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THE INTERSTATE COMMERCE COMMISSION AND THE GENESIS OF AMERICA'S JUDICIALIZED ADMINISTRATIVE STATE1

  • Hiroshi Okayama (a1)

Abstract

Revisiting the origins of the Interstate Commerce Commission (ICC) created in 1887 and offering a fresh interpretation that the commission was conceived and operated as a highly court-like agency, this paper argues that its emergence triggered the judicialization of the U.S. administrative state. It has been argued that the blueprint of the ICC took after existing railroad commissions. Its proponents in Congress, however, redesigned it with judicial courts as a model after facing criticisms based on the common-law principle of the supremacy of law allowing adjudication only to judicial courts. In accordance with such an institutional scheme, both the president and judiciary promoted the commission's judicialization by appointing lawyers as its members and reviewing its decisions. By the early twentieth century, the ICC was a prototypical agency whose court-like features permeated the administrative state. This paper thus offers a corrective to the literature on the U.S. administrative state building that has come to trivialize the role of the rise of the ICC. It was, instead, a critical juncture in the emergence of the modern administrative state in which being “quasi-judicial” was the norm rather than the exception for an administrative agency.

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The author thanks Sheila A. Hones, Sayuri Guthrie Shimizu, Kensuke Takayasu, the Journal's anonymous reviewers, and participants in the 2011 American Political Science Association Annual Meeting panel on “Law and the Rights Revolution” for very helpful comments. The hospitality of the faculty and staff at University of Virginia School of Law, at which bulk of preparation for this work was made, is warmly acknowledged. Research for this paper was supported by the JSPS Grants-in-Aid for Scientific Research.

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NOTES

2 Wilson, Woodrow, “The Study of Administration,” Political Science Quarterly 2 (June 1887): 201.

3 Lawrence M. Friedman, A History of American Law, 3rd ed. (New York: Touchstone, 2005), 329.

4 Stephen Skowronek, Building a New American State: The Expansion of National Administrative Capacities, 1877–1920 (New York: Cambridge University Press, 1982).

5 Stillman, Richard J. II, “The Constitutional Bicentennial and the Centennial of the American Administrative State,” Public Administration Review 47 (Jan.–Feb. 1987): 48. Also see Ralph Clark Chandler, ed., A Centennial History of the American Administrative State (New York: Free Press, 1987); Miller, Geoffrey P., “Independent Agencies,” The Supreme Court Review 1986 (1986): 4197; Lutton, Larry S., “History and American Public Administration,” Administration and Society 31 (May 1999): 205–21.

6 Brian Balogh, A Government Out of Sight: The Mystery of National Authority in Nineteenth-Century America (New York: Cambridge University Press, 2009); Jerry Mashaw, Creating the Administrative Constitution: The Lost One Hundred Years of American Administrative Law (New Haven, CT: Yale University Press, 2012). Stephen Rockwell argues that America has always had a “big government.” Rockwell, Indian Affairs and the Administrative State in the Nineteenth Century (New York: Cambridge University Press, 2010).

7 Fiorina, Morris P., “Legislator Uncertainty, Legislative Control, and the Delegation of Legislative Power,” Journal of Law, Economics, and Organization 2 (Spring 1986): 3251; Fiorina, Morris P., “Legislative Choice of Regulatory Forms: Legal Process or Administrative Process?Public Choice 39:1 (1982): 3366; Lee Benson, Merchants, Farmers, and Railroads: Railroad Regulation and New York Politics, 18501887 (Cambridge, MA: Harvard University Press, 1955); Nash, Gerald D., “Origins of the Interstate Commerce Act of 1887,” Pennsylvania History 24 (July 1957): 181–90; Gabriel Kolko, Railroads and Regulation, 18771916 (New York: W. W. Norton, 1965); Ari Hoogenboom and Olive Hoogenboom, A History of the ICC: From Panacea to Palliative (New York: W. W. Norton, 1976); Gerald Berk, Alternative Tracks: The Constitution of American Industrial Order, 1865–1917 (Baltimore: Johns Hopkins University Press, 1994); Elizabeth Sanders, Roots of Reform, Farmers, Workers, and the American State, 1877–1917 (Chicago: University of Chicago Press, 1999), 179–95; Purcell, Edward A. Jr., “Ideas and Interests: Businessmen and the Interstate Commerce Act,” Journal of American History 54 (Dec. 1967): 561–78. Scott C. James, Presidents, Parties, and the State: A Party System Perspective on Democratic Regulatory Choice, 1884–1936 (New York: Cambridge University Press, 2000).

