The Government at the Mercy of Its Contractors : How the New Deal Lawyers Reshaped the Common Law to Challenge the Defense Industry in World War II

On the eve of the United States\u27 entry into World War II, the Roosevelt administration tried to convince the federal judiciary to rein in the prices of defense contracts, using the doctrine of economic duress. In time of war, so the argument went, the nation depends on defense contractors for its very life, and these private firms should not be permitted to exploit public necessity for inordinate gain. This argument, had it succeeded, would have been perhaps the largest expansion of judges\u27 common law power over big business during the twentieth century. However, the Supreme Court, in the case of United States v. Bethlehem Steel Corp., rejected that argument. The newly appointed Justice Robert H. Jackson, who had authorized the duress theory in his previous post as Attorney General, blasted the decision as the dirtiest day\u27s work the Court has ever done and a defeat for the Government worse than Pearl Harbor. Justice Felix Frankfurter, dissenting, was equally adamant in support of the duress theory. Thus did Jackson and Frankfurter - two of the greatest legal minds of the New Deal-advocate a radical innovation in the common law to deal with the nascent military-industrial complex. Surprisingly, scholars have given this remarkable case no serious attention since the Second World War. This Article fills that void. It demonstrates that the U.S. government, desperate to provide for its troops during total war, had no choice but to meet the demands of large contractors. This was because, although the state had the legal power to seize defense plants, it lacked the practical means to do so. Further, this Article explains how the duress theory became a political weapon for New Deal lawyers against big business, how it represented a revolution in the legal understanding of duress and coercion, and how it caused an intense and illuminating controversy among liberal jurists about the true meaning of judicial restraint

The Endgame of Administrative Law: Governmental Disobedience and the Judicial Contempt Power

Scholars of administrative law focus overwhelmingly on lawsuits to review federal government action while assuming that, if plaintiffs win such lawsuits, the government will do what the courts say. But in fact, the federal government\u27s compliance with court orders is imperfect and fraught, especially with orders compelling the government to act affirmatively. Through an examination of thousands of opinions (especially of district courts), docket sheets, briefs, and other filings, plus archival research and interviews, this Article provides the first general assessment of how federal courts handle the federal government\u27s disobedience. The Article makes four conclusions. First, the federal judiciary is willing to issue contempt findings against agencies and officials. Second, while several federal judges believe they can (and have tried to) attach sanctions (fines and imprisonment) to these findings, the higher courts have exhibited a virtually complete unwillingness to allow sanctions, at times swooping down at the eleventh hour to rescue an agency from incurring a budget-straining fine or its top official from being thrown in jail. Third, the higher courts, even as they unfailingly thwart sanctions in all but a few minor instances, have bent over backward to avoid making pronouncements that sanctions are categorically unavailable, deliberately keeping the sanctions issue in a state of low salience and at least nominal legal uncertainty. Fourth, even though contempt findings are practically devoid of sanctions, they have a shaming effect that gives them substantial if imperfect deterrent power

Federal Agency Guidance and the Power to Bind: An Empirical Study of Agencies and Industries

The typical federal agency issues a vast amount of guidance, advising the public on how it plans to exercise discretion and interpret law. Under the Administrative Procedure Act (APA), the agency must follow onerous procedures to issue full-blown regulations (including notice and comment) but can issue guidance far more easily. What justifies this difference, in the familiar telling, is that guidance is not binding in the way regulations are. Agencies are supposed to use guidance flexibly. But critics claim that agencies are not flexible-instead they follow guidance rigidly and thus pressure regulated parties to do the same. If true, this claim means agencies can issue de facto regulations simply by calling them guidance, threatening to make a dead letter of the APA \u27s constraints

The De-Privatization of American Warfare: How the U.S. Government Used, Regulated, and Ultimately Abandoned Privateering in the Nineteenth Century

