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American Bar Association

ADMINISTRATIVE & REGULATORY LAW NEWS


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Recent Articles of Interest

John S. Applegate, Beyond the Usual Suspects: The Use of Citizens Advisory Boards in Environmental Decisionmaking, 73 Ind. L.J. 903 (1998). In this Article, Professor Applegate evaluates the procedures for public involvement in agency decisionmaking and identifies citizens advisory boards as a particularly useful method for involving the public in many agency decisions. Comparing the benefits and limitations of the various techniques, he finds that the use of citizens advisory boards allows for earlier public participation in the decisionmaking process than the review-and-comment method, and is more transparent and involves greater participation by less-organized interest groups than the regulatory negotiation process. Using an EPA site-specific advisory board as an example, Applegate explores the structure and operation of a citizens advisory board, identifying six elements of implementation and discerning that a board is most beneficial in deciding controversial, big picture issues that have a relatively narrow and well-understood impact. He argues that under these circumstances, the use of citizens advisory boards can result in better administrative decisions with widespread public support.

Lisa Heinzerling, Regulatory Costs of Mythic Proportions, 107 Yale L. J. 1981 (1988). Critiques of risk regulation rely pervasively on estimates of the costs of various federal regulations per life saved. Professor Heinzerling reports that most of these estimates derive from a single source, a table prepared in the 1980s by an economist in the Office of Management and Budget, John Morrall. That table reports costs per life saved reaching hundreds of millions, even billions, of dollars. These oft-cited estimates are, however, vastly higher than the agencies' own estimates of costs and benefits. The divergence in estimates stems from the fact that Morrall adjusted the agencies' figures by discounting future lives saved and, in many cases, greatly decreasing estimates of risk. Without these adjustments, Heinzerling demonstrates, the costs per life saved of the allegedly costliest regulations drop, in virtually every case examined, to less than $5 million. This number compares favorably to currently cited estimates of the monetary value of a human life. Moreover, Morrall's calculations exclude many unquantified benefits of the regulations in question. An assessment of the cost-effectiveness of current risk regulation thus turns on one's own opinions regarding discounting, risk assessment, and regulatory purposes. These in turn depend on one's views of the relative worth of lives saved today and lives saved in the future, the appropriate response to scientific uncertainty, and the relevance of unquantified benefits. These matters involve choices among values about which reasonable people may disagree. Thus, instead of providing an objective basis for setting regulatory priorities and judging the wisdom of regulation, figures on costs per life saved embody the very normative judgements they have been thought to support.

Dennis D. Hirsch, Bill & Al's XL-ent Adventure: An Analysis of the EPA's Legal Authority to Implement the Clinton Administration's Project XL, 1998 Ill. L. Rev. 129. In the United States, the traditional approach to environmental regulation has been for the Environmental Protection Agency to design pollution control standards and then mandate that facilities subject to the standard comply with it. Although this "command-and-control" system has been easy to administer, it may not be the most cost-effective way to regulate. To address this concern, the Clinton administration has developed a new program--Project XL--that allows industry leaders, the EPA, and the public to work together to come up with more cost-effective, and more protective, pollution control strategies for specific facilities. As of the date of this Article, fifty-two companies had submitted proposals to participate in Project XL. The main hurdle presently facing Project XL is a legal one. An essential component of the program is the EPA's promise to substitute innovative control strategies for existing command-and-control requirements where the new approach would protect the environment better, and for less cost, than the existing one would. Serious questions have been raised about the EPA's legal authority to lift valid and binding regulatory and statutory requirements in order to make way for Project XL. In this article, Professor Hirsch examines the legal foundations of Project XL. He first analyzes the four legal mechanisms that the EPA has stated it will use to grant regulatory flexibility to XL participants. After finding each of these four mechanisms to be flawed, Professor Hirsch argues that the Agency should consider using a fifth mechanism: implied waiver authority. This little-recognized power allows administrative agencies to grant exceptions from existing requirements where certain conditions are met. Professor Hirsch demonstrates that Project XL satisfies these criteria. He argues that the EPA could use its implied waiver authority to lift existing command-and-control requirements and to substitute in their place innovative strategies that protect the environment better and at less cost to society.

