The reason administrative law is in such a muddle is because the Supreme Court has yet to properly define what is a rule versus what is a law. The text of the Constitution makes the distinction on purpose.
In 2015, Justice Elena Kagan made the observation about the Supreme Court: “We're all textualists now.” Textualism is essentially the theory that constitutional controversies should be resolved by the plain meaning of the words of the document when possible. The attitude of "sticking with the text" is, or should be, generally accepted; it's why attorneys often tell their clients to get things in writing.
One of the first things we are taught about the Constitution is that it does not vest generic, inherent sovereign authority to the federal Congress. Congress is not to wield absolute and undisputed power; the Constitution distributes certain enumerated categories of authority, subject to boundaries and procedural channels, with distinct federal branches (Separation of Powers) and state prerogatives (Federalism). Here are some relevant clauses:
The original and contemporary administrative law problems stem from a foundational category error: treating the government’s sovereign power to legislate over private rights as interchangeable with its proprietary power to administer its own property, money, and contracts.
The Constitution’s text maintains this taxonomy with precision and purpose:
| Category | Textual Anchor | Operative Mechanism | Delegability |
|---|---|---|---|
| Sovereign “Law” | Art. I, § 1; Art. I, § 7; Fifth Amendment | Coercive deprivations of private liberty or property backed by civil fines or criminal sanctions. | Strictly Nondelegable. Requires bicameral passage, presentment, and ex ante fair notice. |
| Proprietary “Rule” | Art. IV, § 3, cl. 2; Art. I, § 8, cl. 1; Art. I, § 9, cl. 7 | Fiduciary management of public land, treasury assets, voluntary loans, and contractual procurement. | Delegable to Hired Managers. Exercises administrative discretion over property based on voluntary consent. |
Under the Fifth Amendment, no person may be subjected to penalties or deprived of property without due process of law. An executive decree or administrative edict is not the “Supreme law of the land.” Laws can only be passed by Congress. Also, Congress must define what act or omission is or is not illegal, that way the judge and juries can determine if a violation may have occurred, and a person may plan their affairs to avoid punishment or sanction.
When an administrative body is given a broad mandate to "fill in the details" respective coercive laws— like when it is permitted to declare what is "unfair" or "dangerous" —then Congress no longer needs to manage its scope of work. By passing vague or ambiguous laws, Congress can claim it is helping the President go after the bad guys. No need to say what is or is not illegal; a majority of people trust the President, so the President gets to determine what is unfair or dangerous. James Madison pointed out this unconsitutional scheme after the passage of the Alien and Sedition Acts.
Conversely, where the government acts as a property owner or market participant, coercion disappears and Congress may broadly delegate. The question is not whether the rule is ambiguous, the question is whether there was a fair claims process, i.e. consent, conscionability, and/or the federal rule or its application is "needful". In his 1791 Opinion on the Constitutionality of a National Bank, Alexander Hamilton cleanly drew this line between federal property management and coercive police powers. He pointed out that Congress could not, under the guise of the power to provide for the general welfare, supervise the enforcement of Philadelphia's local criminal laws. Apparently, that would not be providing for the general welfare, nor would it be related to commerce.
As Hamilton pointed out, the "ends" of the taxing and spending powers "for the common defense and general welfare" are quite broad. Additionally, Congress may make "all needful rules" respecting the management of federal property. Finally, the creation of a national bank (or the building of a university or infrastructure project), operates strictly on voluntary consent. No citizen is compelled to buy national bank stock, travel on a federal road, enroll in the federal university, or agree to a federal contract. Because no private right or privilege of liberty or property is invaded by a sovereign command, Congress may structure proprietary rules with wider operational flexibility.
This same logic can be seen elsewhere inside the four corners. The First Amendment states that “Congress shall make no law... abridging the freedom of speech.” It clearly bars Congress from passing a coercive Law that throws private citizens into prison just for printing a friendly newspaper. Even the Sedition Acts said the writings had to be "dangerous". On the other hand, Congress or its administrative officers can enforce a proprietary Rule conditioning a discretionary contract, grant, or employment agreement with a Congressionally owned corporation. Congress can put strict non-disparagement, confidentiality, and performance terms on its contracts without violating the First Amendment. Further, Congress can "coerce" the states to change their health and safety laws by threatening to withhold federal spending completely, but it can't control the reserved police powers of the states (more clearly established after the 10th amendment).
The modern distortion of administrative power did not begin with the New Deal or the Wilson Administration. Three blatant deviations from the text formed the cracks in the early Republic.
The Constitutional Mechanics: Under Article I, Section 8, Clause 1, the “common Defence and general Welfare” are not regulatory heads; they are substantive ends for which Congress may appropriate money. For example, under Clause 7, Congress is empowered “To establish Post Offices and post Roads.” In 18th-century usage (including Samuel Johnson’s 1755 Dictionary), “to establish” meant to physically construct, erect, and settle firmly. Further, Article I Sec. 8 provides that Congress may only exercise exclusive legislation over needful buildings inside states with consent of the state legislature. By implication, Congress may exercise some legislative powers inside states, like enabling infrastructure development projects, without their consent. Nevertheless James Madison took the position that Congress did not have the authority to fund the construction of new roads.
