AMERICAN BAR ASSOCIATION
SECTION OF ADMINISTRATIVE LAW AND REGULATORY PRACTICE
2003 MIDYEAR MEETING
COUNCIL MEETING
Saturday, February 8, 2003
The Westin
Seattle, Washington
8:00 a.m. – 9:00 a.m. Continental Breakfast
8:20 a.m. – 10:15 a.m. Council Meeting
AGENDA
8:20 – 8:30 a.m.
Call to Order, Approval of 2001 Fall Meeting
Council Minutes and Introduction of Persons Present
8:30 – 8:40 a.m.
Remarks from ABA President-Elect Nominee candidate Earle Lassiter
8:40 – 8:45 a.m.
Report of the Chair, Eisner
8:45 – 8:50 a.m.
Report of the Chair-Elect, Funk
8:50 – 8:55 a.m.
Nominating Committee Report – Election of Vice Chair, Levin
8:55 – 9:05 a.m.
Remarks from ABA President-Elect Nominee candidate Thomas Hayward
9:05 – 9:55 a.m.
Delegates Report, Gellhorn, Kaleta
9:55 – 10:00 a.m.
Creation of New Homeland Security Committee, Eisner, Zusman
10:00 – 10:10 a.m.
Ombuds Committee
Proposed Revision to Ombuds Standards, Harter
TAB 1
TAB 2
TAB 3
10:10 – 10:20 a.m.
Remarks from ABA President-Elect Nominee candidate Michael Greco
10:20 – 10:30 a.m.
Break
10:30 – 12:00 p.m.
White House Review of Agency Rulemaking:
An Empirical Investigation
Steve Croley, Prof. University of Michigan School of Law, presents the results
of his empirical study of Executive review of agency rulemakings with panelists
Peter Strauss, Tom Susman, and David Vladeck.
AMERICAN BAR ASSOCIATION
SECTION OF ADMINISTRATIVE LAW AND REGULATORY PRACTICE
2003 MIDYEAR MEETING
COUNCIL MEETING
Sunday, February 9, 2003
The Westin
Seattle, Washington
8:00 – 8:30 a.m. Continental Breakfast
8:30 a.m. – 11:00 a.m. Council Meeting
AGENDA
8:30 – 8:35 a.m.
Welcome and Introduction of Persons Present
8:35 – 9:00 a.m.
Federal Register On-Line, White
9:00 – 9:25 a.m.
E-Rulemaking (E-Government Act)
Harvard Project, Strauss
9:25 – 10:05 a.m.
APA Project, Adjudication Section, Asimow
10:05 – 10:15 a.m.
Discussion of U.S. Consensus Council,
representative from Dispute Resolution Section, Pamela Enslen
10:15 – 10:25 a.m.
Adjudication Committee Informational Report, Levine, Patterson
10:25 – 10:35 a.m.
Fellows Report, Harter
(ACUS project; Great Debates)
10:35 – 10:40 a.m.
Publications Committee Report, May
10:40 – 10:45 a.m.
Administrative & Regulatory Law News Advisory Board Report, Young
10:45 – 10:50 a.m.
Membership Committee, Eastwood
10:50 – 10:55 a.m.
Budget Report, Cohen
10:55 – 11:00 a.m.
Unfinished Business
11:00 a.m.
Adjourn
AMERICAN BAR ASSOCIATION
SECTION OF ADMINISTRATIVE LAW AND REGULATORY PRACTICE
COUNCIL MINUTES
THE RITZ-CARLTON HOTEL
PLAZA BALLROOM
WASHINGTON, D.C.
***
OCTOBER 19, 2002
9:30 a.m. - 12:00 noon
Call to Order. Section Chair Neil Eisner called the meeting to order. In addition to the Chair, Chair-Elect
William Funk, and Representatives to the House of Delegates Ernest Gellhorn and Judith Kaleta, all
members of the Council were present. After the welcome and introduction of persons present, the minutes
of the Summer 2002 Council meeting and Annual Section Meeting (at Tab 1 in the meeting materials) were
approved, with technical corrections. 1
Chair Report. Chairman Eisner began by thanking Dan Cohen for overseeing the conduct of the Fall
Meeting programs, which were of exceptional quality and were very well-attended. He also reported that,
with the withdrawal of Tom Morgan as Vice-Chair of the Section, Bill Funk has moved up to succeed him
as Vice-Chair. Chairman Eisner also noted a series of letters that had been sent by or on behalf of the
Section. He noted the difficulties of filling the Section’s Legislative Liaison position, and indicated that the
Section may have to consider eliminating the position. He also said that the Section is doing a lot of things
to keep its costs down, such as circulating and posting Section-related materials on the Section’s Website.
With respect to the Seattle Midyear Meeting, he said that Kathy Braeman is Chair of the Midyear Meeting;
and that the Section was looking for suggestions on panel topics such as corporate responsibilities and
invasion of non-indigenous species. Section Delegate Gellhorn questioned the value of advertising to
improve the ABA’s position. Chairman Eisner responded that the President of the ABA supported the use
of such advertising. Former Chairman and Section Fellow Thomas Susman noted that the idea of the ABA
advocating lawyers as lawyers has grass-roots support.
Delegates Report. Section Delegate Gellhorn reported on the actions of the House of Delegates at the
Annual Meeting in August 2002. (The Delegates Report is at Tab 2 in the meeting materials.) He
indicated that he knew of nothing relating to the Section that would be coming up on the ABA’s agenda.
He welcomed Judy Kaleta as the new second Section Delegate. Section Delegate Kaleta thanked Gellhorn
for his remarks, and thanked the Section for selecting her.
Ombuds Committee Report. Sharan Levine, Chair of the Ombuds Committee, reported that the
Committee was continuing its work. She noted that she had worked all year with Larson Frisby. On the
topic of corporate responsibility, she stated that the Committee had become aware of the existence of an
ABA Task Force on Corporate Responsibility. Three Section Chairs, including Chairman Eisner, have now
signed a letter relating to the Committee’s interest in this area, and she expected that the Ombuds
Committee would reach out to others involved in this area.
Federal Register Online. A brief report on the status of the online edition of the Federal Register was
postponed to the Midyear Meeting in Seattle.
Report and Recommendation on Veterans’ Disability Claims. Ronald Smith, Chair of the Veterans
Affairs Committee, appeared before the Council concerning the report and recommendation on veterans’
disability claims. (The text is at Tab 3 of the meeting materials.) Sid Shapiro, Co-Chair of the Regulatory
1
Council Member Merrick Garland abstained from all votes during the Council meeting.
Initiatives Committee, spoke first on the redrafted report and recommendation. In Paragraph 1(a), the
recommendation now includes the term “appropriate briefing.” In Paragraph 1(b), the words “in
appropriate cases” were added so that the Court of Appeals for Veterans Claims (CAVC), at least in some
instances, could try to speed up the resolution of cases. Although the Committee had written again to the
Department of Veterans Affairs (VA), the VA, in a September 19, 2002, letter, provided the Committee
with a terse reply, declining to comment.
The presenters also noted that the revisions to Paragraph 2(a) and (b) do not change the tenor of those
provisions, but were intended to clarify things. Section Delegate Gellhorn commented that Congress does
not usually tell courts to resolve all legal claims, and that these provisions look like micromanagement.
Smith responded that if these provisions were taken literally, it would waste a lot of time. Shapiro
commented that these were both worthy points, but that the agency in question was the VA, with a unique
system of adjudicating veterans’ claims.
Smith also noted a concern that creating the CAVC was taking things in the wrong direction by making the
process more formal rather than leaving it within the VA. He stated that the CAVC tends to remand for the
Board of Veterans’ Appeals’ (BVA’s) failure to give reasons for decision, but has taken the position that
once it determines that the BVA failed to give reasons, it will remand without giving the BVA guidance.
On remand, the BVA then further articulates its reasons for decision. The purpose of the Committee’s
proposal is to tell the CAVC that it should decide all issues presented to it, and say yes or no with respect to
the issues raised so that when the case goes back to the BVA there is some prospect of a final decision. He
further noted that some effort at reform is warranted, but that more fundamental change may be needed.
Council Member David Vladeck proposed that in paragraph 2(a), the word “could” be changed to “is likely
to.” Smith replied that he was not opposed to that proposal. Former Section Chairman Ron Levin said that
it would strike a better balance for this Section to leave it to the Court’s discretion, rather than saying it
would be required to do so. Gellhorn found Shapiro’s point about the unique issues with veterans’ claims
persuasive, but felt that there should be some reference to that effect in the language of the resolution or the
report. Former Section Chairman James O’Reilly observed that these are very bizarre cases, and the
CAVC seems indisposed to address the problems.
Council Member John Duffy proposed that paragraph 2a include the words “in this case.” Former Section
Chair Peter Strauss urged the inclusion, in paragraph 2(a) of the phrase “promote the closure of claims.”
Lynne Zusman, Co-Chair of the Defense and National Security Committee, recommended that paragraph
2a end with a period after the phrase “capable of resolution” (thereby striking the phrase “without regard to
either issue preclusion or exhaustion”). Gellhorn commented that because the litigant is not represented
below, there is no issue preclusion. He added that he was looking for way to defend the resolution if
challenged in the House of Delegates.
Smith then requested a few minutes to resolve the various issues that had been raised. Smith and Shapiro
later returned to the Council with a further revision of the resolution. Young suggested two changes in the
revised draft. Smith noted that he favored flexibility in the selection of administrative judges. Council
Member Michael Asimow said that he supported Young’s proposed changes, and asked whether, on the
proposed paragraph 2(c), VA would “fight this to the death.” Smith replied that the VA will fight to the
death, but that that would be far less likely in view of Young’s proposed amendments. Peter Strauss
proposed that paragraph 2(c) include a reference to merit-based selection procedures. Jack Young stated
that he had no objection to that proposal. Sharan Levine commented that the Section would want to get the
Administrative Law Judges Section to cosponsor this. Jeffrey Lubbers said that paragraph 2(c) of the
resolution needed to be more prescriptive in specifying the procedures contemplated in the phrase
“modeled on.”
As amended, the recommendation was moved, seconded, and approved. The final text of the
recommendation is as follows:
RESOLVED, The American Bar Association recommends, concerning adjudication and
judicial review of veterans’ disability claims, that
(1) because veterans are generally unrepresented by counsel at the administrative level,
the U.S. Court of Appeals for Veterans Claims (“CAVC”), as a matter of general
practice, should
a.
b.
determine and decide all questions of law presented
to it after appropriate briefing rather than refusing to resolve a
legal claim not expressly argued before the Board of Veterans’
Appeals (“BVA”); and
exercise its statutory authority to expedite VA
decisions in appropriate cases when it remands a case for further
administrative proceedings by VA.
(2) Congress should
a.
b.
c.
promote the closure of claims by requiring the CAVC to resolve all
dispositive allegations of error presented and briefed by an appellant that are
capable of resolution, without regard to either issue preclusion or exhaustion;
authorize the CAVC to certify class actions and authorize the
United States Court of Appeals for the Federal Circuit to transfer a case to the
CAVC in which class relief is warranted; and
require the Secretary of Veterans Affairs to select members of the
BVA through procedures that facilitate recruitment from outside the agency,
modeled on the merit-based procedures used for the selection of federal
administrative law judges and Board of Contract Appeals administrative judges.
Section Chair Eisner urged that the Section get as many cosponsoring Sections as possible for this
recommendation.
Fellows Report. Philip Harter, Chair of the Fellows Committee, began his report on the Section Fellows
by following up on Sharan Levine’s report on the Ombuds Committee. He reported that proposed
legislation on the Environmental Protection Administration Ombuds was totally changed to incorporate all
of the ABA Ombuds Standards. He also stated that the Fellows had decided to undertake looking at the
potential revival of the Advisory Committee on Intergovernmental Relations, and would be working on a
“white paper.” The Fellows are also soliciting ideas for “Great Debates” on administrative law-related
topics.
APA Project Update. Council Member John Duffy reported on two major developments in the status of
the APA Project. First, the underlying reports are in the process of being published. Michael Asimow’s
report on adjudication is now coming out in print by mid-November, 2002. Second, the project is now
entering its “prescriptive phase.” Duffy noted that this new phase is intended to move towards proposals
for change in legislation or agency practice. On this issue, he indicated that his Committee would decide
the best approach to write up a small number of proposals and decide which proposals to bring to the
Council. Chairman Eisner thanked Duffy and the Committee members for their efforts on this project.
Administrative Law Review. Thomas Sargentich reported that the Law School at American University
wanted to continue to develop the Administrative Law Review. He urged Section members to submit
articles for the Review’s consideration. Pamela Michaux, the Editor in Chief of the Review, introduced
several members of the Law Review staff. She indicated that the Review needs a very open pipeline of
scholarship and ideas for future issues, and that the Review staff wants to raise the Review’s profile within
the Law School. She also reported that the Review staff is now planning for an FDA-based issue, and is
specifically planning a Symposium on Developments in Securities Regulation for Friday, January 31, 2003,
to coincide with Founders Day at the Washington College of Law. The Review has funding for this
symposium, and wants both submissions of papers and attendees at the symposium.
Nominating Committee. Ronald Levin, Past Section Chair and Chair of the Nominations Committee,
reported that the Committee consists of himself, Russell Frisby, and Katie Kunzer. He noted that in
addition to its regular business, the Committee must now find a new Vice-Chair to take Tom Morgan’s
place immediately. He stated that the Committee is talking to various people now, and will try to wrap this
up as quickly as possible and get a report circulated for consideration by the Midyear Meeting. On the
regular nominations process, Levin stated that the Committee is starting to solicit suggestions to fill the
positions of a new Vice-Chair for August 2003 (presumptively to be filled by someone from outside
Washington, D.C.), Section Delegate (as Ernest Gellhorn’s term will conclude in 2003), and other Council
appointive positions.
Upcoming Meetings. Chairman Eisner noted that our Delegate, Ernest Gellhorn, is serving on the ABA
Nominating Committee. He noted that the ABA Presidential election will be contested, and that he was
contemplating asking the three candidates to address the Section at the Midyear Meeting. Gellhorn
advocated that we invite them to speak briefly at the Section’s Midyear Meeting, preferably on Saturday,
February 8 as the Nominating Committee meets on Sunday.
Second, with respect to the Annual Meeting, the ABA is considering raising the basic fee for Annual
Meeting attendees from $95 to $155, charging for rooms used for Annual Meeting programs, and charges
that each Section would end up paying for speakers it invited if those speakers were not registered for the
Annual Meeting. (Materials on this topic are at Tab 4 in the meeting materials.) Other Sections reportedly
are also bothered about enforcing the latter requirement. Council Member Russell Frisby thought that the
more recent Annual Meeting was a disaster, based on ticket sales. Former Section Chair James O’Reilly
found the content was great at the Annual Meeting, but felt that the process of collecting (or not collecting)
and having tickets at different locations was chaotic. Council Member Anne Dewey-Balzhizer noted that it
was easier to get one’s office to pay single fee for the meeting than to pay separately for various programs.
She also reported that she could not get early information about which speakers would be on particular
programs, and that when she did not use several CLE tickets that she had bought in advance, she had to call
to get her money back for those programs.
Former Section Chair Peter Strauss found the ABA’s unwillingness to pick up speaker costs discouraging,
and noted that as a law professor, he cannot ask his Dean in good conscience to pick up such costs. He also
had no need of CLE credit for ABA programs. Section Delegate Judy Kaleta indicated that the ABA is
trying to encourage the presentations of fewer programs, but programs of higher quality. Sharan Levine
observed that because smaller ABA Sections would be hurting from this approach, this Section may want
to partner with smaller Sections if it wants to pursue this issue within the ABA. Chairman Eisner noted
that the Section Officers Conference has been very effective as a mechanism for exploring such issue.
Student Liaison. Elise Hoffman, the Section’s liaison to the Law Student Division, reported that a Student
Liaison note will be published in Student Lawyer magazine. The note will talk about the benefits of the
Administrative Law Section and careers in administrative and regulatory law. She also noted that Student
Lawyer Magazine would like to have articles by practitioners, and that she would like to have articles about
the Section published in other law school student publications. In response to a question from the audience,
Section Director Leanne Pfautz stated that she can get a list of law students, broken down by school, from
the ABA.
Membership. Myles Eastwood, Chair of the Membership Committee, reported that since the Committee’s
last report, the Section has 12,927 members (more than half of whom are law student members). Among
other activities described in the Membership Report (at Tab 5 of the meeting materials), the Committee sent
a promotion in September 2002 to Class 1 ABA members in Group Billing; the results of that promotion
are not yet known. In the last 15 months, the Section has increased its lawyer members by 110 and its law
school members by 4,462. The challenge is to get law school members to stay in this Section after
graduation.
Continuing Legal Education Committee. Former Section Chair and CLE Chair John Hardin Young
stated that survey respondents overwhelmingly report that what they want most from ABA membership is
continuing legal education. In the ABA Connection program that the Section did two days ago on “What
Every Lawyer Should Know About Campaign Finance Laws,” the Section had more than 2,000
participants.
Publications Committee. Randy May, Chair of the Publications Committee, began by thanking the
Administrative Law Review staff members who are present for their efforts. He reported that the
Committee had gotten out a letter promoting the Federal Administrative Procedure Sourcebook and the
Guide to Federal Agency Rulemaking. (The Section has sold 57 copies of the Rulemaking Guide and 30
copies of the Sourcebook in the last month.) He noted that Bill Funk and Ron Levin have also sent letters
to other faculty members, urging Cass’s Sunstein book, The Cost-Benefit State, for classroom use. To
promote Eleanor Kinney’s Guide to Medicare Coverage Decision-Making and Appeals, the Section has
distributed 10,000 e-mails to this Section’s members and others. The Section has sold 316 copies of the
Kinney book already; some of these sales are attributable to the Section “package plan” for membership.
May also was optimistic about Michael Asimow’s book on federal agency adjudication. He predicted that
by the end of this year, the Committee would have the manuscript of a new guide on the Government in the
Sunshine Act. He added that there has been some discussion about a book on cyberlaw by law professors
Eugene Volokh and David Post.
Section Staff. Leanne Pfautz reported that Jessica Elliott has joined the Section staff and will do meeting
coordination and logistics. Elisa Jones is working part-time on the Section’s website and its technological
needs.
Budget: Dan Cohen, the Section’s Budget Officer, reported that for the year just ending, it appears that the
Section may be in the black. (The Budget Officer’s Report is at Tab 6 of the meeting materials.) The
projection for the coming year is that the budget will be in balance. For upcoming meetings, he stated that
he projects a need for significant sponsorship of events. The Section has also been looking to do more
publication of Section-related information online. Finally, he noted that the Section may need to revisit the
hard-copy publication of the Administrative Law News, even with the steps that Bill Morrow has been
taking to control costs. Chairman Eisner informed the Section that it had to vote on the proposed budget
for the coming year. A resolution to adopt the proposed budget was moved, seconded, and approved.
There being no further business, the Chair adjourned the meeting at 12:00 noon.
***
REPORT OF THE
ABA TASK FORCE ON CLASS ACTION LEGISLATION
In the fall of 2001, then-ABA President Robert Hirshon appointed a Task Force on Class Action
Legislation to “study the issues related to the move toward directing large class action lawsuits into the
federal courts instead of the state courts.” The Task Force was extended by ABA President A.P. Carlton,
Jr. for the period of his presidency.
The creation of the Task Force is an indication of the importance the ABA places on ensuring that
this issue is carefully considered in a non-politicized atmosphere by the bench and bar, as well as the
general public. The Task Force’s mission has been to study the issues from both the plaintiff and defense
sides in the hope of finding common ground. The Task Force has focused primarily on the proposed
legislation referred to as the “Class Action Fairness Act of 2001,” H.R. 2341 and S. 1712 (107 th Cong. lst
Sess.).2 This legislation has been the subject of extensive hearings that reflected very differing views on its
merits.3 The House version was passed by the House of Representatives on March 13, 2002, but the Senate
version was not reported out of the Senate Judiciary Committee. Alternative approaches to the issues
involved have been the subject of considerable study over the past decade by a variety of committees,
governmental bodies, and organizations. 4
The Task Force’s members are all experienced in large class actions and represent a wide range of
class action practice. The chair of the Task Force is Edward F. Sherman, professor of law and former dean
of Tulane Law School. William Conroy is a member-at-large, and the other members have been appointed
from ABA sections, including Leo Jordan and Thomas Minton from the Tort Trial and Insurance Practice
Section; Rich Wallis and Jeff LeVee from the Section of Antitrust Law; David Cathcart and Richard
Seymour from the Section of Labor and Employment Law; Tom Allman and Elizabeth Stong (who is also
liaison from the Commission on Women in the Profession) from the Section of Business Law; Robert
Clayton and John Beisner from the Health Law Section; Dinita James and Jeffrey Greenbaum from the
Section of Litigation. Lawrence Baca from the Commission on Racial and Ethnic Diversity in the
Profession and William C. Robinson from the Section of Individual Rights and Responsibilities serve as
liaisons to their respective units. Federal District Judges Lee Rosenthal and Jed Rakoff participate in the
This was derived from the “Class Action Fairness Act of 2000,” H.R. 1875 and S. 353 (106 th Cong., 2d
Sess.), which, in turn, was derived in part from the “ Interstate Class Action Jurisdiction Act of 1999,” H.R.
