Permissible Delegations Standards

Implicit in the concept of filling in the details is the idea that there is some intelligible guiding principle or framework to apply. Indeed, the requirement that Congress set forth “intelligible principles” or “standards” to guide as well as limit the agency or official in the performance of its assigned task has been critical to the Court's acceptance of legislative delegations. In theory, the requirement of standards serves two purposes: “it insures that the fundamental policy decisions in our society will be made not by an appointed official but by the body immediately responsible to the people . . . , [and] it prevents judicial review from becoming merely an exercise at large by providing the courts with some measure against which to judge the official action that has been challenged.” 1

More about Permissible Delegations Standards

The only two instances in which the Court has found an unconstitutional delegation to a public entity have involved grants of discretion that the Court found to be unbounded, hence standardless. Thus, in Panama Refining Co. v. Ryan,2 the President was authorized to prohibit the shipment in interstate commerce of “hot oil”&emdash; oil produced in excess of state quotas. Nowhere&emdash;not in the language conferring the authority, nor in the “declaration of policy,” nor in any other provision&emdash;did the statute specify a policy to guide the President in determining when and under what circumstances to exercise the power.3 Although the scope of granted authority in Panama Refining was narrow, the grant in A. L. A. Schechter Poultry Corp. v. United States 4 was sweeping. The National Industrial Recovery Act devolved on the executive branch the power to formulate codes of “fair competition” for all industry in order to promote “the policy of this title.” The policy was “to eliminate unfair competitive practices, to promote the fullest possible utilization of the present productive capacity of industries, . . . and otherwise to rehabilitate industry. . . .” 5 Though much of the opinion is written in terms of the failure of these policy statements to provide meaningful standards, the Court was also concerned with the delegation's vast scope&emdash;the “virtually unfettered” discretion conferred on the President of “enacting laws for the government of trade and industry throughout the country.” 6

Permissible Delegations Standards: Developments

Typically the Court looks to the entire statute to determine whether there is an intelligible standard to guide administrators, and a statute's declaration of policies or statement of purposes can provide the necessary guidance. If a statute's declared policies are not open-ended, then a delegation of authority to implement those policies can be upheld. For example, in United States v. Rock Royal Co-operative, Inc.,7 the Court contrasted the National Industrial Recovery Act's statement of policy, “couched in most general terms” and found lacking in Schechter, with the narrower policy that an agricultural marketing law directed the Secretary of Agriculture to implement.8 Similarly, the Court found ascertainable standards in the Emergency Price Control Act's conferral of authority to set prices for commodities if their prices had risen in a manner “inconsistent with the purposes of this Act.” 9

Other Aspects

The Court has been notably successful in finding standards that are constitutionally adequate. Standards have been ascertained to exist in such formulations as “just and reasonable,” 10 “public interest,” 11 “public convenience, interest, or necessity,” 12 “unfair methods of competition,” 13 and “requisite to protect the public health [with] an adequate margin of safety.” 14 Thus, in National Broadcasting Co. v. United States,15 the Court found that the discretion conferred on the Federal Communications Commission to license broadcasting stations to promote the “public interest, convenience, or necessity” conveyed a standard “as complete as the complicated factors for judgment in such a field of delegated authority permit.” 16 Yet the regulations upheld were directed to the contractual relations between networks and stations and were designed to reduce the effect of monopoly in the industry, a policy on which the statute was silent.17

Other Issues

When, in the Economic Stabilization Act of 1970, Congress authorized the President “to issue such orders and regulations as he may deem appropriate to stabilize prices, rents, wages, and salaries,” and the President responded by imposing broad national controls, the lower court decision sustaining the action was not even appealed to the Supreme Court.18 Explicit standards are not even required in all situations, the Court having found standards reasonably implicit in a delegation to the Federal Home Loan Bank Board to regulate banking associations.123 Even in “sweeping regulatory schemes” that affect the entire economy, the Court has “never demanded . . . that statutes provide a 'determinate criterion' for saying 'how much [of the regulated harm] is too much.' ” 20 Thus Congress need not quantify how “imminent” is too imminent, how “necessary” is necessary enough, how “hazardous” is too hazardous, or how much profit is “excess.” Rather, discretion to make such determinations may be conferred on administrative agencies.21

For a time, the Court appeared to have approved a bootstrap theory under which administrative implementation of a congressional enactment could provide the intelligible standard necessary to uphold a delegation. The Court's decision in Lichter v. United States 22 relied on an administrative interpretation of the term “excessive profits” as applied to the performance of certain wartime government contracts, and was applied to profits earned prior to Congress's incorporation into the statute of the administrative interpretation.23 The Court, however, subsequently rejected the idea in Whitman v. American Trucking Associations.24 In Whitman, the Court asserted that Lichter mentioned agency regulations only “because a subsequent Congress had incorporated the regulations into a revised version of the statute.” 25 “We have never suggested that an agency can cure an unlawful delegation of legislative power by adopting in its discretion a limiting construction of the statute,” 26 the Court concluded.

