Deference asymmetries: Distortions in the evolution of regulatory law

Texas Law Review

Volumn 93, Issue 3, 2015, Pages 625-678

  Wasserman, Melissa F ^a  

^a UNIVERSITY OF ILLINOIS AT URBANA CHAMPAIGN   (United States)

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EID: 84923834500     PISSN: 00404411     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Article

References (112)

1. Chevron U.S.A. Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837 (1984) (proscribing a highly deferential “reasonableness” standard of review when evaluating an agency’s interpretation of a statute subject to that agency’s administrative and interpretive authority)
2. Skidmore v. Swift & Co., 323 U.S. 134 (1944) (requiring less deference to agency decision making in areas over which authority was not delegated to the agency); see also infra section II(B)(4).
3. Martin Shapiro, WHO GUARDS THE GUARDIANS?: JUDICIAL CONTROL OF ADMINISTRATION 167-173 (1988)
4. Cynthia R. Farina, Statutory Interpretation and the Balance of Power in the Administrative State, 89 COLUM. L. REV. 452-456 (1989)
5. Thomas W. Merrill & Kristin E. Hickman, Chevron’s Domain, 89 GEO. L.J. 833-835 (2001).
6. Matthew D. McCubbins et al., Structure and Process, Politics and Policy: Administrative Arrangements and the Political Control of Agencies, 75 VA. L. REV. 431-435 (1989)
7. This Article conceptualizes an agency’s selection of legal constructions as falling upon a spectrum: at one end of the spectrum is the legal interpretation that most aligns with the interests of the agency’s regulated entities, and at the other end of the spectrum is the legal interpretation that least aligns with the agency’s regulated entities. See infra subpart III(A).
8. There is a voluminous literature on the proper scope of judicial review of agency decisions. For a small sampling on this issue, see generally CHRISTOPHER F. EDLEY, ADMINISTRATIVE LAW: RETHINKING JUDICIAL CONTROL OF BUREAUCRACY 3-4, 105-10 (1990)
9. JAMES M. LANDIS, THE ADMINISTRATIVE PROCESS (1938)
10. Merrick B. Garland, Deregulation and Judicial Review, 98 HARV. L. REV. 505 (1985)
11. Richard J. Pierce, Essay, Chevron and Its Aftermath: Judicial Review of Agency Interpretation of Statutory Provisions, 41 VAND. L. REV. 301 (1988)
12. Cass R. Sunstein, On the Costs and Benefits of Aggressive Judicial Review of Agency Action, 1989 DUKE L.J. 522 (1989).
13. I am, however, unaware of any article that has systematically explored the consequences of deference asymmetries in the administrative state.
14. There is widespread belief that an agency’s decisions overly favor its regulated entities. See, e.g., Richard B. Stewart, The Reformation of American Administrative Law, 88 HARV. L. REV. 1667-1713 (1975) (“It has become widely accepted, not only by public interest lawyers, but by academic critics, legislators, judges, and even by some agency members, that the comparative overrepresentation of regulated or client interests in the process of agency decision results in a persistent policy bias in favor of these interests.” (footnotes omitted)).
15. Melissa F. Wasserman, The PTO’s Asymmetric Incentives: Pressure to Expand Substantive Patent Law, 72 OHIO ST. L.J. 379-402 (2011) (predicting that a bias evolution in legal standards results from the PTO seeking to minimize reversal of its decision making).
16. For a small sample of such literature, see Roger G. Knoll, REFORMING REGULATION: AN EVALUATION OF THE ASH COUNCIL PROPOSALS 99-100 (1971)
17. Paul J. Quirk, INDUSTRY INFLUENCE IN FEDERAL REGULATORY AGENCIES 4 (1981)
18. B. DAN WOOD & RICHARD W. WATERMAN, BUREAUCRATIC DYNAMICS: THE ROLE OF BUREAUCRACY IN A DEMOCRACY 18-19 (1994)
19. Steven P. Croley, Theories of Regulation: Incorporating the Administrative Process, 98 COLUM. L. REV. 1-5 (1998)
20. Michael E. Levine & Jennifer L. Forrence, Regulatory Capture, Public Interest, and the Public Agenda: Toward a Synthesis, 6 J.L. ECON. & ORG. 167-68 (1990)
