Administrative Law Commons^™

Reform At Risk — Mandating Participation In Alternative Payment Plans, Scott Levy, Nicholas Bagley, Rahul Rajkumar

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In an ambitious effort to slow the growth of health care costs, the Affordable Care Act created the Center for Medicare and Medicaid Innovation (CMMI) and armed it with broad authority to test new approaches to reimbursement for health care (payment models) and delivery-system reforms. CMMI was meant to be the government’s innovation laboratory for health care: an entity with the independence to break with past practices and the power to experiment with bold new approaches. Over the past year, however, the Department of Health and Human Services (HHS) has quietly hobbled CMMI, imperiling its ability to generate meaningful data …

High‐Frequency Trading And The New Stock Market: Sense And Nonsense, Merritt B. Fox, Lawrence R. Glosten, Gabriel V. Rauterberg

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The stock market has been transformed during the last 25 years. Human suppliers of liquidity like the NASDAQ dealers and NYSE specialists have been replaced by algorithmic market making; stocks that once traded on a single venue now trade across twelve exchanges and a multitude of alternative trading systems. New venues like dark pools, and new participants like high‐frequency traders, have emerged to take on prominent roles. This new market has had more than its share of controversy and regulatory scrutiny, particularly in the wake of Michael Lewis’s bestseller Flash Boys. In this article, the authors analyze five of the …

The Brand-X Effect: Declining Chevron Deference In The 21st Century, Stephen Johnson

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Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc. is the most frequently cited Supreme Court administrative law decision and has generated substantial scholarship over the past thirty-four ears. Almost three decades ago, Robert Glicksman and Christopher Schroeder examined the nature of judicial review of the actions of the Environmental Protection Agency ("EPA") by the federal courts during the agency's first twenty years of existence, focusing, in part, on the changing nature of that review in light of the Chevron decision. Glicksman and Schroeder concluded that the courts aggressively reviewed EPA's actions during the agency's early years, interpreting the …

Indeconstructible: The Triumph Of The Environmental “Administrative State”, Stephen M. Johnson

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Shortly after the 2017 Presidential inauguration, a senior advisor to the President proclaimed that a top priority of the Administration would be the “deconstruction of the administrative state.” A primary target of the Administration’s deconstruction efforts was the U.S. Environmental Protection Agency (“EPA”) and federal environmental regulations.

While the President can use a variety of tools, including the appointment power, budget power, treaty power, and executive orders, to influence the manner in which the EPA and other agencies interpret and enforce laws, the President has very little power to unilaterally “deconstruct the administrative state.” The “administrative state” is a creation …

Quacks Or Bootleggers: Who’S Really Regulating Hedge Funds?, Jeremy Kidd

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Influential scholars of corporate law have questioned previous federal interventions into corporate governance, calling it quackery. Invoking images of medical malpractice, these critiques have argued persuasively that Congress, in responding to crises, makes policy that disrupts efficient private rules and established state laws. This Article applies the Bootleggers and Baptists theory to show that Dodd–Frank’s hedge fund rules are more than just negligent or reckless, but designed to benefit special interests that compete with the hedge fund model. Those rules offer no solutions to any real or perceived risks arising from hedge fund investing, but might offer an advantage to …

Regulating By Example, Susan C. Morse, Leigh Osofsky

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Agency regulations are full of examples. Regulated parties and their advisors parse the examples to develop an understanding of the applicable law and to determine how to conduct their affairs. However, the theoretical literature contains no study of regulatory examples or of how they might be interpreted. Courts differ about whether examples serve as an independent source of law. There is uncertainty about the proper role of this frequently used regulatory tool.

In this Article, we argue that regulatory examples make law. Our claim is that, as a default rule, the legal content offered by regulatory examples is coequal with, …

Heretical Archives: Heterotopic Institutions And Fictive Records, Peter Goodrich

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No abstract provided.

