The Inside Out Perspective: A First Person Account
The title of this volume, and of the conference where its chapters were first presented,
seeks to capture a vision of administrative law scholarship that characterizes much of my work in
that field. And, while that perspective hardly inhabits all of my research in administrative law,1
this chapter is devoted to an explanation of how I understand it. It would, of course, be more
accurate to say “How I understand it now”. Looking back I can see unifying threads in work that
appeared to me when done as much more opportunistic and heterogeneous than as a program of
research carrying out some master plan. Nevertheless, there are important differences between
what I will characterize as “internal” and “external” approaches to administrative law. This
essay reflects on those differences and attempts to tease out their implications, both substantive
and methodological, using some of my published books and articles as examples. After briefly
surveying some of the sorts of questions and investigations that the inside out perspective has led
me to pursue I will provide a more extended discussion of ongoing work that illustrates a
particular virtue that I find in one form of internal investigation – case studies of particular
agency functions.
Wandering Inside
1
I have been guilty of publishing theoretical and policy-wonkish work as well. On the theoretical side, see, e.g.,
JERRY L. MASHAW, DUE PROCESS IN THE ADMINISTRATIVE STATE (1985); GREED, CHAOS AND GOVERNANCE:
USING PUBLIC CHOICE TO IMPROVE PUBLIC LAW (1997); “Administrative Due Process: The Question for Dignitary
Theory”, 61 B.U. L. REV. 885 (1981); “Explaining Administrative Process: Normative, Positive and Critical Stories
of Legal Development”, 6 J. L. ECON. & ORG. 267 (1990); “Improving the Environment of Agency Rulemaking: An
Essay on Management, Games and Accountability”, 57 L. & CONTEMP. PROBS. 185 (1994); and “Accountability and
Institutional Design: Some Thoughts on the Grammar of Governance”, in MICHAEL DOWDLE, Ed., PUBLIC
ACCOUNTABILITY: DESIGNS, DILEMMAS AND EXPERIENCES 115-156 (2006). Policy work includes: THEODORE R.
MARMOR, JERRY L. MASHAW AND PHILIP L. HARVEY, AMERICA’S MISUNDERSTOOD WELFARE STATE: PERSISTENT
MYTHS, ENDURING REALITIES (1990); MICHAEL J. GRAETZ AND JERRY L. MASHAW, TRUE SECURITY: RETHINKING
AMERICAN SOCIAL INSURANCE (1999); THEODORE R. MARMOR, JERRY L. MASHAW AND JOHN PAKUTKA, SOCIAL
INSURANCE: AMERICA’S NEGLECTED HERITAGE AND CONTESTED FUTURE (2013); and Jerry L. Mashaw and
Virginia Reno, BALANCING SECURITY AND OPPORTUNITY: THE CHALLENGE OF DISABILITY INCOME POLICY (1996).
1
In many ways administrative law is a sub-field of American constitutional law.
Academic administrative lawyers are preoccupied with the ways in which administrative
agencies are empowered, structured, and monitored by political and legal overseers in the three
constitutionally-established branches of American government. Separation of powers questions
provide an overarching structure for investigation into the legally appropriate modalities for
presidential and congressional oversight and for judicial review of administrative action. Studies
featuring these sorts of issues generally take what I am calling an external perspective on
administrative law. They ask how law authorizes, structures and constrains the accountability of
administrative actors to legal and political overseers. Moreover, under the baleful influence of
the Langdelian case method, much of the study of administrative law and much administrative
law scholarship is doctrinal, at least in the sense that questions are pursued through the medium
of judicial opinions. Peter Strauss’ contribution to this volume laments that judiciocentric
focus,2 a lamentation with which I heartily agree.
My scholarly interests have centered, for good or ill, more on how administrative
agencies themselves operate. I have been concerned with internal rules and procedures,
bureaucratic systems, and internal techniques of instruction, oversight and control of agency
personnel. And I have had a particular interest in how this “internal law” is shaped, or not, by
external legal and political constraints. These interests have led me to focus on questions that are
2
As Peter notes both he and I are guilty of this sin as evidenced by the way that materials are presented in our
casebooks. The problem for most course book editors, I think, is not just the judiciocentric American legal culture,
but the relative efficiency of presenting administrative law (or other) substantive areas of law through the medium of
judicial opinions. This apparently relentless focus on cases in most course materials may, of course, not tell the
whole story. Most administrative law teachers, in my experience, supplement their course book materials with
hypotheticals and problems that invite students to take up the position of agency staff or council attempting to
implement programs within the constraints of the law, or as counselors to individuals or firms seeking to evaluate
the meaning and legality of agency rules, guidance or enforcement actions. The availability of digital tools to add
materials of all sorts to the published course books makes this process that much easier.
2
analogous to those pursued by scholars in fields such as organization theory,3 public
administration,4 or American political development.5
My interest in how law works at the agency level, and how agencies respond to external
political and legal constraints, was sparked by an early investigation of local administration of
the Aid to Families with Dependent Children’s Program in Virginia.6 Having discovered
“curiosities” in local welfare rules while organizing the representation of poor clients in central
Virginia, a group of students and I set out to understand what motivated the peculiar, and often
illegal, policies pursued by five county welfare offices. These investigations opened up a
window into a larger class of administrative operations in which state and local administrators
implement so-called “cooperative federalism” programs.7 That interest led to work on the
Federal Aid Highways Program,8 but more importantly, to a realization that there was a
significant class of federal programs that were not administered by federal employees. And,
because they are not, administrative implementation of these programs is mostly invisible from
administrative law’s standard peep hole into administrative behavior, that is, instances of judicial
review of federal administrative action.9
Jerry L. Mashaw, Mirrored Ambivalence: “A Sometimes Curmudgeonly Comment on the Relationship Between
Organization Theory and Administrative Law”, 33 J. LEG. EDUC. 24 (1983).
4
See, e.g., STEVE KELMAN, UNLEASHING CHANGE: A STUDY OF ORGANIZATIONAL CHANGE IN GOVERNMENT
(2005), and PROCUREMENT AND PUBLIC MANAGEMENT: THE FEAR OF DISCRETION AND THE QUALITY OF
GOVERNMENT PERFORMANCE (1990). See also, ROBERT A. KAGAN, REGULATORY JUSTICE: IMPLEMENTING WAGE
PRICE FREEZE (1978), and ROBERT A. KATZMANN, REGULATORY BUREAUCRACY: THE FEDERAL TRADE
COMMISSION AND ANTI-TRUST POLICY (1980).