21. George J. Stigler, The Theory of Economic Regulation, 2 BELL J. ECON. & MGMT. SCI. 3 (1971).
22. Levine & Forrence Supra note 13, at 169.
23. Stephen Breyer, BREAKING THE VICIOUS CIRCLE: TOWARD EFFECTIVE RISK REGULATION 11 (1993).
24. Einer R. Elhauge, Does Interest Group Theory Justify More Intrusive Judicial Review?, 101 YALE L.J. 31-32 (1991)
25. Richard C. Ausness et al., Providing a Safe Harbor for Those Who Play by the Rules: The Case for a Strong Regulatory Compliance Defense, 2008 UTAH L. REV. 115-140 (“The risk of agency capture is exacerbated by the ‘revolving door’ between regulatory agencies and private employers which encourage agency personnel to promote the interests of regulated industries in order to enhance their prospects of future employment in the private sector.”)
26. Timothy A. Canova, Financial Market Failure as a Crisis in the Rule of Law: From Market Fundamentalism to a New Keynesian Regulatory Model, 3 HARV. L. & POL’Y REV. 369, 384 (2009). As Timothy Canova observes: Several factors have contributed to the capture of key federal regulatory agencies by the nation’s financial services industry. One of these is the so-called “revolving door,” the tendency of regulatory officials to leave their government posts for lucrative positions in the private financial industry. The movement of key personnel back and forth between regulators and regulated has become incestuous. Policy naturally comes to reflect the bargain of the moment between the most powerful private interests. Canova, supra; see also infra note 138.
27. The model also assumes that agencies, upon receiving an unfavorable decision from their reviewing court, acquiesce to the court’s determination. Scholars have noted that at times, administrative agencies are not always subservient to adverse court decisions. See, e.g., Samuel Estreicher & Richard L. Revesz, Nonacquiescence by Federal Administrative Agencies, 98 YALE L.J. 679-682 (1989) (listing examples of various agencies refusing to follow adverse court rulings, dating back to the 1920s)
28. Emily Hammond Meazell, Deference and Dialogue in Administrative Law, 111 COLUM. L. REV. 1722-1781 (2011) (observing that agencies continue to engage in contested activities during decades of litigation, even after courts have failed to uphold those actions).
29. Joel d. Aberbach, KEEPING A WATCHFUL EYE: THE POLITICS OF CONGRESSIONAL OVERSIGHT 2 (1990) (detailing Congress’s oversight of agencies and bureaucracies)
30. McCubbins et al., Supra note 4, at 432 (asserting that elected officials utilize administrative procedures as one means of shaping agency decision making).
31. Elena Kagan, Presidential Administration, 114 HARV. L. REV. 2245-2248 (2001) (arguing that President Clinton dramatically expanded presidential control over administrative agencies)
32. Terry M. Moe, An Assessment of the Positive Theory of ‘Congressional Dominance, 12 LEGIS. STUD. Q. 475-489 (1987) (explaining that the President and his administration have increasingly used the appointment power to fill agencies with individuals whose political backgrounds “are conducive to presidential control”).
