Category: Administrative Law

Interview on The Black Box Society

BBSBalkinization just published an interview on my forthcoming book, The Black Box Society. Law profs may be interested in our dialogue on methodology—particularly, what the unique role of the legal scholar is in the midst of increasing academic specialization. I’ve tried to surface several strands of inspiration for the book.

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F.F. — Make of him what you will, but . . .

Felix Frankfurter

Felix Frankfurter

I want to recommend a relatively new article in the Journal of Supreme Court History. It is impressively researched, commendably thoughtful, and refreshingly balanced. Before doing so, however, permit me to say a few prefatory words.

It is hard to be fair when writing of those with whom we disagree, and harder still when we dislike their personal manner. Arrogant, argumentative, and devious – these are not the words that fair-minded scholars like to use unless the fit is fair. All of which takes us back in time to this man: Felix Frankfurter (1882-1965).

What to make of him?

As a Supreme Court Justice he was, in Mel Urofsky’s words, “a divisive figure whose jurisprudential philosophy is all but ignored today.” Others have been even less kind in their assessment of the temperament and jurisprudence of the Justice from Vienna. While Cass Sunstein has recently labored to revive respect for Justice Frankfurter and his judicial opinions, that effort may prove Sisyphean (save, perhaps, in a few discrete areas involving federal jurisdiction).

Still, there was more to Felix Frankfurter than the life he led on the Court between 1939 and 1962. The trajectory of his career (fueled by hard work, ambition, and brilliance) is an immigrant-come-to-America success story at its best. His work – first with Louis Brandeis and then on his own – to advance the cause of fair and humane labor practices exemplifies the Progressive movement in its glory. Then there was the role he played early on in helping to launch the ACLU. With a mix of courage and insight, he later called for a retrial for Nicola Sacco and Bartolomeo Vanzetti by way of an impressive lawyer-like article he published in the Atlantic in 1927; the article was thereafter expanded into a small book. And, of course, there is more, much more, which brings me back to that article I alluded to earlier.

Sujit Raman

Sujit Raman

Sujit Raman (the chief appellate lawyer in Maryland’s U.S. Attorney’s office) has just published an engaging and highly informative article. Its title: “Felix Frankfurter and His Protégés: Re-examining the ‘Happy Hot Dogs.’” It captures Felix in all his complexity and does so with objective nuance. With skilled brevity Raman also sketches the story of the Jewish immigrant’s struggle to assimilate, the Harvard Law student’s meritocratic success, the progressive’s desire to improve government when he went to work for Henry Stimson (first in New York and then in Washington, D.C), and then the Harvard professor’s cultivation of the best and brightest, whom he invited to his Sunday teas.

Above all, Sujit Raman’s real story is about Felix Frankfurter’s “greatest legacy,” namely, the “legions of students he trained and nurtured at the Harvard Law School, . . . who, in their own right, shaped the age in which they lived.” Consistent with that objective, Frankfurter’s “avowed intent as a professor was to instill in his students an interest in public service, and from his earliest days, he began collecting recruits for his crusade.” In time, they would come to be known as Frankfurter’s “Happy Hot Dogs” as Hugh Samuel Johnson tagged them.MTE5NTU2MzE2MjE5NDc1NDY3

Could he be snobbish? Yes. Could he be petty? Yes. Spiteful? Yes. Did he delight in manipulating matters from unseen sidelines? Yes again.

Clearly, F.F. had his psychological warts. Yet, when one steps back and beholds the man and this patch of his life work at a detached distance, he stands rather tall. Why?

Now, to cut to the chase: “Frankfurter was one of the New Deal’s intellectual architects as well as one of its most accomplished draftsmen of policy – yet he had no legislative portfolio or any official position in the Roosevelt Administration.” Moreover, adds Raman, “Frankfurter was the New Deal’s principal recruiting agent. He placed his protégés in all levels of government, and consequently his vision was carried forth, albeit indirectly, by his able lieutenants.” In sum, “the New Deal was in many ways the embodiment and culmination of Frankfurter’s life work.”

James Landis

James Landis

In the span of 28 pages (buttressed by 127 scholarly endnotes), Sujit Raman fills in many of the blanks in the Professor-and-the-New-Deal story. While he is cautious not to exaggerate Frankfurter’s role and influence, Raman’s account makes it difficult to deny the remarkable magnitude of Frankfurter’s unique impact on public law and its operation at a crucial stage in our legal history.