5
See, e.g., DANIEL CARPENTER, REPUTATION AND POWER: ORGANIZATIONAL IMAGE IN PHARMACEUTICAL
REGULATION AT THE FDA (2010), and THE FORGING OF BUREAUCRATIC AUTONOMY (2001). See also JAMES Q.
WILSON, BUREAUCRACY: WHAT GOVERNMENT AGENCIES DO AND WHY THEY DO IT (1989).
6
Jerry L. Mashaw, “Welfare Reform and Local Administration in Aid to Dependent Children in Virginia”, 57 VA.
L. REV. 818 (1971).
7
Jerry L. Mashaw and Edward A. Tomlinson,” Enforcement of Federal Standards in Federal Grant-in-Aid
Programs”, 58 VA. L. REV. 600 (1972).
8
Jerry L. Mashaw, “The Legal Structure of Frustration: Alternative Strategies for Public Choice Concerning
Federally-Aided Highway Construction”, 122 U. PA. L. REV. 1 (1973).
9
The peep hole permits observation of challenges to federal agency approvals of state-level decisions (see, e.g.,
Citizens to Preserve Overton park v. Volpe, 401 U.S. 402 (1971)) and review of state agency implementing action in
3
3
My emerging sense was, and remains, that judicial review of administrative action, even
judicial decisions imposing revised decision processes on federal and state agencies, reveals less
than the proverbial tip of the iceberg concerning the realities of how agency operations are
structured by law. This view was reinforced by further work on the administration of public
benefits programs. For example, the historic decision in Goldberg v. Kelly, imposing
constitutional due process requirements on local welfare officials, set off a train of effects that
radically re-imagined the administration of public welfare. But virtually none of those effects
were either intended or anticipated.10 What seemed consequential was not administrative law
doctrine, but how that doctrine was internalized by the administrators who were required to live
with its consequences.11
Moreover, as four colleagues and I pursued a project on Social Security disability
hearings and appeals12 we could hardly escape the conclusion that the thousands of judicial
review proceedings in lower federal courts each year had essentially no effect on the program.
And, to the extent that Social Security disability cases reached the law making level of Supreme
Court decision making, the uniform message from that Court was that it presumed that SSA
knew what it was doing and was, therefore, not disposed to meddle in its affairs.13
a limited number of cases via a suit pursuant to 42 U.S.C 1983. See, e.g., Blessing v. Freestone, 520 U.S. 329
(1997).
10
William Simon, “Legality, Bureaucracy and Class in the Welfare System”, 92 YALE L.J. 1198 (1983). Jerry L.
Mashaw, “How Much of What Quality: A Comment on Conscientious Procedural Design”, 65 CORNELL L. REV.
823 (1980) and Jerry L. Mashaw, “Conflict and Compromise Among Ideals of Administrative Justice”, 1981 DUKE
L. J. 181.
11
Jerry L. Mashaw, “The Management Side of Due Process: Some Theoretical and Litigation Notes on the
Assurance of Accuracy, Fairness and Timeliness in the Adjudication of Social Welfare Claims”, 59 CORNELL L.
REV. 772 (1974).
12
JERRY L. MASHAW, ET AL., SOCIAL SECURITY HEARINGS AND APPEALS (1978).
13
Important Supreme Court opinions affirming Social Security Administration procedural and substantive rules
include Matthews v. Eldridge, 424 U.S. 319 (1976); Richardson v. Perales, 402 U.S. 389 (1971); and Heckler v.
Campbell, 461 U.S. 458 (1983).
4
What seemed to matter, and matter importantly in disability adjudication, was the
managerial effort of the policymaking branches of the Social Security Administration. And,
since the quantitatively most significant level of decision making is not at the hearings and
appeals level, but at the initial and redetermination stages of state disability adjudication, I set
out to try to understand how administrative law affected those operations.14 The answer was that
the standard sources of law, the Social Security Act, judicial decisions interpreting it and agency
regulations published in Code of Federal Regulations, have essentially no direct effect. The
thousands of state agency personnel who decide millions of disability claims each year rely
exclusively on the Disability Insurance State Manual (DISM) (always referred to by them by its
acronym), which is the Social Security Administration’s interpretation of the relevant legal
sources. The DISM instructions are reinforced by a constant stream of memoranda sent from
SSA or its field offices to state agencies and by a sophisticated statistical quality assurance
system that monitors and reports on state agency performance. This internal law, what I once
characterized as “the management side of due process”, is the effective law of most cases
decided in this vast system of mass administrative justice.
I hasten to add that the argument that I am making here for the internal perspective is not
that external law does not matter. It is, instead, that what matters ultimately is how that law is
interpreted and used by those who in Carl Llewelyn’s famous phrase “have the doing in charge”.
Indeed, in the study of the regulatory activities of the National Highway Traffic Safety
Administration that I did with David Harfst, our basic hypothesis was that the external legal
culture was enormously important. But the story that emerged from our investigations, as
14
JERRY L. MASHAW, BUREAUCRATIC JUSTICE: MANAGING SOCIAL SECURITY DISABILITY CLAIMS (1983).
5
published in several articles15 and a book16, is a story of how signals from the external legal
culture empower or disempower certain actors within a bureaucratic system. In that instance, it
was also a story of how those internalized signals radically reoriented the agency’s regulatory
strategy. That transformation produced a regulatory posture quite different from the one
seemingly contemplated by the Congress that unanimously enacted the Motor Vehicle Safety Act
of 1966. I will have more to say on this topic below.