1875 (106th Cong., 2d Sess.) .
3
See, e.g., Hearings before the Senate Committee on the Judiciary on “Class Action Litigation,” July 31,
2002; Senate Report 106-420 from the Committee on the Judiciary on “The Class Action Fairness Act of
2000,” Sept. 26, 2000; House Report 106-320, from the Committee on the Judiciary on “Interstate Class
Action Jurisdiction Act of 1999,” Sept. 14, 1999; Hearing before the Committee on the Judiciary on H.R.
1875, “Interstate Class Action Jurisdiction Act of 1999,” July 21, 1999; Hearing before the Subcommittee
on Courts and Intellectual Property, House Committee on the Judiciary, June 18, 1998; Hearing before the
Subcommittee on Administrative Oversight and the Courts, Senate Committee on the Judiciary, on “S. 353,
The Class Action Fairness Act of 1999,” May 4, 1999.
4
See, e.g., American Bar Association Report to the House of Delegates, Commission on Mass Torts (Feb.
1990)(report withdrawn by the proponents and not considered by the House of Delegates); Report of the
Judicial Conference Ad Hoc Committee on Asbestos Litigation (1991); American Law Institute Complex
Litigation Project (1991); Report of the Advisory Committee on Civil Rules and the Working Group on
Mass Torts to the Chief Justice of the United States and to the Judicial Conference of the United States
(Feb. 15, 1999); RAND Institute for Civil Justice, Class Action Dilemmas: Pursuing Public Goals for
Private Gain (2000); Memorandum to Members of the Advisory Committee on Civil Rules from L.
Rosenthal, E. Cooper, & R. Marcus, “Proposed Amendments to Rule 23” (April 10, 2001); E. Cooper,
Reporter’s Call for Informal Comment: Overlapping Class Actions (Committee on Rules of Practice and
Procedure of the Judicial Conference of the United States, Sept. 2001); Memorandum to the Civil Rules
Advisory Committee from Judge David F. Levi, “Perspectives on Rule 23 Including the Problem of
Overlapping Classes” (April 24, 2002).
2
1
Task Force by providing information but are not voting members. ABA staff liaison is Susan Lynch Nolte,
and Lillian Gaskin has provided expertise on legislative affairs.
Over the past year, the Task Force has sought the expertise and advice of a wide range of
organizations and individuals. It has held a large number of meetings and telephone conferences, including
two public meetings with testimony from interested persons, organizations, and governmental entities. 5
The proposed legislation can be divided into two principal parts: first, the heart of the proposal,
provides for expanded federal court jurisdiction over class actions based on a “minimal diversity” rationale
and for removal of such actions from state to federal court, and second, a number of provisions relating to
the administration of class actions in federal courts, which have been collectively referred to as “Consumer
Class Action Bill of Rights and Improved Procedures for Interstate Class Actions.”
I. Jurisdiction and removal provisions
The portion of the legislation concerning jurisdiction and removal is by far the most controversial.
The Task Force attempted to identify the principal concerns with class action practice that have prompted
proposals to expand federal court jurisdiction and removal of class actions. The issues involved are
complex and controversial, and strongly held views, supported by legitimate considerations, exist on both
sides.6
The Task Force was able to reach agreement on the following principles in
considering federal legislation that would expand federal-court jurisdiction and
removal of class actions
First, the Task Force recognizes that “[a]ny proposal to add to federal subjectmatter jurisdiction must be considered with great care.”7
Discussion: This is consistent with the 1995 Report to the ABA House of Delegates from
the Standing Committee on Federal Judicial Improvements, which stated that
Congress should be encouraged “to conserve the federal courts as a distinctive
5
In the April 2002 meeting of the Task Force, the following organizations made presentations: Alliance of
American Insurers, American Tort Reform Association, Association of Trial Lawyers of America,
Consumer Federation of America, Defense Research Institute, Lawyers’ Committee for Civil Rights under
Law, Lawyers for Civil Justice, National Association of Securities and Commercial Law Attorneys,
National Center for State Courts, Public Citizen, and United States Chamber of Commerce (Institute for
Legal Reform). At the Task Force’s May 2002 meeting, staff members from congressional committees,
representing both proponents and opponents of the legislation, discussed the legislation with the Task
Force. Presenters included Jeffrey Miller, Counsel to the Senate Judiciary Subcommittee on Antitrust,
Competition and Business, and Consumer Rights; Elizabeth Treanor, Minority Counsel to the Senate
Judiciary Committee; John F. Mautz, IV, Counsel to the House Judiciary Committee; Shelley Hanger,
Legislative Director, Office of Representative Bob Goodlatte (R-Va.); and Michone Johnson and Scott
Deutchman, Minority Counsel to the House Judiciary Committee. The Task Force also invited written
comments and received and considered submissions from a number of organizations.
6
The differing positions and arguments are set out in the Task Force’s Interim Report submitted to the
ABA Board of Governors at its Annual Meeting in Washington, D.C., on August 4-6, 2002. This Report
can be found on the ABA Website, www.abanet.org (click on the icon on the first page for the Task Force
on Class Action Legislation).
7
See Memorandum to the Civil Rules Advisory Committee from Judge David F. Levi, supra note 3 at 15.
2
judicial forum of limited jurisdiction in our system of federalism”8 and “to exercise
restraint in the enactment of new statutes that assign civil jurisdiction to the federal
courts and should do so only to further clearly defined and justified interests.”9
Second, the Task Force believes that some concerns over class action practice
could be addressed with federal legislation providing for expanded federal
court jurisdiction. Any expansion should preserve a balance between
legitimate state-court interests and federal-court jurisdictional benefits.
Policymakers, in the drafting of any federal legislation providing for
expanded federal jurisdiction of class actions, should consider such factors as
aggregate amount in controversy, number of plaintiffs in the alleged class,
percentage of the class who are citizens or residents in the forum state,
whether the defendants are all residents of the forum state, standards for
removal, and existence of overlapping classes or cases; and how the entire
mix of all factors balance legitimate state-court interests and federal-court
jurisdictional benefits. Not every bill that addresses these factors would be
appropriate, because the factors are interrelated and the key is to strike a
reasonable balance as a whole.
Discussion: The Task Force early on identified the filing of multiple class actions on the
same matters resulting in the pendency of overlapping or competing class actions in a
number of courts as one of the most serious concerns with class action practice.10 Such
overlapping class actions consume unnecessary litigation resources, encourage “gaming”
of court filings, and risk inconsistent treatment of like cases.11 The Judicial Panel on
Multi-District Litigation (MDL) permits consolidation of federal cases for pre-trial
proceedings, and, although a few states have similar devices for cases within their state,
no such device exists for consolidating suits in different states. Thus, removal to a
federal court would permit the invocation of MDL treatment that is not available when
overlapping cases are pending in state courts. The proposed legislation does not address
the problem of overlapping class actions, although the scope of its grant of federal
8
Recommendation #1, Report to the ABA House of Delegates from the Standing Committee on Federal
Judicial Improvements (August 1995).
9
Id., Recommendation #6.
10
The problem of overlapping class actions has been described as “multiple filings of multi-state diversity
class actions in both federal and state courts.” Memorandum to the Civil Rules Advisory Committee from
Judge David F. Levi, supra note 3, at 9. This memorandum was approved unanimously by the Civil Rules
Committee at its meeting on May 6-7, 2002, and by the Standing Committee on the Rules of Practice and
Procedure at its meeting on June 10-11, 2002. See notes 12-17 for further developments concerning this
memorandum.
See id. at 11: “Membership in these classes may overlap with classes sought - or actually certified - in
other courts, state or federal. Pretrial preparations may overlap and duplicate, proliferating expense and
forcing delay now in one proceeding, now in another, as coordination is worked through. Settlement
negotiations in one action may be played off against negotiations in another, raising the fear of a “reverse
auction” in which class representatives in one court accept terms less favourable to the class in return for
reaping the rewards that flow to successful class counsel.”
11
3
jurisdiction presumably would allow removal of the vast majority of such cases to federal
courts.
The Task Force also recognized the concern that class actions involving class
members from multiple states can be filed in state courts (which may be considered to be
more favorable to plaintiffs or may lack sufficient resources for handling certain classactions), resulting in those courts adjudicating cases that have a nationwide impact
despite possibly small interest of the forum state in the suit. It also recognized the
concern of plaintiffs that some federal courts have applied stricter class certification
standards than have some state courts and are often considered more favorable to
defendants.
Questions have been raised as to whether Article III of the Constitution
authorizes “minimal diversity” jurisdiction based simply on any non-party class
member being a citizen of a state different than that of any defendant. 12 Without
resolving this constitutional issue, the Task Force notes that, given a legislative
finding of impact on interstate commerce, the commerce clause of Article I may
provide constitutional authority for expanded federal-court jurisdiction regarding
overlapping and multistate class actions, so long as there are appropriate limitations
to leave within the jurisdiction of state courts those class actions in which a state’s
interests are stronger than federal interests.
Support for basing expanded federal-court jurisdiction on a “minimal
diversity” rationale has come from the Committee on Rules of Practice and
Procedure of the Judicial Conference of the United States. It approved a
recommendation approved by the Advisory Committee on Civil Rules to “support
12
The Supreme Court’s approval of “minimal diversity” in State Farm Fire & Casualty Co. v. Tashire,
386 U.S. 523 (1967) was for statutory interpleader in which there was minimal diversity between
parties, while the proposed minimal diversity in the class action context would rely on the
citizenship of any class member rather than that of formal parties. Some argue that when a proposed
class action is filed, a constitutional “controversy” exists only between the named plaintiffs and the
defendant, and diversity jurisdiction cannot be constitutionally maintained prior to certification and
some reasonable assurance that there is, in fact, diversity. Others, in response, argue that the
complete diversity required by Strawbridge v. Curtis, 3 Cranch 267 (1806), was derived from the
statute and not the Constitution and that the status of non-party class members has been recognized
regarding a variety of functions in class action cases. See Phillips Petroleum Co. v. Shutts, 472 U.S.
797 (1985); American Pipe & Construction Co. v. Utah, 414 U.S. 538 (1974); Zahn v. International
Paper Co., 414 U.S. 291 (1973).
They argue that statutes and cases have made practical
determinations about who constitutes a party, and “minimal diversity” would be a determination by
Congress that unnamed class members shall be considered parties prior to certification. The recent
Supreme Court decision in Devlin v. Scardelletti, 122 S.Ct. 2005 (2002), which held that class
members other than named representatives could appeal a court’s approval of a settlement, is seen as
a further indication that the Court would allow “minimal diversity” based on the citizenship of any
class member. Others maintain that the decision accords absent class members lesser rights than the
named representatives and recognizes the administrative difficulties in having to consider the
citizenship of all class members to determine jurisdiction.
4
the concept of minimal diversity for large, multistate class actions in which the
interests of no one state are paramount, with appropriate limitations or threshold
requirements so that the federal courts are not unduly burdened and the states’
jurisdiction over in-state class actions is left undisturbed.”13 The supporting
memorandum concluded that “[t]here is a secure basis in the Article III
authorization of diversity jurisdiction to consider various approaches to
consolidating overlapping class actions by bringing them into federal court”14 and
that “minimal diversity” legislation “could be crafted to bring cases of nationwide
scope or effect into federal court without unduly burdening the federal courts or
invading state control of in-state class actions.”15
The Committee on Federal-State Jurisdiction of the Judicial Conference,
however, declined to endorse this recommendation of the Committee on Rules. It
expressed concern with minimal diversity jurisdiction “as the sole means to respond
to the problem of overlapping and competing class actions.”16 It noted the
objections of the Conference of Chief Justices to the legislation on federalism
grounds17 and reiterated its objections to the legislation while recognizing “the
importance of continuing to explore less intrusive and burdensome means, both
statutory and non-statutory, to redress the problems presented by overlapping and
competing class actions.”18
If exercised to the maximum degree, the “minimal diversity” approach could permit removal of
virtually all class actions in the state courts. In recognition of this fact, the 2002 version of the legislation
limited the extent of “minimal diversity”-based federal jurisdiction over class actions. The legislation
contained a minimum amount in controversy ($2,000,000 of aggregated class member claims 19) and
13
Memorandum to the Civil Rules Advisory Committee from Judge David F. Levi, supra note 3, at 17.
Id. at 13.
15
Id. at 16.
16
Report of the Judicial Conference Committee on Federal-State Jurisdiction to the Chief Justice of the
United States and Members of the Judicial Conference of the United States, Agenda F-9, Federal-State
Jurisdiction, Sept. 2002, at 4. See also Letter to House Judiciary Chairman Hyde from Leonidas Ralph
Mecham, Director of the United States Administrative Office, opposing the proposed legislation.
17
See Letter to House Judiciary Chairman Hyde from Chief Justice David Brock, President of the
Conference of Chief Justices, July 19, 1999, expressing the Conference’s opposition to the proposed
legislation as “an unwarranted incursion on the principles of judicial federalism underlying our system of
government”; Letter to Senate Committee on the Judiciary Chairman Leahy from Annice M. Wagner,
President, Conference of Chief Justices, March 28, 2002, reiterating the opposition and stating that “the
state courts and state legislatures should be responsible for correcting any problems,” which, in fact, they
are doing, including a CCJ training program for judges on managing class actions pursuant to a grant from
the State Justice Institute.
18
Id.
19
The legislation would permit aggregation of the claims of all putative class members to determine the
amount in controversy for diversity jurisdiction, reversing existing precedents that class members may not
aggregate their claims to satisfy the amount in controversy, Snyder v. Harris, 394 U.S. 332 (1969), and that
the claim of each class member must meet the amount in controversy, Zahn v. International Paper Co., 414
U.S. 291 (1973).
14
5
number of class members (100) aimed at excluding smaller class actions 20 and a carve out for cases deemed
to present primarily state, as opposed to multi-state, controversies (actions in which “the substantial
majority’ of the class members and “the primary defendants” are citizens of the forum state and the claims
are “governed primarily by the laws” of that state).21
The Task Force has considered a number of different factors that have been – or might be included in proposed legislation to limit the scope of class actions that would be subject to federal
jurisdiction under a “minimal diversity” rationale in the interests of striking a balance between legitimate
state-court interests and federal-court jurisdictional benefits. First, it has considered the provisions of the
legislation that impose threshold requirements of a minimum amount in controversy and minimum number
of class members and that provide a carve out for suits brought under state law with certain further
requirements.22 It has considered whether these provisions are suitable for excluding from federal –court
jurisdiction those cases that properly belong in the state courts. It has further considered whether the
numbers contained in those provisions are set at a correct level.
Second, the Task Force has considered a wide range of other provisions that might serve the
objective of leaving in state courts those cases that properly belong there. It has identified certain factors
that, in combination, seem highly relevant to striking a balance between legitimate state-court interests and
the benefits of expanding federal-court jurisdiction. Those factors are the aggregate amount in controversy,
number of plaintiffs in the alleged class, percentage of the class who are citizens or residents in the forum
state, whether the defendants are all residents of the forum state, standards for removal, including whether
any discretion should be allowed the court; and existence of overlapping classes or cases. The Task Force
recognizes that this is not an exclusive list and that appropriate legislation need not contain all of these
factors. It also recognizes that not every bill that addresses these factors would be appropriate, because any
factors selected are interrelated and the key is to strike a reasonable balance as a whole. The critical
question is how the entire mix of the factors utilized by the policymakers will balance legitimate state-court
interests and federal-court jurisdictional benefits.
Third, the Task Force reaffirms the position of the American Bar Association that, when
legislation is considered that may affect the federal courts, Congress should take into
account the judicial impact of the proposed legislation, including the increased caseload and
resulting costs for the federal court; and in the event of any expanded federal jurisdiction
over class actions, Congress should provide adequate resources to meet any added burden.
II. Provisions relating to the administration of class actions
The bill would exclude from “minimal diversity” jurisdiction those class actions with an amount in
controversy of less than $2 million (in the aggregate) and encompassing fewer than 100 persons. H.R.
2341, text at supra note 1, at § 4(a)(4) and 4(a)(3)(C).
21
“Minimal diversity” jurisdiction would not apply to any civil action in which “the substantial majority”
of the class members and “the primary defendants” are citizens of the state in which the action was filed
and the claims are “governed primarily by the laws” of that state. H.R. 2341, supra note 1, at §
4(a)(3)(A)(I) & (ii). The Senate Committee Report stated that the exception when a “substantial majority”
of the class members are citizens of the forum state should apply “only if virtually all members of the
proposed class [using an example of “more than 99%”] are residents of a single State of which all ‘primary
defendants’ are also citizens and the claims are governed by that State.” “The Class Action Fairness Act of
2000,” Senate Report 106-420, supra note 2, at 29. “Primary defendants” are defined as “those defendants
who are the real ‘targets’ of the lawsuit – i.e., the defendants that would be expected to incur most of the
loss if liability is found.” Id. at 29. Carve outs are also provided for class actions that solely involve a
claim (1) concerning a covered security under the federal securities laws, (2) that relates to the internal
affairs or governance of a corporation or other form of business enterprise and that arises under the laws of
the state of incorporation or organization, and (3) that relates to rights, duties, and obligations pursuant to
any security under the Securities Act of 1933.
22
See text and footnote at notes 19-20, supra.
20
6
The Task Force reaffirms the support of the American Bar Association for the
Congressionally-enacted, judicial rulemaking process in the Rules Enabling Act; opposes
enactment of legislation that conflicts with or touches upon the subjects covered in existing
Rule 23 or the proposed amendments to Rule 23 which were approved by the Judicial
Conference of the United States on September 24, 2002 and are pending before the United
States Supreme Court; and recommends that any legislation respecting class action practice
be confined to the subject of the expansion of the jurisdiction of the Federal Courts and the
appropriate limitations thereto.
Discussion: The members of the Task Force agree that there are legitimate concerns over the current
administration of class actions, particularly relating to settlements and notice to class members. They
favor in general the objectives of many of the provisions of the legislation relating to the administration of
class actions, but do not support their passage as legislation at this time because they are addressed by the
proposed amendments to Rule 23 and could be the source of confusion in the administration of class
actions.
The Task Force believes many of the objectives sought by the administrative
provisions are served by the existing Rule 23 and the proposed amendments to Federal
Rule 23 (which were finalized after this legislation was originally drafted).
The proposed amendments to Rule 23 relate to four primary areas: timing of the certification decision and
notice; judicial oversight of settlement; attorney appointment; and attorney compensation. These
amendments have been approved by the standing Committee on Rules of Practice and Procedure and have
been sent to the Supreme Court by the Judicial Conference of the United States. The Supreme Court has
until May 1 to forward them to Congress, and they will become effective in December unless Congress
passes adverse legislation. The Task Force believes that these issues are particularly within the purview
and expertise of the rule-making process and that differences in language between legislation and rules
could give rise to confusion and unnecessary litigation in class-action practice.
The American Bar Association adopted a policy in 1995, “reaffirm[ing] its support for the
Congressionally-enacted, judicial rulemaking process set forth in the Rules Enabling Act and opposing
those portions of the Common Sense Legal Reform Act or other legislation that would circumvent that
process.” The Task Force also notes that the RAND study of class actions recommended greater judicial
involvement in the administration of class actions. 23 The proposed amendments to Rule 23 impose
responsibility on federal judges to oversee the administration of class actions and provide the discretionary
tools to assure better supervision. The Task Force believes that the grant of judicial discretion is preferable
to precise legislative standards in this matter.
Although the Task Force agrees with some of the apparent objectives of some of the provisions of the
legislation that concerns class-action administrative practices, the Task Force believes that it would be
preferable to leave those issues to the judicial rulemaking process, as set forth below:
I. The Task Force agrees in general with the apparent objectives of the following
provisions of the legislation, but believes that they are addressed or touched on by the
existing Rule 23 or the proposed amendments to Rule 23 or would be within the authority
of the federal rulemaking apparatus:
Judicial scrutiny of coupon and other noncash settlements, which is not directly
addressed by the proposed amendments to Rule 23(e) but which would fall within the
judicial responsibility to review the terms of settlement required under those proposed
amendments;
23
See RAND Institute for Civil Justice, Class Action Dilemmas: Pursuing Public Goals for Private Gain, at
486-90, 497-989 (2000).
7
Clearer and simpler settlement information, which is addressed by amended Rule
23c)(2)(A)(1), requiring the court to direct notice to the class that “concisely and clearly
describe[s] in plain, easily understood language” and which is being implemented by a
project of the Federal Judicial Center to draft and promulgate model notices for various
kinds of class actions;
Protection against net loss to class members, which is not directly addressed by the
proposed amendments to Rule 23(e) but which would fall within the judicial
responsibility to review the terms of settlement required under those proposed
amendments;
Disclosure of the amount and method of calculating and funding attorney’s fees,
which is not directly addressed by the proposed amendments to Rule 23(e), but which
would be the subject of rulemaking;
Report on class action settlements by the Judicial Conference within 12 months on
the best practices for class action settlements, which could be initiated by the Judicial
Conference itself.
