Notice & Comment

Is Administrative Summary Judgment Unlawful?: Policy and Implications, by Alexander I. Platt

*This is the second post in a series on Alex’s new Article, Is Administrative Summary Judgment Unlawful? For earlier posts in the series, click here.

My last post argued that the text, legislative history, and legal historical context of the Administrative Procedure Act (APA) demonstrate the statute prohibits enforcement agencies from using administrative summary judgment to resolve formal administrative adjudications.

Why, then, has this evidently illegal practice persisted so long?

First, the interpretation I offer is hard to square with the often-repeated understanding that the APA’s rules governing formal adjudication are trans-substantive. The truth is that the statute affords some greater procedural protections to parties in enforcement matters as compared to formal adjudications involving benefits or initial licenses. This conclusion may inform current scholarly debates about restoring adjudicator impartiality in the wake of Lucia. Some propose reforming all administrative adjudication regardless of subject-matter, while others focus proposed reforms on enforcement matters. Perhaps contrary to the conventional wisdom, the APA actually reflects some support for the principle that enforcement adjudications merit special concern.

Second, another explanation for the persistence of administrative summary judgment is the widespread acceptance of policy arguments to justify the practice. Proponents argue that administrative summary judgment promotes administrative efficiency by allowing agencies to avoid costly and cumbersome hearing procedures, and that the agency’s burden of demonstrating “no genuine issue of material fact” means that no meaningful procedural rights will be harmed.  

Actually, there are good reasons to doubt these arguments. Authorizing administrative summary judgment may do more than change the result of an individual case. It may also change an agency’s enforcement priorities, leading it to pursue a different mix of cases that they would not otherwise have pursued. A key question—one that is not addressed by administrative summary judgment’s proponents—is whether this shift in enforcement priorities is likely to improve or undermine effective enforcement.

The Securities and Exchange Commission provides a worrisome example. The agency’s usage of administrative summary judgment peaked while the agency was pursuing what then-Chair Mary Jo White described as a “broken windows” enforcement policy of aggressively prosecuting “small” violations which, White claimed, were “very often just the first step toward bigger ones down the road.” This enforcement policy, which relied heavily on administrative summary judgment and might not have been possible without it, was universally condemned, Many worried that the agency’s reallocation of resources towards small violations might reduce its focus on more significant matters. It was quickly abandoned after White departed the agency.

There are also reasons to worry that agencies are using administrative summary judgment to deprive parties of hearings that would be meaningful. The SEC again provides a case in point. Current agency doctrine provides that summary disposition is presumptively appropriate in follow-on actions, where the agency is seeking to impose an additional penalty on a respondent who has already been found liable for a securities violation in some other forum. But the factors that the ALJ is supposed to consider before imposing the penalty would seem to be exactly the kinds of issues where an in-person oral hearing would be most valuable, including “the sincerity of the defendant’s assurances against future violations,” “the degree of scienter involved,” and “the defendant’s recognition of the wrongful nature of his conduct.”

Notwithstanding the confident statements of administrative summary judgment’s promoters, the real use and impact of the procedure in the enforcement context is actually complicated and uncertain. The actual on-the-ground practice of administrative summary judgment has not been subject to comprehensive study in fifty years. It may be time to revisit the issue.

Third, and finally, the conflict between what the APA says and what agencies are doing when it comes to administrative summary judgment provides a reality check for those who study shifting tides of judicial review of agency action. For better or for worse, scholars have observed that judges today seem to be less likely to let agencies play fast and loose with statutory authority, even where they have a very compelling policy-based rationale for doing so. The continued vitality of administrative summary judgment seems to illustrate that the non-textualist, “common law” approach is still very much alive and well – at least for the time being.

Alexander I. Platt is Associate Professor of Law at the University of Kansas School of Law.

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