DELEGATIONS TO PRIVATE ENTITIES: THE APPLICATION OF THE BOLL WEEVIL EIGHT FACTOR TEST I. INTRODUCTION ........................................ 275 A. United States Supreme Court and the Nondelegation Doctrine ......................................... 275 B. Nondelegation Jurisprudencein Texas Priorto Boll Weevil ........ ........................... 277 C. Boll W eevil Decision ............................... 278 II. NONDELEGATION CASES SINCE TEXAS BOLL WEEVIL .......... 283 A. ArbitrationClause Cases ............................ 283 1. Proctor v. Andrews ............................ 283 2. W ilson v. Andrews ............................. 288 B. FM Properties Operating Co. v. City of Austin ........... 289 C. Ex ParteElliot .................................... 294 III. CONCLUSION ......................................... 297 I. INTRODUCTION The Constitution of the United States vests all legislative powers in Congress.' Similarly, the Texas Constitution vests legislative power in the "Legislature of the State of Texas."' However, given the complexity of society, no legislature possesses the time, resources, or expertise to draft laws regulating every aspect of society.3 Congress has delegated its powers on numerous occasions to allow the government to function. The United States Supreme Court has stated that the delegation of power is both necessary and proper.' A. UnitedStates Supreme Courtand the NondelegationDoctrine The nondelegation doctrine prohibits Congress from delegating its legislative powers to any other institutions.6 The history of the nondelegation doctrine in the United States Supreme Court can generally be divided into three categories: (1) cases prior to the New Deal; (2) New Deal cases; and (3) post New Deal cases.7 Prior to the New Deal, the Supreme Court was 1. U.S.CONST. art. I, § 1. 2. TEx. CONST. art. 1i, § 1. 3. Field v. Clark, 143 U.S. 649, 693-94 (1892). 4. RICHARD J. PIERCE, JR. ET AL., ADMINISTRATIVE LAW AND PROCESS § 3.4 (3d. ed. 1999). 5. Field, 143 U.S. at 693-94. 6. Id. 7. Id. 276 TEYAS TECH JOURiNAL OF TEXASADMINISTRATIVE LAW [Vol. 2:275 reluctant to apply a strict interpretation of the nondelegation doctrine.' Different tests were employed by the Court to determine the constitutionality of the delegation.9 In the first nondelegation case to come before the Court, the legislation involved was approved because the authority delegated to the executive was limited to taking a specific, prescribed action mandated by Congress when a named contingency occurred." The "named contingency" test was abandoned in the first case where its use would not have permitted the delegation." In Butterfield v. Stanahan, the Court announced it would allow delegations if the legislature set sufficient standards to clearly limit the scope of the agency's authority to regulate.'I The change of tests alone was not sufficient to save the delegation in Butterfield.4 The Court also interpreted the legislative history and determined that the authority of the executive to set rules was sufficiently limited." Prior to the New Deal, the Court employed a pragmatic approach that only required Congress to establish a sufficiently "intelligible principle" to which a delegate should conform.' The Court also saved vague delegations by finding a more definitive meaning for words in the legislative history of the statutes.' The Court's reluctance to strictly apply the nondelegation doctrine ended in the New Deal." In Panama Refining Co. v. Ryan, 9 the Court struck down a provision of the National Industrial Recovery Act (NIRA) because Congress failed to give the President an intelligible principle or guiding standard to follow when enforcing the statute.2" The Court held other provisions of the NIRA unconstitutional in A.L.A. Schecter Poultry Corp. v. United States.2' The Court held that Congress could not delegate legislative power to the President to exercise unfettered discretion to make whatever laws he thinks are needed.' During the New Deal, the Court also invalidated a statute that delegated rule-making power to a private group of coal miners and producers.? 8. Id. 9. Id. 10. The Cargo ofthe Brig Auromra BumnSide v. United States, II U.S. (7 Cranch) 380 (i813). 11. PIERCE, jupra note 4, § 3.4.1. 12. 192 U.S. 470 (1904). 13. Id. at 497. 14. Id. at496-97. 15. Id. 16. PIERCE, supra note 4, 3.4. 1. 17. Id. 18. Id. § 3.4.2. 19. 293 U.S. 388 (1935). 20. Id. at 431-33. 21. 295 U.S. 495 (1935). 22. id. at 537-38. 23. Carter v. Carter Coal Co., 298 U.S. 238 (1936). 