33. There is a body of literature that models court and agency interaction in the face of standards of judicial review, although most model the agency as strategically attempting to minimize judicial reversal and none (of which I am aware) predict a tilt in substantive law towards a pro-regulated- entity direction. See, e.g., Linda R. Cohen & Matthew L. Spitzer, Solving the Chevron Puzzle, 57 LAW & CONTEMP. PROBS. 65-68 (1994) (interpreting data to indicate that the Supreme Court’s desire for circuit courts “to take a more active role in determining administrative policy”)
34. Yehonantan Givati, Strategic Statutory Interpretation by Administrative Agencies, 12 AM. L. & ECON. REV. 95-96 (2010) (introducing a model predicting that agencies will make more aggressive decisions in response to being granted greater judicial deference)
35. Jud Mathews, Deference Lotteries, 91 TEXAS L. REV. 1349-1379 (2013) (arguing that agencies face uncertainty over what standard of review will be applied to their interpretations of statutes and exploring how this might affect agency behavior)
36. Matthew C. Stephenson, The Strategic Substitution Effect: Textual Plausibility, Procedural Formality, and Judicial Review of Agency Statutory Interpretations, 120 HARV. L. REV. 528-544 (2006) (arguing that agencies engage in strategic substitution, trading administrative costs for increased judicial deference when facing strained “textual plausibility”)
37. Emerson H. Tiller, Controlling Policy by Controlling Process: Judicial Influence on Regulatory Decision Making, 14 J.L. ECON. & ORG. 114-115 (1998) (focusing “on judicial control of agency policy” through the “imposition of process requirements on regulators”)
38. Emerson H. Tiller & Pablo T. Spiller, Strategic Instruments: Legal Structure and Political Games in Administrative Law, 15 J.L. ECON. & ORG. 349-351 (1999) (developing models based on bilateral interactions between either an agency and a court or between a lower court and a higher court)
39. Jonathan S. Masur & Lisa Larrimore Ouellette, Deference Mistakes 2 (Coase-Sandor Inst. for Law & Econ., Working Paper No. 679, 2014) (positing that mistakes in the deference regime applied by a court coupled with asymmetries in adjudication can generate systematic shift in the evolution of law).
40. The extent to which a court’s best or most plausible construction is influenced by interpretive method is irrelevant to this analysis, as well as the debate regarding the legitimacy of various interpretative methods. See, e.g., STEPHEN BREYER, ACTIVE LIBERTY: INTERPRETING OUR DEMOCRATIC CONSTITUTION 85 (2005)
41. William N. Eskridge, DYNAMIC STATUTORY INTERPRETATION 1-5 (1994)
42. Adrian Vermeule, JUDGING UNDER UNCERTAINTY 183-84 (2006)
43. Antonin Scalia, Common-Law Courts in a Civil-Law System: The Role of United States Federal Courts in Interpreting the Constitution and Laws, in A MATTER OF INTERPRETATION: FEDERAL COURTS AND THE LAW 3, 10 (Amy Gutmann ed., 1997).
44. Complicating the agency’s ability to predict the “best” construction is the fact that a panel of three judges will be drawn at random from the reviewing court to evaluate an agency’s statutory interpretation and judges themselves may disagree on the most plausible interpretation of the statute. See 28 U.S.C. § 46(b) (2012) (allowing the hearing of cases by separate panels of judges within a circuit); FED. CIR. R. 47.2 (determining that assignment to panels should be random)
45. Kornhauser & Sager. Supra note 30, at 107 (noting that judges on a multimember court could disagree on the rules applicable to the decisions of a specific case and that in turn could lead to disagreement and inconsistency).
46. Stephenson, Supra note 31, at 544 (arguing that an agency will “stretch the statutory text” in an effort to advance its policy agenda “just shy of the point” where its reviewing court would reject the interpretation).
47. Rapanos v. United States, 547 U.S. 715, 739, 742 (2006) (plurality opinion) (holding that the term ‘‘navigable waters’’ under the CWA includes only relatively permanent standing or flowing bodies of water, not intermittent or ephemeral flows of water, and only wetlands with a connection to bodies of waters of the United States, or that “navigable waters” means waters with a significant nexus or a hydrological connection to waters that could be made navigable)
48. Solid Waste Agency of N. Cook Cnty. v. U.S. Army Corps of Engineers, 531 U.S. 159, 171 (2001) (holding that isolated ponds, wholly located within two Illinois counties, do not fall under the definition of “navigable waters”)
49. United States v. Riverside Bayview Homes, Inc., 474 U.S. 121, 139 (1985) (finding that the Corps of Engineers reasonably interpreted the CWA to require permits for discharging fill materials into wetlands adjacent to “navigable waters”).
50. U.S.C. §§ 1311(a), 1344(a), 1344(d), 1362(6) (2012). This example is stylized and does not necessarily represent the views of the EPA or its reviewing court. Furthermore, while actual interpretation and enforcement of the CWA involves multiple entities, this example has simplified that relationship to focus on the complex interaction between an agency, the courts, and the regulated industry. See, e.g., id. § 1344(a)(d) (granting the Secretary of the Army, acting through the Chief of Engineers of the U.S. Army Corps of Engineers, the power to issue permits).
