The power to privilege.

AuthorSohon, Mila
PositionIntroduction through II. Administering Privilege, p. 487-524

A new and startling development has recently occurred in the law of delegation: Congress has for the first time expressly delegated to an administrative agency the power to write rules of privilege. Privileges abound in federal law, but until now, they have been defined either by statute or judicial opinion. The type of law that Congress has now authorized agencies to create--the regulatory evidentiary privilege--is a true novelty in our legal system.

This Article is the first to grapple with the implications of migrating the power to write rules of privilege from Congress and the courts, on the one hand, to the executive branch, on the other. It begins by describing an underappreciated aspect of the administrative state: the law of privilege is becoming increasingly important to the functioning of administrative agencies. As a result, administrative agencies are actively pursuing control over the law of evidentiary privilege to further their substantive mandates.

Granting agencies that sought-after control through a privilege delegation will imperil key federal and state regulatory and governance interests. First, privilege delegations will reduce agency accountability. A delegated authority to write privileges that enables an agency to shield its own communications from disclosure will allow the agency to insulate itself from external review and oversight. Second, privilege delegations will erode state interests in allowing litigants and the public broad access to information. Agencies promulgating regulatory evidentiary privileges are likely to displace state laws that would permit disclosure to a greater extent than would be the case if Congress and the courts retained the privilege pen. Third, privilege delegations threaten to undercut state sovereignty. When Congress authorizes federal agencies to privilege the communications of state officials, it obstructs the capacity of the states to monitor state agents and thereby produces a type of harm akin to prohibited congressional commandeering of state governance.

After establishing the risks attendant to privilege delegations, this Article offers some design principles that should govern the institution chosen to draft any new set of privileges that may be invoked by executive branch agencies and explains that the existing judicial rulemaking system fits well with these principles. Finally, this Article explains why this innovation in delegation provides a unique opportunity to test prevailing scholarly models of why and to whom Congress chooses to delegate. When it delegates the power to privilege to an agency, Congress is substituting a new delegate--a politically accountable executive agency--for an old delegate--the politically unaccountable federal courts. Accounts of delegation grounded in party competition have greater explanatory power for this swapping of delegates than alternative accounts.

INTRODUCTION I. THE SOURCES OF PRIVILEGE LAW A. Common Law Privileges B. Statutory Privileges C. The Executive Rebuffed D. A Word on Some Mechanics II. ADMINISTERING PRIVILEGE A. Agency Enforcement B. Agency Coordination III. DELEGATING PRIVILEGE A. Accountability B. Preemption C. Commandeering D. A Summary IV. PRIVILEGE AND INSTITUTIONAL CHOICE V. DELEGATION SWAPS AND PARTY COMPETITION CONCLUSION APPENDIX INTRODUCTION

In 2010, Congress enacted sweeping reform of the health insurance market, cutting through decades of deadlock with a mammoth piece of legislation. Embedded within the Patient Protection and Affordable Care Act (ACA) (1) was a historically unprecedented provision. This provision augmented federal authority in novel ways. It threatened to encroach upon long-recognized state prerogatives. It placed federal agencies in an unfamiliar and intrusive regulatory role. And it entirely escaped scholarly and public attention.

The provision is not the "individual mandate" targeted by the Commerce Clause challenges to the ACA. (2) Rather, it is an amendment to the Employee Retirement Income Security Act (ERISA) made by section 6607 of the Act. The new provision authorizes the Secretary of Labor to promulgate regulations that "provide[] an evidentiary privilege for, and provide[] for the confidentiality of communications between or among" a host of federal and state entities, including the Treasury Department, the Department of Justice, state attorneys general, and an association of state insurance regulators with no official governmental status whatsoever. (3) The Department of Labor is also authorized to privilege communications between "[a]ny other Federal or State authority," as long as--in the Secretary's determination--the extension of the privilege is "appropriate" for the purposes of enforcing ERISA's employee benefit provisions. (4) The power to privilege entrusted to the Department of Labor is simple and startling: it is a wholesale delegation of the authority to craft regulatory evidentiary privileges covering communications between dozens of federal, state, and private entities.

In the ongoing cacophony of debate surrounding the ACA, section 6607 has been overlooked. (5) Yet this provision could (eventually (6)) prove to have a more sustained impact on public law than the individual mandate--which, when all was said and done, turned out to be merely a poorly phrased tax provision. (7) The type of law contemplated by section 6607--the regulatory evidentiary privilege--is a true novelty. Privileges abound in federal law, but they are defined either by statute or judicial opinion. Section 6607 bestows on federal regulators a power that they have never before held: the power to write rules of privilege from the ground up.

Many within the federal bureaucracy will no doubt welcome this innovation in delegation as long overdue. Equipped with the power to privilege communications between an agency and regulated entities, an agency could more easily induce regulated parties to cooperate with its investigations. An agency could also more comfortably coordinate its activities with other agencies, state entities, or private parties, if it could shield from disclosure its communications with these other entities through promulgating regulatory evidentiary privileges. In these and other contexts, a delegated power to write privileges could be valuable indeed.

Given the influence that federal agencies wield over the shape of federal legislation, it was perhaps only a matter of time before Congress enacted an express delegation of the power to promulgate privileges. Section 6607 is the first such delegation, but it probably will not be the last. Now is the time--before more such delegations are enacted--to think through the implications of migrating the power to write rules of evidentiary privilege from Congress and the courts, on the one hand, to the executive branch, on the other.

This contribution is valuable because no scholarly literature probes the intersection of the law of delegation and the law of privilege. Scholarship on delegation ignores privilege law, despite the fact that privilege law rests on a sweeping delegation of interpretive authority to courts. (8) And scholarship on privilege law starts from the widely shared initial premise that Congress and the courts, as opposed to executive agencies, will control the substance of federal evidentiary privileges. (9) As section 6607 shows, this premise is faulty. This law opens up the prospect of federal administrative agencies crafting new evidentiary privileges through the rulemaking process. This Article is the first to grapple with the ramifications of that scenario--a scenario that is no longer theoretical.

Delegating the power to write rules of privilege to an executive agency poses three risks. The primary threat is to agency accountability. Authorizing an agency to write rules to protect its own communications from disclosure is an invitation to mischief. Executive agencies resist compliance with open government laws, and they overutilize the mechanisms already available to them for shielding their own information. If an agency can write regulations to shield its own information and communications from exposure to the public or to adversaries in litigation, the transparency and accountability of government will decrease.

Authorizing agencies to write evidentiary privileges will cause trouble even if the resulting regulations apply only to the communications of parties outside the agency, such as private parties or state entities. The chief concern here arises from the likelihood that agencies will want to give their new regulatory privileges broad preemptive effect. Many substantive state laws are designed to ensure either public access to government information (e.g., open government laws) or litigant access to private information (e.g., rules of discovery). As much literature on administrative federalism suggests, federal agencies will likely prioritize achieving their substantive mandates over the federalism harms of preempting such state rules. (10) The result is likely to be a greater volume of privileges with a concomitantly greater degree of displacement of state law than if Congress and the courts retained the privilege pen.

A distinct harm to federalism--and one that may be more disturbing--is the prospect that a federal regulatory evidentiary privilege might shield the communications of state agents, such as state attorneys general or state insurance regulators, from disclosure to the public or to their state-level principals, such as governors or state legislatures. By obstructing the ability of the states to monitor their agents, privilege delegations could imperil not only state regulatory interests but also state governance interests.

After canvassing some necessary background, the discussion below elaborates on these problems with delegations of the power to privilege. It then leverages this critique to generate some institutional design principles that should govern...

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