and to prevail they must be express and clear beyond a doubt; a doubt defeats the power."(23) In part, this restrictive view grew out of the notion that corporations were organized to serve special purposes that would impact the public interest.(24)

      As corporations instead became engines for private enterprise, conceptions of their status and freedom of action changed markedly. Nowadays, where the filing of articles of incorporation has replaced the issuance of a corporate charter, shareholders rarely succeed in claiming that a corporate decision was unlawful on ultra vires grounds because state statutes limit the application of this doctrine and, more importantly, provide that a corporation may pursue "any lawful purpose" without requiring a detailed enumeration of powers.(25) Have regulatory statutes similarly changed?

    2. Enabling Acts as Constitutions

      Even if one generally accepted the analogy to corporate charters, some observers have argued that organic...

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