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.”101

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,102 the President was authorized to prohibit the shipment in interstate commerce of “hot oil”— oil produced in excess of state quotas. Nowhere—not in the language conferring the authority, nor in the “declaration of policy,” nor in any other provision—did the statute specify a policy to guide the President in determining when and under what circumstances to exercise the power.103 Although the scope of granted authority in Panama Refining was narrow, the grant in A. L. A. Schechter Poultry Corp. v. United States104 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. . . .”105 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—the “virtually unfettered” discretion conferred on the President of “enacting laws for the government of trade and industry throughout the country.”106

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.,107 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.108 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.”109

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,”110 “public interest,”111 “public convenience, interest, or necessity,”112 “unfair methods of competition,”113 and “requisite to protect the public health [with] an adequate margin of safety.”114 Thus, in National Broadcasting Co. v. United States,115 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.”116 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.117 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.118 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.119

The Court has emphatically rejected the idea that administrative implementation of a congressional enactment may provide the intelligible standard necessary to uphold a delegation. The Court’s decision in Lichter v. United States120 could be read as approving of a bootstrap theory, the Court in that case having upheld the validity of a delegation of authority to recover “excessive profits” as applied to profits earned prior to Congress’s incorporation into the statute of the administrative interpretation.121 In Whitman v. American Trucking Associations,122 however, the Court asserted that Lichter mentioned agency regulations only “because a subsequent Congress had incorporated the regulations into a revised version of the statute.”123 “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,”124 the Court concluded.

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.’ ”125 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.126

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,127 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.”128 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.129 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.130

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.”131 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.132 This requirement may be met through the provisions of the Administrative Procedure Act,133 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.134

Footnotes

101
Arizona v. California, 373 U.S. 546, 626 (1963) (Justice Harlan, dissenting). [Back to text]
102
293 U.S. 388 (1935). [Back to text]
103
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. [Back to text]
104
295 U.S. 495 (1935). [Back to text]
105
48 Stat. 195 (1933), Tit. I, § 1. [Back to text]
106
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”). [Back to text]
107
307 U.S. 533 (1939). [Back to text]
108
307 U.S. at 575. Other guidance in the marketing law limited the terms of implementing orders and specified the covered commodities. [Back to text]
109
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). [Back to text]
110
Tagg Bros. & Moorhead v. United States, 280 U.S. 420 (1930). [Back to text]
111
New York Central Securities Corp. v. United States, 287 U.S. 12 (1932). [Back to text]
112
Federal Radio Comm’n v. Nelson Bros. Bond & Mortgage Co., 289 U.S. 266 (1933). [Back to text]
113
FTC v. Gratz, 253 U.S. 421 (1920). [Back to text]
114
Whitman v. American Trucking Ass’ns, 531 U.S. 547 (2001). [Back to text]
115
319 U.S. 190 (1943). [Back to text]
116
319 U.S. at 216. [Back to text]
117
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). [Back to text]
118
Amalgamated Meat Cutters & Butcher Workmen v. Connally, 337 F. Supp. 737 (D.D.C. 1971). The three-judge court relied principally on Yakus. [Back to text]
119
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). [Back to text]
120
334 U.S. 742 (1948). [Back to text]
121
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. [Back to text]
122
531 U.S. 547 (2001). [Back to text]
123
531 U.S. at 472. [Back to text]
124
531 U.S. at 472. [Back to text]
125
Whitman v. American Trucking Ass’ns, 531 U.S. 457, 475 (2001). [Back to text]
126
Whitman, 531 U.S. at 475–76. [Back to text]
127
488 U.S. 361 (1989). [Back to text]
128
488 U.S. at 378. [Back to text]
129
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). [Back to text]
130
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). [Back to text]
131
Yakus v. United States, 321 U.S. 414, 425 (1944). [Back to text]
132
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). [Back to text]
133
Act of June 11, 1946, 60 Stat. 237, 5 U.S.C. §§ 551559. 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. [Back to text]
134
E.g., Goldberg v. Kelly, 397 U.S. 254 (1970); Wisconsin v. Constantineau, 400 U.S. 433 (1971). [Back to text]