Symbolism and Separation of Powers in Agency Design

Kristin E. Hickman*

The political polarization of our time has profound implications for the ability of federal government agencies to perform the functions and accomplish the goals that Congress has given them.¹ Congress depends heavily on agencies to implement and administer government programs, not limited to but certainly including policymaking through the promulgation of regulations and the adjudication of individual enforcement actions.² No matter how doggedly an agency enforces statutory and regulatory requirements, however, the efficacy of government programs ultimately depends on the willingness of their targets and beneficiaries to accept and comply with the pronouncements of the agencies tasked with administering those programs.³ If we want people voluntarily to comply with statutory requirements, we ought to have some concern for public perceptions regarding the fairness and legitimacy of agencies and agency action.⁴ Meanwhile, in the current political climate, a substantial portion of the electorate questions that fairness and legitimacy.⁵

Administrative law has seen several cases in recent years focused on agency design and separation of powers principles. In particular, the Supreme Court and the D.C. Circuit have found the statutory design of a particular federal government agency or office within an agency to be constitutionally flawed on separation of powers grounds.⁶ When a court finds a legal problem with an agency’s structure or actions, the traditional remedy is to vacate the action or actions giving rise to the challenge.⁷ With structural deficiencies in an agency’s design, this traditional remedy means that none of the agency’s actions are valid until Congress resolves the problem. But in these recent cases, upon finding constitutional violations, the courts’ remedy du jour has been to take it upon themselves to tweak the details of the challenged agency’s design—specifically, by severing a sentence or two from the agency’s governing statute to allow particular agency officials to be removed from office by the President at will rather than only for cause.⁸ Meanwhile, the courts left the actions of the challenged agency, and the structures and actions of identically or similarly designed agencies, largely or entirely untouched. In short, the challenging parties achieved a symbolic victory in favor of their vision of the Constitution, but otherwise not much changed.

My goal with this Essay is a modest one: to raise a few reservations regarding judicial refashioning of agency design via this severance remedy for separation of powers violations. To that end, the Essay will proceed fairly straightforwardly. I will describe three cases or sets of cases in which the Supreme Court or the D.C. Circuit has employed the severance remedy: Free Enterprise Fund v. Public Company Accounting Oversight Board,⁹ a series of D.C. Circuit cases brought by the Intercollegiate Broadcasting System against the Copyright Royalty Board,¹⁰ and PHH Corp. v. Consumer Financial Protection Bureau.¹¹ Then I will highlight three reservations I have about using the severance remedy in this way: (1) that the remedy may not reflect the judicial restraint that motivates it; (2) that the remedy is sufficiently weak that its repeated use will chill litigation of legitimate constitutional challenges; and (3) that the remedy makes agency officials more politically accountable when, arguably, popular understandings of separation of powers principles might counsel otherwise. To the extent these reservations are accurate, judicial use of the severance remedy to address agency design flaws may, in turn, exacerbate questions regarding the fairness and legitimacy of agency actions.

I have no grand proposals for addressing these reservations. Conceding longstanding administrative law precedents, realities of contemporary governance, and institutional constraints faced by the judiciary, I am not even prepared to say that the severance remedy is not the best alternative available in at least some agency design cases. To the extent one concludes that the severance remedy is a problem, the only true solution may be for Congress to amend existing statutes or think again before getting too creative with agency design. At a minimum, however, courts ought to at least contemplate the potential drawbacks, as well as the arguable benefits, before employing the severance remedy.

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© 2018 Kristin E. Hickman. Individuals and nonprofit institutions may reproduce and distribute copies of this Article in any format at or below cost for educational purposes so long as each copy identifies the author, provides a citation to the Notre Dame Law Review, and includes this provision in the copyright notice.

*Distinguished McKnight University Professor and Harlan Albert Rogers Professor in Law, University of Minnesota Law School. I am thankful to the students of the Notre Dame Law Review for inviting me to participate in the Symposium for which this Article was written, and to participants at the Symposium for helpful comments and suggestions. Thank you also to Jerry Kerska, Bill McGeveran, Peter Shane, Mark Thomson, and students in my advanced administrative law course for helpful conversations, comments, and suggestions. Many thanks also to Trevor Matthews and Paul Dimick for outstanding research assistance.

1 See, e.g., Gillian E. Metzger, Essay, Agencies, Polarization, and the States, 115 Colum. L. Rev. 1739, 1746–48 (2015) (summarizing some of the implications of political polarization for administrative agencies).

2 1 Richard J. Pierce, Jr., Administrative Law Treatise § 2.3 (5th ed. 2010) (observing that agencies are responsible for most of the government’s policy decisions, rules of conduct, and adjudications of individual cases).

3 Ian Ayres & John Braithwaite, Responsive Regulation: Transcending the Deregulation Debate 20–21 (1992) (recognizing that “[i]ncreasingly within both scholarly and regulatory communities there is a feeling that the regulatory agencies that do best at achieving their goals are those that strike some sort of sophisticated balance between” deterrence of noncompliance through enforcement and penalties versus “gentle persuasion” to secure compliance with legal requirements).

4 See, e.g., Tom R. Tyler, Psychological Perspectives on Legitimacy and Legitimation, 57 Ann. Rev. Psychol. 375, 376–78 (2006) (linking legitimacy, defined as “the belief that authorities, institutions, and social arrangements are appropriate, proper, and just,” with voluntary compliance with legal requirements).

5 See, e.g., Philip Wallach, Ctr. for Effective Pub. Mgmt. at Brookings, The Administrative State’s Legitimacy Crisis (2016); Gillian E. Metzger, Foreword: 1930s Redux: The Administrative State Under Siege, 131 Harv. L. Rev. 1, 8–9 (2017).

6 See Free Enter. Fund v. Pub. Co. Accounting Oversight Bd., 561 U.S. 477 (2010); PHH Corp. v. Consumer Fin. Prot. Bureau, 839 F.3d 1 (D.C. Cir. 2016), rev’d en banc, 881 F.3d 75 (D.C. Cir. 2018); Intercollegiate Broad. Sys., Inc. v. Copyright Royalty Bd., 684 F.3d 1332 (D.C. Cir. 2012).

7 3 Richard J. Pierce, Jr., Administrative Law Treatise § 18.1, at 1675 (5th ed. 2010) (“In most cases, successful prosecution of a review proceeding yields instead a judicial decision setting aside the agency action and remanding the proceeding for further agency action not inconsistent with the decision of the reviewing court.”).

8 See, e.g., Intercollegiate Broad. Sys., 684 F.3d at 1340–41.

9 561 U.S. 477.

10 Intercollegiate Broad. Sys., Inc. v. Copyright Royalty Bd., 796 F.3d 111 (D.C. Cir. 2015); Intercollegiate Broad. Sys., 684 F.3d 1332; Intercollegiate Broad. Sys., Inc. v. Copyright Royalty Bd., 571 F.3d 69 (D.C. Cir. 2009) (per curiam).

11 839 F.3d 1. Although the three-judge panel in PHH applied the severance remedy, id. at 37–39, the en banc court’s conclusion did not require it to consider the remedy. PHH Corp. v. Consumer Fin. Prot. Bureau, 881 F.3d 75, 77 (D.C. Cir. 2018) (en banc). Nevertheless, separate dissenting opinions authored by Judges Brett Kavanaugh and Karen LeCraft Henderson debated the severance remedy.