These neo-Realist and quasi-contrarian interests in agency behavior also led me to
question why we have a cottage industry (perhaps an industrial sector) devoted to analyzing
judicial application of the Chevron doctrine, and little or no study of how the agencies whose
interpretations are being reviewed go about the business of statutory interpretation.17 It also
provoked skepticism concerning the received wisdom that American administrative law, and by
implication American administrative governance, begins in the late 19th or early 20th century in
the United States.18
As it turns out, this conventional understanding is perfectly reasonable if one views
administrative law through the lens of judicial review, or of trans-substantive statutes that apply
across the board to all or most administrative operations. On the other hand, if one looks at the
early operations of administrative departments, bureaus and commissions, the way in which
Jerry L. Mashaw and David L. Harfst, “Regulation and Legal Culture, The Case of Motor Vehicle Safety”, 4
YALE J. ON REG. 257 (1987) and “Inside the National Highway Traffic Safety Administration: Legal Determinants
of Bureaucratic Organization and Performance”, 57 U. CHI. L. REV. 443 (1990).
16
JERRY L. MASHAW AND DAVID L. HARFST, THE STRUGGLE FOR AUTO SAFETY (1990).
17
Jerry L. Mashaw, “Norms, Practices and the Paradox of Deference: A Preliminary Inquiry into Agency Statutory
Interpretation”, 57 ADMIN. L. REV. 501 (2005) and “Agency-Centered or Court-Centered Administrative Law – A
Dialogue with Richard Pierce on Agency Statutory Interpretation”, 59 ADMIN. L. REV. 889 (2007).
18
JERRY L. MASHAW, CREATING THE ADMINISTRATIVE CONSTITUTION: THE LOST 100 YEARS OF AMERICAN
ADMINISTRATIVE LAW (2012); “Recovering American Administrative Law: Federalist Foundations 1787-1801”,
115 YALE L. J. 1256 (2006); “Reluctant Nationalists: Federal Administration and Administrative Law in the
Republican Era, 1801-1829”, 116 YALE L. J. 1636 (2007); “Administration and “The Democracy”: Administrative
Law From Jackson to Lincoln, 1829-1861”, 117 YALE L. J. 1568 (2008); “Federal Administration and
Administrative Law in the Gilded Age”, 119 YALE L. J. 1362 (2010);
15
6
those operations were directed and structured both by hierarchical superiors and by patterns of
congressional legislation, a quite different view of administrative governance in the 19th century
begins to emerge. There was an administrative law before it had a name, a law that was
embodied in legislative and administrative practices, patterns of institutional organization and
constitutional understandings, many of which persist into the 21st century.19
Once again this is not an argument against doctrinal analysis or attention to transsubstantive requirements as elaborated in statutes or executive orders. These are important
matters. This is an argument for a more granular, neo-Realist approach to how law works in
practice and for the building of theoretical hypotheses from fine-grained empirical investigation.
It is also, in part, an argument for a particular form of empiricism that is more qualitative than
the quantitative empiricism that has risen to prominence in many fields of law during the last
decade or so.
The Virtues of Case Study Empiricism
I want to elaborate that latter argument by first describing briefly the argument of my
1990 book, The Struggle for Auto Safety, co-authored with David Harfst, and then summarizing
some preliminary findings of further research on the National Highway Traffic Safety
Administration that Harfst and I are currently pursuing.20 This new research was provoked by a
quantitative analysis that both questioned our earlier work and suggested that, even if it were
sound when written, it was now an historical curiosity. That study certainly got our attention. If
Jerry L. Mashaw, “The American Model of Federal Administrative Law: Remembering the First 100 Years”, 78
GEO. WASH. L. REV. 975 (2010); “Center and Periphery in Antebellum Federal Administration: The Multiple Faces
of Popular Control,” 12 U. PA. J. OF CONST. L. 331 (2010); “Governmental Practice and Presidential Direction:
Lessons From the Antebellum Republic”, 45 WILLAMETTE L. REV. 659 (2009); “The American Model of Federal
Administrative Law: Remembering the First 100 Years”, 78 GEO. WASH. L. REV. 975 (2010).
20
The working paper as of December 14, 2015, is Jerry L. Mashaw and David L. Harfst, “The Transformation of
Auto Safety Regulation: Bureaucratic Adaptation to Legal Culture”,
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2703370. I will not burden the description in this chapter with
multiple citations to the relevant portions of either Struggle or the working paper, which is under constant revision.
19
7
we were wrong we should recant. If not, we should at least explore why the world looked so
different to an experienced and accomplished observer using different, more external and
quantitative, methods.
1. The Struggle Account. In our earlier study Harfst and I evaluated the first two decades
of regulatory activity under the Motor Vehicle Safety Act of 1966.21 That statute was built on
several beliefs: One was that the epidemic of deaths and serious injuries on America’s highways
was not responding to the behavior modification efforts of state and local police, driver
education requirements or safe driving campaigns. A second was that cars could be made safer,
particularly by protecting motorists from the so-called “second collision”. As epidemiologists
and aeronautical engineers understood the vehicle safety problem, injuries and deaths resulted
not from car crashes, but from the collision of motor vehicle passengers with the interior of a
vehicle, or with external objects when ejected from the vehicle. A third was that because
manufacturers believed that safety did not sell, they could not be expected to provide vehicles
that protected motorists effectively. While a few high end motor vehicle producers, like Volvo,
emphasized safety, Congress was intent on insuring that all American consumers could benefit
from technological advances then available only to the privileged few. Moreover emboldened by
the technological successes of the U.S. Space Program, Congress believed that much more
progress could be made if innovations in vehicle safety performance were mandated by federal
law.
The 1966 Act, thus, was in some sense an offspring of other congressional initiatives,
civil rights legislation and the space program. It was also adopted in a general law reform
environment that viewed existing independent, multi-member, adjudicatory agencies as lethargic
21
Pub. L. No. 89-563, 80 Stat. 718, Codified as amended at 49 U.S.C. Sections 30101-30183.
8
and ineffective. Congress, therefore, empowered a single-headed, executive agency, the
National Highway Traffic Safety Administration, to force the technology of automobile safety by
adopting general rules containing performance standards for all new motor vehicles and motor
vehicle components. Almost as an afterthought the Congress gave NHTSA an adjudicatory
authority, the power to demand the recall of vehicles that failed to comply with its performance
standards, or that were otherwise found to have a defect related to automobile safety.