2001] APPLICATION OF THE BOLL WEEVIL EIGHT FACTOR TEST 277 Since the New Deal cases, the Supreme Court has approved all of the legislation it has reviewed under the nondelegation doctrine.24 The Court's willingness to favorably interpret legislative delegations has created a body of case law that can be used to approve broad and vague delegations." Justice Thurgood Marshall stated that the nondelegation doctrine "has been virtually abandoned by the Court for all practical purposes."26 Recently, some members of the Supreme Court have suggested their willingness to strictly enforce the nondelegation doctrine, however, the majority of the Court has rejected the idea of reinvigorating the doctrine." B. NondelegationJurisprudence in Texas Priorto Boll Weevil Texas courts have a history of invalidating legislative delegations more frequently than courts of other states or the federal courts. 28 Prior to Boll Weevil,2 the most significant delegation case was HousingAuthority of Dallas v. Higginbotham." The case dealt with the Housing Authorities Law, which gave the Housing Authority of Dallas the power to exercise eminent domain.3 In Higginbotham, the Texas Supreme Court first determined the legislature had provided sufficient standards to guide the Housing Authority in its functioning. 2 The court then enumerated six categories of acceptable legislative delegation: (1) cases where the legislature delegated authority because it could not practically or efficiently exercise such powers; (2) cases where the legislature delegated to an administrative body the power to make rules or to effectuate completed laws; (3) cases where the legislature delegated to an administrative body the power to ascertain conditions upon which an existing law may operate; (4) cases where the legislature delegated power to enforce policies and standards laid down in statutes to municipalities or entities; (5) cases where the legislature delegated power to fix rates within prescribed limits; and (6) cases where the legislature delegated the power of eminent domain.33 24. PIERCE, supra note 4, § 3.4.3. 25. Id. 26. Federal Power Comm'n v. New England Power Co., 415 U.S. 345,352-53 (1974) (Marshall, J., dissenting). 27. PIERCE, supra note 4, § 3.4.4. 28. Gary J.Greco, Standards or Sqfeguards: A Survey of the Delegation Doctrine in the States, 8 ADMIN. L.J. AM. U. 567, 580-88 (1994). 29. Texas Boll Weevil Eradication Found., Inc. v. Lewellen, 952 S.W.2d 454 (Tex. 1997). 30. 143 S.W.2d 79 (Tex. 1940). 31. Id. at 81. 32. Id. at 87. 33. Id. 278 TEXAS TECH JOURIVAL OF TEXAS ADMINISTRATIVE LAW [Vol. 2:275 After Higginbotham, it appeared a delegation would be constitutional if it fit into one of the six categories. 4 The court later clarified that the most important factor in a delegation case was whether the legislature laid down sufficient standards to guide the delegate in its functioning." Following Higginbotham,most delegation challenges centered around either the broad- ness or vagueness of terms in the delegation. 6 In more recent cases, the Texas Supreme Court has given the legislature more room to make delegations." In RailroadCommission v. Lone Star Gas Co., the court stated the legislature did not have to include every detail in promulgating its standards in delegations." Requiring the legislature to include every detail would defeat the purpose of delegating legislative authority. 9 The court also stated that a legislative delegation was constitu- tional as long as the legislature establishes "reasonable standards to guide the entity to which the powers are delegated."4' Prior to Boll Weevil,4 the Texas Supreme Court had decided only one case dealing with a private delegation, which did not result in the announcing of a clear legal standard. 42 In Greene v. Robinson, the court upheld a statute that allowed private persons to lease state owned oil and gas reserves located beneath their land and dedicate the money to the Permanent School Fund.43 The court upheld the statute because the legislature had laid out all of the rules for the oil leases." In another private delegation case, the Austin Court of Appeals held legislative delegations to private entities were constitutional as long as "the legislative purpose is discernible and there is protection against the arbitrary exercise of power.""5 C. Boll Weevil Decision Cotton is the number one row crop in Texas.4" In the last five years Texas has supplied on average over a quarter of all of the cotton produced in 34. Id. at 87. The court ruled the statute constitutional because it fit into the sixth category. 35. Jordan v. State Bd. of Ins., 334 S.W.2d 278, 280-81 (Tex. 1960). 36. See Id.; Texas Antiquities Comm. v. Dallas County Community College Dist., 554 S.W.2d 924 (Tex. 1977). 37. See Railroad Comm'n v. Lone Star Gas Co., 844 S.W.2d 679 (Tex. 1992); Edgewood Indep. Sch. Dist. v. Meno, 917 S.W.2d 717 (Tex. 1995). 38. Railroad Comm 'n, 844 S.W.2d at 689. 39. Id. 40. Id. 41. Boll Weevil, 952 S.W.2d at 454. 42. Greene v. Robinson, 8 S.W.2d 655, 656-67 (Tex. 1928). 43. Id. at 656. 44. Id. at 656-57. 45. Office of Pub. Ins. Counsel v. Texas Auto. Ins. Plan, 860 S.W.2d 231,237 (rex. App.-Austin 1993, writ denied). 46. Robert Elder, Jr., Disturbing the Peace; Boll Weevils and Big Bucks, TEX.