Seventh Amendment Implications of Providing for the Administrative Adjudication of Claims Under Title VIII of the Civil Rights Act of 1968
Congress may, consistent with the Seventh Am endment and Article III of the Constitution, assign adjudication o f certain violations of the Fair Housing Act to an administrative agency w ithout a right to a ju ry trial.
Congress m ay do so even though the statute alternatively permits such claims to be brought in federal court, w here the Seventh Am endment would guarantee the right to a jury trial.
Such a statutory schem e, under which a defendant’s right to a jury trial is in large part contingent on procedural choices o f other parties to the proceedings, does not violate the Due Process Clause.
February 8, 1985
M em orandum O p in io n f o r t h e A s s is t a n t A ttorney G eneral, C iv il R ig h t s D iv is io n
In response to your request we have reviewed the question whether Con gress, without offending the jury trial requirement of the Seventh Amendment, may provide for an administrative adjudication and award of damages to an individual to remedy violations o f Title VIII of the Civil Rights Act of 1968,42 U.S.C. §§ 3601-3619 (Fair Housing Act). Although we find the issue ex tremely difficult, we are inclined to believe that Congress may, consistent with the Constitution, assign adjudication of fair housing violations to an adminis trative agency absent a jury trial, even though Congress has provided that the same violations may alternatively be remedied by civil actions in which a jury trial is constitutionally required. See Curtis v. Loether, 415 U.S. 189 (1974). We are troubled, however, by a congressional enforcement scheme that enables an aggrieved person to obtain substantially similar relief in administrative or court proceedings, yet conditions the jury trial right of the defendant on the forum choice of other parties to the proceeding. Accordingly, we set forth our reasoning in detail below.
I. Background
S. 1220, the Mathias-Kennedy bill to amend Title VIII of the Civil Rights Act of 1968, contains a complex enforcement scheme with two primary en 32 forcement options: administrative proceedings and private civil actions. Sec tion 810(a)(1) provides in part that the Secretary of Housing and Urban Devel opment (Secretary) shall make an investigation “whenever an aggrieved per son, or the Secretary on the Secretary’s own initiative, files a charge alleging a discriminatory housing practice.” If, after such an investigation, the Secretary determines that reasonable cause exists to believe the charge is true, the Secretary shall, on behalf of the aggrieved person filing the charge, either file an administrative complaint under § 811 or refer the matter to the Attorney General for the filing of an appropriate civil action under § 813(b). See § 810(c)(1).1 Section 811(a) provides for an administrative hearing on the record, which may result in an administrative order “providing for such relief as may be appropriate (including compensation for all damages suffered by the aggrieved person as a result of the discriminatory housing practice), and . . . a civil penalty of not to exceed $10,000.” The order of the administrative law judge is subject to review on appeal by an appeals panel of the Fair Housing Review Commission. See §§ 808(c), 811(a). A final order may be appealed within sixty days to the appropriate court of appeals. See § 811(b). Judicial review is conducted pursuant to the general provisions governing the review of orders of certain federal agencies. See 28 U.S.C. §§ 2341-2351. Findings of fact are conclusive if supported by substantial evidence in the record as a whole. The Attorney General is authorized to bring a civil action in district court to enforce any final order that is referred for enforcement by the Secretary, or to collect any civil penalty assessed by the administrative law judge under § 811(d)(1) for violation of a final order. See § 813(b). Alternatively, § 812(a)(1) authorizes a private aggrieved individual to com mence a civil action in an appropriate federal or state court. In such actions, the court shall award such relief as may be appropriate, including “money damages, equitable and declaratory relief, and punitive damages.” § 812(c). This relief is similarly authorized for civil actions brought by the Attorney General under § 813. If the Secretary has commenced an administrative hearing with respect to a charge made by an individual to the Secretary, that individual may not com mence a private civil action. See § 812(a)(3). In parallel fashion, if an ag grieved individual has commenced a trial on the merits in a civil action, the Secretary may not commence administrative “proceedings toward the issuance of a remedial order based on such charge.” § 812(a)(2).2 This scheme of mutually exclusive administrative and judicial enforcement options has an anomalous effect on a party’s right to a jury trial. On the one
1 The Secretary m ust refer to Che A ttorney G eneral any “charges involving the legality o r validity o f any State o r local zoning, o r other land use law o r ordinance, or any novel issue of law or fact or other com plicating factor." § 810(c)(2). 2 The Secretary may also investigate housing practices sua sponte to determ ine w hether charges should be brought. See § 810(a)(1). The bill does not specify the forum in which such charges w ould be brought. W e assume that it was intended that such charges m ight proceed adm inistratively, although § 810(c)(1)(A ) suggests that the adm inistrative forum is limited solely to charges filed on b ehalf o f aggrieved persons w ho previously have filed charges with the Secretary.
33 hand, no jury trial is available in the administrative proceedings. On the other hand, the Supreme Court has held that the Seventh Amendment entitles either party to demand a jury trial in an action for damages in the federal courts under current § 812 of the Civil Rights Act of 1968, which, similar to proposed § 812(a)(1), authorizes private plaintiffs to bring civil actions to redress viola tions of the fair housing provisions of the Act. See Curtis v. Loether, 415 U.S. 189 (1974). Consequently, although a defendant would be entitled to a jury if a plaintiff proceeds in federal court, the same defendant would have no right to a jury trial if an aggrieved person flies a complaint with the Secretary and the Secretary subsequently files an administrative complaint.3 In order to resolve the constitutionality of this multiple enforcement scheme, we must address the following questions: 1. Can Congress constitutionally vest adjudication of housing discrimination claims in an administrative tribunal, in which there would be no right to a jury trial? 2. Given that a defendant would constitutionally be entitled to a jury trial in a damages action brought in federal court under the Fair Housing Act, can Congress simultaneously provide for an essentially similar action before an administrative tribunal, in which there would be no right to a jury trial, without violating the defendant’s Seventh Amendment right? 3. Assuming that there are no Seventh Amendment concerns, does the statutory scheme nevertheless deny the defendant due process insofar as the defendant landlord’s jury trial right is in large part contingent on the procedural choices of other parties?