8 Robert E. Cushman, The Independent Regulatory Commissions (New York: Oxford University Press, 1941).

9 Daniel P. Carpenter, The Forging of Bureaucratic Autonomy: Reputations, Networks, and Policy Innovation in Executive Agencies (Princeton, NJ: Princeton University Press, 2001), 8–9.

10 The President's Committee on Administrative Management, Report of the Committee, with Studies of Administrative Management in the Federal Government (Washington, D.C.: Government Printing Office, 1937), 5. Also see James O. Freedman, Crisis and Legitimacy: The Administrative Process and American Government (New York: Cambridge University Press, 1978), esp. ch. 3; John A. Rohr, To Run a Constitution: The Legitimacy of the Administrative State (Lawrence: University Press of Kansas, 1986), 152–53.

11 Huntington, Samuel P., “The Marasmus of the ICC: The Commission, the Railroads, and the Public Interest,” Yale Law Journal 61 (Apr. 1952): 467509; Marver H. Bernstein, Regulating Business by Independent Commission (Princeton, NJ: Princeton University Press, 1955); Jaffe, Louis L., “The Independent Agency: A New Scapegoat,” Yale Law Journal 65 (June 1956): 1068. William Novak offers a critical new look at the development of the capture thesis in “A Revisionist History of Regulatory Capture” in Daniel Carpenter and David A. Moss, eds., Preventing Regulatory Capture: Special Interest Influence and How to Limit It (New York: Cambridge University Press, 2014), 25–48.

12 For an overview, see Louis Fisher, The Politics of Shared Power: Congress and the Executive, 4th ed. (College Station: Texas A&M University Press, 1998).

13 Mark Allen Eisner, Regulatory Politics in Transition, 2nd ed. (Baltimore: Johns Hopkins University Press, 2000); Bernstein, Regulating Business by Independent Commission, 6; Thomas K. McCraw, Prophets of Regulation: Charles Francis Adams, Louis D. Brandeis, James M. Landis, Alfred E. Kahn (Cambridge, MA: Belknap Press of Harvard University Press, 1984), 61–62.

14 Gerald Berk, Louis D. Brandeis and the Making of Regulated Competition, 1900–1932 (New York: Cambridge University Press, 2009); Berk, Gerald and Galvan, Dennis, “How People Experience and Change Institutions: A Field Guide to Creative Syncretism,” Theory and Society 38 (Nov. 2009): 543–80.

15 Mashaw, Creating the Administrative Constitution, 310.

16 Morton J. Horwitz, The Transformation of American Law, 18701960: The Crisis of Legal Orthodoxy (New York: Oxford University Press, 1992), 222; Verkuil, Paul R., “The Emerging Concept of Administrative Procedure,” Columbia Law Review 28 (Mar. 1978): 258329; Stephen G. Breyer et al., Administrative Law and Regulatory Policy: Problems, Text, and Cases, 7th ed. (New York: Aspen Publishers, 2011), 18; Rabin, Robert L., “Federal Regulation in Historical Perspective,” Stanford Law Review 38 (1986): 11881326; Morton Keller, Regulating a New Economy: Public Policy and Economic Change in America, 1900–1933 (Cambridge, MA: Harvard University Press, 1990); Ernst, Daniel R., “Morgan and the New Dealers,” Journal of Policy History 20 (2008): 447481; and Ernst, Tocqueville's Nightmare: The Administrative State Emerges in America, 19001940 (New York: Oxford University Press, 2014); Schiller, Reuel, “‘Saint George and the Dragon’: Courts and the Development of the Administrative State in Twentieth-Century America,” Journal of Policy History 17 (2005): 110–24; Anthony M. Bertelli and Laurence E. Lynn Jr., Madison's Managers: Public Administration and the Constitution (Baltimore: Johns Hopkins University Press, 2006); Joanna L. Grisinger, The Unwieldy American State: Administrative Politics since the New Deal (New York: Cambridge University Press, 2012). Also see Joanna L. Grisinger, “Law and the Administrative State” in Sally E. Hadden and Alfred L. Brophy, eds., A Companion to American Legal History (Chichester, UK: Wiley-Blackwell, 2013), 367–86.

