Judicial federalism and the administrative states

Federal courts are reluctant to review the work of state and local administ rative agencies. Despite the presence of diversity or federal question juri sdiction to challenge final agency action, federal courts have sometimes ab stained from exercising their jurisdiction out of fear of disrupting a comp lex regulatory scheme and displacing state courts in the uniform developmen t of state regulatory policy. At other times, federal courts have treated r eview of state administrative action as "appellate" in nature and therefore beyond the jurisdiction of the federal district courts, especially when re view of agency action would be deferential understate law. And at still oth er times, federal courts have invoked preclusion principles to bar federal challenges to agency action that was judicial in nature. While recent decis ions of the Supreme Court may have moved away from imposing a jurisdictiona l bar, the American Law Institute proposes to revive such a limit, arguing that such review of agency action is contrary to the historic role of the f ederal courts and would alter their essential function as courts of origina l jurisdiction. In this Article, Professors Woolhandler and Collins challenge these various practices preventing review of nonfederal administrative action, and they question the rationales behind them. They argue that, as a historical matte r federal courts once engaged in a robust review of state administrative ac tion, even as to issues of state law. In addition, they suggest that concer n for federal court interference with uniformity of state policy making has been overstated, while traditional concerns of federal jurisdictional poli cy in providing a neutral forum for out of staters as well as those raising federal challenges to state and local action, have been slighted. They als o attack the characterization of judicial review of administrative action a s appellate, and suggest why it is both descriptively accurate and normativ ely desirable to see judicial review as an original proceeding distinct fro m agency action. And in many cases, they observe, according state agency de cision making the same level of deference that it would obtain in a state c ourt would serve as a better measure of the respect owed such decision maki ng than formal preclusion. Although the Article takes the position that fed eral courts should not shy from entertaining diversity-based challenges to state administrative decision making, or even most-challenges grounded in f ederal law, it concludes that, absent diversity, due process reasonableness challenges to agency action should ordinarily be relegated to state courts .