b'Damages and Arbitration Provisions in Proposed\nAmendments to the Fair Housing Act\nC ertain proposed am endm ents to the Fair Housing Act would provide that parties may voluntar\xc2\xad\nily subm it their dispute to an arbitrator empowered to im pose compensatory and punitive\ndam ages (as opposed to equitable relief or restitution). These amendments would be permis\xc2\xad\nsible under the Seventh Amendment because they amount to a waiver o f a right, that would\notherw ise obtain, to a jury trial on com pensatory and punitive damages. The amendments also\ncom port with the strictures of A rticle III. The Supreme Court has held that Article III\nstrictures cannot be waived, but the Court also has found that purely voluntary procedures\nseverely m inim ize any Article III concerns.\nO ther aspects o f the proposed am endm ents to the Fair Housing Act, which authorize mandatory\nproceedings before an arbitrator o r adm inistrative law judge with the power to award compen\xc2\xad\nsatory and punitive damages, w ould likely not survive scrutiny under the Seventh Amend\xc2\xad\nm ent and A rticle III. The cause o f action created by the Fair Housing Act appears to be\nderived from a com m on law action that is historically within the exclusive preserve of Article\nIII courts operating with a jury. Furtherm ore, the right at issue is private in nature, in that it is\nintended to determ ine the liability o f one individual to another. In addition, the housing\nm arket is not a specialized area o f adm inistrative regulation by the Federal Government.\nFinally, the Fair Housing Act setting does not seem to involve an imperative necessity for\nCongress to choose an administrative remedy, as demonstrated by the fact that judicial\nproceedings would remain available to plaintiffs and there w ould be only minimal differences\nin the relief available in the adm inistrative and judicial forum s. Under the Supreme C ourt\xe2\x80\x99s\nadm ittedly confusing and inconsistent precedents, these factors suggest that the proposed\nm andatory adm inistrative proceedings would not comport with Article III or the Seventh\nA m endm ent.\n\nJune 8, 1987\nM e m o r a n d u m O pin io n f o r t h e A s s is t a n t A t t o r n e y G e n e r a l ,\nC iv i l R ig h t s D iv isio n\n\nThis responds to your request for our opinion on the Seventh Amendment\nissues raised by the use of civil penalties and punitive damages in proposed\namendments to the Fair Housing Act, 42 U.S.C. \xc2\xa7\xc2\xa7 3602-3631. The Civil\nRights Division has drafted a bill entitled \xe2\x80\x9cFair Housing Amendments Act of\n1987\xe2\x80\x9d (draft bill), while the Senate is considering S. 558.\nThe draft bill and S. 558 raise three questions. First, may an arbitrator award\nanything other than equitable relief in a voluntary arbitration proceeding?\nSecond, is the defendant in a civil action entitled to a jury trial on the issue of\nliability for civil penalties? Third, may an arbitrator or an administrative law\njudge award compensatory damages, punitive damages, or civil penalties in an\nadministrative proceeding?\n50\n\n\x0cI. Analysis\nA. Punitive Damages in Voluntary Arbitration\nThe first question is whether an arbitrator may award damages in a voluntary\nproceeding under \xc2\xa7 812 of the draft bill. The bill would permit the parties to\nagree to voluntary arbitration that would be binding on the parties. \xc2\xa7 812(a)(2).1\nThere is certainly no impediment to the arbitrator in such a voluntary proceed\xc2\xad\ning imposing the equitable relief now outlined in the draft bill: a permanent or\ntemporary injunction and restitution. Nor do we believe that the Seventh\nAmendment precludes the parties from agreeing voluntarily to submit their\ndispute to an arbitrator who could impose punitive damages. In these circum\xc2\xad\nstances, both parties will have waived any Seventh Amendment rights that\nwould otherwise obtain.\nThe question whether this proceeding is consistent with Article III of the\nConstitution is somewhat more problematic. The voluntary participation of\nprivate litigants in a proceeding outside the confines of the federal judiciary\ndoes not ipso facto insulate it from Article III attack. Commodities Futures\nTrading Comm\xe2\x80\x99n v. Schor, 478 U.S. 833, 851-54 (1986). The Court in Schor\nemphasized that the strictures of Article III (unlike the protection of Seventh\nAmendment) cannot be waived by the consent of the parties. Id. For the reasons\ndiscussed more fully below, however, we believe that the arbitration proceed\xc2\xad\ning contemplated in \xc2\xa7 812 of the draft bill would survive Article III scrutiny\nbecause a very similar administrative scheme was upheld in Schor primarily\nbecause of its voluntary nature. Id. at 856-57.\nB. Jury Trial in a Civil Action\n\nOn the issue of liability for punitive damages, we believe that the Seventh\nAmendment entitles the defendant to a jury trial in a civil action under either\n\xc2\xa7 814(c) of the draft bill or \xc2\xa7 813 of S. 558.\nThe Supreme Court has held that suits by the Government to recover civil\npenalties are analogous to a common law action in debt, an action covered by\nthe Seventh Amendment\xe2\x80\x99s requirement of a jury trial. Tull v. United States, 481\nU.S. 412, 420-23 (1987). Therefore, the defendant in an action to recover a\ncivil penalty under the Clean Water Act, 33 U.S.C. \xc2\xa7 1319(d), is entitled to a\njury trial. The Court distinguished between actions at law, which are covered\nby the Seventh Amendment, and actions in equity, which are not.2 Tull, 481\nU.S. at 416. Noting that civil penalties were punitive in nature, and were\nintended to do more than make the offender disgorge unlawful profits, the\nCourt in Tull observed:\n1 Section 812(a)(4), although incom plete, supports o ur assum ption that the hearing w ill be conducted\naccording to rules that provide for presentation o f witnesses and evidence so as to satisfy any due process\nconcerns.\n2 A ctions at equity include tem porary and perm anent injunctions and orders, such as reparations, that\nrestore the status quo.\n\n51\n\n\x0cA civil penalty was a type of remedy at common law that could\nonly be enforced in courts of law. Remedies intended to punish\nculpable individuals, as opposed to those intended simply to\nextract compensation or restore the status quo, were issued by\ncourts of law, not courts of equity.\nId. at 422. The Court analyzed the legislative history of the Clean Water Act\xe2\x80\x99s\npenalty provision and determined that it was intended to punish offenders and\ntherefore reflected \xe2\x80\x9cmore than a concern to provide equitable relief.\xe2\x80\x9d Id.\n\xe2\x80\x9cCongress wanted the district court to consider the need for retribution and\ndeterrence, in addition to restitution, when it imposed civil penalties.\xe2\x80\x9d Id. Tull\ntherefore stands for the proposition that civil penalties that are designed to\npunish are actions at law that must be tried to a jury under the Seventh\nAmendment. See also Curtis v. Loether, 415 U.S. 189, 194 (1974). The\ndetermination in a civil action of liability for \xe2\x80\x9cpunitive damages\xe2\x80\x9d thus requires\na trial by jury. Punitive damages are designed to punish and were, not surpris\xc2\xad\ningly, identified by the Court as another kind of action at law that requires a\njury trial. Tull, 481 U.S. at 422 n.7. Therefore, a defendant in an action brought\nunder \xc2\xa7 814(c) of the draft bill or \xc2\xa7 813 of S. 558 would be entitled to a jury\ntrial.\nMoreover, even if civil penalties or punitive damages were not available, a\njury trial would still be required so long as a private litigant could recover\nactual, compensatory damages. The Court in Curtis, noting that \xe2\x80\x9c[a] damages\naction sounds basically in tort,\xe2\x80\x9d held that a suit by an aggrieved person to\ncollect damages under \xc2\xa7 812 of the Fair Housing Act required a trial by jury.