II. Analysis
1. Can Congress constitutionally vest adjudication o f housing discrimina tion claims in an administrative tribunal, in which there would be no right to a jury trial? Before determining whether administrative adjudication of Fair Housing Act violations would offend an individual’s Seventh Amendment right, a threshold question is whether administrative adjudication of the rights created by the Fair Housing Act comports with Article III of the Constitution. If Congress cannot constitutionally vest adjudication of certain housing discrimi nation claims in a non-Article III tribunal, then we need not reach the narrower Seventh Amendment issue. Article III of the Constitution provides in part: “The judicial Power of the United States, shall be vested in one supreme Court, and in such inferior Courts as the Congress may from time to time ordain and establish.” U.S. Const, art. 3 The reasoning o f C urtis v. Loether m ight also apply if the Secretary refers the m atter to the A ttorney G eneral and the A ttorney G eneral brings a c iv il action in federal court under § 813. A ccordingly, a defendant's rig h t to a ju ry trial m ight also be affected by th e S ecretary's determ ination either to proceed adm inistratively o r to refer the m atter to the A ttorney General fo r judicial proceedings. Because the Suprem e Court has never determ ined w hether the Seventh Amendment is applicable to governm ent-initiated litigation, how ever, we decline to reach this issue. See Atlas Roofing Co. v. O ccupational Safety a nd H ealth R eview C om m ’n , 430 U .S. 442, 4 4 9 -5 0 n.6 (1977).
34 Ill, § 1. Moreover, “Judges, both of the supreme and inferior Courts,” enjoy tenure “during good Behavior,” and receive salaries not subject to diminution during their term of office. Id. There is no question that S. 1220 does not extend the Article III protections of life tenure and undiminished salary to the admin istrative law judges who would hear complaints filed by the Secretary under § 811. We therefore first examine whether Congress may commit adjudication of housing discrimination complaints brought by the Secretary on behalf of an individual, who may obtain relief in the form of compensatory damages, to officers not enjoying life tenure and irreducible compensation. In creating statutory rights, Congress has considerable discretion to define in what manner and forum such rights may be vindicated. See Crowell v. Benson, 285 U.S. 22, 50-51 (1932); Murray’s Lessee v. Hoboken Land & Improvement Co., 59 U.S. (18 How.) 272, 284 (1856). Unfortunately, Supreme Court deci sions defining the scope of Congress’ discretion to vest federal judicial power in non-Article III tribunals involve one of the most confusing and controversial areas of constitutional law, Glidden Co. v. Zdanok, 370 U.S. 530, 534 (1962) (plurality opinion), and “do not admit of easy synthesis,” Northern Pipeline Co. v. Marathon Pipe Line Co., 458 U.S. 50, 91 (1982) (Rehnquist, J., concur ring in judgment). In particular, the Court’s latest Article III pronouncement in Northern Pipe line, which concluded that the broad grant of jurisdiction to non-Article III bankruptcy courts was incompatible with the Constitution, failed to establish a unitary or comprehensive Article III jurisprudence. Northern Pipeline raised the question whether a non-Article III bankruptcy court could adjudicate a common law contract claim, brought by a company undergoing Chapter 11 reorganization against its purported debtor. Six Justices agreed that Article III prohibits a non-Article III federal tribunal from adjudicating state common law claims over the objection of a party. Id. at 87 (plurality opinion); id. at 91 (Rehnquist, J., concurring in judgment). Because only four members of the Court joined in the plurality’s elaboration of Article III principles, we must explore the current problem not only in light of the plurality opinion but also with regard to the views of the concurring Justices. The plurality opinion in Northern Pipeline examined two theories pursuant to which Congress may vest judicial power in non-Article III tribunals: the “legislative court” exception and the Article III court “adjunct” theory. Ac cording to the plurality, Congress may vest judicial power in legislative courts in “three narrow situations,” all of which involve exceptional grants of power to the Executive and Legislative Branches. Id. at 64. These legislative court exceptions include “territorial courts,” see American Ins. Co. v. Canter, 26 U.S. (1 Pet.) 511, 546 (1828), “courts-martial,” see Dynes v. Hoover, 61 U.S. (20 How.) 65, 79 (1857), and cases involving “public rights,” see Murray’s Lessee, 59 U.S. (18 How.) at 284. The plurality’s “adjunct” theory was based on the recognition that Article III “does not require ‘all determinations of fact [to] be made by judges;’ with respect to congressionally created rights, some factual determinations may be made by a specialized fact-finding tribunal 35 designed by Congress, without constitutional bar.” Northern Pipeline, 458 U.S. at 81 (quoting Crowell v. Benson, 285 U.S. at 51) (citation omitted). But the functions of the adjunct must be limited so that “the essential attributes” of judicial power are retained in an Article III court. Id. The adjudicatory scheme for housing discrimination claims created by S. 1220 clearly does not fall within the legislative court exception for territorial courts or courts-martial. A persuasive argument can be made, however, that S. 1220 creates a “public right” in establishing a duty not to discriminate in the provision of housing. The “public rights” doctrine was initially articulated in M urray’s Lessee: [W]e do not consider congress can either withdraw from judicial cognizance any matter which, from its nature, is the subject of a suit at the common law, or in equity, or admiralty; nor, on the other hand, can it bring under the judicial power a matter which, from its nature, is not a subject for judicial determination. At the same time there are matters, involving public rights, which may be presented in such form that the judicial power is capable of acting on them, and which are susceptible of judicial determina tion, but which Congress may or may not bring within the cogni zance of the courts of the United States, as it may deem proper. 