THE NEVER-ENDING ASSAULT ON THE ADMINISTRATIVE STATE.

• Author: Beermann, Jack M.
• Position: Symposium: Administrative Lawmaking in the Twenty-First Century

INTRODUCTION

The administrative state is under attack. It is always under attack. Even decades after the main contours of the administrative state were sustained by the Supreme court, it is still under attack. This Article is an exploration of the primary contours of the attack and a discussion of the reasons why the attack has been and should remain largely unsuccessful.

It should not be surprising that the assault on the administrative state is never ending. The subjects of regulation have strong incentives to resist burdensome regulation with every available tool, including judicial review of agency action directed against them. In the course of litigation, regulatory subjects deploy whatever legal arguments are available, including those directed at the structure of the administrative state, which takes the assault on the administrative state far beyond aggressive judicial review of the substance of agency action and compliance with statutory procedural requirements into the realm of structural constitutional law. Although the Supreme court has long approved of the structural foundations of the administrative state, a substantial number of lower court judges are sympathetic to arguments attacking that structure, and once in a while, an attack succeeds, which fuels the perception that the legitimacy of the administrative state remains an open question.

Despite the fact that the Supreme court has approved and sometimes even strongly endorsed key aspects of the administrative state, administrative state skeptics have powerful constitutional and policy arguments on their side. Constitutional skeptics have long complained about the "headless fourth branch of government" that has "deranged" the three-branch constitutional structure and usurped the legislative, judicial, and executive powers allocated to the other branches. (1) Democratic accountability is absent when government power is wielded by unelected bureaucrats. Policy skepticism is grounded in the view that the growth of the administrative state is an unwarranted expansion of the reach of government that produces stifling and unnecessary regulation. Job losses, high prices, and the inability of American businesses to compete in international markets are all attributed by skeptics to the excesses of the administrative state. The never-ending assault on the administrative state is a sustained effort to attack these unfortunate constitutional and political developments.

The assault on the administrative state is conducted on several fronts with various weapons. Legal challenges, of course, are carried out in the courts. The legal assault on the administrative state spans a broad range including fundamental constitutional challenges to the structure of administrative agencies, vigorous enforcement of statutory and constitutional procedural requirements against agencies and intensive scrutiny of the factual and policy bases of agency action. With the appointment of Justice Neil Gorsuch and the likelihood of additional vacancies in the near future, the Supreme Court may become more receptive to elements of this legal assault.

Politically speaking, with Republican control over both houses of Congress, and now the presidency as well, the push to limit regulation, which includes elements of the assault on the administrative state, has moved front and center onto the legislative agenda. Republicans in Congress are generally more receptive to businesses' arguments against excessive regulation and to constitutional attacks on the structure of the administrative state. The House has passed reforms of the administrative state for years, only to see them die in the Senate under the cloud of a certain veto by former President Obama. These proposed reforms would increase the procedural and analytic burdens agencies must bear before issuing important regulations and they would decrease or even prohibitjudicial deference to agency determinations. Senate rules still make passage of the more extreme elements of House bills unlikely, but the chance that some legislation will make it to President Donald Trump's desk is much greater than before.

In the academy, scholarly attacks on the administrative state have reached a new crescendo with the 2014 publication of Professor Philip Hamburger's book Is Administrative Law Unlawful? (2) This volume is an elegant and comprehensive attack on the administrative state and is quickly becoming the bible of administrative state skeptics, including scholars, lawyers, policymakers, and even judges. In an apparent effort to make the argument more accessible to nonscholars, Professor Hamburger published a pamphlet entitled The Administrative Threat, which distills the attack into a sixty-four-page polemic. (3) The pamphlet's penultimate sentence sums up Hamburger's conclusions as follows: "Americans therefore need to recognize that administrative power revives absolute power and profoundly threatens civil liberties." (4) This is a rhetorical call to arms against the foundations of the administrative state.

Hamburger's argument is powerful but ultimately misguided. Following Hamburger would result in a massive shift of power from Congress to the federal courts, with judges rather than legislators determining the appropriate structure of government and the scope of federal power. Further, Hamburger would disable the federal government from dealing effectively with the myriad challenges facing modern society. In fact, that's the way of most attacks on the administrative state. Administrative state skeptics would have courts reject Congress's policies and design in favor of a more conservative set of policies and a structure based on judicial reconstruction of the intent of the Framers of the Constitution, without the sort of firm constitutional grounding that ought to be required to justify such intensive judicial intervention, and they present no persuasive evidence that their reforms would not cripple the government's ability to advance important policies. While enforcement of clear constitutional provisions is normally appropriate, applying general notions of separation of powers or government accountability to restructure the government should be viewed as beyond judicial power.

This Article is an exploration of the twists and turns of the never-ending assault on the administrative state. Without attempting to resolve all of the separation of powers controversies that have existed since the beginning of the Republic, this Article examines and analyzes the fundamental constitutional challenges to the administrative state as well as the more peripheral constitutional difficulties involving the administrative state and the nonconstitutional legal challenges that have arisen over the decades. In my view, the legal and political arguments made in favor of major structural changes to the administrative state do not provide sufficient normative bases for such change. In fact, most of them are inconsistent with a reasonable understanding of the Constitution of the United States and are normatively inferior to the status quo.

The Article proceeds as follows. Part I sets forth the key elements of the administrative state, as designed by Congress and approved by the Supreme Court. Part II sets out and analyzes the assault on the administrative state in the courts, Congress, and, to a lesser extent, the executive branch itself. And Part III discusses the scholarly assault on the administrative state, focusing largely on the work of Gary Lawson and Phillip Hamburger.

1. JUDICIAL AND LEGISLATIVE APPROVAL OF THE STRUCTURE OF THE ADMINISTRATIVE STATE

   The administrative state was designed by Congress and has been resoundingly approved by the Supreme Court of the United States. That's not to say that Congress's power is unlimited. The Supreme Court has frequently rejected congressional efforts to violate clear constitutional commands and has occasionally turned back innovations that it finds too threatening to the balance of power established by the Constitution. Administrative state skeptics, especially in the academy, seem undeterred, and continue to take aim at the heart of the administrative state. Unfortunately for administrative state skeptics, the courts and Congress consistently turn those efforts back, maintaining the features of the administrative state by and large intact.

   The key structural features of the administrative state include delegation of discretionary authority from Congress to the executive branch; independence of some agencies through insulation of agency officials from complete presidential control; the combination of executive, quasi-legislative, and quasi-judicial functions within single agencies; administrative authority to inspect the premises of regulated entities and to require them to provide information to regulators; initial adjudication of regulatory disputes within administrative agencies; and deferential judicial review of agency action. Each of these features has been approved resoundingly by the Supreme Court, albeit sometimes with important qualifications. Substantively, the administrative state depends on acceptance of broad regulatory power and, at the federal level, an expansive understanding of Congress's enumerated powers, mainly the power to regulate interstate commerce and the power to attach conditions on the receipt of federal funds. Substantive regulatory power has also been resoundingly approved by the Supreme Court, perhaps even more firmly than the structural aspects of the administrative state.

   Turning to substance first, the end of the Lochner (5) era signaled judicial acceptance of broad regulatory power at the federal and state levels. During the late nineteenth and early twentieth centuries, the Supreme Court employed substantive due process and related constitutional doctrines to place significant limits on governmental regulatory power. State and federal laws regulating wages, hours...