Deep Dive Episode 180 – Book Review: Administrative Law Theory and Fundamentals: An Integrated Approach
With his new casebook, “Administrative Law Theory and Fundamentals: An Integrated Approach,” Professor Ilan Wurman seeks to provide fresh thinking to the field of administrative law. In the casebook, Professor Wurman proposes a theory of administrative power that he feels explains constitutional text and structure, as well as historical and modern practice, more completely than competing accounts. He argues that there are “exclusive” powers that only Congress, the President, and the courts can respectively exercise, but also “nonexclusive” powers that can be exercised by more than one branch. With this theory of “nonexclusive powers” Professor Wurman seeks to help students and scholars of administrative law critically analyze administrative law concepts such as delegation, quasi-powers, judicial deference, agency adjudications, and the separation of powers more broadly.
In this episode, Professor Wurman and Professor Richard Epstein discuss the new casebook and its theory of administrative power.
Although this transcript is largely accurate, in some cases it could be incomplete or inaccurate due to inaudible passages or transcription errors.
Evelyn Hildebrand: Welcome to The Federalist Society’s teleforum virtual event this afternoon. Today we discuss Professor Ilan Wurman’s new book titled Administrative Law Theory and Fundamentals: An Integrated Approach. My name is Evelyn Hildebrand, and I am an Associate Director of Practice Groups at The Federalist Society. As always, please note that all expressions of opinion are those of the experts on today’s call.
Today, we are fortunate to have with us Professor Richard Epstein, the Laurence A. Tisch Professor of Law and the Director of the Classical Liberal Institute at New York University School of Law. He is the Peter and Kirstin Senior Fellow at the Hoover Institution and the James Parker Hall Distinguished Service Professor Emeritus and Senior Lecturer at the University of Chicago. He has written and spoken extensively on a wide range of topics and writes a regular column for Defining Ideas. We’re very pleased to welcome Professor Epstein, and he will introduce Professor Wurman in a moment.
After our speakers give their opening remarks, we will turn to you, the audience, for questions, so be thinking of those as we go along. If you do have a question for either of our speakers this afternoon, please enter the question in the chat or the Q&A function at the bottom of your screen.
With that, thank you for being with us today. Professor Epstein, the floor is yours.
Prof. Richard Epstein: Well, thank you so much. It’s a great pleasure to introduce Ilan. I met him as a very eager and on-the-rise student when he was at the Stanford Law School. He reminded me just before that he was a student of Mike McConnell, and I reminded him that Mike McConnell was a student of mine. So at this particular point, I am now introducing my grandchild, who is an expert on these kinds of issues.
And the point actually really does matter. I’ve taken a look at the table of contents, and I realize that the approach that he has to administrative law is not the approach that would be given either in my generation or in the generation that followed it. And I think it’s extremely instructive to understand that sensibilities start to change. Events that you regard as contemporary when you enter the teaching profession as I did in 1968 are not going to be regarded as contemporary by somebody who was not even born in that particular year.
So what I’m going to do now is turn this over to Ilan to describe what it’s about. And the way we’re going to proceed is he’s going to first begin by telling us something about what he thinks to be the distinctive approach that’s associated with his topic. It’s something on which I have written, influenced, I’m happy to say, by Ilan himself, after which we’ll take some questions, and then we’ll open up to an additional structure where he will talk about other things. So Ilan, why don’t you take a deliberate amount of time in order to explain to people what you think to be distinctive and important about the casebook that you have written.
Prof. Ilan Wurman: Great. Well, thank you so much for having me, and thank you for the very generous introduction. I want to apologize in advance. It tells me my internet connection is unstable. This was supposed to be a call this morning so I was less worried about it, but hopefully my internet will persist.
The reason we’re doing this is because I have this new casebook, and it’s called Administrative Law Theory and Fundamentals. It’s out with this new doctrine and practice series with Foundation Press. And a new casebook — how many casebooks do we already have on this subject? They can be really hard to justify. And so I wanted to say a few words about the casebook and why I thought a casebook like this needed to be written.
It seems to me that, particularly in light of having a more originalist Supreme Court today, that administrative law is in some need of fresh thinking. In City of Arlington v. FCC, Chief Justice Roberts — and this case has become quite prominent among originalists. Maybe less important than one would have expected for the Chevron holding. But in terms of what Chief Justice Roberts said in this passage, he described the administrative state as unlawfully combining legislative, executive, and judicial powers. So here’s what he said.
He said, “Although modern administrative agencies fit most comfortably within the executive branch,” —this is Chief Justice Roberts— “as a practical matter, they exercise legislative power by promulgating regulations with the force of law, executive power by policing compliance with those regulations, and judicial power by adjudicating enforcement actions and imposing sanctions on those found to have violated their rules.” And he went on to say that this accumulation of powers in the same hand is not an occasional or isolated exception to the constitutional plan. It is a central feature of modern American government, he says.
Now, Chief Justice Roberts’ description, as I said, is somewhat standard fare in conservative and originalist circles, this idea that the administrative state is all unconstitutional, it’s all combining powers that should be separate. Philip Hamburger has this book Is Administrative Law Unlawful? and implies that the answer is yes. And it makes us think this whole administrative state is unconstitutional.
And I wonder is this view accurate? Is Chief Justice Roberts’ statement accurate? And so my casebook has a theory that drives it and that arises throughout the entirety of the materials. And the theory I think is a bit different and better explains constitutional text and structure as well as contemporary and historical practice than other competing approaches.
What I argue in this casebook, what this casebook puts forward, the theory, if you will, in the Theory and Fundamentals in the title, is that there are exclusive powers and there are nonexclusive powers. And it helps us to think of administrative power in this frame. So there are exclusive powers that only Congress, only the president, and only the courts can respectively exercise.
But there are also nonexclusive powers. What do I mean by nonexclusive power? This is power that can be exercised by more than one branch. So not every regulation, not every rulemaking is an exercise of the legislative power that Congress must exclusively exercise. Some regulations are nonexclusive in the sense that they partake in both legislative and executive qualities and therefore can be exercised by more than one branch. They can be exercised by both branches.
Not every adjudication is an exercise of the judicial power that courts must exclusively exercise. Many are, in fact, over what are called public rights, and these can be adjudicated in the judiciary, but also in the executive, and also, by the way, in congressional committees. So call it, say, nonexclusive judicial power, if you will.