51. A growing empirical literature suggests appellate judges are influenced by ideological preferences. See, e.g., Cass R. Sunstein et al., ARE JUDGES POLITICAL?: AN EMPIRICAL ANALYSIS OF THE FEDERAL JUDICIARY 1-3 (2006) (inquiring into the relationship between judicial votes and political convictions)
52. Thomas J. Miles & Cass R. Sunstein, Do Judges Make Regulatory Policy? An Empirical Investigation of Chevron, 73 U. CHI. L. REV. 823-826 (2006) (finding that “data reveal a strong relationship between the justices’ ideological predispositions and the probability that they will validate agency determinations”)
53. Thomas J. Miles & Cass R. Sunstein, The Real World of Arbitrariness Review, 75 U. CHI. L. REV. 761-763 (2008) (identifying emerging concerns that judicial review might reflect judges’ individual policy commitments)
54. Richard L. Revesz, Environmental Regulation, Ideology, and the D.C. Circuit, 83 VA. L. REV. 1717-1719 (1997) (recounting correlative conclusions from a systematic study of the impact of judges’ ideologies on judicial decision making). These findings, however, are not inconsistent with a constraining effect of legal doctrine.
55. Frank B. Cross & Emerson H. Tiller, Essay, Judicial Partisanship and Obedience to Legal Doctrine: Whistleblowing on the Federal Courts of Appeals, 107 YALE L.J. 2155-2156 (1998) (finding substantial empirical support for the theory that the presence or absence of judges with divergent or minority policy preferences bears on whether “judges will perform their designated role as principled legal [decision makers]” or follow personal or partisan policy preferences)
56. Jonathan P. Kastellec, Panel Composition and Judicial Compliance on the US Courts of Appeal, 23 J.L. ECON. & ORG. 421-423 (2007) (surveying possible effects that the three-judge panel system may have on U.S. Courts of Appeals decisions). Moreover, even legal realists, like Judge Posner, have noted there is a substantial difference in the mindset of a judge who is applying strong judicial deference versus one who is applying de novo review.
57. RICHARD A. POSNER, HOW JUDGES THINK 114 (2008) (“The only distinction the judicial intellect actually makes is between deferential and nondeferential review.”).
58. U.S.C. § 702 (2012) (“A person suffering legal wrong because of agency action... is entitled to judicial review thereof.”); see also Abbott Labs. v. Gardner, 387 U.S. 136, 140-41 (1967) (“[T]he Administrative Procedure Act... embodies the basic presumption of judicial review,... so long as no statute precludes such relief or the action is not one committed by law to agency discretion” (citations omitted) (citing 5 U.S.C. §§ 701(a), 702)).
59. U.S.C. § 706(2)(F). Although this language arguably implies that something other than the APA must make the facts “subject to trial de novo,” the Supreme Court has interpreted this section of the APA to allow for no deference under the following two circumstances: (1) when “the agency fact-finding procedures are inadequate” or (2) when “issues that were not before the agency are raised in a proceeding to enforce nonadjudicatory agency action.” Citizens to Preserve Overton Park, 401 U.S. at 415. Nevertheless, it is exceedingly rare for courts to find either of these circumstances present. To date, there appears to be only one case under which a court has applied de novo review because either the agency’s fact-finding was inadequate or because issues that were not before the agency were raised in a proceeding to enforce nonadjudicatory agency action. Porter v. Califano, 592 F.2d 770, 782-83 (5th Cir. 1979) (involving substantial bias in the agency disciplinary proceeding)
60. Ronald M. Levin, Scope-of-Review Doctrine Restated: An Administrative Law Section Report, 38 ADMIN. L. REV. 239-274 (1986) (explaining that the language of § 706(2)(F) has been construed considerably narrower than originally intended, referring to only a few circumstances under which a trial de novo is guaranteed by statute or the Constitution).
61. Chandler v. Roudebush, 425 U.S. 840, 863-64 (1976) (recognizing a statutory guarantee of trial de novo of federal employees’ Title VII claims).