Building a road, clearing a canal, or dredging a harbor is a direct execution of the spending power. It takes zero criminal law jurisdiction from the states. The infrastructure project does not supersede State laws or redefine trespass, murder, or negligence. Those laws applied on the road the same as they apply inside a federal building inside states, unless the state gives consent to the federal government to exercise "exclusive legislation". In any case, the state law is not usurped. The road is simply public infrastructure built with appropriated federal funds.
The Subversion: In Federalist Nos. 41 and 42, Madison vigorously defended national authority over transit corridors, citing the petty tolls and fragmented river fees of Switzerland and the German Empire as the precise evils the new Constitution was drafted to prevent. Patrick Henry and George Mason warned Madison directly at the Virginia Ratifying Conventions that federal spending and corporate creations would inevitably outgrow state control. Madison dismissed their warnings as alarmist, refused to draft substantive spending limits into the Bill of Rights in 1789, and then saw Capitol Hill and the White House burned and sacked in the War of 1812, because the federal government didn't invest in the transportation and infrastructure necessary and proper to national defense.
Yet, on March 3, 1817, on his final day in office, Madison vetoed the Bonus Bill. The bill took $1.5 million in profit from the Second Bank of the United States and dedicated it to fund interstate roads and canals, with state consent. Madison vetoed it and said Congress could only designate already existing roads, could not fund the building of new canals. He said that kind of spending wasn't general. This was not good-faith textualism. It was Madison realizing what George Mason and Patrick Henry warned him of. The Federal control over commerce and spending would enable a national majority to control Virginia and the domestic slave trade.
In Wayman v. Southard, 23 U.S. (10 Wheat.) 1 (1825), Chief Justice John Marshall confronted the nature of the judicial power, whether it could create rules of federal court procedure. Rather than relying on the text, C.J. Marshall says:
“The line has not been exactly drawn which separates those important subjects, which must be entirely regulated by the legislature itself, from those of less interest, in which a general provision may be made, and power given to those who are to act under such general provisions to fill up the details.” — 23 U.S. at 43
C.J Marshall essentially asserts that the legislature may pass vague or ambiguous laws, and in so doing plants the seed of confusion among coercive lawmaking powers, rules respecting the legislative, executive, and judicial processes, and federal property management. This dicta is still used today; Congress may pass laws that fail to provide citizens with notice as to what act is or is not illegal.
In Sere v. Pitot, 10 U.S. (6 Cranch) 332 (1810), Marshall discussed the scope of congressional power over territories under Article IV, Section 3, Clause 2. He declared:
“The power of governing and of legislating for a territory is the inevitable consequence of the right to acquire and to hold property... [T]he Constitution declares that ‘Congress shall have power to dispose of and make all needful rules and regulations respecting the territory or other property belonging to the United States.’ Accordingly, we find congress possessing and exercising the absolute and undisputed power of governing and legislating for the territory of Orleans.” — 10 U.S. at 336–337
The Omission of “Needful”: Marshall discussed this power as an unconditional mandate to govern populations without constitutional restraint, systematically ignoring the limiting textual qualifier: “needful.”
Article IV grants authority to make “needful Rules”—a standard of prudence, with a mind towards justice and equity, not an absolute commission to rule over human beings unconstrained by any kind of reasonableness standard. The Constitution and our legal tradition did not and should not have contemplated absolute or undisputed power.
By untethering Article IV from any reasonable or needful bounds, Marshall laid the groundwork for the Insular Cases (such as Downes v. Bidwell in 1901), creating an invented doctrine where American subjects could be ruled by federal decree without respect to any unalienable rights. Today, at least two Justices from opposing sides of the ideological spectrum —Justice Neil Gorsuch in United States v. Vaello Madero (2022) and Justice Sonia Sotomayor in FOMB v. Aurelius Investment (2020)—stand united on one point: the Insular Cases have no foundation or place in our law.
Once these three errors became rooted in the Supreme Court lexicon, the justifications for their continued existence became less and less tenable over time.
In Industrial Union Dept., AFL-CIO v. American Petroleum Institute (The Benzene Case), 448 U.S. 607 (1980), Justice William Rehnquist penned a concurrence attempting to resurrect the nondelegation doctrine against OSHA’s toxic substance standards and independent agencies. Rehnquist correctly diagnosed that Congress had intentionally punted the fundamental policy choice to an administrative agency.
