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Administrative State

August 16, 2023

Goldwater Institute

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The Goldwater Institute argues that state legislatures can and should play a role in reducing the power of the administrative state through laws that ensure the judiciary remains fair, impartial and independent when deciding cases involving administrative agencies.

A fundamental tenet of our legal system is that when two parties appear before a court, they are on equal footing. That is, the court ought to apply the law equally to both parties, weigh the merits of each case impartially and not be predisposed in favor of one party’s legal arguments over another.

Yet in judicial actions that involve decisions from administrative agencies, a series of deference doctrines require courts to defer to the government when the government is prosecuting or defending an action from an administrative agency. In other words, in cases in which a court applies deference to administrative agencies, the court is obligated to put its proverbial thumb on the scale for the government and its legal arguments.

These doctrines raise core due process and separation of powers concerns because they prevent meaningful and impartial review of decisions from executive branch agencies by the judiciary. Courts are supposed to exercise their independent judgment when interpreting the laws created by the legislature, but deference short-circuits this process and bars courts from questioning the executive branch’s interpretation of laws the legislature enacted, or worse, the agency’s self-created rules.

While much commentary has focused on the myriad problems that judicial deference has created at the federal level, deference to administrative power is not a uniquely federal problem. Many state courts have also adopted various forms of deference doctrines. This has turned judicial deference into a nationwide foundation for a large and powerful administrative state at both the federal and state level.

Efforts to reform deference doctrines have also traditionally been focused on the judiciary, but a solution need not come only from the courts. Because deference doctrines are based on judicial interpretations of the Federal Administrative Procedures Act — a law that sets out the legal framework for how courts review administrative decisions — clarity in the statute could direct courts on how to address deference or whether to apply it at all.

Additionally, because many states model their state-level administrative procedure statutes on the federal APA, state legislatures can play a key role in scaling back or eliminating this centerpiece of the administrative state. This provides a unique opportunity for state legislatures to lead the way in this important area.

This is precisely what was done in Arizona. In 2018, based on legislation developed by the Goldwater Institute, Arizona became the first state in the country to eliminate the state equivalent of the most pernicious deference doctrines by statute.

Now that the courts and state agencies have had an opportunity to interpret and apply Arizona’s law, the question becomes: Is the law effective?

Goldwater’s new paper reviews research conducted in the first three years of the law’s operation from both the courts and the Arizona Attorney General’s office to review whether the statutory reforms are an effective solution to the problems created when state courts apply various deference doctrines.

A review of the case law and court filings in this area demonstrates that the courts appear to be faithfully applying the law by not deferring to the administrative agencies on legal questions, and the state does not appear to be seeking deference in cases involving agency actions.

Based on this review, state legislatures now have an effective tool to ensure that all parties—including those who are regulated by administrative agencies — can have their day in court.

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