62. In order to determine whether a standard of review influences the judicial process, ideally one would want to observe if the court’s decision to uphold the agency’s legal interpretation varied as the standard of review changed. Of course, such counterfactuals do not exist in our legal system; the same case is not tried across multiple appellate courts that have been randomly assigned different standards of review. Selection biases in affirmance rate studies may confound the conclusions that can be drawn from them. First, the set of agency’s legal interpretations that are afforded de novo review likely vary substantially from those that are eligible for Chevron deference. As discussed above, de novo review is appropriate when an agency is interpreting a legal provision that it has no special authority to administer, such as the Constitution. See supra section II(B)(2). There may be something inherently different in reviewing the construction of the Constitution than reexamining an agency’s legal interpretation of its organic act that may skew the results. Second, the standard of review applied can affect a potential litigant’s decision to appeal the agency’s legal interpretation in the first place. If the potential litigant believes her chance of winning an appeal is inversely related to the strength of the deference afforded the agency’s decision, then she may choose not to appeal marginal cases when a strong deference standard will be applied. As a result, the reversal rate of agency action that is afforded Chevron deference may be arbitrarily high, as litigants choose only to appeal cases where the agency seems clearly to have adopted an interpretation that was unreasonable. Thus, even if affirmance rate studies suggest there is only a weak association between review standards and agency win rates, the standards of review may still have a significant impact upon judicial decision making.
63. If the court itself is biased in its decision making then it is possible that, depending on the court’s bias, the pro-regulated-entity tilt identified in this Article will either enhance or counteract the court’s own bias. For instance, if the court’s preferred construction does not reflect the aims embedded in the statute but instead overly favors the regulated entities then the bias identified in this Article will only be amplified. In contrast, if the court’s preferred construction overly disfavors the regulated entities then the bias identified in this Article could help to counteract the court’s bias resulting in unbiased agency-applied law.
64. Whether this bias or tilt will grow over time will depend upon several factors, including how frequently a legal construction must be updated. Take for example patentable subject matter, which is the doctrine that limits the types of inventions that fall under the purview of the patent system. 35 U.S.C. § 101 (2012)
65. Dan L. Burk & Mark A. Lemley, Policy Levers in Patent Law, 89 VA. L. REV. 1575-1544 (2003) (explaining that, barring several exceptions, “patentable subject matter has been defined quite broadly” based on § 101). The PTO must decide whether each new technology is patent eligible. 35 U.S.C. § 131. Thus, the tilt in regulatory law described in this Article may take on a dynamic drift, as each time the PTO must determine whether a new technology is patent eligible an opportunity for a bias in the development of patentable subject matter is created.
66. Benjamin Kapnik, Essay, Affirming the Status Quo?: The FCC, ALJs, and Agency Adjudications, 80 GEO. WASH. L. REV. 1527-1531 (2012) (“Agencies ‘conduct millions of adjudications each year’—far more than the federal courts.” (quoting 1 RICHARD J. PIERCE, JR., ADMINISTRATIVE LAW TREATISE § 8.1 (5th ed. 2010))).
67. It is of course possible that Congress would step in and override the agency. Congress may also serve as a check on an agency’s legal interpretation of a statute. See ABERBACH, supra note 28, at 2 (noting that Congress may review agency actions and policies via Congressional oversight)
68. Barry R. Weingast & Mark J. Moran, Bureaucratic Discretion or Congressional Control? Regulatory Policymaking by the Federal Trade Commission, 91 J. POL. ECON. 765-793 (1983) (concluding that Congress does play an influential role in agency decisions, even when it appears that Congress has not been active in controlling the agency).
69. It is also possible that the reviewing court applies a less deferential standard of review to an agency’s pro-regulated-entity legal interpretations than an agency’s legal interpretations that are less favored by its regulated entities. Because the agency’s anti-regulated stances will be more likely to be upheld than its pro-regulated-entity stances, an anti-regulated-entity bias in the evolution of legal standards may develop. This Article, however, focuses on the legal standards tilting toward outcomes more favorable to the regulated entities because I was only able to find circumstances in the administrative state where the application of deference regimes was systematically biased to create such an outcome.