Why is this framing helpful? It almost sounds obvious when I say it. Well, it helps explain a lot of things in administrative law that seem to confuse people. So it explains what Chief Justice Marshall meant when he wrote in Wayman v. Southard. This is the Court’s first major nondelegation case, I would say. He said that Congress cannot delegate power that is exclusively legislative in nature, but it can delegate to other departments power that Congress could have exercised itself, namely, Marshall said, the power to fill in the details pursuant to a more general provision.
In other words, there comes a point where Congress could always continue legislating. Congress could always legislate in more detail, but it doesn’t have to. It can leave the details to the executive.
One of the earliest examples, and I’m going to mention this example today because it comes up repeatedly in my casebook. We always come back to this example, and the casebook asks us to analyze these modern issues in light of this precedent from George Washington. So one of the earliest statutes was a single-sentence statute that said that new government will assume the pension payments to the invalid veterans of the Revolutionary War that had been paid by the Continental Congress — or the Confederation Congress, I should say, quote, “under such regulations as the President of the United States may direct.”
Now, this is often cited as an example of this broad delegation of power to the executive, but of course, what does Washington do? We have his regulation. It’s preserved in the Library of Congress. President Washington and his Secretary of War, Henry Knox, promulgated a regulation respecting the timing of the payments, that payments would be made in two equal installments three months apart, and the regulation provided that the invalid veterans had to sign certain affidavits and proofs that you were in such-and-such vessel or regiment when you were injured, and so on.
Now, could Congress have enacted into a statute these regulations? Of course it could have. Of course Congress could have done it. But did it have to do so? I don’t think so. It was officially a matter of detail, administrative detail, that it could be left to the executive. In other words, the regulation part took in both legislative and executive qualities and could have been promulgated by either branch. In the casebook, I call it nonexclusive legislative power. Now, Congress didn’t have to promulgate them. It wasn’t an exercise of exclusively legislative power, which was Marshall’s term.
Okay, just a few more examples. I think this distinction between exclusive and nonexclusive power helps explain other concepts over which we are confused, like quasi-legislative and quasi-judicial powers. Quasi powers are appealing, they’re intuitive, but they’re ultimately erroneous. So these concepts are appealing because as we’ve just mentioned, a regulation can look legislative; hence, I say quasi-legislative. An adjudication can look judicial. And again, that’s because regulations can also be done by Congress, and an adjudication over public rights, for example, can be assigned to court.
But my argument is neither has to be. They could be done by more than one branch. That’s why these quasi powers are appealing, but they’re ultimately misleading. The concept is erroneous because the Court in Humphrey’s Executor suggested that these categories of power that need not be exercised by any of the branches, that was the problem with Humphrey’s. That’s why Humphrey’s is wrong because it says, oh, it’s quasi-legislative power that doesn’t have to be exercised by Congress but also doesn’t have to be exercised by the president. That’s what’s erroneous.
The theory of nonexclusive powers explains, shows, demonstrates that either Congress or the executive could exercise these powers; hence, they’re sort of quasi-legislative, if you will. But still, one of them must be the department to exercise it. You can’t create a fourth branch of government. Powers are overlapping, but they still must be exercised by one of the main constitutional actors.
Okay, one or two other things. This distinction between exclusive and nonexclusive powers also explains the quote, unquote, chameleon-like quality of government power. Justice Stevens in numerous cases, in dissent or concurrence, argued that power is chameleon-like. It takes the shape of whatever branch is exercising it. In a few cases, he says, “Let’s just recognize this is legislative power and call it legislative power.” So I’m thinking of Bowsher v. Synar. I’m thinking of Whitman v. American Trucking Association.
Now, the concept of nonexclusive power explains what’s going on. Yes, power can often look chameleon-like because it’s nonexclusive. It can be exercised by more than one branch. But that doesn’t mean there aren’t some powers that are exclusive to one branch, exclusively legislative power, whatever that is, that Congress can’t delegate, and so on.
I also think this theory explains why Congress must authorize agencies to promulgate legislative rules under the APA. They’re called legislative rules. This always confuses my students. They’re not legislative in the sense of Congress has delegated legislative power, but they are legislative in the sense of it is nonexclusive legislative power in a lot of these cases. And so the executive can make these regulations, but Congress must authorize them to do it.
Now, of course, some regulations, in fact, slide into or transgress this boundary between nonexclusive and exclusive legislative powers. That’s the stuff of the nondelegation doctrine, but my point is simply conceptual. It’s not to fight over what that line is, at least not on this call.
I have one other point about Chevron deference. I think it explains Chevron once it’s acknowledged that in most of these Chevron cases, by the way, agencies aren’t actually interpreting law. Usually, there’s just a gap. The statute is silent. There’s a gap. I’m not talking about ambiguity. I think interpretive ambiguities are for courts to resolve.
But sometimes, there’s a gap, and when an agency — and I think Chevron is an example. The bubble concept is an example. The statute didn’t say what do you do when more than one definition of stationary source applied. And so it’s, I think, making policy. It’s filling a gap. It’s interstitial legislative power, if you will. So I call most of these Chevron cases, actually, the agencies were exercising nonexclusive legislative power.
And of course, I’ll just add my final point is, again, on adjudication. Most adjudications in agencies are over public rights. These are not exclusively judicial power, the stuff of private rights that must be adjudicated only by the courts.
So to sum up at this point, and then I’ll kick it back to Richard, administrative law, I think, is in need of some serious rethinking and clarification. And I think my new casebook lays this necessary groundwork. It takes formalism and originalism seriously but concludes that much, although certainly not all — I just mentioned Humphrey’s Executor. There are still adjudications over private rights that occur sometimes, although with high amounts of deference from the courts. So certainly parts of the administrative state, parts of administrative law doctrine, are unconstitutional, but I don’t think all of it is. And I think much of it might ultimately be constitutional.
Later on, as Richard said, I’ll talk about other things the casebook does, organizational changes, especially to reviewability in case there are professors on the call who are interested in those kinds of innovations. But for now, I will kick it back to Richard.
Prof. Richard Epstein: Well, good. Thank you so much, Ilan. Needless to say, I do have some comments about this sort of material, and I think it’s perfectly appropriate to say where I agree and disagree. I’ve also written on this subject, influenced by my grandchild, in a piece in the Chapman Law Review on delegation.
