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The Mirage of Administrative Justice

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The trademark of modern political thinking is faith in discretionary power wielded by benevolent politicians and administrators and in letting government employees treat private citizens as they think best. We have far more federal agencies than we used to have, and they are under less restraint than what they used to be. The sheer volume of federal action — of laws, regulations, consent decrees, and memos that have the force of law — makes effective judicial and congressional oversight of federal agencies a near impossibility. The larger government has grown, the less controlled it has become.

While in previous eras the citizen worried only about the sheriff and the tax collector, he must now often face the power and authority of the zoners, the wage regulators, the compulsory preservationists, the import-price controllers, the occupational licensers, and a multitude of others. We have a vast administrative state with minimal control over the administrators. Because the courts have shown a casual attitude toward administrative justice, thousands of administrators effectively have arbitrary power over millions of citizens.

The federal judiciary has created an overwhelming presumption in the legality of the actions of federal agencies. More and more acts by government officials are approved or sanctioned that once would have been considered outrageous, illegal, or unconstitutional.

In a case involving confiscation of private land by the District of Columbia, the Supreme Court in 1954 whitewashed any concern about fairness or individual rights. Justice William Douglas, writing for the Court, proclaimed, “When the legislature has spoken, the public interest has been declared in terms well-nigh conclusive.” Almost 30 years later, in Chevron v. Natural Resources Defense Council, the Court awarded sweeping discretion to federal agencies to interpret federal laws as they chose — and thus, in many cases, to decree the limits of their own power. Lawyer Michael Greve, the director of the Center for Individual Rights, observed that the Supreme Court now relies on an “insanity test — if an agency’s interpretation of a federal statute is not clinically insane, then it stands.”

The combination of the Court’s acceptance of legislatures’ definition of the public interest and its deference toward government agencies’ interpretations of laws creates an overwhelming bias against citizens seeking relief from government oppression. Law professor E.P. Krauss observed that “judicial review is played out like a cynical shell game, in which the government always wins and the institutional checks and balances of administrative power are proven to be ineffectual.”

Most citizens’ disputes with government agencies are resolved within the agencies themselves, not by local, state, or federal courts. Kenneth Davis, author of the highly respected five-volume Administrative Law Treatise, estimates that federal administrative “trials” outnumber federal court trials by a ratio of more than 6 to 1 — and that up to 93 percent of all disputes are resolved in federal agency settings rather than in federal court settings. Thus, the sanctity of a citizen’s rights rests largely on the justice of administrative procedures. Unfortunately, “administrative justice” is often an oxymoron.

Modern administrative regimes create elaborate faades of due process that merely camouflage the arbitrary power of political appointees. Most federal agencies effectively prohibit a citizen from taking a dispute between himself and the agency to an independent federal judge until he has exhausted his “administrative remedies.” This “exhaustion of administrative remedies” requirement allows a federal agency to hold citizens or companies hostage for years, causing them to incur hundreds of thousands of dollars in legal fees regardless of how dubious the government’s position may be.

Contemporary administrative justice is a farce because the judges themselves are often peons of the same agencies that have shafted citizens. The General Accounting Office reported in 1992 that administrative law judges in six federal agencies believed that the agency had attempted to “compromise their independence.” One administrative law judge at the Interior Department told the ABA Journal: “We do operate in a wholly vindictive and retaliatory environment.” Edward Slavin of the Government Accountability Project in Washington, D.C., observed, “Rather than having the independence of a district court judge, [administrative law judges] are essentially on the payroll and subjected to the pressure of the agencies.” Rep. Barney Frank observed in 1990, “We have gotten allegations from administrative law judges of coercion, threatened transfers, and other kinds of pressures.” Yet citizens are forced to spend months or years slogging through these systems as if they were real judicial systems.

The Labor Department’s Office of Federal Contract Compliance Programs (OFCCP) routinely demands that private companies pay millions of dollars in back wages to people never hired by the company, on the basis of legal interpretations that agency officials know federal judges would probably reject. According to former OFCCP director Ellen Shong Bergman, OFCCP officers are sometimes guilty of “attempted extortion” in their threats against businesses that fail to hire and promote sufficient numbers of minorities and women. Before a federal contractor can get access to a federal judge to rule on the legality of the OFCCP’s demands, the company must spend three or more years in the tar pit of Labor Department appeals processes and hearings before Labor Department administrative law judges. Even if an administrative law judge rules against the agency, a political appointee can overturn the judge’s decision with the flip of a memo.

