{"id":269624,"date":"2024-07-22T12:00:39","date_gmt":"2024-07-22T11:00:39","guid":{"rendered":"https:\/\/www.transcend.org\/tms\/?p=269624"},"modified":"2024-07-16T05:36:00","modified_gmt":"2024-07-16T04:36:00","slug":"the-supreme-court-takes-on-the-administrative-state","status":"publish","type":"post","link":"https:\/\/www.transcend.org\/tms\/2024\/07\/the-supreme-court-takes-on-the-administrative-state\/","title":{"rendered":"The Supreme Court Takes on the Administrative State"},"content":{"rendered":"

15 Jul 2024 <\/em>– In a highly controversial decision, the Supreme Court on June 28 reversed a 40-year old ruling, reclaiming the Court\u2019s role as interpreter of statutory law as it applies to a massive body of regulations imposed by federal agencies in such areas as the environment, workplace safety, public health and more.<\/p>\n

The Court\u2019s 6-3 conservative majority overturned a 1984 ruling, also issued by that Court\u2019s conservative majority, that\u00a0 granted authority to a federal agency if a Congressional statute involving that agency was ambiguous or incomplete. It left the interpretation of the law to the agency rather than the courts.<\/p>\n

This principle blocked individuals and businesses from suing agencies in court for damages incurred when the agencies exceeded their Congressional mandates.<\/p>\n

\u201cChevron<\/em>\u00a0deference,\u201d the name given the 1984 decision due to the litigation involving that company, has been grounds for upholding thousands of regulations by a host of federal agencies over the last four decades. Opinions by commentators on its reversal range from \u201can epic disaster<\/a>, \u2026 one of the worst Supreme Court rulings \u2026 another huge gift to special interests and corporations,\u201d to \u201ca victory for the common man<\/a>\u201d and \u201can important win for accountability and predictability<\/a>\u00a0at a time when agencies are unleashing a tsunami of regulation \u2014 in many cases clearly exceeding their statutory authority \u2026.\u201d<\/p>\n

On July 10,\u00a0Reuters reported<\/a>\u00a0that House Republicans had asked all federal agencies to begin reviews of regulations that could be affected by the recent ruling, noting:<\/p>\n

Three House committees \u2014 Agriculture, Oversight, and Education and Workforce \u2014 targeted agencies including the Environmental Protection Agency, the Securities and Exchange Commission and Department of Labor in what the chamber\u2019s No. 2 Republican, Steve Scalise, called a \u201cfight to free the American people from the power-\u200bhungry administrative state.\u201d<\/p><\/blockquote>\n

The \u201cadministrative state\u201d had modest beginnings during George Washington\u2019s presidency, with the formation of the Defense, State, Treasury and Justice Departments. Today it has mushroomed into\u00a0more than 400 agencies<\/a>.\u00a0 For the 178 laws passed by Congress in 2020 alone,\u00a0federal agencies issued<\/a>\u00a0an average of 19 rules and regulations for each law passed,\u00a0 for a total of 3,382 such rules. The Federal Register, a common measure of regulatory action, hit an all-time high\u00a095,894 pages in 2016<\/a>. That\u2019s 75 times\u00a0The Complete Works of William Shakespeare<\/a>, which contains 1280 pages.<\/p>\n

The issues raised by the\u00a0Chevron<\/em>\u00a0doctrine go back to the founding of the country and make for an interesting lesson in civics. But first a look at the fishing case that reversed it.<\/p>\n

The Fishermen Who Challenged a Bureaucracy<\/strong><\/p>\n

On Jan.17, 2024, the U.S. Supreme Court heard oral arguments in two combined cases,\u00a0Loper Bright Enterprises v Raimondo\u00a0<\/em><\/a>and\u00a0Relentless, Inc v Department of Commerce,<\/em><\/a>\u00a0which would determine the fate of\u00a0Chevron<\/em>.\u00a0On June 28, the Court ruled in favor of the fishermen plaintiffs in the\u00a0Loper Bright<\/em>\u00a0case, rejecting the deference that courts have given federal agencies in cases where the law is unclear.\u00a0The Court did not rule on the merits \u2014 the question whether the agency had exceeded its statutory authority. It just ruled on the judicial question whether\u00a0Chevron<\/em>\u00a0blocked the case from proceeding. Chief Justice John Roberts, who wrote the\u00a0Opinion of the Court, stated<\/a>:<\/p>\n