The reason I think he’s right about the notion that there have to be some blended powers is not because the text commands it. Indeed, if you look at the text, it seems to treat these things as three watertight compartments, the judicial, the legislative, and the executive power. And we never treated it that way. But if you start looking at ordinary private businesses, what you typically discover is there is no translucent line which says, “Ah, this is for the board of directors to decide,” and “Ah, this for the CEO to decide.” But what happens is things can go in both directions.
To give another one of the early cases that Ilan talks about, quite intelligently, I might add, the Post Office case, it’s quite clear that you could certainly have Congress try to put station by station in every location, and even dictate the street on which these station houses are going to be build, but the inefficiencies are such that it could be delegated down to the president, as was suggested. And indeed, one thing that’s extremely important is as the scale of government starts to get larger, the likelihood of delegation is going to be much greater. Nobody can conceive of Congress today figuring out where the stations are going to go in a nation which has 330+ million people, a hundred times larger or more than it was at the time of the colonies.
Essentially, if you look at the private model, I think what it does is it starts to suggest that there’s legitimacy here. The first example that he gave with respect to the Wayman case is the federal rules of civil procedure actually reflect what Ilan’s talking about is in the first instance, these are directed and promulgated by the courts, but then Congress has a veto power with respect to the way in which they’re operating. It’s clearly a dual system under these circumstances. And I think that it actually makes, under these kinds of situations, sense.
I also think Ilan is correct when he starts talking about the fill in the gaps point, a phrase that Justice Gorsuch has come to use in connection with the pension. But what I would do, I think, and I think this is a friendly amendment, I do not believe that you can delegate to an administrative agency a decision to, say, determine the amount of liabilities you would like the country to pay with respect to pensions. And the reason in this case it’s so powerful is these sums were liquidated by the Assumption Clause so that the only thing left was execution.
And this is an illustration of distinction which some people regard as unintelligible. It’s not only intelligible; it’s perfectly workable. And so under those circumstances, it seems to me again that one does not want to have this in a kind of a deeply skeptical sort of way.
But I do disagree on some things. Most notably, I think that the idea that you can throw the judicial system in with the executive and legislative system is, to me, much more doubtful. I’m not sure whether your casebook has Lucia or Oil States in it, but I suspect they make mentions of both of them. But I regard those cases as extremely dangerous kind of extension of judicial power.
You mentioned something about the theory of public rights. I don’t think you gave the origin of it. Public rights was kind of a desperation move. What happened is we had delegated these things out on customs and so forth to administrative agencies to apply. And then people would have disputes within the administrative agency, and they would have an internal appellate body. And after a while, it’s kind of like the court of equity, there was that system. Well, after it’s been in place at both state and federal level, particularly federal level, for 40 or 50 years, somebody’s going to turn around and say, “Oh, the whole thing’s unconstitutional.” So it was historical, but they all involved claims for the government.
And a public right does not include the kinds of things that are called public rights today. I regard, to be perfectly blunt about it, the Oil States case is damnable error. And I think Lucia is a miscarriage of justice. I do not think any agency is allowed to appoint in any way, shape, or form the people to adjudicate so that it litigates on one side in front of a friendly home court advantage.
So my question to Ilan, and then we’ll throw it open to the audience, is you want to basically say that you can start having things like National Labor Relations Board, three from mine, two from yours, or these other ad hoc kinds of situations. I know of no precedent of that sort in the private sector whatsoever, and I know of no historical precedent for it in the thing. So I’m just curious as to whether or not this notion of overlapping jurisdictions covers the judiciary with the same force that it covers the legislative and executive branch. So take it away, Ilan.
Prof. Ilan Wurman: Yeah, it’s a terrific set of questions and comments. And so obviously, I tried to be a bit vague in my initial comments over the scope of what is within the exclusively judicial power, what is within the scope of exclusive executive or exclusively legislative power. Obviously, the more that’s in the scope of the exclusively legislative power, the more robust of a nondelegation doctrine you’re going to have. And the more robust your conception of public rights is, the more you’re going to allow agencies to do.
And so what I think public rights are — and this, by the way, there’s a question over where is the theory of exclusive versus nonexclusive powers in the text of the Constitution? And it comes from what does it mean to be judicial power? And I think public rights is a good example of this. It’s not written in the text anywhere, but why is there a quote, unquote, “exception” to the judicial power being vested in the federal courts for public rights cases? Well, because there’s this background principle of sovereign immunity.
And by the way, sorry about the changes in lighting. I am not used to being in this room, so I’m trying to figure out the best place to sit for it.
But anyway, back to the point about public rights. What is a public right? A public right, at a minimum, like the core of a public right, is a case not between two private individuals but between a private citizen and the government, and not where the government is trying to take away your life, liberty, or property, but where you’re seeking something from the government, so say like an initial land grant.
Why historically do you not have to — those cases don’t have to be heard in court, in a federal court? Well, the answer is sovereign immunity because if you think the government has wrongfully applied the law and mistakenly denied you your invalid veterans pension, another public right, if you think they’ve wrongfully denied you your public land grant, well, too bad. There’s nothing you could do. You can’t sue them. They have sovereign immunity. And so this greater power to refuse consent to be sued includes the lesser power, the lesser included power, to consent to be sued in the tribunal of Congress’s choice, including by congressional committee.
So these public rights cases, the sovereign immunity as a background principle, explains why public rights cases can be assigned to the judiciary, but they don’t have to be. They can be resolved by non-Article III judges, which is the court of claims today, non-Article III judges. They could be decided in the CFTC by an administrative adjudicator. And they could be decided with any amount or no amount of judicial review.
And so Lucia v. FCC, in my view, was not a matter of public rights. That was private rights. When the NLRB ordered an employer to order back pay to an employee, that’s private rights. That’s not public rights. That’s liability from one private citizen to another. Lucia, when they prohibited him from participating in the securities industry for his entire life and they fined him $300,000, those are private rights cases. That’s when the government is trying to punish a private citizen, taking away their life, liberty, or property for violating their legal obligations to other private citizens.
I’m not saying the administrative state never adjudicates private rights. They do. They do, starting with Crowell v. Benson. In Crowell v. Benson, they acknowledge this is a private rights case. Oh, but it’s okay. The central attributes of judicial power are maintained so long as the courts have some amount of differential review over jurisdictional facts, questions of law, none of which is true anymore, by the way.