Although Congress must ordinarily provide some guidance that indicates broad policy objectives, there is no general prohibition on delegating authority that includes the exercise of policy judgment. In Mistretta v. United States,27 the Court approved congressional delegations to the United States Sentencing Commission, an independent agency in the judicial branch, to develop and promulgate guidelines binding federal judges and cabining their discretion in sentencing criminal defendants. Although the Court enumerated the standards Congress had provided, it admitted that significant discretion existed with respect to making policy judgments about the relative severity of different crimes and the relative weight of the characteristics of offenders that are to be considered, and stated forthrightly that delegations may carry with them “the need to exercise judgment on matters of policy.” 28 A number of cases illustrate the point. For example, the Court has upheld complex economic regulations of industries in instances in which the agencies had first denied possession of such power, had unsuccessfully sought authorization from Congress, and had finally acted without the requested congressional guidance.29 The Court has also recognized that, when Administrations change, new officials may have sufficient discretion under governing statutes to change or even reverse agency policies. 30

It seems therefore reasonably clear that the Court does not require much in the way of standards from Congress. The minimum upon which the Court usually insists is that Congress use a delegation that “sufficiently marks the field within which the Administrator is to act so that it may be known whether he has kept within it in compliance with the legislative will.” 31 Where the congressional standards are combined with requirements of notice and hearing and statements of findings and considerations by the administrators, so that judicial review under due process standards is possible, the constitutional requirements of delegation have been fulfilled. 32 This requirement may be met through the provisions of the Administrative Procedure Act,33 but where that Act is inapplicable or where the Court sees the necessity for exceeding its provisions, due process can supply the safeguards of required hearing, notice, supporting statements, and the like.34

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References

This text about Permissible Delegations Standards is based on The Constitution of the United States of America: Analysis and Interpretation, published by the U.S. Government Printing Office.

[Footnote 1] Arizona v. California, 373 U.S. 546, 626 (1963) (Justice Harlan, dissenting).

[Footnote 2] 293 U.S. 388 (1935).

[Footnote 3] The Court, in the view of many observers, was influenced heavily by the fact that the President's orders were nowhere published and notice of regulations bearing criminal penalties for their violations was spotty at best. Cf. E. CORWIN, THE PRESIDENT: OFFICE AND POWERS 1787-1957 394-95 (4th ed. 1958). The result of the Government's discomfiture in Court was enactment of the Federal Register Act, 49 Stat. 500 (1935), 44 U.S.C. § 301, providing for publication of Executive Orders and agency regulations in the daily Federal Register.

[Footnote 4] 295 U.S. 495 (1935).

[Footnote 5] 48 Stat. 195 (1933), Tit. I, § 1.

[Footnote 6] 295 U.S. at 542. A delegation of narrower scope led to a different result in Fahey v. Mallonee, 332 U.S. 245, 250 (1947), the Court finding explicit standards unnecessary because “[t]he provisions are regulatory” and deal with but one enterprise, banking, the problems of which are well known and the authorized remedies as equally well known. “A discretion to make regulations to guide supervisory action in such matters may be constitutionally permissible while it might not be allowable to authorize creation of new crimes in uncharted fields.” The Court has recently explained that “the degree of agency discretion that is acceptable varies according to the scope of the power congressionally conferred.” Whitman v. American Trucking Ass'ns, 531 U.S. 457, 475 (2001) (Congress need not provide “any direction” to EPA in defining “country elevators,” but “must provide substantial guidance on setting air standards that affect the entire national economy”).

[Footnote 7] 307 U.S. 533 (1939).

[Footnote 8] 307 U.S. at 575. Other guidance in the marketing law limited the terms of implementing orders and specified the covered commodities.

[Footnote 9] Yakus v. United States, 321 U.S. 414 (1944) (the principal purpose was to control wartime inflation, and the administrator was directed to give “due consideration” to a specified pre-war base period).

[Footnote 10] Tagg Bros. & Moorhead v. United States, 280 U.S. 420 (1930).

