The Administrative Threat
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The Administrative Threat

Philip Hamburger

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The Administrative Threat

Philip Hamburger

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About This Book

Government agencies regulate Americans in the full range of their lives, including their political participation, their economic endeavors, and their personal conduct. Administrative power has thus become pervasively intrusive. But is this power constitutional? A similar sort of power was once used by English kings, and this book shows that the similarity is not a coincidence. In fact, administrative power revives absolutism. On this foundation, the book explains how administrative power denies Americans their basic constitutional freedoms, such as jury rights and due process. No other feature of American government violates as many constitutional provisions or is more profoundly threatening. As a result, administrative power is the key civil liberties issue of our era.

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Although the United States remains a republic, administrative power creates within it a very different sort of government. The result is a state within the state – an administrative state within the Constitution’s United States. The state within is sometimes called the “regulatory state” to emphasize its burdens on economic and personal freedom, and is sometimes called the “deep state” because of its tendency to interfere with our elected government. This book focuses on the legal side of the problem – on the power claimed by the administrative state and how it slices through basic civil liberties.

Not Just Economics

Over the past century, most complaints about administrative power have come from an economic perspective. It is said that administrative power is inefficient, dangerously centralized, burdensome on business, destructive of jobs, and stifling for innovation and growth. All of this is painfully true, but these are largely economic complaints, and economic complaints are not the entire critique of administrative power.
Although this power began as an exceptional method of regulation, and was applied mostly to corporations, it has become the dominant reality of American governance, which intrudes into the full range of American life, including not only economic endeavors but also political participation and personal decisions.
The economic critique does not address the breadth of this danger. Indeed, it tends to protest merely the degree of administrative regulation, and it thereby usually accepts the legitimacy of administrative power – as long as it is not too heavy-handed on business. No wonder the economic criticism has not stopped the growth of administrative power.

The Centrality of the Legal Challenge

For a better understanding of the administrative threat, one must turn to law. The legal critique more fully addresses the problem than does the economic protest, for although much administrative power is economically inefficient, all of it is unconstitutional. And this legal objection is central, because it confronts administrative power on its own terms – on its pretension to bind Americans in the manner of law.
In saying that administrative power is unconstitutional, this is not to deny that executive power is extensive. Executive power is often portrayed as merely the power to execute the laws, but more accurately (as recognized by Alexander Hamilton) it amounts to the power to execute all of the nation’s lawful force. It thus includes the power to prosecute offenders in court, to exercise discretion in distributing benefits, to determine the status of immigrants, and so forth.
In contrast, administrative power involves not force but legal obligation, and this is why the legal challenge matters so much. Contemporary theorists sometimes suggest that law is a sovereign’s command backed by coercion. But traditionally in America, notably when the Constitution was adopted, law was something that came with legal obligation – the obligation to obey. Working from underlying ideas about consent, eighteenth-century Americans assumed that a rule could have the obligation of law only if it came from the constitutionally established legislature elected by the people, and that a judicial decision could have such obligation only if it came from a constitutionally appointed judge exercising independent judgment. On the basis of such principles, the US Constitution placed lawmaking power in Congress and judicial power in the courts. The power to bind – that is, to create legal obligation – was thus in these departments, not the executive.
Nonetheless, through administrative power, the executive purports to create legal obligation. It binds Americans and deprives them of their liberty, not through acts of Congress and acts of the courts but through other mechanisms. And this evasion of the Constitution’s pathways for law is what makes the legal objection to administrative power so central.
Adding to the problem, administrative power also evades many of the Constitution’s procedures, including both its legislative and judicial processes. Administrative power thereby sidesteps most of the Constitution’s procedural freedoms.
Administrative power is thus all about the evasion of governance through law, including an evasion of constitutional processes and procedural rights. These legal problems are forceful reasons to reject all administrative power and, indeed, to consider it the civil liberties issue of our time.

