Loper Bright Enterprises v. Raimondo: A Conservative Assault on the Administrative State | naked capitalism

By Lambert Strether of Corrente.

Loper Bright Enterprises v. Raimondo (Loper), to be decided in this Supreme Court term, is an even bigger case than United States v. Google Inc (Google). Google has indeed been brought by the FTC against a ginormous and heinous Silicon Valley monopoly; but Loper could strike at the heart of the “administrative state” itself, hence at the FTC’s rule-making authority (or even at its very existence).

Unfortunately for both of us, IANAL, and the conservative war against the administrative state has generated an enormous literature, replete with grudge matches, which it’s beyond the capacity of this humble blogger to master (at least in one post). I am tempted simply to reduce the petitioner’s views to the beastly frothing and stamping of the monied classes and their public relations service providers — law firms, think tanks, economists, and such-like — because somebody’s trying to drag a bit of profit away from their jaws and claws (with very little justification other than pique, I might add[1]). But I don’t want to be more unfair than necessary; sadly for both liberals and the left, it’s clear that all the passion and the intellectual energy is on the right, so it’s necessary to examine at least some of their arguments.

As a sidebar, I should, before proceeding, point to the current liberal assault on the corrupt and repellent billionaire’s boy toy, Clarence Thomas, and the subsequent moral panic, which has — and I know this will surprise you — turned out to be motivated:

I agree with Durbin, but where is the argument on the merits? Surely, stare decisis is not the most effective defense in the political arena? That is, the assault on Thomas is also an assault on a vote for Loper, as was, some would urge, the moral panic during Kavanaugh’s nomination, another case of refusal to argue on the merits. (Why not just say that Kavanaugh’s views make him unfit for the Court?) The head-counting is even more dicey given that Ketanji Brown Jackson, a reliable liberal vote, has recused herself because she was part of the circuit court that first heard the case. Hence only eight justices will hear the case, unless Thomas caves, which he won’t. End Sidebar.

First, I will look at the cause of action in Loper (herring, if you can believe it). Then I will look at the “Chevron Doctrine” (Chevron), which Loper‘s advocates seek to overturn, and its role in undergirding the administrative state, which conservatives seek to overthrow[2]. Next, I will look at the separation of powers issues raised by Loper (none, to my simple mind). Finally, I’ll look at a few tendentiously selected amicus briefs, and conclude.

The Cause of Action in Loper

Herring, I said. From Harvard’s Environmental Law & Energy Program, “CleanLaw — The Loper Bright Case and Fate of the Chevron Doctrine with Jody Freeman and Andy Mergen“:

[ANDY MERGEN] [Loper] arises under the Magnuson-Stevens Act, an act enacted in 1976, to regulate fishing and federal waters…. The act is a complicated statute. It envisions a role for the regulated community in the development of the regulatory regime, a really unique role, in that fishery councils and there are regional councils for New England, for Alaska, for the Western Pacific, those councils develop the rules, and present them to the federal government, to NOAA, the National Oceanic and Atmospheric Administration, and the National Marine Fishery Service [NMFS] an agency within NOAA, to accept the council’s proposal.

The councils’ membership consists of state fishery officials appointed by the governor, and fishermen themselves. They come up with the rules, and present them to the federal government. The federal government makes a decision about them.

This particular regulation relates to observer coverage in the herring fishery in New England. The pursued fish is the Atlantic herring, fish really good for you, not a super important economic fish, but an important one.

So (this is the “jaws and claws” part) who pays for the observer, and how is that decision made?

[ANDY MERGEN] [M]onitoring and observers, the placement of an individual to record the catch and develop information about the catch that the fishermen are taking in, has long been part of the regulatory regime. It actually predates the act. NOAA started using observers in 1972, and there’s no dispute that the statute authorizes the placement of observers in fisheries.

Often, NOAA itself will pay for the observers. In this particular case, what has made this controversial is that the rule requires the fishermen to pay the freight for the observers. The fishermen must have room for the observer on the vessel, and pay costs that are estimated to be around, everyone uses the figure of around $700 a day. That’s somewhat unusual in the sense that often, the agency itself pays the freight on the observers.

Here, the question presented is not whether you can require observers. Plainly, the statute has long contemplated that. The question is, does the statute authorize the council and NMFS to adopt a rule that requires industry to pay for the observers?

