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The Permit Power Revisited: The Theory and Practice of Regulatory Permits in the Administrative State

103 Pages Posted: 18 Feb 2014 Last revised: 22 Nov 2014

Eric Biber

University of California, Berkeley - School of Law

J. B. Ruhl

Vanderbilt University - Law School

Date Written: February 10, 2014

Abstract

Two decades ago, Professor Richard Epstein fired a shot at the administrative state that has gone largely unanswered in legal scholarship. His target was the “permit power,” under which legislatures prohibit a specified activity by statute and delegate administrative agencies discretionary power to authorize the activity under terms the agency mandates in a regulatory permit. Describing the permit power, accurately, as an “enormous power in the state,” Epstein bemoaned that it had “received scant attention in the academic literature.” He sought to fill that gap. Centered on his premise that the permit power represents “a complete inversion of the proper distribution of power within a legal system,” Epstein launched a scathing critique of regulatory permits in operation, condemning the practice as a “racket” for administrative abuses and excesses.

Epstein’s assessment of the permit power was and remains accurate in three respects. First, the permit power is vast. Regulatory permits reach into all corners of modern society and are one of the primary workhorses of the administrative state’s exercise of authority. Second, the permit power is ripe for administrative abuse. Like any government power, it must be closely monitored. Third, the permit power has been largely ignored in legal scholarship. Indeed, it does not stretch things to say that Epstein has had the first and last words on the permit power. The problem is that, beyond what he got right about the permit power, most of Epstein’s critique was based on an incomplete caricature of permitting in theory and practice.

This Article is the first to return comprehensively to the permit power since Epstein’s critique and offer a deep account of the theory and practice of regulatory permits in the administrative state. Part I positions regulatory permits within the administrative state. We define what a regulatory permit is, outline the scope and scale of permitting in the regulatory state, and explain the different types and characteristics of permits. Part II compares the pros and cons of different permit design approaches and identifies the conditions under which one type of permit, known as the “general permit,” is most likely to offer significant advantages, including mitigating many of the concerns Epstein advanced. Using environmental degradation problems as examples, Part III applies the theoretical model in concrete policy settings, concluding that general permits, if carefully designed and administered, could be deployed and used to effectively respond to many of the complex policy problems looming in the future. We close by proposing a set of default rules and exceptions for permit design and suggesting how they apply to such problems.

Keywords: regulatory permits; permit power; general permits; climate change; wetlands permits; administrative state; regulatory exemptions

Suggested Citation

Biber, Eric and Ruhl, J. B., The Permit Power Revisited: The Theory and Practice of Regulatory Permits in the Administrative State (February 10, 2014). Duke Law Journal, Vol. 64, Forthcoming; Vanderbilt Public Law Research Paper No. 14-4. Available at SSRN: https://ssrn.com/abstract=2397425 or http://dx.doi.org/10.2139/ssrn.2397425

Eric Biber

University of California, Berkeley - School of Law ( email )

215 Boalt Hall
Berkeley, CA 94720-7200
United States

J. B. Ruhl (Contact Author)

Vanderbilt University - Law School ( email )

131 21st Avenue South
Nashville, TN 37203-1181
United States

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