In recent years, several judges on the nation’s most important regulatory court - the United States Court of Appeals for the District of Columbia Circuit -- have given birth to libertarian administrative law, in the form of a series of judge-made doctrines that are designed to protect private ordering from national regulatory intrusion. These doctrines involve nondelegation principles, protection of commercial speech, procedures governing interpretive rules, arbitrariness review, standing, and reviewability. Libertarian administrative law can be seen as a second-best option for those who believe, as some of the relevant judges openly argue, that the New Deal and the modern regulatory state suffer from basic constitutional infirmities. Taken as a whole, libertarian administrative law parallels the kind of progressive administrative law that the same court created in the 1970s, and that the Supreme Court unanimously rejected in the Vermont Yankee case. It should meet a similar fate. Two cases to be decided next Term provide an opportunity for the Court to repudiate libertarian administrative law.Sunstein and Vermeule state
In the years before Vermont Yankee  was decided, the District of Columbia Circuit - acting through a determined subset of its judges - made a concerted effort to push administrative law in a direction that the Supreme Court was ultimately unwilling to go. These judges believed that administrative law should show special solicitude for environmental interests, consumer interests, and other interests that the judges thought to be under-represented in the political process, because the costs and dynamics of political organization yielded relatively greater authority to industry and producers. Perhaps influenced by prominent work in social science, which seemed to support the claim of under-representation, the judges devised a distinctly progressive approach to administrative law, featuring, among other things, hybrid procedural requirements. These innovations required agencies to offer more procedures than the Administrative Procedure Act (APA) mandated, at least when special solicitude for environmental or other interests was necessary (in the judges’ view).
To obtain a flavor of the period, consider these remarkable words: “Several recently enacted statutes attest to the commitment of the Government to control, at long last, the destructive engine of material ‘progress.’ But it remains to be seen whether the promise of this legislation will become a reality. Therein lies the judicial role.” The court affirmed that role in another case announcing that “[w]e stand on the threshold of a new era in the history of the long and fruitful collaboration of administrative agencies and reviewing courts,” in which judges would be “increasingly asked to review administrative action that touches on fundamental personal interests in life, health, and liberty.” The court proclaimed that such “interests have always had a special claim to judicial protection, in comparison with the economic interests at stake in a ratemaking or licensing proceeding.”
It was not coincidental that such words appeared in an opinion vindicating the claims of a prominent environmental organization, which sought to ensure implementation of regulatory requirements. In a sense, the court’s approach could be seen as an effort to apply its own version of the famous footnote 4 of the Carolene Products case, suggesting that the judicial role should be heightened when politically vulnerable groups were at risk. The approach was a clear administrative law analogue to constitutional developments, associated above all with the Warren Court, that had an unmistakably progressive “tilt.” We might even see the court of appeals in the relevant period as a kind of junior-varsity Warren Court, enlisting principles of administrative law to protect preferred rights (“fundamental personal interests”) and to correct for democratic failures (“Therein lies the judicial role”).
The implicit political science behind the court’s agenda, emphasizing the alleged organizational problems of dispersed interests, was not implausible, and it had some conceptual and empirical foundations. But it was far from self-evidently correct, and even if correct, it did not obviously justify stringent judicial oversight. The more immediate problem with the lower court’s agenda, however, was that it was inconsistent with the governing law. “Fundamental personal interests in life, health, and liberty” may or may not deserve some kind of priority over “economic interests,” but it is a separate question whether judges may legitimately enforce any such priority. The APA did not permit judges to offer greater procedural protection to their preferred types of interests, barring a constitutional due process problem. The Supreme Court found it necessary to reassert control over administrative law, rebuking the lower court for its presumption - most dramatically in Vermont Yankee itself, which held that hybrid procedural requirements were lawless impositions with no basis in the APA or other recognized legal sources. That holding was accompanied by a highly unusual passage, suggesting that the Court was aware that a more general principle was at stake:
Nuclear energy may some day be a cheap, safe source of power or it may not. But Congress has made a choice to at least try nuclear energy, establishing a reasonable review process in which courts are to play only a limited role. The fundamental policy questions appropriately resolved in Congress and in the state legislatures are not subject to re-examination in the federal courts under the guise of judicial review of agency action. Time may prove wrong the decision to develop nuclear energy, but it is Congress or the States within their appropriate agencies which must eventually make that judgment. In the meantime courts should perform their appointed function.
Since then, it has been observed that some lower-court doctrines have seemed to conflict with Vermont Yankee, and perhaps with the more general principle as well, and scholars have periodically called for a “Vermont Yankee II,” or III or IV, to correct lower-court holdings that seem to defy the Court with respect to discrete issues of administrative law, above all by imposing procedural requirements that lack standard legal justifications.
Yet the Court has not roused itself to police the D.C. Circuit in any systematic way, apart from ad hoc and relatively small-bore interventions, not generally involving large-scale administrative law doctrines. From the Court’s point of view, this is a plausible allocation of resources, corresponding to a similar lack of intervention during the pre-Vermont Yankee period (notwithstanding the DC Circuit’s frequently irreverent approach to the APA and the Supreme Court’s precedents). And for most of the post-Vermont Yankee period, there has been no systematic lack of fidelity by the D.C. Circuit that would warrant a rebuke.
