Keeping the Regulatory Faith

Adam S. Zimmerman, The Corrective Justice State, 5 J. Tort Law 189–225 (2012).

Id., Part I.B.

Id., Part II.

Id., Part Iv.

Id., p. 189.

See generally Richard A. Harris & Sidney M. Milkis, The Politics of Regulatory Change: A Tale of Two Agencies (2nd ed. 1996).

Republican Presidential Debate, Nov. 9, 2011, http://www.youtube.com/watch?v=0uvmKnFY4uk (excerpt). See James W. Ceaser, Andrew E. Busch, & John J. Pitney, Jr., After Hope and Change: The 2012 Elections and American Politics 68–69 (2013). The candidates’ favorite target for elimination was the Commerce Department. Commerce conducts the national census, which is required by the Constitution, provides patents to inventors, manages commercial fisheries, enforces restrictions on the export of government-subsidized weapons systems to unfriendly nations and monitors the weather, both to warn people about natural disasters and to keep air and sea travel safe. It would be interesting to find out which of these functions the candidates actually wanted to eliminate.

Adam S. Zimmerman, 5 J. Tort Law 189 (2012).

Recent legislation offers specific encouragement for this approach. The “Fair Funds” provision of the Sarbanes-Oxley Act, 15 U.S.C. § 7246, authorizes the Securities Exchange Commission to remit amounts obtained from fraud penalties to the private victims of the fraud.

See David E. Lewis & Jennifer S. Selin, Sourcebook of the United States Executive Agencies 117–20 (2013) (listing agencies that are exempt from Congressional appropriation and describing this exemption as insulation from Congressional control); Edward Rubin, Hyperdepoliticization, 47 Wake Forest L. Rev. 631, 665–72 (2012) (describing self-funding as one strategy that Congress uses to insulate administrative agencies from its own control). The most famous case of self-funding is the Federal Reserve Board, which generates funding from its monetary control operations, but other examples include the Federal Deposit Insurance Corporation and the Bureau of Engraving and Printing.

General systems theory holds that an institution will behave like an organism and specifically that it will strive to maintain its internal coherence and its distinctive boundaries. See Ludwig von Bertalanffy, General Systems Theory: Foundations, Development, Applications (rev. ed. 1968); Nicolas Luhmann, Social Systems (Joun Bednarz, Jr., trans. 1995). Work on corporate identity focuses on both cognitive processes and organizational structure. For a survey, see Joep P. Cornelissen, S. Alexander Haslam, & John M. T. Balmer, Social Identity, Organizational Identity and Corporate Identity: Towards an Integrated Understanding of Processes, Patternings and Products, 18 British J. Management s1 (2007); T. C. Melewar, Determinants of the Corporate Identity Structure: A Review of the Literature, 9 J. Marketing Communications 195 (2003).

For vivid depictions of the intensity of the political pressure that elected officials can bring to bear against an agency, see, e.g. Bruce Bimber, The Politics of Expertise in Congress: The Rise and Fall of the Office of Technology Assessment (1996) (dealing with a Congressional agency) Michael Pertschuk, Revolt Against Regulation: The Rise and Pause of the Consumer Movement (1983) (dealing with an independent agency). See generally Martha Derthick & Paul J. Quirk, The Politics of Deregulation 96–146 (1985).

Aristotle, Nichomachean Ethics, in 2 The Works of Aristotle 339, 377–81 (1952) (Bk. V, Chs. 2–5, *1130a-*1133b).

See David L. Shapiro, The Choice of Rulemaking or Adjudication in the Development of Administrative Policy, 78 Harv. L. Rev. 921 (1965).

This is, of course, the familiar justification for regulatory governance. See James Landis, The AdministrativeProcess (1938); Lon Fuller, The Forms and Limits of Adjudication, 92 Harv. L. Rev. 353 (1978) (originally circulated in manuscript, 1957).

This is one rationale for granting Chevron deference to agency adjudicatory decisions as well as to agency rulemaking. See Christensen v. Harris County, 529 U.S. 576 (2000).

Adam S. Zimmerman, 5 J. Tort Law 189–225 (2012). [Sec IV.A, first para].

Id. [Sec. IV.A, third para].

