The Federal Inaction Commission

• Publication year: 2009

The Federal Inaction Commission

Glen Staszewski

THE FEDERAL INACTION COMMISSION

Glen Staszewski^*

ABSTRACT

This Article proposes the establishment of a "Federal Inaction Commission" (FIC). This new, independent agency would be charged with investigating and reviewing the inaction of Executive Branch agencies and reporting its findings and recommendations to elected officials and the public. The FIC would provide many of the same benefits that would result from increasing the availability of judicial review of non-enforcement decisions and other regulatory inaction. At the same time, the FIC would be in a position to minimize the practical disadvantages that have been identified with judicial review of such decisions. Not only would the establishment of the FIC therefore provide a more workable solution to the problem of agency inaction than other commentators have offered, but the agency would also provide a political solution to what the staunchest defenders of the status quo have maintained is solely a "political" problem.

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INTRODUCTION

Congress routinely delegates broad authority to administrative agencies to implement federal programs in the modern regulatory state. When agencies make policy decisions pursuant to this authority, they can err by going too far in either of two fundamentally different directions. On one hand, agencies can implement their programs in an unduly aggressive fashion and potentially exceed the scope of their statutory authority or engage in arbitrary governmental action. By and large, the law does a pretty good job of dealing with this concern—regulated persons who are adversely affected by final agency action can typically obtain judicial review and invalidate governmental decisions that are deemed arbitrary and capricious or contrary to law.¹

On the other hand, agencies can implement federal programs in an unduly lenient fashion and potentially render arbitrary decisions by refusing to take action that is authorized by statute.² In contrast to challenged agency action, federal courts are often reluctant to conduct meaningful judicial review of agency inaction. For example, the Supreme Court has held that federal courts lack subject matter jurisdiction over generalized grievances against Executive Branch agencies based on their alleged failure to comply with the terms of regulatory statutes, even when Congress has expressly authorized such adjudication.³ Similarly, the Court has held that administrative decisions declining to take enforcement action are presumptively immune from judicial review under the Administrative Procedure Act (APA).⁴

Commentators have recognized that the current state of affairs is problematic because it creates an unwarranted asymmetry between the legal treatment of regulated entities and regulatory beneficiaries.⁵ Simply put,

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regulated entities have access to legal relief when they challenge unduly aggressive agency action, whereas regulatory beneficiaries do not have access to legal relief when they allege that an agency has failed to implement its statutory mandate. This asymmetry creates incentives for agencies to pay more attention to the interests and perspectives of regulated entities—and to ignore the views of regulatory beneficiaries—during the administrative process.⁶

Critics of the status quo typically advocate some form of judicial review of non-enforcement decisions and other inaction by administrative agencies.⁷ The idea is that if those decisions were subject to judicial review under the arbitrary and capricious standard, agencies would be obligated to provide reasoned explanations for their non-enforcement decisions and other inaction. This obligation would, in turn, compel agencies to consider all of the relevant interests and perspectives during their decision-making processes, in addition to preventing arbitrary governmental action and securing a meaningful form of democratic accountability.⁸

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Critics of these reform proposals contend that enforcement decisions are a political matter and, therefore, none of the judiciary's business.⁹ At the same time, even the proponents of meaningful judicial review of agency inaction acknowledge the serious practical difficulties such review would present.¹⁰ Thus, as things currently stand, non-enforcement decisions and other forms of regulatory inaction remain a serious problem in search of a workable solution.

This Article proposes the establishment of the "Federal Inaction Commission" (FIC). This new, independent federal administrative agency would be charged with (1) identifying policy areas in which Executive Branch agencies have declined to exercise their delegated statutory authority; (2) directing agencies to adopt sensible enforcement guidelines for implementing their existing programs; (3) investigating and resolving complaints regarding particular non-enforcement decisions; (4) securing reasoned explanations from Executive Branch agencies for any perceived deficiencies in the foregoing areas; (5) reporting to elected officials and the public on the nature and scope of regulatory inaction by Executive Branch agencies; and (6) making recommendations regarding budgetary matters and substantive legislation that could alleviate perceived deficiencies.

The FIC would provide the same benefits that are expected to result from judicial review of non-enforcement decisions and other inaction by administrative agencies. At the same time, the FIC would be in a position to minimize the practical disadvantages that would accompany judicial review of administrative decisions of this nature. Not only would the FIC provide a more workable solution to the problem of agency inaction than other commentators have offered, but such an agency would also provide a political solution to what the staunchest defenders of the status quo have maintained is solely a "political" problem.

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I. THE PROBLEM OF AGENCY INACTION

There are two different worlds of modern administrative law. The first, which is governed by the rule of law, imposes procedural obligations on agencies and subjects most of their final decisions to judicial review. The second, which is better characterized by its "lawful lawlessness,"¹¹ is largely devoid of procedural obligations or meaningful judicial review. This Part explains that when agencies take action to implement their statutory mandates, regulated entities are generally entitled to the protections of the first world of administrative law. In contrast, regulatory beneficiaries who are adversely affected by "agency inaction" are often relegated to the second world (or third world?) of administrative law.¹² As a result, agencies have powerful incentives to give more weight to the interests and perspectives of regulated entities than to the views of regulatory beneficiaries during the administrative process.

This is not merely an academic concern. The goals of modern regulatory statutes simply cannot be achieved without administrative action to implement and enforce their provisions. For example, in any area where Congress has delegated broad authority to administrative agencies to promote public health and safety or to protect the environment, regulatory inaction threatens to undermine those goals with potentially devastating consequences. Scholars have therefore sharply criticized the most recent Bush Administration for failing to implement the Clear Air Act, the Clean Water Act, and the federal

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Superfund Program in an adequate fashion.¹³ Moreover, some of the most challenging problems currently facing our society could potentially have been alleviated or avoided if agencies had exercised their existing legal authority in a more proactive fashion. For example, the Environmental Protection Agency (EPA) has notoriously refused to take action to limit greenhouse gas emissions from new motor vehicles despite its authority to do so under the Clean Air Act.¹⁴ Similarly, the Securities and Exchange Commission (SEC) reportedly failed to take any legal action to address a variety of abuses in the mutual fund industry until the New York Attorney General's Office began putting pressure on the industry.¹⁵

Finally, structural flaws in the existing legal and political processes predictably facilitate inaction of this nature. In this regard, one prominent group of administrative law scholars has explained that "[i]n many ways, the regulatory process provides the ideal setting for . . . collusion between the administration and corporate interests because there are numerous subtle and quiet ways to scuttle regulatory protections even while the laws embodying those protections remain in force."¹⁶ Another respected commentator provided the following explanation in response to the SEC's failure to take action against the mutual fund industry prior to the financial crisis:

Deep down, what is at work here is less a formal policy of accommodation than the habitual response of overworked bureaucrats operating in an esoteric and insular field of law that the

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public does not understand and that is dominated by a powerful lobby playing the role of the 600-pound gorilla. Add to this mix a rapidly revolving door between the SEC and private legal practice, and SEC staffers tend to learn that, unless an issue has become high profile, it is best not to rock the boat. Efforts to expand the law only gain a staffer the reputation of a troublesome dissident and interfere with his ability to return to private practice with an enhanced resume.¹⁷

Because the SEC eventually took action in response to the work of the New York Attorney General's Office, the same commentator concluded that "[s]ome measure of regulatory competition may be necessary to protect the public from the danger that federal agencies, even prestigious ones like the SEC, may be captured or stalemated by interest groups and their lobbies."¹⁸ This Article's proposal to establish the FIC would...