Nathaniel O. Keohane, Richard L. Revesz, & Robert N. Stavins, The Choice of Regulatory Instruments in Environmental Policy, 22 Harv. Env. L. Rev. 313 (1998). This collaborative effort between a Political Economy Ph.D. student, a law professor, and a Public Policy professor attempts to explain the disparity between normative economic theory and the positive political reality at play in the nation's choice of regulatory instruments for environmental policy. While the normative theory would suggest the use of market-based or economic-incentive instruments, the political reality has repeatedly relied upon command-and-control type instruments such as standard setting. Theorizing as to why this is, the authors set up an equilibrium model of instrument choice based upon the metaphor of a political market, under which the legislators constitute the supply-side and various interests including firms, individuals, and interest organizations make up the demand-side, and the instrument choice results from a supply-demand equilibrium. Under this model, each interest, including the legislators', is analyzed for its interest motives and the cost in effort to support a particular instrument. Based on such analysis, the authors conclude that it is not surprising that environmental regulatory instruments have opted for command-and-control type regulations. However, they anticipate that a greater understanding of market-based instruments will influence the supply-demand equilibrium and increase the utilization of these instruments for future, currently unregulated, environmental problems.

Orin S. Kerr, Shedding Light on Chevron: an Empirical Study of the Chevron Doctrine in the U.S. Courts of Appeals, 15 Yale J. on Reg. 1 (1998). The prevalence of the Chevron doctrine in administrative law has prompted widespread scholarly controversy concerning how the doctrine operates in practice. Three descriptive models have emerged. Some commentators have embraced a contextual model and contend that Chevron is a "revolution on paper" that has failed to replace the traditional contextual approach to judicial review of agency action. Others rely on a political model and maintain that the Chevron doctrine is so indeterminate that it serves primarily as cover for judges who decide cases based on their personal political preferences. Other commentators rely on an interpretive model and insist that Chevron is unstable because textualist judges apply the doctrine differently from judges who reject a textualist approach. This Article presents the results of an empirical study designed to evaluate how accurately the three models describe the Chevron doctrine. By examining the published decisions of the U.S. Courts of Appeals in 1995 and 1996, the author concludes that the three descriptive models largely fail to predict outcomes in actual controversies. The political model mounts the most effective attack, as the study reveals a significant difference in voting patterns between Republican and Democratic judges in ideologically charged cases. However, the results suggest that the contextual model's ability to predict Chevron results is weak at best, and that the interpretive model's predictions are unsupported. The author concludes by offering possible explanations for the divergence between the models' predictions and the reality suggested by the study's results.

Neil Kinkopf, Of Devolution, Privatization, and Globalization: Separation of Powers Limits on Congressional Authority to Assign Federal Power to Non-Federal Actors, 50 Rutgers L. Rev. 331 (1998). In this article, Professor Kinkopf analyzes the constitutional principle of separation of powers as applied to congressional assignments of federal power to non-federal actors. He begins by establishing that the Supreme Court has articulated a coherent doctrine of separation of powers. He then demonstrates that assignments to non-federal actors are to be assessed under the general separation of powers principle, which upholds congressional allocations of power so long as they do not prevent another branch from fulfilling its constitutional role. Professor Kinkopf argues that under this standard there is no generally applicable bar to assignments of authority to non-federal actors. After reviewing the disagreement among scholars regarding the meaning of the constitutional separation of powers as derived from history and the Constitution's text, Professor Kinkopf next demonstrates that the Supreme Court's doctrine takes sides in this debate. The assignment of federal powers issue is topical due to the 1997 Supreme Court's decision in Printz v. United States. In Printz, the Supreme Court suggested in dictum that the constitutional separation of powers prohibits assignment of federal authority to non-federal actors by requiring that all congressionally chartered authority and functions be performed by the President or validly appointed federal officers. As Professor Kinkopf demonstrates, however, the Printz dictum is contrary to well-established doctrine and significant, long-standing practice. He also explains that the Appointments Clause does not bar congressional assignments of authority outside the federal government. Professor Kinkopf concludes his article by applying the separation of powers doctrine to three current assignments of federal power to non-federal actors: the qui tam provisions of the False Claims Act, pending legislation that will confer upon the states' power to enforce CERCLA, and the recent ratification of an international treaty on chemical weapons which confers enforcement power on an international body. Professor Kinkopf concludes that these assignments to private parties, states and an international organization respectively, all should pass muster under the separation of powers doctrine.

