____________________________________________________________________________________
CONSULTANT REPORT

Final Version
January 21, 2022
____________________________________________________________________________________

GREENLIGHTING ADMINISTRATIVE PROSECUTION:
CHECKS AND BALANCES ON CHARGING DECISIONS
Michael Asimow
Dean’s Executive Professor of Law
Santa Clara Law School

This report was prepared for the Office of the Chairman of the Administrative Conference of the United
States. It does not necessarily reflect the views of the Office of the Chairman or the Conference (including
the Conference’s Council, committees, or members).
Recommended Citation
Michael Asimow, Greenlighting Administrative Prosecution: Checks and Balances on Charging Decisions
(Jan. 21, 2022) (report to the Admin. Conf. of the U.S.).

GREENLIGHTING ADMINISTRATIVE PROSECUTION: CHECKS AND
BALANCES ON CHARGING DECISIONS
Michael Asimow*

I. INTRODUCTION
This study concerns the charging practices of federal regulatory agencies that engage
both in law enforcement and adjudication. It focuses on the process by which the agency staff
decides to charge suspected violators (hereinafter referred to as “targets”1) and the agency
(usually but not always a multi-member board or commission) approves these charging
decisions—a process I describe as “greenlighting.”2
The decision to charge a target is an exercise of prosecutorial discretion by agency staff
that resembles the charging decision by prosecutors in criminal cases.3 The charging decision
may be the most consequential decision point in the administrative adjudicatory process, as it is
in criminal prosecution. The charging decision is often announced to the public through a press
release which ensures adverse publicity.4 The vast majority of targets settle enforcement cases
after the staff decides to recommend enforcement.5 A settlement usually requires the target to
*

Dean’s Executive Professor of Law, Santa Clara Law School; Professor of Law Emeritus, UCLA Law School. The
author thanks Daniel Asimow, David Ball, David Engstrom, Russ Frisby, Robert Gordon, Bill Gould, Pratheepan
Gulasekaram, Jon Michaels, Michelle Oberman, Cathy Sandoval, Bill Simon, David Sloss, and Tseming Yang for
comments on this article and Jeremy Graboyes and the ACUS staff for editorial assistance. This paper was presented
at ACUS’ Council of Independent Regulatory Agencies, Santa Clara Law School, and the annual meeting of the
ABA Section on Administrative Law and Regulatory Practice. I am most grateful to the interview subjects who
provided the data for this paper (and in some case generously reviewed drafts of the paper). See text following note
8, infra, for discussion of my interview methodology. I have protected the anonymity of all interview subjects.
1
The defendant in enforcement cases is often referred to as a “respondent” or “subject,” but I use the catchier term
”target.”
2
“Greenlighting” is a term often used in the entertainment industry. It refers to an executive-level decision by a
financing or distribution company to approve a proposal for a new film or television show. I also borrowed the
greenlight metaphor from Harlow and Rawlings who distinguish redlight and greenlight theories. CAROL HARLOW
AND RICHARD RAWLINGS, LAW AND ADMINISTRATION (2004). Most of administrative law is redlight—stopping
agencies from doing what they want to do. In contrast, public administration theories stress greenlight approaches
that help agencies do what they want to do effectively and efficiently.
3
It is beyond the scope of this study to compare the charging process in the administrative and criminal justice
systems. However, it is often pointed out that the charging decisions of criminal prosecutors (who settle perhaps
95% of their cases) are largely unaccountable. See Rachel E. Barkow, Foreword: Overseeing Agency Enforcement,
84 GEO. WASH. L. REV 1129 (2016) (criticizing the lack of accountability of both administrative and criminal law
prosecutors, especially in the area of under-enforcement) [hereinafter Barkow, Overseeing Agency Enforcement];
Rachel E. Barkow, Institutional Design and the Policing of Prosecutors: Lessons from Administrative Law, 61
STAN. L. REV. 869 (2009) (advocating separation of functions for criminal prosecutors) [hereinafter Institutional
Design]; Samuel J. Levine, Disciplinary Regulation of Prosecutorial Discretion, 16 OHIO ST. J. CRIM. L. 237, 237
n.1 (2019).
4
See Admin. Conf. of the U.S., Recommendation 73-1, Adverse Agency Publicity, 38 Fed. Reg. 16839 (June 27,
1973).
5
In the interviews conducted for this study, I asked respondents what percentage of charged cases settled before
hearing. Depending on the agency in question, the estimates ran between 30% and 95%. In federal criminal cases,

accede to various unwelcome remedies. For those who settle after being charged, the charging
decision is the only agency decision that matters.
If a target decides to contest the charges through the adjudicatory process—typically a
hearing before an administrative law judge (ALJ) and an appeal to the agency—it will face
heavy costs and fees and a significant drain on the time of its executives. And, of course, there is
a better than average probability that the target will lose, perhaps becoming subject to more
onerous remedies than it could have settled for.6
An agency’s refusal to charge is equally
consequential, since it may signal under-enforcement of regulatory norms or industry capture of
the agency’s enforcement mechanism.
Thus, the charging decision is a critical landmark in an administrative enforcement case,
whether it is settled or litigated. Charging decisions and administrative prosecutorial discretion
are worthy subjects for inquiry and for development of best practices, but they have been
understudied.7
Part II of this study describes the greenlighting practices of five multi-member combinedfunction independent agencies: the Securities and Exchange Commission (SEC), Federal Trade
Commission (FTC), Federal Energy Regulatory Commission (FERC), Federal Communications
Commission (FCC), and National Labor Relations Board (NLRB). Part III discusses the pros and
cons of greenlighting, ultimately concluding that the benefits outweigh the costs. Part IV
discusses the legality of greenlighting, concluding that it satisfies both constitutional due process
and the dictates of the Administrative Procedure Act (APA). Part V discusses the benefits and
costs of various procedural mechanisms relating to the greenlighting process that agencies have
adopted or that writers have recommended. Part VI concludes with recommended best practices
for combined-function agencies.
The primary source of data for this report involves interviews by the author with experts
familiar with the enforcement practices of the SEC, FTC, FERC, FCC, and NLRB.8 The
more than 95% of cases are plea bargained. See Ellen Podgor, The Dichotomy Between Overcriminalization and
Underregulation, 70 AMER. U. L. REV. 1061, 1093 (2021).
6
See Urska Velikonja, Are the SEC’s Administrative Law Judges Biased? An Empirical Observation, 92 WASH. L.
REV. 315 (2017) (ALJs ruled for the SEC in 90% of cases; federal district judges ruled in favor of the SEC in 88%
of cases).
7
There is a large and informative literature on the administrative enforcement function, but little of it concentrates
on the subject of this paper—that is, greenlighting in combined-function agencies. Cf. EUGENE BARDACH & ROBERT
A. KAGAN, GOING BY THE BOOK (1982); Kate Andrias, The President’s Enforcement Power, 88 N.Y.U. L. REV.
1031 (2013); Barkow, Overseeing Agency Enforcement, supra note 3; Stephanie Bornstein, Public-Private CoEnforcement Litigation, 104 MINN. L. REV. 811(2019); John Braithwaite et al., An Enforcement Taxonomy of
Regulatory Agencies, 9 LAW & POLICY 323 (1989); Margaret H. Lemos, Democratic Enforcement: Accountability
and Independence for the Litigation State, 102 CORNELL L. REV. 929 (2017); Daniel L. Markell & Robert L.
Glicksman, A Holistic Look at Agency Enforcement, 93 N.C. L. REV. 1 (2014); Max Minzner, Should Agencies
Enforce? 99 MINN. L. REV. 2113 (2015); Jodi L. Short, The Politics of Regulatory Enforcement and Compliance:
Theorizing and Operationalizing Political Influences, 15 REGUL. & GOVERNANCE 653 (2019); Mila Sohoni,
Crackdowns, 103 VA. L. REV. 31 (2017); Rory Van Loo, Regulatory Monitors: Policing Firms in the Compliance
Era, 119 COLUM. L. REV. 369 (2019).
8
The five agencies I studied have multiple members. However, I believe my findings and recommendations apply to
combined-function agencies in the executive branch as well as independent agencies. They also apply to agencies
that have only a single head (although the advantage of encouraging collegial discussion discussed in Part IUII. A.

2

interviews were conducted with present and former agency members and staff, as well as law
professors and private defense lawyers (many of whom were themselves former agency members
or staff). I am most grateful to these interviewees for serving as data sources and I have promised
them anonymity. As a result, citations to interview data will identify the agency concerned and
the interviewees by number but will not disclose their names or any identifying details.
II. THE ENFORCEMENT PROCESS IN
FIVE COMBINED-FUNCTION AGENCIES
This Part provides an overview of the enforcement process, including greenlighting
mechanisms, in five combined-function, multi-member, independent federal agencies: the SEC,
FTC, FERC, FCC, and NLRB.
A. Securities and Exchange Commission (SEC)
The SEC can impose significant monetary sanctions on persons who violate the securities
laws. Increasingly, the SEC litigates the majority of enforcement cases through administrative
litigation rather than by seeking relief in federal courts since the available monetary remedies are
the same in either venue.10
9

The enforcement process begins with investigation by the Enforcement Division (ED).
The investigators can initiate investigations and issue subpoenas without agency-head
approval.11 After ED makes a preliminary determination that the facts justify a charging
decision, it generates a detailed “Wells notice” that summarizes its conclusions and
recommendations.12 The target then can file a detailed “Wells submission” in response to the
Wells notice.13
The Dodd-Frank Act requires the Commission to issue a complaint within 180 days of
issuing a Wells notice.14 As a result, the staff now frequently dispenses with the Wells procedure
in order to avoid triggering the timing requirement and to secure additional time for
investigation. Another reason to dispense with the Wells notice is that public companies believe
obviously would not apply). The five agencies are all subject to the adjudication provisions of the APA whose
hearings are conducted by ALJs. Its findings should also apply to combined-function agencies outside the APA (socalled Type B adjudication) whose trial-type adjudicatory hearings are conducted by administrative judges (AJs)
instead of ALJs.
9
Dodd-Frank Act § 929P(a), 15 U.S.C. §§ 77h1, 78u-2, 80a-9, 80b-3.
10
Velikonja, supra note 6 at 341-45; Gideon Mark, SEC and CFTC Administrative Proceedings, 19 U. PA. J.
CONST. L. 45, 53-59 (2016).
11
At one time, the Commission had to approve issuance of subpoenas but that authority has been delegated to
individual investigators. Under current practice, subpoenas must be approved by the Director of Enforcement, but
not by the Commission.
12
The Wells notice is named after John A. Wells, chair of a committee that recommended the practice in 1972. The
Wells procedure is SEC practice and is not legally required.
13
17 C.F.R. 202.5(b), (c); SEC DIVISION OF ENFORCEMENT, ENFORCEMENT MANUAL § 2.4 (2017).
https://www.sec.gov/divisions/enforce/enforcementmanual.pdf [hereinafter SEC ENFORCEMENT MANUAL].
14
15 U.S.C. § 78d-5(a)(1). This provision allows the Director of Enforcement to extend the period for an additional
180 days in complex cases. If additional time is needed, the Commission must approve the extension. Id. § 78d5(a)(2).

3

they must disclose issuance of a Wells notice and therefore prefer to avoid it. Instead, the staff
often communicates its intention to recommend issuance of a complaint via an informal
memorandum or phone call to the target. The target can respond with a “white paper.”15 As a
practical matter, the informal communication may provide as much information to the target as a
Wells notice, and the white paper can provide as much information to the agency as a Wells
submission.16
Under either procedure, targets may request access to the Commission’s investigative
file, and staff has discretion to disclose information that will assist the target to defend the case.17
Staff members vary in their willingness to disclose material in investigative files.18
If the staff is not persuaded by the Wells submission or the white paper, it generates an
“action memorandum” to the commissioners. This memorandum is circulated to all operating
divisions of the Commission as well as to the General Counsel (GC). The action memorandum
contains a comprehensive explanation of the factual and legal foundation of the recommendation
and analyzes the strengths and weaknesses of the case. It summarizes and responds to arguments
submitted by targets in the Wells submission or the white paper as well as input received from
other Commission offices or from the GC.
If the target and the staff have agreed to a settlement the action memo contains the
proposed settlement. The vast majority of cases are settled at some point before hearing.19 If the
case is not settled, the action memorandum recommends one of three possible actions: that the
agency issue a complaint for in-house administrative enforcement (“action instituting
proceedings”), seek enforcement action in federal court, or make a criminal referral to the
Department of Justice (DOJ). Staff may conduct meetings with commissioners to discuss
particular charging recommendations.20
When the Chair determines that the matter is ready for full consideration, the five
commissioners consider the charging decision or proposed settlement at a closed meeting.21 The
GC and heads of the relevant SEC divisions are present at this meeting. The commissioners have
access to the Wells notice and the Wells submission (or the informal memorandum and
responsive white paper if the Wells procedure is not used). The commissioners vote on whether
to charge the target or accept a settlement. Occasionally the matter will be put over until a later
meeting or resolved by seriatim emails. In situations deemed to require immediate issuance of a
complaint, the “duty officer” (a single commissioner) has power to authorize enforcement action;
15

SEC 1, 7, 8. The white paper procedure existed before the development of the Wells notice.
SEC 8.
17
The SEC Enforcement Manual provides that the staff should consider whether “access to portions of the file
would be a productive way for both the staff and the recipient of the Wells notice to assess the strength of the
evidence that forms the basis for the staff’s proposed recommendations.” SEC ENFORCEMENT MANUAL, supra note
13, § 2.4.
18
SEC 7.
19
Interviewees estimated that 70 to 80% of cases are settled before hearing. SEC 7, 8; see also Barkow, Overseeing
Agency Enforcement, supra note 3 at 1164.
20
SEC 3.
21
See SEC ENFORCEMENT MANUAL, supra note 13, § 2.5 for details concerning Commission consideration and
seriatim voting.
16