\n415 U.S. at 194-95.\nC. Seventh Amendment and Article III: Permissibility o f\nMandatory Arbitration\n\nHaving concluded that an action for compensatory or punitive damages\nwould require a jury trial in an Article III court, we turn to the most difficult\nquestion posed by the draft bill and S. 558: whether providing precisely the\nsame cause of action in an administrative tribunal where no jury is available\ncan survive constitutional scrutiny under the Seventh Amendment and\nArticle III.\n1. Case Law\nThe Supreme Court has held that the Seventh Amendment does not prohibit\nCongress from assigning adjudication of certain statutory rights to an adminis\xc2\xad\ntrative forum, even if a jury would have been required under the Seventh\nAmendment had Congress assigned adjudication of the same rights to a federal\ncourt: A tlas Roofing Co. v. Occupational Safety & Health Comm\xe2\x80\x99n, 430 U.S.\n442,450(1977):\n52\n\n\x0cAt least in cases in which \xe2\x80\x9cpublic rights\xe2\x80\x9d are being litigated \xe2\x80\x94\ne.g., cases in which the Government sues in its sovereign capac\xc2\xad\n\nity to enforce public rights created by statutes within the power\nof Congress to enact \xe2\x80\x94 the Seventh Amendment does not\nprohibit Congress from assigning the factfinding function and\ninitial adjudication to an administrative forum with which the\njury would be incompatible.\nSee also Tull, 481 U.S. at 418 n.4; NLRB v. Jones & Laughlin Steel Corp., 301\nU.S. 1 (1937); Block v. Hirsh, 256 U.S. 135 (1921). The Court made clear,\n\nhowever, that actions involving \xe2\x80\x9cprivate rights\xe2\x80\x9d as distinguished from \xe2\x80\x9cpublic\nrights\xe2\x80\x9d could not be transferred to administrative proceedings:\nOur prior cases support administrative factfinding in only those\nsituations involving \xe2\x80\x9cpublic rights,\xe2\x80\x9d e.g., where the Government\nis involved in its sovereign capacity under an otherwise valid\nstatute creating enforceable public rights. Wholly private tort,\ncontract, and property cases, as well as a vast range of other\ncases are not at all implicated.\nAtlas Roofing, 430 U.S. at 458.3\n\nThe problem is that the Court has never stated with any clarity what distin\xc2\xad\nguishes a public right from a private right.4 \xe2\x80\x9cThe distinction between public\nrights and private rights has not been definitively explained in [the Court\xe2\x80\x99s]\nprecedents.\xe2\x80\x9d Northern Pipeline Constr. Co. v. Marathon Pipe Line Co., 458\nU.S. 50,69 (1982) (plurality opinion). But while the Court\xe2\x80\x99s application of the\npublic rights doctrine has not been particularly consistent or coherent, the\nconceptual underpinnings of this theory are reasonably discernible.\nEssentially, the public rights doctrine reflects the Court\xe2\x80\x99s recognition that\nthe nature and historical backdrop of the federal right at issue are quite\nsignificant in determining whether congressional substitution of alternative\ntribunals for Article III courts impermissibly encroaches on the independence\nand authority of the federal judiciary. At one end of the spectrum, the Court has\nsought to prevent Congress from usurping the constitutional prerogatives of\ncourts and, in some circumstances, juries, by removing from Article III tribu\xc2\xad\n3 Tull does not diverge from this line o f cases. In a footnote, the majority stated:\nThe Court has also considered the practical lim itations o f a ju ry trial and its functional com pat\xc2\xad\nibility with proceedings outside o f traditional courts o f law in holding that the Seventh Amend\xc2\xad\nment is not applicable to adm inistrative proceedings. But the C ourt has not used these consider\xc2\xad\nations as an independent basis for extending the right to a ju ry trial under the Seventh Amendment.\n481 U.S. at 418 n.4 (citing Atlas Roofing and Pem ell v. Southall Realty , 416 U .S. 363 (1974)). We are not\ncertain what these tw o sentences m ean. At a m inim um , how ever, they indicate that Tull is not m eant to signal\na reexam ination o f the principles underlying Atlas Roofing.\n4 We believe the public rights d octrine is prim arily based on A rticle III principles and thus w ill discuss this\nissue principally in those terms. The conclusion that a right is \xe2\x80\x9c public\xe2\x80\x9d for A rticle III purposes would seem to\nsubsume any Seventh Amendm ent objections on this basis. Cf. Atlas Roofing , 430 U.S. a t 456; Northern\nPipeline , 458 U.S. at 67 n.18. In any event, in analyzing the public rights doctrine, the C ourt has treated the\nconstraints o f the Seventh Amendm ent and A rticle III as virtually coextensive, discussing and citing S eventh\nA mendment and A rticle III cases interchangeably.\n\n53\n\n\x0cnals matters which the Constitution\xe2\x80\x99s text, structure and history suggest are\ntheirs to resolve. At the other end of the spectrum, the Court has perceived no\nplausible threat to an independent judiciary or trial by jury from non-Article III\nresolution of matters that are committed by the Constitution or historical\nconsensus to political branches, and which thus \xe2\x80\x9ccould have been determined\nexclusively\xe2\x80\x9d by the executive and legislative branches absent any judicial\nreview save that required by the Due Process Clause.5 Northern Pipeline, 458\nU.S. at 68 (plurality opinion) (citing Crowell v. Benson, 285 U.S. 22 (1932)). In\nshort, the dividing line that has emerged from the Court\xe2\x80\x99s precedent is that\ncases which are \xe2\x80\x9cinherently . .. judicial,\xe2\x80\x9d Ex parte Bakelite Corp., 279 U.S.\n438, 458 (1929), because they involve traditional rights governing \xe2\x80\x9cthe liability\nof one individual to another,\xe2\x80\x9d Crowell, 285 U.S. at 51, may not be removed\nfrom adjudication in the federal courts absent extraordinary circumstances,\nwhile those involving disputes \xe2\x80\x9cbetween the government and others\xe2\x80\x9d may\npermissibly be committed to agency adjudication. Ex parte Bakelite Corp., 279\n5 T his and sim ilar phrases, often repeated but rarely explained by the Court, apparently refer to those\nm atters that the political branches co u ld have disposed o f in a sum m ary fashion before the evolution o f\nm odern substantive and procedural d ue process theories. T h is would include those areas where the text of the\nC onstitution grants plenary authority to one o f the political branches \xe2\x80\x94 such as immigration or taxation \xe2\x80\x94\nand d isputes concerning the removal o f \xe2\x80\x9cprivileges\xe2\x80\x9d such as G overnm ent financial assistance, rather than\n\xe2\x80\x9crig h ts\xe2\x80\x9d as traditionally understood. \xe2\x80\x9c The understanding o f these cases is that the Framers expected that\nC ongress w ould be free to commit such m atters com pletely to non>judicial executive determ ination, and that\nas a result there can be no constitutional objection to C ongress\' em ploying the less drastic expedient of\ncom m itting th eir determ ination to a legislative court o r an adm inistrative agency.\xe2\x80\x9d Northern Pipeline , 458\nU .S. at 68 (plurality opinion). See also Crowell v. Benson , 285 U.S. at 50, Thomas v. Union Carbide Agric.