Academic journal article Harvard Journal of Law & Public Policy

The New Private-Regulation Skepticism: Due Process, Non-Delegation, and Antitrust Challenges

Academic journal article Harvard Journal of Law & Public Policy

The New Private-Regulation Skepticism: Due Process, Non-Delegation, and Antitrust Challenges

Article excerpt

INTRODUCTION I.   THE PROBLEM OF PRIVATE REGULATION      A. Private Regulation and Its Discontents      B. Five Examples         1. Amtrak         2. The North Carolina Board of Dental            Examiners         3. The Mississippi Board of Pharmacy         4. The Texas Boll Weevil Eradication            Foundation         5. Texas Water Quality Protection            Zones      C. What Is "Private"? II.  THE DUE PROCESS CLAUSE      A. The "Private Due Process" Doctrine         1. The Eubank-Thomas Cusack-Roberge            Synthesis         2. The Mandatory-Discretionary            Distinction         3. Application      B. No Private Due Process Doctrine III. NON-DELEGATION DOCTRINE      A. At the Federal Level      B. In the States      C. Commingling Non-Delegation and Due         Process         1. The D.C. Circuit's Private Delegation            Doctrine         2. The Carter Coal Puzzle         3. How the Amtrak Case Should Have            Been Decided         4. Other Comminglers IV.  ANTITRUST THEORIES      A. State Action Immunity         1. Applicability to State Agencies         2. The Cursory View         3. The Intermediate View         4. The FTC and Areeda-Hovenkamp            View         5. Application      B. Actual Antitrust Violations         1. The Fourth Circuit's Dental            Examiners Reasoning         2. The Other Cases      C. Remedies V.   CONCLUSION 

INTRODUCTION

In recent years, state and federal courts have been ruling against private regulatory organizations on a number of theories. This Article explores this new private-regulation skepticism and the theories that underpin it.

This Article focuses on three main sources of law: the Due Process Clause, non-delegation doctrine, and antitrust law. To illustrate the doctrines, it follows five examples from recent cases and recent news of regulation by Amtrak, the North Carolina Board of Dental Examiners, the Mississippi Board of Pharmacy, the Texas Boll Weevil Eradication Foundation, and landowners in Texas water quality protection zones.

The Due Process Clause is a potential limit on the private exercise of regulatory power, especially if the regulators and the regulated parties compete with each other. Federal non-delegation doctrine, by contrast, is unlikely to be much help in these challenges, though some states, like Texas, have vibrant non-delegation doctrines that not only are stricter than the federal one but also strongly distinguish between public and private delegates. Some courts don't clearly distinguish between non-delegation and due process. I argue that they should, as the two doctrines serve very different purposes.

Finally, federal antitrust law is available to guard against the anticompetitive dangers of "industry regulating itself." Excessive conflicts of interest decrease the chance that a court will find state action immunity from antitrust law, and increase the chance that a court will find a substantive antitrust violation because of structural anticompetitive factors. Additionally, regulators that are sufficiently independent from state government are less likely to be insulated from liability by sovereign immunity. This new regulation skepticism thus provides several useful tools to challenge private regulation.

I. THE PROBLEM OF PRIVATE REGULATION

A. Private Regulation and Its Discontents

Using private entities to achieve regulatory goals has been a long-standing American practice. The most salient examples for lawyers are our own professional accreditors--state bars and the American Bar Association--but examples can be found across the entire economy, (1) and the growth of the regulatory state, combined with resource constraints for governments, suggests that the phenomenon will continue. (2)

On the one hand, relying on the private sector to regulate its own ranks seems to offer an advantage because lawyers, doctors, and the like know more about their own professions than the government does. …

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