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In the context of Government laboratories, there is an additional twist. For most people, laws are disabling: In other words, you can do whatever you want unless it is prohibited by law. For the Government as an acting entity, with few exceptions, laws are enabling: An Agency (and its authorized representative) can do only what the law has expressly authorized. In the establishment of relationships between Government agencies and non-Government parties, this divergence of point-of-view is often a major cause of problems. In particular, companies and universities, accustomed to crafting essentially whatever terms their internal institutional policies will allow, simply do not understand why the Government Agency says, "no, we cannot do that."
The enabling character of law as it applies to Government action stems from the Constitution, the very foundation of the Government, which lists those specific things Congress can do. Ultimately, the written authority for an Agency to take a given action must be directly traceable from a provision in the Constitution, to a law passed by Congress (or occasionally, an order issued by the President), through regulations promulgated by the Secretary of the Agency, and a written trail of delegations down the chain of command within that Agency. At each delegation, the authority to act may be restricted further. The scope and meaning of these documents may be illuminated by opinions of courts, the U.S. Attorney General, and the General Counsel of the Agency. Finally, each Agency may establish its own policies of implementation, which generally stem from the original mission set out by Congress. As a consequence, even if a given person has the raw potential to receive authority to act on behalf of the Agency, the scope of authority actually delegated may be severely circumscribed by these various layers of Government. In certain circumstances, a particular office in an Agency may want to take an action that is still within the law, but exceeds existing delegations of authority. Unfortunately, circumventing a given authority may require so much review at so many levels, and may precipitate so much political fallout, that only the most dire case would justify the attempt.
Occasionally, the law also acts on Agencies in a disabling way. For example, Agencies of the Government are directly forbidden to take an action that would incur upon the Agency a debt that exceeds its appropriated budget, without express statutory authorization to do so. 14
Thus, in the Neurion scenario, the NIH could not agree to protect Neurion from the product- liability lawsuits brought by the injured students, as the possible judgments against Neurion (not to mention Neurion’s legal fees) might well exceed the agency’s appropriated budget. At best, Neurion may feel cheated, having entered an agreement in good faith, and will be reluctant to enter future agreements with anyone at NIH. At worst, if any Government employee purports to incur such a liability on behalf of the Government -- as Gillian did in the agreements she signed - - the employee risks, in theory at least, going to jail. 15