administrative procedure act and 1946 and ambiguity of statute and substantial evidence and arbitrary and capricious

The virtue of Shepherd's long article on the prehistory of the APA, in 90 Nw U L R 1557 (1996) is that it shows that the unanimous passage of the bill in 1946 does not imply that unanimity or harmony was characteristic of the process leading to passage. Indeed he suggests that the interpretive manual for the statute, put out by the Attorney General in 1947 and available online, gives the government's one-sided construal of some of the ambiguous language of the Act at the expense of more conservative (and private--such as throught the ABA or Chambers of Commerce) interpretations. Rather than trying to explore the Act in its entirety, this essay will suggest one way in which the Act seemed to reflect conservative victory and one way that the values of New Dealers were honored.

Conservative Victory

Section 4 of the final Act, on the process of rulemaking, reflects both compromise and conservative victory. The latter is especially evident in the requirements for publication in the Federal Register and the "notice and comment" provision. General notice of a proposed rule making "shall include: (1) a statement of the time, place, and nature of public rule making proceedings; (2) reference to the authority under which the rule is proposed; and (3) either the terms or the subjects and issues involved." Though the statute differentiates between formal and informal rule making, both allow written submissions or comments and the former requires a procedure where a full record is kept and oral testimony is permitted.

In addition, rules do not become effective until thirty days after the proposed rules are published in the Federal Register. New Deal opponents of these features argued that agencies should only be obliged to receive public comment but not either to address or incorporate these comments. New Dealers also throught that they ought not be required to publish rules in an easily accessible public place. The fear of the New Dealers was that any process which would escape the controlled environment of the "experts" would needlessly slow down the "efficient" operation of the agencies. We can see, however, how interpretation of the statute will be crucial when we read the following list of agency activity exempt from public notice and comment. "This section shall not apply to interpretive rules, general statements of policy, rules of agency organization, procedure, or practice, or in any situation in which the agency for good cause finds...that notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest." Sounds like a field day for interpretive possibilities, doesn't it?

Judicial Review

One of the "hot" issues for the conservative opponents of agency power was the scope of judicial review of agency decisions. This issue is, however, much more complex that meets the eyes at first. The ABA and other conservative groups changed in their approach to this issue. As early as 1935 they favored extensive judicial review (and an Administrative Court) of agency decisions. After all, the judges were in a mood to overturn much of the New Deal agenda in those days, and administrative agency adjudications would be another such target for reversal. But as Roosevelt appointed more and more of his judges to appellate courts, the ABA became decidedly more cool to judicial review, even almost ignoring it in the latest proposals. When the ABA and other conservatives wanted judicial review, they supported it according to the "substantial evidence" standard. In one proposal this standard was changed to "substantial evidence having probative value." This would mean that reversal was possible unless the agency had substantial evidence to support the conclusion that was reached. A "substantial evidence" standard was much less forgiving of agency action than a "scintilla of evidence" standard, for example.

The Adminstration interests, however, were to have limited judicial review at first and, if judicial review was to happen at all, it must be considered under an "arbitrary or capricious" standard. The final language of Sec. 10, the "judicial review" section, provided:

"[the agency shall] hold unlawful and set aside agency action, findings, and conclusions found to be (1) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law....(5) unsuppported by substantial evidence in any case subject to the requirements of sections 7 and 8 [relating to hearings]..."

It appears at first that this is an example of the final effort at compromise, since it seemingly maintains both the administration and the ABA-type language, but a quick glance at the 1947 Attorney General's manual tells us the following: "The provisions of section 10 constitute a general restatement of the principles of judicial review embodied in many statutes and judicial decisions.." In other words, even though the language of section 10 can be read to incorporate two rather contrary standards (arbitrary and capricious; substantial evidence), the AG's conclusion that the new law merely restates old law suggests that a highly deferential review is envisioned.

Conclusion

The final form of the APA thus owes language both to opponents and supporters of the adminstrative agencies. As with many pieces of legislation, ambiguous language was incorporated into the statute so that courts ultimately would have to sort out what was meant. But by the end of WWII it was more important that such a statute existed than that it was perfectly clear in its meaning. Administrative agencies had played an immensely important role in the prosecution of the War effort from 1942-45, even if the popular feeling had it that they bungled a lot of things too. But the administrative state was here to stay; 60 years later we still are in its tentacular grip.

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