II. The Task Force has not reached a consensus in support of or opposition to the
following provisions of the legislation, but believes that they are addressed or touched
upon by the existing Rule 23 or the proposed amendments to Rule 23 or would be within
the authority of the federal judicial rulemaking apparatus:
Notifications to appropriate federal and state officials before final court approval of
settlement, which is not required under the present rules;
Mandatory interlocutory appeal of class action certification with discovery and other
proceedings stayed pending appeal, which would expand that discretionary appeal
authority established several years ago by Rule 23(f) and its provision that an appeal does
not stay proceedings unless the district judge or court of appeals so orders;
Prohibition on payment of greater sums to some class members based on closer
geographic proximity to the court, which would fall within the judicial review of the
terms of settlement under proposed Rule 23(e).
Prohibition on the payment of “bounties” to class representatives, which would fall
within the judicial discretion in amended Rule 23(e) to insure that settlement terms and
award payments are fair.
III. One provision of the legislation does not relate specifically to class action practice
and has not been considered by the Task Force:
Sunshine in court records, providing that no court record, including discovery, whether or not formally
filed with the court, may be sealed unless the court makes a finding that the sealing is “narrowly tailored,
consistent with the protection of public health and safety, and is in the public interest” and that “disclosing
8
the information is clearly outweighed by a specific and substantial interest in maintaining the
confidentiality of such information.”
Respectfully submitted,
Edward F. Sherman, Chair and Reporter
ABA Task Force on Class Action Legislation
February 2003
9
EXECUTIVE SUMMARY
Summary of the recommendation
Believing that some concerns over class action practice could be addressed by
expanded federal-court jurisdiction, the American Bar Association recommends
that any expansion should preserve a balance between legitimate state-court
interests and federal-court jurisdictional benefits. In drafting such
legislation, policymakers should consider such factors as aggregate amount in
controversy, number of plaintiffs in the alleged class; percentage of the
class who are citizens or residents in the forum state, whether the
defendants are all residents of the forum state, standards for removal, and
existence of overlapping classes or cases; and how the entire mix of all
factors balance legitimate state-court interests and federal-court
jurisdictional benefits. The impact on federal judicial resources should be
taken into account and adequate resources provided to meet any added burden.
Reaffirming support for the Congressionally-enacted, judicial rulemaking
process in the Rules Enabling Act, the American Bar Association opposes
enactment of legislation that conflicts with or touches upon the subjects
covered in existing Rule 23 or the proposed amendments to Rule 23 and
recommends that any legislation respecting class action practice be confined
to the subject of the expansion of the jurisdiction of the Federal Courts and
the appropriate limitations thereto.
Summary of the issue which the recommendation addresses
The recommendation addresses proposals in expected to be reintroduced
legislation similar to the proposed “Class Action Fairness Act of 2002” of
the 107th Congress that would have expanded federal-court jurisdiction and
removal of class actions in state courts and imposed administrative standards
on class-action practice in federal courts as to such matters as settlement
and attorney’s fees.
An explanation of how the proposed policy position will address
the issue
The recommendation proposes that any legislation to expand federal-court
jurisdiction and removal preserve a balance between legitimate state-court
interests and federal-court jurisdictional benefits and recommends
consideration of six non-mandatory and non-exclusive factors in striking that
balance. It also proposes that the impact on federal judicial resources
should be taken into account and adequate resources provided to meet any
added burden.
It opposes enactment of legislation that conflicts with or
touches upon the subjects covered in existing Rule 23 or the proposed
amendments to Rule 23 and recommends that any legislation respecting class
action practice be confined to the subject of the expansion of the
jurisdiction of the Federal Courts and the appropriate limitations thereto.
A summary of any minority views or opposition which have been
identified.
The recommendation received the unanimous approval of the Task Force members,
and no known minority views or opposition are identified.
GENERAL INFORMATION FORM
To Be Appended to Reports with Recommendations
(Please refer to instructions for completing this form.)
Submitting Entity:
Task Force on Class Action Legislation
Submitted By:
Edward F. Sherman, Chair, Task Force on Class
Action Legislation
1. Summary of Recommendation(s).
Believing that some concerns over class action practice could be
addressed by expanded federal-court jurisdiction, the American Bar
Association recommends that any expansion should preserve a balance
between legitimate state-court interests and federal-court
jurisdictional benefits. In drafting such legislation, policymakers
should consider such factors as aggregate amount in controversy, number
of plaintiffs in the alleged class; percentage of the class who are
citizens or residents in the forum state, whether the defendants are
all residents of the forum state, standards for removal, and existence
of overlapping classes or cases; and how the entire mix of all factors
balance legitimate state-court interests and federal-court
jurisdictional benefits. The impact on federal judicial resources
should be taken into account and adequate resources provided to meet
any added burden.
Reaffirming support for the Congressionally-enacted, judicial
rulemaking process in the Rules Enabling Act, the American Bar
Association opposes enactment of legislation that conflicts with or
touches upon the subjects covered in existing Rule 23 or the proposed
amendments to Rule 23 and recommends that any legislation respecting
class action practice be confined to the subject of the expansion of
the jurisdiction of the Federal Courts and the appropriate limitations
thereto.
2. Approval by Submitting Entity.
The Task Force on Class Action Legislation approved the Resolution and
Report.
3. Has this or a similar recommendation been submitted to the House
or Board previously?
The second and third resolved clauses reaffirm existing ABA policy.
This recommendation has not been submitted to the House of Delegates or
Board of Governors previously.
4.
What existing Association policies are relevant to this
recommendation and how would they be affected by its adoption?
In August 1995, the ABA House of Delegates adopted policy in support of
efforts by the Judicial Conference to plan for the future of the
federal courts and adopted specific policies in response to the Plan’s
recommendations including a recommendation that says when legislation
is considered that may affect the federal courts directly or
indirectly, Congress should take into account the judicial impact of
the proposed legislation, including the increased caseload and
resulting costs for the federal courts and a recommendation that
encourages Congress “to conserve the federal courts as a distinctive
judicial forum of limited jurisdiction in our system of federalism” and
“to exercise restraint in the enactment of new statutes that assign
civil jurisdiction to the federal courts and should do so only to
further clearly defined and justified interests.”
In January 1982 and February 1995, the ABA adopted policy supporting
the judicial rulemaking process set forth in the Rules Enabling Act.
In August 1974 and February 1997, the ABA adopted policies regarding
Rule 23 of the Federal Rules of Civil Procedure regarding class action
practice.
5. What urgency exists which requires action at this meeting of the
House?
It is expected that legislation modeled on the “Class Action Fairness
Act of 2002” will be introduced early in this Congress and will proceed
to committee consideration within a short time.
6.
Status of Legislation.
(If applicable.)
In the 107th Congress, legislation, the “Class Action Fairness Act of
2002,”H.R. 2341, passed the House on March 13, 2002 by a vote of 233190. In addition, S. 1712, the Senate version of the legislation was
the subject of Senate Judiciary Committee hearings on July 31, 2002.
These bills would have expanded federal court jurisdiction and removal
of class actions from state courts and imposed administrative standards
on class-action practice in federal courts as to such matters as
settlement and attorney’s fees. Legislation has not been introduced in
this Congress but legislation similar to H.R. 2341 and S. 1712 will be
introduced in the 108th Congress and will receive attention.
7.
Cost to the Association.
(Both direct and indirect costs.)
There are no costs to the Association.
8. Disclosure of Interest.
(If applicable.)
Members of the Task Force, some of whom represent plaintiffs and
others, defendants, have clients who might be affected by this
legislation.
9.
Referrals.
A copy of the recommendation has been submitted to the chairs of all
ABA Sections and Divisions and Standing and Special Committees and
Commissions.
10.
Contact Person.
(Prior to the meeting.)
Edward F. Sherman
Tulane Law School
6329 Freret Street
New Orleans, LA 70118-6231
Business: (504) 865-5979
Fax: (504) 862-8859
E-mail: esherman@law.tulane.edu
11.
Contact Person.
(Who will present the report to the House.)
Edward F. Sherman
Tulane Law School
6329 Freret Street
New Orleans, LA 70118-6231
Business: (504) 865-5979
Fax: (504) 862-8859
E-mail: esherman@law.tulane.edu
TAB 2
MEMORANDUM
TO:
Section Council
FROM:
Section Delegates: Ernest Gellhorn and Judy Kaleta*
SUBJECT:
2003 Preliminary Agenda of the Midyear Meeting of the
American Bar Association House of Delegates
DATE:
January, 2003
______________________________________________________________________
The ABA has provided us with a summary of each recommendation on the agenda of the House
of Delegates.
This report includes those summaries and our preliminary thoughts, based
primarily on more extensive executive summaries of the recommendations, but not the reports.
Note that the Committee on Rules and Calendar has placed all recommendations marked “**” on
the consent calendar. Please review these recommendations and our comments. We welcome
your concerns, objections, or concurrence. The basis for positions would be helpful. If you
believe any of the recommendations should be removed from the consent calendar, please let us
know.
100A
STANDING
COMMITTEE
ON
LEGAL
ASSISTANTS
Grants approval, reapproval and the extension of approval to
several legal assistant education programs.
JK: Because this issue is germane to the ABA’s mission and raises
no admin law issues, I recommend we not oppose it.
EG: This should go to the consent calendar.
100B**
STANDING
COMMITTEE
ON
LEGAL
ASSISTANTS
Adopts amendments to the ABA Guidelines for the Approval of
Legal Assistant Education Programs, dated February 2003, which
reflect changes in terminology, correction of grammatical
errors and reorganization of some sections for clarity and to
avoid instances of duplication.
JK: Because this issue is germane to the ABA’s mission and raises
no admin law issues, I recommend we not oppose it.
EG: This is on the consent calendar.
*
The views expressed herein are the personal views of Judy Kaleta as informed by her years of
membership in the Section and service on the Section’s Council and do not represent the views of the U.S.
Department of Transportation.
101
STANDING
COMMITTEE
INFORMATION
ON
TECHNOLOGY
AND
SYSTEMS
Urges jurisdictions to participate in the creation of an American
universal system of citation for case reports, statutes,
administrative documents and other resources upon which the
legal profession relies.
JK: The ABA passed a resolution in 1996 supporting a
uniform citation and specified a case citation format. The 1996
resolution limits that ABA’s ability to compromise.
I
recommend we not oppose this recommendation.
EG: I'll go a step further and support this recommendation.
Please note that this recommendation refers to a uniform
citation format for identifying cases, statutes or other legal
materials – not citation systems such as the Bluebook or the
Maroon Book which describe how to implement systems
designed by others. With the advent of computers and what is
called XML citation standards for legal materials, the need for
a uniform format is increasingly important if briefs, cases and
articles are to create readily usable links.
102
SECTION OF ADMINISTRATIVE LAW AND REGULATORY
PRACTICE
Recommends that the U.S. Court of Appeals for Veterans Claims
and Congress take a series of procedural steps to seek faster and
more efficient resolution of veteran’s disability claims.
EG: Judy's passing by this recommendation is too modest. She is
taking the lead on getting cosponsors and shepherding it through
the House of Delegates.
103A
CRIMINAL JUSTICE SECTION
Adopts the black letter ABA Criminal Justice Standards on Collateral
Sanctions and Disqualification of Convicted Persons dated February
2002, as an addition to the Third Edition of the Criminal Justice
Standards, which address issues related to the legal disabilities that
flow from a criminal conviction over and above the sentence
imposed by the court.
JK: The proposed Standards would ensure that information about
collateral sanctions is readily available and provided to defendants
prior to pleading or sentencing, and would provided mechanisms for
obtaining appropriate modifications of or relief from collateral
sanctions. I recommend that we not oppose this recommendation,
but would like to hear what our committee has to say about this.
EG: I'd like to hear the debate before making a decision, but there
are aspects to the recommendation that appear to be troublesome.
In particular, once the legislature has set forth a collateral sanction
(e.g., disenfranchisement) for an offense, I am unclear why a court
or administrative agency should be able to waive or modify it when
determining the appropriate sentence or other order. Similarly, I
want to hear the case for limiting disenfranchisement or jury service
to periods of actual confinement (or in the latter case, also during
periods of probation, parole or other period of judicial supervision).
(In the District of Columbia, how you resolve this issue may decide
a mayoral election.)
103B
CRIMINAL JUSTICE SECTION
Urges federal, state, territorial and local governments to evaluate
their existing laws, practices and procedures and to develop criteria
relating to the consideration of prisoner requests for reduction or
modification of sentence based on extraordinary and compelling
circumstances arising after sentencing, to ensure their timely and
effective operation.
JK: The recommendation also urges jurisdictions to develop
criteria, noting that rehabilitation alone shall not be considered an
extraordinary or compelling circumstance. I recommend that we not
oppose this recommendation, but I would like to hear what our
committee has to say about this.
EG: I tend to agree with Judy on this because I think Criminal
Justice has some expertise in this area. However, the real fight
here is over determinate sentencing and whether the states and
federal government went too far in adopting this approach. The
recommendation is limited to urging the legislature to evaluate
existing laws and practices. It seems hard to oppose rethinking
important issues of public policy periodically.
104
TASK FORCE OF GATEKEEPER REGULATION AND THE
PROFESSION, CRIMINAL JUSTICE SECTION, SECTION OF
LITIGATION ECTION OF REAL PROPERTY, PROBATE AND
TRUST LAW
Supports and urges reasonable and balanced initiatives designed to
detect and prevent domestic and international money laundering
and terrorist financing.
JK: The recommendation is more complex than the summary
indicates. It includes some general principles that should be
considered as the U.S. establishes and implements money
laundering and terrorist financing polices. The principles refer to the
role of the judiciary and the organized bar in establishing ethical
rules and the critical need for confidentiality. I have no concern with
the principles. However, the next recommendations would have the
ABA oppose any laws that would compel lawyers to disclose
confidential information without taking a position on whether the
current Model Rules of Professional Responsibility should be
modified to permit disclosure in certain circumstances.
The
recommendation goes on to say that bar associations and law
schools should undertake education efforts about current
requirements that apply to lawyer to safeguard the profession from
being used to facilitate money laundering. It seems the ABA is
leaning against any modifications without taking a clear policy
position by amending the Model Rules, which causes me concern
as a procedural matter. I would like to hear from the Section’s
Ethics 2000 expert, Tom Morgan on this.
EG: I also would like to hear from our national security experts and
the new committee on Homeland Security that Neil appointed for
their views. There is an interagency task force currently considering
the issue and it is likely to propose legislation. Thus, it seems
appropriate for the ABA to express its views at this time. Whether
the balance should be struck in favor of client confidentiality is
always debatable. Here the recommendation's language that the
ABA "supports the enactment of reasonable and balanced initiatives
designed to detect and prevent domestic and international money
laundering and terrorist financing" seems indisputable. However,
that careful statement seems inconsistent with the third resolve
clause that the ABA opposes any law or regulation that "would
compel lawyers to disclose confidential information or otherwise
compromise" the independence of the bar. But then in the next
paragraph the recommendation urges a review of the Rules of
Professional Responsibility to determine whether the rules
permitting disclosure in appropriate circumstances should be
modified. Maybe this can be reconciled as consistent or maybe we
shouldn't care. I hope that our committees or the discussion on the
floor of the House will provide some enlightenment.
105
TORT TRIAL AND INSURANCE PRACTICE SECTION
Recommends that states improve procedures for dealing with
insolvent insurance companies and improve the operation of the
current state receivership system by enacting legislation and/or
adopting regulations.
JK: One of the specific recommendations is to use special masters
to assist receivership courts in administering the estates of insolvent
insurers. I would recommend we not opposed, but I’ll defer to
technical experts on this.
EG: Generally I try to know as little as possible about bankruptcy
but this seems to my untrained eye to be a thoughtful report and
careful recommendation for improving the current state insurance
receivership system. While that may doom it, I would support the
recommendation unless my betters persuade or direct me
otherwise.
106A
COMMISSION ON DOMESTIC VIOLENCE
Recommends that law schools, through their deans, professors,
clinicians, curriculum directors and students, incorporate education
about domestic violence within their substantive, clinical, and
specialty law curricula and law school activities.
JK: I have not seen the report, so I don’t know why domestic
violence is being singled out. The Section of Legal Education and
Admissions to the Bar have raised concerns about this
recommendation. I recommend we support this only as part of a
more comprehensive recommendation on law school curricula and
activities.
EG: I've read the report and am unpersuaded that this is an issue
deserving a special ABA recommendation. The Section on Legal
Education has developed standards and makes recommendations
to law schools. Some are sensible and others are foolish. Likewise
I do not doubt that the issue of domestic violence is a serious one.
But so are lots of others in criminal and civil law and the ABA does
not have special recommendations on them. This recommendation
comes from a commission that hosted five law school conferences
for over 50 law schools; it identified substantial efforts in many
schools. A report from the commission to law schools and the
Section on Legal Education would be appropriate and sufficient. I
would appreciate hearing your views, especially if you disagree or
question my analysis.
106B
COMMISSION ON DOMESTIC VIOLENCE YOUNG LAWYERS
DIVISION
Urges that state and federal legislatures, administrative agencies,
and courts prevent discrimination in housing against victims of
domestic violence.
JK: While I haven’t seen the report on this recommendation, at
least 2 million American women are battered every year and in the
2002 appropriation legislation, Congress directed HUD to develop
plans to protect victims of domestic violence from being
discriminated, so there seems to be a problem. No admin law
issues have been raised. I recommend that we support this
recommendation.
EG: We discussed this issue when presented with a far more
specific recommendation (but I think the same report) a year ago. It
now seeks a reversal of the Supreme Court's decision in HUD v.
Rucker insofar as it is not limited to drugs in public housing projects
and is applied to incidents of domestic violence. Whether "one
strike" or "zero tolerance" policies are desirable is a question of
social policy on which I don't think the ABA as a group has special
insight.
On the other hand, the recommendation has been
narrowed to urge only that legislation "prohibit discrimination in
housing against victims of domestic violence."
Stated that
generally, I am prepared to vote for the recommendation. I assume
that adherence to this recommendation would not bar public
housing authorities from evicting violent and disruptive tenants in
"appropriate circumstances."
107
STANDING COMMITTEE ON LEGAL AID AND INDIGENT
DEFENDANTS SPECIAL COMMITTEE ON DEATH PENALTY
REPRESENTATION, CRIMINAL JUSTICE SECTION
Adopts revisions to the ABA Guidelines for the Appointment and
Performance of Defense Counsel in Death Penalty Cases, dated
February 2003 and recommends adoption of the Guidelines by
death penalty jurisdictions.
JK: These guidelines update the ABA’s 1989 guidelines. While
there is general consensus on the need for such guidelines and I
would recommend we not oppose this recommendation, I have
some reservations. I want to alert you to one significant policy that
is buried within the guidelines. The scope of the standards have
been amended to apply “from the moment the client is taken into
custody” to make explicit that the guidelines apply when an
uncharged prisoner who might face the death penalty is denied
access to counsel. The example given is ”the federal government
invoking national security…”
EG: Good eye, Judy. In light of the Administration's likely
opposition to the provision you identify and current litigation in
federal court that may reach the Supreme Court this year or next, I
have concerns that this matter should be considered more carefully
and not buried in the middle of a set of "black letter" guidelines.
108
SECTION OF TAXATION
Recommends that Section 751 of the Internal Revenue Code of
1986 be amended to conform Section 751(a) and Section 751(b) so
as to eliminate the substantial appreciation threshold for Section 751
(b) and harmonize the treatment of transactions under Sections
751(a) and 751(b).
JK: Because this issue is germane to the ABA’s mission and raises
no admin law issues, I recommend we support it. I do note that
some persons believe that this recommendation is complicating in
that it broadens the application of Section 751(b) to cases in which
inventory items have not substantially appreciated.
EG: You may think this focus on "hot assets" is a sexy topic worthy
of study if not extended discussion. Actually its about the sale of
partnership assets – and that's all I know. As Justice Frankfurter
once commented during argument of a tax case to counsel who
offered to give the Court an explanation of how a particular
provision came to be enacted, "I think that we would rather not
know." I therefore will follow Judy's lead on this.
109
TASK FORCE ON TREATMENT OF ENEMY COMBATANTS
CRIMINAL JUSTICE SECTION
SECTION OF INDIVIDUAL RIGHTS AND RESPONSIBILITIES
Urges that U.S. citizens and other persons lawfully present in the
United States who are detained within the United States based on
their designation as “enemy combatants” be afforded the opportunity
for meaningful judicial review of their status, that they not be denied
access to counsel in connection with the opportunity for such review
and urges Congress to establish clear standards and procedures
governing their designation and treatment.
JK: This is likely to generate debate about how to protect the
people and each person’s individual rights. As we co-sponsor a
recommendation reaffirming the bar’s commitment to judicial review
as a fundamental principle for a nation governed by the rule of law,
how can we deny it here?