But to my view, the judicial power is the power to decide de novo all questions of law and fact, jurisdictional or non-jurisdictional. So Crowell v. Benson was a foundational misstep. It gets everything wrong about the Constitution. But that doesn’t change the conceptual point. Richard, I we agree on —
Prof. Richard Epstein: — No, we don’t.
Prof. Ilan Wurman: Oh, no. Okay, so what’s your take on Crowell?
Prof. Richard Epstein: First of all, one of the things I always do when I read a case like Crowell v. Benson is see who the young lawyers are who argued it. And on the brief in Crowell v. Benson for the government is none other than Erwin Griswold, which kind of tells you something about his future life.
But I disagree with you. There’s a long line of cases which draws the following distinction. Sovereign immunity applies to the extent that there’s not been a vested grant, but once the grant has been made, then the only way that you can undo it is to go into court and take it back. There’s a famous case called McCormick decided around 1898 or so, which —
Prof. Ilan Wurman: — I agree with you, by the way.
Prof. Richard Epstein: Yeah, but that means that Oil States was wrong because these were completed grants. So what happens is you’re absolutely right, although you didn’t quite state it, that if you decide not to give one of these things out that there’s nothing that you can do to go outside the system because the rights themselves have not been vested. But once it’s done, then it can’t.
Now, this is extremely important. Ilan, I want to get your take on this. There’s a large number of people, very dubious, I think, making the following claim that patent rights are completely different. They’re not really grants, even though that’s the way they’re described in the 1790 Act. What they are is they’re decisions not for the government to interfere with doing that, and so therefore they could be described administratively and so forth.
My view is that they are grants. They are completed when made. And to revoke them, therefore, requires that you have to show the usual thing, and there’s no difference between revoking a land grant or a patent grant. And the conditions of revocation are the same whether it’s a private donor, or a grantor, or a public grantor.
So the notion of public rights that you started with didn’t go into these distinctions, so I hope — are you prepared to say, because it matters in this case what you think, that Lucia, you said, is wrong. Do you agree the same thing about Oil States?
Prof. Ilan Wurman: My instinct is that Oil States was wrong. My instinct is once — so you have no recourse. If Congress wants to create a patent system and they deny you a patent, I don’t think you have any recourse except what Congress chooses to give you. But once they’ve granted you the right, I think it’s vested. I think it becomes private right under the law. The laws can create rights. The laws create rights all the time, and if they’re violated, then there has to be an adjudication, an interference proceeding, or the government can come after you and do it in a court. So my instinct is that Oil States was wrong.
I will, in full disclosure, when I was in private practice, contributed to a brief in Oil States. I think we argued it was a public right. I’m not going to say that that was my view of the matter, but my name might be on that brief, so I’ll just say that in full disclosure.
Prof. Richard Epstein: I wrote three articles on this particular case, all in The Federalist Society publication, all with respect to [inaudible 26:25].
I wanted to ask you another question about this, and then I will read off what people have said to you, which is I disagree with you that what Congress could do is to say, “Here we are. We’re going to grant you this patent right because we have the power to grant patent, but we’re going to say that the only place in which you can adjudicate this is before an administrative panel inside the government.”
Is the doctrine of unconstitutional conditions properly applied to dealing with separation of powers such that Congress has the power whether or not to create or not to create these rights? But essentially, can it then say we pass any statute, any statute dealing with something and say, “You know, we’re going to give you a right under the National Labor Relations Act, but there’s going to be a five-person panel. They are basically going to decide this, and there’s no appeal to the court.” Essentially, can Congress in the exercise of its monopoly power tell the judicial system to butt out of all cases?
That’s something which I don’t think you’ve addressed. And so I’m a big believer that monopoly power is always subject to the unconstitutional conditions doctrine, and legislation is always monopoly power. So what are your views on that particular question? Then I’m going to read two things for you to respond to.
Prof. Ilan Wurman: Yeah. So the best thing I ever wrote, I think, was my student note in the Stanford Law Review when I was a 2L called “Drug Testing Welfare Recipients as a Constitutional Condition” where I talk about unconstitutional conditions doctrine. I think there is no problem, again, foregoing a review in an Article III court if it’s a public rights case, if it’s you seeking something from the government, which is why, by the way, they can — if you’re seeking welfare benefits from the government, the historical doctrine said Congress or the state can make you forego Fourth Amendment rights as a condition of receiving the welfare benefits.
For example, you can be subjected to suspicionless home searches, welfare searches, suspicionless drug testing, and things like that. And the unconstitutional conditions doctrine says that Congress or a legislature can make you forego a constitutional right in exchange for obtaining a public right to which you’re otherwise not entitled to if the condition is germane to the program.
Now, applying that here, it wouldn’t apply to private rights cases because, again, a private rights case, when Congress establishes by law a public right, again, you have no entitlement to it but on the conditions that Congress establishes.
Prof. Richard Epstein: Again, let me ask you the following question. I understand you’re saying this with respect to welfare benefits and germaneness, but now somebody wants to get a driver’s license. And the only place you can get the driver’s license is from the federal government, say, in Washington, D.C. And they say, “We hereby grant you your driver’s license on condition that you waive all Fourth Amendment rights with respect to searches that take place with respect to your cars, with respect to stop and frisk, and everything else.”
The entire Fourth Amendment law is basically built around exactly the opposite assumption. And I think it’s actually some very rough sledding not just for you but for me to try to figure out why it is that a gift of welfare grants is treated as different from a license. And let me ask this one case. The reason you think it is a license is basically designed to make sure that you do not abuse a natural right that you have. It’s not a subsidy. It’s essentially a way to check that you do not commit harms and frauds against other individuals, drive into them, and so forth.
Welfare benefit doesn’t have that, and so I can understand you making the distinction. But the way you put it, there would be no difference between a license and a welfare grant. Then the question I’m asking you is do you think that that is, in fact, an accurate statement of A) the law as it is, and B) the law as it ought to be?
Prof. Ilan Wurman: Yeah. So this is a tough question, and it’s not fully fleshed out in my mind. I will say John Harrison recently has a paper on nondelegation where he tries to explain early precedents like the Steamboat Act as like a grant of a license to the public to —
Prof. Richard Epstein: — You should tell everybody else what the Steamboat Act is.
