The Birth of Administrative Agencies and Administrative Law

Introduction

Modern government depends upon institutions that did not exist in anything resembling their present form when the United States Constitution was written.

Congress enacts statutes, but Congress cannot personally administer every program it creates. Courts resolve disputes, but courts do not ordinarily investigate every regulated industry, issue technical regulations, inspect every facility, supervise every financial market, administer every federal benefits program, or enforce every detailed regulatory requirement.

That work is performed largely by administrative agencies.

Administrative agencies are governmental bodies authorized to implement legislative directives, develop more detailed rules, enforce federal requirements, conduct investigations, issue licenses or permits, and, in some circumstances, adjudicate disputes. Cornell Law School’s Legal Information Institute defines administrative agencies in essentially these terms and explains that agencies implement legislative directives by developing more precise and technical rules than a legislature can practically formulate itself. Cornell Legal Information Institute — Administrative Agency

The body of law governing these institutions is administrative law.

Cornell describes administrative law as the branch of law governing the creation and operation of administrative agencies, including the powers granted to agencies, the substantive rules they create, and their legal relationships with Congress, the executive branch, courts, regulated entities, and the public. Cornell Legal Information Institute — Administrative Law

Administrative law is therefore about much more than government regulations.

It concerns a fundamental constitutional problem:

How can a modern government exercise specialized regulatory power while remaining subject to law?

The answer developed gradually.

The Constitution created Congress, the President, and the federal judiciary. It did not create the modern administrative state. Early federal government was comparatively small, and many governmental functions were performed directly by Congress, the President, courts, state governments, or local institutions.

As the United States industrialized, however, the government confronted increasingly complex problems involving railroads, banking, labor, food and drugs, securities, communications, environmental protection, public health, transportation, and economic competition.

Congress increasingly responded by creating specialized governmental bodies.

Those bodies required authority.

Authority required legal limits.

Their decisions required procedures.

Their procedures required judicial review.

And the resulting body of doctrine became modern administrative law.

The history of administrative agencies is therefore also the history of the transformation of American government from a relatively small nineteenth-century constitutional system into a modern regulatory state.

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1. Administrative Government Before the Modern Administrative State

Administrative government did not suddenly appear in the twentieth century.

The federal government had administrative officers and departments from the beginning of the Republic.

The Constitution itself presupposed executive administration.

Article II vested executive power in the President and provided for executive officers and departments. Congress soon established institutions necessary to operate the new federal government.

In 1789, Congress created the first executive departments, including the Department of State, Department of War, and Department of the Treasury.

These departments performed administrative functions.

The Treasury collected revenues and managed federal finances.

The War Department administered military affairs.

The State Department managed diplomatic and foreign affairs.

These institutions were governmental agencies in a broad sense, but they were not yet the specialized regulatory agencies associated with modern administrative law.

There was an important difference.

Early federal administration was primarily concerned with carrying out governmental functions.

Modern administrative agencies increasingly became responsible for regulating private conduct.

That distinction is central to understanding the later development of administrative law.

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2. The Constitutional Foundation of Administrative Government

The Constitution does not contain a single provision establishing an “administrative branch.”

Instead, the modern administrative state developed through the interaction of several constitutional powers.

Congress possesses legislative authority under Article I.

The President possesses executive power under Article II.

The federal judiciary possesses judicial power under Article III.

Congress can enact statutes that establish governmental programs and delegate authority to executive or independent agencies to administer those statutes.

An agency therefore normally exists because Congress has created it through legislation.

Its organic statute, sometimes called its enabling statute, defines its mission and grants its legal authority.

Cornell explains that agencies are generally created through statutes that establish their structure and authorize them to interpret, administer, and enforce particular legislative programs.

This is one of the fundamental principles of American administrative law:

An agency does not possess unlimited governmental power simply because it is an agency.

Its authority must come from law.

That authority is subject to statutory and constitutional limits.

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3. Why Congress Began Creating Specialized Agencies

The growth of administrative agencies was closely connected to the transformation of American society.

The nineteenth century brought:

• industrialization;
• national railroad networks;
• large corporations;
• interstate markets;
• urbanization;
• technological development;
• national banking;
• mass production;
• communications networks; and
• increasingly complex commercial relationships.

Congress could enact general rules, but many problems required continuous technical supervision.

Railroad regulation provides an especially important example.

A statute could declare that railroad rates must satisfy certain standards.

But someone needed to examine railroad practices, investigate complaints, gather information, determine whether particular conduct violated statutory requirements, and develop more detailed regulatory standards.

Congress could not realistically perform all of these functions itself.

A specialized administrative body could.

The creation of agencies therefore reflected a practical problem of modern government:

legislation establishes the framework, but administration requires continuing expertise and institutional capacity.