EG: Ah, if only the question were that simple and easy. The issue
of the scope of judicial review is, of course, central to the topic of
administrative law and this Section has often opposed denial of
access to review for veterans benefits and other administrative
actions. The issue here is of much greater moment and subtlety.
Under the Constitution, the President, as commander-in-chief, has a
special authority and his actions have not be subject to close judicial
review and often are simply unreviewable. Designation of someone
as an enemy combatant in particular has been given great (almost
total) deference. Courts have relied, in part, on the needs of
national security and also on the fact that the designation does not
involve a criminal charge or penal sanction; it is to ensure that a
valuable source of information is not silenced or freed to rejoin an
enemy force. I also wonder whether questions now before the
lower courts and undoubtedly on their way to the Supreme Court
could not be better addressed through an amicus brief that can be
more precise, measured and authoritative. In any event, looking at
the recommendation itself, I am troubled by what is meant by
"meaningful judicial review" – "de novo" or "substantial evidence," or
merely "some evidence" or "rational basis"? A heading in the report
urges "substantial but not absolute deference to the executive
designation" which is somewhat clearer than "meaningful" (itself
borrowed from a district court opinion that I believe was reversed by
a court of appeals). At its core, the proposed standard has as much
substance as a seedless grape. Thus, without greater clarification, I
am inclined to oppose the recommendation and probably to raise
these questions in the floor debate.24 Before making a decision, I'd
like to hear the views of our homeland security and separation of
powers committees as well as be informed by the views of the
Council.
110
STANDING COMMITTEE ON THE DELIVERY OF LEGAL
SERVICES SECTION OF LAW PRACTICE MANAGEMENT
Adopts Best Practice Guidelines for Legal Information Web Site
Providers, dated February 2003, to provide direction to those who
provide legal information through the Internet.
JK: I would like to hear the views of those who have followed the Egovernment initiatives to determine if we should suggest additions
to, or express concerns about, the guidelines.
EG: I'm back with Judy on this one.
111
STANDING COMMITTEE ON LEGAL ASSISTANCE FOR
MILITARY PERSONNEL STANDING COMMITTEE ON ARMED
FORCES LAW STANDING COMMITTEE ON DELIVERY OF
LEGAL SERVICES GENERAL PRACTICE, SOLO AND SMALL
FIRM SECTION GOVERNMENT & PUBLIC SECTOR LAWYERS
DIVISION
Adopts the black letter “Model Expanded Legal Assistance Program
Rule for Military Personnel”, dated February 2003 and urges states
and territories to adopt the model rule in order to provide low-income
military service members and their dependents free civil legal
assistance and in-court representation by military attorneys.
JK: The recommendation provides a limited privilege to practice in
selected situations and subjects military personnel to state CLE
requirements and disciplinary actions. Because this issue is
germane to the ABA’s mission and raises no admin law issues, I
recommend we not oppose it.
EG: I need to give this more study. The recommendation may
taste great and be less filling but who's going to pay for expanded
legal assistance? Since the cases are in state court, it would seem
that the states would pay (just what they need right now, another
drain on their resources). If it's the federal government, is this the
right allocation of scarce resources? And why should military
lawyers be assigned cases that normally would be handled by
plaintiff lawyers on a contingency fee basis? Once again, I want to
hear the debate and your views if you have any.
112
SENIOR LAWYERS DIVISION JUDICIAL DIVISION
CRIMINAL JUSTICE SECTION
Supports the United States Constitution as the supreme law of the
land and reaffirms its commitment to the doctrine of “judicial review”
as a fundamental principle for a nation governed by the rule of law.
The Section has agreed to sign-on as a co-sponsor
EG: Will you support me when I suggest a similar resolution reaffirming
Brown v. Board of Education on its 50th anniversary next year?
113A
NATIONAL CONFERENCE OF COMMISSIONERS ON UNIFORM
STATE LAWS
Approves the Uniform Parentage Act promulgated by the National
Conference of Commissioners on Uniform State Laws in 2000 and
amended in 2002 as an appropriate Act for those States desiring to
adopt the specific substantive law suggested therein.
JK Because this issue is germane to the ABA’s mission, raises no
admin law issues, and the Section had an opportunity to participate
in the development of the uniform act, it appears we should not
oppose it. However, I defer to Mike Asimow, Section Liaison to
NCUSL, for a recommendation.
EG: As I understand it, this is an update of a 1974 uniform act
which was first considered by the House two years ago and
withdrawn over objections. What those objections were I don't
recall and am not informed by the meager supporting report. But
the proposal to bring genetic testing into modern parentage actions
seems appropriate. I will be interested in the views of the Family
Law Section.
113B**
NATIONAL CONFERENCE OF COMMISSIONERS ON UNIFORM
STATE LAWS
Approves the Uniform Nonjudicial Foreclosure Act promulgated by
the National Conference of Commissioners on Uniform State Laws
in 2002 as an appropriate Act for those States desiring to adopt the
specific substantive law suggested therein.
JK: Because this issue is germane to the ABA’s mission, raises no
admin law issues, and the Section had an opportunity to participate
in the development of the uniform act, it appears we should not
oppose it. However, I defer to Mike Asimow, Section Liaison to
NCUSL, for a recommendation
EG¨ This Act would provide two new methods of foreclosure
designed to result in higher prices to the benefit of both the debtor
and creditor. In addition to the conventional foreclosure by means
of an auction sale, the UNFA would also allow for negotiated sales
and foreclosure by appraisal. This is on the consent calendar and
seems like it should stay there.
113C**
NATIONAL CONFERENCE OF COMMISSIONERS ON UNIFORM
STATE LAWS
Approves the Uniform Child Witness Testimony by Alternative
Methods
Act promulgated by the National Conference of Commissioners on
Uniform State Laws in 2002 as an appropriate Act for those States
desiring to adopt the specific substantive law suggested therein.
JK Because this issue is germane to the ABA’s mission, raises no
admin law issues, and the Section had an opportunity to participate
in the development of the uniform act, it appears we should not
oppose it. However, I defer to Mike Asimow, Section Liaison to
NCUSL, for a recommendation.
EG: This uniform act would allow greater latitude to courts to take a
child's testimony (as otherwise defined by a state) in alternative
ways not now generally recognized. In a criminal trial, this could
mean testimony not in open court or face to face with the defendant.
In either a criminal or civil trial the court would have broad discretion
on how to structure a child's testimony without traumatizing the
child. The description of this proposed act is limited so I will am
anxious to hear the views of trial lawyers and especially the Criminal
Law Section on this issue. (While it is on the consent calendar, it
seems unlikely to stay there.)
113D**
NATIONAL CONFERENCE OF COMMISSIONERS ON UNIFORM
STATE LAWS
Approves the 2002 Amendments to Articles 3 and 4 of the Uniform
Commercial Code promulgated by the American Law Institute and
the National Conference of Commissioners on Uniform State Laws
as appropriate Amendments for those States desiring to adopt the
specific substantive law suggested therein.
JK Because this issue is germane to the ABA’s mission, raises no
admin law issues, and the Section had an opportunity to participate
in the development of the uniform act, it appears we should not
oppose it. However, I defer to Mike Asimow, Section Liaison to
NCUSL, for a recommendation.
EG: This is something about negotiable instruments and bank
deposits. The amendments to the amendments of 1990 and 1991
are technical (e.g., a receiver of a failed bank would be able to
enforce an instrument lost before it is transferred to the receiver –
whatever that means) and, in particular, update the law to recognize
electronic documents. I'm sure it's okay or someone will complain
loudly but not me in this instance. (Currently it's on the consent
calendar and probably will remain there.)
113E
NATIONAL CONFERENCE OF COMMISSIONERS ON UNIFORM
STATE LAWS
Approves the Uniform Interstate Enforcement of Domestic-Violence
Protection Orders Act promulgated by the National Conference of
Commissioners on Uniform State Laws in 2000 and amended in
2002 as an appropriate Act for those States desiring to adopt the
specific substantive law suggested therein.
JK Because this issue is germane to the ABA’s mission, raises no
admin law issues, and the Section had an opportunity to participate
in the development of the uniform act, it appears we should not
oppose it. However, I defer to Mike Asimow, Section Liaison to
NCUSL, for a recommendation
EG: This act apparently fills a gap in state law and would improve
the interstate enforcement of protection orders. It clearly seems
worthy of our supporting vote.
113F**
NATIONAL CONFERENCE OF COMMISSIONERS ON UNIFORM
STATE LAWS
Approves the Uniform Securities Act promulgated by the National
Conference of Commissioners on Uniform State Laws in 2002 as an
appropriate Act for those States desiring to adopt the specific
substantive law suggested therein.
JK Because this issue is germane to the ABA’s mission, raises no
admin law issues, and the Section had an opportunity to participate
in the development of the uniform act, it appears we should no
oppose it. However, I defer to Mike Asimow, Section Liaison to
NCUSL, for a recommendation
EG: The proposed act updates and expands enforcement at the
state level regarding the registration of IPOs, the registration of
securities professionals, and the prohibition of fraudulent practices.
Unless Business Law opposes or someone on the Council, I would
expect to vote for this proposal. (Again, it's currently on the consent
calendar.)
113G
NATIONAL CONFERENCE OF COMMISSIONERS ON UNIFORM
STATE LAWS
Approves the Uniform Computer Information Transactions Act
(2002) promulgated by the National Conference of Commissioners
on Uniform State Laws as an appropriate Act for those States
desiring to adopt the specific substantive law suggested therein.
JK: UCITA will be a hot topic at the meeting. ABA’s UCITA
Working Group has raised several concerns, including the clarity of
the statute and the definition of “computer.” There is strong
opposition from the SOC Technical Committee and TTIPS,
consumer groups, and at least 35 State Attorneys General. I
recommend we listen to the debate.
EG: Judy's right. It involves a distinction between the transfer of
computer information (usually by license) and the sale of goods (the
latter now controlled generally by Article 2 of the UCC). Believe it or
not, I have been called and petitioned by over 25 people urging
support or opposition. The most thoughtful comments have come
from the Act's supporters but I plan to dig into this more deeply
before the debate. At this time, I am uncertain, have no position
and will listen closely to the arguments. I would be grateful for
informed guidance.
113H**
NATIONAL CONFERENCE OF COMMISSIONERS ON UNIFORM
STATE LAWS
Approves the Uniform Apportionment of Tort Responsibility Act
promulgated by the National Conference of Commissioners on
Uniform State Laws in 2002 as an appropriate Act for those States
desiring to adopt the specific substantive law suggested therein.
JK Because this issue is germane to the ABA’s mission, raises no
admin law issues, and the Section had an opportunity to participate
in the development of the uniform act, it appears we should not
oppose it. However, I defer to Mike Asimow, Section Liaison to
NCUSL, for a recommendation
EG:
This uniform act would replace prior uniform acts on
comparative fault act and contribution among joint tortfeasors with a
partial or modified form of comparative fault where a contribution of
50% (or more than 50% as an alternative) converts into an absolute
defense. It generally discontinues contribution among multiple
tortfeasors except
where they act in concert.
While the
comparative fault recommendation seems to make sense, I am
more skeptical about the limitation on contribution. Until I hear the
discussion, however, I'll keep an open mind. (But that may not be
necessary if it stays on the consent calendar.)
114**
STANDING COMMITTEE ON SPECIALIZATION
Grants reaccreditation to several specialty certification programs for
lawyers in accordance with the Standards for such programs
adopted in February 1993.
JK: Because this issue is germane to the ABA’s mission and raises
no admin law issues, I recommend we not oppose it.
EG: This is on the consent calendar and deservedly so.
115
SECTION OF LABOR AND EMPLOYMENT LAW
SECTION OF INDIVIDUAL RIGHTS AND RESPONSIBILITIES
SECTION OF LITIGATION
Recommends that Congress enact the Civil Rights Tax Relief Act
(H.R. 840 and S. 917) or similar legislation that would provide relief
to civil rights and employee complainants to exclude from gross
income amounts received on account of claims based on certain
unlawful discrimination, retaliation and employment claims.
Nancy Shallow, Chair of the Section’s Labor and Employment Committee,
recommends that the Section co-sponsor this recommendation.
JK: I defer to our Committee Chair and support co-sponsoring this
recommendation.
EG: The rules on when recoveries are taxable and when they are
not are a mystery to me. Piecemeal modification doesn't seem to
be the way to go. On the other hand, this one is sure to pass (the
lists of cosponsors is endless), our applicable committees support it,
and I expect to join Judy and vote for it despite my ignorance.
116
COMMISSION ON HOMELESSNESS AND POVERTY STEERING
COMMITTEE ON UNMET LEGAL NEEDS OF CHILDREN,
COMMISSION ON MENTAL AND PHYSICAL DISABILITY LAW
STANDING COMMITTEE ON LEGAL AID & INDIGENT
DEFENDANTS,
STANDING
COMMITTEE
ON
LEGAL
ASSISTANCE FOR MILITARY PERSONNEL
Recommends standards to assist jurisdictions in developing a
homeless court program to address the legal problems of the
homeless participants as well as linking them with appropriate
services and treatment programs.
JK The summary is misleading. In fact, the recommendation urges
the adoption of Homeless Court Programs, but doesn’t set
standards.
These programs offer a systemic approach to
addressing legal and social problems of the homeless defendant.
Because this issue is germane to the ABA’s mission and raises no
admin law issues, I recommend we not oppose it
EG:. This is an area of special interest to me. Numerous studies
show that many, perhaps most, of the homeless have problems not
just of poverty but also of mental illness and substance abuse.
Homeless Court Programs seek to address part of the problem for
those charged with misdemeanors and hopefully would reduce the
use of jails as "treatment" centers. San Diego has had some
success; DC's attempts have been frustrated by the incompetence
of district officials (five directors of mental health in seven years).
The recommendation here is not a panacea but nonetheless is, in
my opinion, worthy of support.
117
SECTION OF INTELLECTUAL PROPERTY LAW
Supports the enactment of federal legislation to protect an
individual’s right of publicity to the extent the individual’s identity is
used for a commercial purpose in “commerce”.
JK: The recommended legislation would also prospectively preempt
inconsistent state laws. I’d like to hear from our Intellectual Property
Committee on this.
EG: Approximately half of states provide protection of one's
commercial identity, and the other half do not. Arguments for
making this a preemptive federal law concentrate on consistency
with federal copyright law, efficiency gains and the reduction of
transaction costs. What is unexplained by IP's report is why this
right should be mandated for half the states that have not done so?
Even in the law of sales we don't seek to impose a single federal
law but rather urge a uniform standard recognizing that some
variation may be desirable. This policy concern seems even
stronger where half the states have not chosen to recognize this
cause of action. My inclination is to oppose this recommendation.
118
SECTION OF INDIVIDUAL RIGHTS AND RESPONSIBILITIES
Urges Congress to conduct regular and timely oversight of the
government’s use of Foreign Intelligence Surveillance Act (“FISA”)
to ensure that FISA investigations comply with the First, Fourth, and
Fifth Amendments to the Constitution.
JK: In addition to the above action, this recommendation urges
legislation to clarify that the FISA should only be used for bona fide
foreign intelligence-gathering and to require more detailed annual
reports on FISA investigations. This is likely to generate debate
about how to protect the Nation while respecting our basic
freedoms. The recommendations seem to strike an appropriate
balance. While I would generally be inclined to recommend
opposition to encouraging Congress to engage in oversight (why tell
Congress to do its job?), because of the limited judicial review of
FISA actions and the Court of Reviews decision effectively
eliminating the wall between federal personnel conducting
surveillance on foreign agents and criminal prosecutors
investigating crimes, this recommendation seems reasonable.
Note: IRR has requested our support and co-sponsorship of this
recommendation.
EG: This is another national security issue that raises sensitive
issues of the proper balance between personal privacy and civil
liberties and how best to protect national interests in the modern era
of terrorism. In general, I support the idea of seeking clarification
from Congress to ensure that needless ambiguities are resolved
and that the proper balance is struck. But this resolution makes no
attempt to identify either the specifics or to suggest the appropriate
balance. The underlying report notes several specific issues – e.g.,
the 2001 Act's authority for investigating and obtaining "roving
wiretaps" for surveillance of foreign intelligence gathering activities
where that intelligence gathering is a "significant" (rather than
"primary") purpose of the investigation; the expansion of warrants
from "any tangible thing" to business, medical, educational and
library records – but none of these specific issues are mentioned in
the recommendation. Instead it urges that Congress conduct
regular and timely oversight, and legislation to require an annual
statistical report on FISA investigations and a clarification of
procedures. This seems to me to be wrongheaded. The ABA
should specifically address the primary issues such as: should
telephone taps and other intrusive techniques used to investigate
foreign intelligence gathering require warrants to identify in advance
specific lines to be tapped or are roving wiretaps justified in this
circumstance; should that warrant authority include the power to
seize business records or even library records in the scope of things
that can be seized? Instead the recommendation merely urges
Congress to hold hearings to ensure that government investigations
strike the proper balance between "legitimate intelligence activity
and the individual's interest in being free from improper government
intrusion." The implication of the recommendation, stated only
somewhat more specifically in the report, is that the right balance
has not been struck and that government investigations have gone
too far.
But rather than making this case and developing
recommendations to correct identifiable problems, this proposal
passes the buck to Congress without any guidance or suggestion.
Thus, I am inclined to oppose this recommendation in its current
form.
177B
BOARD OF GOVERNORS
Recommends an increase in ABA membership dues of
approximately 15%.
JK: As Ernie reported in his September 19 memo to the Council,
this has been under discussion for some time and an increase has
been expected. I recommend we not oppose this recommendation.
EG: The proposed annual dues increase varies depending on how
many years one is out of law school. The increase for those out of
law school 4-5 years would go down 12% (from $125 to $ 110); for
those out 10 years or more it jumps 18.6% (from $295 to $350). It
is projected to raise almost $9 million per year and if this is correct it
should cover the shortfall expected over the next three years. The
Board of Governors has examined the issue at length after first
seeking to cut back expenses where it thought possible. I am
inclined to favor the recommendation but hope that someone will
spend the time and energy to make a case against it.
30TAB 3
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Draft Revised Ombuds Standards
AMERICAN BAR ASSOCIATION
SECTION OF ADMINISTRATIVE LAW AND REGULATORY PRACTICE
SECTION OF DISPUTE RESOLUTION
REPORT TO THE HOUSE OF DELEGATES
RECOMMENDATION
1
2
RESOLVED, that the American Bar Association supports the greater use of “ombuds” to
receive, review, and resolve complaints involving public and private entities.
3
4
FURTHER RESOLVED, that the American Bar Association endorses the Standards for
the Establishment and Operation of Ombuds Offices dated August 2001.
30
2TAB 3
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Draft Revised Ombuds Standards
STANDARDS25 FOR THE ESTABLISHMENT AND OPERATION OF
OMBUDS OFFICES
PREAMBLE
Ombuds26 receive complaints and questions from individuals concerning people
within an entity or the functioning of an entity. They work for the resolution of particular
issues and, where appropriate, make recommendations for the improvement of the
general administration of the entities they serve. Ombuds protect: the legitimate interests
and rights of individuals with respect to each other; individual rights against the excesses
of public and private bureaucracies; and those who are affected by and those who work
within these organizations.
Federal, state and local governments, academic institutions, for profit businesses,
non-profit organizations, and sub-units of these entities have established ombuds offices,
but with enormous variation in their duties and structures. Ombuds offices so established
may be placed in several categories: A Classical Ombuds operates in the public sector
addressing issues raised by the general public or internally, usually concerning the
actions or policies of government entities or individuals. An Organizational Ombuds
may be located in either the public or private sector and ordinarily addresses problems
presented by members, employees, or contractors of an entity concerning its actions or
policies. Both types may conduct inquiries or investigations and suggest modifications in
policies or procedures. An Advocate Ombuds may be located in either the public or
private sector and like the others evaluates claims objectively but is authorized or
required to advocate on behalf of individuals or groups found to be aggrieved.
As a result of the various types of offices and the proliferation of different
processes by which the offices operate, individuals who come to the ombuds office for
assistance may not know what to expect, and the offices may be established in ways that
compromise their effectiveness. These standards were developed to provide advice and
guidance on the structure and operation of ombuds offices so that ombuds may better
fulfill their functions and so that individuals who avail themselves of their aid may do so
with greater confidence in the integrity of the process. Practical and political
considerations may require variations from these Standards, but it is urged that such
variations be eliminated over time.
The essential characteristics of an ombuds are:

independence
25
These standards expand on a 1969 ABA resolution to address independence, impartiality, and
confidentiality as essential characteristics of ombuds who serve internal constituents, ombuds in the private
sector, and ombuds who also serve as advocates for designated populations.
26
The term ombuds in this report is intended to encompass all other forms of the word, such as
ombudsperson, ombuds officer, and ombudsman, a Swedish word meaning agent or representative. The
use of ombuds here is not intended to discourage others from using other terms.
2
3TAB 3
January 27, 2003
Draft Revised Ombuds Standards


impartiality in conducting inquiries and investigations, and


confidentiality.
ESTABLISHMENT AND OPERATIONS
A.