Prof. Ilan Wurman: There was one in 1838, and then the one I’m talking about was in 1852, which basically, again, there was this pandemic of steamboat explosions, if you will, an epidemic, I guess, of steamboat explosions. And Congress decided to legislate in great detail the criteria for boilers and safety parameters. And then you had to get a license, and an inspector had to confirm that you were consistent in meeting these safety criteria to get a license.
And so John Harrison thinks that that might explain why these delegations were okay. That makes me worried because then we can become a Soviet system where everything’s prohibited unless there’s a license by the government, and then everything becomes a public right.
And I think there is a definitional distinction between the kinds of things that are private rights and the kinds of things that are public rights. Public rights are things that you can’t have in the state of nature. They’re things that they only exist because government chooses to tax citizens and then give, out of its largesse and generosity, say, welfare benefits, or charities, or land grants, or something like that.
But to say things that you had in the state of nature, your right to life, your right to liberty, your right to property, in a free market, contract, property, and then to say, “We’re going to prohibit them and only give you a license to do it on the condition that you forego all these rights,” I think it’s still a private right. Just because the government is choosing to take it over doesn’t make it a public right. It makes it a private right.
Things about public rights are the kinds of things I think that they can’t exist without the government getting together and choosing to enforce this thing. So a patent is a monopoly against the world. So that’s an example of why the initial grant of a patent is a public right. Once it’s vested, maybe it’s a private right. Welfare benefits, you can’t get welfare benefits in the state of nature. Yeah, you can pursue charity, but there’s no way to get government to tax people and then distribute welfare. And so I do think there is a definitional difference between private rights and public rights, but it’s hairy. It’s very hairy.
Prof. Richard Epstein: I hear you. I think a voluntary transfer subsidy is a public right, but I think a patent, which is part of the patent bargain, would fall on the other side of that particular line. But I do think, in effect, it’s extremely important that one sort this thing out because I believe that this question, which has come up about two or three times in the last five years, is going to come up again and again.
But anyhow, let me just read to you a comment from Devin Watkins, and then you could respond to this. It’s a little bit off what we’ve been saying, but it kind of relates. He says, “I think Congress can delegate the issue and set rules that are ministerial where it has no discretion as to what the law is but merely a factual determination. But the delegation of authority as to what the rules under the people are required to live seems to me to be exclusive to Congress.” I take it you disagree with that.
Prof. Ilan Wurman: Yeah, I think I disagree a little bit. So I obviously have a robust, I think, defense of the nondelegation doctrine that just came out in the Yale Law Journal. And Devin’s question goes to, okay, well, what is the scope and content of the nondelegation doctrine? What is the category of exclusively legislative power that Congress can’t delegate? If Justice Thomas is right, that any regulation affecting private rights or private conduct is exclusively legislative power, then maybe the entire administrative state is unconstitutional, and that’s a problem.
Prof. Richard Epstein: Amen, amen.
Prof. Ilan Wurman: So we have to figure this out. And my instinct is private — I adopt Chief Justice Marshall’s instinctive test, which was he said the line has not been exactly drawn over the important subjects, between the important subjects over which Congress must delegate and the matters of less interest that can be left to administrative detail. I think if it’s a matter of private rights versus public rights, official conduct versus conduct, I think those kinds of questions will go to whether it’s an important issue. Obviously, if it’s a private versus a public right, I think it’s a more important matter, and Congress has to resolve more of the details. But that doesn’t mean it has to resolve all of them.
So let me give you an example. The Steamboat Act of 1852 allowed steamboat inspectors to impose passenger limits on ships. It authorized them to make subsidiary rules telling ships how many passengers they can and can’t have as necessary for the safety of the vessel. Suppose the board of inspectors comes and says, “Okay, if you’re running this class of steamboat vessel, this tonnage, you’re only allowed to have X number of passengers.” And suppose you’re the captain of the ship. You’re the owner of the vessel. It’s like, “Wait a minute. That’s 50 percent what I think my safe capacity is.”
Well, that affects your private rights. It affects your bottom line. It affects your contract rights. It affects the rights of the passengers. It clearly affects private rights. But do we really expect Congress to establish a table in a statute today for airplanes saying, “Okay, if you’re an Airbus A321, this many passengers or this much weight. If you’re Airbus A320, if you’re a Boeing 737, this –”. Obviously, those are the kinds of things that affect private rights but can be left, I think, to administrative detail. And so — yeah, go ahead, Richard.
Prof. Richard Epstein: I have another question for you. One of the common things that we had as a theoretical matter is we worry about those regulations which are bona fide as safety regulation, and those regulations which are anticompetitive. And suppose what happens is that you have a boat which has a perfect record. It had 100 people on it, and the safety guy says only 25 people can come on, at which point the ship has to shut down. So here’s the question that you can delegate the authority, but even after the authority is delegated can one raise the argument the reason you did this had nothing to do with health and safety but because of the fact that you wish to eliminate this form of transportation.
So it would be in the modern age saying, “We really have to worry about this stuff, and gasoline is so dangerous, so we’re going to say all automobiles in the name of global warming can only carry one person.” I think you have to recognize that the agency itself is going to be subject to the same kinds of limitations, and if the distinction between health and safety and anticompetitive stuff is relevant—and is it, is the question—doesn’t that also apply to its delegatee?
Prof. Ilan Wurman: Yeah, I think so. And this maybe goes to Devin’s follow-up question, which is maybe it’s potentially a factor of the termination. Surely, you can say within the standard of the delegation that the agency has exceeded its delegated authority or misapplied its authority. That’s absolutely true. But look, there always needs to be some amount of discretion. Can you say that, well, 100 passengers versus 95 passengers? What is clearly right or clearly wrong? I don’t think if you can’t say that, well, it still affects private rights. It’s five fewer passengers. So it seems to me that the test can’t entirely be private rights versus official conduct or private rights versus public rights. But obviously, it’s going to be more important.
Prof. Richard Epstein: Let me give you the standard response, with sound discretion of a court of equity in issuing an injunction would do exactly that. And so you have to weigh type one against type two. Do you think you could carry that kind of analysis into this case so that since 95 to 100 is close enough, and that variation exists out there anyhow, fine, but 100 is against 5 is not within that realm because nobody could ever operate a steamboat, and therefore you strike it down?
