Federalism and Final Agency Action

by Seth Davis — Monday, Mar. 7, 2016

On March 30th, the Supreme Court will hear oral argument in United States Army Corps of Engineers v. Hawkes Co., Inc. The question presented concerns “final agency action”: Is the Army Corps’ determination that the Clean Water Act applies to waters on private land “final agency action” reviewable under the Administrative Procedure Act? According to an amicus brief filed by 23 states, this question raises “serious federalism concerns,” which “require reading the APA to permit immediate review of such jurisdictional determinations.”

Federal jurisdiction under the CWA obviously has something to do with the allocation of federal and state authority over land and water use. But it’s not immediately apparent that federalism has anything to do with the meaning of “final agency action” in the APA. As far as I can tell, the Solicitor General’s brief in Hawkes Co. doesn’t mention the word “federalism.” Perhaps that’s unsurprising. UnderBennett v. Spear, 520 U.S. 154 (1997), the test for “final agency action” asks whether the agency’s action is “the consummation of the agency’s decisionmaking process” and determines “rights or obligations” or otherwise has “legal consequences.”

What does federalism have to do with that test? According to the state amici, the Army Corps’ conclusion that private property contains “waters of the United States” under the CWA “potentially claims jurisdiction at the expense of the States’ sovereign authority . . . . by setting a federal floor on discharges of dredged or fill material into the water.” The APA and the CWA do not, the state amiciargue, contain a “clear statement from Congress . . . . to allow the Corps’ assertions of federal jurisdiction to effectively go unchallenged and result in a de facto expansion of federal authority at the expense of the States.” Accordingly, federalism requires the Court to interpret the APA and the CWA to allow judicial review of the Corps’ jurisdictional determination.

I’m not interested in adjudicating whether the state amici are right that the meaning of “final agency action” has something to do with federalism, at least in some cases. What interests me instead is how the states’ argument brings together two trends in administrative law: “administrative law as the new federalism” and “libertarian administrative law.” The former term, coined by Gillian Metzger, is reflected in the state amici’s take on judicial review under the APA, which they call “an important bulwark against federal encroachment.” The latter term, coined by Cass Sunstein and Adrian Vermeule, refers to a trend on the D.C. Circuit towards “doctrines that are designed to protect private ordering from national regulatory intrusion.” Quoting Bond v. United States, the state amici inHawkes Co. urge the Court to interpret the APA’s requirement of “final agency action” so as to protect state autonomy and thus to “secure[] the freedom of the individual” from federal regulation.

To borrow a phrase from Abigail Moncrieff, this is administrative law as “libertarian federalism.” It views federal regulation of private landowners as an injury to state sovereignty and looks to expand judicial review to protect individuals and states alike. It’s worth observing that Hawkes Co. suggests administrative law as libertarian federalism is contingent, not systematic. After all, as Massachusetts v. EPA confirms, “special solicitude” for the states in administrative law isn’t necessarily libertarian. Still, thinking about administrative federalism in these terms makes the state standing question in United States v. Texas all the more interesting — but that’s a thought for another day and a different post.

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