83 research outputs found
The California Greenhouse Gas Waiver Decision and Agency Interpretation: A Response to Professors Galle and Seidenfeld
Responding to Agency Avoidance of OIRA
Concerns have recently been raised that US federal agencies may sometimes avoid regulatory review by the White House Office of Information and Regulatory Affairs (OIRA). In this article, we assess the seriousness of such potential avoidance, and we recommend a framework for evaluating potential responses. After summarizing the system of presidential regulatory oversight through OIRA review, we analyze the incentives for agencies to cooperate with or avoid OIRA. We identify a wider array of agency avoidance tactics than has past scholarship, and a wider array of corresponding response options available to OIRA, the President, Congress, and the courts. We argue that, because the relationship between agencies and OIRA involves ongoing repeat player interactions, some of these avoidance tactics are less likely to occur (or to succeed) than has previously been alleged, and others are more likely; the difference depends significantly on how easy it is for OIRA to detect avoidance, and for OIRA, the courts, and others to respond. Further, we note that in this repeat player relationship, responses to agency avoidance tactics may induce further strategic moves and countermoves. Thus we further argue that the optimal response may not always be to try to eliminate the avoidance behavior; some avoidance may be worth tolerating where the benefits of trying to reduce agency avoidance would not justify the costs of response options and countermoves. We therefore conclude that responses to agency avoidance should be evaluated in a way similar to what OIRA asks of agencies evaluating proposed regulations: by weighing the pros and cons of alternative response options (including no action)
Supervising Outsourcing: The Need for Better Design of Blended Governance
We are long past the “vending machine”-style privatization of government functions – where the government contracts to buy a discrete product or service at a set price, whether aircraft components or landscaping. Government is increasingly enlisting, or collaborating with, private entities for functions long perceived as distinctly public. Private entities may make policy explicitly (through standards that agencies later adopt) or implicitly (through the third party verification of compliance with regulatory objectives). For example, the Department of Health and Human Services relies on the recommendations of an American Medical Association committee of specialist physicians to establish Medicare physician payments, while the US Department of Agriculture relies on private and state organizations to certify that food meets federal organic standards. Not only do these appear to be public functions, and important ones, but private actors also are exercising considerable discretion and sophisticated judgment in carrying them out. Meanwhile, as the examples suggest, many of these outsourcing relationships are far from the fairly structured principal–agent relationship that characterizes traditional outsourcing by contract
A Control-Based Approach to Shareholder Liability for Corporate Torts
Some commentators defend limited shareholder liability for torts and statutory violations as efficient, even though it encourages corporations to overinvest in and to externalize the costs of risky activity. Others propose pro rata unlimited shareholder liability for corporate torts. Both approaches, however, fail to account fully for qualitative differences among shareholders. Controlling shareholders, in particular, may have lower information costs, greater influence over managerial decisionmaking, and greater ability to benefit from corporate activity. This Article develops a control-based approach to shareholder liability. It first explores several differences among shareholders. For example, a controlling shareholder can more easily curb managerial risk aversion and consequently will likely prompt a company to externalize more costs. Further, because a controlling shareholder can obtain special benefits from corporate activity, imposing pro rata shareholder liability likely will not fully deter overinvestment in risky activities. This Article then proposes to hold shareholders with a capacity to control corporate activity fully responsible for corporate torts and statutory violations. Compared with the limited liability and pro rata liability regimes, a control-based liability regime is the most likely to compel corporations to internalize their costs and to ensure that injured tort plaintiffs are compensated. However, the regime could potentially overdeter some socially beneficial activities if insurance is unavailable. While definitively resolving the size of such effects requires further empirical investigation, a control-based liability regime more explicitly addresses shareholder differences and appears most likely to address limited liability\u27s moral hazard. This Article accordingly concludes that such a regime offers a promising alternative
The Permissibility of Acting Officials: May the President Work around Senate Confirmation?
Recent presidential reliance on acting agency officials, including an acting Attorney General, acting Secretaries of Defense, and an acting Secretary of Homeland Security, as well as numerous below-Cabinet officials, has drawn significant criticism from scholars, the media, and members of Congress. They worry that the President may be pursuing illegitimate goals and seeking to bypass the critical Senate role under the Appointments Clause. But Congress has authorized—and Presidents have called upon—such individuals from the early years of the Republic to the present. Meanwhile, neither formalist approaches to the constitutional issue, which seem to permit no flexibility, nor current Supreme Court doctrine, which contributes few bounds on acting officials, satisfactorily answer how much latitude a president should have to work around Senate confirmation.