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4. The Interstate Commerce Commission and the Beginning of Modern Federal Regulation

The most important early milestone in the development of the modern federal regulatory agency was the creation of the Interstate Commerce Commission (ICC) in 1887.

Congress enacted the Interstate Commerce Act in response to widespread concerns about railroad practices, including discriminatory rates and the power of railroad companies over interstate commerce.

The Act created a five-member Interstate Commerce Commission.

The National Archives describes the Interstate Commerce Act as the first major federal statute regulating an entire private industry and identifies the ICC as the model for many later regulatory agencies.

The ICC was historically significant because it represented a new kind of federal institution.

It was not simply a traditional executive department.

It was an independent regulatory commission with specialized responsibilities.

The Commission was given authority to oversee interstate railroad practices and administer the regulatory system established by Congress.

The National Archives identifies the ICC as an independent agency established by the Interstate Commerce Act on February 4, 1887.

This was a major turning point.

The federal government was no longer merely performing traditional governmental functions.

It was beginning to regulate complex private economic activity on a continuing basis.

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5. The Railroad as a Constitutional and Economic Problem

Why did railroads produce such an important administrative innovation?

Railroads had characteristics that made traditional market regulation difficult.

They required enormous investments.

They often operated as regional monopolies or near-monopolies.

Their activities crossed state borders.

Their rates affected farmers, manufacturers, merchants, passengers, and other businesses.

Individual states attempted to regulate railroads, but interstate transportation created constitutional and practical difficulties.

The Supreme Court’s decision in Wabash, St. Louis & Pacific Railway Co. v. Illinois (1886) helped clarify that regulation of interstate railroad rates was primarily a federal matter.

Congress responded with the Interstate Commerce Act.

This sequence is important because it demonstrates a recurring pattern in administrative law:

constitutional authority → congressional legislation → administrative agency → regulatory rules → judicial review.

That pattern would become characteristic of the modern administrative state.

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6. The Progressive Era and the Expansion of Regulation

The administrative state expanded substantially during the Progressive Era.

The late nineteenth and early twentieth centuries brought increasing concern about industrial concentration, unsafe products, financial markets, working conditions, public health, and corporate power.

Government increasingly became involved in regulating activities that had previously been left primarily to private markets.

New agencies and regulatory institutions appeared.

Among the important developments were:

• the Food and Drug Administration’s institutional predecessors;
• the Federal Reserve System;
• the Federal Trade Commission;
• expanded federal labor administration;
• banking regulation; and
• increasingly specialized economic regulation.

The Federal Trade Commission Act of 1914 created the Federal Trade Commission and gave the federal government a specialized institution for addressing unfair methods of competition.

The emergence of these agencies reflected a broader transformation in American legal thought.

The government was increasingly expected not merely to punish violations after they occurred, but to establish regulatory frameworks designed to prevent certain harms and supervise complex markets.

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7. From Traditional Government to the Administrative State

The phrase administrative state describes a government in which administrative agencies perform extensive regulatory and governmental functions.

This concept developed gradually.

Traditional government largely depended upon:

• legislatures making laws;
• executives enforcing laws; and
• courts deciding disputes.

Administrative government introduced additional institutional activity.

Agencies could:

• write detailed regulations;
• investigate conduct;
• issue licenses;
• inspect facilities;
• gather information;
• conduct administrative hearings;
• impose administrative sanctions;
• administer benefits;
• enforce regulatory statutes; and
• sometimes adjudicate disputes within their statutory jurisdiction.

This created a constitutional question.

If Congress makes laws and courts interpret laws, what happens when Congress authorizes an agency to create detailed rules having legal effect?

That question became one of the central issues of administrative law.

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8. Delegation of Legislative Authority

Administrative agencies depend upon delegated authority.

Congress frequently establishes broad statutory objectives and authorizes an agency to develop detailed regulations necessary to implement those objectives.

For example, Congress might determine that a particular industry must satisfy safety standards.

The statute may establish the general policy.

The agency may then determine technical details based upon scientific, economic, or engineering information.

This arrangement creates a practical division of labor.

Congress establishes the governing framework.

The agency supplies specialized implementation.

But delegation raises a constitutional concern.

Article I vests legislative power in Congress.

How much authority can Congress give to an administrative agency without improperly transferring legislative power?

This became known as the nondelegation doctrine.

The Supreme Court has historically allowed Congress substantial flexibility in delegating authority when Congress provides an intelligible principle to guide administrative action, although the precise boundaries of permissible delegation have remained an important constitutional issue.

Administrative law therefore developed partly around the question of how delegated authority could remain constitutionally controlled.

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9. The Supreme Court and the Administrative State

The federal courts played a major role in defining the legal boundaries of administrative agencies.

