Winter 1999, Vol 24 No2

Recent Articles of Interest

Michael Abramowicz, Market-Based Administrative Enforcement, 15 Yale J. On Reg. 197 (1998). In administrative law, the market paradigm has led to revolution, as policymakers have followed commentators in turning from command-and-control regulation to incentives. This reconceptualization, however, has left one aspect of administrative law untouched: administrative adjudication. This neglect is unjustified, as the article shows that adjudication itself could be accomplished through market processes. In an administrative market, the government would auction off rights to a fraction of any judgment award that an administrative agency might ultimately win against a given corporation. Such a market would reward third-party efforts to gather relevant information by allowing those possessing private information to trade on it. With further refinement, the government could use this market to determine what the final judgment against the corporation should be, thus supplanting traditional adjudication. At first glance the proposal might seem likely to lead to inaccurate judgments. The article, however, explains that the government could give traders incentives to price securities accurately by adjudicating a small percentage of randomly selected claims. Traders who overvalue securities would lose enough money in these randomly selected cases that traders ex ante would always act as if every claim will be adjudicated. Thus, the government would tether the market to traditional adjudicative norms, ensuring that it gives litigants due process even when their cases are not selected for traditional adjudication. The article demonstrates that the resulting Apartially supplanting administrative market@ helps to economize on judicial process. The market, though, does more than that: It can serve as an alternative to qui tam litigation, and it encourages regulators to craft regulations at higher levels of generality. The article concludes by suggesting that the vast information-processing power of capital markets could shrink administrative agencies while improving their functioning.

Paul D. Carrington, Law and Economics in the Creation of Federal Administrative Law: Thomas Cooley, Elder to the Republic, 83 Iowa L. Rev. 363 (1998). Professor Carrington is apparently in the process of a book-length study of Thomas Cooley, and this article focuses on Cooley=s leadership as the first chairman of the Interstate Commerce Commission, the first regulatory commission. Carrington provides a background of Cooley=s life before taking on the Commission; he was already 63 and had been a judge and legal scholar when President Cleveland appointed him to the Commission. Politically, Cooley had been a Jacksonian, with a skepticism of government interference in the economy, but at the same time with the growth of the corporate state in the late nineteenth century, he saw the need for government intervention to protect the less powerful. At the time of his appointment, he was known through his scholarship as one knowledgeable about rate-setting, while viewed as a Asymbol of integrity.@ Cooley=s special contribution, Carrington concludes, was not in the substantive area of ratemaking but in the area of procedure. Carrington sees in Cooley three major features which have become models for administrative law. First, Carrington suggests that Cooley elevated the process of mediation and negotiation in the regulatory context, Aavoiding wherever possible the use of the lash of adjudicative power.@ Second, in response to the threat of intensive judicial review, Cooley developed the concept of what he called Aadministrative due process of law@ for the development of rules, arguing that Commission decisions resulting from such a process should be accorded a high degree of deference. Third, Cooley set a standard for agency decisions and regulations that were clear and self-limiting, rather than indeterminate and preserving of the agency=s discretion. This, Carrington says, made Ahis administrative law indeed law in the conventional sense.@

Richard D. Cudahy, The Folklore of Deregulation (with Apologies to Thurman Arnold), 15 Yale J. on Reg. 427 (1998). At the dawn of the new millennium, deregulation has spread like wildfire, unmindful of counsels of caution. A touching faith in competition as the universal solvent of economic ills has fostered all sorts of quaint and obscure beliefs. Judge Cudahy traces these beliefs as they have grown and proliferated in telecommunications, the airlines, and electric power, so as to form a folklore of deregulationCa sort of mythology of the market. In this Commentary, Judge Cudahy surveys the hallmarks of deregulationCpeculiar phenomena like unbundling, the stranding of costs, and mergers on a gigantic scale. And he celebrates the army of middlemen sustained by the folklore of deregulationCmarketers, publicists, advertisers, and the likeCa new class dedicated to reinventing venerable industries as savvy competitors.

Joseph D. Kearney and Thomas W. Merrill, The Great Transformation of Regulated Industries Law, 98 Col. L. Rev. 1323 (1988). The nation=s approach to regulating common carriers and public utilities has undergone a wide-ranging transformation in the last quarter-century. The original paradigm of regulation, characterized by legislative creation of an administrative agency charged with regulatory oversight of particular industries, has given way to a new paradigm where the goals are the promotion of competition and maximization of consumer choice. This article details this transformation and then seeks its causes. After finding that no consistent pattern of institutional leadership can be discerned, the article argues that the causes are rooted in deep-seated economic an social forces. The article concludes that the most persuasive explanations are that key interest groups have discovered that regulatory change is in their interests, and that an ideological consensus has emerged among policy elites that the risks of regulatory failure under the original paradigm exceed the risks of market failure under the new paradigm.

Symposium, The Independent Counsel Act: From Watergate to Whitewater and Beyond, 86 Georgetown L. J. (July 1998). Foreword, Jerome Shestack; Running Special Investigations: The Inspector General Model, Michael R. Bromwich; The Gratuities Offense and the RICO Approach to Independent Counsel Jurisdiction, George D. Brown; Independent Counsel: No More, No Less a Federal Prosecutor, Samuel Dash; Damned if She Does and Damned if She Doesn=t: The Attorney General and the Independent Counsel Statute, Katy J. Harriger; Four Unresolved Questions About the Responsibilities of an Independent Counsel, Philip B. Heyman; The President and the Independent Counsel, Brett M. Kavanaugh; Doing Congress=s Dirty Work, Norman J. Ornstein; The Interaction Between Impeachment and the Independent Counsel Statute, Julie R. O=Sullivan; Bad Incentives and Bad Institutions, Cass R. Sunstein; Trials and Tribulations of the First Special Prosecutor Under the Ethics in Government Act of 1978, Arthur H. Christy; The Independent Counsel Act: A Good Time to End a Bad Idea, Joseph E. DiGenova; The Independent Counsel: A View from Inside, Donald C. Smaltz; The Need for Renewal of the Independent Counsel Act, Lawrence E. Walsh.

Special Issue: European Administrative and Regulatory Reform, 4 Colum. J. Eur. L.493 (1998). Introduction, Susan Rose-Ackerman; Regulations and Comitology: The EC Committee System in Regulatory Perspective, Michelle Egan and Dieter Wolf; Food Safety Regulation in the European Union and the United States: Different Cultures, Different Laws, Marsha A. Echols; Parliamentary and Administrative Reforms in the Control of Intelligence Services in the European Union, Shlomo Shpiro; Community Competition Law Enforcement Deregulation and Re-regulation: The Commission, National Authorities and Private Enforcement, Barry J. Rodger and Angus MacCulloch; The Policymaker=s Perspective on Administrative and Regulatory Reform in Europe, J. David Enriquez; Better Lawmaking: The Experience and the View of the European Commission, Giuseppe Ciavarini Azzi; Improving the Quality of Law Drafting in Finland, Jyrki Tala,Juhani Korhonen, Kaijus Ervasti and Emanuel Metz; Simplification of the Public Administration: The ALean State@ as a Long-Term Task, Emanuel Metz.

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