Yet, as regards substantive regulatory policy, the power to litigate is one of intrinsic importance to the independent commissions. Regulatory responsibility is necessarily diminished if an agency cannot, on its own initiative, seek court enforcement of its orders, or injunctions against violations of its statutes and rules. The same is true if a commission is precluded from full participation in judicial proceedings challenging agency actions or authority. In those situations the agency stands powerless to act, awaiting the judgment and inclination of an entirely separate body; or looks on in an advisory capacity, while lawyers beyond its control manage the litigation-deciding what to do and when to do it.

Decisions in the course of litigation do have an impact on regulatory policy. That is most obvious in the power to decide whether to initiate suit, or seek an appeal; but it is equally true of other aspects of litigation, such as choosing legal theories and defenses. At least equal to any other form of executive branch coordination, control of litigation may directly affect the development and implementation of specific regulatory policies.

And without question the Justice Department for this purpose views these agencies as part of the executive branch. Unmistakably, coordination of policy-without regard to the issue of independence-is at the heart of the Attorney General's opposition to litigating authority for the commissions. As a spokesman for the Department stated several years ago, the general statutes are intended

[to insure] that the Government take a consistent and uniform position in its litigation and that authority for representation of the Government's interest in court derive from one source.203 This coordination, as the Department indicated, makes no distinction for the independent agencies:

Executive power necessarily includes the control of judicial policies within the Executive Branch, especially in litigation involving not just the particular interests of the government entity immediately before the court but also the interests of the Government and the United States as a whole.2 204

Reduced to essentials, the overall interest of the President is the central theme of the Department's position.

We do not agree. Regulatory responsibility was vested by Congress in the agencies for, it is important to recall, a very definite reason. Congress intended that these particular commissions operate outside the supervision and direction of the President and other executive branch officials, including the Attorney General. The commissions are accountable to Congress for their success or failure. The practice of allowing the Justice Department to control agency court proceedings diffuses that accountability, by transferring an important responsibility outside the agency. If the commissions are denied independent access to the courts, if they are instead dependent upon the Justice Department and its lawyers, then in this important regard they function as nothing more than Presidential commissions. Our recommendations on litigation rest on the assumption that these agencies were

203 W. Vincent Rakestraw, Assistant Attorney General, to Sen. Sam J. Ervin, Jr., July 24, 1974. in Committee on Government Operations, Compendium of Information, op cit at fn. 148. p. 136.

204 Ibid., p. 137.

not established to assist the President in implementation of executive branch policies. The President may, without objection from the Congress, coordinate litigation for those agencies accountable to him. But that should not include the independent regulatory commissions.

Just weeks ago, in June 1977, the Justice Department proposed that the answer to the problem lay in informal agreements between itself and the various agencies. That suggestion came in response to the then pending Interim Regulatory Reform bills, which would have granted five commissions litigating authority somewhat similar to that of the Trade Commission.205 Specifically those acts provided that the agency could commence, defend, or supervise litigation, if the Attorney General was notified in advance and failed to take the requested action within 45 days. The Attorney General had the option to accept the case, or allow the agency to proceed. The bills expressly recognized the potential contribution of the Department expertise, by providing:

*The Attorney General shall, to the extent practicable, provide the Commission with such assistance as will promote the successful and economical resolution of any civil action with respect to which the Commission exercises the authority granted by this subsection, and the Commission shall cooperate with the Attorney General in all other actions.

Finally the proposed legislation did not seek to modify the Justice Department's authority over litigation before the Supreme Court.206 However, at the request of the Department and the Senate Judiciary Committee, those provisions were deleted from the bills before they were adopted.207 The Justice Department did propose that informal agreements on litigation authority be developed, along the lines of an understanding that had been reached with the Environmental Protection Agency. Reportedly a similar agreement has also been developed for the Commodity Futures Trading Commission,208 and the Department indicated that the same kind of understanding could be developed within six months for the agencies covered by the Interim Regulatory Reform bills. 209

We have reviewed the agreement between EPA and Justice as one possible approach to this problem. The "Memorandum of Understanding" first states that the Attorney General has "control over all cases" to which EPA is a party. Upon request of the agency, the Justice Department may "permit" EPA lawyers to "participate" in cases involving direct review in the courts of appeals and other civil cases, provided that agency attorneys "be subject to supervision and control of the Attorney General." Agency lawyers may also be required to take an oath of office as special U.S. attorneys, further emphasizing the relationship to the Department. The Department must take litigation action requested by the agency within 60 days, or explain the delay; if no complaint is filed within 120 days, then EPA may demand ac