Courts confronted questions concerning:

• the scope of agency authority;
• delegation of legislative power;
• due process;
• judicial review;
• agency adjudication;
• executive control;
• separation of powers; and
• the relationship between agencies and Congress.

One important early development involved the recognition that agencies could exercise functions that did not fit neatly into traditional judicial or legislative categories.

Administrative bodies could investigate and make determinations within statutory frameworks.

They could also develop regulations.

The courts therefore had to construct a legal framework for reviewing administrative action without converting every administrative decision into a completely new judicial proceeding.

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10. The New Deal and the Great Expansion of Administrative Government

The largest expansion of the federal administrative state occurred during the New Deal of the 1930s.

The Great Depression created economic conditions that profoundly changed American government.

Congress enacted a large number of statutes dealing with:

• banking;
• securities;
• labor;
• agriculture;
• social welfare;
• economic stabilization;
• public works;
• financial markets; and
• industrial regulation.

These programs required institutions capable of administering them.

The result was a dramatic expansion of federal administrative agencies.

Among the institutions associated with the New Deal era were:

• the Securities and Exchange Commission;
• the National Labor Relations Board;
• the Social Security Administration’s predecessor institutions;
• expanded federal banking regulators; and
• numerous other agencies and administrative bodies.

The modern administrative state began to resemble the system familiar today.

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11. The Constitutional Conflict of the New Deal Era

The growth of administrative government generated significant constitutional controversy.

The Supreme Court considered whether Congress had delegated too much legislative authority and whether particular administrative structures violated separation-of-powers principles.

In Panama Refining Co. v. Ryan (1935) and A.L.A. Schechter Poultry Corp. v. United States (1935), the Supreme Court invalidated provisions of New Deal legislation on nondelegation grounds.

These decisions demonstrated that administrative power was not beyond constitutional review.

Congress could delegate authority, but the delegation had constitutional limits.

The Court’s approach subsequently became more permissive, and the modern federal regulatory state continued to expand.

The historical importance of these cases is therefore not simply that they invalidated particular provisions.

They demonstrated that the constitutional legitimacy of administrative government depends upon maintaining boundaries between legislative authority and administrative implementation.

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12. Independent Agencies and the Separation of Powers

Not all administrative agencies are structured in the same way.

Some agencies operate as part of the executive branch under direct presidential supervision.

Others are structured as independent agencies, often headed by multi-member commissions with statutory protections concerning removal.

The Federal Trade Commission and the Securities and Exchange Commission are prominent examples of independent regulatory commissions.

The constitutional status of these agencies has generated extensive litigation.

One important Supreme Court decision was Humphrey’s Executor v. United States (1935), involving the removal of an FTC commissioner.

The Court upheld statutory limits on the President’s ability to remove certain independent commissioners, distinguishing the FTC from purely executive officers.

The doctrine concerning presidential control of agencies has continued to evolve.

Modern administrative law therefore involves not only the relationship between agencies and Congress, but also the relationship between agencies and the President.

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13. Administrative Agencies and Expertise

One of the principal justifications for administrative agencies is expertise.

Modern regulatory problems can be extraordinarily technical.

Consider environmental regulation.

An agency may need expertise in:

• chemistry;
• biology;
• toxicology;
• engineering;
• atmospheric science;
• economics;
• public health; and
• risk assessment.

Similarly, financial regulation may require expertise in:

• accounting;
• securities markets;
• corporate finance;
• economics;
• banking;
• derivatives; and
• market structure.

Congress can establish the legal framework but cannot realistically maintain a permanent staff of specialists capable of administering every technical regulatory program directly.

Administrative agencies developed partly because modern government requires specialized knowledge.

This does not mean that agencies possess unlimited expertise or authority.

Their expertise exists within statutory and constitutional boundaries.

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14. Rulemaking: Agencies as Makers of Regulations

One of the defining powers of modern administrative agencies is rulemaking.

Rulemaking is the process through which an agency formulates, amends, or repeals rules.

Cornell explains that federal rulemaking generally involves an agency acting under statutory authority to issue rules with future effect and describes the Administrative Procedure Act’s framework for notice, public participation, and publication. Cornell Legal Information Institute — Rulemaking

This is one of the most important differences between an agency and an ordinary executive office.

An agency can often establish general regulatory requirements that apply to large categories of people or businesses.

For example, an agency may issue regulations governing:

• financial reporting;
• workplace safety;
• environmental emissions;
• food labeling;
• transportation standards;
• telecommunications;
• securities markets; or
• immigration procedures.

The agency does not possess independent legislative sovereignty.

Its rulemaking authority comes from statutes enacted by Congress or, in the case of state agencies, state legislatures.