An entity undertaking to establish an ombuds should do so pursuant to a legislative
enactment or a publicly available written policy (the “charter”) which clearly sets
forth the role and jurisdiction of the ombuds and which authorizes the ombuds to:
(1)
receive complaints and questions about alleged acts, omissions, improprieties,
and systemic problems within the ombuds’s jurisdiction as defined in the
charter establishing the office
(2)
exercise discretion to accept or decline to act on a complaint or question
(3)
act on the ombuds’s own initiative to address issues within the ombuds’s
prescribed jurisdiction
(4)
operate by fair and timely procedures to aid in the just resolution of a
complaint or problem
(5)
gather relevant information
(6)
resolve issues at the most appropriate level of the entity
(7)
function by such means as:
(a)
conducting an inquiry
(b)
investigating and reporting findings
(c)
developing, evaluating, and discussing options available to affected
individuals
(d)
facilitating, negotiating, and mediating
(e)
making recommendations for the resolution of an individual complaint
or a systemic problem to those persons who have the authority to act
upon them
(f)
identifying complaint patterns and trends
(g)
educating
(h)
issuing periodic reports, and
3
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January 27, 2003
Draft Revised Ombuds Standards
(i)
(8)
advocating on behalf of affected individuals or groups when specifically
authorized by the charter
initiate litigation to enforce or protect the authority of the office as defined by
the charter, as otherwise provided by these standards, or as required by law.
QUALIFICATIONS
B.
An ombuds should be a person of recognized knowledge, judgment, objectivity, and
integrity. The establishing entity should provide the ombuds with relevant
education and the periodic updating of the ombuds’s qualifications.
INDEPENDENCE, IMPARTIALITY, AND CONFIDENTIALITY
C.
To ensure the effective operation of an ombuds, an entity should authorize the
ombuds to operate consistently with the following essential characteristics. Entities
that have established ombuds offices that lack appropriate safeguards to maintain
these characteristics should take prompt steps to remedy any such deficiency.
(1)
Independence. The ombuds is and appears to be free from interference in the
legitimate performance of duties and independent from control, limitation, or
a penalty imposed for retaliatory purposes by an official of the appointing
entity or by a person who may be the subject of a complaint or inquiry.
In assessing whether an ombuds is independent in structure, function, and
appearance, the following factors are important: whether anyone subject to
the ombuds’s jurisdiction or anyone directly responsible for a person under
the ombuds’s jurisdiction (a) can control or limit the ombuds’s performance of
assigned duties or (b) can, for retaliatory purposes, (1) eliminate the office, (2)
remove the ombuds, or (3) reduce the budget or resources of the office.
(2)
Impartiality in Conducting Inquiries and Investigations. The ombuds conducts
inquiries and investigations in an impartial manner, free from initial bias and
conflicts of interest. Impartiality does not preclude the ombuds from
developing an interest in securing changes that are deemed necessary as a
result of the process, nor from otherwise being an advocate on behalf of a
designated constituency. The ombuds may become an advocate within the
entity for change where the process demonstrates a need for it.
(3)
Confidentiality. An ombuds does not disclose and is not required to disclose
any information provided in confidence, except to address an imminent risk of
serious harm. Records pertaining to a complaint, inquiry, or investigation are
confidential and not subject to disclosure outside the ombuds’s office. An
ombuds does not reveal the identity of a complainant without that person’s
express consent. An ombuds may, however, at the ombuds’s discretion
4
5TAB 3
January 27, 2003
Draft Revised Ombuds Standards
disclose non-confidential information and may disclose confidential
information so long as doing so does not reveal its source. An ombuds should
discuss any exceptions to the ombuds’s maintaining confidentiality with the
source of the information.27
LIMITATIONS ON THE OMBUDS’S AUTHORITY
D.
An ombuds should not, nor should an entity expect or authorize an ombuds to:
(1)
make, change or set aside a law, policy, or administrative decision
(2)
make binding decisions or determine rights
(3)
directly compel an entity or any person to implement the ombuds’s
recommendations
(4)
conduct an investigation that substitutes for administrative or judicial
proceedings
(5)
accept jurisdiction over an issue that is currently pending in a legal forum
unless all parties and the presiding officer in that action explicitly consent
(6)
address any issue arising under a collective bargaining agreement or which
falls within the purview of any existing federal, state, or local labor or
employment law, rule, or regulation, unless the ombuds is authorized to do so
by the collective bargaining agreement or unless the collective bargaining
representative and the employing entity jointly agree to allow the ombuds to
do so, or if there is no collective bargaining representative, the employer
specifically authorizes the ombuds to do so, or
(7)
act in a manner inconsistent with the grant of and limitations on the
jurisdiction of the office when discharging the duties of the office of ombuds.
REMOVAL FROM OFFICE
E.
The charter that establishes the office of the ombuds should also provide for the
discipline or removal of the ombuds from office for good cause by means of a fair
procedure.
27
A classical ombuds should not be required to discuss confidentiality with government officials and
employees when applying this paragraph to the extent that an applicable statute makes clear that such an
individual may not withhold information from the ombuds and that such a person has no reasonable
expectation of confidentiality with respect to anything that person provides to the ombuds.
5
6TAB 3
January 27, 2003
Draft Revised Ombuds Standards
NOTICE
F.
These standards do not address the issue whether a communication to the
ombuds will be deemed notice to anyone else including any entity in or for
which the ombuds acts. Important legal rights and liabilities may be affected
by the notice issue.
CLASSICAL OMBUDS
G.
A classical ombuds is a public sector ombuds who receives complaints from
the general public or internally and addresses actions and failures to act of a
government agency, official, or public employee. In addition to and in
clarification of the standards contained in Paragraphs A-F, a classical ombuds:
(1)
should be authorized to conduct independent and impartial investigations into
matters within the prescribed jurisdiction of the office
(2)
should have the power to issue subpoenas for testimony and evidence with
respect to investigating allegations within the jurisdiction of the office
(3)
should be authorized to issue public reports
(4)
should be authorized to advocate for change both within the entity and
publicly
(5)
should, if the ombuds has general jurisdiction over two or more agencies, be
established by legislation28 and be viewed as a part of and report to the
legislative branch of government.
ORGANIZATIONAL OMBUDS
H.
An organizational ombuds facilitates fair and equitable resolutions of concerns that
arise within the entity. In addition to and in clarification of the standards contained
in Paragraphs A-F, an organizational ombuds should:
(1) be authorized to undertake inquiries and function by informal processes as
specified by the charter
(2) be authorized to conduct independent and impartial inquiries into matters within
the prescribed jurisdiction of the office
(3) be authorized to issue reports
28
The 1969 ABA Resolution, which remains ABA policy, provided that a classical ombuds should be
“appoint[ed] by the legislative body or . . . by the executive with confirmation by the designated
proportion of the legislative body, preferably more than a majority, such as two thirds.”
6
7TAB 3
January 27, 2003
Draft Revised Ombuds Standards
(4) be authorized to advocate for change within the entity.
ADVOCATE OMBUDS
I.
An advocate ombuds serves as an advocate on behalf of a population that is
designated in the charter. In addition to and in clarification of the standards
described in Paragraphs A-F, an advocate ombuds should:
(1)
have a basic understanding of the nature and role of advocacy
(2)
provide information, advice, and assistance to members of the constituency
(3)
evaluate the complainant’s claim objectively and advocate for change relief
when the facts support the claim
(4)
be authorized to represent the interests of the designated population with
respect to policies implemented or adopted by the establishing entity,
government agencies, or other organizations as defined by the charter, and
(5)
be authorized to initiate action in an administrative, judicial, or legislative
forum when the facts warrant.
7
TAB 3
Draft Revised Ombuds Standards
January 27, 2003
8
TAB 4
WHITE HOUSE REVIEW OF AGENCY RULEMAKING:
AN EMPIRICAL INVESTIGATION
Steven P. Croley
draft of: 10.05.02
work in progress; please do not cite or quote without permission
forthcoming University of Chicago Law Review (2003)
1
WHITE HOUSE REVIEW OF AGENCY RULEMAKING: AN EMPIRICAL INVESTIGATION
Table of Contents
INTRODUCTION
I. WHITE HOUSE OVERSIGHT AND REGULATORY GOVERNMENT
A. Activist White House Oversight of Agency Rulemaking .............................................................................................
B. Activist White House Oversight and the Strong-President Debate .............................................................................
C. The Strong President Debate and Theories of Regulatory Politics ............................................................................
D. Pro and Con Activist White House Oversight: Competing Predictions .....................................................................
II. OIRA REVIEW OF AGENCY RULES: AN EMPIRICAL ANALYSIS
A. The Institutional Framework ......................................................................................................................................
B. Sources of Data ...........................................................................................................................................................
C. General Trends: 1981-2000 ........................................................................................................................................
D. Rulemaking Review During the Clinton Administration .............................................................................................
E. OIRA Meetings With Persons Outside of Government: 1993-2000 ............................................................................
F. EPA Rules Specifically ................................................................................................................................................
G. Summary of Findings ..................................................................................................................................................
III. GOVERNMENT STRUCTURE AND REGULATORY THEORY REVISITED
A. In Defense of Activist White House Oversight ............................................................................................................
B. Skepticism Toward Activist White House Oversight ...................................................................................................
C. OIRA Rulemaking Review As Regulatory Good Government .....................................................................................
CONCLUSION
APPENDIX
2
WHITE HOUSE REVIEW OF AGENCY RULEMAKING: AN EMPIRICAL INVESTIGATION
Steven Croley*
Introduction
Among the many important developments in administrative law of the past two decades, indeed of political
decision-making in domestic policy generally, efforts by recent presidents to exert greater control over regulatory
agencies ranks near the very top. As many have observed,1 recent presidential administrations, beginning most
significantly with the administration of President Reagan, have sought to exercise increased influence over agency
decision-making in both procedural and substantive ways. Procedurally, presidents have required agencies to
inform the White House of important pending regulatory actions and, far beyond that, to seek some form of White
House approval for those actions. Substantively, recent presidents have required agencies to demonstrate to the
White House, in the course of getting approval for their pending regulatory decisions, that major regulatory actions
are justified by one form or another of cost-benefit analysis, and also that those actions otherwise conform to the
President’s own regulatory priorities. While this trend toward greater executive control over agencies was originally
closely associated with the deregulatory agenda of the President Reagan and President George H. W. Bush
administrations,2 President Clinton reincarnated earlier Republican efforts to effect greater control over agencies,
and White House oversight eventually was seen as a potential friend of regulatory government as well.
*
Professor of Law, University of Michigan Law School. A.B., University of Michigan; J.D., Yale Law
School; Ph.D. (Politics), Princeton University. Thanks to Rick Hills, Kevin Karty, Rick Pildes, Susan RoseAckerman, Peter Strauss, and Chuck Weisselberg for helpful comments. Thanks also to Kevin Karty for advice and
assistance with some of the technical portions of this Article. Thanks finally to participants at the University of
California at Berkeley, Boalt Hall, Brown Bag Workshop and the University of Southern California Law School’s
Law & Economics Workshop. The University of Michigan Law School Cook Research Fund provided support for
this research.
1
See, e.g., Elena Kagan, Presidential Administration, 114 HARV. L. REV. 2245 (2001); Lawrence Lessig &
Cass R. Sunstein, The President and the Administration, 94 COLUM. L. REV. 1 (1994) [hereinafter Lessig &
Sunstein, The President]; Richard H. Pildes & Cass R. Sunstein, Reinventing the Regulatory State, 62 U. CHI. L.
REV. 1 (1995) [hereinafter Pildes Sunstein, Regulatory State]; Peter L. Strauss & Cass R. Sunstein, The Role of the
President and OMB in Informal Rulemaking, 38 ADMIN. L. REV. 181 (1986) [hereinafter Strauss & Sunstein, Role of
the President].
2
See, e.g., Chrisopher C. DeMuth & Douglas H. Ginsburg, White House Review of Agency Rulemaking, 99
HARV. L. REV. 1075 (1986) [hereinafter DeMuth & Ginsberg, White House]; Alan B. Morrison, OMB Interference
with Agency Rulemaking: The Wrong Way to Write a Regulation, 99 HARV. L. REV. 1059 (1986) [hereinafter
Morrison, OMB Interference]; Peter M. Shane, Political Accountability in a System of Checks and Balances: The
Case of Presidential Review of Rulemaking, 48 ARK. L. REV. 161 (1995) [hereinafter Shane, Presidential Review].
3
White House Review of Rulemaking
4
But while greater presidential control over agencies came to be embraced by both political parties as each
alternately occupied the White House, scholars and commentators remain divided over the desirability of greater
White House influence on regulatory decision-making.3 On the one side, defenders of what can be thought of as
“activist” White House oversight see greater presidential control as a welcome and perhaps even constitutionally
necessary development. On the other side, critics worry that greater presidential control makes for poor regulatory
policy, threatens congressional will, or jeopardizes careful balances between law and politics that characterize the
administrative state. This general debate over the “strong president” is really three debates in one–a descriptive
debate, a normative debate, and legal-constitutional argument as well. The first considers just how far increased
presidential control has really come and indeed, given the limitations of the president’s institutional resources, how
realistic White House centralization could ever be. The normative debate focuses on whether greater presidential
influence tends to produce sounder regulatory policy, however far that influence has or has not already come. 4 The
legal-constitutional argument considers whether the administrative state lacks constitutional legitimacy if the
President has not or does not exercise considerable influence over agency decision-making: Constitutional
defenders of the “unitary executive” thesis argue that, but for substantial presidential control, the administrative state
lacks constitutional grounding.5
This general debate over the strong president can be linked–in fact on a deeper level is closely tied–to
competing general visions of regulatory government. That is, one’s position with respect to whether greater
presidential control over agencies is desirable or even possible depends in part ultimately on one’s underlying vision
of the regulatory state. For example, those who find merit in the pluralistic “interest representation” model of
regulatory government might be especially troubled by White House centralization to the extent that greater
presidential control upsets the more or less benign dynamics of interest-group competition in other administrative
decision-making fora.6 Of course, that worry depends on exactly what increased presidential control looks like. If
greater White House centralization in practice entails correcting for interest-group imbalances in the legislative or
administrative spheres, then a proponent of interest-group pluralism might instead welcome recent trends. For
another example among many, one who views the regulatory state largely as an institution that delivers socially
harmful rents to powerful interest groups might be inclined to favor greater presidential control, that is, to the extent
presidential control makes it harder rather than easier for agencies to deliver rents to favored groups. In short, the
debate over the strong president is derivative – parasitic on larger debates over the promise and performance of
regulatory government: Greater or lesser presidential control is not desirable or undesirable in the abstract; the
question rather is how such control operates within some larger picture of regulatory government.
With that understood, this Article contributes to the debate over the strong president, or rather promotes it,
by examining White House review of agency rulemaking over the past twenty years in actual practice, focusing
especially on the Clinton Administration. The effort here is partly descriptive: This Article explores how extensive
White House review of rulemaking has been–how many rules the White House has reviewed, from which agencies,
on what grounds, with what apparent levels of scrutiny, with what level of transparency, prompted by whom, and
finally with what result. At the same time, however, this empirical inquiry is situated with reference to the debate
over the strong president and, just as importantly, debates about the successes and failures of regulatory government
more generally. The data here thus facilitate evaluation of competing claims about the merits of a strong regulatory
president and competing visions of regulatory government (though given the limited focus of this Article those
3
See generally Cynthia R. Farina, Undoing the New Deal Through New Federalism, 22 Harv. J. L. & Pub.
Pol’y 227 (1998); Peter L. Strauss, Presidential Rulemaking, 72 CHI.-KENT L. REV. 965 (1997) [hereinafter Strauss,
Presidential Rulemaking].
4
See generally Mark Seidenfeld, A Big Picture Approach to Presidential Influence on Agency
Policymaking, 80 IOWA L. REV. 1 (1994) [hereinafter Seidenfeld, Big Picture]; Sidney A. Shapiro, Political
Oversight and the Deterioration of Regulatory Policy, 46 ADMIN. L. REV. 1 (1994); Shane, Presidential Review,
supra note 2.
5
See generally Steven G. Calabresi & Saikrishna B. Prakash, The President’s Power to Execute the Laws,
104 YALE L. J. 541 (1994) [hereinafter Calabresi & Prakash, The President’s Power]; Steven G. Calabresi, Some
Normative Arguments for the Unitary Executive, 48 ARK. L. REV. 23 (1995); Lessig & Sunstein, President and
Administration, supra note 1; David B. Rivkin, Jr., The Unitary Executive and Presidential Control of Executive
Branch Rulemaking, 7 ADMIN. L. J. AM. U. 309 (1993).
6
See, e.g., Cynthia R. Farina, The “Chief Executive” and the Quiet Constitutional Revolution, 49 ADMIN.
L. REV. 179 (1997); Seidenfeld, Big Picture, supra note 4; Strauss, Presidential Rulemaking, supra note 3.
4
White House Review of Rulemaking
5
evaluations will of course be incomplete). Last but not least, this Article argues that greater White House influence
on agency rulemaking is, on balance, a welcome development in administrative law.
Part I first lays the groundwork by explaining the form and scope of White House review of agency
rulemaking over the last two decades. Part I surveys competing claims that participants in the debate over the strong
president make, and connects some of those claims to broader theories of regulatory government. Part II provides
an empirical analysis of White House review of agency rulemaking from 1981 to 2000, focusing on the period from
1993 to 2000, and highlighting EPA rules in particular. Part II reports descriptive and inferential statistics found in
or derived from publically available but previously unmined sources of data. Part III returns to the debates
concerning the strong president and regulatory government, considering whether and to what extent the findings of
Part II provide support for competing views, and ultimately providing a qualified defense of the strong regulatory
president.
I. WHITE HOUSE OVERSIGHT AND REGULATORY GOVERNMENT
A. Activist White House Oversight of Agency Rulemaking
In early 1981, President Ronald Reagan issued his famous Executive Order number 12291. 7 Among other
things, Executive Order 12291 required agencies to submit to the Director of the Office of Management and Budget
(“OMB”) a “Regulatory Impact Analysis” for all of their “major” rules. 8 Executive Order 12291 defined “major”
rule as any rule likely to: (1) have an annual effect on the economy of one-hundred million dollars or more; (2)
impose a major increase in costs or prices for consumers, industries, government agencies, or geographic regions; or
(3) have a significant adverse effect on competition, employment, investment, productivity, or innovation.9 For
such rules, agencies’ regulatory impact analyses had to provide an assessment of the costs and benefits of their rules,
a calculation of a rule’s net benefits, and a description of alternative courses of action that might achieve the same
regulatory goal together with an explanation of the reasons why those alternatives, if cheaper, could not legally be
adopted.10 Executive Order 12291 further required agencies to submit regulatory impact analyses twice, once
accompanying a given “proposed” form and, following the notice-and-comment period, once again for the pending
“final” version of the same rule.11 Such analyses would allow the White House, through the Director of OMB acting
under the direction of the “Presidential Task Force on Regulatory Relief,” to approve or seek changes in all major
rules. Finally, Executive Order 12291 also required agencies to publish their regulatory agendas for each year, and
to initiate reviews of all of their rules currently in effect. 12
In early 1985, following President Reagan’s reelection, he issued Executive Order number 12498,
expressly “intended to complement the existing regulatory planning and review procedures” outlined in Executive
Order 12291.13 Executive Order 12498 further solidified the Reagan White House’s control, or assertion of control,
over rulemaking agencies. Executive Order 12498 required agencies to submit to the Director of OMB a statement
of their regulatory policies, goals, and objectives for each year. 14 The order also required agencies to ensure that
such plans were consistent with the goals of the agency “and of the Administration,” including “the Administration’s
regulatory principles.”15 Together, Executive Orders 12291 and 12498 went far, at least by design, to make the
7
Exec. Order No. 12291, 3 CFR 128 (1981), reprinted in 5 U.S.C. § 601 note (1988) [hereinafter
EO 12291].
8
EO 12291 § 3(a).
9
Id. § 1(b)(1)-(3).
10
Id § 3(d)(4).
11
Id. § 3(c)(2).
12
EO 12291 § 5.
13
Exec. Order No. 12498, 3 C.F.R. 323 (1985), reprinted in 5 U.S.C. § 601 note (1988) [hereinafter
EO 12498].
14
EO 12498 § (1)(a).
15
Id. § 1(b), 2(b) .
5
White House Review of Rulemaking
6
Reagan White House a central part of the process of agency rulemaking. Agencies now had to obtain OMB
clearance for their major rulemaking initiatives not once but twice during a rule’s development, and furthermore had
to provide advance notice to the White House of regulatory initiatives in the form of annual reports of their
regulatory intentions. And wherever the White House believed an agency’s regulatory impact analysis did not
justify its rule, the White House could require the agency to change if not abandon its rule. Little wonder that the
orders have often been characterized as one of the most significant developments in administrative law of the
1980s.16
Not surprisingly, then, White House review of rulemaking by the Reagan Administration, and later by the
administration of President George W. Bush, who preserved the Reagan orders, had its critics (as well as
defenders).17 They complained that OMB oversight was merely a front for deregulation—that the Reagan and later
the Bush White House was hostile to regulation generally, and that it therefore used the institution of OMB
oversight to stymie agencies’ regulatory initiatives. Critics further complained that OMB oversight was clandestine,
and thereby provided a very friendly decision-making forum for business interests that were against regulation.