True, the “Happy Hot Dogs” story has been told before and from a variety of perspectives (see, e.g.,  here and here). Even so, Mr. Raman does what others before him have not quite done: he tells the story in a concise yet authoritative way and with enough panache to draw the reader back in history for glimpses into the exciting world of F.F. and his adept protégés – the likes of Thomas G. Corcoran (video here), Benjamin V. CohenJames M. Landis, David Lilienthal, and Charles Wyzanski, among others. They were all part of Frankfurter’s network, all “elite lawyers” hand picked because of their ties to F.F. and their “reformist inclinations.”

Whatever your opinion of Felix Frankfurter, his star may yet brighten anew, though probably not in the universe of Supreme Court history and jurisprudence. His true galaxy was elsewhere – in that realm where the “minds of men” move the gears of government to places only once imagined in classrooms in Cambridge.

Ask your librarian for, or go online or order a copy of, Sujit Raman’s illuminating article in volume 39 (March 2014, #1, pp. 79-106)) of the Journal of Supreme Court History. Better still, join the Supreme Court Historical Society. Either way, it will serve you well.

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The FTC and the New Common Law of Privacy

I’m pleased to announce that my article with Professor Woodrow Hartzog, The FTC and the New Common Law of Privacy, 114 Colum. L. Rev. 583 (2014), is now out in print.  You can download the final published version at SSRN.  Here’s the abstract:

One of the great ironies about information privacy law is that the primary regulation of privacy in the United States has barely been studied in a scholarly way. Since the late 1990s, the Federal Trade Commission (FTC) has been enforcing companies’ privacy policies through its authority to police unfair and deceptive trade practices. Despite over fifteen years of FTC enforcement, there is no meaningful body of judicial decisions to show for it. The cases have nearly all resulted in settlement agreements. Nevertheless, companies look to these agreements to guide their privacy practices. Thus, in practice, FTC privacy jurisprudence has become the broadest and most influential regulating force on information privacy in the United States — more so than nearly any privacy statute or any common law tort.

In this Article, we contend that the FTC’s privacy jurisprudence is functionally equivalent to a body of common law, and we examine it as such. We explore how and why the FTC, and not contract law, came to dominate the enforcement of privacy policies. A common view of the FTC’s privacy jurisprudence is that it is thin, merely focusing on enforcing privacy promises. In contrast, a deeper look at the principles that emerge from FTC privacy “common law” demonstrates that the FTC’s privacy jurisprudence is quite thick. The FTC has codified certain norms and best practices and has developed some baseline privacy protections. Standards have become so specific they resemble rules. We contend that the foundations exist to develop this “common law” into a robust privacy regulatory regime, one that focuses on consumer expectations of privacy, extends far beyond privacy policies, and involves a full suite of substantive rules that exist independently from a company’s privacy representations.

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FTC v. Wyndham

The case has been quite long in the making. The opinion has been eagerly anticipated in privacy and data security circles. Fifteen years of regulatory actions have been hanging in the balance. We have waited and waited for the decision, and it has finally arrived.

The case is FTC v. Wyndham, and it is round one to the Federal Trade Commission (FTC).

Some Quick Background

For the past 15 years, the FTC has been one of the leading regulators of data security. It has brought actions against companies that fail to provide common security safeguards on personal data. The FTC has claimed that inadequate data security violates the FTC Act which prohibits “unfair or deceptive acts or practices in or affecting commerce.” In many cases, the FTC has alleged that inadequate data security is deceptive because it contradicts promises made in privacy policies that companies will protect people’s data with “good,” “adequate,” or “reasonable” security measures. And in a number of cases, the FTC has charged that inadequate data security is unfair because it creates actual or likely unavoidable harm to consumers which isn’t outweighed by other benefits.

For more background about the FTC’s privacy and data security enforcement, please see my article with Professor Woodrow Hartzog: The FTC and the New Common Law of Privacy, 114 Colum. L. Rev. 583 (2014). The article has just come out in print, and the final published version can be downloaded for free here.

Thus far, when faced with an FTC data security complaint, companies have settled. But finally one company, Wyndham Worldwide Corporation, challenged the FTC. A duel has been waging in court. The battle has been one of gigantic proportions because so much is at stake: Wyndham has raised fundamental challenges the FTC’s power to regulate data security under the FTC Act.