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15. The Federal Register and Public Notice

As administrative government expanded, another problem emerged:

How should the public know what agencies are doing?

The federal government addressed this problem through publication requirements.

The Federal Register Act of 1935 created the basic legal framework for centralized publication of federal agency rules, notices, and presidential documents.

The National Archives explains that the Federal Register provides a central location for public inspection of federal regulatory documents and that the Code of Federal Regulations was added in 1937 to codify rules of general applicability.

This was an important development in administrative law.

Administrative government could not function legitimately if agencies could secretly create rules and impose them upon the public.

Publication therefore became part of the rulemaking process.

The public needed access to:

• proposed rules;
• final rules;
• agency organization;
• procedural requirements;
• legal authority; and
• other regulatory documents.

Transparency became a central component of administrative legality.

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16. The Administrative Procedure Act of 1946

The next great milestone was the Administrative Procedure Act of 1946.

The APA established a general procedural framework for federal administrative agencies.

It did not create the administrative state.

The agencies already existed.

Instead, it established common procedural rules governing how agencies exercise important powers.

The National Archives explains that the APA was approved on June 11, 1946, and established procedures for informal rulemaking, including publication of proposed rules and opportunities for public comment.

Cornell describes the APA as the principal federal statute governing administrative procedures, including rulemaking and administrative adjudication. Cornell Legal Information Institute — Administrative Procedure Act

The APA therefore became a kind of procedural constitution for federal administrative government.

It established a general framework for:

• rulemaking;
• adjudication;
• agency procedure;
• public participation;
• administrative records; and
• judicial review.

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17. Notice-and-Comment Rulemaking

One of the APA’s most important procedures is notice-and-comment rulemaking.

Under the ordinary federal procedure, an agency proposing a legislative rule generally publishes a notice of proposed rulemaking.

The public receives an opportunity to submit comments.

The agency considers the relevant submissions.

It then publishes a final rule, subject to statutory requirements and judicial review.

This process serves several purposes.

First, it provides public notice.

Second, it gives regulated parties an opportunity to identify practical problems.

Third, it allows experts and interested organizations to provide information.

Fourth, it creates an administrative record.

Fifth, it provides a procedural basis against which courts can later evaluate agency action.

The process therefore connects administrative expertise with public participation.

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18. Administrative Adjudication

Administrative agencies can also perform adjudicative functions.

An agency may be authorized to resolve disputes arising under the statutes it administers.

For example, an agency may determine whether a regulated party violated a regulatory requirement or whether a claimant qualifies for a statutory benefit.

Administrative adjudication can resemble judicial proceedings.

Parties may receive notice, present evidence, make legal arguments, and obtain a written decision.

The APA establishes procedures for certain forms of formal adjudication, including provisions concerning hearings, evidence, administrative law judges, and agency decisions.

Administrative adjudication does not mean that an agency becomes an Article III federal court.

Administrative adjudicators operate within the statutory and constitutional framework governing the agency.

Their decisions may also be subject to administrative review and, where authorized, judicial review.

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19. Administrative Law Judges

The modern administrative system created a specialized class of adjudicators known as Administrative Law Judges, or ALJs.

ALJs conduct administrative hearings and make findings and decisions in matters assigned to them.

Cornell explains that administrative law judges conduct administrative hearings and generally resolve factual and legal questions within an agency’s jurisdiction. Cornell Legal Information Institute — Administrative Hearing

ALJs are not federal judges appointed under Article III.

They are part of the administrative system.

Nevertheless, administrative adjudication incorporates important procedural safeguards designed to promote impartial decision-making.

This illustrates the hybrid nature of administrative law.

Administrative agencies are not ordinary courts.

But some agency proceedings resemble judicial proceedings.

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20. Judicial Review of Administrative Action

Administrative law would be incomplete without judicial review.

The courts play an essential role in determining whether an agency has acted within the authority granted by Congress and complied with constitutional and statutory requirements.

Judicial review can address questions such as:

• Did Congress authorize the agency’s action?
• Did the agency exceed its statutory authority?
• Did the agency follow required procedures?
• Did the agency consider the relevant factors?
• Did the agency act arbitrarily or capriciously?
• Did the agency violate constitutional rights?
• Did the agency interpret a statute correctly?

The APA contains an important statutory framework for judicial review of agency action.

This creates a continuing institutional relationship:

Congress creates the agency.
The agency administers the statute.
Courts review the legality of agency action.

Administrative law therefore connects all three branches of government.

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21. The Rise and Fall of Chevron Deference

One of the most famous doctrines in modern administrative law was Chevron deference.

In Chevron U.S.A., Inc. v. Natural Resources Defense Council (1984), the Supreme Court established a framework under which courts historically gave substantial deference to reasonable agency interpretations of ambiguous statutes administered by those agencies.