\nProd. Co., 473 U .S. 568, 596-97 n .l (1985) (Brennan, J., concurring). M oreover, \xe2\x80\x9c [t]his doctnne may be\nexplained in part by reference to the traditional principle o f sovereign immunity, w hich recognizes that the\nG overnm ent may attach conditions to its consent to be sued \xe2\x80\x9d Northern Pipeline, 458 U.S. at 67. See also\nM urray\'s Lessee v. Hoboken Land & Improvement Co., 59 U.S. (18 How.) 272, 283-85 (1856); Ex parte\nBakelite Corp., 279 U.S. 4 3 8 ,4 5 2 (1929). In other words, the original A rticle III cases seem to be premised\non concepts akin to the \xe2\x80\x9cbitter with th e sw eet\xe2\x80\x9d theory o f procedural due process and the \xe2\x80\x9cright/privilege\xe2\x80\x9d\ndistinction. See Arnett v. Kennedy, 4 1 6 U.S. 134 (1974); Bailey v. Richardson, 182 F.2d 46 (1950), a f f d,\n341 U .S. 918 (1951). That is, the G overnm ent could condition suit against itself on the p la in tiffs w aiver of\nany rig h t to choose a forum or a jury trial, and in connection with exercising plenary grants o f authority or\nlim iting financial benefits, the political branches were fully free to dispose o f governm ent-created entitle\xc2\xad\nm ents w ithout providing any means o f contesting such sum m ary action.\nO f course, as a d ue process matter, subsequent case law has underm ined these conceptual underpinnings. It\nis now clear that there is a property interest in G overnm ent entitlem ents, a substantive due process right\na g ain st arbitrary o r capricious governm ent practices, and a prohibition against conditioning the extension of\nG overnm ent benefits on the waiver o f constitutional rights. See, e.g., Goldberg v. Kelly, 397 U.S. 254 (1970);\nCleveland Bd . o f Educ. v. Loudermill, 470 U .S. 532 (1985); Speiser v. Randall, 357 U.S. 513 (1958).\nN evertheless, fo r A rticle III purposes, w e believe these concepts help to describe w hat is meant by matters\nw hich \xe2\x80\x9ccould be conclusively determ ined\xe2\x80\x9d by the executive and legislative branches. The notion is that\ntraditional, private state law claims antedating the newly created federal statutory rights are the type that\nshould rem ain w ithin the province o f A rticle III courts. T hese rights do not exist solely by virtue o f the federal\nstatu to ry schem e, do not involve disputes betw een a private individual and the G overnm ent qua G overnment,\nand d o not co ncern alleged deprivations caused by the G overnm ent\'s adm inistration o f its own regulatory or\nfinancial assistance schem es. A ccordingly, even under a \xe2\x80\x9cconsent to suit\xe2\x80\x9d or \xe2\x80\x9cbitter with the sweet\xe2\x80\x9d theory,\nsuch m atters w ould not be subject to sum m ary disposition by the political branches because they involve\ntraditional d isputes solely between private individuals and w ould thus fall outside the rationale supporting the\ne arlie r Article III cases. Again, the ris e o f m odem due process theory should not affect the A rticle III\nanalysis. T hat recent due process cases create checks against the G overnm ent\'s pow er to engage in summary\ndisposition o f certain m atters does not provide a rationale supporting the non-A rticle III adjudication of\nm atters not previously subject to sum m ary disposition.\n\n54\n\n\x0cU.S. at 451. Although the Court has not comprehensively or even consistently\ndefined this concededly abstract line of demarcation, it has identified the\nfactors that tend to differentiate public from private rights.\nProbably the most important factor in defining the nature of the federal right\npresented is the historical underpinnings of the right. If the claim at issue is\nanalogous to \xe2\x80\x9cthe stuff of the traditional actions at common law tried by the\ncourts at Westminster in 1789,\xe2\x80\x9d there is at least a strong presumption that it\nmust be resolved by an Article III court. Northern Pipeline , 458 U.S. at 90\n(Rehnquist, J., concurring). Although the Northern Pipeline plurality and some\nearlier cases seem to hold that Congress may not \xe2\x80\x9cwithdraw from judicial\ncognizance any matter which, from its nature, is the subject of a suit at the\ncommon law, or in equity, or admiralty, Northern Pipeline, 458 U.S. at 67\n(plurality opinion) (quoting M urray\xe2\x80\x99s Lessee v. Hoboken Land & Improvement\nCo., 59 U.S. (18 How.) 272, 284 (1856)), the Court\xe2\x80\x99s recent decisions seem\xc2\xad\ningly conclude that the traditional common law attributes of a claim do not,\nstanding alone, prohibit such a withdrawal. Nevertheless, even these recent\ndecisions have emphasized that such traditional legal and equitable causes of\naction are at the \xe2\x80\x9cprotected core\xe2\x80\x9d of Article III judicial powers. Thomas v.\nUnion Carbide Agric. Prod. Co., 473 U.S. 568,587 (1985). See also Schor, 478\nU.S. at 853. As the Court put it in Schor, \xe2\x80\x9cthe state law character of a claim is\nsignificant for purposes of determining the effect that an initial adjudication of\nthose claims by a non-Article III tribunal will have on the separation of powers\nfor the simple reason that private, common law rights were historically the\ntypes of matters subject to resolution by Article III courts.\xe2\x80\x9d Id. at 854.6\nAccordingly, if Congress creates a statutory cause of action, the roots of\nwhich can fairly be traced to a traditional legal or equitable claim, there is a\nheavy, albeit rebuttable, presumption that the claim may not be delegated to\nadministrative adjudication.7\nConversely, \xe2\x80\x9cmatters arising \xe2\x80\x98between the Government and persons subject\nto its authority in connection with the performance of the constitutional func\xc2\xad\ntions of the executive or legislative departments,\xe2\x80\x99 [and] matters that histori\xc2\xad\ncally could have been determined exclusively by those departments\xe2\x80\x9d are clearly\n6 The Court has em phasized that the historical antecedents o f a particular right, not an objective evaluation\no f w hether it is o f the sort that should be resolved by the judiciary, are param ount in public rights analysis. As\nthe plurality noted in Northern Pipeline :\nDoubtless it could be argued that the need for independent ju dicial determ ination is greatest in\ncases arising betw een the G overnm ent and an individual. But the rationale for the public-rights\nline o f cases lies not in political theory, but rather in C ongress\' and this C o u rt\'s understanding o f\nwhat pow er w as reserved to the Judiciary by the C onstitution as a m atter o f historical fact.\n458 U.S. at 68 n.20, cited in Schor, 478 U.S. at 854.\n7The public rights analysis obtains with respect to \xe2\x80\x9cnew " rights created by congressional statutes, as well as\nto non-A rticle III adjudication o f common law claims not em bodied in a congressional statute. See Curtis v.\nLoether , 415 U.S. 189, 193 (1974) (\xe2\x80\x9cWe have considered the applicability o f the constitutional right to jury\ntrial in actions enforcing statutory rights \xe2\x80\x98as a m atter too obvious to be doubted.\xe2\x80\x99\xe2\x80\x9d ). See also Tull, 481 U.S at\n420; Pemell v. Southall Realty, 416 U.S. 363, 375 (1974). Indeed, a contrary conclusion would make\nnonsense o f the C o u rt\'s em phasis on the historical lineage o f the right and would essentially eviscerate the\nprotection of A rticle III and the Seventh A m endment, because C ongress always m akes law by em bodying\n\xe2\x80\x9cnew " rights in a statute.\n\n55\n\n\x0cpublic rights. Northern Pipeline, 458 U.S. at 67-68 (plurality opinion) (quoting\nCrowell, 285 U.S. at 50). See also Schor, 478 U.S. at 853-54 (\xe2\x80\x9cwhen Congress\nselects a quasi-judicial method of resolving matters that \xe2\x80\x98could be conclusively\ndetermined by the Executive and Legislative Branches,\xe2\x80\x99 the danger of en\xc2\xad\ncroaching on the judicial powers is less than when private rights, which are\nnormally within the purview of the judiciary, are relegated as an initial matter\nto administrative adjudication\xe2\x80\x9d); Thomas, 473 U.S. at 589; Ex parte Bakelite\nCorp., 279 U.S. at 458; Oceanic Steam Navigation Co. v. Stranahan, 214 U.S.