The reason why this is a Chevron question, if you will, and why we went into the long description of Chevron is, the statute doesn’t precisely address this question. There’s no specific provision in the law that says, “Yes, industry can be required in some instances to pay for these onboard observers.”

(I highly recommend a full reading of piece, for a real nuts-and-bolts perspective in lay language.) With that, let’s turn to the Chevron Doctrine (“Chevron”)[3].

The Chevron Doctrine and the Administrative State

The Chevron Doctrine was formulated in Chevron U.S.A., Inc. v. NRDC, 467 U.S. 837 (1984) [breaking out calculator, 39 years ago. There’s a good deal of motivated whinging from the usual suspects about how difficult the Chevron Doctrine is, but it seems straightforward enough to me. Chevron is about as close to algorithmic as you can get:

Chevron’s two-step review

The U.S. Supreme Court’s 1984 ruling in Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc. provided federal courts with the following two-step process for reviewing an agency’s interpretation of a statute:

Step one

A court must determine whether Congress expressed intent in the statute and, if so, whether or not the statute’s intent is ambiguous.

• If the intent of Congress is unambiguous, or clearly stated, then the inquiry must end. Agencies must carry out the clearly expressed intent of Congress.
• If, however, the intent of Congress is unclear, or if the statute lacks direct language on a specific point, then a federal court must decide whether the agency interpretation is based on a permissible construction of the statute—one that is not arbitrary or capricious or obviously contrary to the statute.

Step two

In examining the agency’s reasonable construction, a court must assess whether the decision of Congress to leave an ambiguity, or fail to include express language on a specific point, was done explicitly or implicitly.

• If the decision of Congress was explicit, then the agency’s regulations are binding on federal courts unless those regulations are arbitrary, capricious, or manifestly contrary to statute.
• If the decision of Congress was implicit, then so long as the agency’s interpretation is reasonable, a federal court cannot substitute its own statutory construction superior to the agency’s construction.

Preliminary review: Chevron step zero

In 2001, the U.S. Supreme Court’s ruling in United States v. Mead Corporation narrowed the scope of application for Chevron deference and shed light on a preliminary step in the Chevron process that scholars later described as Chevron step zero. Under Chevron step zero, a federal court asks the initial question of whether or not the Chevron framework applies to the situation. In other words, a federal court must determine whether or not Congress intended for agencies or courts to possess interpretive authority over a statute before embarking on the Chevron two-step process.

Sure, plenty of semantics blah blah blah. That’s why we have legislators (to leave in the requisite “ambiguities”) and regulators (to winkle them out and resolve them), and advocates, too, whether citizens or highly paid lawyers from Alexandria and environs. In this case, I believe that Loper stopped at Step One in the lower courts.

However, judicial deference to agencies’ “reasonable” “constructions” is the space that gives the administrative state room to breathe and live. As the Heritage Foundation, “3 Supreme Court Cases Could Shake Up the Administrative State“:

In practice, Chevron deference enables agencies to often overstep their authority by treating vague language or doubtful gaps in a statute as authorization for actions that the agencies favor but which Congress never intended.

And the Wall Street Journal, “No More Deference to the Administrative State“:

Chevron deference allowed the EPA to set national carbon-dioxide standards, the Transportation Department to prescribe automobile safety features and numerous other agencies and departments to regulate virtually every aspect of American life.

But this approach corroded democratic accountability by freeing lawmakers from the duty to legislate clearly. Chevron also dramatically weakened the judiciary’s ability to check agencies’ regulatory overreach. Before [Chevron], the judiciary took a “hard look” approach in assessing the legality of federal regulations. Chevron was more of a rubber stamp. Judges blessed specific regulations and countenanced agency actions that Congress had never authorized. It made a mockery of Chief Justice John Marshall’s declaration in Marbury v. Madison (1803): “It is emphatically the province and duty of the Judicial Department to say what the law is.”