For approximately four decades, Chevron became a central feature of federal administrative law.

But that doctrine changed dramatically in 2024.

In Loper Bright Enterprises v. Raimondo, the Supreme Court overruled Chevron.

Cornell’s current explanation of administrative law states that after Loper Bright, courts must independently interpret statutes and may not automatically defer to an agency’s interpretation merely because the statute is ambiguous.

This is an important development in the continuing history of administrative law.

It demonstrates that administrative law is not static.

The relationship between agencies and courts continues to evolve.

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22. Administrative Agencies After Loper Bright

The end of Chevron did not eliminate administrative agencies.

Agencies continue to:

• administer federal statutes;
• issue regulations within delegated authority;
• conduct investigations;
• enforce laws;
• adjudicate matters assigned to them;
• collect information; and
• provide technical expertise.

What changed was the judicial approach to statutory interpretation.

Under the post-Loper Bright framework, courts must exercise independent judgment when determining the meaning of statutes.

Agency expertise may still matter.

An agency’s interpretation can be persuasive, particularly when it reflects technical knowledge or specialized experience.

But ambiguity in a statute no longer automatically triggers Chevron’s former framework of mandatory deference.

This distinction is essential for understanding modern administrative law.

The administrative state remains, but the relationship between agencies and federal courts has been recalibrated.

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23. The Constitutional Questions Surrounding Administrative Agencies

Administrative law exists at the intersection of several constitutional principles.

Separation of powers

Administrative agencies perform functions that can resemble legislative, executive, and judicial activities.

This creates questions about the proper allocation of governmental power.

Delegation

Congress must determine how much authority it can constitutionally delegate to agencies.

Due process

Administrative proceedings can affect property, liberty, licenses, benefits, employment, business operations, and other important interests.

Constitutional due process may therefore impose procedural requirements.

Presidential control

Questions arise concerning the President’s authority to supervise and remove executive officials.

Judicial review

Courts must determine how far they can review agency decisions without improperly substituting judicial judgment for lawful administrative judgment.

These questions have produced some of the most important cases in modern constitutional and administrative law.

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24. Administrative Agencies and the Separation of Powers

The existence of administrative agencies can appear to challenge the traditional three-branch model.

The traditional model suggests:

Congress makes laws.
The executive enforces laws.
Courts decide cases.

Administrative agencies, however, can:

• write regulations;
• investigate violations;
• prosecute administrative enforcement actions;
• adjudicate disputes; and
• interpret statutes.

Why is this constitutionally permissible?

The modern answer is that agencies operate pursuant to authority granted by Congress and subject to constitutional limits, presidential control where applicable, procedural requirements, and judicial review.

The system therefore does not eliminate separation of powers.

Instead, it creates a more complicated institutional structure within that constitutional framework.

Administrative law is essentially the legal discipline that governs this complexity.

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25. Agencies and the Modern Regulatory State

By the second half of the twentieth century, administrative agencies had become embedded in almost every major area of federal regulation.

Federal agencies became responsible for areas including:

• environmental protection;
• workplace safety;
• securities markets;
• communications;
• transportation;
• financial regulation;
• labor relations;
• consumer protection;
• food and drug safety;
• immigration;
• energy;
• taxation;
• social welfare; and
• public health.

The administrative state therefore became one of the principal mechanisms through which federal statutes were implemented.

A modern federal statute frequently creates a program rather than providing every operational detail.

The agency then develops the institutional machinery necessary to make the statute work.

This explains why administrative law has become one of the central fields of American public law.

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26. Administrative Law and the States

Administrative law is not exclusively federal.

Every state has administrative agencies.

State legislatures create departments, commissions, boards, and other regulatory bodies.

These agencies may regulate:

• professional licensing;
• health care;
• education;
• insurance;
• utilities;
• environmental matters;
• transportation;
• labor;
• public benefits; and
• local government.

States generally have their own administrative procedure statutes.

The precise rules differ from state to state.

The federal Administrative Procedure Act therefore cannot simply be assumed to govern every agency in the United States.

Federal administrative law governs federal agencies.

State administrative law is governed principally by state constitutions, statutes, administrative procedure acts, and state judicial decisions.

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27. Administrative Law as a New Source of Law

The development of administrative agencies added another important layer to the American legal system.

Traditional American law included:

• constitutions;
• statutes;
• judicial decisions;
• common law;
• equity; and
• treaties.

Administrative government added an extensive body of:

• regulations;
• agency orders;
• administrative decisions;
• interpretive materials;
• enforcement policies; and
• procedural rules.

This created a more complex legal hierarchy.

An agency regulation cannot simply contradict a statute.

An agency must act within the authority Congress delegated.

