Sidney A. Shapiro

Judicial Incentives and Indeterminacy in Substantive Review of Administrative Decisions

It was not supposed to be like this. In Chevron and State Farm, the Supreme Court announced what appeared to be controlling standards for substantive review of administrative decisions. Chevron adopted a two-step approach to statutory interpretation under which courts were to overturn agency interpretations that were contrary to the clear intent of Congress, but defer to permissible agency constructions of a statute. State Farm indicated that an agency’s policy judgments should be analyzed according to a specific set of inquiries that focused on the agency’s reasoning process. Administrative law scholars, whether they agreed or disagreed with the Court’s standards, assumed that the two cases were landmark decisions that signaled a turning point in the substantive review of agency decisions. Instead, the Chevron framework has broken down, and State Farm has been all but ignored by agencies and the courts, including the Supreme Court.This article accounts for this breakdown by analyzing the impact of judicial incentives on substantive review in administrative law. Its centerpiece is a model of judicial behavior based on the “craft” and “outcome” components of judicial decisionmaking. Judges engage in the well-reasoned application of doctrine as a matter of craft, and they consider the implications of a result for the parties and society in general as a matter of outcome. When these components pull in opposite directions in a given case, our model suggests how judicial incentives influence the resolution of this tension. Our model of judicial behavior explains why Chevron and State Farm have not been as influential as commonly assumed. Judges have stronger incentives to control outcome and weaker incentives to develop determinate craft norms that limit pursuit of outcome in administrative law than in other areas of law. Because reliance on indeterminate craft norms enables judges to pursue outcome without sacrificing craft, judges have avoided applications of Chevron and State Farm that are determinate. Drawing on this model, we propose a modified approach to substantive judicial review that accounts for the way that judicial incentives influence substantive review doctrine. We recommend that Congress require courts to respond to a series of specific questions that would apply to substantive agency decisions. These questions would make it more difficult for judges to manipulate scope of review standards and would require more explicit reasons for affirming or reversing an agency decision.

Heightened Scrutiny of the Fourth Branch: Separation of Powers and the Requirement of Adequate Reasons for Agency Decisions

In recent years, the requirement that administrative agencies provide adequate reasons for their decisions has come to play a central role in judicial review of agency decisions. While the increasing importance of this requirement has been recognized, no systematic study of its history and doctrinal basis has been undertaken. Grounded in a survey of court of appeals decisions reviewing agency action, and a careful review of Supreme Court decisions, this article proposes that the requirement is best understood as a form of heightened scrutiny of the rationale of agency decisions and that the doctrine of separation of powers requires such scrutiny because of the unique position of administrative agencies in terms of the constitutional structure of government. The separation of powers conception of the reasons requirement derives from an analysis of political values underlying administrative law, the evolution of various models of judicial review, and the history of the reasons requirement itself.The article begins by considering the political values underlying our governmental structure and describes the apparent conflict between two competing sets of values. ‘Liberal’ values restrict government action in order to preserve individual freedoms and are reflected in the Constitution through principles such as representative government, separation of powers, and due process. ‘Progressive’ values promote government action in order to relieve social problems, and are implemented through delegation of legislative and judicial powers to unelected administrators functioning outside of the political and constitutional limitations originally established for the exercise of those powers. Thus, administrative law jurisprudence is faced with the difficult task of accommodating two sets of conflicting values.The article then examines the Supreme Court’s efforts to accommodate liberal and progressive values through its articulation of the scope of judicial review of agency decisions. This examination identifies three distinct models of review reflecting the Court’s evolving jurisprudence—a ‘structuralist,’ a ‘proceduralist’ and a ‘rationalist’ model. We argue that the structuralist and proceduralist models have failed to accommodate progressive and liberal values both as a theoretical and practical matter. These models could not explain how liberal values had been preserved in the face of acceptance of progressive programs; nor could they provide meaningful protection for affected parties without unduly impairing the administrative process. We suggest that as a result the Court is turning to the rationalist model of judicial review, which has as its central feature the requirement that agencies articulate adequate reasons for their decisions. However, the Court has not fully explained the significance of this requirement, or the doctrinal basis of the rationalist model.The article locates that doctrinal basis by tracing the heretofore unexplored origin and development of the adequate reasons requirement. This history reveals that the requirement originally had a separation of powers dimension which was later obscured by the influence of the proceduralist model. This separation of powers dimension provides the basis for a more complete articulation of the rationalist model of judicial review under which the requirement of adequate reasons is best understood as a product of the separation of powers doctrine. This understanding not only reflects the history of the requirement, but also enables the rationalist model to accommodate liberal and progressive values. At the theoretical level, the rationalist model explains how structural safeguards are preserved so as to protect liberal values. At the practical level, the rationalist model provides a meaningful check on administrative action without unduly impairing the implementation of progressive programs by administrative agencies.