\n320, 339 (1909). The Court has thus concluded that disputes involving newly\ncreated rights unknown to the common law or matters that, as an historical\nmatter, \xe2\x80\x9ccould be conclusively determined by the Executive and Legislative\nBranches,\xe2\x80\x9d may be adjudicated by non-Article III forums. Thomas, 473 U.S. at\n589 (quoting Northern Pipeline, 458 U.S. at 68 (plurality opinion)). In such\ncircumstances, the dispute is not over the scope of the federal statutory duty X\nowes to Y, but the scope of the Government\xe2\x80\x99s authority in administering its\nown programs; it is thus a dispute between the Government and others. Accord\xc2\xad\ningly, the Court has looked to whether the rights asserted are derived from a\ncomprehensive regulatory scheme concerning a specialized area, such as fed\xc2\xad\neral broadcast licenses and \xe2\x80\x9centitlements\xe2\x80\x9d to federal welfare benefits. See, e.g.,\nSchor, 478 U.S. at 854-56; Thomas, 473 U.S. at 600-01 (Brennan, J., concurring).\nIt is more difficult to discern whether public rights are created by virtue of\nthe Government\xe2\x80\x99s participation in matters not committed to its exclusive and\nall-encompassing regulatory discretion. Specifically, it is unclear what signifi\xc2\xad\ncance should be attached to the mere fact of Government participation in a\nrepresentative or prosecutorial capacity, rather than in its capacity as adminis\xc2\xad\ntrator of its own regulatory programs.\nThe Court has recently established that neither the presence nor the absence\nof the Government as a party of record is dispositive in resolving whether a\nparticular right is public or private.8 Rather, one must \xe2\x80\x9cloo[k] beyond form to\nthe substance of what [the statutory scheme] accomplishes\xe2\x80\x9d with due regard for\n\xe2\x80\x9cthe origin of the right at issue [and] the concerns guiding the selection by Congress\nof a particular method for resolving disputes.\xe2\x80\x9d Id. at 587,589.\nFor this reason, as we previously stated with respect to another proposed\namendment to the Fair Housing Act, the Government\xe2\x80\x99s participation is of little\nsignificance if it \xe2\x80\x9csimply has stepped into the individual\xe2\x80\x99s shoes in [the]\nadministrative proceeding, and is suing in a representative capacity.\xe2\x80\x9d9 In this\n8 In Northern Pipeline , the plurality stated: \xe2\x80\x9cIt is thus clear that the presence o f the U nited States as a proper\nparty to the proceeding is a necessary b u t not sufficient m eans o f distinguishing "private rights* from \xe2\x80\x98public\nrig h ts.\xe2\x80\x99 \xe2\x80\x9d 4 5 8 U .S. at 69 n.23. Only a fe w years later, how ever, a m ajority o f the C ourt rejected this \xe2\x80\x9cbrightline test" as exalting form over substance, holding that the U nited States\xe2\x80\x99 party status was neither necessary\nnor su fficien t in resolving the public rig h ts question for purposes o f A rticle III. Thomas, 473 U.S. at 586. In\nThomas, the C ourt rejected both the v iew that \xe2\x80\x9cthe right to an A rticle III forum is absolute unless the federal\ngovernm ent is a party o f record" and th e contrary view th a t44A rticle III has no force sim ply because a dispute\nis betw een the G overnm ent and an in dividual.\xe2\x80\x9d Id.\n9 \xe2\x80\x9cSeventh A m endm ent Implications o f Providing for the A dm inistrative A djudication o f C laim s Under\nTitle V III o f the C ivil R ights Act of 1968,\xe2\x80\x9d 9 Op. O .L.C . 32 (1985).\n\n56\n\n\x0ccontext, the Government simply acts as a prosecutor to vindicate the rights of\none private individual against another, not to resolve a dispute between an\nindividual and the Government qua Government; it is thus difficult to discern\nwhy the presence of the United States should convert such private disputes into\n\xe2\x80\x9cpublic\xe2\x80\x9d rights. Giving such talismanic effect to the Government\xe2\x80\x99s mere initia\xc2\xad\ntion of an administrative complaint would be inconsistent with Thomas\' admo\xc2\xad\nnition that public rights analysis should not be a formalistic endeavor that\nfocuses on the \xe2\x80\x9cidentity of the parties alone\xe2\x80\x9d without \xe2\x80\x9cregard to the origin of\nthe right at issue.\xe2\x80\x9d Id. at 587. As one commentator has noted, any such\nunderstanding of the Court\xe2\x80\x99s Article III precedent does indeed result in \xe2\x80\x9c[f|orm\n. . . replacing] substance: Congress could avoid conferring jurisdiction upon\nan Article III court simply by altering the party structure in its new action, by\nreplacing the private plaintiff with a government prosecutor.\xe2\x80\x9d L. Tribe, Am eri\xc2\xad\ncan Constitutional Law 43 (1978).10\nNevertheless, there are cases in which administrative schemes have provided\nincidental relief to private parties in the course of enforcing public policy. See\nSchor, supra\xe2\x80\x99, NLRB v. Jones & Laughlin Steel Corp., 301 U.S. 1 (1937); Block\nv. Hirsh, 256 U.S. 135 (1921). The relief available in Jones & Laughlin,\nhowever, was essentially equitable in nature (reinstatement and backpay), and\nonly the NLRB could seek court enforcement of the order." Moreover, al\xc2\xad\nthough the Court often cites Block v. Hirsh, 256 U.S. 135 (1921), for the\nproposition that what would usually be viewed as a private right \xe2\x80\x94 a landlord/\ntenant dispute \xe2\x80\x94 can be a \xe2\x80\x9cpublic right,\xe2\x80\x9d 12 it does so without noting what the\nBlock court itself recognized. The case arose during an extraordinary housing\nshortage in the District of Columbia caused by World War I, which had\ntransformed housing from its normal status as a matter of private sector\nconcern into a matter of grave public concern: \xe2\x80\x9ccircumstances have clothed the\nletting of buildings in the District of Columbia with a public interest so great as\nto justify regulation by law.\xe2\x80\x9d Id. at 155. Thus, Block did not involve a purely\nprivate right: \xe2\x80\x9cThe [rent] commission did not . . . afford all-purpose relief to\ncomplaining private parties.\xe2\x80\x9d 2 Op. O.L.C. 16, 19 (1978). As we have previ\xc2\xad\nously observed, \xe2\x80\x9c[i]t cannot be concluded, based on these rather limited prece\xc2\xad\ndents, that administrative proceedings initiated by a public agency but provid\xc2\xad\ning the full panoply of judicial relief to private parties are necessarily permitted\nunder the Seventh Amendment.\xe2\x80\x9d Id.\nFurther, the Court, principally in the Schor opinion, has considered two other\nfactors in determining whether judicial resolution of particular disputes is\n10 As we stated w ith regard to a 1978 proposal that w ould have authorized the D epartm ent o f H ousing and\nU rban D evelopm ent to file adm inistrative complaints:\nIt could be argued that Congress should not be able, under the vague rubric \xe2\x80\x9cpublic rig h t/\' to\ncircum vent the Seventh A m endm eat com pletely by creating a chain o f adm inistrative courts\ncapable o f giving traditional com m on-law remedies to private litigants seeking re lie f from\nw rongs (such as dignitary torts) traditionally regarded as private in character.\n\xe2\x80\x9cFair H ousing \xe2\x80\x94 C ivil R ights A ct,\xe2\x80\x9d 2 Op. O .L.C. 1 6 ,2 0 (1978).\n112 Op. O.L.C. at 19 (citing Amalgamated Utility Workers v. Consolidated Edison Co., 309 U.S. 261 (1940)).\n12See, e.g., Thomas, 473 U .S. at 589.\n\n57\n\n\x0cconstitutionally required. Although the Court\xe2\x80\x99s language admits of differing\ninterpretations, we do not view these factors as interpretive aids in defining the\npublic right but rather as exceptions to the public right doctrine. In other words,\nthese factors identify the narrow circumstances in which non-Article III adjudi\xc2\xad\ncation of arguably private rights may be permissible.