The need to reform administrative law not just a Washington problem

The concept of administrative law has been controversial since it appeared over a century ago. Felix Frankfurter, a Supreme Court justice nominated by FDR, famously labeled the practice as “this illegitimate exotic.”

Administrative law undermines the separation of powers by essentially bringing all three branches of government — legislative, executive and judiciary — under one roof. This happens when Congress or state legislatures delegate to unelected officials in executive branch agencies the authority to write rules that have the force of law, administer and enforce those rules, and adjudicate any challenges in the agency’s own administrative law courts.

{mosads}In theory, anyone aggrieved by the outcome could challenge it in the independent state or federal judicial branch. But in practice, this option is mostly not available. It has been narrowly circumscribed by, among other things, judges who give excessive deference to agency actions, to the point of letting agencies interpret the powers given to them by the legislature under real laws.

It’s not just a Washington problem. Several generations of state legislatures have passed hundreds and thousands of statutes that delegate to particular agencies the power to write, enforce and adjudicate rules that have the force of law.

The problematic nature of this practice has been noted by scholars and political actors across the political spectrum, and states are investigating ways to rein in the regulators. These fall into four broad categories:

• Create, or give teeth to, a legislative Joint Committee on Administrative Rules.
• Tighten up statutes, known as administrative procedures acts, that establish the process for agencies “promulgating,” or enacting, rules that have the power of law.
• Consolidate various agencies’ administrative law judges into an independent administrative hearings bureau, run by a gubernatorial appointee.
• Give the judiciary, or require it to exercise, greater authority over the powers and actions of agencies, rather than defer to their own interpretations of law.

In August, the American Legislative Exchange Council adopted the Administrative Procedures Act, a model bill that illustrates each of these tools in statutory language. Here is a quick summary:

Establish a Joint Committee on Administrative Rules with teeth. A JCAR would have the power not just to review proposed rules but to void them. The committee would be composed of six members from each chamber of the legislature, with the bodies alternating every two years in selecting a 13th member. The full legislature could overrule the committee with a joint resolution of disapproval.

The grounds on which a JCAR could halt a rule are specified and include, among others, an absence of statutory authority, a failure to comply with expressed legislative intent and a conflict with statutory law.

Tighten-up the rulemaking process. All agencies would have to use the same process to promulgate enforceable rules. The rules would have the same standards and definitions for terms like “willfully,” “knowingly,” “gross negligence,” and “arbitrary and capricious.”

Certain agency documents, such as “declaratory orders,” “intra-agency memoranda” and “guidance documents,” would not be considered enforceable rules.

Proposed rules would have to include a statement of need that includes its intention and scope; its legal basis; its costs, benefits and alternatives; and a statement of its impact on state and local policy, individual liberty and small businesses.

Create a separate State Office of Administrative Hearings. Administrative law judges would be consolidated into a separate state hearings office, making them independent of the agencies whose processes and rules they must evaluate.

A full-time chief administrative law judge appointed by the governor, with advice and consent of the Senate, would serve for a two-year term as director of this independent office. That official would have sole authority to hire and manage the administrative law judges, who must be attorneys and explicitly not responsible or subject to the indirect influence of anyone, except the chief administrative law judge.

State agencies would be barred from attempting to influence the hearings office’s fact-finding or interpretation of the law, other than openly presenting evidence and making arguments in cases.

Specify standards and the scope for judicial review and remedies. Individuals who are aggrieved or suffering a legal wrong because of an agency action would have a right to judicial review that is spelled out in the model statute. It includes a list of some agency actions for which a person can seek judicial review, and lays out the specific scope and standards of review.

ALEC model bills are intended to be templates that state legislatures modify and adapt to fit their own needs and circumstances. This particular model is useful because it offers a well-rounded menu of reforms, not least of which is subjecting the administrative law process to greater political accountability. Recent high-profile abuses and growing public suspicion of “the deep state” make this a good time for political leaders to act.

Jack McHugh is the senior legislative analyst at Mackinac Center for Public Policy in Michigan. He previously spent six years as a legislative chief of staff in the Michigan House of Representatives.