The Court’s Opinion and Some Thoughts

1. The FTC’s Unfairness Authority

Wyndham argued that because Congress enacted several data security laws to regulate specific industries (FCRA, GLBA, HIPAA, COPPA) that Congress did not intend for the FTC to be able to regulate data security more generally under FTC Act unfairness. The court rejected this argument, holding that “subsequent data-security legislation seems to complement—not preclude—the FTC’s authority.”

This holding seems quite reasonable, as the FTC Act was a very broad grant of authority to the FTC to regulate for consumer protection for most industries.

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Economic Dynamics and Economic Justice: Making Law Catastrophic, Middling, or Better?

Contrary to Livermore,’s post,  in my view Driesen’s book is particularly powerful as a window into the  profound absurdity and destructiveness of the neoclassical economic framework, rather than as a middle-ground tweaking some of its techniques.  Driesen’s economic dynamics lens makes a more important contribution than many contemporary legal variations on neoclassical economic themes by shifting some major assumptions, though this book does not explore that altered terrain as far as it might.

At first glance, Driesen’s foregrounding of the “dynamic” question of change over time may, as Livermore suggests, seem to be consistent with the basic premise of neoclassical law and economics:   that incentives matter, and that law should focus ex ante, looking forward at those effects.   A closer look through Driesen’s economic dynamics lens reveals how law and economics tends to instead take a covert ex post view that enshrines some snapshots of the status quo as a neutral baseline.  The focus on “efficiency” – on maximizing an abstract pie of “welfare”  given existing constraints —  constructs the consequences of law as essentially fixed by other people’s private choices, beyond the power and politics of the policy analyst and government, without consideration of how past and present and future rights or wrongs constrain or enable those choices.  In this neoclassical view, the job of law is narrowed to the technical task of measuring some imagined sum of these individual preferences shaped through rational microeconomic bargains that represent a middling stasis of existing values and resources, reached through tough tradeoffs that nonetheless promise to constantly bring us toward that glimmering goal of maximizing overall societal gain (“welfare”) from scarce resources.

Driesen reverses that frame by focusing on complex change over time as the main thing we can know with certainty.  In the economic dynamic vision, “law creates a temporally extended commitment to a better future.” (Driesen p. 52). Read More

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FAA Appeals Drone Decision

Last week, an administrative law judge invalidated a fine against Raphael Pirker by the Federal Aviation Administration for using a small drone for a commercial purpose.  I discuss the basis for the decision–in short, that the FAA implied that the type of craft Pirker was using was subject only to non-binding guidance–over at Forbes.  In that post and elsewhere, I cautioned drone start ups and others to wait and see what the FAA does in response to the ruling before rushing ahead with their idea for a drone-based business.  Today the FAA announced it was, in fact, appealing the decision.

How the appeal fares may depend on the way the appeals court characterizes the decision.  In issuing rules, the FAA has to follow the strictures of the Administrative Procedure Act, including issuing notice and soliciting comment.  The judge at one point refers to a defect in the FAA’s public notice concerning “unmanned aerial systems.”  According to the judge, “Notice 07-01 does not … meet the criteria for valid legislative rulemaking,” due to defects in title (not called an “Notice of Proposed Rulemaking” or “NPRM”) and timing (not issued 30 days in advance).  My understanding is that courts review procedural defects de novo under the APA.  Now, if an appellate court upholds the administrative judge’s decision on this basis, then the FAA loses authority to regulate drones in general, but only until they follow the proper procedure to create valid rules.

If the basis is that the FAA misinterpreted its own rules, however–i.e., the agency was wrong to sweep the drone Pirker was operating into its definition of “aircraft”–then arguably Seminole Rock / Auer deference applies.  Auer has faced its share of criticism, as my colleague Kathryn Watts explores in a forthcoming article in Georgetown Law Journal.  But it remains the law of the land, and requires courts to uphold agency interpretations unless they are “plainly erroneous” or else inconsistent.  I don’t see the FAA’s decision to include unmanned aircraft systems as aircraft as plainly erroneous.  Otherwise, you could simply replace the pilot of a cargo plane with a robot and suddenly the plane falls outside the authority of the FAA.  But the FAA’s decision could be inconsistent: As the administrative judge notes, official FAA communications repeatedly treat some categories of “model aircraft” or “modelers” separately than other UAS.

