The Lost History of Delegation at the Founding

• Publication year: 2021

The Lost History of Delegation at the Founding

Christine Chabot
Loyola University Chicago, cchabot@luc.edu

The Lost History of Delegation at the Founding

Cover Page Footnote
Associate Director for Regulation, Institute for Consumer Antitrust Studies, and Distinguished Scholar in Residence, Loyola University Chicago School of Law. Thanks to Kevin Arlyck, Emily Bremer, Craig Green, Hal Krent, Nick Parrillo, Matthew Sag, Josh Sarnoff, Jamelle Sharpe, Barry Sullivan, Spencer Waller, and participants at the AALS Annual Meeting, New Voices in Administrative Law and Legislation, Constitutional Law Colloquium, and Chicagoland Junior Scholars Conference for helpful comments. Thanks also to Anna Kenneally and Madeleine Morris for outstanding research assistance and the Loyola Law School Faculty Research Support Fund for financial assistance. All errors are my own.

THE LOST HISTORY OF DELEGATION AT THE FOUNDING

Christine Kexel Chabot^*

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The new Supreme Court is poised to bring the administrative state to a grinding halt. Five Justices have endorsed Justice Gorsuch's dissent in Gundy v. United States—an opinion that threatens to invalidate countless regulatory statutes in which Congress has delegated significant policymaking authority to the Executive Branch. Justice Gorsuch claimed that the "text and history" of the Constitution required the Court to replace a longstanding constitutional doctrine that permits broad delegations with a more restrictive one. But the supposedly originalist arguments advanced by Justice Gorsuch and like-minded scholars run counter to the understandings of delegation that prevailed in the Founding Era. This Article brings to light previously overlooked historical evidence of debates over the constitutionality of delegation in the First Congress, as well as an in-depth analysis of important policy decisions that the First Congress subsequently delegated to the Executive Branch. It shows that Alexander Hamilton, James Madison, and the First Congress all approved of legislation that delegated some of our nation's most consequential policy decisions to the Executive Branch.

Delegation was the First Congress's solution to what was arguably the greatest problem facing our fledgling Republic: a potentially insurmountable national debt. Alexander Hamilton proposed a debt restructuring plan that would delegate Congress's Article I, Section 8 power to "borrow Money," and James Madison and other members of the First Congress

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debated this delegation before concluding that it was constitutional. The resulting legislation delegated decisions regarding borrowing and payment policies of the utmost importance to the national economy to President Washington and executive officers serving on the Sinking Fund Commission. Delegation was also the First Congress's solution to a protracted dispute over national patent rights to revolutionary steam power technology. Although the Intellectual Property Clause empowered Congress to resolve inventors' competing petitions for exclusive patent rights, the First Congress declined to do so and instead passed a bare-bones patent act that required executive officers to determine fundamental legal parameters for granting patents. The first U.S. debt and patent laws implicated some of the most significant policy questions facing our nation, and Hamilton, Madison, and the First Congress never understood the Constitution to prohibit Congress from delegating these questions. The doctrine recognized in the Founding Era provides no reason for the Court to overhaul Congress's constitutionally prescribed role or set aside over eighty years of precedent.

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Table of Contents

I. Introduction......................................................................85

II. The Legal Landscape......................................................91

A. LEGISLATIVE POWERS (WHAT ARTICLE I SAYS AND LEAVES UNSAID).........................................................91
B. PRECEDENT: IMPORTANT SUBJECTS AND INTELLIGIBLE PRINCIPLES................................................................97
C. THE MANY FACES OF NONDELEGATION ORIGINALISM 101

III. The First Congress's Delegation of Important Questions......................................................................112

A. THE FIRST U.S. LAWS ON BORROWING AND REPAYMENT OF DEBT...................................................................113