\nFirst, Schor establishes that the Court will attach great, if not dispositive,\nsignificance to whether the party asserting a constitutional deprivation has\nparticipated in the non-Article III proceeding on a purely voluntary basis and\nthus has effectively waived any right to complain. The complaining party in\nSchor had opted for the CFTC\xe2\x80\x99s administrative forum rather than state or\nfederal courts with full knowledge that the regulatory scheme allowed the\nCFTC to exercise jurisdiction over all counterclaims, including those involving\nmatters of state law; indeed, the complaining party then \xe2\x80\x9cexpressly demanded\nthat [the opposing party] proceed on its [state law] counterclaim in the [admin\xc2\xad\nistrative] proceeding rather than before the District Court.\xe2\x80\x9d 478 U.S. at 849.\nAlthough the Schor Court determined that Article III separation of powers\nlimitations, unlike Seventh Amendment rights, cannot be \xe2\x80\x9cwaived\xe2\x80\x9d by a private\nlitigant, it nonetheless made clear that the purely voluntary nature of the\nproceedings severely minimized any Article III concerns that might otherwise\nhave obtained: \xe2\x80\x9cjust as Congress may encourage parties to settle a dispute out\nof court or resort to arbitration without impermissible incursions on the separa\xc2\xad\ntion of powers, Congress may make available a quasi-judicial mechanism\nthrough which willing parties may, at their option, elect to resolve their\ndifferences.\xe2\x80\x9d Id. at 855. See also id. at 849 (noting that \xe2\x80\x9cthe absence of consent\nto an initial adjudication\xe2\x80\x9d was \xe2\x80\x9ca significant factor\xe2\x80\x9d in Northern Pipeline\'s\ncondemnation of Article I bankruptcy courts).13\nSecond, the Schor Court also seemed to permit administrative adjudication\nof private rights, at least where participation in the administrative process is\nvoluntary, if those private claims are wholly ancillary to the public rights\ncreated by the federal regulatory scheme and if their resolution in the adminis\xc2\xad\ntrative process is necessary to enable resolution of the statutory public rights in\nthat forum. The issue in Schor concerned a CFTC administrative process\nestablished to provide reparations to \xe2\x80\x9cdisgruntled customers of professional\ncommodity brokers seek[ing] redress for the brokers\xe2\x80\x99 violations of the Act or\nCFTC regulations.\xe2\x80\x9d Id. at 836. When Mr. Schor invoked this procedure, his\nbroker counterclaimed, on state law grounds, for a debit balance which Mr.\nSchor alleged had resulted from the broker\xe2\x80\x99s violations of the Commodity\nExchange Act that were at issue in the administrative proceeding. If resolution\nof such private state law counterclaims was not permitted in the administrative\nforum, administrative resolution of the public rights created by the CEA would\nnever occur, as a practical matter, \xe2\x80\x9cfor when the broker files suit to recover the\ndebit balance, the customer will normally be compelled either by compulsory\n13 T he C ourt in Thomas described the chem ical com panies as \xe2\x80\x9c voluntary participants in the program ,\xe2\x80\x9d 473\nU .S. at 589, although the only element o f choice seem s to have been w hether to engage in the m anufacture o f\nchem icals.\n\n58\n\n\x0ccounterclaim rules or by the expense and inconvenience of litigating the same\nissues in two fora to forgo his reparations remedy and to litigate his claim in\ncourt.\xe2\x80\x9d Id. at 843-44.\nAccordingly, Schor created an exception to the public rights doctrine, which\npermits resolution of private claims in otherwise valid administrative schemes\nwhere resolution of those private rights \xe2\x80\x9cis limited to that which is necessary to\nmake the [scheme] workable\xe2\x80\x9d by resolving the public rights created by the\nregulatory scheme. Id. at 856. As the Court put it, \xe2\x80\x9cabsent the CFTC\xe2\x80\x99s exercise\nof that authority [over state law counterclaims], the purposes of the [adminis\xc2\xad\ntrative] reparations procedure would have been confounded.\xe2\x80\x9d Id. at 856. In\ncontext, then, Schor\xe2\x80\x99s departure from the public rights line of cases is clearly\npremised on the voluntary and necessary aspects of the administrative tribunal\xe2\x80\x99s\nresolution of private rights.\nFinally, and most generally, the Court has looked to the \xe2\x80\x9cconcerns motivat\xc2\xad\ning the legislature\xe2\x80\x9d in choosing a non-Article III forum. Thomas, 473 U.S. at\n590. In this regard, the Court has attached significance to a showing that there\nis an \xe2\x80\x9cimperative necessity\xe2\x80\x9d for administrative procedures because of the\nspecialized, complex nature of the subject matter and a demonstrated need for\nexpedited adjudication. M urray\'s Lessee, 59 U.S. (18 How.) at 282. See also\nSchor, 478 U.S. at 852; Thomas, 473 U.S. at 590. Cf. Palmore v. United States,\n411 U.S. 389, 407-08 (1973). The rationale here is that strong \xe2\x80\x9cevidence of\nvalid and specific legislative necessities,\xe2\x80\x9d Schor, 478 U.S. at 855, can be\naccommodated without unduly disrupting separation of powers concerns be\xc2\xad\ncause such exceptions are limited in scope and reveal that Congress\xe2\x80\x99 sole\nmotivation was to solve a pressing emergency, not to avoid Article III adjudi\xc2\xad\ncation for its own sake. See id. at 855-57; Thomas, 473 U.S. 590-593.\n2. Analysis\nApplication of these principles to the draft bill leads us to conclude that it is\nof doubtful constitutional validity. Although S. 558, unlike the draft bill,\nprovides that the Department of Housing and Urban Development (HUD) will\nact as the moving party in an administrative proceeding, we do not believe that\nthis difference alone should substantially affect the constitutional inquiry.14\nWe will analyze each of the proposed bills in turn.\n14W e do not believe that the use o f adm inistrative law ju d g es to determ ine punitive dam ages may be upheld\non the theory that the adm inistrative proceeding is merely an adjunct to the district court. T he Supreme C ourt\nhas upheld against A rticle III challenges the use o f adm inistrative agencies as factfinders in cases involving\nprivate rights \xe2\x80\x9conly as an adjunct to an Art. Ill court, analogizing the agency to a jury or a special m aster.\xe2\x80\x9d\nAtlas Roofing ,4 3 0 U.S. at 4S0 n 7. However, we do not believe that these cases uphold the use of adjuncts in\ncases involving private rights that are also actions at com m on law. As originated in Crowell, the adjunct\ntheory did not include private n g h ts o f action found at common law. Crowell involved a case arising in\nadmiralty and the C ourt distinguished this from common law actions* \xe2\x80\x9c In cases of equity and adm iralty, it\nis historic practice to call to the assistance o f courts" non-judicial factfinders. 285 U.S. at 51. However, \xe2\x80\x9c on\nthe common law side o f the Federal courts, the aid o f ju ries is not only deem ed appropriate but is required\nby the C onstitution itself.\xe2\x80\x9d Id. Thus, the C ourt recognized that juries \xe2\x80\x94 not non-judicial factfinders \xe2\x80\x94\nContinued\n\n59\n\n\x0cPerhaps the most important consideration in assessing the draft bill\xe2\x80\x99s pro\xc2\xad\nposed administrative proceeding is that the right adjudicated is derived from a\ncommon law action that is historically within the exclusive preserve of Article\nIII courts. In Curtis v. Loether, 415 U.S. 189 (1974), the Court concluded:\nWe think it is clear that a damages action under 812 [of the Fair\nHousing Act] is an action to enforce \xe2\x80\x9clegal rights\xe2\x80\x9d within the\nmeaning of our Seventh Amendment decisions. A damages\naction under the statute sounds basically in tort \xe2\x80\x94 the statute\nmerely defines a new legal duty, and authorizes the courts to\ncompensate a plaintiff for the injury caused by the defendant\xe2\x80\x99s\nwrongful breach. As the Court of Appeals noted, this cause of\naction is analogous to a number of tort actions recognized at\ncommon law. More important, the relief sought here \xe2\x80\x94 actual\nand punitive damages \xe2\x80\x94 is the traditional form of relief offered\nin the courts of law.