A Reform Agenda for Administrative Adjudication: Administrative Procedure Act reformers should also pay attention to adjudication.

• Author: Walker, Christopher J.

Last August, the U.S. Justice Department issued a 129-page report entitled Modernizing the Administrative Procedure Act, based on a summit the department held at the end of 2019. As the title suggests, the report argues that now is the time to modernize the Administrative Procedure Act of 1946 (APA).

Modernization is needed. The APA is the quasi-constitution of the federal regulatory state. It sets the default rules that govern agency actions and subsequent judicial review. This quasi-constitution celebrates its 75th birthday this year. Yet, the APA has only been amended 16 times since it was originally enacted in 1946, according to the online legal research service Westlaw. The last major amendment happened nearly a quarter century ago with the passage of the Electronic Freedom of Information Act Amendments of 1996.

The lack of substantial legislative reform does not mean the APA has remained constant. As I often tell my students, regulatory lawyers would commit malpractice if they just followed the text of the APA. The statutory text bears little resemblance to modern regulatory practice. On the contrary, the Supreme Court and the lowers courts--with the D.C. Circuit playing a prominent role--have substantially rewritten the rules of the road. They have done so by grafting onto the APA myriad administrative common law doctrines in response to what Boston University law professor Gary Lawson has coined "the rise and rise of the administrative state."

The legislative failure to modernize the APA is not for a complete lack of trying. Over the decades, the American Bar Association (ABA) and the Administrative Conference of the United States (ACUS) have recommended numerous consensus-driven, common-sense reforms. More recently, many Republicans--joined by some Democrats--have introduced a number of bills to modernize the APA. Legislation entitled the Portman-Heitkamp Regulatory Accountability Act of 2017 was perhaps the most comprehensive and promising reform proposal in decades. Harvard professor Cass Sunstein, for instance, declared that the legislation "deserves careful attention" because it was "an intelligent, constructive, complex, imperfect bill" to modernize notice-and-comment rulemaking. Unfortunately, the bill was never voted on by the Senate. (See "Reinvigorating the Paperwork Reduction Act," Fall 2020.)

Like most of the legislative APA modernization proposals in recent years, the Justice Department's reform efforts largely focus on agency rulemaking. Absent from most conversations about APA reform is the modernization of administrative adjudication. Yet, the vast majority of regulatory actions today take place via adjudication, not rulemaking. As ACUS has documented, the United States has roughly 2,000 administrative law judges and more than 10,000 administrative judges who hold hearings and decide millions of cases each year.

If we turn our administrative reform attention toward agency adjudication, here are what seem to me to be the top four areas for reform. First, we must attempt to reconcile the constitutional tensions in administrative adjudication between adjudicator decisional independence and political control of agency adjudication. Second, we must reform the new world of agency adjudication that is not governed by the APA's formal adjudication provisions in order to protect individuals navigating those adjudicative systems. Third, we must modernize mass agency adjudication through quality assurance measures, including improved agency appellate review and effective use of artificial intelligence. Fourth, and related, we must explore ways to eliminate the "refugee roulette" in immigration adjudication by bringing more consistency and procedural fairness to the system.

This reform agenda, sketched out below, identifies some proposals in each area that have been recommended by scholars, bar associations, federal agencies, and policymakers. In mentioning these various recommendations, I do not intend to endorse each one. In fact, some I would likely oppose. They present difficult policy considerations, and the pros and cons cannot be exhaustively examined in this short essay. But I hope this reform agenda will provide a roadmap for further empirical inquiry, as well as increased scholarly, policy, and political attention. With the 117th Congress and President Joe Biden now in office, the 75th anniversary of the APA may be the ideal time for such legislative reform. And adjudication reform efforts have the potential to draw bipartisan support--for reasons similar to why the First Step Act of 2018 succeeded in the 115th Congress.

RECONCILE CONSTITUTIONAL TENSIONS IN ADMINISTRATIVE ADJUDICATION

In 2018, the Supreme Court decided two cases that could potentially reshape the constitutional future of agency adjudication. In Lucia v. Securities and Exchange Commission, the Court held that administrative law judges (ALJs) at the SEC are unconstitutionally appointed because they are, at minimum, inferior "officers of the United States," yet they were not appointed by the president, the head of a department, or a federal court, as required by Article II of the U.S. Constitution. In Oil States Energy Services v. Greene's Energy Group, the Court upheld the constitutionality of certain agency adjudications at the U.S. Patent and Trademark Office against challenges that they unconstitutionally strip parties of property rights in issued patents.

The separate opinions issued in these cases illustrate the constitutional tensions in modern agency adjudication. On the one hand, the Court's treatment of the Appointments Clause in Lucia dictates that agency adjudicators must be appointed by the president or the agency head to provide for sufficient presidential control over federal regulatory activities. And although not addressed in Lucia, under Article II the agency head may also need to have the power to remove agency adjudicators at will. One could frame these appointment and removal concerns in terms of political accountability. As Justice Clarence Thomas, joined by Justice Neil Gorsuch, put it in his Lucia concurrence, "the Appointments Clause maintains clear lines of accountability--encouraging good appointments and giving the public someone to blame for bad ones."

On the other hand, such political control over agency adjudication--especially such adjudications that implicate core life, liberty, or property interests--potentially raises due process concerns. One concern is that agencies function as both the enforcer and the adjudicator. Another is the injection of politics into the adjudication of disputes between private parties and/or those implicating private rights. Insulating agency adjudicators from political influence thus becomes a central objective. Indeed, Congress expressly addressed this issue of adjudicator or decisional independence in the APA.

In his Oil States dissent, Justice Gorsuch, joined by Chief Justice John Roberts, expressed deep concern about political pressures in agency adjudication (at least in the context of private rights): "Powerful interests are capable of amassing armies of lobbyists and lawyers to influence (and even capture) politically accountable bureaucracies." In...