Double Deference in Administrative Law
68 Pages Posted: 11 Sep 2016 Last revised: 18 Oct 2016
Date Written: September 9, 2016
Administrative law presumes a neat system of agency rulemaking and adjudication followed by judicial review. But the reality of the administrative state departs starkly from this model. One such departure is the use of audited self-regulatory organizations (SROs) -- private organizations comprised of specific industries that formulate binding law to regulate themselves. Although SROs operate subject to the oversight of federal agencies, their power is vast, reaching significant swaths of the national and international economies. There is little to constitutionally constrain such arrangements, and whereas the administrative law model values the norms of participation, deliberation, and transparency, the procedures used by SROs depart from these norms in important ways. Moreover, oversight agencies are deferential to SROs, and courts in turn are deferential to the oversight agencies. This doubling of deference both undermines accountability and fails to adequately guard against arbitrariness. This Article brings a much-needed administrative law lens to SROs, providing both a positive and theoretical account of SROs and exposing flaws in the model. To better ameliorate these concerns, this Article illustrates how existing administrative law can more comprehensively account for SROs and offers a series of institutional design considerations for furthering administrative law norms in the future.
Keywords: administrative law, self regulation, self-regulatory organization, privatization, deference, judicial review
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