Knowledge And Decisions

Another practice counter to American legal tradition is putting the burden of proof on the defendant. As noted in Chapter 8, the Robinson-Patman Act makes mere price differences to different customers prima facie evidence creating a “rebuttable presumption” of illegal price discrimination. In practice, the many possible interpretations of given cost statistics makes such rebuttal virtually impossible and the Supreme Court’s conception of classifying customers can make it too costly to attempt. Moreover, the cost justification must first be made to the Federal Trade Commission, which has every incentive not to accept it. Like a justice-of-the-peace who is paid out of the fines he imposes, the FTC’s judicial decisions affect its own economic well-being, since the size of the appropriations and staff which it can ask of congress in its executive role, and the scope of the power it can exercise in its legislative role depend on how much of a problem it finds its judicial role. In view of these institutional incentives and constraints, it is hardly surprising that the FTC has almost invariably gone further than the courts in the stringency with which it has applied the Robinson-Patman Act.¹² This is, however, neither peculiar to the FTC nor to the area of its jurisdiction.

Very similar principles and results are found in the very different jurisdiction of the Equal Employment Opportunity Commission (EEOC). Here an employer’s proportion of minority or female employees must, in retrospect, match the expectations of the EEOC or he faces a rebuttable presumption of discrimination, under guidelines legislated and administered by the EEOC. He must rebut this presumption before the EEOC, acting in its judicial capacity. Again, the EEOC like the FTC, has consistently applied the law more stringently than the courts.¹³ It is not the prospective use of law but the retrospective punishment of results displeasing to the EEOC. But because the punishment consists largely of liability to have federal money stopped, it is not legally the same as punishment and so escapes constitutional bans on retrospective punishments for acts not specified in advance. Also contrary to the principles behind the Fifth Amendment, employers are forced to confess in advance to “under-utilization” of minority and female employees whenever their employment numbers do not meet EEOC expectations, as a precondition for being eligible for federal money. The Fifth Amendment protects Nazis, Communists, and criminals but not businessmen in this situation, because technically the latter are not being punished or subjected to criminal penalties — even though they may be subject to heavier losses than the fines imposed in criminal cases.

In short, administrative agencies have become a major part of the American legal system, and a part not merely outside the original vision of the Constitution, but also able in practice to enact and enforce laws in ways forbidden to other organs of government by the Constitution. Despite their formal subordination to legislative correction by Congress and judicial review by the appellate courts, regulatory commissions are insulated from effective control by their sheer numbers, by the intricacies and arcane language of their regulations, and by the multitude of other claims on the time of Congress and the courts. Effective feedback comes largely from special interests, each with a sufficient stake to monitor its respective agency, to shoulder the cost of appeals, and to lobby before the appropriate committee of Congress. But a criminal can challenge the verdict of a trial court much more cheaply than an ordinary citizen can challenge the ruling of an administrative agency. Moreover, the kind of personal bias which would disqualify a judge is considered acceptable, or even desirable, in members of a regulatory commission. That advocates of recreational interests (“environmentalists”) should dominate commissions concerned with environmental matters is considered as natural as that “minority” activists should dominate the EEOC. This would be a questionable departure from legal tradition, even in cases not dependent upon “rebuttable presumptions,” to be rebutted to the satisfaction of such officials.