[Footnote 11] New York Central Securities Corp. v. United States, 287 U.S. 12 (1932).

[Footnote 12] Federal Radio Comm'n v. Nelson Bros. Bond & Mortgage Co., 289 U.S. 266 (1933).

[Footnote 13] FTC v. Gratz, 253 U.S. 421 (1920).

[Footnote 14] Whitman v. American Trucking Ass'ns, 531 U.S. 547 (2001).

[Footnote 15] 319 U.S. 190 (1943).

[Footnote 16] 319 U.S. at 216.

[Footnote 17] Similarly, the promulgation by the FCC of rules creating a “fairness doctrine” and a “right to reply” rule has been sustained, Red Lion Broadcasting Co. v. FCC, 395 U.S. 367 (1969), as well as a rule requiring the carrying of anti-smoking commercials. Banzhaf v. FCC, 405 F.2d 1082 (D.C. Cir. 1968), cert. denied sub nom. Tobacco Institute v. FCC, 396 U.S. 842 (1969).

[Footnote 18] Amalgamated Meat Cutters & Butcher Workmen v. Connally, 337 F. Supp.

[Footnote 19] (D.D.C. 1971). The three-judge court relied principally on Yakus.$$123 Fahey v. Mallonee, 332 U.S. 245, 250 (1947) (the Court explained that both the problems of the banking industry and the authorized remedies were well known).

[Footnote 20] Whitman v. American Trucking Ass'ns, 531 U.S. 457, 475 (2001).

[Footnote 21] Whitman, 531 U.S. at 475-76.

[Footnote 22] 334 U.S. 742 (1948).

[Footnote 23] In upholding the delegation as applied to the pre-incorporation administrative definition, the Court explained that “[t]he statutory term 'excessive profits,' in its context, was a sufficient expression of legislative policy and standards to render it constitutional.” 334 U.S. at 783. The “excessive profits” standard, prior to definition, was contained in Tit. 8 of the Act of October 21, 1942, 56 Stat. 798, 982. The administrative definition was added by Tit. 7 of the Act of February 25, 1944, 58 Stat. 21, 78.

[Footnote 24] 531 U.S. 547 (2001).

[Footnote 25] 531 U.S. at 472.

[Footnote 26] 531 U.S. at 472.

[Footnote 27] 488 U.S. 361 (1989).

[Footnote 28] 488 U.S. at 378.

[Footnote 29] E.g., Permian Basin Area Rate Cases, 390 U.S. 747 (1968); American Trucking Ass'ns v. Atchison, Topeka & Santa Fe Ry., 387 U.S. 397 (1967).

[Footnote 30] Chevron, U.S.A. v. NRDC, 467 U.S. 837, 842-45, 865-66 (1984) (“[A]n agency to which Congress has delegated policymaking responsibilities may, within the limits of that delegation, properly rely upon the incumbent administration's views of wise policy to inform its judgments.” Id. at 865). See also Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Ins. Co., 463 U.S. 29, 42-44, 46-48, 51-57 (1983) (recognizing agency could have reversed its policy but finding reasons not supported on record).

[Footnote 31] Yakus v. United States, 321 U.S. 414, 425 (1944).

[Footnote 32] Yakus v. United States, 321 U.S. 414, 426; Skinner v. Mid-America Pipeline Co., 490 U.S. 212, 218 (1989); American Light & Power Co. v. SEC, 329 U.S. 90,107, 108 (1946); Opp Cotton Mills v. Administrator, 312 U.S. 126, 144 (1941). It should be remembered that the Court has renounced strict review of economic regulation wholly through legislative enactment, forsaking substantive due process, so that review of the exercise of delegated power by the same relaxed standard forwards a consistent policy. E.g., Ferguson v. Skrupa, 372 U.S. 726 (1963); Williamson v. Lee Optical Co., 348 U.S. 483 (1955).

[Footnote 33] Act of June 11, 1946, 60 Stat. 237, 5 U.S.C. §§ 551-559. In NLRB v. Wyman-Gordon Co., 394 U.S. 759 (1969), six Justices agreed that a Board proceeding had been in fact rule-making and not adjudication and that the APA should have been complied with. The Board won the particular case, however, because of a coalescence of divergent views of the Justices, but the Board has since reversed a policy of not resorting to formal rule-making.

[Footnote 34] E.g., Goldberg v. Kelly, 397 U.S. 254 (1970); Wisconsin v. Constantineau, 400 U.S. 433 (1971).

Permissible Delegations Standards

Permissible Delegations Standards