THE CASE FOR ENHANCED JUDICIAL REVIEW OF AGENCY SUBDELEGATIONS OF LEGISLATIVE POWER
This Part urges a more rigorous application of the private delegation doctrine and Chevron to rulemakings that are conducted by private parties without the express consent of Congress. To the extent that agency subdelegations of policymaking power are not grounded in statutory text, they would seem perforce to violate both the nondelegation and Chevron doctrines. Thus, in "its role as protector of the constitutional design," (295) the Supreme Court should develop a private subdelegation doctrine that requires congressional authorization for agency handoffs of legislative authority to the private sector.
Additionally, or in the alternative, the Court should decline to apply Chevron deference to rulemakings that are heavily influenced by unrepresentative segments of the private sector. Courts are better suited than extraconstitutional, private actors to render definitive interpretations of vague legislation. Such adaptations of the nondelegation and Chevron doctrines would foster normative principles of good government--including public accountability, transparency, legitimacy, and rational decisionmaking--when public power is exercised on the private end of the constitutional policymaking continuum.
A Private Subdelegation Doctrine
The nondelegation and private delegation doctrines grapple with a tension between workability and accountability; that is, how to develop legal doctrine that reflects the layered nature of modern government while ensuring fidelity to the separation of powers. This tension defines the battleground for constitutional analysis of unorthodox quasi-governmental structures today, including policymaking by private parties. The leading doctrines for addressing the constitutionality of private lawmaking-the nondelegation and Chevron doctrines-resolve that tension by reference to express or presumed congressional intent. A private subdelegation doctrine should likewise confine policymaking to the political branches of government unless Congress expressly authorizes private sector rulemaking.
Development of a subdelegation doctrine is sensible for several reasons. First, the Constitution's separation of powers embodies a recognition that, "without th[e] check of judicial review, agencies could essentially become judges of their own cases, which the framers clearly opposed." (296) To be constitutionally permissible, therefore, delegation requires judicial review. (297) Yet judicial review requires legislative standards. Even under the lax intelligible principle test, the Court has adhered to the notion that a total "absence of standards for the guidance of [an agency's] action, so that it would be impossible in a proper proceeding to ascertain whether the will of Congress has been obeyed," is unconstitutional. (298) If Congress authorizes an agency to make policy under a particular statute, the agency's power is limited to what Congress allows it to do. If Congress does not authorize agencies to subdelegate governmental authority to the private sector, or if it fails to provide statutory boundaries to govern the private exercise of that authority, courts cannot meaningfully exercise judicial review. Without legislative authorization, agencies' decisions to outsource their policymaking powers are constitutionally infirm.
Second, a subdelegation doctrine would enforce the existing presumption that, for the nondelegation doctrine to work, Congress must delegate to particularized recipients. Just as the nondelegation doctrine is confined to delegations by Congress, the intelligible principle standard only applies to delegations to particular executive branch agencies. The doctrine assumes that congressionally-delegated authority is exclusive to the agency specifically identified in a statute. This is why, say, the Federal Trade Commission cannot promulgate environmental or labor laws with the force of law--those tasks are delegated to the Environmental Protection Agency and the Department of Labor, respectively. In Mistretta v. United States, the Court explained that a delegation is "constitutionally sufficient if Congress clearly delineates the general policy, the public agency which is to apply it, and the boundaries of this delegated authority." (299) The Third Circuit has likewise construed the intelligible principle test as requiring "that Congress identify the recipient of the delegated authority." (300) Given that private parties are less democratically accountable than federal agencies--and thus more structurally attenuated from Congress itself--it makes little sense to preclude the Federal Trade Commission from issuing securities regulations while allowing the regulated industry to issue such regulations at the behest of the Securities Exchange Commission. Moving from accountable government agents to unaccountable private ones deflects from democratic decisionmaking, which is at the heart of the constitutional requirement that Congress delegate intelligible principles.
Third, a subdelegation doctrine would ensure that Congress's constitutionally protected power remains in the hands of the legislative branch. In the words of Justice Kagan and Judge Barron, "[a]ll the constitutional structure suggests is that Congress has control over the allocation of authority to resolve statutory ambiguity." (301) This idea finds support in Whitman v. American Trucking Ass 'ns, in which Justice Scalia wrote a majority opinion upholding the CAA's delegation of power to the EPA to promulgate national ambient air quality standards that "are requisite to protect the public health." (302) Because the text of Article I "permits no delegation of [legislative] powers," he explained, "Congress must 'lay down by legislative act an intelligible principle to which the person or body authorized to [act] is directed to conform.'" (303) He rejected the suggestion that "an agency can cure an unlawful delegation of legislative power by adopting in its discretion a limiting construction of the statute." (304) An agency cannot "declin[e] to exercise some of that power" it was delegated. (305) That choice--"that is to say, the prescription of the standard that Congress had omitted--would itself be an exercise of the forbidden legislative authority." (306) Justices Thomas and Stevens each wrote separately to take issue with whether legislative power per se is delegable, but effectively agreed that Congress holds the reigns when it comes to delegating policymaking authority--and must retain that hold in its enabling legislation. (307)
If agencies cannot decline to exercise delegated power, it follows that they cannot unilaterally decide to give that power to a private third party, either. To be sure, in his concurring opinion in Whitman, Justice Stevens read the Vesting Clauses as devoid of express delegation limits. (308) Yet his analysis is consistent with the majority's view that it is Congress's prerogative to dictate the terms whereby--and by whom--a statute is implemented. (309) The legislative power is vested in the Congress, a political branch of government. Thus, only Congress can decide whether extra-constitutional actors may exercise that power.
Fourth, agency subdelegations of legislative power to private parties raise conflict-of-interest concerns of constitutional weight, which do not exist when Congress or federal agencies make policy on their own. The Supreme Court has repeatedly indicated that the coercive power of private interests is antithetical to the legislative function under the Constitution. In Schechter Poultry, the government argued that the NIRA provisions in question were constitutional because the privately-drafted codes the statute authorized would "consist of rules of competition deemed fair for each industry by representative members of that industry--by the persons most vitally concerned and most familiar with its problems." (310) The Court rejected this argument on the rationale that it is not Congress's role to support the objectives of private industry, which is inherently biased: "would it be seriously contended that Congress could delegate its legislative authority to trade or industrial associations or groups so as to empower them to enact the laws they deem to be wise and beneficent for the rehabilitation and expansion of their trade or industries?" (311) The Court deemed it "obvious" that "[s]uch a delegation ... [would be] utterly inconsistent with the constitutional prerogatives and duties of Congress." (312)
In Carter v. Carter Coal Co., (313) the Court cast its concern over self-interested private regulators in due process terms. It drew a "fundamental" distinction "between producing coal and regulating its production" under the statute at issue in Carter, with "[t]he former ... a private activity" and "the latter ... necessarily a governmental function, since, in the very nature of things, one person may not be entrusted with the power to regulate the business of another, and especially of a competitor." (314) Hence, the Court reasoned, "a statute which attempts to confer such power undertakes an intolerable and unconstitutional interference with personal liberty and private property," rendering "[t]he delegation ... a denial of rights safeguarded by the due process clause of the Fifth Amendment." (315)
The Carter Court's nod to due process has yet to rematerialize in private delegation doctrine. (316) Yet the notion that private parties' inevitable drive to regulate for their own benefit and at the expense of competitors and/or the public applies with even greater force to agency subdelegations of regulatory authority to the private sector. The logic of Carter accordingly suggests that, at a minimum, agency decisions to outsource regulatory power to private industry should be grounded in express legislative authorization.
Thus, by enabling judicial review of agency decisions to subdelegate legislative...