The Private Performing The Public: Delimiting Delegations To Private Parties

Private parties discharge critical roles in the Obama administration, as they have in administrations past. The Obama administration has appointed an attorney in private practice, Kenneth Feinberg, to set executive compensation rates; directed a private advisory group to investigate and report potential civil liberties violations by governmental authorities; and advocated that a private entity – the National Academy of Sciences – play a determinative role in setting global warming policy. As with its predecessors, the Obama administration has also contracted out a wide variety of services and duties to the private sector, in contexts ranging from national security to claims adjudication.This Article first argues (as have others) that the exercise of private power at times violates the constitutional principle of accountability. The Constitution does not authorize either Congress or the President to outsource decisional authority to private parties – authority that binds other private parties in the government’s name. Private parties are not subject to presidential appointment or removal; nor are they subject to impeachment. Exercise of authority by private parties may escape the checks and balances woven into the Constitution. As a result, individual liberty may be compromised.The Article then asks whether existing judicial doctrines sufficiently police delegations to private entities. First, courts have looked to the Due Process clause as a protection against self-interested involvement by private parties in implementation of federal law. Second, courts have used the nondelegation doctrine, particularly during the New Deal, to invalidate a number of delegations to private producer groups. Third, and more recently, courts as well as academics have suggested that judges turn to the President’s appointment and removal authorities to safeguard the public exercise of governmental authority. None of the three doctrinal formulations, however, specifically addresses the problem of delegation to private parties. The Due Process Clause traditionally has not been relied upon to prevent delegations to private firms, at least as long as property and liberty rights are not directly involved. The nondelegation doctrine is indifferent to the identity of the individual exercising the power – if legislative standards exist, the individual’s private status does not come into play. And, only appointments to “offices” trigger the Appointments Clause – appointment of individuals and groups to exercise discrete or episodic functions escapes Article II scrutiny. The lack of fit between the three doctrines and delegation to private parties has obscured the unique status of private party governance.The Article therefore argues that a discrete doctrine should be fashioned to check untoward delegations of power to private parties. The first doctrinal step should focus on what type or level of authority exercised by private entities is constitutionally problematic. Neither the scope nor subject matter of duties should be determinative. Rather, the nature of the duties delegated should control. The second step in a refashioned doctrine should focus on whether the actor should be treated as public or private. The issue is noncontroversial if the individual is appointed in conformance with Article II or receives a federal governmental salary. Yet, as the prior examples attest, it is not always clear whether the entity is public or private, because attributes of both are present. In such cases, the key in determining the propriety of the delegation lies in the applicability of government-wide rules and regulations designed to ensure that public officials discharge tasks in a public regarding way. Those rules and regulations, whether FOIA or the Ethics in Government Act, reflect what we expect from public servants. If that framework were applied, some of the developments in the Obama administration appear constitutionally problematic.