59 U.S. (18 How.) at 284. That is, because Congress may constitutionally commit to nonjudicial executive determination matters that arise between the government and its citizens “in connection with the performance of the consti tutional functions of the executive or legislative departments,” Crowell v. Benson, 285 U.S. at 50, Congress is equally free to commit the determination of such matters to legislative courts or administrative agencies. Matters that fall within the public rights doctrine may involve the entire range of Congress’ Article I powers: “Familiar illustrations of administrative agencies created for the determination of such matters are found in connection with the exercise of the congressional power as to interstate and foreign commerce, taxation, immi gration, the public lands, public health, the facilities of the post office, pensions and payments to veterans.” Id. at 51; see also Atlas Roofing Co. v. Occupa tional Safety & Health Review Comm’n, 430 U.S. 442,456-57 (1977); Oceanic Steam Navigation Co. v. Stranahan, 214 U.S. 320, 339 (1909).4 The difficulty, as the Supreme Court has conceded, is that “the distinction between public rights and private rights has not been definitively explained in [the Court’s] precedents.” Northern Pipeline, 458 U.S. at 69 (plurality opin ion). A threshold definition of public rights is that they arise “between the government and others.” Ex parte Bakelite Corp., 279 U.S. 438,451 (1929). Private rights, in contrast, involve “the liability of one individual to another under the
4 The C o u rt has refused to lim it Congress' discretion to create public rights and to establish legislative tribun als in w hich to adjudicate them to p articu lar A rticle 1 g ran ts o f pow er that might be deem ed “inherently in the e x clu siv e dom ain o f the Federal G overnm ent and critical to its very existence — the pow er over im m igration, the im portation o f goods, and taxation.*’ A tla s Roofing Co., 430 U.S. at 456.
36 law as defined.” Crowell v. Benson, 285 U.S. at 51. Moreover, “the presence of the United States as a proper party to the proceeding is a necessary but not sufficient means of distinguishing ‘private rights’ from ‘public rights.’” North ern Pipeline, 458 U.S. at 69 n.23 (plurality opinion). In the administrative scheme established by S. 1220, the Secretary files a complaint “on behalf of the aggrieved person.” § 810(c)(1)(A). The aggrieved person has the right to intervene in the proceedings. § 811(a). Although the administrative official has discretion to provide compensatory damages relief for the aggrieved person, the bill does not authorize the administrative award of punitive damages (which are available in individual court actions brought under § 812). Further, a civil penalty not to exceed $10,000 is available to the government. In these latter two respects — the exclusion, in the administrative proceeding, of punitive damages for the individual and the availability of a civil penalty for the government — S. 1220 differs from an earlier housing discrimination bill that this Office concluded was constitutionally vulnerable. See “Fair Housing — Civil Rights Act,” 2 Op. O.L.C. 16 (1978). The earlier bill authorized administrative officials to award punitive damages to individu als and did not provide for a civil penalty for the government. We believe it is a close question whether the government has simply stepped into the individual’s shoes in this administrative proceeding, and is suing in a representative capacity, or whether S. 1220 in fact creates a public right that, consistent with Article III, may be adjudicated in an administrative tribunal. Cf. EEOC v. Corry Jamestown Corp., 719 F.2d 1219, 1225 (3d Cir. 1983) (EEOC has right to jury trial in court action under Age Discrimination in Employment Act in order to avoid “inequitable and anomalous result” of individual losing his Seventh Amendment right whenever EEOC sues on his behalf). This determination is complicated because S. 1220 concurrently provides for an essentially similar individual damages action in court, an action that resembles the current damages action under the Fair Housing Act. The Supreme Court has declared that existing actions under § 812 are actions “to enforce ‘legal rights’ within the meaning of our Seventh Amendment decisions,” Curtis v. Loether, 415 U.S. at 195, and are “analogous to a number of tort actions recognized at common law,” id. Significantly, there are only minimal differences between the relief available in the administrative forum (in which a civil penalty for the government replaces punitive damages for the individual) and the judicial forum. Nonetheless, there are clearly precedents for administrative bodies both enforcing public policy and providing incidental relief, including monetary relief, to private citizens. As courts have recently noted in the context of administratively determined reparations awards under the Commodity Ex change Act, the fact that new statutory rights are enforceable in favor of a private party does not preclude administrative adjudication of such rights. Myron v. Hauser, 673 F.2d 994,1005 (8th Cir. 1982) (citing Atlas Roofing Co., 430 U.S. at 452-55); Rosenthal & Co. v. Bagley, 581 F. 2d 1258,1261 (7th Cir. 1978) (same). In NLRB v. Jones & Laughlin Steel Corp., 301 U.S. 1 (1937), for 37 example, the Court upheld an administrative award of both reinstatement and back pay for an employee. Somewhat similarly, in Block v. Hirsh, 256 U.S. 135 (1921), the Court rejected a constitutional challenge to a statute that temporarily suspended the legal remedy of ejectment and established an ad ministrative tribunal to determine fair rents while tenants held over notwith standing the expiration of their leases. Just as the Northern Pipeline plurality distinguished between the restructuring of debtor-creditor relations, which “may well be a ‘public right,’” 458 U.S. at 71, and the adjudication of state- created private rights, a distinction exists between the government-prosecuted administrative proceeding in S. 1220 and the individual damages action in federal court. Unquestionably, the determination that S. 1220 creates a public right would be considerably simplified if no compensatory relief were available to the individual in the administrative proceeding. We believe, however, that the courts would conclude that insofar as S. 1220 creates a right (1) in an area of important public concern, cf. Bob Jones Univ. v. United States, 461 U.S. 574, 594-96 (1983) (identifying a firm national policy against racial discrimina tion), (2) that is enforceable by the government in an administrative action, (3) provides a civil penalty for the government, and (4) does not to provide the