17 G. Edward White, The Constitution and the New Deal (Cambridge, MA: Harvard University Press, 2000), ch. 4; Friendly, Henry J., “Some Kind of Hearing,” University of Pennsylvania Law Review, 123 (1975): 12671317; James M. Landis, The Administrative Process (New Haven, CT: Yale University Press, 1938); Carl McFarland, Judicial Control of the Federal Trade Commission and the Interstate Commerce Commission, 1920–1930: A Comparative Study in the Relations of Courts to Administrative Commissions (Cambridge, MA: Harvard University Press, 1933); Joseph P. Chamberlain, Noel T. Dowling, and Paul R. Hayes, The Judicial Function in Federal Administrative Agencies (New York: The Commonwealth Fund, 1942).

18 Bradford Ross, “Federal Power Commission Practice and Procedure as Affected by the Administrative Procedure Act of 1946” in George Warren, ed., The Federal Administrative Procedure Act and the Administrative Agencies (New York: New York University School of Law, 1947), 171; Lloyd D. Musolf, Federal Examiners and the Conflict of Law and Administration (Baltimore: Johns Hopkins Press, 1953).

19 Levy, Richard E. and Shapiro, Sidney A., “Administrative Procedure and the Decline of the Trial,” University of Kansas Law Review 51 (May 2003): 473508.

20 Frederick Davis, “Judicialization of Administrative Law: The Trial-type Hearing and the Changing Status of the Hearing Officer,” Duke Law Journal 1977 (May 1977): 389–408; Marshall E. Dimock, Law and Dynamic Administration (New York: Praeger, 1980); Peter Cane, “Judicial Review and Merits Review: Comparing Administrative Adjudication by Courts and Tribunals” in Susan Rose-Ackerman and Peter L. Lindseth, eds., Comparative Administrative Law (Cheltenham, UK: Edward Elgar, 2010), 426–48; Bernard Schwartz and William Wade, Legal Control of Government: Administrative Law in Britain and the United States (Oxford: Oxford University Press, 1972).

21 Compiled from data in ICC Reports; Artola, Lilibet, “In Search of Uniformity: Applying the Federal Rules of Evidence in Immigration Removal Proceedings,” Rutgers Law Review 64 (Spring 2012): 863–93; Rebecca Hamlin, Let Me Be a Refugee: Administrative Justice and the Politics of Asylum in the United States, Canada, and Australia (New York: Oxford University Press, 2014).

22 Robert Kagan has suggested that the judicialized administrative procedures have also led to “adversarial legalism” in Kagan, Adversarial Legalism: The American Way of Law (Cambridge, MA: Harvard University Press, 2001); Eugene Bardach and Robert Kagan, Going by the Book: The Problem of Regulatory Unreasonableness (Philadelphia: Temple University Press, 1982).

23 Rosenbloom, David H., “Public Administrative Theory and the Separation of Powers,” Public Administration Review 43 (May–June 1983): 219–27; Ethridge, Marcus E. III, “Judicialized Procedures in Regulatory Policy Implementation,” Law and Policy Quarterly 4 (Jan. 1982): 119–36. The idea of the tradeoff is usually traced back to Arthur Okun's Equality and Efficiency: The Big Tradeoff (Washington, D.C.: Brookings Institution, 1975).

24 John F. Kennedy, “Special Message to the Congress on the Regulatory Agencies,” Apr. 13, 1961, John T. Woolley and Gerhard Peters, The American Presidency Project, http://www.presidency.ucsb.edu/ws/?pid=8058 (accessed Apr. 22, 2013).

25 Hoogenboom and Hoogenboom, History of the ICC.

26 Clark, Frederick C., “State Railroad Commissions and How They May Be Made Effective,” Publications of the American Economic Association 6 (Nov. 1891): 11110.

27 Chicago Tribune, Apr. 2, 1884.

28 Shelby M. Cullom, Fifty Years of Public Service: Personal Recollections of Shelby M. Cullom (New York: Da Capo Press, [1911] 1969), 306; Skowronek, Building a New American State, 146.