The basis of the invalidation of the fine could be a procedural defect, an inconsistent interpretation, or both.  The ruling is not entirely clear.  We will have to wait and see how the court reacts to the FAA’s appeal.  And even if the court upholds the judgment, we should probably expect a drone NPRM from the FAA to follow.  Those of you with deeper training in administrative law should feel free to jump in.

CLARIFICATION (March 13, 2014): Peter Sachs of Drone Law Journal points out that the first layer of appeal here is to a five-member panel of administrative judges.  They could in theory clarify the basis of the decision (or overrule it) before the case heads to an Article III court.  Thanks, Peter!

The Comments Experiment

I just wanted to announce that I am joining Gerard on this policy. I think it will be an improvement over the status quo (for me at least) because:

1) It works for Sullivan. He gives many great comments or responses a high level of prominence. He doesn’t just highlight people who agree with him. He publishes “dissents of the day” that contradict his position in a constructive, interesting, or provocative way.

2) I’ve heard from several people that they would comment, but don’t want to get “drowned out” in the noise of irrelevant comments. So this is a way for them to get some attention for their views.
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Rethinking Airline Deregulation

The challenge to the US Airways/American merger led Justin Fox to reconsider the much-vaunted “success” of passenger airline deregulation:

Before deregulation, airlines in the U.S. were pretty reliable moneymakers. [After deregulation they] lost $41.6 billion (in 2011 dollars). And it’s not just shareholders who have come off terribly. The past few decades have been, if anything, an even bigger disaster for airline employees, many of whom have seen their pensions mostly evaporate and their pay and status diminish. Taxpayers haven’t come off untouched, either — getting stuck with partial pension bailouts and big loan guarantees to aid the ailing industry in recent years along with ongoing subsidies for airport construction and improvement.

But at least things are good for CEOs, right? Doug Henwood adds more critical perspective:

Between 1963 (when the figures begin) and 1979, the airfare subindex of the CPI grew 25% more slowly than the overall CPI. Since 1979, it’s growth 2.4 times as fast as overall inflation. A major reason for this is that there are many fewer nonstop flights than in the regulated days, and far tighter advance purchase restrictions. To the Bureau of Labor Statistics, which computes the CPI, such quality decreases are the same as price increases. (This is the opposite of the logic prevailing in computers, where rapidly increasing power is the same as a price decline.) And then ridership. Between 1948 and 1978, annual passenger miles flown grew 12% a year; since then, they’ve grown less than 4%.

Perhaps we can thank the deregulators for one thing: cutting the climate impact of a carbon-intensive industry.

Schmayek’s Shutdown

MirowskiCoverIf you asked Ted Cruz or Jim DeMint who was the guiding spirit of their government shutdown, they’d probably mention Friedrich von Hayek. The Nobel Prize winning economist warned the world that “socialism” would put citizens on a “road to serfdom.” For the Tea Party, PPACA is a horror, perhaps even a new form of slavery, a threat to liberty even darker than the feudal past Hayek evoked.

But there is another figure just as important to current neoliberal thought as Hayek. Carl Schmitt provided jurisprudential theories of “the emergency” and “the exception” that highlighted the best opportunities for rapid redistribution of wealth upwards. In Never Let a Serious Crisis Go to Waste, Philip Mirowski explains how neoliberal thought, far from advocating a shrinking of the state, in fact sparks a redirection and intensification of its energies. As he puts it, “A primary function of the neoliberal project is to redefine the shape and the function of the state, not to destroy it” (56). Moreover, the “strong state was necessary to neutralize what [Hayek] considered to be the pathologies of democracy” (84). Even a temporary dictatorship can work in a pinch.

The shutdown is a brilliant strategy to meld Hayekian substance and Schmittian procedure. As Aaron Bady has observed,

A shutdown is a state of exception when the government gets to do things it normally can’t do, like close the Environmental Protection Agency, de-fund WIC, close the national parks, send a lot of government employees home [in what is in many ways a lock-out], and all sorts of other stuff. A shutdown is a moment in which a choice gets made about which laws to obey and which laws to ignore, when the government gets to decide that some people are essential and some people aren’t.

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