aggrieved individual the punitive damages typically available at common law, see Richerson v. Jones, 551 F.2d 918, 926-28 (3d Cir. 1977), it probably is to be characterized as a. public right. This determination is consistent with case law that has rejected Article III and Seventh Amendment challenges to the reparations procedure of the Com modity Exchange Act (CEA), 7 U.S.C. § 18 (1976), under which an individual may obtain a monetary award from an administrative tribunal. The 1974 amendments to the CEA established a reparations procedure, “analogous to the operation of a small claims court,” S. Rep. No. 850, 95th Cong., 2d Sess. 16 (1978), in which a customer, often representing himself pro se, could obtain damages from registered commodities brokers and certain other professionals for violations of the CEA or any Commodity Futures Trading Commission (CFTC) regulations, rules, or orders. Myron v. Hauser, 673 F.2d at 1001; Rosenthal & Co. v. Bagley, 581 F.2d at 1259. Under the 1974 amendments, an individual could file a complaint with the CFTC, which was authorized to investigate the complaint. 7 U.S.C. § 18(a), (b) (1976). If the CFTC determined that the “facts warranted such action,” the CFTC notified the accused commod ity professional and afforded a hearing before an administrative official. Id. § 18(b).5 Thus, although the CFTC provided a forum for resolution of these
s T he 1983 am endm ents sim plified the statutory procedural requirem ents, but did not alter the adm inistra tive schem e in any significant manner. The C E A now provides that any person com plaining o f a violation of the C EA by any registered person may “ap p ly to the C om m ission for an order aw arding actual damages proxim ately caused by such violation.” 7 U .S.C. § 18(a). T he 1983 am endm ents elim inated the specific provisions em pow ering the C FTC to investigate any com plaint, and requiring the CFTC to forward the com plaint, if w arranted, to the respondent fo r an answ er. The C FTC now has general discretion to “prom ul gate such ru les, regulations, and orders as it deem s necessary o r appropriate for the efficient and expeditious adm inistration o f this section.” Id. § 18(b).
38 claims, it did not directly assume a prosecutorial role. Rather, complainants could retain private counsel or represent themselves before the administrative law judge. Myron v. Hauser, 673 F.2d at 1001. The Bagley court summarily dismissed an Article III objection to this con- gressionally-mandated scheme for administrative adjudication of reparations claims as “not even arguable.” 581 F.2d at 1261. The court in Myron v. Hauser, however, explained why it did not think that purely private rights were in volved in the administrative proceedings. Although conceding that “the present case is not one ‘in which the Government sues in its sovereign capacity to enforce public rights,’” the court nevertheless believed that the case was “one in which ‘the Government [was] involved in its sovereign capacity under an otherwise valid statute creating enforceable public rights.’” 673 F.2d at 1005 (emphasis added; citations omitted). Because Congress, acting under the Com merce Clause, had regulated commodity options transactions, the court re garded the case “in a functional sense [as] one between the government and the commodity options broker, the party subject to government regulation.” Id. Under S. 1220, Congress would not simply be regulating the nondiscrimina- tory provision of housing; the government would also be prosecuting alleged violations of the Fair Housing Act in administrative proceedings. If the Myron court concluded that the CEA created a public right that could be adjudicated in an administrative tribunal, even though the statute was enforceable by, and in favor of, private parties, then it certainly would conclude that S. 1220, which is enforceable by the government, creates a public right, the benefits of which also redound in part to aggrieved individuals. Alternatively, the use of administrative tribunals to adjudicate the right to nondiscriminatory housing created by S. 1220 might be validated by the “ad junct” theory articulated by the plurality in Northern Pipeline. The plurality regarded Crowell v. Benson and United States v. Raddatz, 447 U.S. 667 (1980), as establishing two principles that define the extent to which Congress may constitutionally vest judicial functions in non-Article III adjuncts. First, “when Congress creates a substantive federal right, it possesses substantial discretion to prescribe the manner in which that right may be adjudicated including the assignment to an adjunct of some functions historically performed by judges.” Northern Pipeline, 458 U.S. at 80 (plurality opinion). Second, “the functions of the adjunct must be limited in such a way that ‘the essential attributes’ of judicial power are retained in the Art. Ill court.” Id. at 81. In Crowell, the Supreme Court upheld an administrative agency’s power to make factual determinations concerning the nature and extent of employee injuries, pursuant to a federal statute requiring employers to compensate their employees for work-related injuries occurring upon the navigable waters of the United States. In Raddatz, the Court upheld the Federal Magistrates Act, which permits magistrates to adjudicate, subject to de novo review by the district court, certain pretrial motions involving constitutional claims. Because Crowell, like S. 1220, involved congressionally created rights (in contrast to common law or constitutional claims), with respect to which Congress possesses rela 39 tively broad discretion to assign fact-finding to adjuncts, it is the more relevant touchstone for the present analysis.6 In Crowell, the administrative agency performed an admittedly narrower function than would the agency under S. 1220. The federal statute at issue there provided for compensation of injured employees “irrespective of fault” and prescribed a fixed schedule of compensation. 