4

the other commissions will ratify that action at a later time.22 The Commission approves the vast
majority of the charging recommendations in action memoranda. However, there is occasionally
vigorous discussion of the charging decision and split decisions.23
The SEC has a large pending caseload. In the six-month period ending March 2021, there
were 289 outstanding orders instituting proceedings that were pending before the Commission.
The average age of the pending matters was 501 days since the issuance of the order instituting
proceedings.24
B. Federal Trade Commission (FTC)25
FTC enforcement bureaus (either the Bureau of Competition or the Bureau of Consumer
Protection) investigate potential enforcement cases, against targets suspected of violating laws to
prevent fraud, deception, and unfair or anti-competitive business practices. The bureaus normally
initiate investigations without seeking authorization from the full Commission.26 Compulsory
process (such as subpoenas or civil investigative demands) can be authorized by a single
commissioner.27
The FTC staff ordinarily contacts proposed targets to advise them of the general nature of
the inquiry. Representatives of the targets typically meet informally with the staff and the head of
the relevant bureau during the investigation and are entitled to submit memoranda (called “white
papers”) on key issues.28 If no such contact is made during the investigation, the staff contacts
the target at the conclusion of the investigation and informs it that a recommendation for
issuance of a complaint is being forwarded to the agency heads.29
The bureau then prepares a “memorandum recommending complaint” which analyzes the
factual basis for the recommendation and explains why issuance of a complaint would be in the
public interest. If there is a settlement (and the vast majority of cases are settled), the
memorandum includes the proposed consent decree. In unsettled cases, the commissioners
22

Id., § 2.5.2.3; SEC 1.
SEC 1, 2, 4, 7. One current SEC member has frequently opposed enforcement. See Andrew Ramonas, SEC’s
Newest Republican Emerges as One-Woman Party of ‘No,’ BLOOMBERG LAW (May 8, 2018, 6:40 AM),
https://news.bloomberglaw.com/business-and-practice/secs-newest-republican-emerges-as-one-woman-party-of-no.
24
SEC Release No. 91734, Report on Administrative Proceedings for the Period October 1, 2020, through March
31, 2021 (Apr. 30, 2021), https://www.sec.gov/files/34-91734.pdf.
25
Numerous authors have expressed discomfort with the FTC’s combined-function structure. See, e.g., Carl A.
Auerbach, The Federal Trade Commission: Internal Organization and Procedure, 48 MINN. L REV. 383, 418-24
(1963); Terry Calvani, The Federal Trade Commission: A Proposal for Radical Change, 34 ANTITRUST BULL. 185,
202-03 (1989); N.Y.C. Bar Ass’n Comm. on Trade Regul. Federal Trade Commission Procedure for Issuance of
Complaints, 30 REC. ASS’N BAR OF CITY OF NY 213 (1975) (recommending creation of separate adjudicatory
tribunal); Philip Elman, Administrative Reform of the Federal Trade Commission, 59 GEO. L.J. 777, 810-12 (1971).
26
Investigations must be approved by the relevant bureau directors, the Bureau of Economics, and the Evaluation
Committee.
27
Press Release, FTC, FTC Authorizes Investigations Into Key Enforcement Priorities (July 1, 2021),
https://www.ftc.gov/news-events/press-releases/2021/07/ftc-authorizes-investigations-key-enforcement-priorities.
Prior to July 2021, the full Commission had to approve compulsory process.
28
FTC 4.
29
Many of the details of the FTC’s investigatory process were set forth in the FTC Operating Manual, but the
Manual has been withdrawn and is no longer available online.
23

5

receive the white paper and there may be additional memoranda from the GC and from staff and
chiefs of the Bureau of Competition and the Bureau of Economics.30
The memorandum recommending complaint indicates whether the FTC should seek an
injunction pending the administrative process (as it typically does in merger cases). If the case
involves unusually complex or novel issues, the staff also prepares a trial memorandum or brief
citing the evidentiary materials and legal authorities to be relied on.
After the memorandum is submitted, targets have an opportunity to meet individually
with the commissioners to persuade them that no complaint should be issued or that the case
should be settled. Staff members are usually present at these meetings.31
In order to greenlight a complaint, the FTC must determine that there is “reason to
believe” that a violation has occurred and that a proceeding would be in the “public interest.”32 A
“moving commissioner” is assigned randomly to each case, and the moving commissioner
decides when the charging decision is ready for full Commission consideration. However, a
majority of the Commission can bring a matter up for decision despite opposition from the
moving commissioner.33 The Commission discusses the charging decision in a closed meeting or
makes the decision through seriatim communications. The commissioners generally respect and
follow the views of the Chair about enforcement priorities, since the Chair typically has
conferred informally with the staff during the investigatory process and usually concurs in the
staff recommendation.34
The same process is used for the approval of settlements negotiated by staff. There is an
elaborate procedure for public comment on proposed settlements in competition cases.35
The FTC’s caseload is not heavy. In 2020, the Commission resolved 36 competition
cases (12 merger consent orders, 9 merger cases filed, 11 mergers abandoned, 3 non-merger
cases, and 1 civil penalty). In the consumer protection area, the FTC filed 21 administrative cases
and 66 federal court cases.36
C. Federal Communications Commission (FCC)
The FCC’s Enforcement Bureau (EB) investigates a broad range of complaints against
licensees, manufacturers of telecommunications equipment, robo-callers, and others. The FCC
30

FTC 1, 5.
FTC 1, 2, 3, 4, 5. This practice is discussed further in Part V. B.
32
15 U.S.C. § 45(b); 16 C.F.R. § 3.11(a).
33
FTC 1, 4, 5.
34
FTC 3, 4, 5. According to FTC 3, charging decisions are made by the Chair unless overridden by the votes of
three commissioners. In addition, the Chair has appointed senior staff members who reflect the Chair‘s views about
enforcement priorities.
35
See Christopher S. Yoo, Thomas Fetzer, Shan Jiang, & Yong Huang, Due Process in Antitrust Enforcement:
Normative and Comparative Perspectives, 94 S. CALIF. L. REV. (forthcoming 2021) (manuscript at 52-54,
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3558179).
36
Stats & Data 2020, FTC, https://www.ftc.gov/reports/annual-highlights-2020/stats-data-2020 (last visited Sep. 2,
2021). https://www.ftc.gov/reports/annual-highlights-2020/stats-data-2020 (last visited Sep. 2, 2021)
31

6

has no formalized process for notice and comment by targets during the investigation process. If
the staff concludes that a target should be charged, it prepares a detailed Notice of Apparent
Liability (NAL), which is typically when a target learns of the investigation. 37 The NAL can
seek a civil money penalty (called a “forfeiture” in FCC parlance) or a licensee sanction (such as
revocation).
Commission approval is not required for settlements negotiated by staff. The vast
majority of FCC enforcement cases—well over 80%, according to one estimate38—are settled
through consent decrees negotiated by the staff before or after the NAL is issued. Licensees are
very likely to settle, but private parties like robo-callers and pirate radio operations are less likely
to settle. The EB considers about 450 cases a year and issues about 200-300 NALs.
The staff has delegated authority to issue an NAL for a civil penalty that does not exceed
$100,000 for common carriers and $25,000 for other entities. NALs that propose greater amounts
must be greenlighted by the full Commission.39 Charging decisions in cases involving licensee
discipline other than civil penalties must also be approved by the full Commission. The
Enforcement Bureau might consider about 450 cases a year and issue about 200-300 NALs, most
of which are settled. The Commission exercises its greenlighting function in perhaps 20 to 40
enforcement cases per year.40
If an NAL requires Commission approval, the Chair has substantial authority over when
the matter will be presented. The EB does not produce an additional confidential document about
the case for the commissioners to consider, but it may conduct ex parte conversations with
commissioners or their advisory staffs.41 Normally, the Commission votes whether to approve
the NAL and declare a forfeiture through a system of notational voting, rather than an in-person
meeting. The Commission usually greenlights the NAL, although there have been. instances in
which it declined to do so because some commissioners weighed the relevant statutory factors
(such as a target’s ability to pay) differently from the staff. Refusal to issue a forfeiture can also
occur when there are shifts in the membership of the Commission. There have been occasional
dissents to the decision issuing a forfeiture.
If the EB issues an NAL under delegated authority or if the Commission greenlights the
NAL, the target can file a detailed response to the NAL. However, that response is intended
more as advocacy to the commissioners than to the EB, which rarely changes its position once it
commits to an NAL. After issuance of an NAL, targets have the opportunity to meet with FCC
commissioners separately in meetings attended by enforcement staff.42

37

FCC ENFORCEMENT BUREAU, FCC ENFORCEMENT OVERVIEW 4-10 (2020),
https://www.fcc.gov/sites/default/files/public_enforcement_overview.pdf [hereinafter FCC ENFORCEMENT
OVERVIEW]. In most cases, an NAL must be issued within one year of an alleged violation. 47 C.F.R. § 1.80(c)(5).
As a result, EB must act quickly and may lack sufficient time to engage in notice and comment procedure with the
target before issuing an NAL.
38
FCC 1.
39
FCC 1; FCC ENFORCEMENT OVERVIEW, supra note 37, at 19.
40
FCC 4.
41
Id.
42
This practice is further discussed in Part V. B.

7

ALJ hearings are provided in licensee discipline cases that seek remedies such as license
revocation.43 Although the FCC has the option to also adjudicate civil penalty cases through ALJ
hearings, it seldom does so. The commissioners normally decide civil penalty cases through
consideration of documents in the file (i.e., the NAL and the response) rather than by a trial-type
hearing. If the Commission is not persuaded by the response, it issues a notice of forfeiture.44
Although the FCC’s separation-of-functions rules apply in licensee discipline cases sent
to an ALJ, they do not apply in civil penalty cases decided by the Commission. Enforcement
staff can and do speak off the record with the commissioners or their advisers at all points in the
process. The FCC does not consider its civil penalty determinations as adjudicatory, because it
lacks power to collect civil penalties. DOJ must enforce the penalty in federal district court,
which provides a de novo hearing. I was told that it is difficult to get the DOJ interested if the
proposed penalty is less than a substantial amount, perhaps $75,000, depending on the district
and how busy the U.S. attorneys are.45 Obviously, the FCC’s inability to enforce civil penalties
fine through internal adjudication, rather than through federal court litigation controlled by DOJ,
detracts from the effectiveness of civil penalties as a regulatory tool.
D. Federal Energy Regulatory Commission (FERC)46
FERC among other responsibilities regulates the interstate transmission of electricity,
natural gas, and oil. It has the power to levy substantial civil penalties (up to $1.3 million per
violation per day) and can order other remedial sanctions. Its investigative and prosecutorial arm
is the Office of Enforcement (OE). OE focuses on four distinct areas: (1) fraud and market
manipulation, (2) serious violations of the FERC reliability standards, (3) anticompetitive
conduct, and (4) conduct that threatens transparency in regulated markets.
OE dismisses the majority of the cases it investigates as lacking merit and often exercises
prosecutorial discretion in declining to pursue borderline cases when the evidence is weak or no
sanction is warranted. Relatively few cases are actually charged and enforcement is a relatively
small part of FERC’s responsibilities.47 Nevertheless, enforcement cases often require
application of unsettled law about manipulation of energy markets. Thus, enforcement cases are
used as policy-making vehicles.48
During the investigation process, OE and counsel for targets are in constant contact.49 FERC
allows targets to communicate in writing with commissioners during the investigative stage and
43

FCC ENFORCEMENT OVERVIEW, supra note 37, at 21.
Details of the Commission’s consideration of forfeiture cases are provided in 47 U.S.C. § 503(b)(3) and (4) and in
FCC ENFORCEMENT OVERVIEW, supra note 37, at 14-18.
45
FCC 1, 4.
46
For a summary of FERC’s enforcement process, see Total Gas & Power North America v. FERC, 850 F.3d 325
(5th Cir. 2017); Todd Mullins & Chris McEachran, Adjudication of FERC Enforcement Cases: “See You in Court?”
36 ENERGY L. J. 261 (2015); Allison Murphy, Todd Hettenbach, & Thomas Olson, The FERC Enforcement Process,
35 ENERGY L. J. 283, 291-97 (2014) (hereinafter Murphy); Revised Policy Statement on Enforcement, 123 FERC
¶61,156, ¶¶20-40 (May 15, 2008) (hereinafter FERC Policy Statement).
47
FERC 5, 6; see also 2020 REPORT ON ENFORCEMENT (Nov. 19, 2020), https://www.ferc.gov/media/2020-annualreport-enforcement
48
FERC 3, 6.
49
FERC 2, 3, 5.
44

8

the targets often take advantage of this opportunity.50 If the staff seeks formal investigative
authority to issue a subpoena or take a deposition, it must receive authority from the
Commission, but this is rarely necessary since targets usually supply requested information
without compulsion.51
If OE determines that a violation occurred that warrants the imposition of sanctions, it
provides the target with a “preliminary findings letter” that furnishes a detailed and often lengthy
description of the staff’s findings as to facts and legal theories. The letter may be in the form of a
slide deck.52 The target has an opportunity to file a brief that responds to the staff’s preliminary
findings.53 Attorneys who represent targets subject to enforcement issues believe that the
preliminary statement and the opportunity to respond are quite useful to their clients.54
If OE continues to believe a sanction is warranted, it seeks authority from the
Commission to negotiate a settlement with the target. The practice of requiring authorization to
negotiate a settlement seems unique to FERC. OE’s submission to the Commission includes the
target’s response to the preliminary findings letter.55 Staff then pursues settlement negotiations
within the parameters set by the Commission. If a settlement is reached, OE seeks the
Commission’s approval of the settlement. At least 90% of cases settle at some point in the
process.56 Interviewees had conflicting opinions about whether the process of involvement of
agency heads in granting settlement authority to the staff was worth its costs and delays.57
If the parties fail to negotiate a settlement, and OE intends to recommend enforcement
action, it provides the target with notice, called a Rule 1b.19 statement, and a further opportunity
to respond within 30 days.58 The Rule 1b.19 procedure was modeled after the SEC’s Wells
notice.59 Rule 1b.19 statements tend to be briefer than the earlier preliminary findings letter. The
target has the right to respond to the Rule 1b.19 statement, but the staff is not required to answer
the target’s response.60

50
The rule permitting targets to communicate with commissioners in writing dates to 2008. Prior to that time, both
oral and written communications were permitted. FERC 1, 2, 3, 5, 6. Murphy, supra note 46, at 292-93; FERC
Policy Statement, supra note 46, ¶27. For further discussion of this practice, see Part V. B.
51
Generally, the decision whether to use compulsory process is up to the Chair. FERC 6.
52
FERC 5.
53
Murphy, supra note 46, at 294; FERC Policy Statement, supra note 46, ¶ 32.
54
FERC 4, 5.
55
Murphy, supra note 46, at 294-5; FERC Policy Statement, supra note 46, ¶ 35.
56
FERC 3, 4, 5, 6. Cases involving regulated utilities nearly always settle. Cases involving energy market
manipulation are least likely to settle. FERC 5.
57
FERC 5 thought the settlement authorization process was a significant check on prosecutorial discretion. FERC 4
thought it was useful for staff to get an early read from commissioners about the merits of the case. But FERC 5 and
6 thought it was of little utility and contributed to delay in resolving cases.
58
“Such notice shall provide sufficient information and facts to enable the entity to provide a response. “ 18 C.F.R.
§ 1b.19.
59
See Part II. A. FERC staff is supposed to disclose exculpatory material that falls under the criminal-law Brady
standard, but some defense lawyers argue that it does not do so. See FERC 2, 5. See William S. Scherman, Brandon
C. Johnson, & James J. Fletcher, The FERC Enforcement Process: Time for Structural Due Process and Substantive
Reforms, 35 ENERGY L. J. 101, 111-13 (2014) (hereinafter Scherman, FERC Enforcement).
60
Id. at 111–13.