70. More commonly, however, agencies have the full range of law-announcing apparatuses. Administrative bodies that are authorized in at least some contexts to promulgate both legislative rules and conduct administrative adjudications include the EPA, see Clean Air Act, 42 U.S.C. §§ 7409, 7413(a)(2)-(3) (2012); the Federal Communications Commission (FCC), see Communications Act of 1934, 47 U.S.C. § 154(i) (2012)
71. National Labor Relations Board (NLRB), see National Labor Relations Act, 29 U.S.C. §§ 156, 160 (2012); and the Food and Drug Administration (FDA), see Federal Food, Drug, and Cosmetic Act, 21 U.S.C. § 371(a) (2012) and Nat’l Nutritional Foods Ass’n v. Weinberger, 512 F.2d 688, 695-97 (2d Cir. 1975).
72. Both the NLRB and the Federal Trade Commission (FTC) are known for heavily relying on adjudication to announce legal interpretations of the statutes they administer. Mark H. Grunewald, The NLRB’s First Rulemaking: An Exercise in Pragmatism, 41 DUKE L.J. 274-274 (1991)
73. Paul R. Verkuil, The Purposes and Limits of Independent Agencies, 1988 DUKE L.J. 257-263 (“Adjudication... was a substantial part of the business of the [FTC]”).
74. See generally Exec. Order No. 13,422, 3 C.F.R. 191, 192 (2007) (defining a guidance document as “an agency statement of general applicability and future effect, other than a regulatory action, that sets forth a policy on a statutory, regulatory, or technical issue or an interpretation of a statutory or regulatory issue”).
75. Michael Abramowicz & John F. Duffy, Ending the Patenting Monopoly, 157 U. PA. L. REV. 1541-1564 (2009) (discussing agency mass-justice concerns and how agencies respond by constraining the discretion of employees to increase the chances that judgments of agency employees are of “high quality and highly consistent”).
76. Connor Raso, Agency Avoidance of Rulemaking Procedures, 67 ADMIN. L. REV. (forthcoming Mar. 2015) (manuscript at 23), available at http://ssrn.com/abstract=2293455,.
77. Importantly, because rules can be immediately appealed by both sets of constituents, the bias in the evolution of law will only occur when the agency utilizes guidance documents or adjudications to interpret the term “disability.”
78. See, e.g., 8 U.S.C. § 1252(a)(1) (2012) (allowing for judicial review of orders of removal)
79. John W. Guendelsberger, Judicial Deference to Agency Decisions in Removal Proceedings in Light of INS v. Ventura, 18 GEO. IMMIGR. L.J. 605-616 (2004) (noting that federal circuit courts can only review decisions by the Board of Immigration Appeals that are adverse to the alien).
80. Leandra Lederman & Stephen W. Mazza, TAX CONTROVERSIES: PRACTICE AND PROCEDURE 8 (3d ed. 2009) (explaining the process for adjudicating federal tax controversies).
81. DANIEL T. SHEDD, CONG. RESEARCH SERV., R42609, OVERVIEW OF THE APPEAL PROCESS FOR VETERAN’S CLAIMS 2 (2013) (describing numerous opportunities for claimant to seek review of unfavorable decisions).
82. Wasserman Supra note 12, at 401 (noting the pre-AIA unidirectional review of PTO decisions, where patent denials, but not patent grants, are subject to immediate review by the Federal Circuit).
83. U.S. PATENT & TRADEMARK OFFICE, PERFORMANCE AND ACCOUNTABILITY REPORT: FISCAL YEAR 2012, at 13 tbl.1 (2012) (stating the PTO’s mission includes “delivering high quality and timely examination of patent and trademark applications”).
84. U.S.C. § 6(b) (2012). The Patent Trial and Appeal Board was formerly known as the Board of Patent Appeals and Interferences. See 35 U.S.C. § 6(a) (2006) (establishing the Board of Patent Appeals and Interferences); Leahy-Smith America Invents Act, Pub. L. No. 112-29, § 7(a), 125 Stat. 284, 313 (2011) (codified as amended at 35 U.S.C. § 6 (2012)) (restructuring the Board of Patent Appeals and Interferences as the Patent Trial and Appeal Board).