29 Congressional Record, 48th Congress, 2nd sess. (Dec. 10, 1884), 165, (Dec. 11, 1884), 194–95.

30 Henry Parris, Government and the Railways in Nineteenth-Century Britain (London: Routledge & Kegan Paul, 1965); Marshall E. Dimock, British Public Utilities and National Development (London: G. Allen & Unwin, 1933), 70–72; Chantal Stebbings, Legal Foundations of Tribunals in Nineteenth-Century England (Cambridge: Cambridge University Press, 2006), 180–81.

31 Congressional Record, 48th Congress, 2nd sess. (Dec. 18, 1884), 328–30. A newspaper noted that the Cullom bill's ICC was “really a court to try certain specified railroad offences.” Chicago Tribune, Feb. 4, 1885.

32 Congressional Record, 48th Congress, 2nd sess. (Dec. 2, 1884), 31, (Dec. 12, 1884), 20001.

33 The term “Reaganite” was used in the 1880s to refer to the supporters of the Reagan bill. See, for instance, The Statist, Jan. 22, 1887, 92.

34 Congressional Record, 48th Congress, 2nd sess. (Feb. 12, 1885), 1568.

35 Congressional Record, 48th Congress, 2nd sess. (Jan. 7, 1885), 516.

36 Merkel, Philip L., “The Origins of an Expanded Federal Court Jurisdiction: Railroad Development and the Ascendancy of the Federal Judiciary,” Business History Review 58 (Autumn 1984): 336–58; Tony Allan Freyer, Forums of Order: The Federal Courts and Business in American History (Greenwich, CT: JAI Press, 1979); Gillman, Howard, “How Political Parties Can Use the Courts to Advance Their Agendas: Federal Courts in the United States, 1875–1891,” American Political Science Review 96 (Sept. 2002): 511–24.

37 Congressional Record, 48th Congress, 2nd sess. (Dec. 2, 1884), 31.

38 Congressional Record, 48th Congress, 2nd sess. (Dec. 11, 1884), 195; James, Presidents, Parties, and the State, 42–43.

39 59 U.S. 272 (1856). The Supreme Court later admitted agency adjudication of private rights in Crowell v. Benson, 285 U.S. 22 (1932).

40 The latter principle would later play a central role in the battles over administrative procedures owing much to Albert V. Dicey's seminal work, Lectures Introductory to the Study of the Law of the Constitution (London: Macmillan, 1885).

41 In the Forty-Ninth Congress, however, Sen. John Morgan (D-AL) attacked the Cullom bill stating that the ICC would take away the power “for the settlement of the private rights” from the judiciary. Congressional Record, 49th Congress, 2nd sess. (Jan. 6, 1887), 399.

42 Congressional Record, 48th Congress, 2nd sess. (Jan. 7, 1885), 517.

43 Congressional Record, 48th Congress, 2nd sess. (Jan. 17, 1885), 808.

44 Congressional Record, 48th Congress, 2nd sess. (Feb. 2, 1885), 1152.

45 Congressional Record, 48th Congress, 2nd sess. (Dec. 18, 1884), 330.

46 Congressional Record, 48th Congress, 2nd sess. (Dec. 9, 1884), 132. Also see Congressional Record, 48th Congress, 2nd sess., (Feb. 3, 1885), 1197.

47 Congressional Record, 48th Congress, 2nd sess. (Jan. 20, 1885), 859.

48 Congressional Record, 48th Congress, 2nd sess. (Jan. 21, 1885), 884. Also see Congressional Record, 48th Congress, 2nd sess., (Dec. 11, 1884), 188–92, (Dec. 12, 1884), 194–95.

49 Congressional Record, 48th Congress, 2nd sess. (Jan. 7, 1885), 527.

50 Congressional Record, 48th Congress, 2nd sess. (Dec. 9, 1884), 128.

51 Congressional Record, 48th Congress, 2nd sess. (Feb. 3, 1885), 1205.

52 “Report of the Senate Select Committee on Interstate Commerce,” 49th Cong., 1st sess. (Jan. 18, 1886), S. rept. 46, pt. 2, 60–61, 107, 167, 267.

