YAKUS AND THE ADMINISTRATIVE STATE.

Author:Conde, James R.
 
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INTRODUCTION I. THE OUTWORKS OF AN ELABORATE STRUCTURE: ADMINISTRATIVE LAW, CIRCA 1940 II. THE NEW DEAL GOES TO WAR A. The Emergency Price Control Act: Origins and Structure B. The New Dealers' Defense III. THE BEEF OVER BEEF PRICES A. The OPA Goes to Work B. Regulating Meat C. Litigation 1. EPCA Proceedings 2. Equitable Relief: Lockerty 3. Criminal Defenses: Yakus D. Yakus in the Supreme Court 1. The Briefs 2. The Court Decides 3. The Majority Opinion 4. The Dissents E. And in the End IV. CONCLUDING REMARKS: THE LEGACY AND Lessons of Yakus A. Yakus v. United States: Dialectics B. The Lessons, Perhaps, of Yakus INTRODUCTION

On February 24, 1943, a grand jury in Boston indicted Albert Yakus, president of the Brighton Packing Company, for selling beef in violation of the Emergency Price Control Act of 1942 (the "EPCA"). (1) The indictment was part of the Office of Price Administration's ("OPA's") aggressive enforcement campaign to suppress the vast black market in meat that developed during the war as a result of OPA's price control regulations. (2)

OPA's regulations imposed a particularly heavy toll on meat packers. (3) OPA controlled the price of wholesale and retail meat--but not of livestock. (4) The result was a "price squeeze": unregulated livestock prices kept rising, but regulated meat dealers could not raise prices in response to higher costs. (5) Small independent meat dealers like Albert Yakus were forced to choose between facing criminal sanctions for selling "overpriced" meat, or obeying the regulations and going out of business. (6)

In Congress and in the halls of the New Deal bureaucracy, the meat dealers complained that they were being squeezed out of existence by OPA's price regulations. They also fought back in court, and their various challenges to OPA's regulations and to the EPCA reached the Supreme Court on several occasions.

Yakus v. United States was the final, most significant challenge. The meat dealers argued that any statute had to provide criminal defendants with some effective means of testing, in an independent court, the validity of a rule under which they were being prosecuted. (7) The EPCA, they argued, violated that cardinal principle. In an opinion authored by Chief Justice Harlan Fiske Stone, the Supreme Court roundly rejected the meat dealers' contentions. Petitioners, the Court declared, had failed to exhaust the administrative remedies provided by the EPCA. (8) Thus, the fact that the statute categorically barred courts from entertaining challenges to OPA's regulations in enforcement proceedings posed no constitutional problem. (9) Albert Yakus, a highly respected member of the local community and leader of his synagogue, went to jail. (10)

This Article recounts the story of Yakus v. United States in considerable, often depressing detail. The enterprise, we readily acknowledge, may seem of interest mostly to legal historians, rather than doctrinally or practically oriented scholars. Yakus is little more than a footnote cite in current Constitutional Law textbooks, (11) and a hiccup in the standard Federal Courts curriculum. (12) And so far as the administrative law profession is concerned, the case seems to have slipped down a memory hole. Textbooks and treatises mention Yakus as a case about the exhaustion of administrative remedies, (13) pre-enforcement review, (14) or similar issues (15)--but always in passing. As for the case law, stray cites aside, Yakus has figured in only a handful of Supreme Court decisions. (16) Nevertheless, we persist. Our close examination aims to show that the near-forgotten Yakus case should command attention in the contemporary, ideologically fraught debate over the administrative state and its law.

Yakus v. United States arose over an extraordinary statute--a veritable monument to the New Dealers' vision of the administrative process and administrative government. As we shall show, (17) the EPCA entrusted OPA with virtually boundless discretion to set prices across the entire economy. Its administrative procedures were designed to frustrate regulated parties while presenting a mirage of fairness. And the statute's judicial review provisions were carefully calculated to block effective judicial review--even as the statute mobilized federal and state courts to enforce OPA's dictates. Arguably, Congress had enacted comparable provisions in earlier statutes, and the Supreme Court had sustained those enactments. But the EPCA's individual mechanisms and provisions had never been presented, let alone been judicially sanctioned, in combination, and in a form that threatened to accomplish what Congress and the Executive may not do directly: sport away the rights of individuals, and make the courts accomplices in the enterprise. That, at bottom, was the meat dealers' principal contention in Yakus. (18) Their challenge failed; and because it failed, the EPCA's innovations and in particular the foreclosure of judicial review in enforcement proceedings became standard tools of administrative government.