85. Prior to the AIA, the PTO was statutorily authorized to conduct ex parte and inter partes reexamination, in which a party asked the PTO to reconsider its decision to grant an already-issued patent. 35 U.S.C. §§ 301-307, 311-318 (2006). These proceedings, however, were examinational rather than adjudicative and suffered from severe limitations on third-party participation, narrow substantive grounds for review, and strict estoppel provisions. Id. The new proceedings hope to overcome many of these shortfalls. See Wasserman, supra note 70, at 1975-76 (describing the adjudicatory informalities and changes the AIA brings). Importantly, when this Article refers to the PTO’s ability to adjudicate already-issued patents, it is referring only to the agency’s new authority to conduct inter partes and post-grant review.
86. Craig Allen Nard, Deference, Defiance, and the Useful Arts, 56 OHIO ST. L.J. 1415-1434 (1995) (calling the Board’s adjudications informal)
87. Wasserman, A Supra note 70, at 1975-1976 (noting the lack of formal adjudication characteristics, such as oral arguments).
88. Specifically, the statute requires the Director to promulgate regulations, for both inter partes review and post-grant review, “setting forth standards and procedures for discovery of relevant evidence,” 35 U.S.C. §§ 316(a)(5), 326(a)(5) (2012), and “providing either party with the right to an oral hearing as part of the proceeding,” id. §§ 316(a)(10), 326(a)(10).
89. More specifically, an aggrieved patent applicant can appeal the PTO’s decision to deny his or her patent to either the U.S. District Court for the Eastern District of Virginia, wherein new evidence may be submitted, 35 U.S.C. § 145 (2012) and Kappos v. Hyatt, 132 S. Ct. 1690, 1693-94 (2012), or directly to the Federal Circuit, wherein no new evidence may be submitted, 35 U.S.C. § 141 (2006) and Hyatt, 132 S. Ct. at 1694, while an aggrieved party can only appeal the PTO’s decision regarding the validity of an already-issued patent to the Federal Circuit. 35 U.S.C. § 141(c). Any appeals from the U.S. District Court for the Eastern District of Virginia involving patent denials can then be appealed to the Federal Circuit.
90. Abramowicz & Duffy Supra note 76, at 1559-1560 (describing how the PTO constrains individual examiner discretion by distributing manuals containing “hundreds of pages of fairly specific rules”).
91. Wendy Wagner, Revisiting the Impact of Judicial Review on Agency Rulemakings: An Empirical Investigation, 53 WM. & MARY L. REV. 1717-1783 (2012) (noting that “[i]ndustry rarely, if ever, advocated for greater health protection” with respect to EPA air toxin rules).
92. Cary Coglianese, Litigating Within Relationships: Disputes and Disturbance in the Regulatory Process, 30 LAW & SOC’Y REV. 735-741 (1996)
93. Frank B. Cross, Shattering the Fragile Case for Judicial Review of Rulemaking, 85 VA. L. REV. 1243-1217 (1999).
94. RICHARD L. REVESZ & MICHAEL A. LIVERMORE, RETAKING RATIONALITY: HOW COST- BENEFIT ANALYSIS CAN BETTER PROTECT THE ENVIRONMENT AND OUR HEALTH 160 (2008)
95. Kristina Daugirdas, Evaluating Remand Without Vacatur: A New Judicial Remedy for Defective Agency Rulemakings, 80 N.Y.U. L. REV. 278, 290 (2005)
96. Samuel J. Rascoff & Richard L. Revesz, The Biases of Risk Tradeoff Analysis: Towards Parity in Environmental and Health-and- Safety Regulation, 69 U. CHI. L. REV. 1763-1822 (2002) (“[T]he proregulation challenger’s incentive to bring suit to effect a long-term increase in the new regulation’s stringency is undercut by the worry that a legal ‘victory’ might create an even less stringent standard”).
97. William F. West & Connor Raso, Who Shapes the Rulemaking Agenda? Implications for Bureaucratic Responsiveness and Bureaucratic Control, 23 J. PUB. ADMIN. RES. & THEORY 495-508 (2013) (finding that business groups exerted significant influence over agency rule-making agendas)
98. Jason Webb Yackee & Susan Webb Yackee, A Bias Towards Business? Assessing Interest Group Influence on the U.S. Bureaucracy, 68 J. POL. 128-133 (2006) (finding that of the 1,693 public comments reviewed in the study, business interests submitted over 57% of comments, whereas nongovernmental organizations submitted 22% and public interest groups submitted 6%).