53 Justin Crowe, Building the Judiciary: Law, Courts, and the Politics of Institutional Development (Princeton, NJ: Princeton University Press, 2012).

54 Congressional Record, 49th Congress, 1st sess., (Apr. 14, 1886), 3474.

55 Congressional Record, 49th Congress, 2nd sess., (Jan. 14, 1887), 659.

56 James, Presidents, Parties, and the State, 43.

57 “Report of the Senate Select Committee,” pt. 2, 23.

58 “Report of the Senate Select Committee,” pt. 2, 19–20.

59 “Report of the Senate Select Committee,” pt. 2, 22.

60 “Report of the Senate Select Committee,” pt. 2, 981.

61 Also, in Section Eighteen, the commissioners' salaries were made to be “payable in the same manner as the salaries of judges of the courts of the United States.”

62 Congressional Record, 49th Congress, 1st sess. (May 10, 1886), 4307.

63 Congressional Record, 49th Congress, 1st sess. (Apr. 14, 1886), 3471.

64 Congressional Record, 49th Congress, 1st sess. (May 12, 1886), 4422.

65 Congressional Record, 49th Congress, 1st sess. (May 6, 1886), 4225.

66 Congressional Record, 49th Congress, 1st sess. (July 21, 1886), 7289.

67 Congressional Record, 49th Congress, 1st sess. (July 21, 1886), 7296.

68 Congressional Record, 49th Congress, 2nd sess. (Jan. 14, 1887), 646. Also see Congressional Record, 49th Congress, 2nd sess. (Jan. 18, 1887), 786.

69 Congressional Record, 49th Congress, 2nd sess. (Jan. 11, 1887), 529, (Jan. 14, 1887), 639. Also see Williamjames Hull Hoffer, To Enlarge the Machinery of Government: Congressional Debates and the Growth of the American State, 1858–1891 (Baltimore: Johns Hopkins University Press, 2007), 160; Rohr, To Run a Constitution, 96–97.

70 Contrary to James's view, Reagan's acceptance of the ICC may not have meant the jettisoning of his “core agrarian conviction” against regulation by agencies. James, Presidents, Parties, and the State, 102–3. In the Forty-Eighth Congress, some Reaganites had expressed their readiness to support a commission bill with provisions specifying the practices to be banned. Congressional Record, 48th Congress, 2nd sess. (Dec. 4, 1884), 64, (Jan. 20, 1885), 858.

71 Wabash, St. Louis & Pacific Railway Company v. Illinois, 118 U.S. 557 (1886).

72 Ross A. Webb, Benjamin Helm Bristow, Border State Politician (Lexington: University Press of Kentucky, 1969), 296.

73 Charles W. Calhoun, Gilded Age Cato: The Life of Walter Q. Gresham (Lexington: University Press of Kentucky, 1988), 90.

74 Cullom also recommended Cooley for the chairmanship of the ICC. Kolko, Railroads and Regulation, 47.

75 Thomas M. Cooley, A Treatise on the Constitutional Limitations Which Rest Upon the Legislative Power of the States of the American Union, 3rd ed. (Boston: Little, Brown, 1874) and Cooley, The General Principles of Constitutional Law in the United States of America (Boston: Little, Brown, 1880).

76 Benjamin Helm Bristow to Walter Q. Gresham, Feb. 9, 1887, box 34, Walter Q. Gresham Papers, Manuscript Division, Library of Congress.

77 Benjamin Harrison to Thomas M. Cooley, Oct. 29, 1891, box 5, Thomas M. Cooley Papers, Bentley Historical Library, University of Michigan; Miller, Clarence A., “The Interstate Commerce Commissioners: The First Fifty Years: 1887–1937,” George Washington Law Review 5 (Mar. 1937): 580700. Also see I. L. Sharfman, The Interstate Commerce Commission: A Study in Administrative Procedure (New York: Harper & Row, [1937] 1969), 4: 28.

78 Smith, Elmer A., “Practice and Procedure before the Interstate Commerce Commission,” George Washington Law Review 5 (Mar. 1937): 413. Also see Carrington, Paul D., “Law and Economics in the Creation of Federal Administrative Law: Thomas Cooley, Elder to the Republic,” Iowa Law Review 83 (Jan. 1998): 379.

