U.S. Supreme Court just gave federal agencies a big reason to worry
(Reuters) – The U.S. Supreme Court’s decision on Thursday to block the Environmental Protection Agency from regulating greenhouse gas emissions is likely to put a big chill on rulemaking by other federal agencies.
The justices, in a 6-3 opinion written by Chief Justice John Roberts, formally adopted a doctrine that has gained increasing currency over the last few years as a rationale for restricting agencies’ power. The major questions doctrine, as the principle is now formally known, holds that in “extraordinary” cases involving matters of great “economic and political significance,” federal agencies must be able to point to specific Congressional authorization for their actions. Courts should otherwise be “skeptical,” the decision said, that agencies have authority to set broad policy through novel statutory approaches.
At the very least, seven administrative law experts told me, the newly formalized doctrine will discourage regulators from pushing aggressively for innovative policies in politically charged matters, especially because the Supreme Court did not lay out a clear test for when the major questions doctrine should be invoked.
In the past, as Roberts wrote in Thursday’s decision, the court has relied on the reasoning of the doctrine to block the Food and Drug Administration from regulating cigarettes; the Centers for Disease Control and Prevention from barring evictions during the pandemic; and the Occupational Safety and Health Administration from imposing Covid vaccine rules on large businesses.
The new doctrine, experts said, leaves substantial room for interpretation. “My fear is that anything that codes as ‘controversial’ in certain circles or that is politically salient more generally will strike the court as ‘major,’” said University of Michigan law professor Daniel Deacon in an email. “That will leave agencies with plenty of small-bore (though still important) responsibilities, but it may disable them from confronting some of the gravest problems facing the country, as we have seen now in the context of COVID-19 and the climate crisis.”
Added Scott Nelson of Public Citizen: “Right now, whether a case involves a major question seems to turn on whether Chief Justice Roberts and Justice [Brett] Kavanaugh think it does.”
Among the agencies likely to feel the chill are the Securities and Exchange Commission and the Federal Trade Commission, both of which are engaged in aggressive rulemaking to address issues that Congress never contemplated in the decades-old statutes that created the commissions.
Both Jonathan Adler of Case Western Reserve University and Evan Bernick of Northern Illinois University told me the SEC’s proposed rule to require climate-related disclosures from public companies is vulnerable under the major questions doctrine. Law professor Richard Pierce of George Washington University cited the FTC’s contemplated new rules for corporate mergers. Pierce said the Supreme Court’s major questions doctrine will make it harder for the FTC to defend new rules that opponents can characterize as unprecedented – a description, Pierce said, that opponents will surely apply to a vast swath of FTC initiatives.
A caveat: One expert, Daniel Farber of the U.C. Berkeley School of Law, dissented from the otherwise broad consensus about the new doctrine’s chilling effect. Farber said by email that the court seemed to raise the bar for invoking the major questions doctrine by emphasizing the EPA’s unprecedented attempt to use an obscure provision to venture into a new area of regulation. (The EPA case involved systemic rules for coal-fired power plants.)
But everyone does not agree on the decision’s consequences. Kent Barnett of the University of Georgia said via email that the major questions doctrine has been gestating for decades. “If I were advising agencies about the breadth of their rulemaking power, my advice would have been the same yesterday as it is today—the Supreme Court will be highly skeptical of capacious pro-regulatory interpretations,” Barnett said.
Regulatory skeptics, meanwhile, welcomed the decision for restoring power to Congress. The New Civil Liberties Alliance, which filed an amicus brief backing challengers to the EPA’s potential emissions regulation, said in a press release that the ruling properly assures that “the major decisions affecting people’s lives are to be made by the people’s representatives in Congress, not by unelected bureaucrats.”
In the short term, you can expect a slew of challenges to Biden administrative policies under the major questions doctrine. Even if the Supreme Court intends the new test to apply only in extraordinary cases, as Roberts said in the opinion, challengers are not likely to be so discerning when they sue to block rulemaking.
“It’s a new arrow in the quiver,” said Case Western’s Adler. “You will see attorneys general trot this out in every case.”
Major questions challenges have the additional advantage of sidestepping the nuanced analysis required by the traditional framework for evaluating agency authority. The framework, from 1984’s Chevron v. Natural Resources Defense Council, calls for courts to defer to federal agencies to interpret the statutes they enforce. But Chevron never even comes into play if the major questions doctrine applies, since the doctrine is premised on statutory limitations on agency authority. So, at least until lower courts begin to clarify the outer edges of the new doctrine, rule challengers will probably regard it as a blunter and more easily wielded instrument than Chevron.
“This is a significant threat to agencies’ regulatory power,” said law professor Nina Mendelson of the University of Michigan, who described the decision as “an anti-regulatory power grab by the court.”
When Congress passed laws creating agencies like the SEC and the FTC decades ago, Mendelson said, lawmakers used broad language that would allow regulators to respond to new issues. The major questions doctrine, by urging courts to look skeptically at agency rulemaking that is not specifically authorized in these old statutes, “will bar an agency from regulating unless Congress legislates twice by going back and passing a second, specifically-worded statute,” Mendelson said.
She’s not alone in warning of dire consequences. GW professor Pierce said the new doctrine “is going to stop agencies from taking lots of actions they would like to take.” With Congress stymied on major lawmaking, Pierce said, agencies have no choice but to rely on broadly worded statutes enacted before Congress had any inkling of today’s issues. Historically, that broad wording allowed regulators to adapt to new problems. But the Supreme Court’s major questions doctrine, Pierce said, turns the old laws into restrictions on agency power, instead of tools of flexibility.
“Fundamentally,” said Brian Frazelle of the Constitutional Accountability Center, “this in an anti-regulatory doctrine.”