Chevron\u2019s\u00a0presumption is misguided because agencies have no special competence in resolving statutory ambiguities. Courts do. \u2026<\/p>\n

Chevron\u00a0is overruled. Courts must exercise their independent judgment in deciding whether an agency has acted within its statutory authority, as the APA [Administrative Procedures Act] requires.<\/p><\/blockquote>\n

The case was therefore allowed to go forward in the lower D.C. District Court where it originated. Those proceedings are expected to begin this fall.<\/p>\n

The plaintiffs are\u00a0three New Jersey herring fishermen who challenge<\/a>\u00a0what they say is an unlawful requirement that forces them to surrender 20% of their earnings to pay at-sea monitors \u2013 individuals who gather information used to regulate their industry. The cost works out to as much as $700 a day, which can be more pay than the crews themselves take home.<\/p>\n

The requirement was imposed on them by the U.S. Department of Commerce, which oversees the National Oceanic and Atmospheric Administration, which regulates the nation\u2019s fisheries.\u00a0The fishermen don\u2019t contest that federal law allows the government to require at-sea monitors on their boats, but they argue that Congress never gave the executive branch authority to pass monitoring costs onto the fishermen. They contend that the NOAA abused its power, but they were handicapped by\u00a0Chevron<\/em>\u00a0in fighting the rule.<\/p>\n

\u201cWe are grateful the Court has overruled\u00a0Chevron<\/em>,\u201d said Bill Bright, one of the fishermen plaintiffs. \u201cRestoration of the separation of powers is a victory for small, family-run businesses like ours, whether they\u2019re involved in fishing, farming or retail.\u201d<\/p>\n

Paul Clement, former U.S. Solicitor General and attorney for the fishermen, echoed that sentiment, stating, \u201cWe are gratified that the Court restored the constitutionally mandated separation of powers.\u201d\u00a0And that Constitutional mandate is what makes for an interesting civics lesson on the issues.<\/p>\n

Designing a Republic with a Balanced Separation of Powers<\/strong><\/p>\n

The Founding Fathers were famously afraid of centralized power, and they designed the Constitution and Bill of Rights to avoid it. Power was balanced among separate branches of the government \u2014 watchers watching the watchdogs, with no one imperial controller.<\/p>\n

In colonial America, judges were appointed and paid by the monarchy, receiving salaries that were raised from duties paid by the colonists. King George exercised sole authority to appoint colonial governors to represent the Crown\u2019s interests. For legislative control, the monarchy possessed the powers of the purse and the sword, stationing soldiers in the colonies while requiring that colonists house, feed, and pay taxes for the soldiers\u2019 imported supplies.<\/p>\n

Today, many regulatory agencies have their own in-house court systems, which similarly serve as judge and jury.\u00a0As Stone Washington with the Competitive Economic Institute<\/a>, a nonprofit\u00a0libertarian think tank<\/a>, wrote:<\/p>\n

The judicial branch is presumably an independent branch of government, alongside the legislative and executive branches. But many regulatory agencies have their own in-house court systems, called administrative law courts (ALCs). In ALCs, agencies choose their own judges, pay their salaries, and set the rules of procedure. Agencies rarely lose in their own courts. And their abuses to established constitutional norms have garnered the attention of federal courts in recent years especially in antitrust and securities law matters.<\/p><\/blockquote>\n

In administrative law courts, private litigants are\u00a0deprived of basic constitutional privileges<\/a>, including the right to trial by jury, freedom to petition a case before a Constitutional (Art. III) court, and equal application of justice under the law. Litigants who lose may or may not be granted the right to appeal to a federal court; but even if they succeed in getting on the appellate court docket, the process is lengthy and expensive, undemocratically excluding those who cannot afford the cost or the time to wait for a decision.<\/p>\n