According to our account in Struggle, what transpired over the next decade and a half
was an object lesson in the effects of the broader legal environment on regulatory behavior. The
1966 Motor Vehicle Safety Act was part of a revolutionary series of health and safety statutes
that authorized, along with other federal regulators, to adopt consumer protection, environmental
protection, and worker protection standards that would affect virtually every industry and person
in the United States. But these bold new regulatory initiatives were enacted against a back drop
of historic suspicion of federal regulatory authority, particularly the adoption of general
regulatory policies by “unelected bureaucrats”. These bold new statutes were revolutionary
when viewed against historic commitments to federalism, separation of powers and limited
government. In partial recognition of this fundamental aspect of American legal culture,
Congress made the regulations adopted by these agencies reviewable in federal appellate courts
immediately upon their adoption.
NHTSA was, therefore, immediately confronted with law suits challenging its early
standards. And, responding to litigation challenging auto safety, other consumer protection,
worker protection and environmental standards, the federal judiciary developed a so-called “hard
look” review of agency rulemaking. These new agencies were not to be allowed to regulate on
the basis of vague claims to expertise. They must instead assure reviewing courts that they had
9
an adequate factual and scientific predicate for their actions. As sensible as that judicial posture
may appear, hard look review was particularly challenging for an agency like NHTSA. That
agency was supposed to be in the technology forcing business. A judicial demand that the
agency demonstrate that the new safety designs and technologies required by its rules were
technologically feasible and economically sensible based on real world experience made the
agency’s mission begin to seem like “mission impossible”. The agency lost over half of its early
judicial review proceedings.
Meanwhile, the agency’s recall program tapped into a different strain of American legal
culture, products liability law. The 20th century trend in products liability law had been virtually
all in the direction of easing the burdens of consumer plaintiffs seeking compensation for
defective products. In a similar vein, courts adjudicating recall contests allowed NHTSA to
demand a recall if it could show any substantial number of failures of a vehicle component that
might be related to automobile safety, even if the agency could not show that any accidents,
injuries or deaths had resulted from these defects. Under this so-called “per se theory” of defects
NHTSA never lost a recall case. Burdened by skeptical review of its technology-forcing rules,
and heartened by the enthusiastic judicial reception of its recall actions, by the mid-1970s
NHTSA had transformed itself from an agency that was primarily engaged in technology forcing
by rule to one that emphasized the recall of defective vehicles. The signals that the Agency
received from the courts were reinforced by both congressional and executive oversight.
This external legal and political environment had significant procedural and
organizational effects inside the agency as well. Lawyers and cost-benefit analysts gradually
gained the upper hand over safety engineers in the battle for the agency’s direction. The
feedback from the external legal culture took some time to reshape internal bureaucratic
10
operations. But, by 1978, NHTSA’s internal procedures defining the roles of engineers, lawyers
and cost-benefit analysts in the rulemaking process had been profoundly re-cast. These new
procedures institutionalized a fastidious and ponderous rulemaking process intended to protect
the agency from hostile judicial, executive or congressional oversight. The recall program,
which was subject to none of these constraints, expanded dramatically.
While Struggles’ analysis focused primarily on what that study called a “legal culture
hypothesis”, that is, the way in which agency culture and operations are shaped by the external
legal and political environment, the book’s conclusions concerning the virtual abandonment of
rulemaking became part of an ongoing debate concerning the “ossification” of the rulemaking
process in federal regulatory agencies generally.22 I will not pursue that general debate in any
detail here, but will instead focus on a particular critique of the Struggle analysis and our
response to that critique. Critique and response are meant to illustrate an important
methodological point concerning internal and external perspectives on administrative agency
functioning. In short, empirical research that looks quantitatively at rules adopted, cases litigated
and lost or won, and global tallies of regulatory costs and benefits, will paint a particular picture
of agency functioning. A more granular investigation of what types of rules have been adopted,
why litigation does or does not occur, and how benefits and costs are counted by the agencies
reporting those numbers may present a very different vision. Qualitative research on agency
outputs, methods, and explanations, even as evidenced only by agency and congressional
documents, reveals things that are invisible to external, largely quantitative, analysis.
22
See Richard Pierce’s contribution in Chapter ___ of this volume and authorities there cited.
11
2. The Coglianese Critique. Recent empirical research by Professor Cary Coglianese
sharply questions Struggle’s account. In testimony to a Senate sub-committee23 in 2013 he
reported:
“Despite widespread acceptance by virtually every major scholar of
administrative law, the claim that NHTSA has retreated from rulemaking and
shifted instead to recalls does not bear the weight of scrutiny. NHTSA has
continued to issue a substantial body of new regulations even in the wake of
judicial losses that have been thought to have been paralyzing to the Agency. Its
recalls did not increase in the aftermath of either the Agency’s losses in
rulemaking challenges or its wins in recall litigation. When a broad sweep of
NHTSA’s litigated cases is considered, it is clear that NHTSA has not been
beleaguered by high levels of judicial invalidations.”24
Although Professor Coglianese grants that there was a sharp falloff in the number of final
rules issued by NHTSA after 1976, a drop off that continued up through the end of the period
that was analyzed in Struggle, he claims that rulemaking activity is now substantial, that it
imposes significant cost burdens on the motor vehicle industry, saves thousands of lives, and has
substantially improved the safety of motorists on American streets and highways. He also claims
that when evaluated in the light of the number of motor vehicles on the highways NHTSA has
not shifted its emphasis sharply toward the recall of defective vehicles.
3. A Closer Look. I will not here explore the recall question in any detail. Professor
Coglianese argues that while recalls have increased substantially this should not be interpreted as
a shift in agency strategy because “agency initiated” recalls, as coded in the agency’s data, have
not increased nearly so substantially as total recalls.25 But the distinction between agency
23
Testimony of Cary Coglianese, Edward B. Shills Professor of Law, Director, Penn. Program on Regulation,
University of Pennsylvania, Before the U.S. Senate Committee on the Judiciary, Subcommittee on Oversight,
Federal Rights, and Agency Action (November 7, 2013). Available at
http://publicpolicy.wharton,upenn.edu/live/files/203-committee-on-fee-judiciary. (hereafter “Coglianese
Testimony”).
24
Id. at 14.
25
Coglianese Testimony at 9, 15.