Bradford C. Mank, The Environmental Protection Agency's Project XL and Other Regulatory Reform Initiatives: The Need for Legislative Authorization, 25 Ecology L. Q. 1 (1998). See the description of EPA's Project XL in the description of the article by Dennis Hirsch above. Like Hirsch, Mank notes that serious questions of legal authority have been raised with regard to Project XL. Unlike Hirsch, however, Mank believes that new legislative authorization is necessary. In addition, Mank describes concerns that Project XL reforms will lead to inferior environmental protection and public participation. His article proposes a number of statutory provisions to ensure that, once EPA has sufficient authority to pursue its reform agenda, the agency will do so in a way that avoids a diminution of public health safeguards.


Benjamin W. Mintz, Administrative Separation of Functions: OSHA and the NLRB, 47 Cath. U.L. Rev. 877 (1998). In this Article, Professor Mintz analyzes the institutional separation of the decision-making and prosecutorial-investigatory functions at the administrative level and compares the programs associated with the Occupational Health and Safety Act (OSHA) and the Taft-Hartley Act as it applies to the National Labor Relations Board (NLRB). After reviewing the constitutional, statutory, and legislative development of administrative separation of functions relevant to each act, Mintz identifies significant differences between the OSHA and NLRB programs, noting that the adjudicatory NLRB has broad lawmaking authority which is implemented through its adjudication of unfair labor practice cases, and that, in contrast, the adjudicatory function of the OSH Review Commission does not contain a policymaking component because, under OSHA, the policymaking role was given to the rule-making body, the OSH Administration. Mintz uses this fundamental difference between the programs to resolve three issues he identified in association with the OSHA program, concluding that the designation of the policy role to the OSH Administration and not to the Review Commission requires that the Commission give total deference to the OSH Administration's interpretations of both administrative and statutory language, and that the Commission should not be made a party in review proceedings since it does not have a policy interest to defend.

Donna M. Nagy, Judicial Reliance on Regulatory Interpretations in SEC No-Action Letters: Current Problems and a Proposed Framework, 83 Cornell L. Rev. 921 (1998). In 1967, during a panel discussion sponsored by the Section of Administrative Law of the American Bar Association, administrative law scholar Kenneth Culp Davis contended that "some of the most important law of the SEC is embodied in [a] big batch of no-action letters. This is law. The interpretations are law." Manuel Cohen, then Chairman of the Securities and Exchange Commission ("SEC" or "Commission"), objected vehemently to this characterization and retorted that the SEC's bevy of no-action letters "may be lore, l-o-r-e, but it is not law." Today, more than thirty years later, the legal status and significance of SEC no-action letters still engender spirited debate. Much of the controversy stems from the fact that these letters are issued not by the SEC as such, but by members of the SEC staff, in response to particular inquiries by market participants or their counsel in the context of proposed transactions. Courts, however, often defer automatically to the regulatory interpretations in no-action letters. This Article contends that such automatic deference is unwarranted as a doctrinal matter. It also identifies important normative reasons why courts should subject no-action letters to meaningful scrutiny prior to relying on them as interpretive authority. Finally, this Article proposes a framework to assist courts in performing this critical function. Part I focuses on the SEC's no-action letter process. It first places no-action letters in context with various other formats used by the SEC to announce regulatory interpretations. It then describes the SEC's practice of issuing no-action letters, and discusses the ways in which these letters have impacted the actions of securities law practitioners and their clients. Part II first discusses the principles of "automatic deference" that the Supreme Court developed to ensure that administrative agencies, rather than courts, have primary interpretive authority over ambiguous provisions in agency-administered statutes and rules. Part II then criticizes a number of judicial opinions for applying these principles to the informal and unofficial regulatory interpretations in no-action letters. Part II concludes that courts must never rely on no-action letters as definitive interpretations of ambiguous provisions in the federal securities laws. The third Part proposes a framework that courts can use when presented with interpretive issues under the federal securities laws that the SEC seemingly has resolved in no-action letters. The proposed framework recognizes that while courts are never required to defer automatically to regulatory interpretations in no-action letters, courts should nonetheless treat no-action letters as informal and unofficial authority, and may rely on regulatory interpretations in the letters to the extent that they are persuasive.