The Enlightenment of Administrative Law: Looking inside the Agency for Legitimacy

The discourse over the legitimacy of unelected administration has produced two paradigms. Administrative law scholarship has focused almost exclusively on a rational-instrumental paradigm that seeks to legitimate from the outside in, relying on political oversight, judicial review, and scientific and social methodologies to squeeze the discretion out of public administration. By comparison, public administration scholarship has focused on a deliberative-constitutive paradigm that seeks to legitimate from the inside out, relying on administrative expertise, deliberation, and reason giving to ensure reasonable decision-making. This paradigm accepts administrative discretion both as unavoidable and as necessary. Besides failing at its own goal of eliminating discretion, the rational-instrumental paradigm has produced rulemaking ossification, bureaucracy bashing, a misunderstanding of the role of science in administration, and a failure to build a comprehensive theory of administrative accountability, one which takes into account both paradigms. Despite these defects, contemporary administrative law scholarship and practice is so deeply enmeshed in rational-instrumental accountability that it is difficult for administrative lawyers to imagine that there is a complementary approach to legitimacy. Yet, the history of administrative law in this and other jurisdictions highlights the significance of the deliberative-constitutive paradigm. In light of the demise of interest group pluralism in rulemaking, and the scholarly dead end in which we find ourselves, it is time to recognize and develop the deliberative-instrumental paradigm.

Pragmatic Administrative Law

The history of administrative law, according to James Freedman, consists of an extended sense of crisis over the legitimacy of the regulatory state. The specific nature of the crisis has differed in each historical stage depending on the dominant concern of each era, but it has always been related to the difficulty of reconciling the administrative state with traditional American constitutional and political values. In the Reformation of Administrative Law, Richard Stewart discusses the crisis of legitimacy that characterized the 1960s and 1970s and the reforms that were adopted as a result. Stewart was uncertain what might follow the reformation, but now we know. The reformation has been followed by a “counterreformation” that is based on a set of premises that run directly counter for the premises of the reformation. Recently, some scholars, including Professor Stewart, have sought to move beyond the counterreformation, which they find insufficient to produce sound and legitimate government. This literature, like the earlier literature on the reformation and the counterreformation, adopts interest group pluralism as the basis of the administrative process. This essay evaluates the reformation, the counterreformation and the most recent scholarship through a different lens. As I have in other recent work, I propose that the American tradition of philosophical pragmatism offers the best methodology to evaluate and justify the administrative process. This approach leads me to three general conclusions. First, the reformation has been a greater success than Professor Stewart recognizes in the Reformation or his subsequent work. Second, the counterreformation has produced changes in the administrative process that cannot be justified as either improving the rationality of regulation or the legitimacy of the process. Finally, we should be quite cautious about implementing recent proposals by Professor Stewart and others because the available evidence indicates the methods that they favor only work in some specific contexts.

Workers at Risk: Regulatory Dysfunction at OSHA

The Occupational Safety and Health Administration was born with a heavy load to bear – the obligation of ensuring that every worker in America has a safe and healthful workplace for his or her entire working life. In its early years, OSHA acted with great vigor, establishing important standards for occupational health and safety that have prevented hundreds of thousands of injuries and illnesses. But the agency has not aged gracefully. Today its enforcement staff is stretched thin and the rulemaking staff struggle to produce health and safety standards that can withstand industry legal challenges. In short, OSHA is a picture of regulatory dysfunction.This white paper explores the causes of OSHA’s regulatory dysfunctions and describes their negative impacts on OSHA and America’s workers. With the decreasing power of unions to organize and press employers to implement strong health and safety programs, employees in every occupation rely on OSHA to protect them from occupational hazards. Yet, in the last decade, OSHA has dropped more standards from its regulatory agenda than it has finalized, largely due to insufficient budget authority. And the agency’s enforcement program has assessed such paltry fines for even fatality-related violations of the law that many employers see no incentive in addressing hazards, much less developing precautionary health and safety programs. After describing OSHA’s problems in detail, this paper outlines a number of reforms that could enhance the agency’s performance. Although certain aspects of the Occupational Safety and Health Act could use improvement, the recommendations in this paper focus on regulatory reform – that is, administrative actions that OSHA could implement in the short term. A subsequent white paper will address legislative reform.

