THOMAS v. UNION CARBIDE AGRICULTURAL PRODUCTS CO. 473 U.S. 568 (1985)

The Supreme Court's decision in northern pipeline construction co. v. marathon pipe line co. (1982) left considerable confusion about the power of Congress to confer jurisdiction on administrators or legislative courts over cases falling within the judicial power of the United States. Thomas provided some useful clarification.

The Federal Insecticide, Fungicide, and Rodentcide Act (FIFRA) requires a manufacturer, as a condition on registering a pesticide, to supply research data on the pesticide's health, safety, and environmental effects to the Environmental Protection Agency (EPA). These data may be used in evaluating a second manufacturer's registration of a similar product, provided that the second manufacturer offers to compensate the first. If the two manufacturers cannot agree on the compensation, FIFRA requires binding arbitration of the dispute. An arbitrator's decision is reviewable by a court only for "fraud, misrepresentation or other misconduct."

Various pesticide manufacturers sued the EPA administrator challenging the constitutionality of the scheme of binding arbitration with limited court review. The federal district court held that the scheme violated Article III of the Constitution; on direct appeal, the Supreme Court unanimously reversed, upholding the law.

Justice sandra day o'connor, writing for the Court, recognized a broad policy in Article III "that federal judicial power shall be vested in courts whose judges enjoy life tenure and fixed compensation." Marathon effectuated a part of that policy but was distinguishable here. Considering the origin of the claims to compensation in federal law, along with the reasons of public policy that persuaded Congress to impose binding arbitration, the manufacturers' claimed rights were properly considered "public rights," the adjudication of which Congress could place in administrative hands. Cases involving "public rights" were not limited to those in which the government itself was a party. Nor, said the Court in an important obiter dictum, is Article III's requirement of independent judges irrelevant merely because the government is a party. Here the assignment of decision to nonjudicial arbitrators was softened somewhat by FIFRA's provision of some minimal review by constitutional courts of arbitrators' decisions. (In some cases, the Court noted, due process considerations might independently require further court review.)

Thomas thus adopted a flexible approach to Article III's limitations on Congress's employment of nonjudicial tribunals—the very approach urged by the Marathon dissenters. Justice william j. brennan, for three Justices, concurred separately on the basis of his plurality opinion in Marathon. Justice john paul stevens concurred, saying the manufacturers lacked standing to challenge the law's validity.

Kenneth L. Karst
(1986)