9

Some interviewees believe that it is redundant to give the target two notices and the
opportunity to write two briefs, since by this point, it is unlikely OE will change its views.61
Others think it is not redundant because investigations often take years to complete during which
time new commissioners are appointed.62
If OE is not persuaded by the target’s response to the Rule 1b.19 statement, it drafts an
“Enforcement Staff Report and Recommendation” to the Commission. This report can be quite
lengthy. It includes OE’s proposed findings of fact and conclusions of law and its
recommendation to issue an administrative complaint. There is a good deal of negotiation
between the enforcement staff and the Commission’s advisory staff and the commissioners
themselves about the content of the report. The charging recommendation is usually approved
through notational voting rather than at a formal meeting. It is rare that the Commission fails to
approve the recommendation, given the extensive contacts between staff and commissioners
during the drafting process, but non-approval has occurred.63
If the Commission concurs with OE’s recommendation, FERC issues an Order to Show
Cause (OSC), which is the charging document. The target has still another opportunity to
respond to the OSC through a formal brief.64 The Commission’s issuance of an OSC triggers the
Commission’s ex parte and separation-of-functions rules, at which point the enforcement staff is
prohibited from communicating with the commissioners or their decisional advisers except on
the record.65 In gas cases, the Commission may decide the case through a paper hearing, meaning
it is based on documents in the file. In electricity cases, the Commission may refer the case to an
ALJ if there are unresolved factual issues. If the case is heard by an ALJ, the commissioners
make the final agency decision.
In electricity but not gas cases, a target can elect a different process within 30 days after
FERC issues an OSC proposing a civil penalty.66 This alternative process allows the target to
obtain a “review de novo” of the assessment before a federal district court. FERC then files an
action in district court for an order affirming the civil penalty. The court conducts a trial of the
validity of the sanction. In nearly every electricity case, lawyers make this election because they
feel the prospects for success are better before a district court than if the FERC decides the case
in-house.67 However, the Commission has been quite successful in obtaining enforcement of
penalties after de novo judicial proceedings.68

61

FERC 2.
FERC 3.
63
FERC 1, 2, 3, 6. There are occasional dissents to approval of charging decisions. FERC 6.
64
See Murphy, supra note 46, at 296. Murphy describes the Barclay’s case in which the target used all three
opportunities to oppose the charging decision and submitted a total of 850 pages of argument and factual
representations.
65
FERC Policy Statement, supra note 46, at 36. For further discussion of FERC separation of functions, see Part
V.C.
66
See Mullins, supra note 46; see also Total Gas & Power North America v. FERC, 850 F.2d 325 (5th Cir. 2017).
67
FERC 2, 4, 5.
68
FERC 4.
62

10

E. National Labor Relations Board (NLRB)
The NLRB differs from the other agencies I studied because it does not engage in
greenlighting of unfair labor practice (ULP) cases. The charging decision is made by the GC who
is appointed by the President, confirmed by the Senate, and independent of the Board.69 The GC
also has extensive administrative powers, including control of the Board’s regional offices
(ROs). In addition, the GC manages the NLRB’s litigation function. Federal court litigation is
extensive since the Board must enforce is orders in court as well as enforce subpoenas. The GC’s
powers are so extensive that the GC is sometimes described as an additional agency head.
Thus, Board members play no role in charging decisions and exercise no prosecutorial
function.70 There is, however, an important exception to this general rule. Board members must
greenlight the GC’s recommendation to seek a temporary injunction in a ULP case (so called
“10(j) cases”).71 Temporary injunctions are sought in cases where delay would cause irreparable
harm to the interests of charging parties.72 Board members make decisions on whether to
greenlight injunctions by notational voting, rather than at in-person meetings. The Board
generally approves the GC’s recommendation to seek an injunction, but there are occasional
dissents.73 The Board also has power to disapprove recommendations made by regional offices in
representation cases, such as designation of appropriate bargaining units, but such decisions are
not considered prosecutorial.
The NLRB prosecutorial process begins when an outside party (an employee, employer,
or union) files a ULP “charge” with a regional office (RO). The RO affords the target of the
charge an opportunity to file a position statement setting forth its version of the case. NLRB
regional directors decide whether to investigate the target based on the charge and the target’s
position statement.
During the investigation process, the target has informal opportunities to influence the
charging decision through meetings with RO investigators.74 In cases involving unsettled legal
issues, the regional director may seek advice from the GC’s Advice and Review section. During
that process, the target has an opportunity to file a brief and argue its position to investigators. If
the regional director declines to issue a complaint, the charging party can appeal to the appeals

69

Whether the President can discharge the GC is currently the subject of federal court litigation. President Biden
fired GC Peter Robb who had refused to resign. Robb is contesting his discharge and various parties before the
Board are challenging the legality of cases brought by the Acting GC. The NLRB has refused to rule on the legality
of Robb’s discharge. Colleen Naumovich & David J. Pryzbylski, “Status of Former NLRB General Counsel Still Up
in the Air,” Barnes & Thornburg LLC (May 6, 2021), https://btlaw.com/insights/blogs/labor-relations/2021/statusof-former-nlrb-general-counsel-still-up-in-the-air; William B. Gould IV, “Legal Issues Surrounding Firing of NLRB
General Counsel,” Bloomberg Law, https://news.bloomberglaw.com/white-collar-and-criminal-law/legal-issuessurrounding-firing-of-nlrb-general-counsel.
70
29 U.S.C. § 153(d). Whether the NLRB model should be carried to other agencies is discussed in Part V.F. The
structure of the Federal Labor Relations Authority is the same as NLRB. The GC has exclusive authority over
prosecution of unfair labor practice cases. 5 C.F.R. Ch. XIV, App. B.
71
29 U.S.C. § 160(j).
72
NLRB 3.
73
NLRB 3.
74
NLRB 3.

11

and review section of the GC’s office, but the reversal rate is low. Charged parties also may
confer with the GC if the GC agrees to do so.75
During fiscal year 2020, the Board received 15,869 ULP charges from employees,
employers, and unions. ROs found about one-third of them to have merit.76 Many cases settled
without issuance of a complaint. Regional offices issued 809 complaints. The Board sought
temporary injunctions, known as “10j’s” in ten cases. The Board decided 251 ULP cases. These
figures were depressed by the COVID-19 pandemic and by policy decisions made by the GC.
The figures from earlier years are considerably higher.77
Well over 90% of the NLRB’s settle before or after issuance of a complaint. NLRB ALJs
are particularly active in promoting settlements. Mediation is often conducted by a settlement
ALJ, who is different from the ALJ assigned to adjudicate the case.78 Cases that do not settle
proceed to a hearing before an ALJ with a right of appeal to the Board.
III. GREENLIGHTING BY AGENCY MEMBERS
As discussed in Part I, the enforcement process in combined-function agencies begins
with an investigation conducted by agency staff members who suspect a private sector target of
wrongdoing.79 If the investigators conclude that the law and facts support the issuance of a
complaint, they report their conclusion to agency prosecutors. In the agencies I studied, other
than the NLRB, if the prosecutors agree, they must request that agency heads greenlight the case
by authorizing the issuance of a complaint, initiation of federal court action, or referral of the
matter to DOJ for criminal prosecution. In the vast majority of cases, the staff agree to a
settlement with the target before the greenlighting stage and must seek approval of the settlement
from the agency members. An exception is the FCC, where the Commission has delegated many
prosecution decisions and settlement decisions to the staff. The members of the NLRB exercise
no greenlighting function except in temporary injunction cases.
A. Greenlighting as an Accountability Mechanism
Greenlighting serves as an important mechanism for accountability within agencies given
the lack of meaningful external accountability mechanisms80 that might constrain agency

75

NLRB 1, 2, 3. In fiscal year 2020, the Appeals Office resolved 1224 appeals by charging parties who challenged
the RO’s decision not to issue a complaint.
76
NLRB 3. The statistics in this paragraph are derived from the NLRB Performance and Accountability Report
2020, available at https://www.nlrb.gov/sites/default/files/attachments/pages/node-130/nlrb-fy2020-par-508.pdf
77
In fiscal year 2016, for example, the NLRB received 21,326 charges. ROs issued 1272 complaints. The board
decided 295 ULP cases. The Board approved 29 requests to seek 10(j) temporary injunctions. The much lower
number of 10(j) requests in 2020 reflected the policy preferences of the General Counsel. NLRB 3.
78
NLRB 2.
79
For discussion of the division of power between investigators and agency prosecutors, see Van Loo, supra note 7.
80
There is a vast literature on the subject of accountability in administrative law and public administration. See THE
OXFORD HANDBOOK OF PUBLIC ACCOUNTABILITY (Mark Bovens, Robert E. Goodin & Thomas Schillemans eds.,
2014); ELIZABETH FISHER & SIDNEY A. SHAPIRO, ADMINISTRATIVE COMPETENCE: REIMAGINING ADMINISTRATIVE
LAW, 66–100 (2020); Michael Asimow et al., Ex Ante Administrative Review of the Legality of Regulations: A
Comparative Approach, 68 AM. J. OF COMP. L. 332 (2020) [hereinafter Asimow, Ex Ante Administrative Review];

12

discretion.81 The judiciary exercises no oversight over decisions to pursue enforcement actions
because the decision to charge is judicially unreviewable. A charging decision is not a “final
order.”82 Moreover, a decision to charge or not to charge is normally unreviewable because
enforcement decisions are committed to agency discretion.83 In any case, the vast majority of
administrative enforcement cases settle without resulting in a final agency decision subject to
judicial review.
Of cases that do result in a final agency decision, relatively few are judicially reviewed
since the review process is so slow and costly and because various deference doctrines make
reversal unlikely.84 If the case is judicially reviewed, the court considers the merits of the
decision and the fairness of the administrative process, not the preliminary decision to charge the
target. And even a successful judicial challenge by a target following adjudication by the agency
often produces only a remand that allows the agency to reconsider the case and come to the same
conclusion.
Nor does Congress or the President exert any meaningful control over enforcement
discretion in individual cases; indeed, it would generally be improper for those bodies to
interfere in a pending adjudicatory process.85
The charging process is largely concealed from the public and from targets as a matter of
statute. The Government in the Sunshine Act permits agencies to close the meeting at which the
members consider whether to take enforcement action.86 In fact, most agencies make these

Edward Rubin, The Myth of Accountability and the Anti-Administrative Impulse, 103 MICH. L. REV. 2073, 2120–
2134 (2005).
81
Sohoni, supra note 7, at 42-47; Lemos, supra note 7, at 968-79 (discussing the absence of executive and
legislative accountability mechanisms for constraining enforcement).
82
FTC v. Standard Oil Co. of Cal., 449 U.S. 232 (1980) (holding FTC’s “reason to believe” greenlighting
determination is not a final order and thus unreviewable).
83
5 U.S.C. § 701(a)(2); Heckler v. Chaney, 470 U.S. 821 (1985); Public Citizen v. FERC, 7 F.4th 1177, 1195-96
(D.C. Cir. 2021) (FERC decision to terminate market-manipulation investigation is not judicially reviewable even
though its substantive decision in the same case was held to be arbitrary); CREW v. FEC, 993 F.3d 880 (D.C. Cir.
2021) (finding that court cannot review Federal Election Commission‘s deadlocked decision not to prosecute even
though primarily based on a question of law since it was also based on prosecutorial discretion); Lemos, supra note
7, at 990–992.
84
In addition to the costs and delays inherent in the judicial review process, regulated parties often fear that seeking
judicial review of an enforcement decision might trigger reprisals from agencies with which they must maintain a
good relationship. Asimow, Ex Ante Administrative Review, supra note 80, at 359.
85
The executive branch often seeks to dictate enforcement priorities by manipulating the agency’s budget or
appointing pro- or anti-regulation agency heads, but involvement with individual enforcement decisions is rare and
violates unwritten conventions. Andrias, supra note 7; Elena Chachko, Administrative National Security, 108 GEO.
L.J. 1063, 1122-23 (2020); Memorandum from Dana Remus, White House Counsel to White House Staff, July 21,
2021, https://www.whitehouse.gov/wp-content/uploads/2021/07/White-House-Policy-for-Contacts-with-Agenciesand-Departments.pdf?emci=12770deb-dfef-eb11-a7ad-501ac57b8fa7&emdi=eea5f50a-86f0-eb11-b563501ac57b8fa7&ceid=203637; Adrian Vermeule, Conventions of Agency Independence, 113 COLUM. L. REV. 1163,
1211-14 (2013). Congressional interference in a pending adjudication is improper and could violate due process.
Pillsbury Co. v. FTC, 345 F.2d 952 (5th Cir. 1980).
86
5 U.S.C. § 552b(c)(10).

13

decisions by notational voting, not in meetings. And staff memoranda recommending
enforcement are excepted from disclosure under the Freedom of Information Act.87
As a result, the only meaningful accountability mechanisms in individual enforcement
cases are those that agencies impose on themselves. Agencies should generate internal checks on
the enforcement process by creating procedures that limit the discretion of agency members or
staff, allow monitoring by superiors of staff discretionary decisions, and provide protections for
regulated parties and beneficiaries that the agencies are not legally required to provide.88
The following sections assess the arguments for and against greenlighting as a source of
internal administrative law.89 Weighing the case for and against greenlighting, my conclusion is
that the greenlighting function is valuable and should be preserved in agencies where caseload
permits it. I am persuaded by the advantages of this function in terms of public administration
norms. Greenlighting also mitigates the principal-agent problem that arises in the enforcement
function. I think these benefits outweigh the problems of confirmation bias and inefficiency, but
I will suggest further checks and balances in section V that could alleviate both concerns.
B. The Case for Agency-Member Greenlighting
The greenlighting function, which requires agency members to approve staff charging
decisions, has important structural advantages as an accountability mechanism.90 For a number
of reasons, the agency members rather than the staff should make the call when an agency’s
enforcement caseload is small enough to allow it to feasibly do so.91
As pointed out earlier, the charging decision may be the most important procedural event
to the target in the entire administrative and judicial regulatory process.92 If the agency members
believe a case brought to them by prosecutors is weak or ill-advised, or does not align with their
priorities, the case should be stopped before it goes any further. In such cases, the target should
not be forced to agree to a settlement or litigate and the agency should not embark on the costly
adjudication process.

