89. Destabilizing the Administrative State

The Supreme Court's major end-of-term rulings don't augur the *demise* of administrative agencies, but they *do* throw open the floodgates to new challenges even to long-settled agency actions

Welcome back to “One First,” a weekly newsletter that aims to make the U.S. Supreme Court more accessible to all of us.

Every Monday, I’ll be offering an update on goings-on at the Court (“On the Docket”); a longer introduction to some feature of the Court’s history, current work, or key players (“The One First ‘Long Read’”); and some Court-related trivia. If you’re enjoying the newsletter, I hope you’ll consider sharing it (and subscribing if you don’t already):

Last week was … a doozy. Thursday’s bonus issue already looked at the Chief Justice’s sharp turn to the right as reflected in (among other things) the Trump immunity ruling. But Monday also saw two other major rulings from the Court, and Tuesday saw a pretty newsworthy Cleanup Conference list before the justices rose for their summer recess. After briefly recapping all of those developments, this week’s “Long Read” looks at one of Monday’s other rulings (in Corner Post) as part of the Court’s broader assault on the “administrative state” during the October 2023 Term. Although reports of the demise of executive branch agencies may be grossly exaggerated, there’s a subtler but perhaps more insidious problem likely to flow from what the Court did this term: Everything agencies do (or have done) will become more subject to legal challenge, which will make it (1) harder for outside actors to rely upon agency actions; and (2) harder for agencies to justify even taking at least some actions that are likely to be challenged. To me, the watchword isn’t “demise”; it’s “destabilization.”

But first, the (other) news.

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On the Docket

As you no doubt know by now, last Monday, the Supreme Court handed down its final three rulings in cases argued during the October 2023 Term:

1. Corner Post, Inc v. Bd. of Governors: For a 6-3 majority, Justice Barrett held that the six-year federal statute of limitations for challenges to most “final agency action” runs from whenever the plaintiff is injured—not from when the action becomes final. So if a hypothetical agency has a 60-year-old rule that an interest group wants to challenge, all they have to do is find a plaintiff who was just injured for the first time (e.g., find or create a new corporation that didn’t previously have to comply with it). Justice Jackson’s dissent, which was joined by Justices Sotomayor and Kagan, called the majority’s interpretation an “absurdity,” and warned that “[t]he tsunami of lawsuits against agencies that the Court’s holdings in this case and Loper Bright have authorized has the potential to devastate the functioning of the Federal Government.” Here, at least, the fix would be pretty easy—if Congress wanted to fix it.

2. Moody v. NetChoice, LLC: One of the themes of the term’s major rulings was that, when the Court didn’t divide sharply along ideological lines, the decision was usually a pretty narrow punt. That’s a fair summary of the Court’s consolidated ruling in the two NetChoice cases—about the constitutionality of Florida and Texas laws purporting to limit the ability of big social media companies to engage in content moderation on their platforms. The Eleventh Circuit had struck down Florida’s law; the Fifth Circuit had upheld Texas’s. And the Supreme Court vacated both rulings, holding that neither court of appeals had correctly applied the relevant principles for resolving a “facial” (as opposed to as-applied) First Amendment challenge, i.e., a claim that a law is unconstitutional in all of its applications. Justice Kagan wrote the majority opinion—which had more than a few choice words for the Fifth Circuit’s errors, especially. And although Justices Thomas, Alito, and Gorsuch didn’t join the majority opinion (writing separately to concur in the judgment only), the key point for the future is that Kagan had a solid majority (including the Chief Justice and Justices Sotomayor, Kavanaugh, Barrett, and Jackson in part) for most of the key First Amendment holdings. How that cashes out as applied to Florida’s and Texas’s laws (and the relationship between government, social media, and the First Amendment) remains to be seen.