Visual Rulemaking, Elizabeth G. Porter, Kathryn A. Watts

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Visual politics are seeping into the technocracy. Rulemaking stakeholders—including agencies, the President, and members of the public—are deploying politically tinged visuals to push their agendas at every stage of high-stakes, often virulently controversial, rulemakings. These images, GIFs, and videos usually do not make it into the official rulemaking record, so this new “visual rulemaking” world has not been discussed much by scholars or others.

In this article, we explore the new visual rulemaking culture that emerged in Obama’s presidency, providing examples and discussing relevant policy implications. Although we recognize some risks, we argue that, on balance, visual rulemaking is a …

Stock Market Futurism, Merritt Fox, Gabriel Rauterberg

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The U.S. stock market is undergoing extraordinary upheaval. The approval of the application of the Investors Exchange (IEX) to become the nation's newest stock exchange, including its famous "speed bump," was one of the SEC's most controversial decisions in decades. Other exchanges have proposed a raft of new innovations in its wake. This evolving equity market is a critical piece of national infrastructure, but the regulatory scheme for its institutions is increasingly frayed. In particular, current regulation draws sharp distinctions among different kinds of markets for trading stocks, treating stock exchanges as self-regulatory organizations immune from private civil litigation, while …

Remedial Restraint In Administrative Law, Nicholas Bagley

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When a court determines that an agency action violates the Administrative Procedure Act, the conventional remedy is to invalidate the action and remand to the agency. Only rarely do the courts entertain the possibility of holding agency errors harmless. The courts’ strict approach to error holds some appeal: Better a hard rule that encourages procedural fastidiousness than a remedial standard that might tempt agencies to cut corners. But the benefits of this rule-bound approach are more elusive, and the costs much larger, than is commonly assumed. Across a wide range of cases, the reflexive invalidation of agency action appears wildly …

#Betterrules: The Appropriate Use Of Social Media In Rulemaking, Stephen M. Johnson

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In December 2015, the Government Accountability Office (GAO) concluded that the Environmental Protection Agency’s (EPA’s) use of various social media tools in a rulemaking under the Clean Water Act violated prohibitions in federal appropriations laws against publicity, propaganda, and lobbying. Although academics previously explored whether the use of technology in rulemaking might violate the Administrative Procedures Act (APA), the Paperwork Reduction Act, or the Federal Advisory Committee Act, none predicted that one of the first firestorms surrounding the use of social media in rulemaking would arise out of federal appropriations laws. ...

As the Administrative Conference of the United States …

Regulation Of Teacher Certification In Idaho: Proceedings Before Idaho's Professional Standards Commission Covering The Denial Of An Application For Or Action Against A Teaching Certificate, John E. Rumel

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No abstract provided.

The Shadow Of Free Enterprise: The Unconstitutionality Of The Securities & Exchange Commission's Administrative Law Judges, Linda D. Jellum, Moses M. Tincher

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Six years ago, Congress enacted the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), for the first time giving the Securities and Exchange Commission (SEC) the power to seek monetary penalties through its in-house adjudication. The SEC already had the power to seek such penalties in federal court. With the Dodd-Frank Act, the SEC’s enforcement division could now choose between an adjudication before an SEC Administrative Law Judge (ALJ) or a civil action before an Article III judge. With this new choice, litigants contended that the SEC realized a significant home-court advantage. For example, the Wall Street Journal …

The Shadow Of Free Enterprise: The Unconstitutionality Of The Securities & Exchange Commission's Administrative Law Judges, Linda Jellum

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Six years ago, Congress enacted the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), for the first time giving the Securities and Exchange Commission (SEC) the power to seek monetary penalties through its in-house adjudication. The SEC already had the power to seek such penalties in federal court. With the Dodd-Frank Act, the SEC's enforcement division could now choose between an adjudication before an SEC Administrative Law Judge (ALJ) or a civil action before an Article III judge. With this new choice, the SEC realized a significant home-court advantage. For example, in 2014, the SEC's enforcement division prevailed …