87

5 U.S.C. § 552(b)(5); NLRB v. Sears, Roebuck & Co., 421 U.S. 132 (1975). One former agency member told me
that the chair concealed critical information about the charging process even from that member. FCC 2.
88
See Barkow, Overseeing Agency Enforcement, supra note 3, at 1131–38.
89
There is a rich literature on internal administrative law, but none of it concentrates on the problem of checking
enforcement discretion. See Jill E. Family, An Invisible Border Wall and the Danger of Internal Agency Control, 25
LEWIS & CLARK L. REV. 71, 112-19 (2021); Elizabeth Magill, Agency Self-Regulation, 77 GEO WASH L. REV. 859,
884-88 (2009); Gillian E. Metzger & Kevin M. Stack, Internal Administrative Law, 115 MICH. L. REV. 1239 (2017);
Jennifer Nou, Intra-Agency Coordination, 129 HARV. L. REV. 421 (2015); Sidney A. Shapiro & Ronald F. Wright,
The Future of the Administrative Presidency: Turning Administrative Law Inside Out, 65 U. OF MIAMI L. REV. 577
(2011).
90
The necessity of agency head approval of charging decisions was recognized as far back as 1941 Report of the
Attorney General’s Committee on Administrative Procedure which formed the rationale for enactment of the APA
in 1946. See Daniel J. Gifford, Adjudication in Independent Tribunals: The Role of an Alternative Agency Structure,
66 NOTRE DAME L. REV. 965, 978 (1991).
91
See Part V.I. Of course, if the caseload does not permit agency members to practice greenlighting, Congress or the
agency should devise other accountability mechanisms. Gifford, supra note 90, at 992-1000.
92
See Part I.

14

The argument for greenlighting goes well beyond the protection of private interests. An
agency must adopt prosecutorial priorities, since its resources will never be adequate to prosecute
every case that might involve regulatory violations.93 It is appropriate for agency heads to make
the call on how limited enforcement resources should be allocated. Even more significant,
combined-function agencies use adjudication for policymaking, and the choice of which cases to
prosecute is an essential element of the policymaking process. The balance of this section
explores the arguments in favor of greenlighting in greater detail.
1. Improved Decision Making
As practiced in most agencies, greenlighting requires staff prosecutors to produce a
confidential and candid memorandum to the agency heads. These memos explain the factual,
legal, and policy rationales for charging a target or settling the dispute and analyze strategic
concerns such as evidentiary weak points or political implications. As discussed in Part II, SEC
prosecutors file “Action Memos;” FTC prosecutors file “Memoranda Recommending
Complaint;” FERC prosecutors produce the “Enforcement Staff Report and Recommendation.”
The process of preparing such memoranda is likely to improve the staff’s decisionmaking
process because it requires staff to think carefully about the strength of the evidence and
arguments in the case and to abandon weak cases before they go any further. Staff members
realize that they will have repeated interactions with the Commissioners and are anxious to
preserve their credibility by writing thorough and balanced memoranda urging the heads to
approve their charging decisions.
2. Principles of Public Administration94
Professor Gillian Metzger has argued that there exists a constitutional duty for agency
members to supervise the staff.95 Whether or not such a constitutional duty exists, supervision of
staff is essential in agencies that exercise delegated power (whether through rulemaking or
adjudication) to insure that the priorities of agency heads are carried out. Agency head
supervision is particularly vital when it concerns functions like charging decisions that are
unconstrained by external judicial, executive or legislative checks.96 Of course, supervision can
take many forms, but greenlighting is one effective method of accomplishing it.
The greenlighting process serves other goals stressed by public administration scholars.
William Simon97 explains that contemporary administrative procedures are often “performance93

See Part V. G. For discussion of the centrality of resource allocation and priority-setting issues, see Eric Biber,
The Importance of Resource Allocation in Administrative Law, 60 ADMIN. L. REV. 1, 16-24 (2008); Bornstein, supra
note 7, at 859-62 (discussing diminishing budgetary resources for enforcement).
94
Legal scholars often urge that public administration principles be incorporated in administrative law. The field of
public administration is concerned with making government institutions work competently and efficiently, while
administrative law is often concerned with creating constraints upon administrative functions that favor regulated
parties. See Fisher & Shapiro, supra note 80, ch. 1; Harlow & Rawlings, supra note 2.
95
Gillian E. Metzger, The Constitutional Duty to Supervise, 124 YALE L. J. 1836, 1890-99 (2015).
96
See Parts I and III.
97
William H. Simon, The Organizational Premises of Administrative Law, 78 LAW & CONTEMP. PROB. 61 (2015);
William H. Simon, The Organization of Prosecutorial Discretion, in MAXIMO LANGER & DAVID SKLANSKY, eds.
PROSECUTORS AND DEMOCRACY: A CROSS-NATIONAL STUDY (2017) (hereinafter Organization of Prosecutorial
Discretion).

15

based.” They operate mostly ex ante or proactively, before decisions are made, rather than
operating ex post like judicial review. Performance-based processes are transparent to agency
managers and allow for frequent revisions as agency priorities or markets change. Ex ante
procedures entail peer review and constant monitoring as lessons are learned from prior
decisions. Organizations often adopt presumptive rules about how discretion should be organized
and require that departure from the presumptive rules be justified.98
The greenlighting process qualifies as a performance-based procedure described by
Simon. Greenlighting is responsive to input from targets who have the ability to file memoranda
urging staff and agency heads not to charge them. Greenlighting allows the heads to easily
change their priorities as economic, political, personnel, or budgetary conditions change.
Greenlighting allows agency heads to learn from their prior decisions to approve or decline
prosecution and enables them to monitor staff decisionmaking in real time.
Still another advantage of greenlighting from the public administration point of view is
that, in multi-member agencies, the process subjects charging decisions to deliberation by
members who are politically balanced and are likely to have different skill sets and backgrounds.
This sort of collegial decisionmaking may be better than leaving decisionmaking to individual
prosecutors or to the GC (as occurs at the NLRB). Even in this era of hyper-partisanship,
pluralistic decisionmaking by multi-member agencies produces better decisions in both
rulemaking and adjudication. That advantage should apply to the exercise of prosecutorial
discretion as well.99
3. Internal Separation of Powers
The greenlighting function is an example of “internal separation of powers” as described
by Jon Michaels.100 Michaels describes three distinct and competitive interests at play in agency
decisionmaking: the politically appointed agency members, the career staff, and the public
(including regulated parties and regulatory beneficiaries). These three interests engage in
constant rivalrous competition as the agency engages in a variety of administrative functions.
Michaels draws parallels between this internal separation of powers and the traditional systems
of external separation of powers and checks and balances between the legislative, executive, and
judicial branches of government.
The greenlighting function operationalizes the kind of “internal separation of powers”
Michaels describes. Career staff investigators and prosecutors take the initiative to uncover to
uncover violations, prioritize them, and make the initial decision whether to prosecute, settle, or
abandon the cases. The staff is checked by the agency members who must greenlight its decision.
In practice, the heads almost always back the staff, but the need for agency head approval
98

Simon focusses on the criminal prosecution process. He criticizes outdated doctrines such as leaving criminal
charging decisions up to the professional judgment of individual prosecutors. He praises innovations such as
adoption of guidelines, peer review, transparency, and the ability of prosecution offices to make changes to charging
criteria in light of experience.
99
See Paul R. Verkuil, The Purposes and Limits of Independent Agencies, 1988 DUKE L.J. 257, 259–63 (1988); FTC
3.
100
Jon D. Michaels, Of Constitutional Custodians and Regulatory Rivals: An Account of the Old and New
Separation of Powers, 91 N.Y.U. L. REV. 227 (2016).

16

constrains prosecutorial decisions.101 Regulatory targets also have substantial ability to influence
the staff and agency head charging decisions through mechanisms discussed in Part IV of this
study. Thus, the three interests identified by Michaels engage in a competitive struggle within the
adjudicatory process, with the same positive effects as traditional inter-branch checks and
balances. Given that external separation of powers has almost no influence over charging
decisions,102 internal separation of powers seems to be an attractive alternative.
4. The Principal-Agent Problem
Prosecutorial decisions or settlements can represent an important principal-agent problem
if the preferences and priorities of staff prosecutors do not align with the preferences or priorities
of agency members.103 Misalignment of priorities between agency and staff can result in either
over- or under-enforcement.
Agency prosecutors sometimes want to push the envelope to pursue targets they perceive
as wrongdoers even if the evidentiary basis for doing so is questionable or the legal theory is not
well supported by existing precedent.104 The staff may be pursuing a “crackdown” by allocating
resources to a particular class of cases that the heads might not support.105 Prosecutors may be
overcharging to force the target to settle. Agency attorneys may have their own future careers in
mind rather than the public interest.106 The staff may wish to use resources unwisely by
concentrating on trivial cases that are easier to win or to run up the numbers.107 The career staff
might not favor aggressive prosecution policies favored by agency members. Thus, the
requirement that the agency members greenlight a charging decision makes staff prosecutorial
decisions transparent to agency members and helps them rectify misalignment of priorities. Such
misalignment issues have sometimes surfaced in NLRB unfair labor practice enforcement where
the GC rather than the agency members control charging decisions.108
In addition to correcting misalignment of priorities between agency members and staff in
particular cases, the existence of greenlighting creates what is sometimes called a “sentinel
effect.” The sentinel effect means that people make different decisions when those decisions are
subject to check than when they are not. The sentinel effect exists because the staff is well
acquainted with the enforcement preferences of the chair and the other agency members. The
members may have made these preferences clear in previous discussions with prosecutors, or the
prosecutors may discern these preferences from their experience with past greenlighting
decisions. The staff will not advance proposed complaints if they think that the agency members
might reject or narrow them, or even that there might be a contentious discussion or a split vote
101

See discussion of the sentinel effect in Part III. B. 4.
See Parts I and III. B. 3.
103
The literature on this issue is extensive. See Brian Feinstein & Abby Wood, Divided Agencies, SO. CALIF. L. REV.
(forthcoming 2021), http://papers.ssrn.com/sol3/papers.cfm?abstract_id=3925861
(documenting the presence of political misalignment between agency members and career staff and considering its
effect on rulemaking).
104
SEC 5, 6, 7; FERC 3.
105
See Sohoni, supra note 7, at 55-63.
106
Lemos, supra note 7, at 952-56; Sohoni, supra note 7, at 67-69.
107
SEC 6; FTC 5.
108
NLRB 3; Parts II.E, and V.F.
102

17

at the agency-head level. I frequently asked interview subjects a counterfactual question: if
greenlighting did not exist and the staff was free to choose prosecution targets, would the pattern
of prosecutions look different than it does now? Most interviewees answered affirmatively. They
believed that the staff would have been more aggressive in choosing prosecution targets if their
charging decisions were not subject to greenlighting.109
Agency-head approval is less effective as a check on under-enforcement (as opposed to
over-enforcement) since the agency members do not see the cases that the staff decided not to
pursue.110 The under-enforcement problem is often addressed by informal communications
between the Chair and the GC.111 Nevertheless, at some point agency members should perceive
that they are not seeing a certain class of cases that they believe should be prosecuted, thus
enabling them to correct the under-enforcement problem.
C. The Case Against Agency-Head Greenlighting
Despite the institutional advantages of greenlighting enforcement decisions, the process
has given rise to serious concerns about confirmation bias and efficiency that are discussed in
this sub-section.
1. Confirmation Bias
a. The Problem of Confirmation Bias
A number of observers of the administrative enforcement process are troubled by the
problem of confirmation bias.112 The greenlighting process requires agency members to first
discharge a prosecutorial function and later perform a judicial function in the same case. The
concern is that, as a result, they may be unable to render an unbiased final adjudicatory decision
when a case they previously greenlighted returns to them for the final agency decision.113 This
109

All eight of the SEC interviewees answered affirmatively, as did FERC 5, FCC 2, 4, and FTC 5. See Bardach &
Kagan, supra note 7, at 34.
110
Barkow, supra note 7, at 1139; Christopher J. Walker, Administrative Law Without Courts, 65 UCLA L. REV.
1620, 1628 (2018). Indeed, excessive checks and balances may lead to under-enforcement since front-line
investigators and prosecutors are sometimes discouraged by the many hoops they must jump through. Bardach &
Kagan, supra note 7, at 39-44.
111
SEC 8. In the NLRB, a charging party can appeal the regional office’s decision not to issue a complaint, which is
a meaningful check on under-enforcement.
112
See e.g. Edward H. Fleischmann, Toward Neutral Principles: The SEC’s Discharge of its Tri-Functional
Administrative Responsibilities, 42 CATH. U. L. REV. 251 (1993); Miles Kirkpatrick et al., Report of the ABA
Antitrust Section, 58 ANTITRUST L. J. 43, 119 (1989) (finding that “…concern about at least the appearance of
fairness is inevitable” but concluding the benefits of combined functions outweigh the disadvantages); Report of the
Task Force on the SEC Administrative Law Judge Process, 47 Bus. Lwyr. 1731, 1732 (1992) (SEC power to
approve complaints and to reverse ALJ decision “adversely affects in a fundamental way the perceived and actual
fairness of the process”); Andrew N. Vollmer, Accusers as Adjudicators in Agency Enforcement Proceedings, 52 U.
MICH. J. L. REF. 103 (2018) (hereinafter Vollmer, Accusers); Daniel R. Walfish, The Real Problem with SEC
Administrative Proceedings, and How to Fix It, FORBES (July 20, 2015),
https://www.forbes.com/sites/danielfisher/2015/07/20/the-real-problem-with-sec-administrative-proceedings-andhow-to-fix-it/?sh=106c2ea22e01.
113
Another type of bias that might be called “institutional bias” exists independently of confirmation bias.
Institutional bias means that agency heads are likely to believe in strong enforcement of the regulatory statute for