79 First Annual Report of the Interstate Commerce Commission (Washington, D.C.: Government Printing Office, 1887), 27–28.

80 Berk, Louis D. Brandeis and the Making of Regulated Competition.

81 First Annual Report of the Interstate Commerce Commission, 130, 133; Henry Carter Adams, “A Decade of Federal Railway Regulation,” Atlantic Monthly (Apr. 1898): 433–43.

82 Interstate Commerce Commission Reports 1 (New York: L. K. Strouse, 1888), 8.

83 Second Annual Report of the Interstate Commerce Commission (Washington, D.C.: Government Printing Office, 1888), 104; Goodman, Leonard S., “Getting Started: Organization, Procedure and Initial Business of the ICC in 1887,” Transportation Law Journal 16 (1987): 734.

84 Paul R. Verkuil, “The Purposes and Limits of Independent Agencies,” Duke Law Journal 1988 (Apr.–June 1988): 261, n. 17.

85 The Railway and Corporation Law Journal, June 25, 1887.

86 162 U.S. 184 (1896); 168 U.S. 144 (1897) at 176; Hoogenboom and Hoogenboom, History of the ICC; James W. Ely, Jr., Railroads and American Law (Lawrence: University Press of Kansas, 2001), 93–96.

87 Fifth Annual Report of the Interstate Commerce Commission (Washington, D.C.: Government Printing Office, 1891), 18–20.

88 162 U.S. 184 (1896), at 196.

89 Illinois Central Railroad Co. et al. v. ICC, 206 U.S. 441, at 454. Also see ICC v. Union Pacific Railroad Co. et al., 222 U.S. 541 (1912).

90 ICC v. Baird, 194 U.S. 25 (1904). Also see ICC v. Louisville & Nashville Railroad Co., 227 U.S. 88 (1913).

91 New York Central & Harbor Railroad Co. et al. v. ICC, 168 Fed. 131 (1909), at 138–39.

92 Felix Frankfurter and James M. Landis, The Business of the Supreme Court: A Study in the Federal Judicial System (New York: Macmillan, 1928), 156–74.

93 Felix Frankfurter, A Selection of Cases under the Interstate Commerce Act (Cambridge, MA: Harvard University Press, 1915), vii; G. Edward White, Intervention and Detachment: Essays in Legal History and Jurisprudence (New York: Oxford University Press, 1994), esp. part 2.

94 Freund, Ernst, “Legislative Problems and Solutions,” ABA Journal 7 (1921): 657.

95 Bernard Schwartz, Administrative Law (Boston: Little, Brown, 1976), 292. Also see Smith, Loren A., “Judicialization: The Twilight of Administrative Law,” Duke Law Journal 1985 (1985): 427–66.

96 Ronen Shamir, Managing Legal Uncertainty: Elite Lawyers in the New Deal (Durham: Duke University Press, 1995); Shepard, George B., “Fierce Compromise: The Administrative Procedure Act Emerges from New Deal Politics,” Northwestern University Law Review 90 (1996): 15571683; Zeppos, Nicholas S., “The Legal Profession and the Development of Administrative Law,” Chicago-Kent Law Review 72 (1997): 1119–57.

97 American Bar Association, Commission on Law and the Economy, Federal Regulation: Roads to Reform (Washington, D.C.: American Bar Association, 1979), 7 and 10. Also see Ernst, Tocqueville's Nightmare.

98 Daniel R. Ernst, “Law and the State, 1920–2000: Institutional Growth and Structural Change” in The Cambridge History of Law in America (New York: Cambridge University Press, 2008), 3:2; Schwartz, Bernard, “Administrative Law: The Third Century,” Administrative Law Review 29 (Summer 1977): 300.

1 The author thanks Sheila A. Hones, Sayuri Guthrie Shimizu, Kensuke Takayasu, the Journal's anonymous reviewers, and participants in the 2011 American Political Science Association Annual Meeting panel on “Law and the Rights Revolution” for very helpful comments. The hospitality of the faculty and staff at University of Virginia School of Law, at which bulk of preparation for this work was made, is warmly acknowledged. Research for this paper was supported by the JSPS Grants-in-Aid for Scientific Research.

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