A regulation must also comply with the Constitution.

Courts can invalidate agency actions that exceed statutory or constitutional authority.

The result is a layered legal system in which administrative law operates between legislation and implementation.

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28. Why Administrative Agencies Became Necessary

The historical development of administrative agencies can ultimately be explained through several pressures.

Complexity

Modern economic and social systems became too complicated to regulate through broad statutory language alone.

Expertise

Many regulatory problems required specialized scientific, technical, and economic knowledge.

Continuity

Agencies could administer regulatory programs continuously rather than only when Congress was in session.

Enforcement

Agencies could investigate and enforce regulatory requirements.

Flexibility

Administrative rules could be revised more easily than comprehensive statutes when technical circumstances changed.

National markets

Interstate commerce increasingly required national regulatory institutions.

Public expectations

Industrial society generated demands for government intervention in areas previously governed largely by private arrangements.

These factors did not produce the administrative state overnight.

Together, however, they created strong institutional pressures toward administrative government.

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29. The Critics of Administrative Government

The administrative state has never been free from criticism.

Critics have raised concerns about:

• excessive delegation of legislative power;
• concentration of governmental authority;
• insufficient presidential accountability;
• agency overreach;
• regulatory burdens;
• procedural complexity;
• separation of powers;
• agency adjudication;
• lack of direct electoral accountability; and
• excessive judicial deference.

These criticisms are part of the history of administrative law.

Other scholars and policymakers have emphasized the practical necessity of administrative agencies in a complex modern society.

The debate is therefore not simply between people who support agencies and people who oppose them.

A more precise question is:

What institutional structure allows agencies to perform necessary governmental functions while preserving constitutional accountability and legal limits?

That question remains central to modern administrative law.

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30. Administrative Law as a Balance Between Expertise and Accountability

Administrative law can be understood as an attempt to balance two competing needs.

The first is governmental expertise.

Modern regulation often requires knowledge that legislatures and courts do not possess in sufficient detail.

The second is legal accountability.

Expertise cannot mean unlimited governmental authority.

Administrative law therefore creates procedures and institutional constraints.

Agencies receive delegated authority.

They must remain within statutory boundaries.

They must follow applicable procedures.

They may have to provide public notice and opportunities for participation.

Their decisions may be reviewed internally.

Their actions may be reviewed by courts.

And constitutional requirements continue to apply.

The system therefore attempts to combine technical administration with the rule of law.

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31. The Historical Development in Perspective

The history of American administrative law can be understood as a sequence of institutional transformations.

The early Republic

Congress creates departments and administrative offices necessary to operate the federal government.

The nineteenth century

Industrialization creates new regulatory problems.

1887

The Interstate Commerce Act establishes the Interstate Commerce Commission.

Progressive Era

Federal regulatory institutions expand into competition, finance, food, drugs, labor, and other areas.

1930s

The New Deal produces a dramatic expansion of federal administrative government.

1946

The Administrative Procedure Act establishes a general procedural framework.

Late twentieth century

Courts develop increasingly sophisticated doctrines concerning judicial review, agency interpretation, procedure, and presidential control.

1984

Chevron establishes a major doctrine concerning judicial deference to agency statutory interpretations.

2024

Loper Bright Enterprises v. Raimondo overrules Chevron and restores independent judicial interpretation of statutes under the APA framework.

This chronology demonstrates that administrative law remains an evolving field.

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32. The Administrative State and the Rule of Law

Administrative agencies possess significant governmental authority.

That makes the rule of law particularly important.

An agency must be able to identify the legal source of its authority.

The public should be able to determine what rules apply.

Administrative procedures must be followed.

Regulations must remain within statutory authority.

Individuals affected by agency decisions must receive whatever procedural protections the Constitution and applicable statutes require.

Courts must remain available for appropriate judicial review.

These principles prevent administrative government from becoming simply government by bureaucratic discretion.

Administrative law therefore represents an attempt to place the machinery of modern government inside a legal framework.

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33. The Administrative Agency as a Modern Legal Institution

The administrative agency is one of the defining legal institutions of the modern state.

It is neither simply a legislature nor simply a court.

It is a governmental institution with delegated authority that performs specialized functions within a statutory and constitutional framework.

That hybrid character explains both its usefulness and its complexity.

An agency can possess:

• regulatory authority;
• enforcement authority;
• investigative authority;
• licensing authority;
• adjudicative authority; and
• informational authority.

But each power depends upon legal authorization.

The administrative state is therefore not an alternative to constitutional government.

It is a development within constitutional government.

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34. From the Birth of Agencies to Modern Administrative Law

The creation of the Interstate Commerce Commission in 1887 marked one of the most important turning points in this history.

Before that period, the federal government certainly had administrative institutions.