The U.S. government has recently moved toward privatizing military services, most noticeably in Iraq, where profit-seeking contractors frequently engage in combat against insurgents. Many observers are shocked and disturbed by these developments, since they violate the governmental monopoly on military combat, which is probably the most accepted and intuitive aspect of the public-private distinction in America today. In fact, however, exclusive governmental control of combat is not an inherent nor even a particularly old part of the American experience. For much of U.S. history, one of the most important options in the nation\u27s military repertoire was the use of privateers, that is, privately owned and operated ships, licensed to forcibly capture enemy merchant vessels and pocket the proceeds. Privateering constituted the principal U.S. offensive strategy in the maritime theater of the War of 1812 and was a major part of U.S. contingency planning through the Civil War. But sometime thereafter, the U.S. government ceased to consider the option. Thus far, no scholar has seriously investigated how and why the United States abandoned privateering. This Article fills the gap. It recreates the choice that the government faced, delineating how privateers differed from a public navy in terms of strategic capabilities, financing, technology, and the incentives and rules that operated on the persons who did the fighting, plus the institutions that enforced those rules. The Article concludes that privateering survived for so long-in spite of persistent humanitarian objections that accountability structures were not sturdy enough to control the violence that privateers inflicted because the American people wished to avoid a large permanent military establishment, fearing that such an institution would be a menace to democracy. It was only in the 1890s, when the nation gave up its anti-militarist tradition and embarked on a program of imperial expansion overseas, that privateering proved functionally inadequate to the nation\u27s new ambitions and therefore vanished from the realm of possibility

Towards an Administrative Law of Central Banking

A world in turmoil caused by Covid-19has revealed again what has long been true: the Federal Reserve is arguably the most powerful administrative agency in government, but neither administrative-law scholars nor the Fed itself treat it that way. In this Article, we present the first effort to map the contours of what administrative law should mean for the Fed, with particular attention to the processes the Fed should follow in determining and announcing legal interpretations and major policy changes. First, we synthesize literature from administrative law and social science to show the advantages that an agency like the Fed can glean from greater openness and transparency in its interpretations of law and in its long-term policy making processes. These advantages fall into two categories: (1) sending more credible signals of future action and thereby shaping the behavior of regulated parties and other constituents, and (2) increasing the diversity of incoming information on which to base decisions, thereby improving their factual and predictive accuracy. Second, we apply this framework to two key areas—monetary policy and emergency lending—to show how the Fed can improve its policy signaling and input diversity in the areas of its authority that are most expansive. The result is a positive account of what the Fed already does as an administrative agency and a normative account of what it should do in order to preserve necessary policy flexibility without sacrificing the public demands for policy clarity and rigor

Leviathan and Interpretive Revolution: The Administrative State, the Judiciary, and the Rise of Legislative History, 1890-1950

A generation ago, it was common and uncontroversial for federal judges to rely upon legislative history when interpreting a statute. But since the 1980s, the textualist movement, led by Justice Scalia, has urged the banishment of legislative history from the judicial system. The resulting debate between textualists and their opponents—a debate that has dominated statutory interpretation for a generation—cannot be truly understood unless we know how legislative history came to be such a common tool of interpretation to begin with. This question is not answered by the scholarly literature, which focuses on how reliance on legislative history became permissible as a matter of doctrine (in the Holy Trinity Church case in 1892), not on how it became normal, routine, and expected as a matter of judicial and lawyerly practice. The question of normalization is key, for legislative history has long been considered more difficult and costly to research than other interpretive sources. What kind of judge or lawyer would routinize the use of a source often considered intractable? Drawing upon new citation data and archival research, this Article reveals that judicial use of legislative history became routine quite suddenly, in about 1940. The key player in pushing legislative history on the judiciary was the newly expanded New Deal administrative state. By reason of its unprecedented manpower and its intimacy with Congress (which often meant congressmen depended on agency personnel to help draft bills and write legislative history), the administrative state was the first institution in American history capable of systematically researching and briefing legislative discourse and rendering it tractable and legible to judges on a wholesale basis. By embracing legislative history circa 1940, judges were taking up a source of which the bureaucracy was a privileged producer and user—a development integral to judges’ larger acceptance of agency-centered governance. Legislative history was, at least in its origin, a satist tool of interpretation