The Permission Society. Timothy Sandefur
the law did not specify the standards for when or why they should do so, a bank could not know whether it would qualify for a waiver or not. When one bank challenged the law, the Third Circuit Court of Appeals was reluctant to admit that the law provided no standards at all, so it turned to a report drafted years before for members of the legislature when they originally voted on the law. That report told lawmakers that the law would “permit the Commissioner to override the statutory prohibitions against [branches in towns with populations below 10,000] if he decides that the establishment of such banks is in the public interest.”5 Seizing on this extraordinarily broad language – which was not actually in the law itself but appeared in a report written by an unknown, unelected legislative staff member – the court announced that it had found a rule for officials to follow: they could grant a waiver if it was “in the public interest.” What does “public interest” mean? Whatever the officials said it meant. This is about as unclear as a law can get, but the court claimed it was not too vague, because after all, “a more precise formula cannot be devised without hurtful inflexibility.”6
Enforcement by Unelected Bureaucrats
Any law that requires citizens to get a permit before they can do something, and then provides only mushy and obscure criteria for getting a permit, gives officials power to enforce their will arbitrarily and unpredictably. After all, nearly anything can be plausibly described as “in the public interest.” That is why philosopher Hannah Arendt wrote that bureaucracy substitutes the “rule of cleverness” for the rule of law.7
Yet judges are usually reluctant to interfere with bureaucratic agencies. Agencies are staffed by experts in environmental science, or whatever the bureaucracy regulates, and therefore presumably know best. Judges have adopted a theory of deference, which allows bureaucrats to stretch their authority as broadly as they want so long as their acts are “reasonable,”8 an expansive grant of power that deprives citizens of the judicial protection promised by the Constitution, emboldens agencies to stretch their prerogative to the limit, and encourages lawmakers to write ever more vague laws to evade their responsibilities to the voters.
The result is something like this: A politician runs for office on a platform promising, say, to stop pollution. Once in office, he writes a bill that forbids anyone from emitting pollutants without a permit – and also establishes a new bureaucratic agency charged with determining what qualifies as a “pollutant” and how one goes about getting a permit. Once the bill is passed, the politician can tell his constituents that he has taken bold action to solve the problem and move on to the next issue. While voters are applauding his achievement, the new agency begins writing regulations, often with little public attention. These regulations are intricately complex, are backed up by severe penalties, and sometimes have nasty unintended consequences. The unelected officials employed by the agency have every incentive to interpret their mandate as broadly as possible because, after all, they act “in the public interest.” Within a few years, the agency has implemented thousands of petty and complicated rules, which are in effect a code of laws that no elected official ever approved and which neither they nor the voters can realistically control. If the agency ever takes a step that causes a controversy in the media – for instance, declaring a July 4 fireworks display to be illegal “pollution”9 – the politician who wrote the law can shake his head, claim that was not his intention, and chide bureaucrats for going too far – again winning the applause of voters. But since nothing short of a new law is likely to rein the bureaucracy in, he can probably do nothing meaningful about it, even if he wants to.
Agencies combine legislative, judicial, and executive powers. They write regulations, prosecute alleged infractions, and punish those they find guilty. This is particularly disturbing because although people can sometimes go to court to challenge an agency decision, judges are generally not allowed to consider evidence that was not first presented to the agency at one of its own hearings. Yet the legal rules of evidence typically do not apply to those agency hearings, which means that agencies can base their decisions on types of evidence that courts are not usually allowed to consider – hearsay, for example. Later, when the agency’s decision based on hearsay is appealed to an actual court, the judge is typically forced to rely exclusively on the evidence the agency used, including hearsay or other evidence courts normally cannot use. In some cases, courts are not allowed to review agency decisions at all.
The agencies that oversee permit requirements form a branch of government not contemplated by the Constitution, run by officials who do not answer to voters. The result is a powerful, invisible branch of government that the people cannot control. After the 2013 rollout of healthcare.gov became a fiasco, many critics demanded that Secretary of Health and Human Services Kathleen Sebelius resign. She refused, saying, “The majority of people calling for me to resign are people who I don’t work for.”10 That was true: as the head of an enforcement agency, she worked for the President, not voters. Americans spend much time and energy arguing over who should be elected to Congress or sent to the White House, but most of the laws that govern citizens’ lives are written not by elected officials but by bureaucrats whose decisions are shielded against the democratic process.
A fourth problem with permit systems is that whenever officials have the power to make decisions from which citizens will profit, those officials are in a position to demand something in return. At times this can take the form of outright corruption. More often, people seeking permits are forced to provide concessions to the government to serve some general social need. Property owners seeking to develop their land are often subjected to “exactions” that force them to give up property or cash to the government in exchange for development permits – or to surrender some of their property in exchange for permission to sell the rest. As we will see in chapter 6, one California city even forced a couple to give up their right to vote on certain property taxes in exchange for a permit to renovate their home.
Still another problem with permit requirements is that any violation of the requirement is itself against the law, even if the requirement is illegal. This two-layer effect often blocks people from challenging these laws in court. In 1963, city officials in Birmingham, Alabama, persuaded a state judge to order Martin Luther King Jr. and his supporters not to march in protest against segregation. City ordinances required protesters to obtain a permit, and King and his allies had not been issued one. King chose to ignore the court order and march anyway. He and over 1,000 protesters were arrested and sent to jail, where he wrote his famous “Letter from Birmingham Jail” on paper smuggled in by friends. His attorneys appealed, arguing that the permit requirement and the court order violated the First Amendment, but even sympathetic justices of the U.S. Supreme Court were unconvinced. Had King patiently appealed the order, they wrote, they might have ruled in his favor – in fact, the court later did declare the Birmingham permit requirement unconstitutional.11 But King’s outright defiance could not be tolerated, the court said, “however righteous his motives.” People may not “ignore all the procedures of the law and carry their battle to the streets,” because “respect for judicial process is a small price to pay for the civilizing hand of law, which alone can give abiding meaning to constitutional freedom.”12 That is true, but as King explained, such litigation can often take years and can become a “pseudo-legal way of breaking the back of legitimate moral protest.”13
Faced with endless permitting delays and burdensome demands from bureaucrats, property owners often find themselves in a similar position. A person who is told that he may only have a building permit on certain conditions, and believes those conditions are illegal, may not simply ignore them and build anyway. Laws in California and some other states bar him from accepting the permit under protest, starting construction, and later asking a court to rule on the question. Instead, he must postpone work, file a lawsuit, and wait – often for years, sometimes for decades – for courts to rule. However “civilizing” this might be, it is also a “pseudo-legal way of breaking the back” of property owners, with the effect of insulating permit requirements from judicial review. Few citizens can afford such tedious, expensive delays, and those who lose patience and violate the law can then find it impossible to challenge the validity of that law.
But the most troubling aspect of the permit system