Can We Revive the Old Constitution?

“The New Deal constructed numerous federal departments and agencies to regulate the private sector for general, nebulous ends. In effect, we received a new constitution.” ~ Richard M. Reinsch II

Reprinted from Law & Liberty

Two common proclamations currently dominate conservative thinking: (1) We are governed by runaway bureaucrats with no accountability to the people, and (2) We are governed by a Congress that refuses to legislate in any regular capacity, even refusing to deliberate in committee and vote on a federal budget on a department-by-department basis. Both statements are true and are routinely voiced by Republican legislators on social media, Fox News, op-eds, even in fancy speeches to academic and public intellectual audiences.

But congressional representatives or senators seem incapable of taking concrete action to revive legislative deliberation, restore the Congressional committee system, discipline the executive bureaucracy, and concentrate on truly national policy concerns, among other items.

We know the scope of the problem, that a deliberating legislative power is no longer substantively exercised by the branch of government vested by the Constitution with this capacity. Instead, much of this lawmaking power takes place in the regulatory or administrative state. Rulemaking also takes place through adjudication, where disputes with private litigants are presided over by administrative judges ensconced in the actual agency whose rules are in dispute.

Legislation, enforcement, and adjudication are exercised by the same set of hands. Publius called this tyranny, and one of the objectives of the 1787 Constitution was to eliminate it.

A new volume from the American Enterprise Institute titled The Administrative State Before the Supreme Court, featuring contributions from a dozen, mostly legal academics, investigates the prospects of reviving the nondelegation doctrine (NDD), which would prevent or at least place limits on Congress transferring its legislative powers to the administrative state. The hopeful consequence is that it would restore Congress to its representative, deliberative power.

The Rise of the Administrative State

Many see such reform efforts as deeply inadequate. But the logic of the administrative state’s reply to reformist arguments has also run out of meaning. Those inside the agencies are experts, learned men and women, tasked with overlooking and guiding an incredibly large and complex country. Their powers, delegated to them by Congress, are necessary to perform the requisite tasks of governance. For this, the federal judiciary must accord them deference.

The administrative state gives one the process that is due, according to its powers, which do not necessarily throw you in jail or ruin your life. You should, therefore, be able to live with an SEC investigation that turns your company upside down because of an investment disclosure that it made regarding executives. But to state the obvious, administrative state powers affect the entire scope of the economy, impose dramatic costs on private parties—and the ratchet keeps turning.

Now the SEC wants to tackle global warming itself through a new disclosure regimen requiring companies to list how they might be contributing to climate change. Some want these new disclosures to be enforced on private companies by the SEC. Turn and cough, this won’t hurt . . . much.

Two primary characteristics of the administrative state are executive unilateralism and the fear private parties have of legal retaliation by agencies. Robert Gasaway, a lawyer who practices administrative law in Washington, observes:

Executive unilateralism is the practice whereby executive officials, including but not limited to the President, announce and implement sweeping policy changes before they are embodied in regular administrative processes, such as agency regulations or adjudicative proceedings, and approved by a court of law. Closely related to the affliction of unilateralism is the chronic syndrome of regulated parties’ fears of agency retaliation. In the eyes of the regulated, officials prepared to bend or break the law to impose favored policies are unlikely to embrace law-bound evenhandedness when confronted with opposition to their initiatives.

What, then, do we do with open-ended divestitures of legislative power by Congress that direct federal agencies to regulate in the “public interest” or to make policies that are “fair and reasonable?”

The New Deal constructed numerous federal departments and agencies to regulate the private sector for general, nebulous ends. In effect, we received a new constitution.

Congress itself reorganized in 1946 in two dramatic ways to make way for this new constitution of the administrative state. First, it passed the Administrative Procedure Act to attempt the legitimation and regularization of sweeping regulatory power and provide for some measure of common law review and restraint of its incursion into private rights. But the overarching goal was to permit the sectoral regulation of the economy by the federal government.

Congress and the American people accepted this new form of mixture between government and the economy. The result, recognized in the coming decades, was regulatory capture, as these government agencies became the tool of industry itself, turned more in the direction of incumbent players rather than towards a fairer or purer economy, whatever that means.

Second, Congress, through the Legislative Reorganization Act, turned itself into a body of oversight of the administrative state. Congress recognized this new reality of proliferating rules from executive agencies and decided to police and influence it. Over time, Congress came to see the value in conceding its powers to these agencies. Lawmaking became less contentious as the hard work of formulating actual rules that regulate securities, labor, transportation, housing, and later environmental standards, to cite only a few examples, fell to executive branch officials.

Those changes run deep, almost fundamental to the way the federal government operates now. John Hart Ely noted in 1981, “By refusing to legislate our legislators are escaping the sort of accountability that is crucial to the intelligible functioning of a democratic republic.” The problem is now so acute, the atrophy of legislative muscle so dramatic, that major congressional votes on budgets, healthcare, environmental, social, and family policies take place with little debate or compromise throughout the body, more in the manner of a rugby scrum than a deliberative republican body. Policies in the form of “legislation” composed entirely by staffers, spanning hundreds and thousands of pages are announced by congressional leadership of the majority party and voted on within hours or days.