Lawyers estimate that legal fees in OFCCP cases can easily exceed half a million dollars before companies reach a federal court. Because of the high costs of reaching a federal judge, there have been few court rulings limiting the agency’s power. As a result, OFCCP officials have free rein to twist the law to suit their purposes. And even in those areas in which federal judges have issued decisions limiting OFCCP’s power, the agency has often ignored the rulings in subsequent enforcement actions.

Similar charades occur at the National Labor Relations Board. The Labor Policy Association noted in 1996 congressional testimony, “It is only when NLRB decisions reach the federal appeals courts that any impartiality begins to emerge in the law’s enforcement.” In 1996 alone, 50 NLRB rulings were overturned by federal appeals courts; federal judges denounced the agency for a “warped interpretation of the facts,” for a “flagrant disregard of judicial precedent,” and for “abusing its discretion.”

The rising cost of getting due process from the government means fewer and fewer people can afford to say “no” to the demands of government officials. The vast majority of defendants in federal criminal cases cannot afford to hire their own attorneys. Former deputy attorney general Arnold Burns observed in 1998, “More than 90 percent of criminal cases are resolved by plea agreements, without trials. Most often, defendants, even those who are not indigent, simply can’t afford the staggering fees of a trial.” Warner Gardner, a lawyer who practiced in Washington before federal agencies for more than 40 years, wrote in 1974, “The private citizen who has less than $20,000 at stake ordinarily would not be well advised to seek judicial review of agency action.” With inflation, $20,000 in 1974 would now amount to more than $50,000, which nearly equals the entire net worth of almost half of all American families. One 25-year IRS collections veteran, testifying anonymously before Congress in 1997, when asked about the effect of congressional legislation to protect taxpayers, replied, “It’s had very little effect on the conduct of the IRS. The Taxpayer Bill of Rights is very positive … but who is going to enforce this for the taxpayer? If you’re going to sue the IRS, it’ll take 30, 40, 50 thousand dollars.”

Because there can be no level playing field between the citizen and the state, every expansion of the state means increased subjugation of the citizen. Every increase in the cost of achieving justice from the state is a de facto subsidy for government oppression. The higher the cost of legal self-defense, the more likely that government agencies will abuse their power. Government employees who carry out vendettas against citizens almost never have to pay either the government’s or the citizen’s legal bills; their incentive is to stretch their power as far as possible. Every increase in the cost of traversing government administrative processes increases the arbitrary power of government employees over every citizen who cannot afford hefty legal bills.

English constitutional historian A.V. Dicey observed, “A right which an individual cannot enforce is to him no right at all; the dilatoriness of legal proceedings, and their exorbitant cost, or the want of an easily accessible Court, work greater and far more frequent injustice than the formal denial of a man’s due rights.” Sen. John Taylor wrote in 1822: “There are no rights where there are no remedies, or where the remedies depend upon the will of the aggressor.” And, with the constantly expanding power and prerogatives of federal agencies, those remedies depend more than ever before on the bureaucratic aggressors.

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    James Bovard serves as policy advisor to The Future of Freedom Foundation. He has written for the New York Times, The Wall Street Journal, The Washington Post, New Republic, Reader's Digest, Playboy, American Spectator, Investors Business Daily, and many other publications. He is the author of a new e-book memoir, Public Policy Hooligan. His other books include: Attention Deficit Democracy (2006); The Bush Betrayal (2004); Terrorism and Tyranny (2003); Feeling Your Pain (2000); Freedom in Chains (1999); Shakedown (1995); Lost Rights (1994); The Fair Trade Fraud (1991); and The Farm Fiasco (1989). He was the 1995 co-recipient of the Thomas Szasz Award for Civil Liberties work, awarded by the Center for Independent Thought, and the recipient of the 1996 Freedom Fund Award from the Firearms Civil Rights Defense Fund of the National Rifle Association. His book Lost Rights received the Mencken Award as Book of the Year from the Free Press Association. His Terrorism and Tyranny won Laissez Faire Book's Lysander Spooner award for the Best Book on Liberty in 2003. Read his blog. Send him email.