18

concern was identified as early as the famous 1941 Report of the Attorney General’s Committee
on Administrative Procedure, which, as discussed below, offered a suggestion to partially
remedy the problem.114
Confirmation bias might manifest itself in different ways. For example, the agency heads
may be reluctant to overturn an ALJ’s decision against the target because that would suggest that
they were wrong to have greenlighted the complaint in the first place and thus wasted agency
resources.115 And the converse problem exists as well—commissioners who voted against
greenlighting the complaint may be reluctant to uphold an ALJs decision against the target
because to do so would suggest they were wrong to oppose the decision to charge.116
There is another way that participation in the prosecution decision could negatively affect
the final decisionmaking process. Agency heads might rely on ex parte information, opinions,
and anecdotes communicated to them by the prosecutorial staff in meetings that occurred during
the greenlighting process. Yet this material might not appear in the record of the hearing
conducted by the ALJ that should form the exclusive basis for their final adjudicatory decision.
Consequently, it might be difficult for the members to decide the case on that record without
taking account of other information about the case they have obtained during greenlighting. This
problem becomes more severe the greater the number and intensity of the contacts between the
staff and agency heads before the charging decision occurs. In FERC, for example, such
communications apparently occur frequently over a course of years during the investigatory
process.117
The drafters of the APA were concerned by the problem of confirmation bias, as well as
the problem of exposure to non-record information, and they instituted a system of internal
separation of functions to protect against them. Under section 554(d) of the APA, agency staff
members who played a significant adversarial role in a case as prosecutors, investigators or
advocates are prohibited from serving as adjudicatory decisionmakers or as off-the-record
advisers to the decisionmakers. Congress had two rationales for the requirement of internal
separation of functions. First, an adversarial staff member’s prosecutorial or investigative work
may have infused a “will to win” that distorts the adversary’s ability to serve as an impartial
decisionmaker or adviser. Second, the adversary may have been exposed to information about
the facts of the case or other information about the target and its behavior that do not find their
way into the adjudicatory record. 118 Essentially, as discussed above, these are the two ways that
greenlighting might negatively affect the fairness of decisionmaking at the agency head level.
which they are responsible. They probably wish to support the hard work of their prosecutorial and investigative
staff by validating those lower-level prosecutorial decisions. Institutional bias is inevitably present in combinedfunction agency enforcement proceedings, but confirmation bias adds an additional concerning element.
114
See Part V D.
115
See Elman, supra note 25, at 810-12 (“the Commission may fear that dismissal of its own complaint will be
construed as an admission of costly error…”); Richard A. Posner, The Federal Trade Commission, 37 U. CHI. L.
REV. 47, 53 (1969). Posner and Elman offer no empirical support for these assertions which were tossed off briefly
in long articles criticizing the FTC for many other reasons. An additional factor that might induce confirmation bias
is that a dismissal of the complaint at the agency head level could expose the agency to liability for the target’s
attorney fees under the Equal Access to Justice Act. 5 U.S.C. § 504.
116
SEC 8
117
FERC 2; Scherman, FERC Enforcement, supra note 59; Mullins, supra note 46.
118
Grolier, Inc. v. FTC, 615 F.2d 1219-21 (9th Cir. 1980).

19

However, for reasons to be discussed in Part IV,119 the drafters of the APA excluded agency
members from the statute’s separation-of-functions requirement.
b. Reasons to Believe That Confirmation Bias Is Not A Serious Problem
In theory, the risk that agency-head decisionmakers may be infected by confirmation bias
should be greatly reduced by important differences in the roles they play as prosecutors and
adjudicators and their appreciation of these differences. For example, the burden of proof at the
two stages is different. The greenlighting decision is based on probable cause to believe that a
violation of law has occurred. An adjudicatory decision against the target must be supported by a
preponderance of the evidence in the record—a far more demanding decisional standard.
When they greenlight the complaint, the agency members know they are relying on a
one-sided ex parte staff presentation of the evidence and argument in favor of charging. Often
the staff accepted the credibility of outsiders for purposes of deciding whether to charge the
target. The final decision, on the other hand, occurs after a trial-type adversarial hearing that tests
the credibility of witnesses. The ALJ produces a reasoned opinion based on the evidence
presented during the hearing. The agency heads are limited by the APA’s exclusive-record rule
to considering only the evidence introduced at the hearing (unless they decide to hold further
hearings which occurs rarely).
Whether these differences in the decisionmaking function at the two stages make any
practical difference, however, is disputed. In any event, many targets and their attorneys are not
impressed by the differences between the prosecutorial and adjudicatory stages. They continue to
complain that their prosecutors are acting as their judges.
c. Interview Data on Confirmation Bias
In my interviews, a majority of former agency members said that they did not believe that
they personally were subject to confirmation bias, but they were aware of the issue.120 Indeed,
some said they barely remembered the meetings (or the notational voting procedure) at which
they greenlighted the complaints. They pointed to the differences between the greenlighting and
adjudication stages decisions that are discussed above, such as the exclusive record for
decisionmaking and differences in the burden of proof. They observe that a failure to take
account of evidence and argument developed during the ALJ hearing would invite disaster on
judicial review.121 Needless to say, however, such interview data is not very reliable. Some
former agency heads stated that they found the situation uncomfortable122 and others
acknowledged that it might create an appearance of bias even though they believed they were not
personally subject to confirmation bias.123

119

See Part IV B.
SEC 1, 6; FTC 5; NLRB 3.
121
FTC 5.
122
SEC 4; FTC 3, 4; FCC 1, 2.
123
SEC 2, 6.
120

20

Some former agency staff members believe that confirmation bias is a serious problem.124
Other former staff members who are now in the defense bar disagree; they are not concerned
with the possibility of confirmation bias.125
Needless to say, data from interviews with former agency heads about whether they were
biased in making adjudicatory decisions is not very reliable. And data from staff interviews is
even less reliable, since a staff member would have no way to know whether the agency
members were biased in deciding cases that the staff members were involved in prosecuting.
d. Empirical Research on Confirmation Bias
Attempted empirical research on the existence of confirmation bias based on win rates is
inconclusive. This is hardly surprising given the elusive character of psychological phenomena
such as confirmation bias. Clearly, there are many other variables that predict win rates, most of
them more important than confirmation bias.
Most of the empirical work on this issue concerns the FTC. The most comprehensive
study of the issue covered all FTC agency-head administrative decisions between 1977 and 2016
(a total of 145 cases).126 It suggests that confirmation bias is not a major problem if it exists at
all. When the same Commission majority both authorized the complaint and decided the case,
the FTC dismissed 33% of the cases. When a different majority voted out the complaint and
made the final decision, the FTC dismissed only 27% of the cases—the opposite of what one
would expect if confirmation bias was in play.127
Several other studies of FTC decisionmaking point in the opposite direction, but they are
based on a shorter time period and consider only limited portions of the FTC’s work. One study
of FTC merger decisions between 1950 and 2011 indicated that confirmation bias does exist.
When three, four, or five commissioners who made the final decision also participated in the
charging decision, the FTC enjoyed a greater win rate at the agency head level than in situations
where zero, one, or two commissioners participated in both decisions.128 Other studies simply

124

SEC 3; FTC 2; FCC 3
SEC 5, 7, 8; FTC 1; FCC 4.
126
Maureen K. Ohlhausen, Administrative Litigation at the FTC: Effective Tool for Developing the Law or
Rubber Stamp, 12 J. COMPETITION LAW & ECON. 623 (2016). Overall, the FTC agency heads dismissed 40% of
the competition cases that reached them for final decision, but dismissed only 9% of the consumer protection
cases, suggesting that the final decision stage is not a rubber stamp process in competition cases. In an additional
13% of cases in which it imposed liability, the Commission struck some of the allegations, counts, or
respondents, suggesting that it engaged in careful analysis. Id. at 628–35.
125

127

Ohlhausen cautions that this conclusion is only suggestive, as many other factors are in play, such as changes in
antitrust doctrine and the rigor of recent FTC decisions at the time of her survey as compared to the past. In more
recent years, there have been many fewer cases decided by the FTC agency heads, case selection has been more
rigorous, the percentage of complaint dismissals is much lower, and the rate of affirmance by the federal courts is
higher. Id. at 64244.
128
See Nicole Durkin, Rates of Dismissal in FTC Competition Cases from 1950-2011 and Integration of Decision
Functions, 81 GEO. WASH. L REV. 1684 (2013). Durkin’s study concerned only competition cases, not consumerprotection cases and counted only “merits” dismissals, excluding non-merits decisions. The dismissal rate was 21%
in the 1950s, 14% in the 1960s, 18% in the 1970s, 38% in the 1980s, 18% in the 1990s, and 0% from 2000-2011.

21

infer bias from the fact that the agency wins most of the cases decided at the Commission
level.129 However this analytical method is suspect given that the FTC is a law-enforcement
agency with discretion to select only strong cases to prosecute and in which the vast majority of
the cases settle. Agency decisionmakers are naturally subject to institutional bias; it is not
surprising that they would uphold most or all of the ALJ decisions that come to them, whether or
not confirmation bias also exists.130
As a practical matter, the confirmation bias problem arises infrequently. Most
greenlighted cases settle; very few of them make it all the way to a final decision by the agency
heads. And of those cases that traverse the entire process, confirmation bias is seldom a problem
because of the high rate of turnover of agency members. The members who are called upon to
make the final decision are usually not the same people who greenlighted the case years before.
But those members who remain in their job for more than a couple of years are likely to see
cases a second time.
2. Efficiency
A second disadvantage of the greenlighting system is based on efficiency concerns. The
greenlighting process can be quite time consuming for agency members, especially if they are
conscientious about reading the complete files. Another efficiency concern is that the need for
greenlighting at the agency head level can prolong settlement negotiations or increase the time
between the prosecutorial decision to charge a target and the commencement of an agency
hearing. Thus, greenlighting may contribute to the problem of administrative delay.
At the SEC, for example, action memos can run 50 to 75 pages in length, and perhaps
five to ten of them are circulated each week. In addition, the Wells responses or white papers are
often lengthy, and some commissioners read them in full.131 Greenlighting is considered at
formal SEC meetings which are sometimes contentious. As a result, a substantial portion of the
time of SEC members is devoted to enforcement matters.
Agencies that handle the greenlighting function through notational voting spend less time
in meetings but the members must still read the lengthy files. At FERC, the agency heads make
greenlighting decisions in several stages. Each stage generates lengthy memos, but voting is
generally done through a notational process rather than in-person meetings. The same is true at
FCC where enforcement matters are seldom taken up during commission meetings.
SEC interviewees estimated that perhaps 40% or more of the time of agency heads is
taken up in enforcement matters, including but not limited to charging decisions and settlement

The majority of the dismissals were “straddle” cases meaning they were brought under a president from one party
but decided under a president from the opposing party.
129
See A. Douglas Melamed, Comment Letter on FTC Workshop Concerning Section 5 of the FTC Act 14-17 (Oct.
14. 2008) (questioning the impartiality of the FTC heads based on a high percentage of agency wins); Joshua
Wright, Supreme Court Should Tell FTC to Listen to Economists, Not Competitors on Antitrust, FORBES March 14,
2016, 11:00 AM), https://www.forbes.com/sites/danielfisher/2016/03/14/supreme-court-should-tell-ftc-on-antitrust.
130
See supra note 113, discussing the difference between institutional and confirmation bias.
131
SEC 1, 3, 4, 6, 8.

22

approvals.132 At FERC, estimates were much lower, perhaps in the 10% range, because relatively
few enforcement cases make it that far.133 One former FTC member estimated that the member
spent half of work time on enforcement issues, but thought the time investment was well worth
it.134
Obviously, agency heads pay a substantial opportunity cost in order to achieve this level
of involvement in enforcement issues.135 This is time the heads could devote to other important
responsibilities such as rulemaking, ratemaking, liaisons with other agencies, study of the
problems faced by the regulated industry or regulatory beneficiaries, development of policy, or
consideration of adjudicatory records at the time of final decision.
IV. LEGALITY OF GREENLIGHTING
Weighing the case for and against greenlighting as a matter of policy, Part III concluded
that the greenlighting process is valuable and should be preserved in agencies where the caseload
makes it practicable to do so. But some commentators have raised concerns about the legality of
greenlighting founded in constitutional due process or the APA. This Part evaluates those
arguments. It concludes that greenlighting violates neither due process nor the APA.
A. Due Process
In an important article, Andrew Vollmer argues that a target of an SEC enforcement
action is denied due process when the agency heads greenlight a complaint and later issue the
final agency decision.136 I disagree with that analysis, because the Supreme Court has
consistently rejected constitutional attacks that arise out of the structure of combined-function
administrative agencies.
The leading case on this issue is Withrow v. Larkin.137 In Withrow, the Supreme Court
assumed that the heads of a state medical licensing agency had personally investigated a
physician’s conduct, authorized the filing of a criminal complaint against the physician, and then
adjudicated a revocation of his license. The Court unanimously rejected the physician’s due
process claim. It held that agency heads could exercise the functions of both investigation and
adjudication in the same case, absent particularized facts indicating that the heads had prejudged
the case. The Court pointed out that “there is no incompatibility between the agency filing a
complaint based on probable cause and a subsequent adjudicatory decision rendered when all the
evidence is in that there has been no violation of the statute.”138 The Court was obviously
concerned that a contrary decision would cast doubt on the practices of countless federal, state
and local licensing agencies.

