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Administrative Law

Hamburger v. Parrillo on the Nondelegation Doctrine

An interesting exchange on the implications of early agency power to revise tax assessments.


Last year, Professor Nicholas Parrillo published an important article challenging the conventional originalist narrative concerning the nondelegation doctrine, "A Critical Assessment of the Originalist Case Against Administrative Regulatory Power: New Evidence from the Federal Tax on Private Real Estate in the 1790s." In this article (which I noted here), Professor Parrillo discussed how early Congresses delegated power to federal boards of  tax commissioners in each state to, among other things, revise tax assessments across-the-board, and argued this was a clear example of the delegation of broad, rule-making power that had a coercive effect on private citizens domestically. This paper is part of a burst of recent scholarship on whether the nondelegation doctrine has legitimate originalist roots.

In a new paper posted on SSRN, "Nondelegation Blues," Professor Philip Hamburger  responds to Parrillo (and other critics of the conventional originalist narrative) and argues that "fundamental principles, drafting assumptions, and text were all aligned in barring transfers of power among the branches of government."

In a post on the Yale Journal on Regulation's "Notice & Comment" blog, Parrillo takes issue with one aspect of Hamburger's critique (though noting he would also contest others). His post suggests Hamburger has missed the thrust of his argument and its significance for the debate over nondelegation. Focusing on one particular passage in Hamburger's paper, Parrillo writes:

The rules to which Hamburger refers in the passage above are not the rules that are the basis for my claim that the direct tax delegated rulemaking power to bind the public. The rules that are the basis for my claim are the district-wide mass revisions of taxable values, directly determinative of landowners' tax liabilities, that each federal board of commissioners was authorized to make under Section 22 of the Valuation and Enumeration Act of 1798—mass revisions just like the ones in Bi-Metallic that have become the field's touchstone for rulemaking. See Valuation and Enumeration Act § 22, 1 Stat. 580, 589 (1798) ("the commissioners . . . shall have power, on consideration and examination of the abstracts to be rendered by the assessors, as aforesaid, and of the lists aforesaid, to revise, adjust and vary, the valuations of lands and dwelling-houses in any assessment district, by adding thereto, or deducting therefrom, such a rate per centum, as shall appear to be just and equitable").

By contrast, the rules to which Hamburger refers in the passage I block-quoted above are those that the boards were authorized to make under Section 8 of the Act, to govern any actions they or the frontline assessors might take to implement the Act. Section 8 said each board could "establish all such regulations, as to them, or a majority of them, shall appear suitable and necessary, for carrying this act into effect; which regulations shall be binding on each commissioner and assessor, in the performance of the duties enjoined by, or under this act; and also to frame instructions for the said assessors, informing them, and each of them, of the duties to be by them respectively performed under this act." Valuation and Enumeration Act § 8, 1 Stat. 580, 585 (1798), quoted in my article at pp. 1333-34. Hamburger may be correct that rules promulgated under Section 8 were binding on federal officials and not directly on the public; my article does not say otherwise. But the Section 8 rules are not the basis for my claim.

The Section 22 rules are. That is why I devote the bulk of my article to analyzing and contextualizing the boards' power to make these "just and equitable" mass revisions, arguing at length that the mass revisions were sweeping (Part I, Section C), highly discretionary (Part II), political (Part III), unconstrained by judicial review (Part IV), and accepted as constitutional (Part V). I discuss the various boards' Section 8 regulations in one passage of Part II (pp. 1372-79), arguing that their respective definitions and methods of valuation were open-ended and variable, in a way that suggests the indeterminacy of the mass-revision task eventually undertaken by the boards under Section 22. And I discuss a controversy over one federal board's Section 8 regulations in one passage of Part III (pp. 1408-13), because it points up contemporary beliefs about the subjective and political nature of mass valuation, which logically would be applicable to mass revisions under Section 22. That is, I use the Section 8 regulations as indirect evidence for my claim, and I analyze them when relevant in a targeted way. The Section 22 mass revisions are the direct basis for my claim, and I structure the whole article to shed light on them.

In a subsequent post on the "Notice & Comment" blog, Hamburger responds to Parrillo, conceding that he misread portions of Parrillo's argument, but arguing that this does not undermine his overall claims about delegation under the Constitution.  Hamburger writes:

In retrospect, I think Parrillo is correct that my draft misread his argument, and I am glad to correct my mistake. But my error wasn't entirely unreasonable. And a corrected reading of his article doesn't strengthen his argument.

My misreading arose from my naive assumption that when Parrillo said that there was delegated rulemaking under the 1798 tax statute, he was referring to the statute's express authorization for the commissioners to make "regulations." Upon rereading his article, it becomes evident that, on the contrary, he views the commissioners' revisions of assessments to be the key delegated rulemaking. But this just accentuates the limits of his evidence.

When a statute in one section authorizes commissioners to make "regulations," and in another section authorizes them to "revise" assessments, does it really make sense to say that the commissioners' revisions of assessments amounted to delegated rulemaking? Possibly. But not obviously. The statute's distinction between the authority to make "regulations" and the authority to "revise" suggests that the revisions were not regulations.

Second, the assessment process was not considered legislative. Assessments and their revision had long been viewed as determinations of facts, and so were expected to be exercises of judgment, not will. See Nondelegation Blues at 89. In other words, although not actually a matter of judicial power, assessments were to be done in a judicial rather than a legislative spirit. Id.

Third, the text of the 1798 tax statute reinforces this doctrinal point. According to the act, the commissioners were to adjust assessments "as shall appear to be just and equitable." 1 Stat. 589. Parrillo's article tries to preserve its claim about delegated legislative power by saying that the phrase just and equitable referred to a broad open-ended discretion. But this clearly is mistaken. Nondelegation Blues explains:

Although the phrase just and equitable was widely familiar in many contexts as a generic measure of justice, the authorization to officers to act as shall appear to be just and equitable [the statute's phrase] was a standard measure of the conduct of government officials making judicial-like determinations, including assessments. (Pages 89-90.)

So there is yet another reason to doubt whether the power of revision was a delegated legislative power. Not only doctrinally but also textually, the revisions were expected to be exercises of judgment rather than legislative will.

Thus, Hamburger concludes, "Although my article misreads Parrillo's, his misreads the statute."

There's much in both papers to digest.