(I don’t agree that regulations are law, but we’ll get to that.) Or, if you’re really hungry for red meat, Gary S. Lawson, “The Rise and Rise of the Administrative State,” Boston University School of Law, from 1994:

The post-New Deal administrative state is unconstitutional,’ and its validation by the legal system amounts to nothing less than a bloodless constitutional revolution. The original New Dealers were aware, at least to some degree, that their vision of the national government’s proper role and structure could not be squared with the written Constitution: The Administrative Process, James Landis’s classic exposition of the New Deal model of administration, fairly drips with contempt for the idea of a limited national government subject to a formal, tripartite separation of powers. Faced with a choice between the administrative state and the Constitution, the architects of our modern government chose the administrative state, and their choice has stuck.

Just so we’re clear on the stakes.[4]

The Separation of Powers

Some claim that Chevron violates the separation of powers because it encroaches upon the legislative branch. From the Regulatory Review:

[R]ule-making power gives agencies the ability to create secondary legislation. Agency rules should not make primary policy choices. So, when Congress writes statutes in very broad terms, it may not be properly fulfilling its constitutional role.

And from the American Action Forum:

Agencies ask not what Congress has clearly authorized them to do, but what interpretations of statutes could achieve deference and elude courts’ scrutiny. As then-Judge Brett Kavanaugh explained, everything, “unless it is clearly forbidden,” becomes fair game. Agencies risk seizing powers properly understood to belong to the legislative branch, and Chevron deference limits judicial remedies. As Justice Clarence Thomas has noted, Chevron conflates Congress’ neglect to meticulously spell out the precise statutory bounds of an agency’s mandate with an affirmative delegation of expansive authority to the bureaucracy.

Others claim that Chevron encroaches on the judicial branch. Cato:

Chevron is unconstitutional for several reasons. It gives judicial power—the power to interpret the meaning of the law—to the administrative state within the Executive Branch. The Constitution, however, grants all judicial power to the Judicial Branch.

Still others urge that Chevron encroaches on both. Heritage:

To be effective, an agent needs some flexibility to carry out the principal’s commands. But the greater the latitude, the greater the risk that the agent decides to follow his own agenda over the principal’s. The more that agencies reinterpret laws to make room for their own policy judgments, the more agencies appear to act like judges or legislators, though, under the Constitution, they are neither.

In a case so important both doctrinally and to policy — and after decades of collective labor by legal scholars — one would expect conservatives to speak with one voice. Instead, one hears a chorus!

But to my simple mind, the separation of powers concern is the reddest of red herrings. Why? Regulations are not laws! Hence, neither the legislative nor the judicial branches are being encroached upon in the first place. This handy chart from The Theory and Practice of Legislation, “Legislation and regulation: three analytical distinction” (PDF) shows my view, at left, outlined in red:

The simple minds at FindLaw take the same view:

Laws are the products of written statutes, passed by either the U.S. Congress or state legislatures. The legislatures create bills that, when passed by a vote, become statutory law.

Regulations, on the other hand, are standards and rules adopted by administrative agencies that govern how laws will be enforced. So an agency like the SEC can have its own regulations for enforcing major securities laws. For instance, while the Securities and Exchange Act prohibits using insider or nonpublic information to make trades, the SEC can have its own rules on how it will investigate charges of insider trading.

Like laws, regulations are codified and published so that parties are on notice regarding what is and isn’t legal. And regulations often have the same force as laws, since, without them, regulatory agencies wouldn’t be able to enforce laws.

Workers with actual skin the game agree. From Safety Line, “Lone Worker Legislation vs Lone Worker Regulation: What’s the Difference?”

Legislation is synonymous with statutory law; the laws that have been enacted by the legislature as well as those still in the process of being enacted. Legislation is both the description of the legal requirements, and of the punishment for violating the law.

Regulations, by comparison, are the ongoing processes of monitoring and enforcing the law: so not just HOW the legislation is being enforced, but also the very act of enforcement. Where the confusion comes in is that regulation is also the name of the document itself that details the act and description of regulation.

Anybody who has dealt with a legislature and an agency on the same project — as we did, long ago, fighting the landfill — knows in their bones that laws and regulations are not the same. Why, then, do the firms and service providers backing Loper treat them as identical? Leaving aside bad faith, I would speculate that they treat laws and regulations as identical because from their standpoint they are: Both take away their profit (“jaws and claws” once more). But neither voters, nor citizens, nor legislators, nor the courts need to accept that highly motivated view.