Prospects for Reform

We should, therefore, welcome all thoughtful attempts to grapple with this slow, deadening threat to our constitutional order. The problem obviously has entrenched itself into America’s version of the Stuart Monarchy constitution that attempted to establish absolutist rule in 17th century England. Our version of the Stuarts are the progressives and all those who are blessed and rewarded by their enlightened, administrative rule, proving that power is intoxicating, never more so than when exercised for purportedly benevolent ends.

Conservatives and classical liberals, however, have engaged in a nearly quixotic quest to reassert constitutional principles into the operations of the regulatory state. As soon as the constitutional door opens, it has been quickly closed.

The current potential moment was created by Justice Gorsuch’s dissent in the 2019 Gundy case. There, federal legislation required those convicted as sex offenders to be registered in the Sex Offender Registration and Notification Act (SORNA). Gundy, a convicted state offender, had been convicted before passage of the Act. The Attorney General could determine on a case-by-case basis, among those convicted prior to the Act’s passage, who would be required to register. Gundy argued this was the creation of unlimited discretion in the AG, and as such, the requirement that he register under the Act violated the NDD.

The Court ruled against Gundy, but four members of the Court went on record affirming the NDD and their willingness to revisit and perhaps apply a more muscular version of it in the future. As soon as he joined the Court, Justice Kavanaugh made a similar statement, indicating that at least five Justices are ready to alter the status quo on the NDD, perhaps applying it more rigorously than has been done in 85 years.

Such optimism should be tempered by past experiences that featured related openings for the return of the NDD. “We have been here before,” Jonathan Adler observes. “Indeed, it seems someone catches a glimpse of this elusive phoenix stirring in the ashes every 20 years.” The NDD was to have returned in 1980, Adler notes, in the so-called Benzene case, but the moment passed. Adler quotes Professor Scalia at the time saying, “The doctrine has acquired a renewed respectability.” He would jettison this notion in 2000 in yet another moment when the NDD was supposedly to make its long-awaited return, this time in Whitman v. American Trucking Association. Professor Scalia had now become Justice Scalia, and the latter dismissed the nondelegation arguments made against the Clear Air Act. He argued sensibly that the Court “almost never felt qualified to second-guess Congress regarding the permissible degree of policy judgement that can be left to those executing or applying the law.”

On this point, those advocating for the renewal of the NDD have foundered on the shoals of practicability, struggling to second-guess both congressional deference and willingness to permit lawmaking power in the executive bureaucracy. The bureaucracy itself, clothed with expertise in the vital areas of government, seemingly demands deference from the judiciary. Who does the judiciary think it is? Is it really going to reinstitute a doctrine from the old Constitution?

As John McGinnis has argued in this space, three developments are pushing us to a rendezvous with the immense powers wielded by federal agencies: the rise of originalism, textualism in statutory interpretation, and an increasing aversion to regulatory power. The bedrock Chevron case announced that agency interpretation of any statute that committed powers to its discretion would be upheld provided it was reasonable and did not contradict express instructions in the statute. The practical effect was to further embolden agency power and the increased insularity of the administrative state from judicial accountability.

Of course, Congress took from Chevron the principle that it could write general, ambiguously worded legislation, which, as a matter of course, executive rule makers could turn to their own use. They had to pass legislation to learn what was in it. House Speaker Nancy Pelosi was not necessarily wrong about Obamacare when it is considered from this angle.

McGinnis’s point is that originalism necessarily urges the return of separation of powers and the NDD would be the lynchpin of its revival. Textualism looks to “an intentional method of interpretation of statutes.” Rather than let executive agencies devise new bodies of rules, so long as they are reasonable in relationship to an ambiguously worded statute, textualism would ask if the text spoke to the issue itself, according to McGinnis. And this would mean less deference to the agency in the first instance, narrowing their scope of rulemaking power because the statute is more closely read. Inevitably, more judgments will be made that statutes did not authorize administrative regulation. Perhaps of most significance is the increasing view that the administrative state commands less and less respect as it has assumed greater amounts of discretionary authority.

The Gorsuch Test

And that brings us to the present moment and Justice Gorsuch’s question for reigniting the NDD: What is the test? Justices Roberts, Gorsuch, and Thomas filed a dissenting opinion in Gundy. Justice Alito filed a concurring opinion, but noted, “If a majority of justices were willing to reconsider the approach we have taken for the last 84 years [that is, since the 1935 and the decisions in Panama Refining and A.L.A. Schechter Poultry], I would support that effort.” Gorsuch’s dissent, though, looms largest and is the inspiration for AEI’s scholarly effort.