However, Rehnquist committed an equal and opposite error: he rationalized that OSHA rulemaking could be legitimate under the executive branch by suggesting that executive agency lawmaking is justified by the electoral accountability of the President. The President, Justice Rehnquist assured, ought not to be "hermetically sealed" from the lawmaking process. This fundamentally misreads the Constitution. Article I, Section 7 mandates Presentment of all bills, otherwise they shall not be law. The President can assist with drafting, but he or she is not a super member of the Legislature. After concurrence of the members of the House and Senate, the President must be presented with the Bill, which he or she can approve or veto. The Commander-in-Chief or the executive branch is not to define what is or is not illegal. That violates the text's requirement that liberty not be deprived without Due Process of law.
An example of a delegation of legislative authority is Section 5 of the Federal Trade Commission Act (15 U.S.C. § 45), which prohibits, or outlaws, “unfair methods of competition” and other “unfair or deceptive acts or practices.”
Congress provided no statutory definition or guidelines as to what constitutes an unfair or deceptive act or practice. It essentially handed a five-member commission the power to investigate any commerce in all of the United States. Consider the recent “Click-to-Cancel” rule: while easy cancellation of subscriptions is a policy outcome myself and millions of others surely welcomed and enjoy, the mechanism by which it was created simply violates the requirement there be a due process of law first. The House and Senate must agree on what act or omission warrants punishment. Yet nevertheless as of July 2026, the FTC is permitted to define the very prohibition itself, as an administrative “rule,” and immediately subject millions to investigations and civil penalties for acts that are not described as illegal in the US code.
The Administrative Procedure Act (APA) actually cements this distortion by explicitly defining a “rule” as an agency statement designed to “prescribe law” (5 U.S.C. § 551(4)). Here is a law blessing the usurpation of Article I and the Fifth Amendment's due process clause: unelected administrators are permitted to author coercive commercial “laws” while Congress divests its requirement to establish what is or is not illegal and present such bill to the President.
On June 29, 2026, the Supreme Court handed down two companion decisions in this continuing war in administrative law: Trump v. Slaughter and Trump v. Cook. Read together through our structural lens, these cases expose both the collapse of the 20th-century administrative state and the exact location of the constitutional boundary.
In Trump v. Slaughter, the Court formally overruled Humphrey’s Executor v. United States (1935). Writing for the majority, Chief Justice Roberts recognized that the FTC exercises quintessentially executive power: it investigates businesses, promulgates binding rules backed by the force of law, conducts in-house adjudications, and files civil enforcement actions in federal court seeking billions of dollars in penalties.
The Court held that Congress cannot insulate officers wielding this coercive sovereign power behind for-cause removal restrictions. Under Article II, “the buck stops” with the President, who must possess at-will removal authority over all subordinates exercising executive power. Justice Gorsuch, concurring, highlighted the critical nondelegation dilemma:
Slaughter correctly recognized that when an agency exercises coercive sovereign law enforcement against private citizens, it exercises Article II executive power and must be accountable to the courts. But it leaves the nondelegation trap open: giving the President direct control over what is or is not illegal creates the very concentration of powers the Framers tried to prevent from accumulating.
On the very same day, in Trump v. Cook, the Court denied a stay of an injunction preventing President Trump from firing Lisa Cook, a member of the Board of Governors of the Federal Reserve. While the Court rested its narrow holding on the failure to provide Cook statutory pretermination notice and hearing, Chief Justice Roberts squarely addressed the constitutional question: The Federal Reserve’s for-cause tenure protections are constitutional.
Why? Because, as the Court observed, the central bank follows in the distinct historical tradition of the First and Second Banks of the United States—institutions intentionally placed outside direct presidential control to protect monetary stability from political manipulation.
Justice Thomas dissented, pointing out the apparent contradiction: the Federal Reserve Board is an administrative agency created by statute, and if the President has illimitable removal power over all executive officers under Slaughter, he must have it over Federal Reserve Governors as well.
The Resolution Justice Thomas Missed: The majority arrived at the right result, but failed to articulate the true constitutional mechanism. The Federal Reserve does not escape Slaughter because of an ad hoc “historical carveout” for monetary policy. It escapes Slaughter because the Federal Reserve is a proprietary asset manager, not a coercive de facto legislature.
Under Article I, Section 8, Clause 2 (Borrowing), Clause 6 (“Securities”), and Article IV, Section 3, Clause 2 (Property), the Federal Reserve manages public credit, purchases government bonds, adjusts discount rates, and superintends banking liquidity. It manages federal property and credit. It does not enact penal codes governing private morality or haul citizens into court for the supposed crime of “unfairness.” Because its core function is the proprietary administration of assets under Article IV, Congress may by law establish independent managers, prescribe “needful rules,” and limit presidential removal and accord perfectly with Article II.
Resolving Professor Mashaw’s “unresolvable muddle” does not require dismantling modern government. It requires enforcing the distinct operational channels the Framers provided.
The path forward is simple, rigorous, and sticks to the text. Congress must shoulder the burden of making the Laws. It can spend flexibly, but it cannot exercise coercive police powers enacted by administrative decree. Only by restoring the boundary between the Rules and Laws can the American constitution be administered correctly, at last.