Selected Briefs

Finally, I said I’d look at a few of the amicus briefs in Loper. There is, of course, an enormous number (listed here at SCOTUSblog, and hat tip to them for the public service). I needed some selection principle, which in this case was easy. The principle: “Whenever you hear the word ‘Freedom’ it’s some kind of con.” Ditto “America,” “Business,” “Commerce,” etc.; filings encumbered with such verbiage are underlined. Then I eliminated all the filings from trade associations, under the Mandy Rice-Davis (MRD) doctrine; those filings are italicized. Then I eliminated all the think tanks and law firms, also under MRD; in roman. So I’m not going to look at any of these filings:

Advance Colorado Institute, Advancing American Freedom, America First Policy Institute, American Center for Law and Justice, American Cornerstone Institute, American Free Enterprise Chamber of Commerce, American Sustainable Business Council, Buckeye Institute, Businesses for Conservation and Climate Action, Cato Institute, Center for Constitutional Jurisprudence, Chamber of Commerce of the United States of America, Christian Employers Alliance, Competitive Enterprise Institute, Electronic Nicotine Delivery System Industry Stakeholders, FPC Action Foundation and Firearms Policy Coalition, Goldwater Institute, Gun Owners of America, Independent Women’s Law Center, Landmark Legal Foundation, Liberty Justice Center, Main Street Alliance, Manhattan Institute, Mountain States Legal Foundation, National Federation of Independent Business Small Business Legal Center, National Right to Work Legal Defense Foundation, National Sports Shooting Foundation, New England Legal Foundation, Ohio Chamber of Commerce, Pacific Legal Foundation, Relentless, South Carolina Small Business Chamber of Commerce, Southeastern Legal Foundation, Strive Asset Management, TechFreedom, The Foundation for Government Accountability, Third Party Payment Processors Association, and the Washington Legal Foundation.

That list of filers gives a good idea of Loper‘s supporters.

I picked two other briefs to glance at. First, from Public Citizen (PDF):

Congress may legitimately grant agencies discretion to address statutory gaps and to implement broadly worded statutory mandates, consistently with statutory language and structure and the policies they reflect. And “[i]t is quite impossible to achieve predictable (and relatively litigation-free) administration of the vast body of complex laws committed to the charge of executive agencies without the assurance that reviewing courts will accept reasonable and authoritative agency interpretation of ambiguous provisions.” Coeur Alaska, Inc. v. S.E. Alaska Conservation Council, 557 U.S. 261, 296 (2009) (Scalia, J., [Ouch!] concurring in part and in the judgment).

Accordingly, leaving the determination of such details of administration, in the first instance, to the agency charged by Congress with carrying out the statute is not only more workable than letting judges fill in regulatory gaps, but also more consistent with the statutory scheme enacted by Congress. Abandoning Chevron would both fail to yield better results in the run of cases and disregard Congress’s choices to delegate authority to agencies to implement regulatory statutes.

And from The American Association for the Advancement of Science, The American Society for Pharmacology and Experimental Therapeutics, and the Ecological Society of America (PDF):

In both litigation and regulation, scientists have a strong interest in assuring that their findings are understood and properly used by others in society, not least by America’s courts of law. For that reason, AAAS submits this amicus brief in support of Respondents.

As the Court recognized in American Electric Power Co. v. Connecticut, “[f ]ederal judges lack the scientific, economic, and technological resources an agency can utilize in coping with issues of this order.” 564 U.S. 410, 428 (2011). They “may not commission scientific studies or convene groups of experts for advice, or issue rules under notice-and-comment procedures inviting input by any interested person, or seek the counsel of regulators in the States where the defendants are located.” Id. Agencies can hear from all concerned stakeholders and elicit expert input, studying an issue—and the various state attempts to resolve an issue—in a way a court cannot. While some study and dialogue arises organically, some was initiated directly by Congress, such as the EPA’s Science Advisory Board, established in 1978 pursuant to the Environmental Research, Development, and Demonstration Act, 42 U.S.C. § 4365. Indeed, Chevron deference is predicated upon the agency’s compilation and analysis of relevant data and its use and explanation of its choice precisely so there can be adequate judicial review.