Gorsuch returns to the constitutional structure and rationale for why we need a real NDD. He then attempts to do what many jurists have been skeptical towards—the formulation of a test the Court could enforce regarding overly broad divestitures of legislative power. According to Gorsuch, “the framers understood it to mean the power to adopt generally applicable rules of conduct governing future actions by private persons . . .” Moreover, they also knew “that it would frustrate” their plan of government “if Congress could merely announce vague aspirations and then assign others the responsibility of adopting legislation to realize its goals.”

Gorsuch then touches on deliberation. This limitation of lawmaking power to Congress alone was not merely to limit the size of government, he says: “Article I’s detailed processes for new laws were also designed to promote deliberation. . . .” Going even further, “If Congress could pass off its legislative power to the executive branch, the “[v]esting [c]lauses, and indeed the entire structure of the Constitution,” would “make no sense” (quoting Gary Lawson). In conclusion, Gorsuch notes, “Without the involvement of representatives from across the country or the demands of bicameralism and presentment, legislation would risk becoming nothing more than the will of the current President. . . .”

Gorsuch then turns to the big question: how do we know when Congress has acted unconstitutionally in divesting itself of its legislative responsibilities? The Justice then devotes three pages to answering this question. His answer provides, according to Judge Douglas Ginsburg, who currently resides on the United States Court of Appeals for the District of Columbia, a judicially manageable test: “Distinguishing between “policy decisions” and implementation.

Gorsuch’s opinion turns on the following criteria: “Does the statute assign to the executive only the responsibility to make factual findings? Does it set forth the facts that the executive must consider and the criteria against which to measure them? And most importantly, did Congress, and not the Executive Branch, make the policy judgments?” The real emphasis in Gorsuch’s chain of reasoning turns on what is a policy decision, which Congress must answer and not send on to the executive.

Answering Gorsuch

Most of the contributions in the volume are attempts to answer Gorsuch’s question: What is the test? Some offer attempts to provide great robustness to the standard of an intelligible principle that could guide executive agencies in their work and that courts could use to measure if a tailored and direct delegation occurred.

Todd Gaziano and Ethan Blevins seek to apply a “Void-for-Vagueness” standard that would impugn many congressional delegations of power if they lacked actual instructions and limitations on how power is exercised by agencies under the statute. This standard is commonly applied to criminal law statutes that fail to provide notice and therefore due process to civilians about their conduct that might run afoul of the law. Their reasoning and analogies to administrative law are convincing. Does the delegation of power restrain the executive in any meaningful way, or is it so vague as to admit of arbitrary power?

Gary Lawson reviews an early opinion on nondelegation by Justice Marshall in Wayman v. Southard in 1825 where he stated, “The line has not been exactly drawn which separates those important subjects which must be entirely regulated by the legislature itself from those of less interest in which a general provision may be made and power given to those who are to act under such general provisions to fill up the details.” This argument, Lawson traces, goes back to common law on principal and agency relationships, which turn on essential and incidental acts with which an agent would be entrusted in a business or commercial relationship. Likewise, the executive could not exercise core legislative-type power, or the principal agency relationship mandated by the Constitution would be upended. This seems yet another useful way to frame the dynamic on lawmaking power between Congress and the President.

Mark Chenoweth and Richard Samp propose an exacting standard whereby core legislative powers per Article I must receive close judicial scrutiny: tax power, spending, enacting criminal statutes, policymaking, and executive accountability. The upshot of their approach is that it attempts to root in the Constitution what can be delegated but under narrow circumstances. This would be opposed to other approaches which say that NDD should be denied in “major” policy decisions. But what is a major issue? Chenoweth and Samp argue that the better standard is the Constitution which makes no such distinction.

Congress Must Breathe Again

The volume’s contributions are thoughtful and would align the work of the federal government with the constitutional structure of power. There does seem a missing premise here, though. Thousands of regulations are issued during any given Congressional session while only a few dozen laws are actually approved. Congress will have to do real work again. And a real test limiting divestitures of congressional power to the executive branch would incentivize this outcome. But real difficulties obviously remain. What is a policy test? What is fact-finding and filling up the details? These hard questions can be answered by the Court, but Congress will also have to be responsive to the Court’s instructions or else we might find how truly weak the judicial branch is.

No judicial doctrine alone can revive constitutional government in America and strictly limit the power of the administrative state. Ginsburg soberly warns that even a renewal of NDD along the lines proposed by Justice Gorsuch is unlikely to reduce the size of government. Legislation and regulation follow public demand, he says, and that call for large government is unlikely to dissipate.

Besides, the administrative state in its current form will not be struck down but likely grandfathered in. The good will come in the form of Congress taking on responsibility again for making policy decisions lest their work be thrown out by the Court. If that happens, we can surely make more than a Bronx cheer. Congress will have become the seat of policymaking, with the administrative state left with the task “to fill up the details.” We return to the old Constitution, and the old is good.



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