As the 113th Congress considers legislation to reform the federal regulatory process, a look back at remarks by former SEC Chair Harold Williams may prove instructive with regard to providing an expanded role for federal judicial review of SEC and other agency regulations. In remarks at the National Press Club on Nov. 7, 1979, Chairman Williams said that federal courts should not be encouraged to substitute their general knowledge for the specific expertise of an administrative agency, adding that the judicial process is not well-suited to decide matters of economic regulation and social policy on a routine basis.
Indeed, he continued, the very essence
of effective rulemaking, which is a non-adversarial balancing of many different
and often competing interests, is inconsistent with the case-by-case focus
imposed upon federal courts by Article III of the Constitution.
Remarking on a proposal from then Senator
Dale Bumpers (D-ARK) that would have, as part of judicial review, shifted the burden
to the agency whose regulation is challenged to demonstrate its legitimacy,
Chairman Williams reasoned that subjecting challenged regulation to this kind
of judicial review would undercut the very rationale for having administrative
agencies in the first place. He noted tha, traditionally, courts have been
required to defer to agency expertise in reviewing challenged regulations, to resume
a regulation to be legal and to place the burden on those challenging the
regulation to establish its invalidity.
The SEC Chair, appointed by
President Jimmy Carter, observed that then Chief Judge J. Skelly Wright of the
D.C. Circuit Court of Appeals, the court that handles much of the judicial review
of the regulatory process, is reported to have said that the federal courts
ought to stop telling the regulatory agencies what to do.