132

SEC 1,2, 3, 4, 6, 8.
FERC 5.
134
FTC 5.
135
SEC 1. FTC 3, 5.
136
Vollmer, Accusers, supra note 112.
137
421 U.S. 35 (1975). See Michael Asimow, Withrow v. Larkin, in LEADING CASES IN ADMINISTRATIVE LAW
(Matthew Weiner & Anna Shavers, eds., forthcoming, 2022).
138
Withrow, 421 U.S. 35, 57.
133

23

The Withrow decision is supported by the principle of necessity. If the agency heads were
disqualified by their involvement in prosecution, there would be no way to adjudicate the
doctor’s case and to revoke his license. Withrow is consistent with several earlier Supreme Court
cases also based on the necessity principle. These decisions held that agency adjudicatory
decisionmakers are not biased by reason of their involvement in earlier agency proceedings.139
Under Withrow, it seems clear that due process is not violated when agency heads
greenlight a charging decision and later make the final adjudicatory decision in the same case,
absent some further evidence that they had prejudged the issues. Since Withrow, federal courts
have consistently rejected arguments that agency heads who exercised overlapping functions
could not fairly adjudicate a case.140
Despite this authority, Vollmer argues that due process is violated when agency heads
greenlight and later adjudicate the same case. His analysis is based on Williams v.
Pennsylvania.141 Williams was a death penalty case in which Ronald Castille had previously
served as a prosecutor. Castille later became a justice on the Pennsylvania Supreme Court and
voted to uphold the death penalty in a case that he had previously helped to prosecute. The
Supreme Court held that this combination of functions violated due process.
It seems plain that Williams is distinguishable from the administrative greenlighting
issue. It is shocking and inexplicable that a justice on a state supreme court would not disqualify
himself in an appeal of case he had prosecuted. It is a gross breach of judicial ethics for a judge
to decide a case, let alone a death penalty case, in which the judge served as counsel in an earlier
phase of the case.142 The Williams scenario is likely a situation that will never recur. It easily fits
into the Withrow exception for particularized facts that reveal prejudgment. In contrast, there is
no breach of judicial ethics and ordinarily no particularized facts indicating prejudgment when
139

Hortonville Joint School Dist. v. Hortonville Educational Ass’n, 426 U.S. 482 (1976); Cement Institute v. FTC,
333 U.S. 683 (1948). In Cement Institute, the Court said: “If the Commission's opinions expressed in
congressionally required reports would bar its members from acting in unfair trade proceedings, it would appear that
opinions expressed in the first basing point unfair trade proceeding would similarly disqualify them from ever
passing on another.” Cement Institute, 333 U.S. at 702.
140
See, e.g., Marine Shale Processors v. EPA, 81 F.3d 1371, 1385 (5th Cir. 1996) (EPA regional administrator
denied permit application, then adjudicated the same issue); Simpson v. Office of Thrift Supervision, 29 F.3d 1418,
1424–25 (9th Cir. 1994) (rejecting claim of due process violation because agency head both approved prosecution
and then decided the case after an ALJ decision); Blinder, Robinson & Co. v. SEC, 837 F.2d 1099, 1107 (D. C. Cir.
1988) (SEC not prohibited from adjudicating case because it earlier prosecuted a criminal case against same party).
A recent case provides a good example of the prevailing law on whether agency heads should be disqualified
because of playing multiple roles in the process. Zen Magnets, LLC v. CPSC, 968 F.3d 1156 (10th Cir. 2020). Zen
Magnets held that due process is not violated when agency heads adopt a product safety regulation about the dangers
of small magnets and then adjudicate the same issue. The agency heads made various statements at the time of the
rulemaking about the dangers of the product but the court considered they were “in role” (meaning they were
performing agency functions as opposed to some non-agency function) and the statements did not indicate they had
prejudged the issue.
141
136 S. Ct. 1899 (2016).
142
See MODEL CODE OF JUD. CONDUCT § 2.11 (AM. BAR ASS’N 2010) (“A judge shall disqualify himself or herself
in any proceeding in which the judge’s impartiality might reasonably be questioned, including [when] … (6) The
judge: (a) served as a lawyer in the matter in controversy, or was associated with a lawyer who participated
substantially as a lawyer in the matter during such association; (b) served in governmental employment, and in such
capacity participated personally and substantially as a lawyer or public official concerning the proceeding…”

24

an agency head greenlights a prosecution, then decides the case. Such action is routine, generally
accepted, and has occurred in countless cases.
By concentrating only on the SEC, Vollmer fails to deal with the systemic effect of
holding that greenlighting plus adjudication is a due process violation. Such a decision would
have an enormously disruptive effect on the state and federal administrative process because
greenlighting is such a common function, particularly in licensing agencies. The Supreme Court
is reluctant to decree due process principles that would have widespread effect of this kind.143 As
the Withrow decision pointed out, invalidation of the prosecution/adjudication combination
would invalidate the “agency head” exception in section 554(d) of the APA,144 a step the
Supreme Court was obviously reluctant to take. The Williams decision does not offend the
principle of necessity because the Pennsylvania Supreme Court could have decided the case if
Castille had recused himself. In contrast, a decision preventing all agency heads who had
greenlighted a prosecution from deciding the case could immobilize the agency for lack of a
quorum, thus making it impossible for it to render a final decision. Thus, Vollmer’s argument
that greenlighting at the SEC or elsewhere violates due process is not persuasive.
Vollmer argues that to solve the due process problem, an agency member who voted to
greenlight a case should be disqualified from voting on the final decision. Although the
Constitution does not require disqualification, whether Scherman’s proposal should be adopted
as a matter of policy is discussed below.145
B. The Administrative Procedure Act
Section 554(d) of the APA imposes a separation-of-functions requirement that prevents a
staff member involved in investigation of a case from serving as an adjudicator in the same case
(or a substantially related one) or as an adviser to the adjudicator.146 However, section 554(d)
does not apply “to the agency or a member or members of the body comprising the agency.”
This “agency head” exception was inserted because Congress believed that application of
separation of functions to the agency head would damage the agency’s ability to conduct law
enforcement.147 As a result, according to a number of cases, the APA allows agency heads to
engage in a prosecution function such as greenlighting, then participate in the agency’s final
adjudicatory decision.148 The Withrow decision contains a dictum confirming that the APA
143

See Richardson v. Perales, 402 U.S. 389 (1971) which upheld the Social Security practice whereby an
administrative law judge represents both sides and then decides the case. “Neither are we persuaded by the
advocate-judge-multiple-hat suggestion. It assumes too much and would bring down too many procedures designed,
and working well, for a governmental structure of great and growing complexity.” Id. at 410.
144
See Section IV. B.
145
See Section V. E.
146
See Michael Asimow, When the Curtain Falls: Separation of Functions in the Federal Administrative Agencies,
81 Colum. L. Rev. 759 (1981) [hereinafter Asimow, When the Curtain Falls]
147
According to the legislative history of the APA, “[t]he exemption from 554(d) was created only for those
positions in which involvement in all phases of a case is dictated ‘by the very nature of administrative agencies,
where the same authority is responsible for both the investigation-prosecution and the hearing and decision of
cases.’” H. R. Rep. No. 79-1980 at 27 (1946). See also Grolier, Inc. v. FTC, 615 F.2d 1215, 1220 (9th Cir. 1980).
148
In Environmental Defense Fund v. EPA, 510 F.2d 1292, 1305 (D.C. Cir. 1975), Judge Leventhal wrote:
“[Congress] has accepted a pragmatic view that the need for effective control by the agency head over the

25

permits agency heads to engage in investigation and prosecution in the same case they
adjudicate.149
V. ADDITIONAL CHECKING MECHANISMS
ON PROSECUTORIAL DISCRETION
Part III of this paper discussed the fundamental rationale for the greenlighting function.
Agency head review of charging decision serves as an accountability mechanism that promotes
public administration values and helps to correct principal-agent misalignments. Nevertheless,
Part III acknowledged concerns about greenlighting because of possible confirmation bias and
inefficiency. This section discusses a number of proposals that might alleviate these concerns.
These mechanisms exist in some agencies or have been suggested in the literature. There are, in
addition, structural changes such as eliminating combined-function agencies that would address
these concerns, but these options are beyond the scope of this study.150
A. Opportunity for Target to Dissuade Staff from Recommending Decision to Charge
Informal interchange of information ordinarily takes place during the investigation
process between the target’s attorneys and agency enforcement staff. In addition, as discussed in
Part II, the SEC, NLRB and FERC employ formalized pre-charging comment procedures that
invite targets to submit memoranda designed to dissuade the staff from charging them.151
When the SEC staff tentatively decides that an administrative complaint should issue or
that the SEC should seek judicial enforcement, it formulates a memorandum to the target (the
“Wells notice”) that summarizes the factual and legal predicates for the complaint and may (but
need not) disclose investigative material from the agency’s file. The target is then entitled to
submit a written rebuttal (the “Wells response”). That response is designed both to dissuade the
staff from seeking a Commission greenlight and to influence the agency heads not to greenlight
the complaint if the staff persists. A strong Wells response is also an important strategic tool in
the settlement process.152

commencement of proceedings requires an ability to conduct consultations in candor with an investigative section
on the question whether a notice should be issued and a proceeding begun, and this notwithstanding any residual
possibilities of unfairness.” See also Air Products & Chemicals, Inc. v. FERC, 650 F.2d 687, 709-10 (5th Cir. 1981)
(APA agency head exception allows prosecutorial staff to meet with agency heads in deciding to issue complaint).
149
“It is also very typical for the members of administrative agencies to receive the results of investigations, to
approve the filing of charges or formal complaints instituting enforcement proceedings, and then to participate in the
ensuing hearings. This mode of procedure does not violate the Administrative Procedure Act, and it does not violate
due process of law.” Withrow v. Larkin, 421 U.S. 35, 56-57 (1975) The APA does not, however, allow an attorneyadviser to the agency head to later serve as a ALJ in the same case in which the adviser materially participated in a
greenlighting decision. Grolier Inc., 615 F.2d at 1220 (9th Cir. 1980). The APA probably does not allow agency
members to be advised ex parte by adversarial staff when the members are considering the final adjudicatory
decision. See Asimow, When the Curtain Falls, supra note 146, at 766.
150
See Part V.I. An additional check on irresponsible prosecution decisions is the ability of targets to collect
attorney fees under the Equal Access to Justice Act if the agency’s action (at the agency level or the judicial review
level) was not substantially justified. 5 U.S.C. § 504, 28 U.S.C. 2812.
151
See Parts II.A, D, E.
152
SEC 5

26

As discussed above,153 the SEC staff now commonly avoids the Wells procedure because
the Dodd-Frank Act imposed time limits on agency consideration of the charging decision that
run from the date the Wells notice is issued. In addition, public companies believe they must
disclose issuance of a Wells notice and thus prefer that the SEC omit the procedure. Instead, the
staff informally notifies the target of its intention to recommend that the Commission charge the
target. This notice is probably less comprehensive than a Wells notice would have been. The
target then is invited to prepare a “white paper” that serves the same function as a Wells
response.
SEC commissioners told me that they and their advisory staff take Wells responses or
white papers seriously.154 These submissions sometimes persuade the SEC heads that issuance of
a complaint is contrary to their policy priorities, that the case against the target is weak, or that
the complaint should be narrowed. Defense lawyers appreciate the Wells process and often use it
to extract more information from the staff than would otherwise be disclosed.155 Among the
people I interviewed, there was unanimous support for the Wells and white paper procedures.156
The regional offices of the NLRB that investigate unfair labor practice charges offer targets
the ability to file a position paper in response to the charge that was filed by a union or employer,
an opportunity that targets usually avail themselves of.
FERC provides two distinct opportunities for the target to influence the charging
decision. After investigating the case and deciding that a complaint should issue, the staff
produces a “preliminary findings memo, ” and the target has the opportunity to file a responsive
brief. These documents are presented to the agency heads when the heads consider whether to
permit the staff to enter into settlement negotiations.157 If the case does not settle, the staff
produces a Rule 1b.19 notice, a process modelled after the SEC’s Wells notice. The Rule 1b.19
notice again sets forth the facts and legal analysis supporting the staff’s decision to seek a
charging decision, but more briefly than the preliminary findings memorandum. The target has
30 days to respond to the Rule 1b.19 notice. The agency heads consider the Rule 1b.19 notice
and the target’s response when they decide whether to issue a charging decision (an OSC in
FERC parlance) or seek federal court enforcement. Several interviewees thought the Rule 1b.19
procedure was redundant since it duplicates the preliminary findings memo and response.158 The
target has a third opportunity to state its case by filing a brief after issuance of the OSC.
The FCC does not provide a formalized notice and comment system prior to issuance of a
Notice of Apparent Liability (NAL). Instead, the target can file a detailed response after the staff
issues the NAL. The response is intended primarily for the benefit of the Commissioners who
will be called on to greenlight the complaint and, later, will adjudicate it.
153

See Part II.A.
SEC 1, 5.
155
SEC 5.
156
SEC 1–8.
157
Everyone I interviewed who is familiar with FERC practice thought the preliminary findings memo and response
procedure was quite useful. FERC 1–6.
158
FERC 2, 4, 5, 6. One interviewee thought the procedure was useful because of the long delays that occur in
FERC enforcement; by the time the Rule 1b.19 memo issues, the composition of the agency heads has often
changed and private lawyers have an opportunity to influence the new commissioners. FERC 3.
154

27

In my opinion, the notice-and-comment procedure employed by the SEC, NLRB, and
FERC during the pre-charging phase of enforcement is quite useful. As urged by Part VI, I
suggest that other combined-function agencies adopt similar devices. This process contributes to
a sense by private parties that they are being treated fairly and helps them decide whether to
settle or keep fighting. The process facilitates reasoned decisionmaking by the enforcement staff
when it decides whether to charge a target and helps to produce an informed decision by agency
heads in the greenlighting process. It furthers what Michaels called internal separation of powers
through the rivalrous competition between agency members, career staff, and regulatory
targets.159 I would not, however, recommend that agencies provide two separate opportunities of
this kind, as occurs in FERC practice. A double notice-and-comment procedure seems redundant
and increases costs for both targets and agencies without corresponding benefit.
B. Opportunity for Target to Communicate with Individual Agency Members Prior to
Greenlighting
Several agencies permit targets to communicate with members of the agency prior to
their greenlighting decision. At the FTC, after the staff recommends issuance of a complaint, the
target is entitled to meet separately with each of the five FTC commissioners to attempt to
dissuade them from greenlighting the complaint. Commission staff are usually present at these
meetings. Because no complaint has issued, the APA’s ban on outsider ex parte communications
to agency decisionmakers160 is not applicable. A similar practice of meetings between targets and
commissioners exists at the FCC, but it is employed less often than at the FTC.161
Among interviewees familiar with the FTC, I found considerable support for the FTC ex
parte meeting procedure.162 Former agency heads found these meetings enlightening since they
are exposed mostly to the staff’s arguments before they are called on to greenlight the
complaint.163 The meetings also tend to offset criticisms that the commissioners are out of touch
and removed from business realities.164 Private lawyers (including former FTC staff) think the
meetings can be useful in persuading a commissioner that a complaint should not issue because
the case is weaker than the staff says it is.165 At times, the commissioners can broker settlements.
Other private lawyers refer to the FTC meetings as “last rites” and think they are a waste of
time.166
Interviewees familiar with the FCC were skeptical about the value of meetings between
targets and FCC commissioners which were regarded as useless in influencing member
greenlighting decisions.167