285 U.S. at 38. In view of these limitations on the agency’s functions and powers, the Court found that the agency’s determinations were “closely analogous to findings of the amount of damages that are made, according to familiar practice, by commissioners or assessors.” Id. at 54. Although S. 1220 does not impose such narrow limitations on the housing discrimination agency’s fact-finding powers, neither does the bill create adjuncts with powers as broad as those possessed by the bankruptcy courts at issue in Northern Pipeline. The Bankruptcy Act of 1978 vested bankruptcy judges with all the powers of a court of equity, law, and admiralty, including the power to preside over jury trials, to issue writs of habeas corpus, and to issue any order or judgment appropriate for the enforcement of the provisions of Title 11. Northern Pipe line, 458 U.S. at 85 (plurality opinion).7 In contrast, the administrative tribunal in S. 1220, similar to the agency considered in Crowell, lacks many of these powers, and specifically has no power to enforce its orders. Moreover, the subject matter jurisdiction of the agency created under S. 1220 is limited to congressionally-created claims of housing discrimination, whereas the juris diction of the bankruptcy courts under the 1978 Bankruptcy Act encompassed not only traditional matters of bankruptcy, but also all civil proceedings arising under or related to cases under Title 11. See 28 U.S.C. § 1471(b) (Supp. IV 1980) (emphasis added). According to both the Northern Pipeline plurality and the Court in Crowell, the most significant aspect of the adjunct scheme challenged in Crowell was that ‘“ the reservation of full authority to the court to deal with matters of law provides for the appropriate exercise of the judicial function in this class of cases.’” Northern Pipeline, 458 U.S. at 81 (quoting Crowell v. Benson, 285 U.S. at 54). S. 1220 provides that the factual findings of the agency are conclusive if supported by substantial evidence, but the reviewing judicial court retains greater authority with respect to matters of law.8 Because S. 1220 6 The N orthern P ipeline plurality em phasized that C ongress does not possess the same degree o f discretion to assign “traditionally ju d ic ia l power to adjuncts engaged in the adjudication o f rights not created by C o n g ress,’' 458 U.S. at 8 1 - 82, and noted th a t “C ongress’ assignm ent o f adjunct functions under the Federal M agistrates A ct [under w hich constitutional, as opposed to solely congressionally-created, rights could be adjudicated] w as substantially narrower th a n under the statute challenged in C r o w e l l i d . at 82. 7 T he only exception to these w ide-ranging pow ers was that bankruptcy courts could “not enjoin another c ou rt o r punish a crim inal contem pt not co m m itted in the presence o f the judge o f the court or w arranting a punishm ent o f im prisonm ent.” 28 U.S.C. § 1481 (Supp. IV. 1980) (quoted in Northern Pipeline, 458 U.S. at 55 (plurality opinion)). 8 See 28 U .S.C . § 2347; F lorida E. C oast Ry. v. U nited States, 242 F. Supp 490, 491 (M.D. Fla.) (statute pro v id in g for ju d icial review o f agency action requires th at prim ary function o f review ing court is to d eterm ine w hether there is substantial evidence on the record as a w hole to support findings of agency, and w h eth er agency applied proper legal standards in conduct o f proceedings before it and in conclusions that it C ontinued
40 involves a congressionally-created right, in distinction to the state common law claim at issue in Northern Pipeline, we do not believe that the assignment of initial adjudicatory functions to an adjunct administrative tribunal is necessar ily incompatible with Article III. Cf. Schor v. CFTC, 740 F.2d 1262 (D.C. Cir. 1984) (holding that Northern Pipeline principles concerning congressional discretion to assign judicial power to adjuncts were not satisfied in case involving agency jurisdiction over common law claim). Because this determi nation is a close and questionable one, however, we prefer to base our conclu sion — that S. 1220 does not violate Article III by vesting administrative officials with power to adjudicate fair housing claims — on the “public rights” theory. The concurrence in Northern Pipeline offers little to either support or detract from the above conclusions regarding S. 1220. The concurrence limited its holding to the case before it, concluding that the Bankruptcy Act of 1978 violated Article III to the extent that it permitted a non-Article III tribunal to adjudicate a state common law claim. 458 U.S. at 91. But “sensible interpreta tion of judicial opinions avoids converting a carefully crafted limitation on a holding into its ratio decidendi." Schor v. CFTC, 740 F.2d at 1275. Quite simply, the concurrence provides scant insight concerning whether S. 1220 creates either a public right or a constitutionally acceptable adjunct system. Because the Article III principles supporting the concurring opinion are in any event no stricter than the plurality’s Article III principles, we believe that to the extent S. 1220 passes muster under the plurality’s “public rights” theory, it would probably be endorsed by a majority of the Court. B. Given that a defendant would constitutionally be entitled to a jury trial in a damages action brought in federal court under the Fair Housing Act, can Congress simultaneously provide fo r an essentially similar action before an administrative tribunal, in which there would be no right to jury trial, without violating the defendant’s Seventh Amendment right? Assuming that S. 1220 creates a public right, there is no question that Congress has discretion to assign the adjudication thereof to an administrative agency free from the strictures of the Seventh Amendment: “When Congress creates new statutory ‘public rights,’ it may assign their adjudication to an administrative agency with which a jury trial would be incompatible, without violating the Seventh Amendment’s in junction that jury trial is to be ‘preserved’ in ‘suits at common law.’” Atlas Roofing Co., 430 U.S. at 455; see also NLRB v. Jones & Laughlin Steel Corp., 301 U.S. at 48—49. S. 1220, however, does not simply assign adjudication of a
8 ( . . . continued) reached), a f f d , 382 U.S. 161 (1965); see also U niversal Cam era Corp. v. N LR B , 340 U.S. 474, 491 (1951) Such a standard o f review does not perm it the review ing court to substitute its own views for the a g en cy 's judgm ent, if that ju dgm ent has support in the record and applicable law, see Am erican Textile Mfrs Inst. v. D onovan, 452 U.S. 490, 523 (1981); N ew York v. United States, 299 F. Supp. 989, 997 (N.D.N.Y. 1969), a f f d t 396 U.S. 281 (1970), but it does leave questions o f law to the court’s determ ination, N LRB v. Yeshiva U niversity, 444 U.S. 672, 691 (1980); Florida P o w er & Light Co. v. E lectrical Workers, 417 U.S. 790, 803 (1974); cf. NLRB v. B ell A erospace Co., 416 U.S. 267 (1974); N LRB v. H earst Publications, Inc , 322 U.S. I l l , 130-31 (1944).
