Archive for the 'Administrative Law' Category

CFTA v. Schor – Crying formalism isn’t enough.

Posted in Administrative Law on February 9th, 2007

Warning – Admin tirade, boring to anyone not taking it. OK, and to most who are.
The question today was whether we prefer the formalism of Brennan’s dissent in Commodity Futures Trading Commission v. Schor or the pragmatism of O’Conner’s majority opinion. It was posed by Dean Kagan (who is obviously my instructor) on the second week of class, so of course my hesitation cost me the opportunity to launch this tirade in class. Another student presented an idea so closely related my own would have seemed redundant. But it was not, so here goes.

Neither. There is a need for adherence to bright-line rules in congressional delegation of judicial functions to administrative agencies. There is a very real risk that massive delegation will erode the jurisdiction of the Article III courts, and without A3 protection, there is a lessening of the judicial independence so carefully crafted into lifetime tenure (and the related prohibition on salary reduction)

But I do disagree with where Brennan draws that line. He would (ignoring the possibility that the original claim is a private right as well) prevent ancillary jurisdiction over related common law claims within administrative agencies. Yet in the case at hand, the parties retain their right to litigate in an Article III court – they waived it when they dismissed their circuit court action and brought it within the CFTA.

Whatever formalistic rules are needed to preserve judicial independence, they are not implicated by voluntary submission of cases to an administrative agency.

The free market model might apply here. If administrative agencies do lose their independence, and if this impacts their ability to fairly resolve a case, parties will simply not consent to their jurisdiction. Not only is the appellate review procedure a guarantee against arbitrary or unfair decisions, but this choice as well will force administrative agencies to retain the independent, fair, and consistent standards we are trying to ensure. We are instilling a competition model into a system where the courts themselves are grateful for it, since (as the O’Conner functionalist perspective points out) they are not equipped to litigate the sheer number of cases generated by statutory-enacted rights.

Oddly enough, this approach is dismissed even by the court opinion, which insists that the institutional concerns make waiver of the parties not determinative. This would be true if the structure encouraged courts to dismiss cases pending in a parallel proceeding within an agency, or if somehow non-consenting parties could end up in agency litigation. But it is not implicated by the scheme I advocate – in which such choice is a mandatory part of any scheme. While a pragmatic approach may counsel against allowing parties to litigate where they choose, allowing mandatory litigation of certain public rights, statutory claims would effectively ensure the efficacy, since most parties would indeed consent – they would otherwise bear the costs of two litigations. An agency structure which provided lower access fees would also serve the pragmatic function of preventing clogging the courts. (Of course this only works if the fees charged in courts are fair and properly waivable, otherwise there might be due process concerns that subject the poor to agency litigations by the circumstances, trouble if this structure undermines the improvements encouraged by the free market model.

We allow parties to submit their claims to arbitration, to mediation, to hammer out deals in conference rooms of law offices. They can litigate in state courts (sometimes without said consent) which do not have the mandatory life tenure, etc provisions either. Indeed, any remaining structural problem would lie only in the fact that the forum consented to here happens to be an administrative agency. This seems a slim basis on which to deny the parties the right to settle claims in an alternate forum.

This supports one suspicion – that O’Conner was more concerned with the rights of courts than she is the rights of citizens. This is further underscored by the mode of analysis which factors in the degree to which the legislature is trying to undermine the judiciary in determining the constitutionality of the delegation. Since the separation of powers principle that is being addressed has to do with the rights of citizens, any structural analysis should have that final end in sight. The way in which judiciary power is stripped is only a concern insofar as it will effect the rights of the people. Although Brennan is correct in that undermining an independent judiciary – when looking at the big picture – does have those effects, it is not quite as automatic as the court’s opinion suggests.
So yes, keep the big picture in sight – establish principals that prevents the whittling down of the jurisdiction of Article III courts by focusing only on the immediate goal of expediency. But the wisdom of formalism doesn’t end when you establish that there should be a bright-line rule, it lies in where you place them. Brennan’s dissent gives short shrift to constructing a rule as narrow as necessary to protect litigants from the majoritarian control and lack of independence that Article III was so carefully constructed to avoid.