Absolute Power, Then and Now

An initial step toward understanding the danger and unconstitutionality of administrative power is to examine some examples, past and present. Although our republic may seem too American and contemporary to bear comparison with England’s old absolute monarchy, the similarities are therefore all the more disturbing.
English absolutism was epitomized by King James I, who ruled from 1603 to 1625. Rather than being content with the government’s regular power to make statutes in Parliament and to have cases adjudicated in the courts, he tried to exercise versions of legislative and judicial powers in his “prerogative” commissions or tribunals – his equivalent of administrative agencies. And his capacity in these bodies to bind his subjects was a significant part of what was called his “absolute power.”
His prerogative tribunals most famously included the Star Chamber and the High Commission. The one had statutory authorization for some of its jurisdiction, and the other was entirely founded on statute. With or without legislative authorization, these bodies exercised absolute power.
Such tribunals are often assumed to have been blood-soaked torture chambers, but they were more bureaucratic than bloody. They were efficient prerogative agencies, and they exercised absolute power in ways that have come back to life in America.
LAWMAKING. Instead of legislating through acts of Parliament, King James personally issued proclamations in the Star Chamber that served as binding regulations on trade, manufacturing, and urban development. He even had these proclamations published in a volume that looked like a statute book – an early equivalent of the Federal Register.
James undoubtedly had the power to issue proclamations, but proclamations that bound in the manner of law were another matter. In 1610, after James used proclamations to create regulatory offenses, Chief Justice Edward Coke and the other chief judges declared such proclamations unlawful and void, saying that the king “by his proclamation cannot create any offense which was not an offense before.” The judges recognized that lawmaking outside of the legislature was unlawful.

Ever tempted to exert more power with less effort, rulers are rarely content to govern merely through the law, and in their restless desire to escape its pathways, many of them try to work through other mechanisms. These other modes of binding subjects are absolute power.

