The Origins of the Novice Administrative State: The earliest regulatory commissions substituted for juries, and like juries they were not supposed to be experts.

• Author: Glock, Judge

Although researchers have offered many reasons for the rise of the administrative state in the late 19th and early 20th centuries, most have agreed that one reason was the desire of reformers and progressives to bring "experts" into government. New independent commissions would be isolated from the legislative, executive, and judicial branches and would allow experts to regulate businesses without political interference.

Yet the earliest proponents of regulatory commissions did not emphasize a desire for apolitical expertise or the need to substitute for the traditional three branches of government. Instead, lawmakers and reformers argued that regulatory commissions would substitute for another body known as the "fourth branch" of government: the jury. Unlike juries, these regulatory commissions would gain experience over time in examining factual questions in a particular area. Yet, like juries, these commissions were not supposed to be composed of preexisting experts. An examination of all the appointments to federal regulatory commissions from 1887 to 1935 shows that few commission members were experts in any modern sense and that a large number were former politicians.

By reexamining these origins, we can see that justifications for the administrative state that are based on the necessity of apolitical expertise are themselves novel. We can also see some of the constitutional structures that the administrative state upset, especially those supporting trial by jury.

FACT-FINDING COMMISSIONS

Although the British Parliament and early American legislatures often created temporary "commissions" to investigate particular subjects, such commissions could not make legally binding decisions on private individuals. In that earlier era, any legal order, fine, or action against private persons had to be pursued through the courts. In the courts, Anglo-American law maintained a sharp line between the "facts" of a case, which were determined by a jury, and the "law," which was determined by judges. The Seventh Amendment to the U.S. Constitution, and similar amendments in state constitutions, states that at common law "no fact tried by a jury shall be otherwise re-examined in any court of the United States," thereby ensuring this division.

Reformist lawyers in the 19th century, however, tended to be suspicious of the motives and capabilities of juries and tried to limit their reach. A particular issue that raised lawyers' hackles in this era was the jury's determination of "mixed questions of law and fact." In traditional jurisprudence, such mixed questions meant the application of a set of facts to the law at hand. As vague legal rules about the "reasonableness" of certain actions came to govern many common law fields such as torts and damage claims, lawyers questioned the ability of a jury to consistently evaluate such vague "mixed questions." They were also concerned that juries tended to disfavor certain large corporations such as railroads.

Railroad commissions I The earliest commission advocates in the 1870s wanted to use regulatory commissions to substitute for juries when making decisions under new railroad laws. These laws penalized "unreasonable" tariffs and rates, an issue that would usually be decided by a jury. The Illinois railroad commission, similar to subsequent ones, would blunt concerns about the vagueness of such rules by establishing a schedule of reasonable railroad rates for different lines and companies. One Illinois legislator objected that, legally, the "legislature could not fix a tariff, nor could it confer the power on any Commission. That was a question for a jury only," and another said that reasonable rates were "a question of fact for the jury." But the advocates for the commission had a workaround. The commission's rate schedule would not be conclusive but would constitute "prima facie" evidence of what were reasonable rates in any court case tried against the company. Thus, the commissioners' evidence and findings were brought into court with the assumption of correctness, and the burden of rebutting it was placed on the opponent of the commission's decision. To further displace the jury, many commissions had the power to issue "orders," as they were called, for changing future railroad rates, which were enforced by courts through actions of equity, in which cases there would be no jury.

Subsequent court cases show that railroad commissions' determinations of the reasonableness of railroad rates blunted accusations that the new penal railroad laws were excessively vague and unconstitutional. An Illinois Supreme Court decision upholding the constitutionality of the new commission argued that under the previous law, which had allowed juries to determine damages, "different persons would have different opinions as to what is a fair and reasonable rate. Courts and juries, too, would differ.... There would be no certainty of being able to comply with the law." Yet the commission demonstrated that the legislature "did not intend to leave the railroad companies ... exposed to such seeming injustice." When states passed railroad regulation laws without providing for commissions, and therefore allowed juries to assess penalties whenever they thought a rate was unreasonable, courts struck them down. The Kentucky Court of Appeals said that under that state's railroad law, where any "unreasonable rate" as decided by a jury could lead to...