41 public right to an administrative tribunal. It simultaneously establishes a statu tory cause of action (to remedy the same underlying housing discrimination claim) that an individual may bring in state or federal court. This individual damages action is virtually identical to the cause of action at issue in Curtis v. Loether.9 In that case, the Court held that parties to such an action in federal court are entitled to a jury trial on demand. 415 U.S. at 195- 97. The Court explained that the right to jury trial extends beyond the common law forms of action recognized in 1791, and that the Court has often found the Seventh Amendment applicable to causes of action based on statutes. Id. at 193. In general, “when Congress provides for enforcement of statutory rights in an ordinary civil action in the district courts, where there is obviously no functional justification for denying the jury trial right, a jury trial must be available if the action involves rights and remedies of the sort typically en forced in an action at law.” Id. at 195. Because a damages action under the Fair Housing Act “is analogous to a number of tort actions recognized at common law,” the Court concluded that it “is an action to enforce ‘legal rights’ within the meaning of our Seventh Amendment decisions.” Id. Consequently, to the extent S. 1220 provides for enforcement in federal court of a statutory action involving legal rights and remedies that the Court has deemed analogous to certain common law actions, a jury trial is constitutionally required upon demand. Id. at 195; Pemell v. Southall Realty, 416 U.S. 363, 383 (1974). The critical question posed by S. 1220 is whether a statutory right to be free from discrimination in the sale, rental, or financing of housing can be both a right enforceable in an administrative action absent a jury trial and a right enforceable in federal court with a jury upon demand. The Court has long recognized that Congress has discretion to vest the determination of public rights in judicial or administrative tribunals. Thus, Congress: in exercising the powers confided to it, may establish “legisla tive” courts . . . to serve as special tribunals “to examine and determine various matters, arising between the government and others, which from their nature do not require judicial determi nation and yet are susceptible of it.” But “the mode of determin ing matters of this class is completely within congressional control. Congress may reserve to itself the power to decide, may delegate that power to executive officers, or may commit it to judicial tribunals.” Crowell v. Benson, 285 U.S. at 50 (quoting Ex parte Bakelite Corp., 279 U.S. 438, 451 (1929)). Similarly, the plurality in Northern Pipeline acknowledged that: when Congress creates a statutory right, it clearly has the discre tion, in defining that right, to create presumptions, or assign 9 The only difference is that the current Fair H ousing A ct provision, which was addressed in C urtis v. L o eth er, lim its the in d iv id u al’s punitive dam ag es to $1,000. S ee 42 U.S C § 3612. S. 1220 places no lim it on the punitive dam ages av ailab le to an individual in a civil court action. See § 812(c).
42 burdens of proof, or prescribe remedies; it may also provide that persons seeking to vindicate that right must do so before particu larized tribunals created to perform the specialized adjudicative tasks related to that right. Such provisions do, in a sense, affect the exercise of judicial power, but they are also incidental to Congress’ power to define the right that it has created.
458 U.S. at 83 (footnote omitted). In light of Congress’ substantial discretion to prescribe the manner in which “public” or statutorily created rights may be adjudicated, we cannot conclude that Congress deprives itself of the power to vest a statutorily created right to nondiscriminatory housing in an administrative agency simply because it also has provided for the enforcement of the same statutory housing right in the federal courts in which a jury trial must be available. That is, we believe that Congress may create a statutory right that, depending on its mode of enforce ment, the forum in which it is to be resolved, or the nature of the remedy available, could be viewed either as a public or a private right. Cf. Merrill Lynch, Pierce, Fenner & Smith v. Curran, 456 U.S. 353, 384-88 (1982) (holding that implied private cause of action in court is available under Com modity Exchange Act, although Act also expressly provides for administrative reparations procedure and arbitration procedure). Prior cases consistently indicate that the Seventh Amendment does not prohibit Congress from assigning the adjudication of statutory rights to an administrative forum, even if a jury would have been required constitutionally had Congress assigned adjudication of those same rights to a federal court instead. Atlas Roofing Co., 430 U.S. at 455 (discussing Pemell v. Southall Realty, NLRB v. Jones & Laughlin Steel Corp., and Block v. Hirsh). In Pemell v. Southall Realty, the Court held that because Congress provided that statutory actions for repossession of property — which resembled common law actions to recover land — be brought as civil actions in court, the Seventh Amendment required preservation of the right to jury trial. 416 U.S. at 384. The Court carefully noted, however, that “we may assume that the Seventh Amendment would not be a bar to a congressional effort to entrust landlord-tenant disputes, including those over the right to possession [and therefore analogous to a common law action], to an administrative agency.” Id. Similarly, in Atlas Roofing Co., in which the petitioners strenuously argued that the statutory civil penalty proceeding in issue there was a suit at common law within the meaning of the Seventh Amendment, the Court concluded that “even if the Seventh Amendment would have required a jury where the adjudi cation of those rights is assigned to a federal court of law,” 430 U.S. at 455, the Amendment did not prevent Congress from assigning adjudication of such civil penalties to an administrative agency with which a jury trial would be incom patible. Id. at 455, 461. Finally, in Block v. Hirsh, 256 U.S. 135 (1921), the Court upheld Congress’ power to transfer temporarily to an administrative commission jurisdiction 43 over an entire range of landlord-tenant disputes that previously had been adjudicated in court with a jury trial right. If Congress by statute could wholly, albeit temporarily, remove a set of common law actions from the courts and subject the regulation and adjudication of the same underlying property rights to an administrative agency, then the Seventh Amendment would not appear to bar the less drastic action of providing simultaneously for the adjudication of a statutory right in individual judicial actions and in administrative proceedings prosecuted by the government.10 As the Court explained in Atlas Roofing, Congress cannot utterly destroy the right to a jury trial by providing for administrative rather than judicial resolution of the vast range of wholly private tort, contract, and property cases that now arise in the courts. 