Cooperative Interbranch Federalism: Certification of State-Law Questions by Federal Agencies

Abstract

When an unresolved state-law question arises in federal court, the court may certify it to the relevant state court. The practice of certification from one court to another has been widely adopted and has been touted as "help[ing] build a cooperative judicial federalism." This article proposes that states promote cooperative interbranch federalism by allowing federal agencies to certify unresolved state-law questions to state courts. It draws on Delaware's recent expansion of potential certifying entities to the Securities and Exchange Commission to argue that this innovation should be extended to other states and other federal agencies.

Certification from federal agencies to state courts promotes cooperative interbranch federalism by preserving state control over certain primary conduct and allocating decisionmaking according to institutional expertise, allowing an agency that is expert in a specialized federal statutory and regulatory scheme to certify questions to a court that is expert in state law. Because the proposed certification procedure is interbranch as well as interjurisdictional, its effect depends on the type of activity in which the agency is engaged: adjudication, rulemaking, or informal action. Federal agency certification has the potential to speed resolution of state-law questions when a federal agency acts as an adjudicator and would add another tool for informed rulemaking. The article concludes that the need for certification is particularly acute, however, when the agency is engaged in informal actions in which no recourse may otherwise be had for interpretations of state law that ultimately the state may reject.

Keywords: certification, administrative law, judiciary, federalism, Delaware, corporate law, SEC, Securities & Exchange Commission, advisory opinions