Critics also argued that the OMB was at least coopted and perhaps upstaged by the deregulatory initiatives of the
Task Force on Regulatory Relief and the Council on Competitiveness, headed during the Reagan-Bush era by Vice
Presidents George Bush and Dan Quayle, respectively. And concerning the regulatory impact analyses required
under Executive Order 12291 in particular, critics argued that the methodology was little more than a guise for
deregulation given that the costs of regulation would be easy to quantify while benefits, less easily quantified, would
be unduly discounted or left out of OMB’s cost-benefit calculus entirely.
16
See, e.g., Pildes & Sunstein, Regulatory State, supra note 1, at __; Strauss & Sunstein, Role of the
President, supra note 1, at __.
17
See, e.g., E. Donald Elliott, TQM-ing OMB: Or Why Regulatory Review Under Executive Order 12291
Works Poorly and What President Clinton Should do About it, 57 L. & CONTEMP. PROBS. 167 (1994); Erik D.
Olson, The Quiet Shift of Power: Office of Management & Budget Supervision of Environmental Protection Agency
Rulemaking Under Executive Order 12291, 4 VA. J. NAT. RESOURCES L. 1 (1984); Morrison, OMB Interference,
supra note 2.
6
White House Review of Rulemaking
7
During the first year of his first term, President Bill Clinton revoked executive orders 12291 and 12498, a
move widely anticipated given their infamy among enemies of cost-benefit analysis and friends of regulation. Yet,
surprisingly to some, Clinton replaced the Reagan orders with his own, Executive Order number 12866, which
resembled the Reagan orders in many crucial ways.18 Like Executive Order 12291, Clinton’s executive order
required an assessment of the expected costs and benefits of their major rules. 19 And like Executive Order 12498,
the Clinton order required agencies to submit their regulatory plans and agenda, in addition to pending major rules to
the OMB–and more specifically to the OMB’s Office of Information and Regulatory Affairs (“OIRA”), identified
by Executive Order 12866 as OMB’s “repository of expertise concerning regulatory issues,” including
methodologies and procedures for reviewing rules, as well as “the President’s regulatory policies.” 20 Thus the
Clinton order embodied both the substantive and procedural aspects of the Reagan orders–imposing cost-benefit
criteria for major rules and designating the OMB as the central overseer and clearinghouse for agency rulemaking.
Executive Order 12866 also contemplated a central role for the Vice President in overseeing agency decisionmaking, much as previous vice presidents had in the Reagan and Bush Administrations, though now within the
framework formally established by executive order. 21
18
Exec. Order No. 12866, 3 CFR 638 (1993) reprinted in 5 U.S.C. §601 note (Supp. 1993) [hereinafter
EO 12866].
19
EO 12866 §1, §6.
20
Id. §2(b). See also §6(2) (outlining OIRA’s central role in implementing the Order).
21
Id. §2(c), §7.
7
White House Review of Rulemaking
8
With respect to the scope of Clinton’s reincarnation of the Reagan orders, Executive Order 12866 applied
to all “significant regulatory action[s],” defined by the Order as any regulatory action “likely to result in a rule” that:
(1) would have an annual effect on the economy of one-hundred million dollars or more, or adversely affect the
economy or a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or
state, local, or tribal governments or communities; (2) create a serious inconsistency or impede action taken by
another agency; (3) materially alter the budgetary impact of entitlements, grants, user fees, or loan programs; or (4)
raise novel legal or policy issues arising out of legal mandates, the President’s priorities, or the principles of
Executive Order 12866.22 Like Executive Order 12291, then, the Clinton order distinguished between rules that met
the criteria for significance because they would have an annual impact on the economy of one-hundred million
dollars or more, on the one hand, and rules that met the criteria for significance for any other reason, on the other.
For the first category of significance–economically significant rules–Executive Order 12866 required agencies to
provide a detailed assessment, including all “underlying analys[e]s,” of the expected benefits and costs of their
action, as well as an account of the costs and benefits of all reasonably feasible alternatives to the proposed action
and why those alternatives were not pursued.23 For all other categories of significance–non-economically significant
rules–however, Executive Order 12866 merely required agencies to provide a summary of the potential costs and
benefits of their rules, as well as a statement explaining how a given rule was consistent with a statutory mandate
and with the President’s priorities while avoiding undue interference with state, local and tribal governments.24 The
Order did not require agencies to provide the underlying analyses upon which their calculations of expected benefits
and costs were derived. In other words, whereas Reagan’s Executive Order 12291 required regulatory impact
analyses for all categories of “major” rules as defined in that Order, Clinton’s Executive Order 12866 focused on the
one-hundred million dollar threshold by requiring extensive cost-benefit analysis only for economically significant
rules and only summary review for all other species of “significant” rules as defined in it. 25
While important similarities outnumbered important differences, Executive Order 12866 did depart from
the Reagan orders in several noteworthy respects. For example, intending to “assure greater openness and
accountability in the regulatory review process,” the Clinton order limited receipt of oral communications “initiated
by persons not employed by the executive branch of the Federal Government” regarding a rule under review to the
Administrator of OIRA.26 The order furthermore required OIRA to disclose publicly information about
communications between OIRA personnel and any person who is not employed by the executive branch, and to
maintain a publicly available communications log containing the status of all regulatory actions, a notation of all
written communications between OIRA personnel and outside parties, and the dates and names of individuals
participating in all substantive oral communications, including meetings and telephone conversations, between
OIRA personnel and outside parties.27 Executive Order 12866 also made clear that enhancing public health and
safety, protecting the environment, and reducing discrimination were to be counted on the benefit side of the ledger
when calculating a rule’s costs and benefits.28 In short, Executive Order 12866 sought to preserve the basic
methodology and institutional structure of the Regan orders, but to avoid the criticisms they met, particularly with
respect to openness and the inclusion of intangible benefits in the cost-benefit calculus. Most fundamentally,
however, the Clinton order embraced both the general principles of cost-benefit analysis, instructing agencies to
select regulatory approaches that “maximize net benefits,”29 just as Executive Order 12291 did, and the centrality of
the White House itself to the rule-planning and rulemaking process, just as Executive Order 12498 did.
22
Id. §3(f)(1)-(4).
EO 12866 §6(a)(3)(C).
24
Id. §6(a)(3)(B).
25
Id. §6(b)(4). See also EO 12866, Statement of Purpose.
26
Id. §6(b)(4)(A).
27
Id. §6(b)(4)(B)(iii), §6(b)(4)(C).
28
EO 12866 §6(a)(3)(C)(i).
29
Id. §1(a).
23
8
White House Review of Rulemaking
9
Immediately following the issuance of Executive Order 12866, the Director of the OMB sent a
memorandum to all “heads of executive departments and agencies, and independent regulatory agencies,” stating
that OIRA would have “primary responsibility” under the order for a number of “specific regulatory review and
planning functions.”30 The Director’s memorandum also explained that the Administrator of OIRA had prepared a
detailed memorandum, dated the same day and attached to his own, providing specific guidance on how Executive
Order 12866 should be implemented. The OMB Director urged agency heads to give the Administrator’s
memorandum immediate attention. Among other things, the Administrator’s implementing memorandum made
clear that one of the purposes of Executive Order 12866 was “greater selectivity in the regulations reviewed by
OIRA.”31 Accordingly, the Administrator directed agencies to focus on the distinction between economically
“significant” and otherwise “significant” rules, and to provide OIRA with more detailed information concerning the
former. The Administrator also explained that OIRA would place in its public reading room a list of all meetings
and telephone conversations between OIRA and the public or Congress to discuss the substance of a rule under
OIRA review. In addition, the Administrator explained that OIRA would ask parties outside of the executive branch
of government to have communicated their concerns to the rulemaking agency before meeting with OIRA, and that
OIRA would invite “policy-level officials” from the issuing agency to all such meetings. 32
Focusing on such details of White House oversight leads directly to questions about how such
developments fit into a more general account of regulatory government. Is such “activist” White House review best
understood as a legitimate and even desirable exercise of the President’s power to carry out the execution of the laws
in the manner most consistent with his own regulatory priorities? Or does the institution raise concerns about
excessive concentration of regulatory power? On the former account, activist White House oversight may be a
useful vehicle for the President to monitor his subordinates, thereby reducing principal-agent slack between the
White House and the many agencies. On the latter account, in contrast, such review may be an unfortunately
effective tool for the White House to provide favorable regulatory treatment to presidential constituencies thereby
undermining not only agency autonomy but possibly congressional intent as well. The following section briefly
considers alternative accounts of more activist White House control over agency rulemaking.
B. Activist White House Oversight and the Strong-President Debate
As mentioned, what increased attention to agency rulemaking by recent presidential administrations implies
about the structure of administrative government, and whether those implications are welcome or unwelcome in the
interest of promoting desirable regulatory outcomes, is a matter of controversy. Proponents of expanded White
House control defend greater control over agency rulemaking on several grounds. First, such control promotes
consistency across the executive branch.33 Because the President is uniquely situated to review pending rules of all
agencies, the White House is able to identify, and avoid, rules from one agency that either work at cross-purposes to
or are redundant with rules of another agency. Here White House review serves a good-government, coordination
purpose.
30
Executive Office of the President, Office of Management and Budget, Leon E. Paretta, Director,
Memorandum for Heads of Executive Departments and Agencies, and Independent Regulatory Agencies, Guidance
for Implementing EO 12866 (Oct. 12, 1993).
31
Executive Office of the President, Office of Management and Budget, Sally Katzen, Administrator,
Office of Information and Regulatory Affairs, Memorandum for Heads of Executive Departments and Agencies, and
Independent Regulatory Agencies, Guidance for Implementing EO 12866 (Oct. 12, 1993) §6.
32
Id. §7.
33
See, e.g., DeMuth & Ginsberg, White House, supra note 2, at 1081-82.
9
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The argument continues: While the OMB is not an expert in any substantive regulatory field, it has become
an expert in the field of regulation itself.34 According to this view, OIRA has developed a special institutional
capacity for distinguishing between regulation likely to advance sound regulatory policy, on the one hand, and
regulation that however well intentioned may lead to unintended and undesirable consequences. In addition to mere
coordination, in other words, White House review provides a “quality check” on pending rules. On this view,
OIRA’s small size and technocratic orientation are important virtues.35 Centralized expertise offers a needed
antidote to the topsy-turvy world of congressional and bureaucratic regulatory politics.
Defenders of greater White House control further argue that the President is uniquely situated also to
advance national interests, as opposed to the factional interests that are so often promoted by Congress and that
consequently find expression in agency decisions.36 According to this argument, presidential control over agencies
is desirable, even necessary, because it promotes evenhandedness in regulatory decision-making. Because the
President’s constituency is a national one, the President can best aggregate and balance competing interests in the
course of developing sound regulatory policy. Here greater presidential control is desirable not merely because it
avoids inconsistencies, redundancies, and unintended consequences in agency rulemaking, but more importantly
because it helps to ensure that all relevant interests are identified and counted. And according to one variation of
this view, OIRA’s specialized institutional focus might also promote reasoned deliberation about regulatory
alternatives more effectively than other, more cumbersome, regulatory institutions. 37 Either way, presidential
oversight tends to promote the general welfare.
Another version of the argument in favor of a strong president, the unitary executive thesis, insists that
presidential control over agencies is necessary not just to promote a national orientation in agency rulemaking, but
also to preserve the political and constitutional legitimacy of the regulatory state. 38 In the absence of presidential
control, there are insufficient checks on agency decisionmakers. Agencies might advance their own visions of good
regulatory policy, but, electorally unaccountable, those visions lack political legitimacy. No less importantly,
because the Constitution contemplates that the executive power of the United States resides in the President,
agencies not closely overseen by and answerable to the President lack constitutional moorings.39 Activist White
House oversight thus is not only desirable but necessary to preserve the constitutional legitimacy of the regulatory
state.
See, e.g., DeMuth & Ginsberg, White House, supra note 2, at 1084 (“The OMB staff is more expert than
the agencies in one field–the field of regulation itself.”).
35
See, e.g., id. at 1083-84.
36
While arguing against “micromanagement” by the OMB of every particular agency decision, Mark
Seidenfeld adopts a middle position, advocating instead a “big picture” approach to White House oversight
according to which the White House should exert a strong influence on administrative policy by advancing broad
regulatory goals informed by the President’s overarching vision of public-interested regulatory policy.
See Seidenfeld, Big Picture, supra note 5 at 1, 25-30. See also DeMuth & Ginsberg, White House, supra note 2, at
1079, 1081 (arguing greater Presidential oversight promotes national interests the President is especially positioned
to promote).
37
See, e.g., DeMuth & Ginsberg, White House, supra note 2, at 1079-81.
38
See Calabresi & Prakash, supra note 5, at ___ .
39
Id. at ___.
34
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But critics see trouble. For one, they see greater presidential control over agencies as unrealistic. While
the White House may exert control over particular agency decisions from time to time, scarcity of presidential
resources limits the extent to which the President can effectively monitor much less influence most agency
decisions.40 Inevitably, substantial agency autonomy is a fact of regulatory life. Presidential control, therefore, will
tend to be ad hoc and politically motivated, not based entirely on a deep understanding of the relevant regulatory
issues.
And to the extent White House control is possible, the argument continues, it is undesirable. This is true
because greater White House centralization upsets a balance between law and politics already struck by the
legislature and reinforced by the courts.41 By this account, activist presidential oversight is meddlesome, for
Congress delegates regulatory power to agencies, not to the President, and while the President is charged with
executing the law, that constitutional charge does not justify presidential reshaping of agencies’ regulatory
initiatives. With respect to agency rulemaking in particular, critics of greater presidential control have argued that
the President should not “behave as if rulemakings were his rulemakings.” 42 In addition, where the President and an
agency disagree in a particular case, the President should not simply rely on his removal power to insist that the
agency yield. Instead, the agency, Congress’s delegatee, should carry the day. 43 Where agencies go astray by
failing to follow congressional intent, courts or if necessary Congress itself can correct for agency waywardness.
Where, on the other hand, Congress has left room for agency discretion, that discretion should not be replaced by
presidential prerogative.
The strongest form of this argument goes farther, alleging that greater White House control not only
improperly reallocates regulatory power away from Congress and agencies, but more ominously provides the White
House with a means to deliver regulatory benefits to politically important constituencies at the expense of the
general welfare.44 According to this view, the President is accountable, yes, but to influential interests with much at
stake rather than to national interests.45 Thus interest groups that did not get everything they wanted in the
legislative and administrative arenas find in the White House review process yet another forum to advance their
goals. By appealing to the White House to scrutinize what are for them undesirable regulatory decisions, powerful
interest groups might see their regulatory preferences realized after all, upsetting whatever compromises were
reached in the legislative and administrative processes.
What is worse, because the White House review process is opaque, the White House is able to provide
regulatory favoritism to its important constituencies without attracting much notice, which provides opportunity for
the White House to benefit those constituencies even where doing so is undesirable from the perspective of sound
public policy.46 In other words, the absence of transparency associated with White House control means the
President can reap political benefits without incurring the political costs that would come with well publicized
regulatory favoritism. On this view, the President not only has no special claim to represent national interests but
also is then motivated and well positioned to advance his own.
C. The Strong President Debate and Theories of Regulatory Politics
See, e.g., Seidenfeld, Big Picture Approach, supra note 4, at 14 (“OMB does not have the personnel or
resources to develop the knowledge or the data necessary to analyze independently most agency proposed
rules. . . . In short, the same shortcomings that result from congressional committees’ needs for information also
plague OMB review and limit the efficacy of such review.”).
41
See, e.g., Thomas O. Sargentich, The Administrative Process in Crisis – The Example of Presidential
Oversight of Agency Rulemaking, 6 ADMIN. L. J. AM. U. 639 (1993); Strauss, Presidential Rulemaking, supra note 4,
at 967-68.
42
Id. at 984.
43
Id. at 983-84.
44
See, e.g., Morrison, OMB Interference, supra note 2, at ___.
45
Id. at ___.
46
Id. at ___.
40
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As all of this implies, alternative accounts of the strong president are ultimately linked to larger competing
visions of regulatory politics, and can be fully understood only with reference to those broader visions. That is,
those who see greater presidential control as benign tend to see the outcome of unsupervised agency rulemaking as
itself problematic. For example, agency rulemaking in the absence of active White House oversight is undesirable
because agencies are too easily captured by the regulated interests they represent. According to one familiar
formulation, agencies are ever worried about their budgetary health as well as the scope of their regulatory
jurisdiction, and for those reasons must be overly solicitous of the preferences of members of Congress, who after
all control agency budgets and define the boundaries of agency authority.47 For their part, members of Congress
must satisfy the regulatory preferences of their powerful constituencies, who provided electoral resources necessary
for a member to remain in office. Thus are legislators motivated to encourage agencies to provide favorable
regulatory treatment to important constituencies, or even to insist they do so.
But the story need not be quite so jaundiced to support the same worry about presidentially unsupervised
agency decision-making. According to one variation of the agency capture thesis, for example, agencies may well
be able to resist the most direct and political forms of interest-group capture, but may nevertheless be coopted by
interest groups because they depend on those groups for so much of the information on which their regulatory
decisions rest.48 This “informational capture” thesis assumes that agencies may seek to provide general-interest
regulation, and even that Congress has too few devices to monitor agencies and discipline them for failing to favor
unworthy congressional constituencies. But because agencies rely so heavily on information about the
consequences of regulatory alternatives from the very interests most affected by regulation, who therefore know the
most about those consequences, agencies over time become unwittingly biased in favor of those they regulate. To
the extent there is a “revolving door” for employment between agencies and regulated interests, 49 the informational
bias becomes worse.
While the President too is subject to his own set of interest-group pressures, the President’s office and his
institutional resources allow him to transcend the forms of interest-group capture to which agencies are so
susceptible.50 Presidential oversight is advantageous, then, because the President does not depend on Congress as
agencies do. Instead, the President is largely above the interest-group fray. And certainly the President is not
commonly susceptible to the regional faction that often motivates legislators and, therefore, agencies.
47
See Steven P. Croley, Public Interested Regulation, 28 FLA. ST. U. L. REV. 7, 11-12 (2000) (summarizing
familiar view that agencies respond to Congress to preserve their statutory authority and budget).
48
See, e.g., Clayton P. Gillette & James E. Krier, Risks, Courts, and Agencies, 138 U. PA. L. REV. 1027
(1990). For a classic statement, see, e.g., Marver Bernstein, REGULATING BUSINESS THROUGH INDEPENDENT
COMMISSION (1969).
49
See generally William T. Gormley, A Test of the Revolving Door Hypothesis at the FCC, 23 AM. J. POL.
SCI. 665, 676 (1979).
50
See, e.g., Lessig & Sunstein, The President, supra Note 1, at 93-106; Calabresi & Prakash, The
President’s Power, supra note 5.
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True enough, a given President may be especially friendly to certain kinds of interests–business interests,
for example, or environmentalists–for ideological or even political reasons, but presidential capture is much less
feasible relative to agency capture for even the most powerful interest groups. The President therefore has the
luxury to advance the interests of ordinary citizens whose interests, because their individual stakes are so small, 51 are
not well represented by legislators or agencies. Better still, the President can use the unequaled visibility of his
office to take credit before the citizenry for his vindication of their general interests. As a result, the President can
compensate for common pathologies of regulatory decision-making resulting from agencies who otherwise take too
many cues from legislators and legislators’ interest-group supporters.
Critics of expanded presidential oversight of agency rulemaking imply a more favorable view of agency
and possibly even of legislative decision-making, however. Their view finds support, for example, from the
traditional picture of agencies as experts whose primary function is not to deliver favorable regulation to politically
powerful constituencies but rather to exercise their expertise is a rational way that promotes the general welfare. 52
According to this picture, Congress delegates rulemaking authority to agencies precisely because agencies have the
institutional capacity to develop well informed responses to regulatory problems. Congress strikes whatever
political balance it deems generally appropriate for the regulatory issue at hand, expressed in an agency’s statutory
mandate, and agencies take it from there, developing the specific information necessary to approach regulatory
problems in a rational way.53
And where agency decisions are not primarily the product of expert decision-making based on
consideration of all relevant information, Congress and especially the courts are there to correct the problem. As
agency legitimacy ultimately borrows from legislative legitimacy, given that agencies act pursuant to legislatively
granted authority, it is the legislature’s role to oversee agencies and ensure that agency decision-making reflects
congressional will. Judicial review helps, for agencies acting contrary to the purposes of their authorizing
legislation, beyond the scope of their delegated authority, or motivated by considerations not reflected in an
agency’s decision-making record are likely to have their decisions invalidated by courts.54
It almost goes without say that critics of strong presidential oversight need not and do not idealize agencies
or Congress, or for that matter courts. Nor do critics imply that agency decision-making is entirely independent of
undesirable political influences and considerations. But the point remains that if White House oversight is
undesirable because it alters the equilibrium otherwise reached by agencies–exercising powers delegated by
Congress and in anticipation of challenges to their actions in court–then it must be the case that that equilibrium is
relatively speaking desirable, preferable to its presidential alteration.