20 S. 1532 (FMC), S. 1534 (ICC), S. 1535 (FPC), S. 1536 (FCC), S. 1537 (CAB). 203 [hid.

That action affected the FMC (S. 1532), FTC (S. 1533), FPC (S. 1535) and FCC (S. 1536). The remaining bills are presently pending as originally reported by the Committee, excent the ICC (S. 1534) which was adopted by the Senate with the litigating provision

intact.

208 New York Times, October 17, 1977.

20 Michael Egan, Associate Attorney General to Sen. Warren G. Magnuson, June 29, 1977, enclosing a copy of "Memorandum of Understanding Between the Department of Justice and the Environmental Protection Agency," June 15, 1977 (Hereafter Memorandum of Understanding.)

tion within 30 days; and if, after all that time passes, there is still no action then-and only then-may the agency proceed on its own.210 Without doubt, the agreement makes it clear that litigation authority remains within the province of the Attorney General. Thus the informal agreement is contrary to the notion that the independent commissions ought to control their own litigation.

We believe that legislative action is required. Only recently this Committee proposed legislation, which was adopted, granting litigating authority for the new Federal Energy Regulatory Commission. The act provides that, other than in cases before the Supreme Court:

Attorneys designated by the Chairman of the Commission may appear for, and represent the Commission, in any civil action brought in connection with any function carried out by the Commission pursuant to this or otherwise authorized by law.211 FERC, like most other independent agencies, remains subject to the Department of Justice as far as litigation before the Supreme Court. It should be noted that the provision does not exclude the Attorney General; rather it only guarantees the Commission self-representation in cases which concern the agency. If the Attorney General sees fit, he is of course authorized to also enter the proceeding.

We have considered various proposals which allow the Department of Justice a period of time to act before the commission may proceed on its own initiative. We are not convinced that is the most acceptable approach, because it adds but another stage to an already overburdened process.

We recommend that the provision adopted for FERC be legislated for all other independent regulatory commissions, which presently do not have that authority. It may also be advisable to include a provision expressly stating that, at the agency's discretion, the attorney general's participation or assistance on a particular matter may be requested.

On the issue of representation before the Supreme Court, there does appear to be special justification for a greater degree of coordination: priorities do need to be set at that level to insure that the Supreme Court is not overburdened by requests for certiorari filed by the Government. The Attorney General and Solicitor General should continue to "control and argue" cases before the Court. At present the agencies included within the Administrative Orders Review Act are expressly empowered to seek writs of certiorari on their own initiative. With that authority, it is not necessary to require that agencies also be permitted to argue and manage the case once it is accepted. Also available statistics suggest that, at present, perhaps as many as half of agency cases before the Supreme Court are argued by agency lawyers under the general direction of the Solicitor General, 2

212

However we do recommend that the Administrative Orders Review Act be amended to include the remaining independent regulatory commissions. To some extent this action would codify what is already existing practice. But such an amendment would also entitle those

210 Ibid.

211 Pub. L. 95-91, sec. 401 (1) (1977).

212 Professor Davis, from a spot check of the United States Reports over a 10 year period, found that "probably more than half of the agency cases are argued in the Supreme Court by agency counsels or their designates." Davis, op cit at fn. 146, p. 22.

agencies to the clear authority to petition the Supreme Court to review adverse decisions of lower courts. That is, we believe, a significant addition to the litigating authority of the agencies.

With those changes, the independent regulatory commissions will be authorized to implement and defend their regulatory policies in court proceedings. We believe that is in keeping with their fundamental purposes.

There are, in summation, limitations on the independence of the commissions-some of which are necessary and appropriate. As to appointments, appropriations, personnel practices and other matters, they are integrated into the rest of government, and subject to the legislative, judicial and executive branches. Other restrictions are imposed by budget and legislative message review, litigation control, coordination of information gathering, and clearance of certain toplevel staff appointments; not all of which are justified in our opinionor at least not to the present extent.