430 U.S. at 457- 58. But “where the Government is involved in its sovereign capacity under an otherwise valid statute creating enforceable public rights,” id. at 458, then the right to a jury trial may well be affected by the identity of the forum to which Congress chooses to submit a dispute, id. at 457-58. See also Myron v. Hauser, 673 F.2d at 1004 (“right to a jury trial turns not solely on the nature of the issue to be resolved but also on the forum in which it is to be resolved”); Rosenthal & Co. v. Bagley, 581 F.2d at 1261 (same). Although we are unaware of statutory schemes in which the individual’s jury trial right is contingent on whether the government enforcement official chooses to proceed in an administrative forum or an individual proceeds in court, we find nothing in the Seventh Amendment that would prohibit such a congres- sionally devised system." The Supreme Court has stated that “Congress is not required by the Seventh Amendment to choke the already crowded federal courts with new types of litigation or prevented from committing some new types of litigation to administrative agencies with special competence in the relevant field.” Atlas Roofing Co., 430 U.S. at 455. Nor do we find anything inherently impermissible in Congress making a jury trial available in certain instances but not in others in the enforcement of the same right. In Ross v. Bernhard, 396 U.S. 531 (1970), the Court acknowledged that prior to the adoption of the Federal Rules of Civil Procedure in 1938, which merged the law and equity functions of the federal courts, a defendant would not be entitled to a jury trial in a stockholder’s derivative suit, even though the defendant 10 W e also note that C ongress has the p o w e r to avoid the strictures o f the Seventh A mendment to the extent it can control the ju risd ic tio n o f the in ferio r federal courts, see U.S. Const, art. Ill, § 1; Sheldon v. Sill, 49 U .S. (8 H ow .) 4 4 1 ,4 4 9 (1850), and thereby transfer judicial business to the state courts, in which the Seventh A m endm ent is inapplicable. See Alexander v. Virginia, 413 U.S. 836 (1973). This does not, o f course, resolve w hether C ongress, w hile continuing to ex ercise federal pow er to decide disputes, may elim inate the right of trial by ju ry sim ply by changing the fe d e ra l forum. B ut it illustrates C ongress' considerable discretion either to m ake ju ry trials available o r to exempt adjudication from any Seventh A m endm ent claim s. 11 T he C om m odity Exchange Act (CEA) appears to establish an enforcem ent structure most analogous to S. 1220. U n d er the C EA , an individual may p roceed w ith a private dam ages action in court, in which a jury trial w ould be available, o r the individual m ay file a com plaint seeking an adm inistrative award o f damages. A lthough the com plaining individual, as o p p o sed to a CFTC official, prosecutes the adm inistrative claim, the adm in istrativ e reparations procedure w ill go forw ard only if the CFTC determ ines that the com plaint w arrants adm inistrative action. 17 C .F.R . § 12.15. H ow ever, the reparations procedure is not available against the com m odities exchanges, nor is it suited for the adjudication o f all other claim s under the CEA. See M e rrill L ynch, 456 U.S. at 384-85.
44 would have had a right to a jury trial had the corporation itself sued on the same underlying claim. Id. at 536-37, 540.12 Significantly, in Merrill Lynch, the Court recently sanctioned the availability of both an individual court action, in which a jury trial presumably would be available upon demand, see Miller v. New York Produce Exch., 550 F.2d 762 (2d Cir.), cert, denied, 434 U.S. 825 (1977), and administrative proceedings, in which an injured individual could obtain damages from another private party absent a jury trial. The Court there held that Congress intended to preserve a private judicial remedy as a supplement to the express enforcement provisions — an administrative reparations procedure, an arbitration procedure provided by every contract market, and state parens patriae actions — under the CEA. Although the Court found that the informal arbitration and reparations proce dures were designed to supplement the private judicial remedy, and that Con gress apparently intended complainants “to be put to the choice between informal and judicial actions,” 456 U.S. at 385, there was no question that damages could be obtained from a futures commission merchant or other registered person in either administrative reparations proceedings absent a jury trial or in a private judicial action, id. at 366, 385-87.13 Nevertheless, the Court expressed no concern that the Seventh Amendment might prohibit an interpre tation of the statute authorizing the award of damages in favor of a private complainant in either an administrative proceeding absent a jury trial or in a judicial proceeding with a jury available on demand. Consequently, assuming that S. 1220 involves a public or statutorily created right that Congress may, compatible with Article III, assign to an adjunct for adjudication, we do not believe that the Seventh Amendment places any independent constraint on Congress’ discretion to provide for both administra tive and judicial enforcement if it determines that alternative mechanisms are necessary to remedy a particular problem. Cf. Atlas Roofing Co., 430 U.S. at 444-45 (finding that Congress enacted OSHA because it found existing state statutory and common law remedies inadequate to protect employees from unsafe working conditions). Insofar as the administrative proceeding provides a remedy for a congressionally created right, Congress has latitude to alter the scope of the jury trial right as a reasonably necessary incident to other proce dural and substantive objectives, because doing so, by definition, does not withdraw the jury trial in an area where historically it was firmly established. C. Assuming there are no Seventh Amendment concerns, does the statutory scheme nevertheless violate due process insofar as the defendant’s jury trial
12 Sim ilarly, because the Seventh Amendm ent does not apply in actions against the federal governm ent, persons seeking relief from the federal governm ent on causes o f action in which they w ould have had a ju ry trial right were the action brought against a non-federal party will often have no jury trial right. See Lehm an v. N akshian, 453 U.S. 156 (1981) (holding that although ju ry trial was generally available in Age D iscrim ina tion in Em ployment A ct suits. C ongress did not create a ju ry trial in suits against the federal governm ent). 13 Moreover, because the CFTC under the CEA, sim ilar to the Secretary under S. 1220, determ ines w hether a com plaint w arrants further adm inistrative action, see 17 C.F.R. § 12.15, both schemes ultimately v est a governm ent official w ith some authority to determ ine w hether a defendant will appear in an adm inistrative forum or a judicial forum .
