The Chair's Message

By Philip J. Harter
Chair - Section of Administrative
Law & Regulatory Practice

The APA at 50: a Celebration, Not a Puzzlement

To any administrative law and regulatory practice junky, one of the major bouts of the past year has been the Congressional consideration of "regulatory reform" in any of its many incarnations. The Senate debated the topic for much of July, with a portion of each day's debate taken up with humorous, or tragic, stories about regulation gone amuck. Yet, the Section is devoting the year to celebrating the 50th Anniversary of the Administrative Procedure Act. How can these two events co­exist? On the one hand a recognition of the extraordinary contributions of the APA, but on the other, a hotly charged indictment that all is not well and in need of renovation and change. Is this a case of "sometimes maybe yes; sometimes maybe no?" I think not. On closer examination, it is clearly a celebration.

Distilled from the best practices developed by agencies during the beginning of the administrative state, and rejecting the ABA's early calls for replicating court proceedings at virtually every turn, the Administrative Procedure Act developed the basic structure that has been followed since. As Justice Jackson wrote not long after its enactment:

The Act thus represents a long period of study and strife; it settles long­continued and hard­fought contentions, and enacts a formula upon which opposing social and political forces have come to rest. It contains many compromises and generalities and, no doubt, some ambiguities. Experience may reveal defects.

Here we are fifty years later. Many more hearings are conducted under its auspices by an administrative judiciary than by the Federal courts. The basic arrangement by which judges fit within agencies was established in the APA and has endured; while there are currently debates over some changes, such as creating a centralized "corps" of administrative law judges, the notion of having judges be part of the executive branch is clearly accepted, something that before the APA was not. The basic relationship between the agencies and courts was also created by the Act. And so too was the process of rulemaking.

The rulemaking procedures of the APA are scant indeed. But their brevity contains several critically important political decisions. First, the entire notion of notice and comment rulemaking is fundamental. It provides a democratic means by which the people who will be affected, either by being regulated or as a beneficiary, or even as a "do­gooder," can participate in the decision. While most of us simply take that right for granted, foreigners often express amazement: the regulators, regarding it as an intrusion on their "right" to simply issue the rule without having to go through the nuisance of any sort of consultation; the populace, incredulous of our ability to have an agency actually consider our views when developing a rule. Second, it provides a means by which the agency can gain important information about the subject matter. Third, it is a means by which the discretion of an agency is held in check through judicial and political review. Fourth, the way the whole system works is to allow for the appropriate exercise of political discretion. The facts and the law define the range of political choice, but it is up to the agency to make the decision within that range.

The APA's rulemaking procedures were undoubtedly predicated on two notions: the expert model of administration which assumes that agencies will exercise considerable neutral expertise in making regulatory decisions; and the belief, based on the experience at the time, that there would not be that many substantive rules. Now, as economic regulation has given way to the control of technology, the expert model is no longer accepted (although, to be sure, its vestiges remain), and rules play a central role in the daily lives of people and companies. To keep pace with the changes, the stark provisions of the APA became embellished with requirements for a "hybrid" form of rulemaking, and the courts repudiated the highly deferential "rational basis test" for a more intrusive "hard look." Although Chevron leads to deference in statutory interpretations and in filling in ambiguities, the courts clearly cabin agency action by looking carefully at what was done and why. Importantly, however, the values established by the APA itself remained in force; in fact, the changes came largely through an interpretation and adaptation of the APA itself.

Congress is now engaged in a great deliberation on regulatory reform, an amendment of administrative procedure, a change in the APA. Does this signal a dissatisfaction with the APA, a need for fundamental change, a failure of the APA, a repudiation of the compromises struck so long ago?

Although it may be heretical to say in the current environment, the APA as it has evolved works pretty well; no, very well. If one listens carefully to the complaints over the regulatory process, the vast bulk of them fall within one or more of three categories: (1) The difficulty arose during the application of a rule, an enforcement case. Many war stories are quite funny or even absurd, but the problems lay in the exercise of discretion in the field, not with CFR. (2) The underlying statute forced the decision, so that any administrative process that was even remotely faithful to the will of Congress would have resulted in a decision subject to criticism. (3) The agency did not comply with the current requirements or at least with good practice. Very few of the complaints seem to center on a failure of the administrative process itself when notice and comment rulemaking, as it has evolved, has actually been followed.

It seems clear from the debates that the contentions leading up to the APA are still alive and well: Some argue in favor of the expert model and very few restrictions on agencies (and a concomitant restriction on "political interference"); they largely ignore the developments of the last 20 years. Others revert back to the Walter­Logan days and would impose exquisite commands and controls on just how an agency can and cannot make decisions. The very existence of that diversity of views over such a fundamental topic argues in favor of some sort of clarification or codification. So what are we to do? To a degree we are just where we were 50 years ago, it is time to step back, survey good procedure, and capture it so that all may know and follow it while still allowing growth and experimentation. The basic structure of the APA is totally intact. Its political goals still live. Indeed, the gloss that has developed is largely the basis for the deliberations. The Section is, therefore, spending the year celebrating the ABA and its enormous contributions!