12
initiated and manufacturer initiated recalls upon which the Coglianese analysis partially relies is
largely illusory. Notwithstanding the operational lapses detailed in Bob Rabin’s paper for this
volume,26 the self-reporting, and penalty features of the recall system, combined with the
reputational fallout of failure to take aggressive action when defects are discovered, make all
recalls at base a function of the regulatory system and, in particular, the futility of manufacturer
challenges to agency recall demands.27 Under agency regulations manufacturers are required to
report any defect related to automobile safety that they discover to the agency within five days of
that discovery.28 Since 2009 automakers have paid fines totaling more than 85 million dollars
for lack of timeliness in reporting defects.29 Recalls that eventuate from these reports are not
“agency initiated”, but that is a distinction without a difference. Commenting on a speech on
recalls earlier this year by NHTSA’s chief counsel, one observer distilled the message as “call us
before we call you”.30
Moreover, Professor Coglianese’s claim that recalls are “positively correlated with the
number of vehicles on the road” can easily be misunderstood. From 1966 to 1985 the average
number of vehicles registered in the United States increased by about 67%. The average number
of vehicles recalled each year for safety defects increased by almost 100%. 31 Recent trends
suggest that recall activity is accelerating, not declining. In the period from 2002 to 2014 the
26
See Chapter ___.
NHTSA Safety Defect Investigations, Presentation by Allan J. Kam, ATLA 2001 Annual Convention, Products
Liability Section, Montreal, Canada (July 12, 2001).
28
49 C.F.R. 573.6 ( ).
29
2014 Senate Commerce Hearing, Friedman Statement at 7.
30
NHTSA’s Message to the Defense: Call Us Before We Call You, Safety Research and Strategies, Inc.,
www.safetyresearch.net (post of June 6, 2014).
31
These recall data are extracted from safercar.gov, National Highway Traffic Safety Administration, Annual
Recalls Reports, 1966-2014.
27
13
yearly average number of defective vehicles recalled, even if limited to those that were directly
influenced by NHTSA investigations, doubled compared with the 1966-1985 period.32
These numbers are important only because they illustrate the continuing effects of the
external legal and political environment on NHTSA’s performance. The courts continue to bless
its recall activities. Congress acts legislatively only to strengthen the recall regime and in
oversight hearings only to belabor the agency for its occasional failure to detect a problem.
OMB demands no cost-benefit analysis of recall activities. Alas, in terms of motor vehicle
safety the recall numbers are probably meaningless. Less than 3% of motor vehicle accidents are
ascribed to vehicle failure. Many if not most of those are likely to be maintenance problems
rather than equipment defects. The effects of recalls on motor vehicle safety remain a mystery.
Recalls like the Takata airbag or GM ignition switch episodes continue to get widespread
publicity, but those defects accounted for a little over 100 fatalities each over multi-year periods.
Thirty thousand motorists and pedestrians die on American highways annually, and, as Professor
Coglianese reports, NHTSA claims that its rules save thousands of lives annually. NHTSA’s
devotion to recalls cannot be explained in terms of its safety mission.
Professor Coglianese’s data do, indeed, show that NHTSA has adopted a substantial
number of rules in the post-1986 period. These standards are reported to have had significant
benefits and imposed significant costs on the industry.33 Moreover, as Professor Coglianese
points out, the agency has seldom been sued in recent years and over its 50 year life span has a
respectable record of wins and losses on appeal.34 On this account the agency has remained in
the technology-forcing business, is seldom burdened by legal challenge and has a regulatory
32
Id.
Coglianese testimony at 6-7.
34
Id. at 11.
33
14
output that imposes billions of dollars of costs and provides even greater billions of dollars of
benefits in lives saved and injuries avoided.
The problem with this analysis is that it operates at too high a level of abstraction. The
reported lives saved and costs imposed by NHTSA’s post-1986 rules are vastly inflated. First,
virtually all of the lives now saved by NHTSA’s rules are attributable to performance standards
that were in effect prior to 1986, mostly prior to 1974, or to behavioral modifications that are
largely attributable to state law, not federal regulation. Second, to the extent that NHTSA’s more
recent rules have any life-saving effects, those effects are significantly overstated. The major
rules adopted over the three decades since Struggle’s account have largely required the industry
to do what it was doing already, what it was promising to do more of, or what was already
required in the European Union. Yet, the agency attributes any lives saved or injuries avoided
after the date of one of its performance standards as caused by that standard. Finally,
manufacturers are unlikely to sue NHTSA for imposing unreasonable requirements or
technologically infeasible ones when the agency is requiring only that they speed up the
diffusion of technologies that they are already using or are in widespread use elsewhere. There
is no space here for extended documentation of these two claims, but let me provide first an
overview analysis comparing the safety effects of the agency’s early and recent safety standards
and then a couple of more specific analyses of recent rules that NHTSA and OMB have treated
as particularly significant. The punch line is straightforward: NHTSA has adopted some rules in
the post-Struggle period (roughly 1986-2015), but their impact on motor vehicle safety is quite
limited.
Global Accounting. In December 2004 NHTSA published a study on the cost and weight
added by the Federal Motor Vehicle Standards to passenger cars and light trucks for model years
15
1968-2001. That study identified only 15 standards as having had any quantifiable cost and
weight impact. It further documented that 96% of the total cost impact was attributable either to
(1) standards in effect in 1974, or (2) subsequent improvements to two of those earlier
standards.35 The vast majority of NHTSA’s rules either had no quantifiable cost or weight
impact (48 standards) or only a negligible one (less than $5.00 or 3 pounds).
A NHTSA study in the same year concerning lives saved by federal motor vehicle safety
standards and other vehicle safety technologies told essentially the same story.36 Virtually all the
lives saved due to technologies associated with (not necessarily mandated by) NHTSA’s rules
were associated with standards adopted in the agency’s heyday of rulemaking from 1968 to
1974. Indeed only ten of the 43 standards in effect in 2002 had any demonstrable life-saving
effect.37 And 73% of the life-saving effect was attributed to a single standard – FMVSS 208, the
passenger restraints standard. 38 Moreover, most of the life-saving benefits of that standard was
credited to lap and shoulder belts, one of the agency’s earliest requirements, and one whose
effects are largely due to state mandatory use laws. In sum, eight standards, all having their
origins in the early 1970s or before, accounted for 96% of all the lives saved in 2002 that were
attributed to NHTSA rules.39
These data do not paint a picture of an agency aggressively forcing the pace of safety
technology in the years following the mid-1970s. Even so NHTSA’s reports somewhat overstate
the case for the efficacy of its rules. All of the 19 safety technologies associated in any way with
35
National Highway Traffic Safety Administration, Cost and Weight Added by the Federal Motor Vehicle Safety
Standards for Model Years 1968-2001 in Passenger Cars and Light Trucks, Executive Summary, Table 1, at viii
(NHTSA Report #DOT 809-834, December 2004).