James, however, had other means of legislating outside of Parliament – most notably, Star Chamber regulations, which were issued more bureaucratically than his personal proclamations. Acting through its adjudicatory proceedings, the Star Chamber could issue regulations in the form of judicial decrees. In other words, judicial-style process was used for lawmaking, and this practice came to an end only when Parliament in 1641 abolished the Star Chamber.
In the twentieth century, the sort of power exercised by King James was revived in the United States. With remarkable fidelity to the old absolutism, some federal agencies used adjudicatory-style proceedings as a basis for issuing binding rules – a process known as “formal rule making.” Because such proceedings came to seem cumbersome, agencies nowadays issue binding rules with littlemore ceremony than giving notice and soliciting public comments – this being called “informal rule making.” Either way, like their seventeenth-century precursors, federal agencies are engaged in lawmaking.
The Affordable Care Act, for example, authorizes Health and Human Services to issue binding rules on health care. Indeed, many federal agencies make binding rules with express authorization. This sort of administrative rule making is justified on the fiction that when Congress states an “intelligible principle,” agencies that follow the principle are merely specifying what Congress has enacted. But this is a fantasy. The crude reality, as recognized long ago by James Landis (a prominent advocate of administrative power) is that the agencies are exercising legislative power.
INTERPRETATION. Not content with overt prerogative lawmaking, James also used his prerogative tribunals to make law through what he called the “interpretation” of statutes. Where statutes seemed ambiguous or indefinite, the Star Chamber and the High Commission used interpretation to make law. And to ensure that these prerogative interpretations had legal effect, James demanded judicial deference to them.
The judges, however, stood their ground; they generally refused to defer. As Chief Justice Coke explained to James in 1610, although the king appointed judges, he lacked judicial office. In contrast, the judges had the office of judging and interpreting. The judges therefore could not defer to the king’s interpretations.
Of course, what really was at stake was not James’s personal interpretations of statutes but the interpretations put forth by his prerogative tribunals. Correspondingly, Coke’s point was that although the members of these bodies acted as the king’s agents, even the king himself could not make authoritative interpretations of law.
The king and his minions obviously had to interpret statutes every day to decide the lawfulness of their own conduct – just as any individual regularly had to interpret statutes to avoid violating the law. And in making such decisions, all such persons could rely on the judgment of their lawyers. But authoritative interpretations came only from the judges, for only they had an office of independent judgment in deciding cases. Because of their office or duty to exercise independent judgment, and because the king’s interpretations were without such authority, the judges could not defer to the interpretations that came from the king’s agents or agencies.
The lawmaking interpretation that James desired for his prerogative bodies has become a reality for American administrative agencies. Federal judges show varying degrees of deference to agency interpretations, and the agencies therefore can use their interpretations to create law.
Most famously, under the 1984 Supreme Court case Chevron v. Natural Resources Defense Council, judges must defer to administrative interpretations of ambiguities in statutes. Such interpretations must be among the “permissible” possible interpretations, but within this standard, agencies generally enjoy much freedom to choose their interpretations and thus to make law wherever they can find a plausible statutory ambiguity. As a result, even where Congress has not expressly authorized administrative rule making, agencies often can use interpretation to make binding rules – that is, to make law.
This can be illustrated by the Clean Power Plan – an Environmental Protection Agency (EPA) rule designed to reduce greenhouse gas emissions by establishing emission standards for existing power plants. Most commentators protest its substance (for example, its destruction of jobs), but the point here is how the agency made the rule. According to the EPA, it can issue the rule because it is merely interpreting an ambiguous section of the Clean Air Act (§111d). Similarly, the EPA relies on interpretation to make its rule on the waters of the United States – a rule that potentially regulates almost all waters in the nation (admittedly not puddles, but nearly everything else).
Even where an agency does not interpret a statute with the formality required for Chevron deference, it can issue less formal statutory interpretation. Although such interpretation does not get as much deference from the courts as the formally issued sort, it receives what the courts call “respect” under the so-called Mead-Skidmore doctrine, and this is enough for agencies to use informal interpretation as a means of legislating.
Topping it off, agencies make law not only by interpreting statutes but also by interpreting their own rules, often in the form of guidance. And this sort of interpretation gets great judicial deference under Auer v. Robbins. An agency can thus both issue a binding rule and interpret it, and at each stage it is making law.
These methods of lawmaking through agency interpretation are disturbing. They are pathways for agencies to do what Congress itself did not do, or even expressly authorize. And they revive a mode of lawmaking that once flourished under James I.
ADJUDICATION AND PROCEDURAL RIGHTS. In addition to using the Star Chamber and High Commission for lawmaking, King James also used them for adjudication. These prerogative tribunals employed civilian-style inquisitorial proceedings. Accordingly, in relying on these tribunals, James escaped not only the courts and their judges but also their juries and the full range of their procedural rights.
Medieval kings had already tried to evade the courts and their processes by summoning, trying, and punishing subjects in prerogative proceedings. In response, fourteenthcentury statutes confined kings to acting through the “due process of law.” As put by a medieval summary of the most comprehensive of these statutes, “None shall be put to answer without due process of law.” Sixteenth- and seventeenth-century kings, however, used the Star Chamber and High Commission to bind subjects, and King James and his son Charles I took this so far as to provoke profound opposition. Many lawyers complained that prerogative adjudication violated the due process of law, and their protests concluded in 1641 with the abolition of both the Star Chamber and the High Commission.
Like the old prerogative courts, contemporary administrative tribunals evade the courts, their judges, their juries, and the due process of law. Administrative tribunals sometimes apply inquisitorial methods, but even where their proceedings are adversarial, they do not live up to the Constitution’s procedural guarantees. The Securities Exchange Commission (SEC), for example, can bring civil insider-trading cases in federal courts, or it can refer insider-trading cases to the Justice Department for it to prosecute criminally in such courts, and either way, defendants get judges and juries and the full range of the Constitution’s applicable procedural rights. But the SEC can also pursue insider-trading cases before administrative law judges, who work for the commission, are not really judges, do not offer juries, and do not even allow equal discovery.
Like their prerogative predecessors, moreover, administrative adjudicators cannot question the lawfulness of the regulations they enforce. It often is said that administrative law judges are independent because they are protected in their tenure and salary. But actually they can be demoted or have their salary docked if they reject administrative regulations as unlawful. This is especially problematic because an underlying question in all administrative proceedings concerns the unlawfulness of the applicable regulations, not least under the Constitution. It thus becomes apparent that administrative law judges are precommitted to upholding the government’s position on the most persistent and serious legal questions. And this means that they usually are systematically biased in favor of one of the parties before them, in violation of the due process of law. Once again, administrative adjudication echoes the past.
WAIVERS. Finally, James I and most other sixteenth- and seventeenth-century English kings claimed a power to suspend the law or at least dispense with it. The suspending power allowed the king to suspend a statute’s obligation for all persons; the dispensing power enabled him to dispense with its obligation for particular named persons. In both ways, a king could evade the need to persuade Parliament to repeal or amend a statute and, instead, could simply relieve some or all subjects of their duty to comply.
This waiver power was widely criticized. It was open to corruption and political favoritism, and it left subjects unequal under the law and in the courts. Eventually, in 1689, the English Declaration of Rights declared the suspending and dispensing powers unlawful unless exercised with Parliamentary consent. And in the next century, at least some Englishmen considered any use of these powers incompatible with the division of executive and legislative power between the Crown and Parliament. As to the suspending power, for example, it was said that “the constitution has entrusted the crown with no power to suspend any act of Parliament, under any circumstances whatever.” In other words, royal or executive power could never include the power to unmake law.
Nowadays, the prerogative to suspend and dispense with the law has been revived in administrative waivers. The waivers sometimes are authorized by statute and sometimes are not – as with the so-called mini-med waivers issued under the Affordable Care Act. Ei...

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