\n. Id. at 195-96 (citations omitted). Thus, the statutory right to be adjudicated in\nthe draft bill\xe2\x80\x99s administrative proceeding is directly analogous to a cause of\naction that was subject to judicial resolution at the time the Constitution came\ninto being, thus creating a strong presumption that it must be tried in an Article\nIII court pursuant to normal procedures. Moreover, the Civil Rights Division\ndraft bill provides that actual and punitive damages may be awarded in the\narbitration hearing. \xc2\xa7 813. As indicated earlier, these are classic \xe2\x80\x9clegal\xe2\x80\x9d rem\xc2\xad\nedies of the type that could be awarded only by a court of law with a jury, not by\na court of equity. See Tull, 481 U.S. at 423 n.7. Cf. Atlas Roofing, 442 U.S. at\n459,460 (The Seventh Amendment is intended to \xe2\x80\x9cpreserve\xe2\x80\x9d the right to a jury\ntrial in common law suits, not to require them where none was previously\nrequired.).\nFurther, wholly apart from its historical roots, the right at issue here is\nprivate in nature, in that it is intended to determine the liability of one indi\xc2\xad\nvidual to another. Crowell, 285 U.S. at 51. Under the Civil Rights Division\ndraft bill, virtually the only role played by the Government is to provide a\n14 ( . . . continued)\nw ere required in cases involving common law questions. Crowell\'s language certainly supports an argument\nthat the Seventh A m endm ent prevents C ongress from placing actions that are both private and based on\ncom m on law actions beyond the reach o f a ju ry trial. Crowell reads the Seventh Amendm ent as requiring a\nju ry in cases a risin g under the common law , while perm itting agencies to act as de facto juries for private\nrights arising in equity o r admiralty. Id. a t 51. See also Northern Pipeline , 458 U.S. at 81-82 (plurality\nopinio n ) (\xe2\x80\x9c Crowell does not support the further proposition necessary to appellants\' argum ent \xe2\x80\x94 that\nC ongress possesses the sam e degree o f discretion in assigning traditionally judicial pow er to adjuncts\nengaged in the adjudication o f nghts not created by C ongress.\xe2\x80\x9d ) (em phasis in original); United States v.\nRaddatz , 447 U .S. 667 (1980). We are especially reluctant to adopt this adjunct theory in the Seventh\nA m endm ent context w hen to d o so would perm it Congress to take from the courts a factfinding function that\ncourts d o not have in com m on law actions under the Seventh Am endm ent. See Tull, supra. U nlike the action\nat issue in Raddatz , the rig h t being resolved under the draft bill is not one a court couid decide if it wished; the\nrig h t to punitive dam ages has to be resolved by a ju ry . The a djunct theory, if applied to private rights based on\ncom m on law actio n s w ould render the Seventh A m endm ent\xe2\x80\x99s protection hollow , dependent entirely upon the\nw him o f a congressional majority.\n\n60\n\n\x0cfederal rule of decision that defines the liability between private actors. Under\nthe proposed bill, only private litigants may initiate the administrative proceed\xc2\xad\ning and they may themselves seek review or enforcement of the arbitrator\xe2\x80\x99s\norder in court. \xc2\xa7 813(a)(1), (c). Although HUD may prevent formal arbitration\nby not issuing a \xe2\x80\x9creasonable cause\xe2\x80\x9d determination and may intervene in the\nhearing, the entire matter may well proceed to final judgment without Govern\xc2\xad\nment participation, and, in any event, HUD\xe2\x80\x99s intervenor role would clearly be\nlimited to vindicating the rights of the private litigant. In this regard, we note as\nwell that civil rights statutes generally are intended to create personal rights,\nguaranteed to the individual. See generally Connecticut v. Teal, 457 U.S. 446\n(1982); Regents o f the Univ. o f Cal. v. Bakke, 438 U.S. 265, 299 (1978)\n(opinion of Powell, J.); Los Angeles D ep\xe2\x80\x99t o f Water & Power v. Manhart, 435\nU.S. 702, 708, 709 (1978); Shelly v. Kraemer, 334 U.S. 1, 22 (1948). In short,\nbecause the statutorily created right here derives from a dignitary tort and is\nenforceable primarily by private individuals for their own benefit pursuant to\ncommon law remedies, the Court\xe2\x80\x99s precedents strongly indicate that these\nadministrative hearings will be viewed as \xe2\x80\x9cwholly private to rt. . . cases [that]\nare not at all implicated\xe2\x80\x9d by the public right exception described in Atlas\nRoofing. Atlas Roofing, 430 U.S. at 458.\nMoreover, none of the other factors on which the Court has focused militate\nin favor of the draft bill\xe2\x80\x99s validity. It is clear that a defendant would be an\ninvoluntary participant in the arbitration proceedings, and it seems quite doubt\xc2\xad\nful that the private housing market in the United States would generally be\nconsidered a \xe2\x80\x9cspecialized area\xe2\x80\x9d for administrative regulation by the federal\ngovernment. Further, the exception created in Schor for ancillary and necessary\nprivate claims is inapplicable since adjudication of common law claims is\nclearly not \xe2\x80\x9cincidental to, and completely dependent upon, adjudication o f . . .\nclaims created by federal law.\xe2\x80\x9d Schor, 478 U.S. at 856.15\n13 W e note that the C ivil Rights D ivision\'s draft bill, as w ell as S. 558, provides for court enforcem ent o f the\nadm inistrator\'s aw ard. D raft bill, \xc2\xa7 813(d), (g); S. 558, \xc2\xa7 812(h), (i). W e confess that w e are uncertain\nw hether this is an argum ent in favor o f or against the proposed b ill\'s constitutional validity, because the\nC ourt\xe2\x80\x99s precedents point in opposite directions. U nder the adjunct theory o f Article III, assignm ent o f some\nlim ited functions to a non*Article III tribunal is som etim es perm issible, so long as \xe2\x80\x9c \xe2\x80\x98the essential attributes\'\no f judicial pow er are retained in the Art. Ill court.\xe2\x80\x9d Northern Pipeline, 458 U.S. at 81 (plurality opinion). See\nalso Crowell, 285 U.S. at 51. Thus, under the adjunct theory as traditionally understood, it w as quite c le a r that\nthe constitutional perm issibility o f the statutory scheme w as enhanced if the non-A rticle III forum was given\nonly quite lim ited \xe2\x80\x9cju d icial" pow ers, such as the right to enforce its own orders. Quite naturally, therefore,\nNorthern Pipeline, in contrasting Crowell, said that a m ajor defect in the bankruptcy courts scheme w as that\nthose non-A rticle III tribunals could enforce their own orders w ithout \xe2\x80\x9cseek[ing] enforcem ent in the district\ncourt \xe2\x80\x9d Northern Pipeline , 458 U.S. at 85 (plurality opinion). See also id. at 91 (R ehnquist, J., concurring);\nCrowell, 285 U.S. a t 51. In Thomas, however, the Court stated that the A rticle III validity o f the arbitration\nscheme was enhanced because it \xe2\x80\x9crelie[d] tangentially, if at all, on the Judicial Branch fo r enforcem ent" o f\nthe arbitrators\xe2\x80\x99 orders, Thomas, 473 U.S. at 591, a conclusion that seems directly at odds with Crowell,\nNorthern Pipeline, and the entire rationale o f the adjunct theory as previously understood. See Crowell, 285\nU.S. at 3 3 -3 8 . Fortunately, we need not engage in the task o f reconciling these cases, because w e have\npreviously concluded that the adjunct theory is probably inapposite here because the statutory right to be\nenforced is derived directly from a private, com m on law claim . We note, parenthetically, that the pow ers\nassigned to the arb itrato r under the draft bill and S. 558 are considerably greater than the pow er (i.e.,\nassessm ent o f value) assigned to the adjunct in Crowell, but less than the plenary pow ers given to the\nbankruptcy courts in Northern Pipeline. See 9 Op. O.L.C. at 40.