1. Alexander Hamilton's Proposal........................114
2. The First Congress Rejected a Constitutional Objection to the Delegation of Borrowing Power ...........................................................................115
3. The Borrowing Legislation Delegated Broad Discretion to Determine Important Terms of Loans.................................................................123
4. The Sinking Fund Legislation Delegated Key Monetary Policy Decisions................................ 128
5. Congress Continued Granting the Executive Broad Discretion to Pay Debt and Borrow Funds for "Public Purposes"........................................134

B. THE FIRST U.S. PATENT LAW.....................................136

1. Congress Required the Patent Board to Determine "Causes of a Very Great Magnitude" ...........................................................................138
2. The Patent Board Created Its Own Procedure to Address Conflicting Claims to Steamboat Technology........................................................142

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IV. Madison's "Necessity" Was Not the Mother of the Important Subjects Doctrine.....................................147

V. The Historical Record Provides No Occasion to Overturn Precedent......................................................153

VI. Conclusion.....................................................................158

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I. Introduction

The United States Congress delegates a wealth of policy decisions to the Executive Branch. Justice Gorsuch's dissent in Gundy v. United States asserts that this practice is unconstitutional, and his opinion casts doubt on countless regulatory statutes that delegate power to make "policy judgments" to executive officers.¹ In Justice Gorsuch's view, such delegations unconstitutionally transfer an exclusively legislative power and exceed the prescribed executive role of finding "facts" and filling up the "details."² He appears to have at least five votes to jettison the precedent condoning such broad delegations,³ and he claims that this doctrinal leap is justified by originalism and fidelity to separation of powers principles enshrined in the Constitution over 200 years ago.⁴ But as this Article demonstrates, it is Justice Gorsuch's argument, and not current doctrine, that is "at war" with the "text and history" of the Constitution.⁵

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While previous debates over delegation traded only a few "scraps" of historical evidence,⁶ Justice Gorsuch's dissent in Gundy has inspired invaluable surveys of delegations in the Founding Era. These surveys reach different conclusions regarding Justice Gorsuch's proposed ban on delegations of "policy judgments,"⁷ which ostensibly encompass any binding "governmental act involving political discretion"⁸ and exceed the Executive's circumscribed duty "to make factual findings."⁹ Recent scholarship has undermined originalist claims that the Constitution bars delegations involving only certain types of policy judgments: early legislation did not reflect a categorical ban on delegations of power to impose "coercive regulation of private rights and private conduct" any more than it reflected a ban on delegation of power over public rights.¹⁰ But this

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work leaves open other questions about the contours of an originalist nondelegation doctrine. Some scholars claim that there were no limits on any of the substantive powers that Congress could delegate to the Executive Branch,¹¹ while other scholars contend that early Congresses sometimes delegated power to make policy judgments, just not important ones.¹² The latter scholars provide continued reasons for the Court to abandon governing precedent and the longstanding requirement that power delegated to the Executive Branch be limited by an "intelligible principle."¹³

This Article brings to light previously overlooked constitutional debates over delegation in the First Congress, as well as an in-depth analysis of important domestic policy decisions that Congress delegated to officers and agencies in the Executive Branch.¹⁴ This

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evidence establishes that the theory and practice of delegation in the Founding Era never reflected a particularly high constitutional bar. Early Congresses routinely delegated important policy decisions that required executive officers to go far beyond finding facts and filling up details.¹⁵ The limits early Congresses recognized for delegation were not exacting and generally required Congress to "establish the principle"¹⁶ (perhaps intelligibly) governing execution of the law.¹⁷ The restrained nondelegation doctrine identified by this Article does not support a significant shift to a requirement that Congress decide all important policy questions.

The First Congress considered and passed laws that delegated powers implicating two of the greatest challenges facing the nation: first, the need to provide a cost-effective means of repaying a potentially insurmountable debt; and second, the need to promote inventions that would facilitate industrialization.¹⁸ The express language of the Constitution designates these powers as "legislative" powers vested in Congress. In particular, Article I, Section 8 authorizes Congress to "pay the Debts," "borrow Money," and "promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries."¹⁹

Congress debated the constitutionality of delegating its Article I, Section 8 powers during its initial efforts to establish the...