The New Jersey fishermen in the two herring boat cases were not required to go through the administrative law court system, but the result was the same: the agency made the rules and enforced them; and under \u201cChevron<\/em>\u00a0deference,\u201d the plaintiffs were powerless to contest the outcome.<\/p>\n

Alexander Hamilton wrote<\/a>\u00a0in\u00a0The Federalist<\/em>\u00a0that any irreconcilable differences between the Constitution and the laws passed by Congress were to be decided in favor of protecting the Constitution as the supreme law of the land. The power of judicial review was first asserted in the Supreme Court\u2019s 1803 decision in\u00a0Marbury v. Madison<\/em>, recognizing the Constitution as the highest law in the land. Through judicial review, the Court reinforced that constitutional system by checking the power of other branches. Not just the administrative arm of the executive branch but the legislature itself could be restrained from passing legislation that violated the Constitution.<\/p>\n

In 1946, Congress passed the Administrative Procedure Act (APA) to codify the procedure for executing administrative law. The APA provides that the \u201creviewing court shall decide all\u00a0 relevant questions of law, [and] interpret\u2026 statutory provisions.\u201d<\/p>\n

It is that deviation from the constitutional system as codified in the APA that the Supreme Court intended to rectify. Justice Elena Kagan, who wrote the dissenting opinion, stated that \u201cthe majority\u2019s decision today will cause a massive shock to the legal system, \u2018cast[ing] doubt on many settled constructions\u2019 of statutes and threatening the interests of many parties who have relied on them for years.\u201d\u00a0 But Justice Roberts made clear that prior decisions relying on\u00a0Chevron<\/em>\u00a0were not automatically nullified but stood under\u00a0stare decisis<\/em>\u00a0(to \u201cstand by things decided\u201d). The issues could be challenged in new cases, but the challenged rules had to be shown to exceed the mandate of Congress.<\/p>\n

The Question of Corporate Capture<\/strong><\/p>\n

No doubt the floodgates to new cases will be opened, as other critics have stated; and it will be a major burden for the court system, which is already backlogged. But it is actually a democratic development. As Robert F. Kennedy Jr. explains on\u00a0X<\/em><\/a>:<\/p>\n

The\u00a0Chevron\u00a0decision cuts both ways. The original ruling allowed agencies to function effectively, which they cannot if every interpretative gray area in the law requires a court decision.\u00a0If the agency is working in the public interest, we definitely want it to exercise broad interpretive leeway. For instance, almost every important environmental decision in federal court over the past 40 years is based upon\u00a0Chevron.\u00a0Without it, the EPA (not an entirely captured agency) is virtually powerless. But when corporate interests have captured a federal agency, then the same interpretive leeway gives the agency even more power to serve their corporate masters at the expense of the public interest. Thus we have the FDA sending armed police to\u00a0shut down Amish farmers\u00a0<\/a>and grocery stores for selling raw milk,\u00a0while they allow<\/a>\u00a0into our food supply hundreds of harmful but profitable chemical additives that are banned in other countries. The\u00a0Chevron\u00a0controversy is therefore a false dilemma with no solution. The real issue is corporate capture. If federal agencies served the public interest, then no one would want to hamstring them.<\/p><\/blockquote>\n

Although critics say the ruling is a boon to corporations, it is the agencies themselves that are notoriously susceptible to \u201ccorporate capture.\u201d As\u00a0explained in Investopedia<\/a>:<\/p>\n

Regulatory capture is a process by which regulatory agencies may come to be dominated by the industries or interests they\u00a0are charged with regulating. The result is that an agency, charged with acting in the public interest, instead acts in ways that benefit incumbent firms in the industry it is supposed to be scrutinizing.<\/p><\/blockquote>\n

It is that sort of corporate capture that\u00a0Chevron<\/em>\u00a0deference protected from the reach of the courts, and that the Supreme Court\u2019s latest ruling has opened to private challenge. The APA tells agencies they cannot act illegally, arbitrarily, or without letting the public meaningfully participate in the creation of new rules. Many agency rules are now vulnerable to judicial review for violating those standards.<\/p>\n

