Constraint Through Independence

63 Pages Posted: 13 Sep 2019 Last revised: 1 Dec 2019

See all articles by Daniel B. Listwa

Daniel B. Listwa

Wachtell, Lipton, Rosen & Katz

Lydia K. Fuller

Yale Law School

Date Written: November 27, 2019

Abstract

A tide of skepticism of the administrative state has been rising among members of the judiciary and the academy. Uncomfortable with the ways doctrines like Chevron and Auer seem to leave bureaucrats unchecked, pressure has been building to cut back on deference to agencies’ legal interpretations. Similarly, these “anti-administrativists” have advocated for striking down statutory regimes granting independence to certain bureaucratic actors, such as administrative law judges (ALJs), who are partially insulated from the President’s removal power. Underlying both of these prongs of the anti-administrativist program is the idea that the federal judiciary needs to be doing more to constrain the exercise of administrative force by unaccountable regulatory bodies.

Taking as given the need for greater judicial constraints on the administrative state, this Note argues that the two-pronged program of the anti-administrativists, challenging deference and ALJ independence, is both woefully incomplete and inherently counterproductive. It is incomplete because, while focusing intently on issues of statutory interpretation, it has ignored an entire hemisphere of agency decision-making and judicial review: fact-finding. It is counterproductive because it fails to appreciate the way in which — on a system level — independence, fact-finding, and legal interpretation interact.

Tightening the tourniquet around legal deference creates incentives for agencies to obscure their policy-making in fact-finding, a hemisphere where judicial review is significantly less effective. As this Note shows using a novel empirical study of over 250 holdings, judicial review of agency fact-finding is dependent on the identification of “red flags” in the administrative record, that is, of evidence of factual manipulation. Independent ALJs, who generate the initial administrative record, are critical in planting those red flags and, as a result, essential for effective judicial review. Exploring these institutional dynamics in the context of both labor and financial regulation, this Note reveals the importance of the counterintuitive observation that judicial review depends on deference and bureaucratic independence.

Keywords: administrative law, administrative law judge, lucia, sec, chevron, auer, deference, interpretation, agency, NLRB

Suggested Citation

Listwa, Daniel and Fuller, Lydia, Constraint Through Independence (November 27, 2019). Yale Law Journal, 129:548 (2019), Available at SSRN: https://ssrn.com/abstract=3448535

Daniel Listwa (Contact Author)

Wachtell, Lipton, Rosen & Katz ( email )

51 West 52nd Street
New York, NY 10019
United States

Lydia Fuller

Yale Law School ( email )

127 Wall Street
New Haven, CT 06511
United States

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