No. 11 Civ. 7387WL 5903773, at *6 (S.D.N.Y. Nov. 11, 2011), stayed, 673 F.3d 158 (2d Cir. 2012). The Court of Appeals for the Second Circuit has heard argument on the merits of the case, but has yet to decide it. Seewww.reuters.com/article/2013/02/08/us-citigroup-sec-appeal-idUSBRE9170YQ20130208 (accessed on Nov. 5, 2013).

The agency alleged that, as the secondary mortgage market began to weaken at the start of what would become the 2007–08 financial crisis, Citigroup had dumped some of its deteriorating assets into a new billion-dollar fund. It then marketed this fund as containing attractive assets that had been carefully chosen by an independent investment advisor, while at the same time take a short position of its own on those very same assets.

Edward Rubin, Settlement, Dispute Resolution and the Public Interest: Reconsiderations in Light of SEC v. Citigroup (forthcoming).

Pub. L. 104-320 (1996), codified at 5 U.S.C. §§ 571–86. The Act was originally passed in 1990, with a five-year sunset, and then re-enacted in 1996 when it was about to lapse. Consequently, it is the Administrative Dispute Resolution Act 1996, although its language has been in effect since the first enactment in 1990.

See Cary Coglianese, Assessing Consensus: The Promise and Performance of Negotiated Rulemaking, 46 Duke L.J. 1225 (1995). For a more general discussion of participation’s ill effects, see Jim Rossi, Public Participation Run Amok: The Costs of Mass Participation for Deliberative Agency Decision Making, 92 Nw. L. Rev. 173 (1997). But see Jody Freeman & Laura Langbein, Regulatory Negotiation and the Legitimacy Benefit, 9 N.Y.U. Envtl. L.J. 60 (2000).

Edward Rubin, Law and Legislation in the Administrative State, 89 Colum. L. Rev. 369 (1989).

These being the two leading conceptions of the representative’s role in a democratic system. See Hannah Pitkin, The Concept of Representation (1972); Philip Pettit, Varieties of Public Representation, in Political Representation 61 (Ian Shapiro, Susan C. Stokes, Elisabeth Jean Wood, & Alexander S. Kirshner eds., 2010).

The most notorious example of this tendency is the National Labor Relations Board. Although granted rulemaking authority and engaged in a regulatory task where the demands of regularity and the need for advance planning by the regulated parties would render rules highly beneficial, it has consistently refused to make use of this device. The usual explanation is that the Board recognizes the politically charged nature of its mission and wants to avoid controversy by acting through the low-profile process of adjudication. See Merton C. Bernstein, The NLRB’s Adjudication-Rulemaking Dilemma Under the Administrative Procedure Act, 79 Yale L.J. 571 (1970); Samuel Estreicher, Policy Oscillation at the Labor Board: A Plea for Rulemaking, 37 Admin. L. Rev. 163 (1985); Cornelius J. Peck, The Atrophied Rule-Making Powers of the National Labor Relations Board, 70 Yale L.J. 729 (1961).

Executive Order 12,291, 46 Fed. Reg. 13, 193 (Feb. 17, 1981).

Executive Order 12,291 remained in force under the subsequent Bush (I) administration. It was superseded by President Clinton’ Executive Order 12,866, 58 Fed. Reg. 51,735 (Oct. 4, 1993), which continued its basic policies and practices. President George W. Bush left 12,866 in place but expanded it in Executive Order 13,422, 72 Fed. Reg. 2,763 (Jan. 23, 2007). President Obama then revoked 13,422, restoring 12,866 to its original form, and subsequently enacted limited changes to it in Executive Order 13,497, 74 Fed. Reg. 6,113 (Jan. 30, 2009). See generally Elena Kagan, Presidential Administration, 114 Harv. L. Rev. 2245 (2001); Richard Pildes & Cass Sunstein, Reinventing the Regulatory State, 62 U. Chi. L. Rev. 1 (1995).

www.youtube.com/watch?v+1ySHtDHrLJY (News conference, Washington, DC, Aug. 12, 1986), at 00:51. After disparaging the work of other administrations with this statement, President Reagan went on to boast that his administration was spending more money on farm assistance in that year than any other administration had spent during its entire tenure. He concluded his opening statement for the press conference by urging Congress to appropriate funds to overthrow the government of Nicaragua.