Simplexity: Plain Language And The Tax Law, Joshua D. Blank, Leigh Osofsky

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In recent years, federal government agencies have increasingly attempted to use plain language in written communications with the public. The Plain Writing Act of 2010, for instance, requires agencies to incorporate "clear and simple" explanations of rules and regulations into their official publications. In the tax context, as part of its "customer service" mission, the Internal Revenue Service bears a "duty to explain" the tax law to hundreds of millions of taxpayers who file tax returns each year. Proponents of the plain language movement have heralded this form of communication as leading to simplicity in tax compliance, more equitable access …

Advancing Auer In An Era Of Retreat, Stephen M. Johnson

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At the dawn of the modern administrative state, the Supreme Court held, in Bowles v. Seminole Rock & Sand Company, that an agency’s interpretation of its own regulation is “of controlling weight unless it is plainly erroneous or inconsistent with the regulation.” A half century later, the Court retained that approach in Auer v. Robbins, a decision authored by Justice Scalia. Auer deference is generally regarded as the most accommodating standard of judicial review applied by courts to agency decision-making.

Although the Supreme Court created Seminole Rock/Auer deference more than seventy years ago, the Court has created exceptions to …

The Sec's Shift To Administrative Proceedings: An Empirical Assessment, Stephen J. Choi, Adam C. Prichard

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Congress has repeatedly expanded the authority of the SEC to pursue violations of securities laws in proceedings adjudicated by the SEC's own administrative law judges, most recently through the Dodd-Frank Act. We report the results from an empirical study of SEC enforcement actions against non-financial public companies to assess the impact of the Dodd-Frank Act on the balance between civil court and administrative enforcement actions. We show a general decline in the number of court actions and an increase in the number of administrative proceedings post-Dodd-Frank. At the same time, we show an increase in average civil penalties post-Dodd-Frank for …

How Privacy Distorted Standing Law, Felix T. Wu

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No abstract provided.

The Other Securities Regulator: A Case Study In Regulatory Damage, Anita K. Krug

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Although the Securities and Exchange Commission is the primary securities regulator in the United States, the Department of Labor also engages in securities regulation. It does so by virtue of its authority to administer the Employee Retirement Income Security Act (ERISA), the statute that governs the investment of retirement assets. In 2016, the DOL used its securities regulatory authority to adopt a rule that, for the first time, designates securities brokers who provide investment advice to retirement investors as fiduciaries subject to ERISA's stringent transaction prohibitions. The new rule's objective is salutary, to be sure. However this Article shows that, …

Trouble On The Exchanges — Does The United Owe Billions To Health Insurers?, Nicholas Bagley

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Yet another bruising fight has erupted over health care reform. On September 9, 2016, the Obama administration offered to open settlement negotiations with health insurers that have sued the United States to recover billions of dollars that they claim they are owed. Congressional Republicans are incensed, believing that any settlement would illegally squander taxpayer dollars in a lastgasp effort to save the Affordable Care Act (ACA).

The Sec, Administrative Usurpation, And Insider Trading, Adam C. Pritchard

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The history of insider trading law is a tale of administrative usurpation and legislative acquiescence. Congress has never enacted a prohibition against insider trading, much less defined it. Instead, the SEC has led in defining insider trading, albeit without the formality of rulemaking, and subject to varying degrees of oversight by the courts. The reason why lies in the deference that the Supreme Court gave to the SEC in its formative years. The roots of insider trading law are commonly traced to the SEC’s decision in Cady, Roberts & Co. Cady, Roberts was only made possible, however, by the …

An Empirical Study Of Implicit Takings, James E. Krier, Stewart E. Sterk

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Takings scholarship has long focused on the niceties of Supreme Court doctrine, while ignoring the operation of takings law “on the ground” – in the state and lower federal courts, who together decide the vast bulk of all takings cases. This study, based primarily on an empirical analysis of more than 2,000 reported decisions over the period 1979 through June 2012, attempts to fill that void.The study establishes that the Supreme Court’s categorical rules govern almost no cases, and that takings claims based on government regulation almost invariably fail. By contrast, when takings claims arise out of government action other …