Presidential alteration is undesirable, on this view, precisely because it threatens agency autonomy and
therefore agencies’ ability to apply their expertise in a disinterested way. White House review, in other words, shifts
regulatory decision-making power away from agencies and to the President, notwithstanding that, between the two,
the President has far fewer institutional resources with which to develop expertise about complicated regulatory
problems. Granted, the President has the legal-constitutional power to direct agencies to exercise the discretion
given to them by Congress, but the President will seldom know better than the agencies how their discretion should
be used. Consequently, regulatory decisions that reflect strong presidential oversight will tend to be based more on
political and less on technocratic considerations.
Worse, strong presidential oversight also shifts power away from Congress and to the President, for by
most acts of delegation Congress intends for agencies to apply their expertise in the course of exercising their
discretion. Where instead Congress wants the President to have influence over particular decisions agencies make,
51
See generally George J. Stigler, The Theory of Economic Regulation, 2 BELL J. ECON. & MGMT. SCI. 3,
10-11 (197); George J. Stigler, Can Regulatory Agencies Protect the Consumer, in THE CITIZEN AND THE STATE:
ESSAYS ON REGULATION 178, 186-87 (1975).
52
See, e.g., Paul J. Quirk, INDUSTRY INFLUENCE IN FEDERAL REGULATORY AGENCIES 1981 (collecting
sources).
53
This image traces to Woodrow Wilson. See Woodrow Wilson, The Study of Administration, 2 POL. SCI.
Q. 197 (1887).
54
See 5 U.S.C. § 706(2) (setting forth scope of judicial review of agency action). See generally American
Bar Association, Section of Administrative Law and Regulatory Practice, A Blackletter Statement of Federal
Administrative Law 54 ADMIN. L. REV.17, 36-45 (2002) (explaining standards of review of agency action).
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as opposed to agenda-setting influence in ordering their statutory priorities or so on, Congress can so indicate by
delegating power to a White House agency specifically. But in the normal course, Congress delegates regulatory
power to agencies so that agencies, not the President, can exercise that power.
This is not to say that the choice between captured agencies and a beneficent President, on the one hand,
and publically interested agencies and a corrupted President, on the other hand, is a necessary choice. There is
middle ground: Agencies may sometimes but not invariably be captured, and the President may sometimes but not
always be overly solicitous of his own political constituencies and too inattentive to general interests. But now the
argument for or against activist White House oversight depends on how that oversight operates, that is, whether in
practice White House oversight tends more often to correct for captured agencies, or to provide a forum for interestgroup rent seeking, or something else.
Finally, one might view agency decision-making as pathological, but view presidential oversight as
similarly pathological. Strong presidential oversight once again may or may not be desirable, depending on whether
it is worse than agency decision-making or instead, although similarly subject to interest-group politics, slightly less
so relative to agency decision-making. Or, one might view agency decision-making as generally benign, in that for
procedural reasons it promotes some minimal level of evenhandedness, 55 but also view presidential oversight as a
welcome development because it provides the President with opportunities to reinforce beneficial agency action and
even to provide agencies with enough political support better to withstand undesirable congressional influence,
interest-group pressures, and capture.56 Now strong White House oversight may be desirable, but only provided
that it works to strengthen rather than to undermine agencies’ political position vis-a-vis Congress and congressional
constituencies.
D. Pro and Con Activist White House Oversight: Competing Predictions
In short, whether greater White House oversight ameliorates or exacerbates underlying defects in
regulatory decision-making processes thus depends on exactly what that oversight actually looks like, as well of
course as on just what regulatory decision-making in the absence of presidential oversight looks like. Focusing on
the former, defenders and critics of expanded White House control imply different predictions about the form that
White House oversight takes. For example, proponents of a strong regulatory president would expect that the White
House in fact has the institutional capacity to undertake meaningful, substantive review of pending agency rules.
This in turn means that the White House should possess the human resources to conduct meaningful, substantive
review of rules, and furthermore that White House reviewers possess the requisite understanding of the particular
regulatory issues implicated by pending rules, or can gather such an understanding from the relevant rulemaking
agency.
Second, defenders of activist White House oversight would predict that changes to rules required as a result
of White House oversight should be based on the merits of the rule, according to some clearly established criteria,
rather than on the White House’s own political calculus. That is, whenever the White House requires a change in a
rule, it does so with reference to ascertainable criteria, rather than to inscrutable considerations. Furthermore,
whenever the White House requires a change in a rule, it should not do so unilaterally, but rather should provide the
rulemaking agency with an opportunity to show how the proposed rule is appropriate given the agency’s regulatory
objectives and as evaluated according to established criteria.
Finally, to the extent the White House is led to scrutinize rules under review due to objections from private
parties, it should do so in an evenhanded way, by entertaining objections from a wide range of interests and points of
view. This expectation too has two components. One predicts that interest-group access to and influence with the
White House is not imbalanced such that certain types of interests consistently see their objections to pending rules
addressed while objections by other types of interests are ignored. Nor should White House review simply recreate
the economic or regional factionalism that is often said to characterize regulatory decision-making at the legislative
and administrative levels.
55
See generally Croley, Public Interested Regulation, supra note 48.
See, e.g., sources cited supra note 51. See also Stephen Breyer, BREAKING THE VICIOUS CIRCLE 59-79
(1993) (calling for centralized Executive review of regulation).
56
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Skeptics of expanded White House control, on the other hand, would make an opposing set of predictions.
The critical view would find support, for example, from a finding that the White House lacks the institutional
capacity to undertake meaningful substantive review of pending agency rules. Specifically, on this view one would
expect to find that the White House does not possess the human resources to conduct meaningful substantive review
of rules, and that those engaged in rulemaking review lack the requisite understanding of the particular regulatory
issues implicated by pending rules, and cannot reliably gather such understanding from the relevant rulemaking
agency or elsewhere.
In addition–in part as a consequence–the critical view predicts that changes to rules required as a result of
White House review are not based on the merits of the rule, according to established criteria, but rather than on the
White House’s own political calculus. That is, when the White House requires a change in a rule, it does so not with
reference to clearly established evaluative criteria, but rather due to its own inscrutable–that is, political and
nontransparent–considerations. A critic would also expect that when the White House requires a change in a rule, it
usually does so unilaterally, without providing the rulemaking agency with an opportunity to show how the rule as it
stands is appropriate given the agency’s regulatory objectives. Because political considerations are primary, the
agency’s regulatory mission is somewhat besides the point.
The critical view would furthermore predict that to the extent the White House is led to scrutinize rules
under review due to outside objections to agencies’ rules (rather than solely on its own initiative), it does so in a
lopsided way by entertaining objections from some types of interests and points of view, and not others. In other
words, interest-group access to and influence with the White House is not evenhanded. Rather, certain types of
interests should consistently see their objections to pending rules addressed, while objections by other types of
interests are ignored. White House review thus provides another forum for the economic and regional factionalism
that may often characterizes regulatory decision-making at the legislative and administrative levels. In fact, a critic
would predict, a lack of transparency at the White House level may well exacerbate the undesirable consequences of
interest-group politics at the legislative and administrative spheres.
On the other hand, because the Clinton order reflected efforts to ensure the openness and evenhandedness
that some argued White House review under the Reagan orders lacked, a defender of executive control might argue
to the contrary that White House oversight as carried out under Executive Order 12866 is especially easy to justify.
Indeed, some contributors to the debate over the strong president have argued or hoped that, given the differences
between Executive Order 12866 and the Reagan orders, presidential oversight under the Clinton Administration
might be especially likely to lead to sound regulatory decision-making.57 Conversely, a critic of greater executive
control might argue that if White House oversight as carried out under Executive Order 12866 is still problematic,
even though such oversight as implemented during the Clinton era may constitute a kind of “best case” for White
House centralization, then a strong regulatory president is certainly undesirable.
Thus the issue is joined. Accordingly, Part II below investigates White House control over agency
rulemaking from 1981 to 2000 by concentrating especially on the last seven years of that period. It does so in part
simply because Executive Order 12866 increased transparency of White House oversight to some degree (whether
enough to matter much is yet to be seen), thereby making systematic study more feasible. But the following analysis
focuses on the Clinton White House also on the assumption that White House oversight from 1993 to 2000 provides
a favorable case for greater presidential influence: Defenders of a strong regulatory president should be able to able
to identify aspects of White House oversight during the Clinton era that bolster their position, otherwise one might
seriously question whether greater presidential control is desirable after all. By the same token, critics should be
able to point to features of White House oversight that confirm their fears, otherwise one might seriously question
whether those fears are overstated and require qualification.
II. OIRA REVIEW OF AGENCY RULES: AN EMPIRICAL ANALYSIS
A. The Institutional Framework
57
See, e.g., Pildes & Sunstein, Regulatory State, supra note 1, at 19-24; Seidenfeld, Big Picture Approach,
supra note 4, at 44-45; Shapiro, Political Oversight, supra note 4, at 36-37.
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Given that White House oversight of agency rulemaking manifests itself institutionally in the form of
OIRA review of pending rules, some background information about that office begins to shed light on the White
House’s expanded role in the rulemaking process. Originally created by the Paperwork Reduction Act of 1980,
OIRA came to be the organizational locus for the White House’s participation in regulatory decision-making at the
“micro” level.58 OIRA is one of three divisions of the management side of OMB, and is itself divided into three
offices, one of which, Regulatory Review and Paperwork, conducts rulemaking review. Although OIRA is not
specifically mentioned in the Reagan orders, it performed regulatory review during the 1980s as well, although back
then it to some degree competed with vice presidential task forces on regulation, whereas Executive Order 12866
and its implementing directives officially delegated to OIRA responsibility for all regulatory review, though under
the supervision of the Vice President and President.
OIRA’s Regulatory Review and Paperwork office also is divided into three branches, “Natural Resources,”
“Commerce and Lands,” and “Human Resources.” These branches allocate responsibility for rulemaking review by
subject matter of submitted rules. For example, the Natural Resources Branch reviews Environmental Protection
Agency (“EPA”) rules, while the Commerce and Lands Branch reviews rules from the Department of Transportation
(“DOT”), and the Human Resources Branch reviews rules from the Occupational Safety and Health Administration
(“OSHA”) and from the Department of Housing and Urban Development (“HUD”). Each branch is headed by a
“Branch Chief,” who together oversee some twenty-five to thirty “desk officers,” who perform the line-level
rulemaking review. The Branch Chiefs answer to OIRA’s Deputy Administrator, who in turn answers to the
Administrator of OIRA, the agency’s only political appointee, and whose appointment requires Senate confirmation.
The Administrator answers to the Director of OMB, as well as to the Vice President and President.
See generally Seidenfeld, Big Picture Approach, supra note 4, (outlining threat of “micromanagement”
of agency rulemakings by OMB and proposing “big picture management” as a desirable alternative). See
also Shapiro, Political Oversight, supra note 4, at 24, 38 (explaining White House “micromanagement”).
58
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Of the three current Branch Chiefs (as of late 2001), two are economists and one is a lawyer. OIRA’s two
and a half dozen desk officers, most of whom have advanced degrees, are trained in public policy, policy analysis,
economics, or statistics. Following a critical report in the early 1980s by OMB Watch, a public-interest watchdog
group, according to which desk officers were insufficiently trained and experienced to have an adequate
understanding of the rules they reviewed, OIRA became more particular in its hiring practices and currently requires
new desk officers to have advanced training in quantitative methods. While much of the OIRA review process
focuses on cost-benefit analysis, however, as the professional training of OIRA’s staff suggests, it should be
emphasized that Executive Order 12866, like the Reagan orders before it, also contemplates that rules are to be
reviewed for their compatibility with the President’s regulatory principles and priorities more generally. 59 On that
subject, Executive Order 12866 provides that disagreements between OIRA staff and a rulemaking agency are to be
resolved wherever possible by OIRA’s Administrator, and in the event of an impasse–when for example an agency
head is unyielding to OIRA–by the Vice President or President directly.60 The order furthermore states that direct
presidential and vice presidential involvement to resolve disputes between OIRA and an agency may be instigated
only by the Director of OMB or by the head of an agency. 61
In the typical case, OIRA desk officers receive rule submissions from agencies and initiate the review
process. Agencies submit to the OIRA an “Executive Order 12866 Submission” form accompanying their rules.
The submission form, standardized by OMB, contains basic information about a submitted rule, including its stage
of development and whether it is economically significant as defined by the Order. Agencies must also certify that a
submitted rule complies with the substance of Executive Order 12866 with signatures of both the agency’s
designated regulatory contact person and the agency’s relevant program official. The 12866 submission form must
further contain contact information for a person at the agency “who can best answer questions regarding the content”
of the submitted rule.62 Through the course of the review process, desk officers often communicate with a rule’s
agency, focusing especially on the technical aspects of a given rule. And under the Clinton order, each agency has
designated a “Regulatory Policy Officer,” who serves as a liaison between OIRA staff and the head of an agency
concerning that agency’s submitted rules, further promoting communication between agencies and OIRA. 63 Where
questions arise concerning a rule’s compatibility with the President’s political objectives, on the other hand, the
Administrator of OIRA assumes a lead role in the review process. According to the data presented below, this entire
review process took on average 25 days for rules reviewed under the Reagan orders, and 44 days for rules reviewed
under the Clinton order.64
With these institutional facts in mind, the following sections present an overview of rulemaking review by
the White House over the past twenty years.
B. Sources of Data
59
EO 12866, supra note 18, at §1(b), §2(a), §4(a), §4(c)(1)(A), §4(c)(5).
Id. at §7.
61
Id.
62
See Executive Order 12866 Submission Form, OMB #83-R (on file with author).
63
EO 12866, supra note 18, at §6(a)(2).
64
See infra Appendix.
60
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Several sources of previously untapped information are used here to investigate what White House review
of agency rulemaking actually looks like in practice. First, the Regulatory Information Services Center (“RISC”), an
office within the General Services Administration (“GSA”), maintains on behalf of OMB a comprehensive computer
log summarizing every rule reviewed by OIRA. The logged information provided for each rule is sparse, but
contains several crucial pieces of information nevertheless, including: the name of the rulemaking agency, a very
brief description of the subject matter of the rule, an OMB and RISC identifying number, an indication of whether
the rule submitted for review was a proposed or final rule, whether the rule was economically significant or not, the
date OIRA received the rule and the date it completed its review, and finally an indication whether the reviewed rule
was changed or instead approved by OIRA without change. The OMB’s own website contains a small, rolling piece
of this log, covering those rules for which OIRA completed its review from the present going backwards in time for
thirty days. That thirty-day window is not large enough to provide very illuminating information about OIRA
review, but hard copies of the entire RISC log–which can be organized alphabetically by agency and roughly
chronologically according to the dates a given agency’s rules were first submitted for review–are available from
GSA for periods extending over several years.
Second, using its comprehensive log, the RISC can also generate summary tables listing the total number of
rules submitted for review by each agency for a given year (or any other time period), the numbers of those rules
that were economically significant, and the number of agency’s rules that were changed and accepted without
change. These summary tables supply no information about any particular rule, but nevertheless provide an overall
picture of OIRA rulemaking review. One can also combine such tables to generate aggregate information about the
number and type of rules (economically significant or not) submitted by any agency for any period of time, as well
as aggregate information about the proportion of an agency’s rules that were changed and not changed during the
review process.
In addition to information available through the RISC, OIRA itself maintains a publically available
“meetings log” documenting every meeting between OIRA staff and any outside (that is, nongovernmental) person
concerning any rule under submission (or expected to be under submission) at OIRA. As explained above, this
meetings log is required by Executive Order 12866, reflecting an attempt to avoid one of the most common
criticisms of White House oversight during the Reagan administration that White House review provided an
opportunity for powerful interest groups to enlist the White House to change rules outside of public scrutiny. The
meetings log thus purportedly lists every meeting between OIRA staff and outside parties, identifying each meeting
by date and a very short (and sometimes cryptic) reference to the rule under discussion. The log also lists for each
meeting the names and organizational affiliations of every party in attendance at a given meeting. Finally, OIRA
also keeps on file any written materials supplied by parties meeting with OIRA staff.65 These written materials
range in length and specificity from short statements identifying the party who requested a meeting to detailed
criticisms of the rule that is the subject of a meeting.
The analysis here employs all of these sources of available data about OIRA rulemaking review: The RISC
tables allow for comparisons of rulemaking review both across time and across agencies. One can examine, for
example, whether the absolute number or percentage of reviewed rules that were changed increases or decreases
from the Reagan-Bush era to the Clinton era. One can also examine, for example, which agencies’ rules are
especially likely to be changed as a result of the review process, over any given period of time. The comprehensive
RISC log can be used, in tandem with the OIRA meetings log, to trace the fate of individual rules. Because
meetings in the OIRA meetings log are dated, it is possible (in most cases) to find the particular rule subject to an
OIRA meeting in the RISC rule log too, and thus to ascertain the rule’s stage and more importantly, whether it was
changed during the review process. The OIRA meetings log itself is an important source of information as well.
Because it lists the names and organization affiliations of persons in attendance at a meeting, it is possible to code
the types of interests represented at a meeting and, more generally, to learn something about what kinds of interests
are typically representing at an OIRA meeting, as well as about what kinds of rules are most commonly the subject
of OIRA meetings.
In addition, again using the RISC log together with the OIRA meetings log, it is then possible to examine
whether rules the subject of meetings with certain types of interests are more or less likely to be changed during the
65
This requirement followed §6(b)(4)(C)(ii) of Executive Order 12866. From 1993 through 1999, OIRA
maintained accessible files containing written materials supplied by outside parties seeking a meeting concerning a
rule under review. Inexplicably, OIRA seems to have discontinued that practice in mid-1999.
18
White House Review of Rulemaking
19
review process relative to rules that were the subject of meetings with other types of interests. For instance, one can
determine whether environmental rules that were the subject of meetings with business firms and trade associations
were more or less likely to be changed relative to environmental rules that were the subject of meetings with
environmental groups. One can also examine whether economically significant rules seem to be changed more often
relative to non-economically significant rules, whether proposed rules are changed more relative to final rules, and
whether certain agencies’ rules are more often changed rather to other agencies’ rules. Finally, the written materials
maintained by OIRA allows for examination whether rules the subject of meetings for which attending parties
submitted written information were more often changed relative to rules for which no written information was
submitted.
In short, the quantitative data examined here both provide several sources of interesting descriptive
information about rulemaking review by the White House, as well as make possible statistical testing for
associations between such things as the type of rule reviewed and likelihood that a rule will be changed, the type of
interests attending an OIRA meeting and the likelihood that a rule will be changed, the agency developing the rule
and the likelihood that a rule will be changed, and the agency developing a rule and the likelihood that there will be
an OIRA meeting.
Because data never quite speak for themselves, however, the analysis here is informed by qualitative as
well as the quantitative sources just described. Specifically, the interpretation of some of the findings below is
informed by conversations with OIRA personnel, including the Branch Chiefs of each of the divisions of OIRA, an
Acting Administrator, and especially the Administrator of OIRA during most of the Clinton era, Sally Katzen.
These sources include individuals most knowledgeable about OIRA rulemaking review generally and OIRA
contacts with persons outside of government in particular. While these conversations are all treated as confidential
(some were, others were not), and thus none of their contents revealed, they provided valuable background
information about how OIRA is organized and how the rulemaking review process works, and they furthermore
influence the interpretation of some of the findings below. The following sections present the findings the data
yield.
C. General Trends: 1981-2000
For the twenty-year period from 1981 to 2000, the White House reviewed a grand total of 34,386 rules
(proposed and final combined). Of these, 1,693 were economically major or economically significant, and 32,693
were otherwise major or significant. Among economically major/significant rules, as defined by the Reagan and
Clinton orders rules from the EPA, The Department of Health and Human Services (“HHS”), the DOT, and the
Department of Agriculture (“USDA”) made up the lion’s share, with a combined total of 1,155, or in other words
sixty-eight percent of all economically major/significant rules. The next tier, by quantity of rules submitted, was
occupied by the Department of Commerce (“DOC”), The Interior Department (“DOI”), and the Department of
Labor (“DOL”). As a general rule, agencies submitting the most economically major/significant rules also
submitted the most otherwise significant rules, with a few exceptions, such as the Department of Veterans Affairs
(“VA”), which submitted over one-thousand otherwise significant rules and only a few economically significant
rules during this twenty-year period.
