Litigators Urged to Challenge Potentially Inquorate Agencies

For the past year, several federal multimember regulatory agencies have been operating with a fraction of their seats filled. Though a single absence doesn’t impede a commission’s ability to operate, too many losses could render an agency inquorate and legally unable to act.

Thanks to term expirations, resignations, and presidential removal, agencies with significant vacancies include the Commodity Futures Trading Commission, which has one of five seats filled; the Federal Trade Commission, which has two of five filled; and the National Credit Union Administration, which has one of three filled.

Despite these vacancies, the agencies continue to act. Supporters argue that the absence of explicit, statutory quorum requirements allows any remaining officials to act—even when, in the case of the NCUA, the agency’s regulations provide that “agreement of at least two of the three Board members is required for any action by the Board.”

We question these assertions and encourage litigators already challenging these agencies’ actions to include quorum violations among their claims that the agencies acted unlawfully.

The Common Law of Quorums. For centuries, courts have been called upon to evaluate the authority possessed by multimember institutions plagued by vacancies.

Over time, they developed default rules that apply in the absence of statutory requirements: First, a simple majority of members constitutes a quorum. Second, this majority is based on the total number of positions, including vacant seats; we call this a fixed-numerosity quorum, in contrast with an appointed-majority quorum that excludes vacancies. Third, bodies may enact quorum rules only if the legislature or their chartering document has granted them explicit authority to do.

The first two rules balance the risks of decisional errors against the risks of dysfunction. Without a majority-quorum rule, a minority of members may exercise the body’s authority in ways that distort collective decision-making and undermine the intent that the body operates through a deliberative process. Requiring the participation of all members, however, prevents the body from functioning when there are absences due to illness or vacancy. The third rule prohibits institutions from enacting their own rules that defeat the goals of deliberation and collective decision-making.

Quorums and Federal Agencies. The US Supreme Court has endorsed compliance with these common law rules when statutory quorum requirements are absent or ambiguous, though it has never opined on whether these rules must or may not be followed. In FTC v. Flotill Products, Inc., the court explained that the FTC was “justified in adhering to [the] common-law rule” that “a majority of a quorum constituted of a simple majority of collective body is empowered to act for the body.”

However, lower courts have diverged from these rules. Contrary to the third common law default above, the US Court of Appeals for the DC Circuit explained in Falcon Trading Group., Ltd. v. Securities and Exchange Commission that, “[i]f not otherwise constrained by statute, an agency sufficiently empowered by its enabling legislation may create its own quorum rule.”

Relatedly, the US Court of Appeals for the Seventh Circuit in Assure Competitive Transportation, Inc. v. United States rejected the common law’s fixed numerosity rule, holding instead that “a majority of the Commissioners actually in office constitutes a quorum.” The US Court of Appeals for the Tenth Circuit concurred in Union Pacific Railroad Company v. United States.

Applying the common law default rules to federal multimember agencies is appropriate and consistent with congressional intent. Congress created commissions as multimember rather than single-headed agencies to encourage deliberation and consensus among a set of varied stakeholders. It frequently imposed qualifications on commissions’ members so that certain viewpoints would be represented, including partisan balance, geographic representation, and expertise requirements.

The common-law rules uphold congressional intent by ensuring that, at minimum, multiple commissioners must deliberate before acting, rather than allowing them to become single-headed agencies when a single commissioner remains. When Congress has determined that a statute should be administered by a commission rather than a single individual, courts should uphold that value judgment in the absence of Congress’s explicit decision to the contrary.

Congress has often adopted the common law rules when it has mandated a specific quorum requirement by statute. We surveyed the quorum rules of 76 federal multimember agencies and found that, to the extent that Congress has codified rules in commissions’ organic statute, the vast majority are fixed at a majority of the total number of commissioners including vacancies.

Thirty-four commissions have fixed-numerosity quorums, whereas only 13 have appointed-majority quorums. By contrast, when commissions interpret statutory silence as allowing them to adopt their own quorum rules, they tend to adopt more flexible arrangements.

The divergent approaches between Congress and the commissions raises concerns about whether commissions abide by Congressional intent in fashioning their procedural rules. It also explains why commissions shouldn’t have the authority to promulgate their own quorum and voting rules absent a specific delegation from Congress.

Challenging commissions’ actions on the basis of inquoracy is risky insofar as they’re inconsistent with the precedent of various circuits. However, these precedents were generally made without fully considering the issues or examining the rationales for common-law default rules and deserve to be revisited. More to the point, we offer violation of common law quorum requirements as an option for litigants who are already challenging agency actions—possible inquoracy is another arrow in the quiver.

Congress created certain agencies as multimember bodies to ensure deliberation and the consideration of multiple viewpoints—goals that quorum rules promote. We hope litigants and their counsels raise common-law quorum requirements when challenging the actions of these agencies.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law, Bloomberg Tax, and Bloomberg Government, or its owners.

Author Information

Todd Phillips is an assistant professor at Georgia State University Robinson College of Business.

Nicholas Bednar is an associate professor at University of Minnesota Law School.

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