I think those things are extremely important. It gets you to cases like Koontz. Are you familiar with that? It’s a case in which you tell somebody if you wish to build on a plot of land, we have two conditions for you. One is you have to have a settling pond so that the stuff that you will take out of the ground doesn’t make it into the river. This is the St. Johns River. And the other thing is we’d like you to repair this upstream bridge that has fallen in disrepair.
And the argument one would make, one has a reasonable effort to try to restrain pollution, okay. You could argue that it’s excessive or not, but you certainly have to reject it. But the other is simply a straight wealth transfer from somebody which ought to be a common expense for repairing general facilities, putting it on the latecomer within the community. I take it — does that distinction make sense to you?
Prof. Ilan Wurman: I think so. I’m not an equity expert for all the things you said about courts of equity. I’m just glad the case you cited was not a Roman law case or something like that.
Prof. Robert Epstein: That’s my specialty.
Prof. Ilan Wurman: But it all goes back to that. But yeah, I think it goes back to what I said earlier, maybe Devin’s point, which is, look, you can misapply this stuff, and the court can enforce that, but it doesn’t — nothing you’ve said and nothing in Devin’s follow up—which I think only we can see, by the way—changes the fact that there’s going to be a realm of discretion of what they can and can’t do within the delegated authority. And within that realm of discretion, private rights will be affected. So I don’t think anything you could say could ever convince me otherwise.
Prof. Robert Epstein: No. Let me just ask, the term that has always been used on the other side is abuse of discretion, standard term. You could review for not for error but for abuse of discretion. Can we carry that concept over into the administrative state?
Prof. Ilan Wurman: Yes, absolutely.
Prof. Robert Epstein: That’s where we are. Now, next question for you, Ilan. You’re going to be working hard, guy. I’m talking about executive overreach, not with filling the gaps but with reinterpreting existing law. You’ve got to know that this one was coming. The reinterpretation of guess which word in Title IX, sex, to include gender identity, depending on who occupies the executive branch, the law will actually change to mean a completely different thing than the legislative branch intended.
Would you consider that part of the nonexclusive legislative power, i.e., what do you do with Bostock as a constitutional matter, statutory matter, administrative matter? Remember, the first time this came up, it was done exactly the opposite way. There was Chevron deference or Auer deference in the air, and they said, “Well, we think it could work.” Then by the time it gets to the Supreme Court the second time around, it’s half across the county. Nobody mentions a word about discretion whatsoever, and you get these, shall we say, novel linguistic theories. So how do you want to answer this question from an anonymous attendee?
Prof. Ilan Wurman: Sure. So I’m going to assert myself here. I’m going to answer the Chevron question, and then, Richard, I would like to say a few other things about my casebook before we — right after this.
Prof. Richard Epstein: Yes, I’m going to get to that. I haven’t forgot that.
Prof. Ilan Wurman: And we have, I see, really robust attendance today, so thank you, everyone, for shifting formats on such short notice.
But look, when I say that most Chevron cases are, in fact, matters of nonexclusive legislative power of gap filling, I don’t mean that what a judge believes is the best reading of the statute is X, but a reasonable interpretation is Y, and that’s what the agency’s interpretation is, they can go with Y. That is not my view. I believe if a judge believes that the best interpretation is X, they must go with X. That is judicial power. That is judicial duty.
And so for example, I give the Title VII case in my class, and I also give another, which is there was a statute that made an immigrant deportable if they’re convicted of child abuse. And the question in the case was is driving under the influence of alcohol with your child in the front seat of the car without a seatbelt child abuse? I think it’s child endangerment. And the court’s like, “Oh, it’s a close call. Is it child abuse, child endangerment? Close enough.” That’s not okay. You must decide what the best reading of the statute is, and if your reading is that it’s endangerment, not abuse, then the immigrant should get to stay, convicted of whatever, but you can’t be deported for Title VII.
If the best reading of the statute is on the basis of sex means that you’re discriminating because this person is a woman, not because this person is a woman plus there’s something about the woman you don’t like, like she’s attracted to someone of the same sex, then if the best reading of the statute in your mind is X, you do X. And I will leave it to you all to figure out the Bostock case on the merits.
But I will say, in most of these — I know I’m dodging. In most of these cases, that’s not what you have. In most of these Chevron cases — look at Chevron itself. Chevron case defined stationary source as any structure, facility, installation, or building — any structure, building, facility, or installation that emits a certain amount of pollution.
Well, what happens when more than one definition applies? What happens when you have an installation with multiple structures, or a facility with multiple buildings? What do you do? Do you treat each smokestack as a stationary source or the plant as a whole as a stationary source? The definition can apply to either. There’s nothing more you can do to interpret the statute. Sometimes, the law just runs out, and then it’s a matter of policymaking. It’s a matter of gap filling, interstitial legislative power.
Let me finish this point by saying in Kisor v. Wilkie, the case where they were discussing whether to overturn Auer, and they said, “We’re not overturning Auer deference,” which was Chevron deference as applied to an agency’s interpretation of its own regulation, Justice Kagan said, “Sometimes, the law just runs out.” Well, excuse me, if the law has run out, then what are you interpreting? What are you interpreting? You are not interpreting anything. You’re making law. It’s interstitial legislative power. It’s what I call nonexclusive legislative power. And I think I’d rather have agencies do it than courts.
Can I talk about my casebook now?
Prof. Richard Epstein: Yes. Okay, now let me just go to the other question that you asked, as this is not just a debate between us, although it’s great fun. It’s also trying to tell about the culture of your casebook. And you’ve indicated your distinctive stuff. You also told me before the show that you thought you would rearrange the pieces of the book so that they would have greater clarity. That was one thing.
And then the second thing which I asked you, I said I don’t teach administrative law the way any administrative law does it. I teach it, well, I know something about securities law. Let’s talk about the administrative law in that context. Same thing with labor law and so forth. So it’s the sort of substantive as opposed to a structural approach.
So take the two things in order and take couple of minutes to do it. And the first of them is what’s novel about your book and organization? And two, do you think you can do administrative law without a closer look at the organic provisions? Go for it, guy.
Prof. Ilan Wurman: Okay, so I’ll spend most of my time on the first question, as you might have anticipated.
Prof. Richard Epstein: I assumed so.