Conclusion

For the last two briefs, I can only say that I wish all scientists were like aerosol scientists and no agencies were starved for funding or captured _{MR SUBLIMINAL Isn’t it pretty to think so}. Still, it’s always possible to make things worse, and it looks to me like Loper, if indeed it overturns Chevron, would do just that. Imagine, for example, a more dysfunctional CDC. Do we want that? Or a crippled FTC? Or a crippled SEC? I understand the “jaws and claws” crowd disagrees. But firms are hardly part of the Constitutional order. Comments from lawyers — jailhouse and otherwise — very welcome!

NOTES

[1] Without much good reason, I might add. Jodi L. Short, “In Search of the Public Interest,” Yale Journal on Regulation:

This Article seeks to move beyond the rhetoric surrounding regulation in the public interest by conducting a grounded inquiry into how agencies implement public interest standards in the statutes they administer. Using data from agency adjudications under four different statutory schemes dating from the early twentieth century to the present, the study investigates how agencies define the public interest, whether agencies use public interest standards with unfettered discretion based on whatever criteria they wish (as some fear), and whether agencies apply public interest standards in ways that infuse policy making with common good or community values (as some hope).

The study’s findings will surprise many and please few. First, it demonstrates that agencies applying statutory public interest standards exhibit rational and predictable patterns that comport with rule-of-law values of transparency and consistency. Second, the study finds that agencies rarely consider what might be characterized as “common good” or “community” values in their public interest analyses unless such considerations are mandated by statute, and that agencies tend to discount such considerations even when statutorily required. Third, in terms of substantive conceptions of the public interest, the study reveals that in most contexts studied, economic arguments are the most-raised and most-accepted justifications for why a particular outcome is in the public interest.

No problems there!

[2] I paint with too broad a brush, here. After all, overturning the “Chevron Doctrine” is not exactly a small-c conservative thing. (Here is an originalist defense of Chevron). From “Supreme Court To Hear Case Endangering the Chevron Doctrine,” The Regulatory Review:

Over 19,000 judicial opinions cite Chevron, making it one of the most important decisions in federal judicial history. Especially after the Court’s momentous decision to overturn Roe v. Wade, disposing of Chevron would solidify the justices’ willingness to reverse longstanding legal precedent.

The future of Chevron deference also holds considerable political weight. Throughout Chevron’s history, Democrats and Republicans alike have employed the doctrine to defend environmental, labor, and other administrative rules. More often than not, courts have upheld agency interpretations, regardless of the party in power.

In the last six years, however, agencies lost 70 percent of Supreme Court cases addressing Chevron. Instead, the Court has applied a more rigid approach to statutory interpretation, giving agencies less leeway.

Yet leaving the doctrine in place.

[3] Not that I’m cynical, but it occurs to me that the real issue is not the cost of the observer, but the presence of the observer. Overfishing is a thing, and a thing the Magnuson-Stevens and the NMFS attempt to prevent. So this is “jaws and claws” from another angle.

[4] Conservatives off and on the court have a substitute for Chevron lined up, called the “Major Questions Doctrine.” From the Yale Journal of Regulation:

The era of “Chevron deference” will have been displaced by what ought to be called the era of “West Virginia skepticism.” The latter label would refer to West Virginia v. EPA, the decision in which the Court crystallized what has come to be called the “major questions doctrine” (MQD)….

Everybody clear on what “major” means? No?

The West Virginia two-step does not start with the statutory text [(!!)], but rather with an examination of the agency action under challenge. Step One determines whether an agency initiative raises a “major question” as to its legality. The Court has not much clarified how this determination is to be made, and a recent study by Natasha Brunstein of the Institute for Policy Integrity found that lower court “judges have taken vastly different approaches to defining and applying the doctrine—even within the same circuit—illustrating that many judges view the doctrine as little more than a grab bag of factors at their disposal.” Prominent among the common considerations is the “economic and political significance” of the challenged action, although the benchmarks for judging that significance remain unclear. (One disquieting possibility is that contemporary political opponents who lacked sufficient clout to influence the original legislation can now stir up enough protest to activate the “political significance” trigger.)

So, a direct line through the major questions doctrine to the courts via entirely spontaneous citizen action conservative moral panicking and dogpiling, plus the musical stylings of the Mighty Wurlitzer, all funded by the usual suspects, including the Koch Brothers. Handy!