Agency Overreach: Some Areas of Vulnerability<\/strong><\/p>\n

Technically, the Federal Reserve, the FDIC, the Treasury, the State Department, the IRS and even the Defense Department are agencies falling under the Administrative Procedure Act and its rules. Even those secretive, non-transparent, unaccountable intelligence agencies sometimes called the \u201cdeep state\u201d could be subject to APA review. But as detailed in a Vanderbilt Law School article titled \u201cThe Politics of Deference<\/a>,\u201d \u201cnational security\u201d has its own special deference under separate case law, so it probably cannot be reached.<\/p>\n

The more likely initial targets will be agencies such as the Environmental Protection Agency (EPA), the Centers for Disease Control and Prevention (CDC), the Food and Drug Administration (FDA) and the Securities and Exchange Commission (SEC).<\/p>\n

MSNBC experts expect<\/a>\u00a0electric vehicles to be most at risk. A Reuters article titled \u201cBiden Tailpipe Emission Rules on Shakier Ground after Supreme Court Ruling<\/a>\u201d explains, \u201cThat\u2019s because the rules target mobile sources of greenhouse gas rather than stationary ones like power plants, even though environmental laws are ambiguous on whether regulators have the mandate to do that.\u201d Another expert says the controversial tailpipe regulations \u201cwill eliminate most new gas cars<\/a>\u00a0and traditional hybrids from the U.S. market in less than a decade.\u201d<\/p>\n

Steve Forbes argues<\/a>\u00a0that Congress would not have passed such a prohibition because of intense public opposition, so it got kicked over to the EPA, which was thought to be untouchable under\u00a0Chevron<\/em>. But\u00a0Chevron\u00a0<\/em>deference is no more. On July 3,\u00a026 states filed suit<\/a>\u00a0against the Administration over EV mandates.\u00a0The Petition for Review states<\/a>, \u201cthe final rule exceeds the agency\u2019s statutory authority and otherwise is arbitrary, capricious, an abuse of discretion, and not in accordance with law.\u201d<\/p>\n

Other agency regulations expected to be the subject of lawsuits include the SEC\u2019s imposition of civil penalties without the benefit of a jury trial, and\u00a0FDA and CDC regulations<\/a>\u00a0involving vaccines, pharmaceuticals and dietary supplements.<\/p>\n

The administrative law system does not follow constitutional principles, which it must if it is ruling on regulations having the force of law. Removing some of the arbitrary red tape hampering small business, local politicians, schools and families by holding administrative regulations up to Constitutional standards can not only stimulate economic productivity and lower inflation and taxes but can help restore the system of checks and balances so important to our country\u2019s founders.<\/p>\n

________________________________________<\/em><\/p>\n

\"\"<\/a> Ellen Brown is a member of the <\/em>TRANSCEND Network for Peace Development Environment<\/a>, an attorney, founder\/chairperson of the\u00a0<\/em>Public Banking Institute<\/a>, and author of thirteen books including\u00a0<\/em>Web of Debt<\/a>,\u00a0The Public Bank Solution<\/a>, and\u00a0<\/em>Banking on the People: Democratizing Money in the Digital Age<\/a>.\u00a0Her articles are at\u00a0<\/em>ellenbrown.com<\/em><\/a><\/p>\n

 <\/p>\n

Go to Original \u2013 ellenbrown.com<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

15 Jul 2024 – In a highly controversial decision, the Supreme Court on June 28 reversed a 40-year old ruling, reclaiming the Court\u2019s role as interpreter of statutory law as it applies to a massive body of regulations imposed by federal agencies in such areas as the environment, workplace safety, public health and more.\u00a0<\/p>\n","protected":false},"author":4,"featured_media":179118,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[40],"tags":[560,70],"class_list":["post-269624","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-transcend-members","tag-law","tag-usa"],"_links":{"self":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts\/269624","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/comments?post=269624"}],"version-history":[{"count":1,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts\/269624\/revisions"}],"predecessor-version":[{"id":269625,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts\/269624\/revisions\/269625"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/media\/179118"}],"wp:attachment":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/media?parent=269624"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/categories?post=269624"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/tags?post=269624"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}