Closer examination reveals a subtler but to our minds equally consequential aspect of the Yakus litigation. The preceding thumbnail account of the statute suggests the range of the constitutionally grounded administrative-law doctrines that were implicated in Yakus: the separation of powers and delegation; due process; and judicial review. Contemporary law provides separate, compartmentalized answers to those doctrinal questions: an "intelligible principle" of delegation; (19) procedural requirements for administrative rulemaking; (20) and a presumption of reviewability, (21) coupled with judicial deference canons. (22) Yakus, however, was litigated against a constitutional understanding under which all the doctrinal answers still hung together, as mutually reinforcing "outworks of an elaborate structure" that buttressed "the supremacy of the law." (23) That understanding was not rigidly formalist: there could be some give in this or that doctrine, provided that the overarching purpose remained in view. Wrenched out of that context, however, the limiting doctrines cease to be integral parts of a recognizable constitutional structure. It then becomes harder to see their point or purpose. To disjoin the doctrines is to render them marginal and in the end nugatory.

That, we shall endeavor to show, makes Yakus a milestone in what Professor Adrian Vermeule has called "Law's Abnegation," meaning the surrender of effective legal constraints on administrative discretion. (24) The combatants at the time understood the point perfectly well. The EPCA's architects defended its unprecedented combination of administrative instruments--broad delegation, bare-bones procedures, the separation of the courts' review and enforcement functions--by way of compartmentalizing the limiting constitutional doctrines. The meat dealers' challenge was a last-ditch effort to keep the pieces of the older order together. It failed: the Yakus majority fully embraced the New Dealers' administrative process model. The victory was sufficiently triumphant to make us forget what the fight was actually about.

Our exhumation of Yakus proceeds in four Parts. Part I reconstructs the legal universe as it presented itself to the EPCA's architects and, in short order, to the parties in incessant litigation over the statute, including the Yakus case.

Part II describes the origins and contours of the EPCA, as well as its architects' legal defense of the statute, one piece at a time. Part III recounts the OPA's aggressive enforcement campaign; Congress's sporadic and, by and large, feckless interventions; the meat dealers' desperate, multi-pronged litigation, culminating in Yakus; the Supreme Court's decision and opinions in the case; and, in the aftermath, the demise of the OP A after the war.

The concluding Part IV sketches our thoughts on the legacy of Yakus and its lessons for the contemporary administrative law debate. We believe that the conflict between the integrated constitutional view of the (pre-)New Deal Era and the disaggregated approach of the postwar, post-APA decades remains--or rather should remain--an enduring question of administrative law. For scholars who embrace the administrative state, Yakus should regain its status as a milestone in the marginalization of constitutionally grounded doctrines. (25) For those who entertain apprehensions about an "unlawful" administrative state, (26) the case suggests the same lesson in reverse: there may be little mileage in agitating for the revision of discrete doctrines unless one can somehow re-connect the constitutional pieces.

  1. THE OUTWORKS OF AN ELABORATE STRUCTURE: ADMINISTRATIVE LAW, CIRCA 1940

    Yakus lies at the end of a history of judicial efforts, spanning a rough half-century, to accommodate a growing administrative state to the constitutional order. The demands of that order are distilled in familiar propositions: only the legislature can make law--that is, rules with binding effect. (27) In matters of private right, citizens must have access to an independent court and its de novo judgment. (28) Roll the tape; cue Marbury v. Madison. (29)

    In constitutional practice, these rock-bottom propositions can and must tolerate a fair amount of slack and doctrinal blurriness. The jurisprudence of the nineteenth century provides impressive evidence of the difficulties that surround the scope of enumerated powers, (30) the delegation of legislative authority, (31) the notion of "private right," (32) the characteristics of industries "affected with a public interest," (33) and other concepts and doctrines that are central to the constitutional order. Still, institutional innovations that may seem dubious from a rigidly formalist vantage may well be bearable so long as constitutional principles are kept in view--and so long as those principles are understood as interconnected elements of a coherent constitutional order.

    This...

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