But the ICC demonstrated how a specialized federal commission could continuously regulate a private industry pursuant to congressional authority.

The Progressive Era expanded the model.

The New Deal transformed it.

The Federal Register and Administrative Procedure Act provided increasingly systematic procedural controls.

The federal courts developed doctrines concerning delegation, due process, judicial review, presidential control, and agency interpretation.

The result is modern administrative law.

It is a field that did not exist in its contemporary form at the founding of the United States because the institutional conditions that made it necessary had not yet developed.

Administrative law was therefore created gradually by the interaction of:

Congress + agencies + executive government + courts + regulated industries + the public.

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Key Takeaways

• Administrative law governs the creation, powers, procedures, and operation of administrative agencies.
• Administrative agencies are governmental bodies that implement statutes through specialized administration and, when authorized, rulemaking, enforcement, and adjudication.
• The United States had administrative offices from the beginning of the Republic, but the modern regulatory agency developed much later.
• Industrialization and the expansion of interstate commerce created problems that traditional governmental institutions could not easily administer on their own.
• The Interstate Commerce Commission, created in 1887, was a major milestone in the development of modern federal regulatory agencies.
• The Progressive Era produced further expansion of federal regulation.
• The New Deal dramatically increased the size and responsibilities of the federal administrative state.
• Administrative agencies generally operate pursuant to authority delegated by Congress through statutes.
• Delegation raises important constitutional questions under the separation of powers and the nondelegation doctrine.
• Agencies may exercise rulemaking, enforcement, investigative, licensing, and adjudicative functions when authorized by law.
• The Federal Register Act of 1935 established a centralized system for publishing federal regulatory documents.
• The Administrative Procedure Act of 1946 created a general procedural framework for federal administrative agencies.
• Notice-and-comment rulemaking became one of the central mechanisms of federal administrative procedure.
• Administrative adjudication allows agencies to resolve certain disputes within their statutory jurisdiction.
• Administrative Law Judges conduct many federal administrative hearings.
• Courts exercise judicial review over agency action within the framework established by the Constitution, statutes, and judicial doctrine.
• The Supreme Court’s 2024 decision in Loper Bright Enterprises v. Raimondo overruled Chevron deference and requires courts to exercise independent judgment when interpreting statutes.
• Administrative law operates at both the federal and state levels.
• The administrative state remains subject to constitutional and statutory limits.
• Administrative law represents an attempt to reconcile modern governmental expertise with accountability under law.

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Frequently Asked Questions

What is an administrative agency?

An administrative agency is a governmental body authorized by law to administer particular statutes or governmental programs.

Depending on its statutory authority, an agency may issue regulations, investigate conduct, enforce legal requirements, conduct hearings, issue licenses, administer benefits, or perform other specialized governmental functions. Cornell Legal Information Institute — Administrative Agency

When did administrative agencies begin in the United States?

There was no single starting date.

The federal government had administrative departments from the beginning of the Republic. The modern regulatory agency, however, developed primarily during the late nineteenth and early twentieth centuries.

The creation of the Interstate Commerce Commission in 1887 is widely regarded as a major milestone in the development of the modern federal regulatory system.

What was the first major federal regulatory agency?

The Interstate Commerce Commission, established by the Interstate Commerce Act of 1887, was the first major federal regulatory commission of the modern type.

It was created to regulate interstate railroad practices and became an important model for later regulatory agencies.

Why did Congress create administrative agencies?

Congress created agencies because modern governmental problems increasingly required specialized expertise and continuous administration.

Congress could establish broad statutory requirements, but agencies could investigate industries, develop technical rules, administer programs, and enforce regulatory requirements on an ongoing basis.

Are administrative agencies part of the executive branch?

Some are.

Executive agencies operate within the executive branch and are generally subject to presidential supervision.

Other agencies are structured as independent agencies or commissions with different statutory relationships to the President.

The constitutional and statutory rules governing presidential control vary according to the agency and the type of official involved.

Can administrative agencies make laws?

Agencies do not possess the same legislative authority as Congress.

They can, however, issue regulations when Congress has delegated authority to them through statute.

Those regulations may have legally binding effects when properly authorized.

Cornell explains that federal rulemaking is the process through which an agency formulates, amends, or repeals a rule and that agencies may issue rules only within authority delegated by statute. Cornell Legal Information Institute — Rulemaking

What is administrative rulemaking?

Administrative rulemaking is the process through which an agency develops regulations.

Under the ordinary federal notice-and-comment process, an agency publishes a proposed rule, receives public comments, considers relevant submissions, and then issues a final rule subject to applicable legal requirements.

What is the Administrative Procedure Act?

The Administrative Procedure Act, enacted in 1946, is the principal federal statute governing many procedures used by federal administrative agencies.