Prof. Ilan Wurman: A few other innovations that you can see that are in line with this. I don’t know if there are law professors on this call, but if you’re considering using it, I have the most extensive discussion in the literature of the 1852 Steamboat legislation that I mentioned earlier and the 1887 Interstate Commerce Act. These are understood to be these crucial precedents for the modern administrative state, and yet, they’re never actually discussed in detail.
I actually have the full text of the statutes in appendices. You can look at them. Jerry Mashaw from Yale argues in his book Creating the Administrative Constitution that the Steamboat Act was this great delegation of power. Well, let’s look at the text. It was actually extraordinarily detailed.
Prof. Richard Epstein: Extraordinarily specific.
Prof. Ilan Wurman: Yeah, it’s very specific. And now you can see it. I wrote out the entire statute, and it’s in an appendix. Same with the Interstate Commerce Act.
I’ll say that there are sections following the material, normative sections, like on debating deference, or debating delegation, debating presidential control, debating the due process revolution, and also debating universal injunctions where you can go through the various policy debates. I quote extensively from the secondary literature, so it should be fun. I think it would be a fun mixed approach.
Now, organizationally, is what, Richard, you talked about. Mostly, administrative law is kind of a catch-22. What do you start with? Do you start with the constitutional questions, delegation, executive power, Article III, and then go to the APA, and rulemaking, and adjudication, or do you flip them?
And it’s a problem because most casebooks start with the constitutional stuff, but the constitutional stuff doesn’t make any sense unless you know what agencies are already doing. When you talk about delegation, why are we talking about delegation? Why am I talking about Article III? I haven’t even seen an agency do a rulemaking or an adjudication. And so I find that problematic. But if you start with rulemaking and adjudication, it immediately raises these questions. Wait a minute, isn’t this legislative power? Isn’t this judicial power? What gives?
And so the way I try to solve it is I have this introductory chapter on the constitutional questions, a long, historical chapter that talks about the George Washington regulation, the Steamboat legislation, the Interstate Commerce Act. Then it has a discussion of Justice Thomas’s Amtrack concurrence on delegation, and Gillian Metzger’s broadside against anti-administrativists in the Harvard Law Review foreword. You can raise these constitutional issues. And then it dives into rulemaking and adjudication, judicial review of the same, before turning to a more in-depth look in the second half of the book, delegation, executive power, and appointments and removals, and Article III, and due process.
I will say, I put due process after Article III. Usually, due process is put in a chapter with adjudication. This doesn’t make any sense. Due process must follow Article III. Why? Because the public rights/private rights distinction that we talked about is absolutely relevant to due process. It explains historically why the Due Process Clause did not apply to welfare cases, to public rights cases. And it explains why the Goldberg revolution — Goldberg v. Kelly was a revolution because it applied due process to public rights cases. And so those are some organizations.
The other changes, I will say, I completely rework reviewability. Now, reviewability is a chapter on, okay, you do have a cause of action, standing, zone of interest, statutory standing, constitutional standing, rightness, etc. Okay, so most chapters on reviewability start with committed to agency discretion by law. There’s this category in the APA that there’s no review if it’s committed to agency discretion by law. I take that — it is no longer in the reviewability section. I put that with judicial review. Why? Because lots of judicial review of agency action involves judicial review of discretion, policymaking discretion under arbitrary and capricious review. There’s an abuse of discretion standard.
So what are you saying, that it’s committed to agency discretion by law that has to be reviewable by abuse of discretion, but it’s also not reviewable? It doesn’t make any sense. Well, the answer is there are different kinds of discretion, some of which are subject to arbitrary and capricious, some of which are subject to abuse of discretion, and some of which are not reviewable. And the question is what kind of discretion are you dealing with? And so I take that out, I think, maybe for the first time of all casebooks, I take it out of reviewability and put it with judicial review.
Prof. Richard Epstein: May I just make a simple observation?
Prof. Ilan Wurman: Go ahead.
Prof. Richard Epstein: I think what you are doing, and I think I agree with this, is you’re saying everything under Section 706 has to be read as a unitary whole, right? And all of these things are there, and what people start to do is they treat Chevron, taking out some of the words as part of the principle, and then when you start going through each of the individual exceptions, instead of reading them as a coherent whole, you read them each separately and independently of the others. That’s what you’re against, isn’t it?
Prof. Ilan Wurman: I think that’s right. The committed to agency discretion by law, I think, is in 702, maybe. I’m blanking now, but the point is they could only be understood together because multiple parts of the judicial review chapter mention discretion. And so it’s like okay, but what kind of discretion? And so yes, they have to be read as a whole, absolutely.
The other thing I say is the entire literature in the casebooks and the cases are wrong about statutory standing. They treat statutory standing and zone of interest as like an issue of standing. So it always comes after constitutional standing. Historically, when you look at the origin of the zone of interest test, it was about a cause of action. It was about whether a statute gave you a right to sue, not whether you had standing. It’s whether you had a cause of action.
And so I completely reorganized — there’s no more prudential standing. There’s no more statutory standing. That’s nonsense. The concept doesn’t make any sense. We start with the APA cause of action. We talk about what it means to be aggrieved under the statute such that you have a cause of action. This goes to the zone of interest test whether you have a cause of action. This goes to preclusion of review. Preclusion of review in a statute has to do with whether you have a cause of action. So all of those are treated as a cause of action.
Then we have a separate section on constitutional standing before turning to ripeness and other timing doctrine, which, by the way, I have a whole dedicated section on pre-enforcement injunctions. So you look at Ex parte Young, you look at ripeness, they all sort of relate to that. So those are some innovations in the casebook. I just think it makes sense. It has this theory that makes administrative law make sense. And I’ll stop there.
Prof. Richard Epstein: Look, I’m not going to disagree with you. I’m going to ask you the following question, which is something — I wrote my casebook on torts. I had the following situation. I tended to champion strict liability among strangers, and there was the Hand formula as regarded by many people as a synthetic unity under a negligence system.
So do you organize the book in accordance with your deep convictions, or do you organize it in accordance with conventional wisdom? And what you’ve decided to do is to do deep convictions, not conventional wisdom. Now, how are you going to persuade other people who are going to teach the course that they should follow your light as opposed to their own?
Prof. Ilan Wurman: Because it makes administrative law make sense. It’s that simple. And I will say that a lot of it — I have the conventional cases. It’s just a lot of it is the organization I present it in, and then the notes leading up to the case, the notes after the case, and that’s where I present this theory. So I have National Petroleum Refinery, a standard case on whether Congress has given the agency authority to make legislative rules. Okay, I explain why does Congress have to delegate that authority, because it’s not exclusive legislative power initially, so I explain it that way.