In the past several years, however, administrative law has entered a world that is, in important respects, the mirror image of the world before Vermont Yankee. The prioritizing of “fundamental personal interests” over “economic interests,” at least as the court understood those terms in the 1960s and 1970s, has been turned upside down, and in part by an identifiable understanding of the dynamics of the political process. Today, a determined subset of judges on the D.C. Circuit explicitly hold a distinctive view - articulated both in extrajudicial writings and in judicial opinions - that has found its way into administrative law decisions, sometimes with questionable support in the existing legal materials and sometimes with no support whatsoever. According to that view, political distortions yield policies that depart unjustifiably, and harmfully, from the baselines set by market ordering. These policies violate liberty, properly understood, and also threaten to reduce social welfare. As a corrective, the judges have articulated an approach that we call libertarian administrative law. This approach seeks to use administrative law to push and sometimes shove policy in libertarian directions, above all through judge-made doctrines that lack solid support in the standard legal sources.
In light of the writings of some of the relevant judges, libertarian administrative law may be understood as a second-best enterprise - an attempt to compensate for perceived departures, during the New Deal, from the baseline of the original constitutional order. We can understand libertarian administrative law to be inspired by a particular, highly controversial account of the Constitution – one that does not fit well with the Supreme Court’s current understanding of the founding document. A central assumption in the argument is that the original constitutional order, as these judges envision it, was far more protective of liberty and of market baselines, and thus less hospitable to politically-distorted governmental decisionmaking, than is the current state of constitutional law. Libertarian administrative law, then, emerges from a long-term programme to restore the “Lost Constitution” - or at least to approximate that goal as closely as possible.
Our principal aims here are descriptive and doctrinal. We seek first to establish the existence of this libertarian administrative law, to sketch its contours, and to elicit the justifications that its proponents offer. This descriptive enterprise, we hope, will be valuable without regard to normative controversies. Those who are inclined to favor libertarian administrative law, and to hope that it will flourish, will doubtless approve of some, many, or all of the doctrinal developments that we catalogue.
Our evaluative comments are offered not from the external standpoint of (say) economics, political science, philosophy, or public choice theory, but from the internal standpoint of administrative law itself. The main problem with libertarian administrative law is that it lacks sufficient respect for the legal sources, emphatically including controlling precedents of the Supreme Court - in some cases quite recent, clear, and bipartisan precedents. Across a number of doctrinal contexts, panels of the D.C. Circuit have acted aggressively to reshape administrative law in ways that are not easy to square with the APA and governing precedents of the Supreme Court. In some cases, the D.C. Circuit can claim some (but not strong) support in those precedents; in other cases, it is operating very much on its own. At the same time, many of the resulting rulings are difficult for the Court to police -- as was progressive administrative law in the years before Vermont Yankee. In its ambitious forms, libertarian administrative law, like its progressive doppelganger, is best seen as a proposal for large-scale legal change, rather than a valid interpretation of current legal sources.
For reasons that we will elaborate, we believe that any significant movement in either progressive or libertarian directions would be in grave tension with the foundations of the APA and of administrative law, properly understood -- and hence that the Supreme Court would be properly criticized if it were to embrace any such movement. American administrative law is organized not by any kind of politicized master principle, but by commitments to fidelity to statute, to procedural regularity, and to nonarbitrary decisionmaking. These commitments will sometimes result in rulings that libertarians will approve, and sometimes in rulings that libertarians will deplore. Any sustained effort to engraft libertarian thinking, or some kind of progressive alternative, onto the legal materials will be unfaithful to those materials. But our principal goal here is narrower. While we will elaborate and defend a general claim about political ideology and administrative law, our major aim is to demonstrate that in some important rulings, the D.C. Circuit has been moving in libertarian directions without sufficient warrant in existing sources of law, including the decisions of the Supreme Court itself. While most of the decisions that we discuss cannot quite be described as lawless, some can, and as a whole they go beyond the boundaries of appropriate interpretation of the law as it now stands. They do so with an identifiable ideological valence.
Part I provides a brief discussion of the context, with reference to the separate opinions of the relevant D.C. Circuit judges and their extrajudicial writings on constitutional questions. Part II, the heart of the paper, describes and illustrates libertarian administrative law in six doctrinal contexts: nondelegation, commercial speech, rulemaking procedure, arbitrariness review, standing, and reviewability. Part III offers a more general evaluation of the programme of libertarian administrative law and, above all, its fit with the existing structure of American administrative law. The fit, we argue, is not good, no matter how charitably we treat the decisions. Overall, and in its ambitious forms, libertarian administrative law is best understood as part of a movement - the “Constitution in Exile” or “Lost Constitution” movement - aimed at changing the framework of American public law more broadly. We suggest that on a suitable occasion, the Court should excise libertarian administrative law root and branch, by issuing a modern version of Vermont Yankee, requiring the D.C. Circuit to hew more closely to the APA and its own precedents, and also reminding lower courts that administrative law lacks any kind of ideological valence. As we will see, the Court has recently granted certiorari in two cases – one involving the so-called “nondelegation doctrine,” and one involving interpretive rules – that jointly or severally provide a suitable occasion for repudiating libertarian administrative law.