\n\n61\n\n\x0cWe further note that the Fair Housing Act certainly does not seem to involve\nthe imperative necessity that the Court recognized in Thomas as a legitimate\nmotivating factor for Congress\xe2\x80\x99 consideration in choosing an arguably prompter\nadministrative remedy. 473 U.S. at 590. Indeed, the Curtis Court rejected\nsimilar arguments advocating the need for expedited judicial review of Title\nVIII actions without a jury trial. Noting the availability of preliminary injunc\xc2\xad\ntions and non-jury trials in cases seeking only equitable relief, the Court stated\n\xe2\x80\x9c[m]ore fundamentally, however, these considerations are insufficient to over\xc2\xad\ncome the clear command of the Seventh Amendment.\xe2\x80\x9d 415 U.S. at 198. It is\nnonetheless conceivable that a strong legislative record demonstrating that\nadministrative trials are for some reason necessary meaningfully to resolve\nFair Housing cases would tend to support the validity of the congressional\npurpose in opting for these proceedings. Of course, any such claim is substan\xc2\xad\ntially undermined by the fact that judicial proceedings remain available to\nplaintiffs so inclined, thus undercutting any notion that administrative proceed\xc2\xad\nings are \xe2\x80\x9cnecessary.\xe2\x80\x9d\nIndeed, in the circumstances presented here, the congressional purpose\nunderlying the establishment of administrative proceedings may well be viewed\nas a substantial deficiency, because the draft bill\xe2\x80\x99s structure and background\nsuggest that the sole purpose o f the administrative alternative is simply to\nsupplement or displace adjudication by Article III courts and juries. In this\nregard, it is significant that \xe2\x80\x9cthere are only minimal differences between the\nrelief available in the administrative forum (in which a civil penalty for the\nGovernment replaces punitive damages for the individual) and the judicial\nforum.\xe2\x80\x9d 9 Op. O.L.C. at 37. By providing for punitive damages in either the\nadministrative or judicial forum, moreover, the draft bill leaves it entirely up to\na plaintiff in an individual case to choose between the Article III and Article I\nfora, without sacrificing any weapon in his arsenal of remedies. Thus, the clear\neffect of the Act is to create parallel, virtually identical Article III and Article I\nprocesses \xe2\x80\x94 a dualism that serves no apparent purpose other than enhancing\nplaintiffs options and his ability to avoid bringing his case before a jury or an\nArticle III judge.\nWe do not mean to suggest that providing plaintiffs with a choice between\nsuch parallel schemes by itself raises independent due process problems, even\nwhere, as here, it renders the defendant\xe2\x80\x99s right to a jury trial utterly dependent\non the plaintiffs choice of fora. However, the dual structure may well directly\nsignal \xe2\x80\x9cthe concerns guiding the selection by Congress of a particular method\nfor resolving disputes.\xe2\x80\x9d Thomas, 473 U.S. at 587. In this regard, it is also\nnoteworthy that \xe2\x80\x9cthe Department would enter the fray, not at the outset, but\nnearly [19] years after the creation of a private cause of action in the district\ncourt which provides for identical remedies, and nearly [13] years after the\nSupreme Court expressly ruled that under such circumstances trial by jury must\nbe available on demand.\xe2\x80\x9d 2 Op. O.L.C. at 20.\nAgainst this backdrop, a reviewing court may fairly conclude that, in con\xc2\xad\ntrast to Schor, Congress\xe2\x80\x99 \xe2\x80\x9cprimary focus was [not] on making effective a\n62\n\n\x0cspecific and limited federal regulatory scheme, [but] on allocating jurisdiction\namong federal tribunals.\xe2\x80\x9d Schor, 478 U.S. at 855. In other words, the back\xc2\xad\nground and parallel structure of the Act might well strongly suggest that the\n\xe2\x80\x9cconcerns that drove Congress to depart from the requirements of Article III,\xe2\x80\x9d\nid. at 851, were merely Congress\xe2\x80\x99 desire to depart from the requirements of\nArticle III because of the cost and delay that attend a jury trial in a federal\ncourt. Although the speed and efficiency of Article I tribunals are virtues, we\nbelieve that speed and efficiency alone cannot be viewed as sufficient reason\nfor establishing Article I adjudication absent \xe2\x80\x9cimperative necessity.\xe2\x80\x9d Indeed,\nacceptance of such a justification would lead to the somewhat circular rule that\nCongress may avoid the constraints of Article III and eliminate the Seventh\nAmendment rights ringingly endorsed in Tull solely on the ground that it\nbelieves that Article III adjudication is more cumbersome than alternative\ndispute resolution without judges and juries.\nWe turn next to consideration of S. 558, which is identical to the draft bill in\nall material respects save one: it provides that HUD may institute administra\xc2\xad\ntive proceedings \xe2\x80\x9con behalf of the aggrieved person filing the complaint\xe2\x80\x9d of\nhousing discrimination, rather than the aggrieved person himself. S. 558,\n\xc2\xa7 810(g)(2)(A). Significantly, the private complainant has a right to file a\ncomplaint or to intervene as a full party in an administrative proceeding\ninitiated by HUD, and he apparently may obtain both judicial enforcement and\nreview of an adverse decision even if HUD does not go forward. Id., \xc2\xa7\xc2\xa7 810(a),\n812(h)(2). Although, for the reasons noted above, the issue is hardly free from\ndoubt, we think that the better view is that HUD\xe2\x80\x99s participation in initiating the\ncomplaint is not alone sufficient to obviate the constitutional difficulties previ\xc2\xad\nously described.\nAs we have suggested, HUD\xe2\x80\x99s participation as a party in these circumstances\nsays very little about the \xe2\x80\x9cpublic\xe2\x80\x9d nature of the right involved, but simply\ndescribes the parties that are authorized to enforce that right. For this reason,\nthe better understanding of the Court\xe2\x80\x99s precedent is that the Government\xe2\x80\x99s\nparty status should not be given dispositive weight, particularly where, as here,\nthe Government does not possess exclusive enforcement authority.\n. We are fortified in our conclusion by the fact that this Office has previously\ndetermined, albeit not without equivocation or difficulty, that a proposed 1978\namendment to the Fair Housing Act, virtually indistinguishable from S. 558,\nwas probably unconstitutional. We so concluded because, as with S. 558, HUD\n\xe2\x80\x9cwould not be the sole enforcer of the statutorily created\xe2\x80\x9d government policy\nand would not be acting in a regulatory capacity with regard to a public right.16\nAn opinion that we rendered in 1985 points to a similar conclusion. There we\nconcluded, albeit tentatively, that a proposed amendment would probably\nsurvive constitutional scrutiny, but we did so in large part because the adminis\xc2\xad\ntrative process failed to \xe2\x80\x9cprovide the aggrieved individual the punitive dam16 2 Op. O.L.C. at 20. A lthough acknow ledging the difficulty o f the issue, we concluded: \xe2\x80\x9cw ere we to opine\none way o r the other, o ur conclusion would probably favor a finding that [the proposal] is u n c onstitutional/\xe2\x80\x99\n\nId.