But within those limits the commissions are independent if they chose to be so. Much depends on the self-image of the agency's leadership. If an independent commission conducts itself in the public view as subordinate to a branch of government, or to any other interest, then dependency will be the likely result. In that regard it is interesting to note-although difficult to document-that some commissions have a tradition of independence, while others do not. Attitude can and does make a difference. If a commission asserts its proper independent status, the structure is there to support that objective.

F. THE EFFECTIVENESS OF THE INDEPENDENT FORM

Freedom from executive domination was, as we have demonstrated,213 the prime motivating force for the creation by Congress of the independent regulatory commissions. More than anything else, they were intended to be independent of the White House. That mainspring, expressed often in terms of the "arm of Congress" idea, also emphasized the special relationship of the commissions to Congress. What success have those interrelated principles had in practice?

As a general proposition, Presidents have respected the independent status of the commissions. There is an expectation that, in discharging their adjudicatory functions in particular, those agencies should be free of interference or direction from the White House. There is every reason to believe that President Carter will follow that same course. For example, Trade Commission Chairman Michael Pertschuk recently recounted what the President said to him in this regard :

[President Carter] pledged to me to maintain the independence of the Commission, and he said that if anyone in his administration either intentionally or inadvertently attempted to interfere with the independence of the Commission, I was to let him know directly.214

213 See pp. 26–32, supra.

214 Hearings, Michael Pertschuk to be Chairman, Federal Trade Commission, Committee on Commerce, Science and Transportation, U.S. Senate, 95th Cong., 1st sess., p. 79 (1977).

In the past, other Presidents have indicated about the same thing to prospective independent commissioners, 215

Communications to those commissions from the White House have always been viewed as sensitive matters. In the 1950s a major scandal, which led to the resignation of a top Presidential advisor, involved improper White House communication to an independent agency on a pending matter.216 Not unsimilar attempts at undue influence also occurred in the early 1970s, one of which contributed to the departure of a chairman of the Securities and Exchange Commission.217 In this area, appearance is as important as reality; and the President must be and appear to be at an arm's length distance from these quasi-judicial commissions. Yet that distance, some would argue, is symptomatic of the problems inherent in the independent form: free of executive guidance and immune from all but the most general national policies on regulation-it is said the agencies are unaccountable and uncoordinated, with the result that independence contributes to aimlessness. 1. Arguments Against the Independent Form

For years the commission form has been bombarded with those criticisms. Indeed when the structure was being developed there were those in Congress who questioned whether independence would prove to be a virtue or an obstacle. In 1914, those doubts led Senator Borah to argue against creation of the Trade Commission:

*** I, as one, am not willing to take the currency question, the industrial business of this country, and the transportation business, and place all those things entirely away from the electorate, entirely away from the recall of the people, with a bureau which is answerable in no respect to the people. . . I am not willing that the most tremendous affairs of government shall be wholly separated from the recall which the people have at stated periods with reference to the election of their officers.218

To President Franklin Delano Roosevelt, the commissions posed an impediment to his economic policies. The President fired a Trade Commissioner to gain a majority on that body (although he was later reversed by the Supreme Court 219). And much of the coordination that presently exists can be traced to the Roosevelt era: executive control of budgets and legislative recommendations, supervision of information gathering plans, and the power to reorganize these bodies in whole or part all first occurred during his presidency. In 1937 a study group appointed by President Roosevelt supported greater coordination in no uncertain terms:

21 See James M. Graham and Victor H. Kramer, Appointments to the Regulatory Agencies: Federal Communications Commission and Federal Trade Commission (1949– 1974), printed for the use of Committee on Commerce, U.S. Senate, 94th Cong., 2d sess., p. 4 (1976); Committee Study, vol. I, op cit., p. 150.

216 Loc cit., 120-123 (Sherman Adams was the Presidential aide).

917 Former Secretary of Agriculture Earl Butz reportedly attempted to influence FTC Chairman Miles Kirkpatrick on forestalling a certain action, a suggestion that Kirkpatrick declined to accept. Ibid., p. 346. The SEC Chairman was G. Bradford Cook, who resigned in 1974 after only several months service, partly as a result of allegations charging that former Commerce Secretary Stans had improperly influenced the Chairman during his tenure as agency general counsel. See Committee Study, vol. I, pp. 107-110. 218 Cushman, op cit. at fn. 12, p. 193.

219 See pp. 36-39,supra.