Chapter: Administrative Agencies - American Bar Foundation

Joanna L Grisinger
Assistant Professor
Department of History
Clemson University [this is still very much a draft - please do not quote or cite without
permission] Chapter 1: The Administrative Process at Work
By 1940, the bureaucrats were in charge. In expanding the federal
government's field of play in previous decades, Congress and the White
House had transferred a remarkable amount of authority to agencies and
commissions to handle the new and staggering workload. In learning how to
navigate the administrative state, individuals who claimed benefits from
the Social Security Board, the Railroad Retirement Board, and the Veterans
Administration joined businessmen who defended their companies against
claims of unfair competition before the Federal Trade Commission, submitted
their shipping rates to the Interstate Commerce Commission and the Maritime
Commission, and sought permits to sell liquor from the Federal Alcohol
Administration and permits to operate radio stations from the Federal
Communications Commission. Over 100 agencies, commissions, bureaus, and
departments operated across the federal landscape, and the number of
matters handled by these administrative bodies dwarfed the caseload of
Congress or the federal courts. The National Labor Relations Board, for
example, resolved over 22,500 cases in its first four years of operation,
while the Board of Veterans' Appeals held hearings in 46,000 cases in less
than six years.[1] By 1940, the Interstate Commerce Commission had
received over 98,000 certificate applications under the Motor Carrier Act
of 1935 alone. In volume, at least, administrative officials had taken on
the lion's share of federal governance. [2]
These officials also took on larger roles in American lawmaking.
Federal law was no longer the exclusive province of Congress, the courts,
and the president, constitutional branches with almost two centuries of
experience and scholarly theorizing among them. Instead, it also came from
agencies and commissions exercising their own authority and often bearing
no clear relationship to the Constitution's separation of powers. As J.
Willard Hurst has observed, as early as the late nineteenth century, rules
made by administrators became "the predominant body of public policy" in
the economic sphere, and this pattern had only intensified.[3]
Administrative officials were charged with "filling in the blanks" of their
congressional directives, and often had a great deal of freedom to do so.
Congress, in drafting the initial legislation for each agency, set out that
agency's general jurisdiction and the broad (often very broad) standards it
was to apply. When Congress banned "unfair methods of competition" in the
Federal Trade Act of 1914, for example, it did not define what this might
include. Instead, legislators at the same time established the Federal
Trade Commission to figure out what practices this language might cover,
now and in the future.[4] Government lawyers managed to avoid difficulties
with the non-delegation doctrine by arguing that Congress had provided
enough specificity that administrators could not do anything they liked.
While such arguments generally passed constitutional muster (with the
National Industrial Recovery Act as a significant exception), the authority
given to agencies and commissions to define vague congressional commands
and police violations thereof was nonetheless considerable.[5]
Such a massive shift in power to a new "fourth branch" of independent
commissions, to say nothing of the executive agencies and departments
wielding similar power, transformed the political relationships, the
institutional framework, and the legal structure of American governance.
Not surprisingly, throughout the twentieth century, both individual
agencies and the "administrative state" as a whole were the subject of
questions, concerns, and, often, hostility from members of Congress and
executive officials troubled by this shift in authority, from regulated
parties and their lawyers worried about how their interests would be
affected, from Democrats and Republicans concerned about the administration
of such laws, and from law professors, constitutional scholars, and
political scientists writing about what this did to the logic of the
constitutional system. At stake was the political legitimacy of the
agencies themselves and the laws they produced. Some of the most powerful
critiques, and proposals for change, came from observers - many of whom had
trained as lawyers - who measured administrative action against the
procedures of common law courts and found the agencies lacking. Against
such attack, however, agency representatives and their supporters countered
opponents' claims of lawlessness by pointing to the elaborate procedures
already in use, and to the courts' approval of these procedures. Meeting
their opponents on their own territory of law - rather than relying
entirely on non-legal arguments about efficiency and economy- proved an
effective strategy in building legitimacy for the institutions of the
administrative state.
? ? ?
By 1940, there was little new about the administrative process. The
Interstate Commerce Commission had been operating for fifty-three years,
and the Federal Trade Commission for twenty-six, and, as Robert Wiebe has
described, the "bureaucratic orientation" of American life had been evident
for decades. Forced to react to the legal challenge posed by the ICC and
later agencies, federal courts had developed a fairly coherent body of
doctrine that recognized that the agencies and commissions differed from
courts and held them to different standards. Even the vast expansion of
administrative capacities by President Roosevelt and the Democratic
Congress during the 1930s was no longer news. The agencies created in the
New Deal's "alphabet soup" approach to policymaking - the WPA, the CCC, the
TVA, the FCC, the NLRB, the Social Security Administration, and the SEC, to
name just a few - had been created on the model of existing agencies and
had, in the years after their creation, developed organizations and
procedures that allowed regulated parties and interests to engage with
administrative officials more or less smoothly.[6] Many of the methods in
use had been developed by the ICC in previous decades, and, as ICC
Commissioner Clyde Aitchison pointed out in 1940, "our administrative
procedure is controlled by 350 Supreme Court decisions."[7] Aitchison's
point - that the courts themselves had established a certain legal
legitimacy for administrative procedure - was one repeatedly made by agency
representatives and by those in favor of this shift in authority. It was
also a fair description of the Supreme Court's own view of the
administrative state.
At the same time, however, an observer interested in learning about
how these agencies and commissions conducted themselves was in for some
difficulty. Beyond the formal rules and regulations that the Federal
Register Act of 1935 required them to publish, agencies and commissions
were not obliged to make their decisionmaking public. While the general
outlines of administrative organizations tended to resemble one another in
broad strokes (i.e. Congress applied the model of interstate commerce
regulation under the Interstate Commerce Act to the communications field in
the Communications Act of 1934), agencies and commissions also varied
widely, as Congress then tailored each statute to the task at hand (and the
task of administering the Meat Inspection Act differed significantly from
that of, say, the Securities and Exchange Act). Each agency had its own
statutes for officials to flesh out, its own more or less controversial set
of businesses and industrial problems it was responsible for managing, and
its own group of interested parties - businessmen, trade associations and
lawyers' groups, members of Congress, and scholars - who sought to
influence the agency's operations. In addition, Congress had given
agencies a great deal of discretion to determine their internal operations
- how they would carry out congressional policy. While specialized bar
associations developed around several of the agencies, a lawyer might find
that his knowledge of ICC procedures was of little help if he was asked for
advice about the Department of Agriculture. Even more problematic was the
damage to public opinion. The opaque nature of the administrative process
gave rumors and charges of "administrative absolutism" an opportunity to
flourish. The task of maintaining political legitimacy for the agencies, of
convincing both regulated parties, and Americans as a whole, that agencies
were trustworthy, was thus made that much harder.
It was especially difficult given that critics of the agency form of
government, and of the substantive laws, were increasingly making charges
of agency lawlessness and "administrative absolutism." Members of the
American Bar Association Members of the American Bar Association's Special
Committee on Administrative Law were among the most vocal critics of this
"quasi-judicial" process, as many members of the traditionally conservative
lawyers' organization (and their corporate clients) opposed the new
regulatory demands of the New Deal agencies, and also balked at the
combination of investigation, prosecution, and adjudication functions
within a single agency that seemed contrary to their legal training.
Measuring the administrative process against a judicial standard and
finding the administrative process wanting, the ABA sought to constrain
administrative discretion through drastic procedural reform. Their
proposed solution, the so-called