After summarizing different methods Presidents have used to rely on unconfirmed officials to perform the work of Senate-confirmed offices, this Article advocates a functional approach to the constitutional question. A functional approach to acting officials possesses the twin virtues of pragmatism and constraint. Presidents have legitimate needs to rely briefly on unconfirmed individuals, but functional considerations, including the need to ensure the integrity, competence, and democratic responsiveness of senior agency officials, weigh against long-term reliance on such individuals. The Article concludes that because the Federal Vacancies Reform Act of 1998 authorizes overly lengthy service, the Act, together with other practices, is constitutionally problematic. The Article concludes with reform recommendations
Taking Public Access to the Law Seriously: The Problem of Private Control Over the Availability of Federal Standards
In the 1930s, Harvard professor Erwin Griswold famously complained about the enormous numbers of New Deal regulations that were obscurely published on individual sheets or in “separate paper pamphlets.” Finding these binding federal rules was difficult, leading to “chaos” and an “intolerable” situation. Congress responded, requiring that agencies publish all rules in the Federal Register and in the Code of Federal Regulations (CFR). Currently, recent federal public laws, the entire U.S. Code, the Federal Register, and the CFR are all freely available online as well as in governmental depository libraries. But with respect to thousands of federal regulations, the clock has been turned back—and worse. To save resources and build on private expertise, federal agencies have incorporated privately drafted standards into numerous federal regulations, but only by “reference.” These standards range widely. The CFR presently contains nearly 9,500 “incorporations by reference” of standards, often referred to as “IBR” rules. Many IBR rules incorporate privately drafted standards from so-called “standards development organizations” or “SDOs.” Agency use of IBR rules is likely to grow. Since the 1990s, both executive branch and congressional policies have officially encouraged agency use of privately drafted standards
A Presumption Against Agency Preemption
Federal agencies are increasingly taking aim at state law, even though state law is not expressly targeted by the statutes the agencies administer. Starting in 2001, the Office of the Comptroller of the Currency (OCC) issued several notices saying that state laws would apply to national bank operating subsidiaries (incorporated under state law) to the same extent as those laws applied to the parent national bank. In 2003, the OCC specifically mentioned state consumer protection laws and took the position that the state laws were preempted and did not apply to mortgage lenders owned by national banks. In December 2006, the Department of Homeland Security declared its own authority to preempt state law on high-risk chemical plant security, announcing a procedure by which interested parties could apply to see if state law would be preempted. In both cases, states responded angrily. In the OCC case, the attorneys general of every state filed Supreme Court briefs opposing the agency’s position in Watters v. Wachovia Bank, N.A. A joint brief filed by the National Conference on State Legislatures and the National Governors Association, also opposing the agency’s position, argued that federal counterparts to state consumer protection laws were not adequate. In response to the Department of Homeland Security, the state of New Jersey asserted its right to address risks presented by the seven high-risk chemical facilities located within its borders, more facilities than in any other state. Recent events have overtaken both agency actions. In the OCC case, the Supreme Court ruled that the relevant banking statutes were preemptive, mooting the impact of the agency action. The Department of Homeland Security backed off its preemptive position to some degree in response to congressional pressure, especially from the New Jersey delegation, and ultimately Congress legislated a limited savings clause for state chemical facility security laws. The examples nonetheless remain significant because the agencies attempted to preempt state law.Meanwhile, agencies have increasingly included preemptive statements in preambles to agency rulemaking documents. These have ranged from a January 2006 Food and Drug Administration (FDA) statement that failureto- warn claims against pharmaceutical manufacturers are preempted because such claims could require more information on a drug label than the FDA requires, to a Transportation Department statement that states could not require any greater safety than its own “roof crush” standards for automobiles. In all of these cases, the statute includes no language preempting state law
A Control-Based Approach to Shareholder Liability for Corporate Torts
Some commentators defend limited shareholder liability for torts and statutory violations as efficient, even though it encourages corporations to overinvest in and to externalize the costs of risky activity. Others propose pro rata unlimited shareholder liability for corporate torts. Both approaches, however, fail to account fully for qualitative differences among shareholders. Controlling shareholders, in particular, may have lower information costs, greater influence over managerial decisionmaking, and greater ability to benefit from corporate activity. This Article develops a control-based approach to shareholder liability. It first explores several differences among shareholders. For example, a controlling shareholder can more easily curb managerial risk aversion and consequently will likely prompt a company to externalize more costs. Further, because a controlling shareholder can obtain special benefits from corporate activity, imposing pro rata shareholder liability likely will not fully deter overinvestment in risky activities. This Article then proposes to hold shareholders with a capacity to control corporate activity fully responsible for corporate torts and statutory violations. Compared with the limited liability and pro rata liability regimes, a control-based liability regime is the most likely to compel corporations to internalize their costs and to ensure that injured tort plaintiffs are compensated. However, the regime could potentially overdeter some socially beneficial activities if insurance is unavailable. While definitively resolving the size of such effects requires further empirical investigation, a control-based liability regime more explicitly addresses shareholder differences and appears most likely to address limited liability\u27s moral hazard. This Article accordingly concludes that such a regime offers a promising alternative
Agency Burrowing: Entrenching Policies and Personnel before a New President Arrives
This Article examines executive branch agency actions concluded just before a new President takes office, such as midnight rulemaking and late-term hiring and promotion, which Professor Mendelson collectively refers to as agency burrowing. Congress, the media, and some commentators have portrayed such activities as unsavory power grabs that undermine the President-elect\u27s ability to direct the functions of administrative agencies. Rather than dismissing agency burrowing out of hand, however, Professor Mendelson argues for a more nuanced approach. In some cases, burrowing can make positive contributions to the democratic responsiveness of agencies, agency accountability, and the rule of law. A fuller analysis of burrowing also suggests the need for a more nuanced approach to Presidentcentered theories of the administrative state. Maximum presidential oversight may be insufficient to ensure agency accountability and democratic responsiveness. Instead of focusing centrally on a formal President-agency relationship, we may wish to give greater attention to more functional means of ensuring agency legitimacy such as monitoring, focused public dialogue on issues before agencies, and agency development of self-limiting rules
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