A number of federal agencies have recently relied upon implied power to reimburse expenses incurred by public participants in administrative proceedings. When the United States Department of Agriculture (USDA) and the Food and Drug Administration (FDA) attempted to exercise this authority, their efforts were challenged by parties who, relying on a purportedly controlling decision of the Second Circuit, contended that participant funding was an impermissible exercise of administrative power. The USDA initiative was upheld in district court, but the FDA program was invalidated by a divided Fourth Circuit panel.

The dispute over agency reimbursement has not been confined to the courts. Explicit and strong differences of opinion over citizen compensation have also arisen in the legislative and executive branches of government. Because the question of whether agencies have implied power to fund remains a compelling and unresolved issue, it is an appropriate time to analyze this complex problem.

The first section of this Article is an historical survey of the developments that have led to the extant disagreement in the judiciary, Congress, and the agencies. In the next section, the cases treating participant reimbursement are assessed, and thereafter a comprehensive analysis of the legal principles raised by the exercise of implied compensation authority is presented. The Article concludes with an evaluation of the performance of the funding programs to date and the implications of this experience for implied reimbursement power.

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