36
National Highway Traffic Safety Administration, Lives Saved by Federal Motor Vehicle Safety Standards and
Other Vehicle Safety Technologies, 1960-2002, DOT HS809-833 (October 2004).
37
Id. at ix.
38
Id. at Table 2-7 at 198.
39
Id. at Tables 2-7, 2-8 and 2-9 at 198-201.
16
the agency standards identified as saving lives were voluntarily introduced before those
standards were adopted. Indeed 14 of the 19 technologies were already equipped in 50% or
more of new vehicles at the time the respective standards mandating them took effect.40 Given
the prospect for design defect liability for failure to use designs that are widespread in an
industry, it seems odd to imagine that manufacturers would not have fairly rapidly installed these
technologies in all of their products. Yet NHTSA attributes all lives saved post its standards to
the standards themselves. During the 1980s and 1990s NHTSA was, indeed, adopting some
standards, but they were basically following the industry’s lead rather than forcing safety
technologies on unwilling manufacturers. What about the 21st century?
Twice in the 1990s41 and six times42 in the early 21st century Congress adopted legislation
mandating that the agency do more. But those legislative prods either prompted the agency to
again try to increase the diffusion of technologies already in use, or mandated that it engage in
standard setting that would protect vulnerable populations, particularly children, from miniscule
risks.
Reacting to these legislative demands NHTSA adopted eight “major” rules (by OMB’s
characterization) between 2003 and 2013. All eight largely codified technology the industry had
already implemented, was in the process of implementing or had voluntarily promised to
implement in the near future. To read the Office of Management and Budget (OMB) 2014 report
to Congress covering these rules one would once again think that the agency was engaged in
40
Id. at Table 2-1 at 178.
The Intermodal Surface Transportation Efficiency Act of 1991, 105 Stat. 2082 (1991); and The Transportation
Equity Act for the 21st Century, 112 Stat. 107 (1998).
41
42
The Transportation Recall, Enhancement, Accountability, and Documentation Act of 2000, 114 Stat. 1800
(2000); The Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users, 119 Stat. 1144
(20005); Anton’s Law, Pub. Law No. 107-318, 49 U.S.C. 30127 (2002); The Cameron Gulbransen Kid’s
Transportation Safety Act of 2007, 122 Stat. 639 (2008); The Pedestrian Safety Enhancement Act of 2010, 124 Stat.
4086 (2011); and The Moving Ahead for Progress in the 21 st Century Act, 126 Stat. 757 (2012).
17
vigorous technology forcing.43 It reported that during the decade at issue NHTSA had imposed
annual costs between 3.6 and 7.2 billion dollars on the motor vehicle industry and that those
regulations yielded annual benefits in the range of 11.1 to 19 billion.44 Yet, if one looks closely
at what NHTSA did, a very different picture emerges.
Some Specifics. Most of the costs and benefits attributed to NHTSA rules are unlikely to
meet a “but for” test of causation. For example, FMVSS 126 requiring the use of electronic
stability control systems (ESC), was one of the least costly and most effective rules adopted after
the turn of the century. Why? Because at the time that the rule went into effect manufacturers
had voluntarily installed ESC in 71% of all vehicles produced in that model year, and they were
likely to move to 100% soon. Indeed the Ford Motor Company had so stated.45 Given ESC’s
modest cost, and the possibility of design defect liability for not installing a technology that
would be the overwhelming industry standard, it is hard to construct a scenario in which
manufacturers would not have followed Ford’s lead. NHTSA nevertheless counted all lives
saved and injuries avoided after the effective date of FMVSS 126 as attributable to the rule.
The upgrade of FMVSS 214, yet another “major” rule, took the model of codifying
industry practices and plans to new heights. In December 2003, the Alliance of Automobile
Manufacturers (industry’s principal trade association) and the Insurance Institute for Highway
Safety announced a new voluntary industry safety commitment to enhance occupant protection
in front and side impact crashes. The participating companies promised that by September 1,
2007, at least 50% of vehicles offered by them for the U.S. domestic market would meet the side
impact performance criteria, and that by September 1, 2009, 100% of such vehicles would do so.
43
Office of Management and Budget, Report to Congress on the Benefits and Costs of Federal Regulations and
Unfunded Mandates on State, Local and Tribal Entities, OMB Office of Information and Regulatory Affairs (2014).
44
Id. at Table A-2, p. 83.
45
72 Fed. Reg. 17,251, Note 38.
18
Six months after industry’s voluntary undertaking, NHTSA issued a notice of proposed
rulemaking 46 stating its intention to upgrade FMVSS 214 to improve protection in side impact
crashes. In September 2007, the agency published its revision of FMVSS 21447 which added a
pole test that, in practical terms, required the deployment of air bag curtains, torso airbags, and
other similar devices. Throughout the preamble to the final rule, NHTSA was careful to assure
and reassure industry that nothing in the rule would upset what industry was already doing.
Instead, the rule would “fortify” industry’s voluntary undertaking. NHTSA’s own analysis,
however, indicates that it was not really bringing much to the party.
To be sure, the rule did somewhat more than simply codify what industry had already
promised to do. The prescribed test dummy was a new model developed by European vehicle
safety agencies and the industry’s 2003 commitment concerned only the driver’s seating position
and head injuries. NHTSA’s new rule applied to the front seat passenger position and measured
forces exerted on the thoracic and abdominal regions as well. But again, it is difficult to imagine
manufacturers installing only driver protections given obvious liability issues and a market in
which they seemed to be competing to see how many airbags they could cram into a vehicle.