99. Rena Steinzor., CTR. FOR PROGRESSIVE REFORM, BEHIND CLOSED DOORS AT THE WHITE HOUSE: HOW POLITICS TRUMPS PROTECTION OF PUBLIC HEALTH, WORKER SAFETY, AND THE ENVIRONMENT 49 fig.15 (2011), available at http://www.progressivereform.org/articles/OIRA_Meetings_1111.pdf, archived at http://perma.cc/DFL5-H8DQ (finding that the OIRA process is dominated by industry participation)
100. Michael A. Livermore & Richard L. Revesz, Regulatory Review, Capture, and Agency Inaction, 101 GEO. L.J. 1337-1344 (2013) (discussing capture concerns with respect to OIRA).
101. Rachel E. Barkow, Insulating Agencies: Avoiding Capture Through Institutional Design, 89 TEXAS L. REV. 15-22 (2010)
102. It is, of course, expensive for the agency to defend its actions in court. To the extent that an agency operates on a fixed budget, resources that it devotes to litigation are resources that it necessarily cannot devote to other agency activity. Beyond these monetary concerns, reversal by the courts might also cause reputational harms. An agency may believe that routine reversal by its reviewing court will diminish its credibility before the court. These reputational concerns are especially significant because repeat players, such as agencies, believe their reputation is “largely their stock in trade.”
103. Galanter, supra note 17, at 98-99 (analyzing repeat players in litigation and acknowledging that one of the advantages that repeat players have is their “opportunities to develop facilitative informal relations with institutional incumbents”). Additionally, an agency’s clout with Congress, and concomitantly its budget, may diminish if its reputation as a fair arbitrator is called into question.
104. See Barry R. Furrow, Governing Science: Public Risks and Private Remedies, 131 U. PA. L. REV. 1403, 1422 n.83 (1983) (noting that attorneys’ fees can provide an incentive to bring public interest litigation). Congress has already enacted a number of fee-shifting statutes expressly to encourage public interest litigation. See, e.g., Civil Rights Act of 1964, 42 U.S.C. § 2000a-3(b) (2012).
105. Robert V. Percival & Geoffrey P. Miller, The Role of Attorney Fee Shifting in Public Interest Litigation, 47 LAW & CONTEMP. PROBS. 233-239 (1984).
106. Catherine R. Albiston & Laura Beth Nielsen, The Procedural Attack on Civil Rights: The Empirical Reality of Buckhannon for the Private Attorney General, 54 UCLA L. REV. 1087-1095 (2007) (explaining how fee-shifting statutes help mitigate disparities between individuals and “resourceful institutional defendants”)
107. Frances Kahn Zemans, Legal Mobilization: The Neglected Role of Law in the Political System, 77 AM. POL. SCI. REV. 690-695 (1983) (noting that many statutes were intended to mobilize private citizens and avoid agency agenda setting).
108. For instance, historic data from public interest organizations indicate that attorneys’ fee awards remain only a small percentage of the budget of most such groups. See, e.g., COUNCIL FOR PUB. INTEREST LAW, BALANCING THE SCALES OF JUSTICE D-10 tbl.II-8 (1976) (listing fee awards as 1% of total sources of funds for various public interest groups between 1972 and 1975).
109. Michael J. Burstein, Rethinking Standing in Patent Challenges, 83 GEO. WASH. L. REV. (forthcoming Feb. 2015) (manuscript at 52), available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2359873
110. Lisa Schultz Bressman, Judicial Review of Agency Inaction: An Arbitrariness Approach, 79 N.Y.U. L. REV. 1657-1684 (2004) (observing that “judicial decisions restricting the citizen-suit provision” turn the courts against Congress “for the benefit of the President”)
111. Scalia Supra note 165, at 881 (arguing that standing is “a crucial and inseparable element” of the separation of powers principle).
112. Pierce Judicially Imposed Limit, Supra note 139, at 1181-1182 arguing that the Court’s “broad grant of standing” to challenge the constitutionality of legislative actions has