The distribution of rules reviewed was not constant during the period, however. Rather, the White House
reviewed a declining number of rules, with a sharp decline immediately following the issuance of Executive Order
12866, due in part to that order’s focus on economically significant rules, as discussed below. Figure 1 shows the
number of rules reviewed by OIRA for the past two decades, from the beginning of the first Reagan Administration
to the end of the second Clinton Administration:
19
White House Review of Rulemaking
20
Figure 1: Number of Rules Reviewed by OIRA, 1981-2000
As Figure 1 shows, by 2000, OIRA reviewed an annual total of 583 rules (93 of which were economically
significant), as compared with 2,286 (121 of which were economically major) in 1992 and 2,790 (60 of which were
economically major) in 1981. Assuming the OIRA staff consists of thirty persons, and assuming (unrealistically)
that only one member of OIRA’s staff works on any given rule, this means a single staff person would review on
average 19 rules for 2000 (including 3 economically major rules), in contrast to 76 rules for 1992 (including 4
economically major rules) and 93 rules (2 economically major) for 1981. Assuming that OIRA’s staff works
roughly 60,000 person hours per year on all aspects of rulemaking review (30 people x 40 hours x 50 weeks =
60,000), each of the submitted rules for 2000 would have received on average 103 person hours of attention, while
the rules submitted for 1992 would have received on average 26 hours and those for 1981 would have received 22
hours of review attention.66
Figures 2 and 3 show the absolute numbers and percentages, respectively, of the rules changed and
unchanged during the review process for the same twenty-year period:
66
These estimates, while reasonably illustrative, are high given that OIRA designates significant human
resources to Paperwork Reduction Act review as well.
20
White House Review of Rulemaking
21
Figure 2: Number of Rules Changed and Unchanged During Review Process, 1981-2000
Figure 3: Percentage of Rules Changed and Unchanged During
Review Process, 1981-2000
As these figures show, beginning in 1995, and every year since, the White House changed more rules than it
approved without a change. For most of those years, it did so at an increasing rate. Dividing the two decades from
1981 to 2000 in two at the time of the Clinton order (1993), the ratio of rules not changed and changed from 1981 to
October 1993 is 3:1, whereas the same ratio for the period from October 1993 through 2000 is closer to 1:1. The
next sections focus on the Clinton era, further contrasting that period with the Reagan-Bush era.
21
White House Review of Rulemaking
22
D. Rulemaking Review During the Clinton Administration
OIRA review changed following President Clinton’s Executive Order12866 in at least two important ways.
First, as Figure 1 above shows, a much smaller number of rules met OIRA scrutiny during the Clinton
Administration as compared to the Bush Administration. Roughly, the Clinton OIRA scrutinized only about onequarter the number of rules examined by the Bush White House. In 1989, for example, the number of rules
submitted to OIRA for review totaled 2,217, a number that falls almost steadily from 1993 until 2000, when 583
were submitted to OIRA for review.
The reason for this change is in part easy to understand, and in part puzzling. On the one hand, as
explained above, whereas Executive Order 12291 required a Regulatory Impact Analysis for all “major” rules (as
defined by that order), whether or not they qualified as “major” because of their projected annual impact on the
economy of $100 million or more, Clinton’s Executive Order 12866 required an analogous extensive cost-benefit
analysis only of “economically significant” rules–again, significant rules that qualify as “significant” (as defined by
that order) because of their projected annual impact on the economy of $100 million or more. Rules meeting
Executive Order 12866's definition of significant for other reasons did not require an extensive cost-benefit analysis,
but rather only a short summary of potential costs and potential benefits. In short, whereas the Reagan order
required extensive analysis of all rules meeting the definition of “major,” the Clinton order focuses specifically on
“significant” rules that meet the $100 million threshold.
Having said this, however, the Clinton order too requires some amount of OIRA review of noneconomically significant rules, and indeed the category of “non-economically significant” rules is recorded in the
GSA/RISC data throughout the Clinton era. Even though the Clinton OIRA focused on rules meeting the $100
million threshold by requiring more extensive review, in other words, still it remains unclear why fewer total rules
were submitted to OIRA for some kind of review or another. In any event, again the number of economically
significant rules submitted for review during the Clinton Administration is comparable to the number of
“economically major” rules during the Reagan-Bush era, as Figure 4 shows; for whatever reason, the Clinton OIRA
seems to have reviewed, or recorded the review, of many fewer non-economically significant and/or non-significant
rules.
Figure 4: Number of Rules with Expected Annual Impact on the
Economy of $100 Million or More, 1981-2000
22
TAB 5
POSSIBLE PRESCRIPTIVE RECOMMENDATIONS: ADJUDICATION
Revised Draft
January 28, 2003
Submitted by Michael Asimow.
[Underlined material is added in this draft as result of suggestions by Neil Eisner and Jeff Lubbers]
This memo contains prescriptive recommendations suggested at various times by the collaborators on the
adjudication portion of the APA project. Asimow has revised them somewhat in light of discussions that occurred
at the Fall, 2000 meeting of the Council and again in light of discussions at the Fall 2002 Administrative Law
conference. This draft also reflects recent suggestions by Neil Eisner and Jeff Lubbers.
The previous draft of this memo discussed recommendations for APA revision that were approved by our
Section and the HOD in 1970 and which are inconsistent with these recommendations in important respects. We
will need to do a cleanup of these outstanding recommendations if we are prepared to move forward with any or all
of these recommendations.
A. Application of the APA Adjudication Provisions
1. When Congress sets up a new program involving adjudications with opportunity for hearing, it should
consider and explicitly determine whether the new program will be subject to APA formal adjudication provisions.
Congress should consider the following factors:
a. Whether the adjudication is likely to involve substantial impact on personal liberties or freedom,
orders that carry with them a finding of criminal-like culpability, imposition of sanctions with substantial economic
effect, or determination of discrimination under civil rights or analogous laws.
b. Whether the adjudication would be similar to, or the functional equivalent of, a current type of
adjudication in which an administrative law judge presides.
c. Whether the adjudication would be one in which adjudicators ought to be lawyers. (Judicial
Division resolution adopted by the HOD)
2. Congress should amend the APA to provide prospectively that absent a statutory requirement to the
contrary, in any future legislation that creates opportunity for hearing in an adjudication, such hearing shall be
subject to the APA's formal adjudication provisions (§§554, 556, 557), whether or not it calls for a "hearing on the
record." (Judicial Division resolution adopted by the HOD)
Reasons for 1. and 2: The APA adjudication provisions now apply only when a statute other than the APA
calls for a "hearing on the record." Where a statute calls for an adjudicatory hearing but does not use the magic
words "on the record," it has been difficult to decide whether the APA applies. The case law is conflicting. This
resolution (already adopted by the HOD) calls for Congress to carefully consider this issue when it adopts a new
program calling for hearings. It also provides a prospective-only default rule that the APA applies whenever
Congress fails to provide the contrary. This resolution makes sense. Congress should consider this issue carefully
when it adopts a new adjudication provision; and there should be a clear default rule that applies when Congress
fails to consider it. The default provided here will nudge the federal administrative system in the direction of more
comprehensive APA coverage and away from further atomization of administrative adjudication.
3. Delete the words "or particular" from APA §551(4). Also delete "and includes the approval or
prescription for the future of rates, wages, corporate or financial structure or reorganizations thereof, prices,
facilities, appliances, services or allowances therefore or of valuations, costs, or accounting, or practices bearing on
any of the foregoing."
Rationale: These changes will make clear that agency action of general applicability is a rule and agency
application of particular applicability is adjudication. The existing APA definitions are defective. For example,
they would classify an FTC cease and desist order as rulemaking (since it is agency action of particular applicability
and future effect), but everyone treats such orders as adjudication. (From APA Recommendations approved in
1970 by our section and the HOD). As under existing law, a rule that in practice would apply to only a single
person is still a rule (rather than an adjudication) as long as it is stated in general terms and it is theoretically
possible that it could apply to additional persons. An agency's grant of exemption from a rule to a particular person
would be an adjudication.
4. Make clear that no APA hearing is required unless the party requesting one can demonstrate the
existence of a disputed issue of material fact that it is necessary to resolve.
Rationale: This provision would codify existing case law.
5. Make clear that if a substitute ALJ must be appointed because the previous ALJ is disqualified or
unavailable, the substitute need not start the hearing over unless the parties demonstrate they will be prejudiced
thereby.
Rationale: This provision would codify existing case law.
B. Separation of functions. These recommendations have been modified after discussion at the Fall 2002
Administrative Law Conference. (They are inconsistent in several respects with recommendations approved in 1970
by our Section and the HOD).
APA §554(d), stating the general requirement of internal separation of functions, should be clarified in the
following respects. Probably the provision on separation of functions should be moved to a separate APA provision
rather than being part of the section that defines when the formal adjudication provisions apply.
1. Separation of functions applies only if the proceeding is prosecutorial or accusatory in nature.
With respect to government benefits (such as loans or grants), separation of functions should apply only in cases of
termination or reduction of such benefits.
Rationale: There is a long-standing and unsettled issue of whether §554(d) applies to matters that do not
involve sanctions. As discussed below, §554(d) is explicitly inapplicable to initial licensing and ratemaking or other
proceedings involving public utilities or carriers. But it is unclear whether it applies to such proceedings as the
modification of a water pollution permit or a nuclear power plant license. Many such proceedings are polycentric
in nature, are quite complex and technical, and involve high economic stakes. Agency decisionmakers need all the
help they can get in deciding such matters, which suggests separation of functions may do more harm than good.
Most of such cases involve initial licenses or ratemaking (or other public utility type determinations) and so are
already exempt from separation of functions; this change would add a relatively small number of cases that would
also be excepted.
The existing statute is ambiguous on this point because it disqualifies "prosecutors or investigators" from
taking part in decisionmaking, which suggests that it might apply only to prosecutorial-type proceedings. To clarify
this uncertainty, we propose limiting §554(d) to prosecutorial-type determinations.
Separation of functions should also be inapplicable to cases involving applications for government benefits,
but should apply to cases involving termination or reduction of such benefits. See also b.7. for clarification of
separation of functions in Social Security cases.
2. The agency staff members who are disqualified as decisionmakers (or advisers to
decisionmakers) by reason of prior participation in a case should be referred to as "adversaries." The term
"adversary" means a staff member whose role in that proceeding or a factually related proceeding is likely to cause
him or her to identify with or against the interest of one of the parties. The term "adversary" includes a staff
member who at any time participates personally and significantly as an investigator or in planning, developing or
presenting evidence in that proceeding or a factually related proceeding. The term "adversary" does not include a
person who served as a presiding officer or assistant to the presiding officer in an earlier stage of the proceeding.
The term "adversary" does not include a staff member who served as a supervisor or a subordinate of an
adversary unless the staff member became personally and significantly involved in the case in the manner described
in the preceding paragraph. Nor does it include a staff member who participates in an insignificant manner (such as
by answering a technical question) or who participates in a collateral matter (such as in judicial review or
rulemaking).
Rationale: This change should clarify §554(d) by providing a much more precise definition of the
persons who are disqualified from serving as decisionmakers or as advisers to decisionmakers. It identifies the
persons who should be disqualified (those who have acquired a will to win) and distinguishes between such persons
and others in the administrative hierarchy who should not be disqualified from decisionmaking or advising
decisionmakers. The goal here is to exclude persons whose work on a case might have strongly predisposed them
toward one particular outcome from others whose contact with the case has been more peripheral or who were in
roles that would not cause them to acquire such predispositions. Because agency decisionmakers often need advice
on pending matters, only those persons who have acquired strong predispositions should be disqualified.
3. Separation of functions is not violated when decisionmakers or advisers to decisionmakers
communicate with adversaries for the purpose of deciding whether to investigate a matter, start a proceeding, or set
a case for formal hearing (or to frame the issues to be considered at a formal hearing).
Rationale: This provision states existing case law but it would be useful to state it clearly in the
statute. For example, the decision whether to issue a complaint often occurs in a meeting in which the agency heads
discuss the evidence with agency prosecutors. Later the agency heads decide the same case. Case law appropriately
establishes that separation of functions is not offended by this common procedure.
4. The "agency head" exception does not permit agency heads to consult off the record with
adversary staff members with respect to an adjudication after the adjudication is initiated.
Rationale: The agency head exception in the existing statute, §554(d)(C), excludes "the agency or
a member or members of the body comprising the agency" from the separation of functions provision. This
exception is poorly drafted and has remained unclear since 1946. It is likely that the exception was intended to
allow agency heads to personally participate in all phases of case investigation and development, then decide the
matter on final review. But it is probable that the provision was not intended to permit adversary staff members to
furnish off-the-record advise to the agency heads when they decide an adjudicatory matter at the agency-head level.
This recommendation provides the necessary clarification.
5. Separation of functions is not violated when decisionmakers or advisers to decisionmakers
communicate with adversaries with respect to collateral matters such as informal public meetings, budget planning,
informal rulemaking, or Congressional testimony.
Rationale: This recommendation prevents separation of functions from interfering unduly with
agency tasks other than formal adjudication.
6. A staff member who takes part in the predecisional or collateral matters described in
paragraphs 3. or 5. is not thereby disqualified from later serving as a decisionmaker or an adviser to
decisionmakers. A staff member who receives legally proper ex parte communications from outside parties before
being designated as an adviser to the decisionmakers is not thereby disqualified from serving as an adviser and need
not disclose the ex parte communications. However, a staff member should not serve as a decisionmaker or an
adviser to decisionmakers if participation in collateral matters, or outsider ex parte contacts, have caused that staff
member to prejudge the matter or become unable to provide objective advice.
Rationale: This recommendation prevents separation of functions from excluding too many
decisional advisers. Participation in predecisional or collateral matters should not strongly predispose a staff
member in favor of the agency's side in an adjudicatory matter. Frequently, staff members receive ex parte contacts
that are legal under APA §557(d) because the employee was not "expected to be involved in the decisional process
of the proceeding." Later that staff member is tapped as a decisional adviser. Again, that staff member should be
available as an adviser despite the exposure to ex parte information and the legal ex parte contact should not become
retroactively illegal.
7. The separation of functions provision should make clear it does not invalidate Social Security's
"three-hat" practice of requiring ALJ to develop the case on behalf of the government, assist the claimant, and make
decision.
Rationale: Richardson v. Perales upheld the three-hat system under due process but left unclear
whether it violated APA separation of functions. This provision would insure that the APA would not invalidate the
three-hat system which is a longtime practice at Social Security.
8. The provision in section 554(d)(1), barring an ALJ from "consulting a person or party on a fact
in issue" should not prevent an ALJ from consulting with the ALJ's law clerk.
+
C. Hearing requirements
1. Burden of proof: Congress should clarify that the language "burden of proof" in APA section 556(d)
refers to the burden of production or in other words the burden of going forward with evidence. It does not apply to
the burden of persuasion (also known as the risk of non-persuasion). This recommendation would overrule the
Supreme Court's decision in Greenwich Collieries. Given the imprecision of the term "burden of proof," Congress
should clarify what particular burden section 556(d) refers to without employing that language. Congress could
specify section 556(d)'s burden with, for example, the following language: "Except as otherwise provided by statute,
the proponent of a rule or order has the burden of producing evidence in support of that rule or order."
Rationale: The Greenwich Collieries decision upset previous understandings and case authority that the
APA's provision on burden of proof referred only to the burden of producing evidence, not the burden of persuasion.
An agency should have the ability to adopt procedural rules establishing burdens of persuasion that are appropriate
in its particular statutory setting, including the rule relating to black lung disease that was overturned in Greenwich.
2. Evidence rules: Each agency that conducts formal adjudications should be required to develop and
promulgate its own set of specific evidentiary rules, implementing APA section 556(d), and to make such
evidentiary rules binding on its administrative law judges and the parties to each agency's adjudication process.
Rationale: It is desirable that evidence rules be codified for the convenience of private parties and to assure
uniform treatment by ALJs. Some ALJs are reported to insist on following the Federal Rules of Evidence even
though no agency rule so requires. The agency might opt for rules that allow ALJs to admit a variety of evidence
(such as hearsay) that are precluded by the FRE. They should consider adopting FRE Rule 403 (which allows
exclusion of evidence the probative value of which is substantially outweighed by other factors, including its
potential for undue consumption of time.). See ACUS Recommendation 86-2). Agencies might also consider the
evidence provisions in the Model Adjudication Rules (recommendations developed by an ACUS committee). See
Michael Cox, The Model Adjudication Rules, 11 Cooley L. Rev. 75, 117-20 (1994).
3. Conference procedure: The APA now provides for only one mode of formal hearings (although some
seldom-applied provisions allow relaxation of the formality in cases of initial licensing, ratemaking, or formal
rulemaking). We recommend introduction of a second, less formal but not informal species of adjudication. After
all, there is a substantial distance between the rigors of formal adjudication and the vagaries of informal
adjudication.
In between, the APA could provide for an alternative formal hearing process called "conference
procedure." Conference procedure would entail only written evidence, without opportunity for cross-examination.
It would provide for a right to respond to evidence in writing and for oral argument. Such cases could be decided by
agency staff members other than ALJs. Other APA provisions relating to adjudication (such as separation of
functions and prohibition of ex parte contacts) would apply.
This procedure would apply when there are no facts in issue or by consent of all parties. Pursuant to rules
adopted in accordance with section 553, agencies could use the alternative procedure in lieu of the traditional formal
procedure in other types of cases in which credibility determinations are unlikely to be in issue or in which the
determinations are likely to be complex or technical or involve multiple parties. In addition, Congress could assign
particular types of cases to the alternate procedure.
Conference procedure applies only to adjudication, not to rulemaking. Under the revised definition of
adjudication discussed in A.3., above, adjudication involves agency action of particular, rather than general,
applicability. The statute should make clear that decisions under conference procedure are not subject to the
various statutes and executive orders imposing procedural requirements on rulemaking.
4. Residuum rule and ALJ expertise in evaluating evidence: The "residuum rule" (followed in some states)
requires that at least some non-hearsay evidence support a decision. It is generally believed that Richardson v.
Perales rejected the residuum rule but this should be made clear in the statute. The statute should also make clear
that a presiding officer can utilize his or her expertise to evaluate evidence.
The second sentence of section 556(d) might be amended to incorporate language drawn from 4-215 of the
Model State APA of 1981. Thus the APA would read: "A rule or order may not be issued except on consideration
of the whole record or those parts thereof cited by a party and supported by reliable, probative, and substantial
evidence, and may be based on such evidence even if it would be inadmissible in a civil trial. The presiding
officer's experience, technical competence, and specialized knowledge may be utilized in evaluating evidence."
D. Informal adjudication.
1. Informal process: The APA now contains a set of provisions in sections 555 and 558 applicable when
the formal adjudication provisions do not apply. The APA could provide for a set of minimal procedures applicable
to informal adjudication. For example, the APA might provide:
APA §551(7.5): formal adjudication means agency process for the formulation of an order where §554
applies under the standards of §554(a).
551 (16): informal process means agency process for the formulation of an order where §554, under the
standards of §554(a), does not apply.
Section 560: Informal Process:
(a) This section applies when §551(16) applies and §551(7.5) does not
apply.
(b) A party subject to a proposed agency order shall be
afforded either notice of the terms of the proposed order
or notice of the subjects or issues involved in the
informal proceeding. When an order will not be
addressed to a particular party, notice shall be published
or given in a manner calculated to reach interested
persons. A party subject to a proposed order shall be entitled to
inspect the agency file applicable to the party's case.
(c) After notice, the subject of the proposed order, if any,
and other interested persons, shall be allowed to
participate in the informal process through submissions
in writing or orally, at the agency's option.
(d) The decisionmaker in the case shall be impartial and shall not be an
"adversary" (as defined in the discussion of separation of functions).
(e) The agency's order, or decision not to issue an order,
shall be accompanied by a brief statement of reasons
and basis for the order, if any. If the decision is adverse to a private
party, the decision shall inform the party of any opportunity for agency
reconsideration of the decision.
Rationale: At present, informal adjudication is the black hole of administrative law. Informal adjudication
covers proceedings that in fact involve quite formal hearings (as in government contract or deportation cases) to
others that involve little more than an agency letter denying an application. This procedure is designed to provide
basic protections even in cases of the most informal procedure. The intention is to provide only rudimentary
requirements that would not result in formalizing existing procedures or increasing agency costs.
The informal process applies only to adjudication, not to rulemaking. Under the revised definition of
adjudication discussed in A.3., above, adjudication involves agency action of particular, rather than general,
applicability. The statute should make clear that decisions under informal process are not subject to the various
statutes and executive orders imposing procedural requirements on rulemaking.
2. Other issues relating to informal adjudication
a. Delete the phrase "in connection with an agency proceeding" from §555(e).
b. Amend §558(c) by adding: No order may be issued without observance of the requirements for
informal process specified in §560 (or such additional procedures as are required by statute or by due process).
However, other interested persons shall not be permitted to participate in such proceedings except as determined by
the agency. Make clear that §558(c) does not trigger formal adjudication under the APA.
E. Transcripts. The APA should provide that transcripts of agency proceedings should be available to private parties
at cost. Thus the APA might include a provision modeled on §11 of FACA providing: "Except where prohibited
by contractual agreements entered into prior to the effective date of this act, agencies shall make available to any
person, at actual cost of duplication, copies of transcripts of agency proceedings (as defined in §551(12)).
:A similar provision in
(file: ABA/Prescriptive recommendations--1-28-03 --revision.doc)