Thirty-eight percent of passenger cars had side airbags that would protect the thoracic and
abdominal regions as early as 2002.48
In any event the agency reassured industry that all was well – the rule would in no way
require them to do much more that they were already doing:
“Through voluntary efforts, manufacturers are able to begin equipping vehicles with
advanced technologies and are able to advance safety more quickly than through the
regulatory process. In formulating this regulation, we have been mindful to remain
consistent with the technological advances upon which the industry’s voluntary
commitments were based so as not to discourage further implementation while
46
47
48
69 Fed. Reg. 27,992 (May 17, 2004).
72 Fed. Reg. 51,908, (September 11, 2007).
69 Fed. Reg. 27,993, note 10.
19
manufacturers develop designs and technologies that are able to comply with this
regulation. This regulation builds upon the same technologies that will be used by the
industry to meet its voluntary commitment, and takes them even further.”49
Indeed events were moving so quickly that the agency decided to shorten the initially proposed
lead time by half, to two years. Ordinarily, halving the compliance period would have caused an
industry uproar. Not here. After making multiple technical objections to many aspects of the
rule and questioning its “practicability,”50 the industry then supported the phase-in schedule.51
The Missing Litigation
Other so-called rules adopted in the period 2002-2013 tell similar stories. And, of course,
no one sued to seek to overturn these rules. That would have been a fool’s errand. Most of
manufacturer’s early success in court had been based on arguments that particular performance
standards were unreasonable because too costly, were technologically infeasible or lacked real
world evidence of their costs or efficacy. Manufacturers ordered to do what they are already
doing have no such arguments.
During its first 20 years NHTSA was sued a total of 16 times in cases challenging its
rulemaking decisions. Thirteen of those cases sought to invalidate all or part of the rule. 52 Only
3 cases were brought by public interest groups seeking stronger agency action. 53 In the next
49
72 Fed. Reg. 51,910.
72 Fed. Reg. 51,938.
51
72 Fed. Reg. 51,945. The manufacturers subsequently rethought their acquiescence and were granted a year’s
delay in starting the phase in and additional year to complete compliance. Safety equipment that some
manufacturers had begun installing in 1996 would be in the entire fleet by 2015.
52
Automotive Parts and Accessories Ass’n. v. Boyd, 407 F.2d 330 (D.C. Cir. 1968); Boating Industry Ass’n. v. Boyd,
409 F. 2d (7th Cir. 1969); Wagner Elec. Corp. v. Volpe, 466 F.2d 1013 (3 rd. Cir. 1972); H&H Tire Co. v. U.S. Dept. of
Transportation, 471 F 2d 350 (7th Cir. 1972); Corp. v. Department of Transportation, 472 F 659 (6 TH Cir. 1972); Ford
Motor Co. v NHTSA, 473 F 2d 1241(6 th Cir. 1973); National Tire Dealers and Retreaders Ass’n. v. Brinegar, 491 F 2d
31 (D.C. Cir. 1974); Chrysler Corp. v Department of Transportation 515 F. 2d 1053 (6 th Cir. 1975); Goodrich v.
Department of Transportation, 541F. 2d 1178, (6 th Cir. 1976): Paccar v. NHTSA, 573 F. 2d 632 (9 th Cir. 1978); B.F.
Goodrich v. Department of Transportation, 592 F. 2d 322 (6th Cir. 1979); Motor Vehicle Mfrs. Ass’n. State Farm Ins. 463
U.S. 29 (1983); and Pacific Legal Foundation v. Department of Transportation, 593 F. 2d 1338 (D.C. Cir. 1979).
53
Motor Vehicle Manufacturers’ Association of U.S., Inc. v. State Farm Mutual Automobile Insurance Co., 463 U.S. 29
(1983); State Farm Mutual Automobile Insurance Co. v. Dole, 802 F.2d 474 (D.C. Cir. 1986); and Center for Auto Safety
v. Peck, 751 F.2d 1336 (D.C. Cir. 1985).
50
20
three decades NHTSA was sued only seven times in rulemaking challenges and not one of those
cases involved a manufacturer or its trade association. 54 Four of the seven involved public
interest groups or individuals seeking stronger agency action. This is hardly the result one would
anticipate when looking at an agency portrayed by OMB and NHTSA itself as imposing billions
of dollars of costs on industry every year. Has the industry become supine in the face of
vigorous standard setting?
The short answer of course is that these regulatory burdens are illusory. NHTSA was
following the industry’s lead and perhaps nudging it forward to diffuse technologies to the full
fleet that were already installed in a majority of new vehicles. This is not a picture of an
energetic safety regulatory program, but it is a program perfectly calibrated to satisfy
congressional mandates and OMB number crunchers, while avoiding trouble on judicial review.
Not only have the manufacturers not challenged the agency’s rules, public interest groups have
almost never succeeded in forcing the agency to do more than it has already planned to do. 55
We do not believe that this cooperative regulatory strategy is based on engineering
considerations. There are clearly targets for technology-forcing that are not making their way to
NHTSA’s rulemaking docket. For example, manufacturers and components suppliers are
developing and beginning to install a number of crash avoidance technologies that could be the
focus of additional rulemaking. 56 However, NHTSA proposes to deal with these technologies
largely by including them over time in its New Car Assessment Program (NCAP), a program that
54
Public Citizen v. Steed, 851 F2d. 444 (D.C. Cir. 1988); National Truck Equipment Association v. NHTSA, 919 F. 2d
1148 (6th Cir. 1990); Simms V. NHTSA, 45 F. 3d 999 (6 th Cir. 1995); Washington v. Department of Transportation, 84 F.
3d 1222); Public Citizen V. Mineta 340 F. 3d 39 (2nd Cir. 2003); Public Citizen V. NHTSA, 374 F. 3d 1251 (D.C. Cir.
2004); and National Truck Equipment Association, 711 F. 3d 662 (6 th Cir. 2013).
55
The one exception was Public Citizen v. Mineta, 340 F.3 rd 39 (2nd Cir. 2003). In that case the Second Circuit
invalidated a rule forced on NHTSA by OMB.
56
For a preview of some of these technologies see The Road Ahead: Advanced Vehicle Technology and its Implications,
Hearing Before the Committee on Commerce, Science and Transportation, United States Senate, 113th Congress 1st
Session, May 15, 2013.