Innovation Prizes In Practice And Theory, Michael J. Burstein, Fiona Murray

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Innovation prizes in reality are significantly different from innovation prizes in theory. The former are familiar from popular accounts of historical prizes like the Longitude Prize: the government offers a set amount for a solution to a known problem, like £20,000 for a method of calculating longitude at sea. The latter are modeled as compensation to inventors in return for donating their inventions to the public domain. Neither the economic literature nor the policy literature that led to the 2010 America COMPETES Reauthorization Act — which made prizes a prominent tool of government innovation policy — provides a satisfying justification …

Manufacturing Barriers To Biologics Competition And Innovation, W. Nicholson Price Ii., Arti K. Rai

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As finding breakthrough small-molecule drugs becomes more difficult, drug companies are increasingly turning to "large molecule" biologics. Although biologics represent many of the most promising new therapies for previously intractable diseases, they are extremely expensive. Moreover, the pathway for generic-type competition set up by Congress in 2010 is unlikely to yield significant cost savings. This Article provides a fresh diagnosis of and prescription for this major public policy problem. It argues that the key cause is pervasive trade secrecy in the complex area of biologics manufacturing. Under the current regime, this trade secrecy, combined with certain features of Food and …

Medicaid Planning In Idaho, John A. Miller

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No abstract provided.

Classing Up The Agency, Sergio J. Campos

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No abstract provided.

Debunking Humphrey's Executor, Daniel A. Crane

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The Supreme Court’s 1935 Humphrey’s Executor decision paved the way for the modern administrative state by holding that Congress could constitutionally limit the President’s powers to remove heads of regulatory agencies. The Court articulated a quartet of features of the Federal Trade Commission’s (“FTC”) statutory design that ostensibly justified the Commission’s constitutional independence. It was to be nonpartisan and apolitical, uniquely expert, and performing quasi-legislative and quasi-judicial, rather than executive, functions. In recent years, the staying power of Humphrey’s Executor has been called into question as a matter of constitutional design. This Essay reconsiders Humphrey’s Executor from a different angle. …

The Pendulum Swings: Reconsidering Corporate Criminal Prosecution, David M. Uhlmann

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Corporate crime continues to occur at an alarming rate, yet disagreement persists among scholars and practitioners about the role of corporate criminal prosecution. Some argue that corporations should face criminal prosecution for their misconduct, while others would reserve criminal prosecution for individual corporate officials. Perhaps as a result of this conflict, there has been a dramatic increase over the last decade in the use of deferred prosecution and non-prosecution agreements for some corporate crimes, even as the government continues to bring criminal charges for other corporate crimes. To move beyond our erratic approach to corporate crime, we need a better …

Visual Rulemaking, Elizabeth G. Porter, Kathryn A. Watts

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Federal rulemaking has traditionally been understood as a text-bound, technocratic process. However, as this Article is the first to uncover, rulemaking stakeholders—including agencies, the President, and members of the public—are now deploying politically tinged visuals to push their agendas at every stage of high-stakes, often virulently controversial, rulemakings. Rarely do these visual contributions appear in the official rulemaking record, which remains defined by dense text, lengthy cost-benefit analyses, and expert reports. Perhaps as a result, scholars have overlooked the phenomenon we identify here: the emergence of a visual rulemaking universe that is splashing images, GIFs, and videos across social media …

Controlling Presidential Control, Kathryn A. Watts

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Presidents Reagan and Clinton laid the foundation for strong presidential control over the administrative state, institutionalizing White House review of agency regulations. Presidential control, however, did not stop there. To the contrary, it has evolved and deepened during the presidencies of George W. Bush and Barack Obama. Indeed, President Obama’s efforts to control agency action have dominated the headlines in recent months, touching on everything from immigration to drones to net neutrality.

Despite the entrenchment of presidential control over the modern regulatory state, administrative law has yet to adapt. To date, the most pervasive response both inside and outside the …