It addresses rulemaking, adjudication, agency procedures, and judicial review.

Cornell describes the APA as the federal statute governing the procedures of administrative law. Cornell Legal Information Institute — Administrative Procedure Act

What is an administrative hearing?

An administrative hearing is a proceeding conducted within an administrative agency to resolve a dispute or determine legal or factual issues within the agency’s jurisdiction.

Administrative hearings can resemble judicial proceedings, including presentation of evidence and legal arguments, but they operate within the administrative system rather than the Article III federal judiciary. Cornell Legal Information Institute — Administrative Hearing

What is an Administrative Law Judge?

An Administrative Law Judge (ALJ) is an administrative adjudicator who presides over certain agency proceedings.

ALJs are not Article III federal judges. They operate within the administrative system and conduct hearings and issue decisions according to the governing statutes and administrative procedures.

Can courts review agency decisions?

Yes.

Judicial review is a fundamental part of administrative law.

Federal courts may review agency action to determine, among other things, whether the agency acted within its statutory authority, followed required procedures, and complied with applicable constitutional and legal requirements.

What happened to Chevron deference?

In Loper Bright Enterprises v. Raimondo in 2024, the Supreme Court overruled the Chevron framework.

Under Chevron, courts generally deferred to reasonable agency interpretations of ambiguous statutes administered by the agency.

After Loper Bright, courts must exercise their own independent judgment when interpreting statutes and may consider agency views as persuasive without automatically deferring to them merely because statutory language is ambiguous.

Did Loper Bright eliminate administrative agencies?

No.

Loper Bright changed an important rule concerning judicial interpretation of statutes. It did not abolish federal administrative agencies.

Agencies continue to administer statutes, issue regulations within delegated authority, enforce laws, conduct investigations, and perform other functions authorized by Congress.

Why is administrative law important?

Administrative agencies affect many areas of modern life because Congress has assigned specialized regulatory and administrative responsibilities to them.

Administrative law provides the legal framework through which those powers are exercised.

It therefore addresses a fundamental question of modern government:

How can specialized administrative power operate effectively while remaining accountable to statutes, the Constitution, and judicial review?

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Conclusion

The birth of administrative agencies was one of the most significant transformations in the history of American law.

The United States began with a relatively limited federal government whose principal constitutional institutions were Congress, the President, and the federal judiciary. The early Republic nevertheless required departments and officers to perform essential governmental functions.

Industrialization changed the problem.

Railroads created interstate economic networks that could not easily be regulated by individual states. Large corporations transformed markets. New technologies created new risks. Financial systems became more complicated. Public health and workplace conditions generated demands for government intervention.

The federal government responded by creating specialized administrative institutions.

The Interstate Commerce Commission became an important early model. The Progressive Era expanded federal regulation. The New Deal dramatically enlarged the administrative state. The Federal Register created a system for public regulatory publication. The Administrative Procedure Act established a general procedural framework.

At the same time, the courts developed constitutional and administrative doctrines governing delegation, due process, agency authority, judicial review, presidential control, and statutory interpretation.

The resulting system was neither purely legislative nor purely executive.

Administrative agencies became institutions operating between legislation and implementation, possessing specialized authority but remaining subject to legal limits.

That development changed the structure of American law.

The legal system was no longer composed only of constitutions, statutes, judicial decisions, and traditional common-law doctrines. It increasingly included administrative regulations, agency decisions, regulatory procedures, and specialized administrative adjudication.

Administrative law emerged to govern this new world.

Its central concern has remained remarkably consistent:

Government may need specialized power to govern a complex society, but specialized power must remain legally accountable.

That tension explains much of administrative law’s history.

The creation of agencies solved one problem—the practical inability of legislatures to administer every technical aspect of modern government. But it created another: how to ensure that agencies remain within the authority granted to them.

The answer has developed through statutes, constitutional principles, administrative procedures, and judicial review.

And the story continues.

The Supreme Court’s 2024 decision in Loper Bright Enterprises v. Raimondo demonstrates that the balance between administrative expertise and judicial authority is still evolving. Agencies remain central to federal governance, but courts have reaffirmed their independent responsibility to interpret statutes.

Administrative law is therefore not merely the law of bureaucracy.

It is the legal framework governing one of the central institutional realities of the modern state.

Its history shows how American law adapted to industrialization, economic complexity, technological change, and expanding governmental responsibilities while continuing to confront the enduring constitutional question of how governmental power should be structured and controlled.

In that sense, the birth of administrative agencies represents another major stage in the history of law:

from the common-law courts, to representative legislatures, to modern administrative government—and ultimately to a legal system in which courts, legislatures, executives, and agencies continuously interact within a constitutional framework.