159

See supra note 100 and accompanying text.
5 U.S.C. § 557(d)(1)(E).
161
FCC 4
162
FTC 1–5.
163
FTC 5
164
Id.
165
FTC 1, 3, 5.
166
FTC 2.
167
FCC 2, 4.
160

28

Staff members and former heads at the SEC and FERC were unenthusiastic about the
FTC’s and FCC’s one-on-one practice.168 I agree with their criticisms. These meetings seem
wasteful of the precious time of the agency heads and of staff members who sit in on them.169
The meetings are costly for clients who must pay their lawyers to engage in numerous separate
meetings, even though it is unlikely that the meetings will have much practical impact. The
meetings can make the confirmation-bias problem worse because the heads learn still more about
the case at the pre-complaint stage, including material that may never be introduced at the ALJ
hearing.170
FERC encourages targets to submit written (but not oral) communications to the agency
heads during the investigation process. This approach (a holdover from prior practice existing
before the FERC obtained civil penalty authority) is less time consuming and costly than the ex
parte meetings at the FTC or FCC. Some FERC practitioners send such letters frequently; others
never do. Whether such communications are useful to targets or to FERC is debatable. Some
interviewees thought that such letters might prompt commissioners receiving them to
communicate with the staff to better understand the issues.171 Others thought the practice was
counter-productive since communications by targets with agency members might prejudice the
staff against a target that attempted to go over their heads.172
I do not favor the FERC written communication practice. It magnifies the confirmationbias problem by exposing agency heads to additional information about the case that might never
get into the record. Considering these letters is time consuming for the busy agency heads, even
if they do not answer them. The existing FERC process that that permits targets to respond to the
staff’s preliminary findings memo seems to furnish an adequate opportunity to provide feedback.
The procedure for sending separate letters to the commissioners seems redundant.
C. Application of Separation-of-Function Rules to the Investigatory Stage
An article by William Scherman proposed that FERC change its rules on ex parte
communication and separation of functions rules so that those rules would go into effect earlier
in the process.173 Under the existing FERC rules, as in most agencies, the curtain falls when
FERC makes a charging decision by issuing an order to show cause (OSC). At that point, neither
the target nor the agency staff adversaries (meaning prosecutors, investigators, and advocates)
can make off-the-record communications to agency heads or their advisers. However, such
communications can occur before the agency makes the decision to charge.174
168

SEC 1-8.; FERC 5, 6.
FCC 4 thought each meeting took about an hour.
170
FTC 2; see Elman, supra note 25, at 788–89.
171
FERC 3, 4.
172
FERC 5.
173
Scherman, FERC Enforcement, supra note 59, at 114–15 (2014).
174
18 C.F.R. §§ 2201, 2202. See Asimow, When the Curtain Falls, supra note 145, for discussion of separation of
functions. The APA rule prohibiting ex parte communications by outsiders to agency adjudicators goes into effect
when the proceeding is noticed for hearing but can come into force earlier if the agency so designates. 5 U.S.C. §
557(d)(1)(E). The separation of functions rule prohibits adversaries from participating or advising in any ALJ
decision or agency review. However, staff adversaries can communicate with agency heads off the record in
connection with the greenlighting decision. 5 U.S.C. § 554(d). See Part IV.B.
169

29

Scherman proposed that the agency’s rules on separation of functions and outsider ex
parte communications should go into effect at an earlier stage of the process, perhaps at the time
the staff issues the Rule 1b.19 notice (meaning staff has decided to recommend charging the
target), or even earlier. His article expressed concern about the fairness of allowing the staff
unfettered access to the Commission during the investigatory and greenlighting phases of the
case, while the ability of targets to communicate with agency heads is limited to written
submissions.175 Under Scherman’s proposal, meetings between the staff and agency heads
concerning greenlighting would be on the record and the target could participate.
In published articles, members of the FERC staff and outside lawyers strongly disagreed
with this suggestion.176 Nearly everyone I interviewed opposed implementing Scherman’s
proposal, whether at FERC or at other enforcement agencies. The interviewees believe that the
staff needs to conduct a candid and robust discussion with the heads about whether to issue a
charging decision. If the target’s representatives are present or if the discussion is on the record,
staff could not level with the agency heads about the weaknesses in the case or the political or
policy issues it creates or the terms on which it might be settled.177 The need for candid
discussion about charging is the reason for the Sunshine Act permits agencies to close meetings
devoted to the initiation of litigation.178 I do not support Scherman’s proposal.
D. Delegation to Enforcement Staff in Routine Cases
The 1941 Report of the Attorney General’s Committee on Administrative Procedure was
concerned with the problem of confirmation bias in the greenlighting process. To alleviate the
problem, the Report suggested that agencies delegate to staff the decision to issue complaints in
cases that raise only the applications of well-established legal principles. Such cases might
present difficulties of proof but would otherwise be routine. Nor would such delegation of the
charging decision in routine cases inhibit the agency’s ability to develop policy through case-bycase adjudication. However, in particularly important cases or in those that involved the
extension of existing precedents or new departures, the agency heads should be responsible for
making the charging decision.179 Doing so ensures that the agency members can supervise staff
and retain primary responsibility for developing policy.
Such delegations are in effect at several agencies. The FCC staff has power to charge
civil penalties below a certain amount ($100,000 for common carriers, $25,000 for others), so
that the majority of enforcement cases need not be considered by the Commission. At FERC,
penalties arising from reliability violations that are assessed by an industry self-regulatory

175

FERC permits targets to communicate with the agency heads in writing before the heads have greenlighted the
case. See Part II.V.
176
Murphy, supra note 46, at 299–302 (2014); Mullins, supra note 46, at 285–86.
177
SEC 1–7; FERC 1, 3, 5, 6. FTC 1–3.
178
5 U.S.C. § 552b(c)(10).
179
See Auerbach, supra note 25, at 418–24. This was the practice at the NLRB before the 1947 legislation stripping
agency heads of power over the charging process. Board members spent one morning per week considering
questions relating to issuance of complaints in non-routine cases. Seymour Scher, The Politics of Agency
Organization, 15 POL. RSCH. Q. 328, 331 (1962).

30

process can be processed without agency head involvement.180 In the NLRB, over 90% of
complaints processed by regional offices involve routine, well-settled applications of law, and
are filed without any involvement of the GC or the GC’s staff, even though, in theory, the GC is
responsible for all NLRB prosecution decisions.181
I think delegation to staff of complaint issuance in routine cases is a good idea, especially
in agencies with substantial enforcement caseloads.182 Delegation would reduce the number of
cases in which confirmation bias is a concern because the agency heads would not have seen
those cases before the final adjudicatory stage. Delegation would be efficiency-enhancing
because it would reduce the amount of time the heads spend on enforcement decisions, Thus, as
proposed below,183 agency heads could adopt procedural rules setting forth classes of cases that
the staff could initiate on its own. Of course, such rules are possible only if allowed by statute.
Some statutes, like the FTC Act, require agency head approval of every complaint.184
Nevertheless, most of the interviewees opposed delegation to the staff of complaint
issuance. They thought it would be difficult to identify precisely which cases are routine or
unimportant.185 At FERC, relatively few enforcement cases are litigated rather than settled; the
ones that remain tend to involve policy questions.186 Even when a case turns on evidentiary
issues rather than disputed legal questions, these evidentiary issues can be controversial and of
fundamental importance, especially in competition and securities cases. Even routine cases
involve the expenditure of resources and can create precedents that may have important effects
on the regulated industry. Some former commission members think that complaints in routine
cases should be approved by politically responsible agency heads in light of the importance of
the cases to the particular parties187 and the sentinel effect.188 Private lawyers want the agencylevel bite at the apple, even if the case seems routine.
In the future, some charging decisions may be made through utilization of artificial
intelligence methodology. An algorithm will reflect the agency heads’ decisions about how to
prioritize limited resources in the choice of which cases to pursue and should be capable of
learning from past decisions. To the extent that AI removes the discretionary element from
charging decisions, there would be little need for the agency members to take a second look.
However, it seems likely that even in a world of AI, the staff and agency members will need to
revise the algorithm periodically to reflect changing enforcement preferences. In addition, the
staff will retain discretion to decide which cases are important enough to charge, regardless of

180

FERC 6.
NLRB 3.
182
See supra note 92.
183
See Part VI. B.
184
See Part II. B. The SEC has power to delegate any function to the staff, but a single commissioner can bring any
delegated matter to the Commission for review. 15 U.S.C. § 78d-1(a), (b). One former SEC staff member thought a
delegation system could work but suggested that the staff should obtain approval from a duty commissioner in
routine cases rather than from the full Commission. SEC 5.
185
SEC 1– 4, 6, 8.
186
FERC 5.
187
SEC 3; FTC 4.
188
SEC 4. The sentinel effect is discussed in text preceding note 110.
181

31

the algorithm, and these decisions to override the algorithm should receive a second look at the
agency head level.189
E. Disqualification of Agency Members Who Participated in Charging Decisions.
One proposal for solving the confirmation bias problem is to require the disqualification
of an agency member from voting on the final adjudicatory decision if he or she previously took
part in the decision to prosecute that same case. Andrew Vollmer, who was a former SEC staff
member, has strongly advocated this proposal.190
One practical problem with Vollmer’s proposal is that such disqualifications might render
the agency unable to muster a quorum to vote on the final decision, causing the case to be
suspended indefinitely. This would not occur frequently, given the fairly rapid turnover of
agency heads, but it would occur occasionally, especially during presidential transitions when the
confirmation process causes substantial delays in filling vacancies. Virtually everyone I
interviewed opposed this proposal, including many who now serve in the defense bar.191
More fundamentally, Vollmer’s proposal would put commissioners (at least those who
have not decided to leave the agency in the near future) to a difficult choice. Should they
disqualify themselves from the greenlighting function in order to preserve the ability to vote on
the final decision, or should they retain the greenlighting function and give up voting on the final
adjudicatory decision? Some of former agency heads who answered this question said they
would opt out of the charging decision because of the importance of being able to make policy
through the adjudicatory decision.192 Others said they would opt out of adjudication because the
charging decisions are so important and so much more numerous than cases that survive all the
way to the final adjudicatory decision.193
As argued above, participation of commissioners in the charging decision is valuable as a
check on prosecutors and as an element of policymaking. It would be unfortunate if many
commissioners opted out of that function. And it would be equally unfortunate if some were
disqualified from taking part in the final decision process. That process involves collegial effort
and compromise of diverse policy perspectives and often entails establishing agency policy for
the future.194
189

The SEC currently uses AI methodology in its investigatory processes, but staff continues to exercise
prosecutorial discretion in charging cases. Engstrom and Ho have expressed reservations about the use of AI in
making enforcement decisions. AI might reduce the costs of searching for violations and thus enable more
enforcement activity from a limited budget. But it could also make the system more susceptible to gaming by wellfinanced private interests anxious to avoid scrutiny. These are concerns for the future, not the present. David
Freeman Engstrom, Daniel E. Ho, Catherine M. Sharkey, & Mariano-Florentino Cuéllar, Government by Algorithm:
Artificial Intelligence in Federal Administrative Agencies 21-29 (2020) (report to the Admin. Conf. of the U.S.);
David Freeman Engstrom & Daniel E. Ho, Algorithmic Accountability in the Administrative State, 37 YALE J. ON
REG. 800, 815-23 (2020).
190
See Vollmer, Accusers, supra note 113. Vollmer also argued that due process is violated when agency heads vote
on a case in which they greenlighted prosecution. See Part IV.A.
191
SEC 1, 2, 6, 7; FERC 5, 6; FTC 1–5; FCC 2.
192
SEC 1.
193
FTC 3; SEC 6.
194
SEC 6; FTC 4, 5.

32

F. Removal of Agency Members Heads from Greenlighting: The NLRB Model
Since passage of the Taft-Hartley Act in 1947, NLRB agency heads lack power to make
charging decisions in ULP cases.195 Instead, the GC makes the charging decisions and is
politically accountable for those decisions. Thus, the confirmation bias problem does not exist in
ULP cases. Much has been written about the separation of prosecution and adjudication
functions in the NLRB.196 A number of articles concerned with the confirmation bias issue have
recommended that Congress mandate that other combined-function enforcement agencies
emulate the NLRB model.197
Although Board members play no prosecutorial role in most ULP cases, the separation of
prosecution and adjudication is not complete. The NLRB members decide whether to approve
the GC’s recommendation that the Board seek a temporary injunction in ULP cases (so-called
10(j) cases).198 Section 10(j) cases are more significant than routine ULP cases. The Board seeks
an injunction when the conduct being enjoined may inflict irreparable injury that could not be
remedied by a later adjudicatory decision. For example, the Board might seek a temporary
injunction against employer violations that interrupt a union organizing campaign; an injunction
is appropriate because an adjudicatory decision in the case would occur long after the momentum
behind the organizing campaign had dissipated.199 Thus, under the NLRB model, the agency
members greenlight the particularly sensitive temporary injunction cases but not the more routine
and far more numerous ULP complaints in which no injunction is sought.
A basic reality is that NLRB regional offices file between 800 and 1200 ULP complaints
each year. This heavy caseload would make it practically impossible for the NLRB agency heads
to be involved in charging decisions in any meaningful way.200 Board members see between ten
and one hundred 10(j) cases each year which is a more manageable task. Limiting the Board’s
greenlighting function to 10(j) cases makes sense, because these cases are more significant than
the routine ULP case.
Confirmation bias remains a potential issue in 10(j) cases since Board members exercise
both prosecution and adjudicatory functions in those cases. For what it is worth, my interview
subjects doubted that the problem was serious, because the GC’s written request for Board
approval of the injunction accepts the credibility of the complainant and does not include much
of the factual and evidentiary material that the prosecutors have assembled. When a 10(j) case

195

See Part II.E.
Michael Ellement, Labor Law in 3(d): Reexamining the General Counsel of the NLRB as an Independent
Prosecutor of Labor Violations, 29 ABA J. OF LABOR & EMPL LAW 477 (2014); Jonathan D. Rosenblum, A New
Look at the General Counsel’s Unreviewable Discretion Not to Issue a Complaint under the NLRA, 86 YALE L.J.
2349 (1977); Scher, supra note 179 (discussing the 1947 politics surrounding adoption of the Taft-Hartley Act)
197
See Calvani, supra note 25, at 206–07; Verkuil, supra note 99, at 267; Report of the Task Force on the SEC
Administrative Law Judge Process, supra note 112, at 1737.
198
NLRB 2 and 3. These approvals are usually secured through notational voting, not at an in-person meeting.
199
NLRB 3.
200
Prior to the Taft-Hartley Act, the Board reviewed regional director decisions to charge or not charge only in cases
involving important or unique legal issues. One morning a week of the Board members’ time was spent in
considering questions relating to the issuance of complaints. Scher, supra note 179 at 331.
196