Lars Noah, Sanctifying Scientific Peer Review: Publication as a Proxy for Regulatory Decisionmaking, 59 U. Pitt. L. Rev. 677 (1998). In the last few years, Congress and federal agencies have begun looking to editorial peer review as a substitute for regulatory decisionmaking, for instance by authorizing pharmaceutical manufacturers to distribute reprints of articles about unapproved uses of approved drugs. Unlike courts making admissibility determinations about novel expert testimony based in part on publication in a scientific journal, regulators seem to be using the fact of publication in the peer-reviewed literature as a fully adequate assurance of reliability. To be sure, journal editors serve as one of the scientific community's gatekeepers, responsible for differentiating methodologically sound and interesting work from sloppy or redundant research. They cannot, however, avoid occasionally publishing erroneous work that will later need to be retracted, detect instances of outright fraud, or fully allay concerns about industry sponsorship of biomedical research. Although he doubts that courts would invalidate the delegation of governmental authority to these private decisionmakers on constitutional grounds, Professor Noah concludes that serious questions about the effectiveness of the editorial peer review process should caution against too ready a dependence on the output of scientific journals in protecting the public health.

Roberta Romano, Empowering Investors: A Market Approach to Securities Regulation, 107 Yale L.J. 2359 (1998). In this Article, Professor Romano advocates a market approach of competitive federalism for securities regulation which would extend the competition among states for corporate charters to two major components of federal securities regulation. Under the market approach, states would develop their own registration and disclosure and antifraud provisions, and firms would elect whether to be covered by federal law or the securities law of a specified state, either the state of incorporation, the primary state of business, or as determined through a choice-of-law clause noticed on the security. The approach would also apply to foreign issuers of securities who would only be subject to U.S. federal or state law if they opted into it, ending the extraterritorial reach of U.S. securities regulation. Using the current competition among state corporate codes as a model, Romano argues that states would have an incentives to adapt their securities regulations to firms' locational decisions in order to benefit from taxes and incorporation and registration fees. Further, a securities market approach would benefit investors in public corporations by facilitating the adoption of regulations aligned with the investors' preferences and, on the international level, by expanding investment opportunities to foreign firms currently excluding U.S. investors in avoidance of U.S. jurisdiction.

Emerson H. Tiller, Controlling Policy by Controlling Process: Judicial Influence on Regulatory Decision Making, 14 J.L. Econ. & Org. 114 (1998). In this article, the ability of a federal appellate court to control agency policy by imposing process requirements upon the agency is analyzed under two administrative law regimes: the deference doctrine, where appellate courts are strictly limited in their ability to interfere with agency decision making, and the nondeference doctrine, where courts have greater reign in scrutinizing agency decision making. The emphasis on the judiciary's ability to affect regulatory process complements earlier scholarship in positive political theory that focused mainly on Congress' ability to use administrative process to control agency behavior. A model of judicial control is developed to allow for comparative statics considering different legal doctrines, shifting agency and judicial preferences, and changing agency resources. An examination of the Federal Energy Regulatory Commission and the D.C. Circuit Court of Appeals' battle over the deregulation of oil pipelines is undertaken to illustrate the insights of the model. Further evidence bearing on the model is also reviewed.

Symposium

Symposium: Administrative Conference of the United States, 30 Ariz. St. L.J. 1 (1998). This symposium on the late Administrative Conference includes: Victor Rosenblum, Contrasting Perspectives on the Deeds and Demise of the Administrative Conference: Is There a Determinable Legacy?; Betty Jo Christian, Penny-wise and Pound-foolish: the Demise of the Administrative Conference; Toni Fine, A Legislative Analysis of the Demise of the Administrative Conference of the United States, Ernest Gellhorn, A Critical Review of the Administrative Conference; Margaret Gilhooley, the Administrative Conference and the Progress of Food and Drug Reform; Jeffrey Lubbers, "If It Didn't Exist, It Would Have to Be Invented"-Reviving the Administrative Conference; Alan Morrison, Farewell Fond ACUS, We Loved You Well; Loren Smith, The Aging of Administrative Law: The Administrative Conference Reaches Early Retirement; Paul Verkuil, Speculating about the next "Administrative Conference": Connecting Public Management to the Legal Process.

Collection

The D.C. Circuit Review, August 1996-July 1997, Geo. Wash. L. Rev. 748 (1998). This review of cases includes student chapters on Standing, Communications Law, Election Law, Employment Law, Energy and Natural Resources Law, Environmental Law, the Freedom of Information Act, Labor Law, and Sovereign Immunity.


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