21
attempts to inform consumers concerning certain safety aspects of vehicles. 57 This information
program, of course, coerces no one. Providing consumers with information is the least
controversial, and probably least effective, form of regulation available to American regulators. 58
The agency claims success for its information program, as does the Insurance Institute for
Highway Safety which has a similar information regime. For reasons that will be summarized
below, these claims are at best unproved. But NHTSA’s information efforts are applauded by
Congress, require no OMB clearance and generate no legal challenges.
Cooperation rather than regulation now seems to characterize the agency’s overall
strategy. NHTSA has recently entered into a contract with ten automobile manufacturers and the
Insurance Institute for Highway Safety whereby the manufacturers’ promise to install (at some
uncertain date) automatic emergency braking systems, presumably of the type currently being
installed and advertised by certain luxury vehicle manufacturers. 59 The agency’s Administrator
has testified that this strategy can “expedite and expand” on what the agency can achieve by
rulemaking. 60 Whether or why this is a strategy that promises improvements in vehicle safety
that would not occur were the agency to exercise its rulemaking authority is unclear. But the
agency’s current regulatory posture – adopting rules that piggyback on industry initiatives,
information provision that may or may not be useful or used by consumers, and voluntary
agreements with manufacturers for the deployment of new safety technologies – has another
57
National Highway Traffic Safety Administration, Notice of Proposed Rulemaking, New Car Assessment Program, 78
Fed. Reg. 38266-38270 (June 26, 2013).
58
See generally Omri Ben-Shahar and Carl E. Schneider, “The Failure of Mandated Disclosure”, 159 U. PA. L. REV. 647
(2011).
59
The Automatic Braking Voluntary Agreement can be found on the press release page of NHTSA’s website, “DOT and
IIHS Announce Historic Commitment From Ten Auto Makers to Include Automatic Emergency Braking on all New
Vehicles” (September 11, 2015).
60
Testimony of Mark Rosekind, NHTSA Administrator, Hearings Before the Subcommittee on Commerce,
Manufacturing and Trade of the House Energy and Commerce Committee, October 21, 2015. This statement can make
sense, of course, only if the agency’s performance standards demand less than safety advances that manufacturers are
willing to achieve voluntarily.
22
rationale. That regulatory stance, combined with continuing massive recall campaigns, is
perfectly fitted to a legal environment that is skeptical of coercive legislative rules by
administrative agencies and receptive both to post-hoc compensatory actions concerning
defective products and to information activities that might conceivably perfect otherwise
imperfect markets.
Empirical investigation inside the agency subsequent to Struggle’s publication, 61
NHTSA’s responses to comments in rulemaking proceedings seeking more ambitious rules,62
and the agency’s testimony before Congress,63 provide evidence that the agency is acutely aware
of the need to adapt in these ways to avoid legal and political risks. This is hardly surprising. To
survive, perhaps prosper, in a potentially hostile external legal environment an agency’s internal
operations must adapt. The interesting questions from our perspective are precisely what forms
those adaptations take and how they cash out in administrative priorities, techniques and outputs.
I hasten to add that adaptation to the legal and political environment may not be the only
explanation for NHTSA’s current regulatory strategies. In the years between 1966 and the
present, a market for automobile safety may have emerged that was non-existent or invisible at
the time of the 1966 Act. If so, information strategies and cooperative agreements with
automobile manufacturers could be an effective way to nudge safety innovation along at a pace
that accelerates the effects of market incentives. Indeed, that automobile manufacturers and
61
MARISSA GOLDEN, WHAT MOTIVATES BUREAUCRATS: POLITICS AND ADMINISTRATION IN THE REAGAN YEARS 40-60
(2000).
62
For example, in response to complaints that the agency was not addressing the problem of occupant ejection through
sunroofs, moon roofs or rear windows in its ejection mitigation rule, the agency reminded the commentators that the
reasonableness, practicability and appropriateness standards of the 1966 Act had not been relaxed and that it lacked real
world data concerning injuries and deaths associated with ejection from vehicles other than through the side windows. 76
Fed. Reg. 3218-19 (January 19, 2011).
63
Reauthorization of the National Highway Traffic Safety Administration, Hearing before the Subcommittee on
Commerce, Trade, and Consumer Protection of the House Committee on Energy and Commerce, 109th Congress
___ Sess. at 9, 15-16. (Testimony of Administrator Jeffrey Runge).
23
components manufacturers have been innovating and adopting safety features well in advance of
NHTSA regulations suggests as much.
Alas, diligent effort by one of our students has failed to turn up reliable evidence that an
effective market for vehicle safety exists or what its characteristics might be.64 Consumers say
that they are interested in safety, but fail to consult the safety information that is available. Sales
of new cars do not seem to respond to improvements in safety ratings. And because NHTSA now
rates virtually all the cars a 4 or a 5 on its 5 star rating system, consumers would not see much
difference were they to consult the agency’s information. Safety features generate no increased
value in used cars and consumer polls reveal that consumers are generally unwilling to pay the
additional costs for current optional safety features such as blind spot warning devises or
emergency driver assist braking. There is more evidence of various sorts and varying reliability.
For now we can only say that the existence and structure of a market for automobile safety
remains mysterious. A regulatory strategy motivated by reliance on that market seems
problematic.
Conclusion
David Harfst and I will have a much more detailed, nuanced, and doubtless revised,
insider tale to tell when we have completed ongoing research in agency, industry and
congressional materials and conduct interviews with congressional, agency, industry and interest
group personnel. But as the foregoing account suggests, it is possible to get a great deal of
information about agency operations, beliefs and strategies by careful parsing of congressional
hearings and rulemaking dockets. Without further belaboring the point, my argument for now is
simply this: A case study approach that looks carefully at the legal, political, and technological
64
William K. Stone, NHTSA and the Elusive Market for Auto Safety (2015) (paper on file with the authors).
24
context within which agency rules are developed and promulgated tells a much different story
than an attempt to gauge agency performance by counting rules adopted, cases litigated, and
costs and benefits reported. Quantitative analysis can tell us many things and raise important
questions, as Cary Coglianese’s study clearly does. But if we are to understand how the external
legal culture called “administrative law” shapes administration, we must also look inside at
agency methods, explanations, procedures and organizational arrangements.
25