\n\n63\n\n\x0cages typically available at common law.\xe2\x80\x9d 9 Op. O.L.C. at 38. As noted, S. 558,\nlike the draft bill, does provide this traditional legal remedy, thus substantially\nreinforcing the private, common law nature of the cause of action and render\xc2\xad\ning the administrative hearing virtually identical to a judicial proceeding.\nIt should be noted, however, that Thomas and Schor, two subsequent deci\xc2\xad\nsions of the Supreme Court have evinced less sympathy for constitutional\nchallenges to administrative proceedings and upheld statutes that share some,\nthough clearly not all, of the defects described above. Nevertheless, for the\nreasons that we have previously indicated, a review of the Thomas and Schor\nopinions persuades us that they contain nothing that requires an analysis or\nconclusion different from those expressed in our prior memoranda. First, with\nrespect to the specific question of the Government\xe2\x80\x99s party status, Thomas\nreinforces the correctness of our previous determination that such party status\nmeans little unless it affects the \xe2\x80\x9csubstance of what [the statute] accomplishes.\xe2\x80\x9d\nThomas, 473 U.S. at 589. Second, Schor\xe2\x80\x99s arguable departure from prior cases\nis not of controlling importance here because the proposed bills contemplate\nthe involuntary participation of the defendant in administrative hearings and do\nnot adjudicate private rights in order to preserve the agency\xe2\x80\x99s practical ability\nto adjudicate public rights.\nFinally, we discern nothing in Thomas that either signals any sort of whole\xc2\xad\nsale retreat from the Court\xe2\x80\x99s Article III jurisprudence or lends meaningful\nsupport to the proposed bills. Thomas simply upheld the administrative imple\xc2\xad\nmentation of a comprehensive federal regulatory scheme in an opinion joined\nby every member of the Northern Pipeline plurality that reached the merits of\nthe case. See Thomas, 473 U.S. at 595 (Brennan, J., concurring). At issue in\nThomas was administrative resolution of a very mechanical and straightfor\xc2\xad\nward dispute over the amount o f compensation owed for access to privileged\ndata, a dispute that nonetheless needed to be resolved expeditiously if the\nadministrative scheme was to accomplish its purpose. As the Court noted,\n\xe2\x80\x9cCongress, without implicating Article III, could have authorized EPA to\ncharge follow-on registrants fe e s \xe2\x80\x9d and that such \xe2\x80\x9crate-making is an essentially\nlegislative function.\xe2\x80\x9d Id. at 590 (emphasis added). Thus, the charging of such\nfees was a matter that \xe2\x80\x9ccould be conclusively determined by the Executive and\nLegislative Branches.\xe2\x80\x9d Id. at 589 (quoting Northern Pipeline, 458 U.S. at 68).\nConversely, the Court placed heavy reliance on the fact that the statute at issue\ndid not \xe2\x80\x9cdisplac[e] a traditional cause of action [or] affec[t] a pre-existing\nrelationship based on a common-law [claim]\xe2\x80\x9d because the statutory right to\ncompensation \xe2\x80\x9cdoes not depend on or replace a right to such compensation\nunder state law.\xe2\x80\x9d Id. at 584, 587. In short, Thomas broke no new Article III\nground because \xe2\x80\x9cat its heart the dispute involve[d] the exercise of authority by\na federal government arbitrator in the course of administration of [the statute\xe2\x80\x99s]\ncomprehensive regulatory scheme. As such it partakes of the characteristics of\na standard agency adjudication.\xe2\x80\x9d Id. at 600 (Brennan, J., concurring).\nHaving said all that, we emphasize that, due to the meandering and confus\xc2\xad\ning course of the Court\xe2\x80\x99s precedent, it is both impossible to offer any determi\xc2\xad\n64\n\n\x0cnative opinion in this area and possible to construct a defense of the proposed\nbills that may prevail in some courts. A line of defense that might be accepted\nby a sympathetic court would proceed along the following lines. First, elimina\xc2\xad\ntion of racial and ethnic discrimination in housing is a paramount public\npurpose. Further, Congress has great discretion in choosing the manner in\nwhich to resolve disputes, so long as the subject matter of the dispute concerns\nan area over which Congress permissibly exercises authority, including any\narea it may reach pursuant to the Commerce Clause. See Atlas Roofing, 430\nU.S. at 456\xe2\x80\x94457; Northern Pipeline, 458 U.S. at 105-113 (White, J., dissent\xc2\xad\ning) (collecting authorities). Moreover, under a highly formalistic approach, a\ncourt could conclude that the common law antecedents of \xc2\xa7 812 of the Fair\nHousing Act are unimportant because Congress created a \xe2\x80\x9cnew\xe2\x80\x9d statutory duty\nwhen it outlawed housing discrimination, and that the presence of the United\nStates, at least as the moving party under S. 558, is of great significance. The\ncourt could further determine that housing discrimination is a \xe2\x80\x9cspecialized\narea\xe2\x80\x9d requiring administrative expertise and that it should defer to Congress\xe2\x80\x99\ndetermination that there is a tangible need for expedited review. More gener\xc2\xad\nally, a court could fairly note that differentiating between public and private\nrights or the regulatory and prosecutorial role of the government is a highly\nabstract endeavor that has not received, and is not susceptible to, principled or\nconsistent resolution.\nWe acknowledge that there is language in some of the Court\xe2\x80\x99s cases that can\nbe interpreted to support such a line of analysis. This sort of analysis would\nplace virtually no limits on congressional authority to remove the resolution of\ndisputes entirely from Article III courts. Congress always creates \xe2\x80\x9cnew\xe2\x80\x9d rights\nby enacting statutes; these statutes must always be directed at an area which\nCongress has the power to regulate, and administrative tribunals are always\nmore expeditious and convenient than juries and judges. Indeed, such an\nanalysis comes perilously close to subordinating Article Ill\xe2\x80\x99s reservation of the\n\xe2\x80\x9cjudicial Power\xe2\x80\x9d and the express guarantees of the Seventh Amendment to the\nNecessary and Proper Clause.17 Accordingly, we believe the draft bill and S.\n558 in their current form are and would likely be declared unconstitutional on\nArticle III and Seventh Amendment grounds.\nII. Conclusion\nAlthough the policy implications of any modification to the draft bill are\nobviously for you to resolve, we recommend certain changes in order to\nenhance the constitutional viability of the draft bill. All concerns under the\nSeventh Amendment and Article III would be alleviated, of course, by deletion\nof the provisions establishing an administrative hearing process. Short of this,\nthe best solution from a constitutional perspective would be to limit the relief\navailable in an administrative proceeding to equitable remedies such as injunc\xc2\xad\n17 N or do we understand why the grave im portance o f a public policy is an argum ent supporting removal of\nthat controversy from an im partial judiciary insulated from political influence.\n\n65\n\n\x0ctions and restitution, thus avoiding any conflict with the Seventh Amendment\xe2\x80\x99s\npreservation of jury trials in \xe2\x80\x9csuits at Common Law.\xe2\x80\x9d At a minimum, serious\nconsideration should be given to eliminating at least punitive damages for\nprivate litigants in the arbitration proceedings. The retention of compensatory\ndamages alone might be upheld under reasoning similar to that the reasoning\nthat we outlined in 1985. See 9 Op. O.L.C. 32.\nC h a r l e s J. C o o p e r\n\nAssistant Attorney General\nOffice o f Legal Counsel\n\n66\n\n\x0c'