And the reality is I’ve now trial tested this twice with my students. They love it. This casebook, it’s fun, it makes administrative law make sense, it’s intellectually stimulating. And I, of course, give play to the conventional views and other views and so on in these debating sections. And so the point is, the casebook, it’s fun and it makes administrative law make sense. And that’s why I think you should check it out.
Prof. Richard Epstein: Okay. Now I’m going to ask you another question about casebooks, which is, again, something I, as a casebook author now, I’m sorry to say, for 50 years, or close to it, always have to do. To what extent do you think when you do a casebook should you spend your time worrying about the Supreme Court body of law and occasional lower court cases, and to what extent do you think you should do the scholarship?
Now, you mentioned the Metzger piece, and there was, of course, a rather caustic response by Justice Gorsuch with respect to it stepping out of its role. But can you in a modern course, given the vastness of this subject, do both, as it were, the case law and all?
Prof. Ilan Wurman: I certainly try, because again, the title, Administrative Law Theory and Fundamentals, it’s both theory and fundamentals. It has the case law. It has the doctrine. It tries to make sense of the doctrine and tries to make sense of why the doctrine doesn’t make sense some of the time, how we can make sense of it. So it tries to do both.
I love the legal literature on administrative law, so I try to cite a lot of secondary sources, especially in the notes and in the debating section. And so it’s a mix. All of these things are a balance. But if I may say so, I think I—am I allowed to say so?—I think I’ve struck a pretty good one.
Prof. Richard Epstein: Look, as we know, the principle of equilibration at multiple margins applies to casebook authors as it does to everything else. And the more you put on the cases, the less you have on the commentary. The more you put on the administrative law, the less time you can spend on the substantive law.
And so let me just mention something to you. We talked about Chenery, and the way in which you treat the case is the way in which most people tend to treat the case, which is you say is this the sort of thing which ought to be done through adjudication or is this a thing that ought to be done through rulemaking?
And then you have to go through Chenery 1 where Frankfurter says, “Why don’t you really put your cards on the table?”, and then Judge Murphy in number 2 does it. The lower court in that case said this is just outrageous. What happens is you inventing a breach of fiduciary duty that nobody had ever heard of, and then once you invent that, what you announce is somebody who would otherwise get a pro rata distribution on his preferred share. Now he’s getting treated as though he’s only entitled to interest for a certain period of time. That should be confiscation.
Would you say that the — if you knew this about the law that you may want to tip the balance on that because of a constitutional commitment to the avoidance canon, or do you think, in effect, that the Supreme Court should be read without having any real knowledge of the way in which these fiduciary duties generally operate?
Prof. Ilan Wurman: I think, obviously, you need sufficient knowledge to be able to understand, as in that case, that these are individuals being deprived of property to which they were entitled under previously existing law. If you know that, I don’t think you need to know that much more about securities.
To take another example, Brown v. Williamson is a case you have to understand how the FDA works. And I think you will agree with me on this one, Richard. You have to understand that if it can’t be safe and effective for its intended use, then it doesn’t belong in the statutory scheme. And cigarettes are not safe and effective for their intended use. You have to understand that, and so I certainly try to give enough of the majority opinions where they discuss it, but only enough because I don’t want to overwhelm the students.
Prof. Richard Epstein: Let me mention something about the FDA. I teach the FCA as a separate course. And the key feature that is mentioned but not stressed by Justice O’Connor is what’s the definition of a drug. And the standard definitions of a drug have nothing to do with the inherent contents of what the subject is. It has to do with the question of whether or not you are making health claims of a therapeutic nature or whether they’re just general kind of health claims at all.
And so what happens is, in the standard rules, nobody would ever say that cigarettes are a drug because they’re not a treatment for anything, notwithstanding the fact that they aren’t safe and effective and so forth. What’s interesting is that just gets completely dropped out of it, and what Justice Breyer does, and what I think is quite a misguided opinion, he ignores literally 50 years of uniform interpretation that says when something affects or changes the structure of the composition of the body, it’s not going to be a drug unless you throw this other things in the gloss.
So the question is can you really decide that case unless you know what a therapeutic limitation is under the section? That’s the question I’m asking. I don’t think you can. So I think there’s actually a disagreement between us. But virtually all the other casebooks agree with you. We have one minute to go, so answer this and then I see Evelyn’s looming presence about to thank everybody for coming.
Prof. Ilan Wurman: Yeah. As all things, it’s a balance. But I will say in a half-dodge, half-response to Richard’s question is my case excerpts are a bit longer. They are a bit longer because I tried to uncover and just ventilate more issues through a smaller set of cases, including by giving more of the necessary facts of cases like that. So I’d like to say I’m something of a hybrid between Richard’s view of this and the conventional wisdom, but maybe a bit closer to the conventional wisdom.
Prof. Richard Epstein: It doesn’t matter. Look, I want to thank you, Ilan, for being so spirited in this discussion. And now Evelyn is looking somberly upon me so as to indicate that our appointed time is over. So I’m going to give you a round of applause, and I will basically treat that as being constructively given by everybody in the audience. I’m exercising my delegated authority and now turning the microphone back to Evelyn.
Prof. Ilan Wurman: Thanks, everyone.
Evelyn Hildebrand: Wonderful. Thank you both so much. I don’t know how I feel about my entrance being somber, but I want to add my thanks to yours, Professor Epstein. On behalf of The Federalist Society, thank you both for your time and expertise this afternoon. If any of our listeners have feedback, please send your feedback in by [email protected] As always, keep an eye on our website and your emails for announcements about upcoming teleforum calls and virtual events. Thank you all for joining us today. We are adjourned.
Prof. Ilan Wurman: Thanks, everybody.
Prof. Richard Epstein: Goodbye. Okay, Ilan, we’ll have to catch up online, okay?
Prof. Ilan Wurman: Yes, we will. Thanks, everyone.
Prof. Richard Epstein: Okay. Bye-bye, guys.
Associate Professor of Law
Sandra Day O'Connor College of Law, Arizona State University
Laurence A. Tisch Professor of Law and Director, Classical Liberal Institute
New York University School of Law
Federalist Society’s Administrative Law & Regulation Practice Group