45 right is in large part contingent on the procedural choices o f other parties? Generally, statutory schemes do not give the government discretion to enforce the same underlying charge by pursuing somewhat similar remedies either administratively without a jury or in court with a jury. Nor is it customary for statutes to provide a choice between individual court actions with jury trials and government-initiated proceedings in administrative forums. Most statutes that create dual enforcement mechanisms authorizing government suits as well as private actions either provide for jury trials in court actions regardless who enforces the statutory right,14 or do not make jury trials available, irrespective of whether the government or a private person is the enforcing party.15 These congruences do not exist, however, if statutory provisions provide different remedies to enforce the same underlying claim in a judicial forum. For example, § 17 of the Fair Labor Standards Act (FLSA) authorizes the Secretary of Labor to seek injunctive relief, including the restitutionary re straint of any withholding of wages found due, in court without a jury trial, while § 16 of the FLSA grants the Secretary and private parties authority to seek legal relief in court with a jury trial. Wirtz v. Jones, 340 F.2d 901 (5th Cir. 1965). The Age Discrimination in Employment Act (ADEA) similarly autho rizes the Equal Employment Opportunity Commission (EEOC) to seek an injunctive remedy in court, for which no jury trial is available, to enforce the statutory prohibition against age discrimination, whereas an individual em ployee may proceed with a damages actions under the ADEA in which a jury trial would be required upon demand. See 29 U.S.C. § 626(b) (providing that the ADEA is to be enforced in accordance with powers, remedies, and proce dures of FLSA). Significantly, under both the FLSA and the ADEA, the individual’s right to bring a private action terminates upon the filing of a complaint by the Secretary or the EEOC, respectively. See id. § 216(b) (FLSA); id. § 626(c)(1) (ADEA); Donovan v. University o f Tex., 643 F.2d 1201, 1207 (5th Cir. 1981). Should the Secretary seek equitable rather than legal relief, the parties would have no right to a jury trial even though a jury trial would have been available had an individual brought a damages action. See Wirtz v. Jones, 340 F.2d at 904. Thus, simply because a party may have a right to a jury trial in certain instances when a particular right is being enforced against him, it does not follow that a jury trial is always available for that party in the enforcement of that right. In this context, it is significant that S. 1220 provides for somewhat different remedies in jury and non-jury proceedings. Punitive damages for the individual are available injudicial actions under S. 1220; compensatory damages for the
14 See E E O C v. B row n & Root, Inc , 725 F.2d 348 (5th C ir. 1984) (Jury trial available w hether governm ent sues un d er § 7(b) o r private party sues u n d e r § 7(c) o f A ge D iscrim ination in Em ploym ent Act); EEO C v. C orry Jam estow n C orp., 719 F.2d 1219 (3 d Cir. 1983) (sam e); Wirtz v. Jones, 340 F.2d 901, 904 (5th Cir. 1965) (§ 16 actions under F air Labor Standards A ct brought by either an em ployee or the Secretary are triable before a jury). 15 See S lack v. H avens, 522 F.2d 1091, 1094 (9th Cir. 1975) (no jury trial right in Title VII suits); cf. Great Am . Fed. Savs. & Loan A s s 'n v. Novotny, 4 4 2 U.S. 366, 375 (1979) (noting that courts o f appeals have held that no ju ry trial rig h t ex ists in Title VII actio n s because all re lie f is equitable in nature).
46 individual and a civil penalty for the government are available in the adminis trative proceedings. Because the Supreme Court has never held it unfair or arbitrary to have juries available some of the time but not all of the time, depending on the nature of the right, the remedy and the forum in which the right is enforced, we find nothing in the Due Process Clause that precludes Congress from providing for the enforcement of the statutory right to nondis- criminatory housing in either an administrative forum without a jury or a judicial forum with a jury. C f Anniston Mfg. Co. v. Davis, 301 U.S. 337 (1937) (holding that Congress may abrogate judicial proceedings if the substituted administrative proceedings afford a fair and adequate remedy). Indeed, it would be anomalous to conclude that the Due Process Clause places a more severe constraint on Congress’ discretion to vest adjudication of congression- ally created rights in administrative forums than do the more specific com mands of the Seventh Amendment or Article III.
Conclusion
Because we believe that the courts would characterize the statutory right to nondiscriminatory housing created by S. 1220 as a public right, Congress may, consistent with Article III, vest the adjudication of housing discrimination claims in an administrative tribunal. Moreover, we conclude that the Seventh Amendment does not prohibit Congress from vesting the adjudication of this congressionally created right both in federal court, in which a jury trial would be available upon demand, and in an administrative tribunal, in which there would be no right to a jury trial. Finally, we believe that a statutory scheme in which a defendant’s jury trial right is in large part contingent on the procedural choices of other parties to the proceeding does not offend the Due Process Clause. We accordingly conclude that although the question is novel and the available judicial precedents provide uncertain guidance, Congress constitu tionally may provide for an administrative award of compensatory damages to an individual, even though such damages are also statutorily authorized in judicial actions in which either party is entitled to a jury trial on demand.
R a lph W . T arr Acting Assistant Attorney General Office o f Legal Counsel