‘Fifty FDAs’: An Argument for Federal Preemption of State Tort Law that is Less than Meets the Eye

This white paper offers a comprehensive refutation of the “50 FDAs” argument in favor of federal regulatory preemption of state tort law in cases involving unreasonably dangerous drugs and medical devices. The 50 FDAs argument posits that federal regulation of drugs and medical devices ought to preempt state tort law, because state tort law subjects manufacturers of these products to a wide range of inconsistent and unpredictable regulatory standards – the effective equivalent of having to comply with the regulations of 50 different FDAs. They contend that a better approach would be for FDA to adopt regulations imposing unitary federal standards that would supplant the entire state tort law system. This white paper shows the 50 FDAs argument for what it really is: an attempt by drug and medical device manufacturers to limit citizen access to the courts so that they can avoid their civil law responsibilities, while at the same time trying to get a weak set of federal regulations that impose only minimal compliance costs. In this way, the 50 FDAs argument is part of the larger effort by regulated industry to preempt state tort law with weak regulations. The authors of the white paper contend that the 50 FDAs argument should be rejected for the following reasons: 1. Despite industry assertions to the contrary, state tort laws are both uniform and predictable, and so are their application. If anything, the application of a unitary federal standard is more unpredictable than the application of state tort laws. 2. State tort law is an essential part of the way government in the United States functions, making good on the Constitution’s promise of jury trials in common law suits – thus giving citizens a chance to recover damages when they are harmed. 3. State tort laws help keep products safe. Fear of litigation makes a difference, as industry’s ongoing campaign to shield themselves from lawsuits demonstrates.

Workers at Risk: The Failed Promise of the Occupational Safety and Health Administration

OSHAs Failed Promise The Plight of Americas Workers Regulatory Failure and Reform OSHAs History The Nixon/Ford Years: Inauspicious Beginnings The Carter Years: OSHA on the Move The Reagan Years: Going Backward The Reagan Years: Inching Forward The Reagan Years: Killing Time The Reagan Years: Tying Up Loose Ends The Reagan Years: New Initiatives The Reagan Years: Weakening Enforcement The Bush Years: An Identity Crisis Internal Reforms: Better Management for OSHA Making OSHA More Efficient: Setting Priorities and Eliminating Bottlenecks More Bang for the Buck: Alternative Methods of Regulation and Implementation Ensuring Compliance: The Puzzle of Enforcement External Reforms: Who Is in Charge? The Presidents Role: OSHA OSHRCs Role: The Failure of the Split-Enforcement Arrangement The Courts Role: Judicial Review and OSHA External Reforms: Changing OSHAs Mandate OSHA and Overregulation: Should Cost-Benefit Analysis Apply? Economics and OSHA: Cost-Benefit Analysis and Underregulation Modeling EPA: A New Mandate for OSHA External Reforms: Empowering Workers Lighting a Fire: When OSHA Is a Reluctant Regulator Empowering Workers: Enforcing the OSH Act Empowering Workers: Rethinking Employment Relationships Selected Bibliography Index

Divorcing Profit Motivation from New Drug Research: A Consideration of Proposals to Provide the FDA With Reliable Test Data

A. FDA Efforts 168 B. Further Modifications in the Present System Designed to Improve the Accuracy of Experimental Data 170 1. Clinical Research Standards 170 2. Changes in Enforcement Policies 171 C. Alternatives to the Present System Designed to Improve the Accuracy of Experimental Data 175 1. Limited Third-Party Testing 175 2. Complete Third-Party Testing 177 (a) Government testing 177 (b) Independent contracting 179 VI. CONCLUSIONS AND RECOMMENDATIONS 181