33

comes to the Board after an ALJ decision, it often looks completely different than it did at the
complaint stage, because of the ALJ’s credibility determinations and the target’s evidence.201
The separation of prosecution and adjudication at the NLRB can create principal-agent
problems when the views of the GC and the Board members misalign. One interviewee
estimated that this might occur in around a dozen cases a year.202 These principal-agent problems
arise most frequently when presidential administrations change and the 3-2 political balance on
the board switches, while the GC holds over.203
The GC may refuse to issue complaints in cases that the heads would have wished to
prosecute.204 Alternatively, the GC may issue complaints that the heads would not have
authorized if they had the power to decide whether to charge.205 Since most cases settle (at least
90%), the Commission never gets an opportunity to pass on the policy issues raised in settled
cases.
One example of this sort of conflict arises out of the GC’s valuable advice-giving
function. If the GC disagrees with Board-made law and hopes to change it, the GC can advise
charging parties to file particular types of charges and regional offices to issue complaints in
those cases. Of course, the Board makes the final call and can reject the GC’s initiative.
Charging parties are allowed to participate in ALJ hearings and can introduce witnesses and
argument supporting their view, perhaps disagreeing with the GC’s approach. On the other hand,
the Board will be unable to change existing law if the GC disagrees and declines to charge cases
raising the issue.206
Another area in which the GC and the agency heads might come into conflict arises in the
area of judicial enforcement. Unlike most independent agencies, the Board’s attorneys handle
litigation for the Board through the court of appeal level. Conflict might arise when the GC is
called on to enforce a Board decision in court with which the GC disagrees (as could occur after
a change in presidential administration, where the GC is a holdover). Such problems have
occurred in the past, but not in recent years.207
An additional problem with the independent GC is that it creates a duplicate power center
within the agency. In a real sense, the GC is a sixth agency head, whose practical power may
well exceed those of the four NLRB members who are not the chair. Particularly during periods
of budget stringency and uncertainty, such as have occurred in recent years, the Board and GC
have disagreed about management and budgetary issues, such as how to make the necessary
budget cuts and allocation of limited resources. A recent example of GC-Board conflict occurred
201

NLRB 2, 3.
NLRB 3.
203
NLRB 1, 2, 3.
204
See Ellement, supra note 196, at 492–93, citing the refusal by the GC to enforce union shop provisions in the
1950s. The Board members could only resort to public criticism of the GC’s decision not to charge these cases.
205
See id. at 491, describing a set of cases in which the General Counsel in the 1950s believed that unfair labor
practices should be prosecuted even if they have only minor effect on interstate commerce, while the Board
members disagreed.
206
NLRB 3.
207
Ellement, supra note 196, at 493–96; NLRB 3.
202

34

out of differences of opinion about replacement of the Board’s outmoded IT systems. In addition,
the GC makes staff hiring decisions (except over the Board members’ personal staffs). GC hiring
decisions have given rise to conflict with Board members.208
In my interviews, I found little enthusiasm for the NLRB model in other federal
combined-function agencies. Most interviewees favored having the agency heads make charging
decisions, both in the interest of constraining prosecutors and articulating policy.209 They were
concerned by the problem of the GC being out of sync with the agency heads and the creation of
a competing power center.210 They feared that an independent GC might increase partisanship.211
A minority of interviewees were open to the idea.212
G. Enforcement Guidelines
Agencies should consider the adoption of guidance documents that establish enforcement
priorities and criteria.213 The guidelines can and should be updated as conditions in the regulated
industry change, as new agency members are appointed with different priorities, or as the agency
gains experience with the outcome of earlier charging decisions.
The process of adoption of enforcement guidelines requires agency members and staff to
consider and resolve issues of enforcement priorities. 214 The guidelines provide readily available
guidance for the staff and help to assure more consistent charging decisions. A concern with
making such guidelines publicly available, however, is that they can undermine deterrence by
informing the regulated industry of what cases are unlikely to be prosecuted.
In my research, I encountered various agency guidelines that establish enforcement
criteria. The FCC adopted guidelines for upward and downward adjustment of forfeiture
penalties.215 The NLRB Office of Advice furnishes detailed guidance to regional offices about
enforcement criteria and policies in unfair labor practice cases. In addition, the NLRB GC
adopted detailed case-handling instructions (publicly available) to regional offices about every

208

NLRB 1, 3; Ellement, supra note 196, at 492–93.
FTC 1, 2, 3, 5. SEC 2, 5–8. SEC 1 was open to the idea, but only if agency members could remove the GC for
any reason.
210
SEC 5, 6.
211
SEC 2, 5.
212
SEC 3.
213
Barkow, Overseeing Agency Enforcement, supra note 3, at 1154-59; Simon, The Organization of Prosecutorial
Discretion, supra note 98; Sohoni, supra note 7, at 82. Agencies are not required to provide pre-adoption notice and
comment with respect to general statements of policy, of which enforcement guidelines would be a paradigmatic
example. 5 U.S.C, § 553(b)(A). Guidelines should be flexible and leave room for discretion at both staff and agency
head levels to avoid being treated as legislative rules that can only be adopted or revised with prior notice and
comment.
214
See generally Cary Coglianese and Daniel E. Walters, Agenda-Setting in the Regulatory State: Theory and
Evidence, 68 ADMIN. L. REV. 93 (2016) (noting importance of the agenda-setting process with respect to agency
rulemaking responsibilities).
215
FCC ENFORCEMENT OVERVIEW, supra note 37, at 17-18.
209

35

aspect of processing ULP, representation and compliance cases.216 In 2021, the newly appointed
GC issued guidelines outlining her enforcement priorities.217
FERC has issued the following guideline: To determine whether there is a substantial
basis for opening an investigation, staff considers available information concerning the following
factors, as appropriate:
•
•
•
•
•
•
•
•
•
•
•

Nature and seriousness of the alleged violation,
Nature and extent of the harm, if any,
Efforts made to remedy the alleged violation,
Whether the alleged violations were widespread or isolated,
Whether the alleged violations were willful or inadvertent,
Importance of documenting and remedying the potential violations to advance
Commission policy objectives,
Likelihood of the conduct recurring,
Amount of detail in the allegation or suspicion of wrongdoing,
Likelihood that staff could assemble a legally and factually sufficient case,
Compliance history of the alleged wrongdoer, and
Staff resources.218

H. Staff Memoranda to Agency Members
As discussed earlier,219 the greenlighting practice of the SEC, FTC and FERC requires
prosecutors to prepare a detailed, candid and confidential memorandum to the agency members
for the members to consider in making greenlighting decisions. These memos summarize the
input by targets and responds to arguments the targets have made. They highlight the legal and
evidentiary strengths and weaknesses of the prosecution and defenses cases and the necessary
resource commitments. The memos may also discuss the strategic and political ramifications of
the decision to charge. They discusses settlement options and often advocate acceptance of a
settlement the staff has negotiated.
The requirement that such memos be prepared is a significant check and balance on
agency prosecutorial decisionmaking. The process of preparing the memo improves the staff
decisionmaking process and facilitates peer review by staff superiors of the charging decisions
by staff prosecutors. And, of course, having these detailed memoranda available at the time the
members must make greenlight decisions improves the quality of those decisions.
I. Delegation of the Internal Agency Appeal Function
Combined-function agencies should consider delegation of the internal appeal function to
an appellate review board (such as the Environmental Appeals Board) or a judicial officer (as
216

Ellement, supra note 195, at 489-90; NLRB 3.
Jennifer A. Abruzzo, Gen. Counsel, NLRB, Memorandum GC 21-04, Mandatory Submissions to Advice (Aug.
12, 2021).
218
FERC Policy Statement, supra note 46.
219
See Section III.A.1.
217

36

occurs in the Department of Agriculture). The delegation could cover certain classes of cases that
are likely to present only factual issues or it could cover all enforcement cases. The agency heads
could retain discretionary review power over decisions of the intermediate review board or
judicial officer in cases presenting important policy issues.
Delegations of final decisional authority are quite common in the administrative state220
and might be attractive for agencies with substantial caseloads or serious backlogs at the agency
head level. In addition to limiting the number of cases subject to potential confirmation bias,
delegation of the adjudicatory function would promote efficient use of the limited time of the
agency heads and reduce delays in making final decisions. Prior ACUS recommendations favor
such delegations,221 but further discussion of this reform is beyond the scope of this report.
J. Structural Changes
There are a number of options involving structural changes in agency organization that
would remove the possibility of confirmation bias. Except for considering the NLRB option for
stripping agency heads of greenlighting power,222 I have not explored these options. They are
beyond the scope of this study and most of them do not seem politically feasible.223
For example, Congress might require that all enforcement adjudication be situated in
federal court rather than being conducted through internal agency adjudication,224 or that a target
would have the right to remove an administrative enforcement case to federal court, as occurs in
the case of FERC,225 or that the agency must bring a de novo federal court action to collect a
civil penalty, as in the case of the FCC.226
Another set of options, often referred to as external separation of functions, calls for
creation of adjudicatory tribunals, as is common in Commonwealth countries, either for specific
agencies (as occurs in Canada) or across-the-board for all enforcement agencies (as occurs in
Australia and the UK).227 Under this model, the enforcement agency engages in rulemaking and
prosecution, but it must adjudicate its cases before a separate agency. This model is employed in

220

See Ronald A. Cass, Allocation of Authority Within Bureaucracies: Empirical Evidence and Normative Analysis,
66 BOS. U. L. REV. 1, 12–13 (1986); Verkuil, supra note 99, at 268-69; Russell L. Weaver, Appellate Review in
Executive Departments and Agencies, 48 ADMIN. L. REV. 251 (1996).
221
See Admin. Conf. of the U.S., Recommendation 83-3, Agency Structures for Review of Decisions of Presiding
Officers under the Administrative Procedure Act. 48 Fed. Reg. 57461 (Dec. 30, 1983); Admin. Conf. of the U.S.,
Recommendation 68-6, Delegation of Final Decisional Authority Subject to Discretionary Review by the Agency, 38
Fed. Reg. 19783 (July 23, 1973).
222
See Part V.F.
223
Similarly, the study does not consider proposals for enhanced executive branch oversight of enforcement
decisions (like the OMB’s control over rulemaking) or increased Congressional supervision of the enforcement
function.
224
See Mullins, supra note 46. There are numerous examples of enforcement agencies that lack adjudicatory power,
such as the EEOC in cases of non-governmental employment discrimination or the Wage and Hours Division of the
Department of Labor.
225
See Part II. D.
226
See Part II.C.
227
See Michael Asimow, Five Models of Administrative Adjudication, 63 AMER. J. COMP. L. 3 (2015).

37

the U.S. in cases involving worker safety, mining safety, and federal taxation, and in many state
unemployment compensation and workers compensation systems.228
VI. RECOMMENDED BEST PRACTICES
FOR AGENCIES
This section consists of recommended best practices for agencies suggested by my
research. These recommendations concern the enforcement function of combined-function
federal agencies, meaning agencies that investigate, prosecute, and then adjudicate complaints
that a target has violated the regulatory law that the agency enforces. In order to issue an
enforcement complaint, the agency prosecutors and investigators must first decide to charge the
target. This charging decision is extremely important, as the vast majority of targets settle the
case after the prosecutors decide to charge them. The charging decision often leads to adverse
publicity. Targets that do not settle encounter an internal adjudication process involving an ALJ
hearing and a final decision by the agency heads. Alternatively, if permitted by statute, an agency
might choose to pursue relief through action in federal court rather through its internal
enforcement mechanism. Either internal or external enforcement is likely to be a lengthy and
costly process for both target and agency. Yet an agency charging decision is not subject to
judicial review or any other external accountability mechanism. Consequently, the charging
decision should be subject to internal agency accountability mechanisms. This recommendation
concerns best practices for such mechanisms.
A. Greenlighting
The agency head (including all of the heads of a multiple-member agency) should decide
whether to approve the charging decisions made by the staff, A practice known as
“greenlighting,” if it is practicable to do so in light of the agency’s caseload.
Greenlighting assures that the choice of enforcement targets aligns with the priorities of
the agency head and is a wise allocation of scarce enforcement resources. The agency heads
should also decide whether to approve settlements negotiated by the staff, again if it is
practicable to do so in light of the agency’s caseload.
B. Delegation to the Staff
The agency should consider whether its enforcement docket includes one or more classes
of cases that are sufficiently routine that the charging decision can be delegated to the staff (if
such delegation is permitted by statute), rather than requiring all complaints to be approved by
the agency heads.

228
See Gifford, supra note 90; Peter L. Strauss, Rules, Adjudications, and Other Sources of Law in an Executive
Department: Reflections on the Interior Department’s Administration of the Mining Law, 74 COLUM L. REV. 1231,
1254–64 (1974); Verkuil, supra note 99, at 268–69. Several authors suggested creation of a separate tribunal for
FTC adjudicatory matters. See supra note 25.

38

C. Prosecution Guidelines
The agency should consider adopting guidelines that set forth priorities for exercising its
prosecutorial discretion.
D. Opportunity for Target to Influence Charging Decision
An agency should provide for a structured notice and comment procedure between the
target of regulatory enforcement and the agency’s investigators and prosecutors before
prosecutors recommend that the target be charged. The explanatory document prepared by
prosecutors for this purpose should contain sufficient detail about the facts uncovered by the
investigation and the applicable law to enable the target to decide whether to settle the case or to
challenge the complaint. The target should be invited to furnish a written response to the
explanatory document. Both documents generated by this interchange should be made available
to the agency members when they decide whether to greenlight the complaint or approve a
settlement.
E. Charging Memoranda
In connection with agency head approval of the staff’s decision to charge, the staff should
generate a detailed memorandum to the agency heads setting forth the facts uncovered by the
investigation and applicable legal analysis to assist the head in deciding whether to approve a
charging decision or settlement. Such memoranda should discuss the arguments made by the
target in its written responses to the staff’s decision to charge (as discussed in Recommendation
D) and explain why the staff has rejected those arguments. Charging memoranda should discuss
why issuance of the complaint complies with the enforcement guidelines discussed in
Recommendation C and why prosecution is a wise use of the agency’s limited resources. Such
memoranda are pre-decisional documents that need not be released to the public under the
Freedom of Information Act.

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