3. Trump v. United States: And then there was Trump. Since I wrote about the ruling in detail for last Thursday’s bonus issue, I won’t say much more here. Chief Justice Roberts wrote for a 6-3 majority as to the existence and scope of a former president’s immunity from criminal prosecution, but only a 5-4 majority as to the limitations on even the evidence that can be used in such cases—with Justice Barrett noting, in her opinion concurring only in part, that she agreed with Justice Sotomayor’s dissent on that point. There’ll be more to say about what the ruling portends for other separation-of-powers disputes going forward, but I’ll save that for another day.

At some point, I’ll also do a deeper dive into the overall statistics reflected in the body of the Court’s work in argued cases. For now, here’s a link to my final spreadsheet covering all 59 decisions in argued cases. (For the fifth term in a row, the Court didn’t get to 60—a total it hadn’t failed to reach prior to OT2019 since … 1864.)

After initially providing guidance that orders from the Cleanup Conference would come Monday afternoon, the Court released the list instead at 9:30 ET Tuesday. As I predicted last week, there’s … too much … to fully cover, including seven different opinions relating to orders. But here are some of the highlights:

• Cert. Grants: The Court added four more cases to its docket for OT2024, the most significant of which is a case in which the Fifth Circuit upheld against a First Amendment challenge Texas’s law requiring websites that display pornographic material to verify the age of those visiting the site.

• GVRs: Perhaps the biggest news in the list was the Court’s refusal to take up any new gun cases after and in light of its decision in Rahimi. Even though the federal government had asked the Court to immediately grant certiorari in at least some of the cases it had been holding for Rahimi, the Court either denied certiorari outright or issued “GVR” orders (granting certiorari, vacating the decision below, and remanding for further consideration in light of Rahimi). In other words, after not conclusively resolving how lower courts should resolve post-Bruen Second Amendment challenges to gun control laws in Rahimi, the Court also seems disinterested in taking up that bigger issue now. Odds are, it won’t be able to hold off for that long.

• Big Cert. Denials: In addition to denying certiorari outright in some of the gun cases, the Court also turned away a right-wing effort to reinvigorate the “non-delegation doctrine” in a challenge to the Occupational Safety & Health Administration’s power to impose workplace safety rules that the agency deems “reasonably necessary or appropriate.” The Sixth Circuit had upheld that authority against a constitutional challenge; only Justice Thomas (who wrote) and Justice Gorsuch (who didn’t) publicly noted that they would’ve taken the case. And the Court turned away, over dissents from the three Democratic appointees, an appeal in an Arizona case arguing that Arizona has effectively brought back mandatory life-without-parole sentences for juveniles—even though the Supreme Court held in 2012 that such sentences violate the Eighth Amendment. Justice Sotomayor’s opinion dissenting from the denial of certiorari was joined by Justices Kagan and Jackson.

Finally, I wanted to flag one of the most ridiculous Supreme Court filings that I’ve ever seen—and friends, that’s saying something. On Wednesday, Missouri Attorney General Andrew Bailey filed a new suit directly in the Supreme Court on behalf of Missouri and against New York. What is the conflict of sovereign interests that’s behind this suit? Bailey wants the justices to immediately stay the gag order and impending sentencing in the New York state prosecution of former President Donald Trump. Because, you know, Missouri as a state is injured by criminal proceedings in a sister state’s courts against someone with no connection to Missouri. (There’s also the separate issue of how relief against “the State of New York” would somehow run to a state court judge, but I digress.)

I’ve written before about the debate over whether the Supreme Court’s jurisdiction in suits between two or more states is “mandatory” (meaning the Court must hear all such claims) or not. Since the mid-1970s, the Court has taken the latter view (although Justices Thomas and Alito have regularly argued for the former). This … frivolous … filing is, to me, a useful example of why the Court having discretion to turn away these cases is a very good thing. Expect that to happen here—although Bailey also ought to be sanctioned for wasting the Court’s time.

Otherwise, I’m not aware of any pending emergency applications likely to warrant the full Court’s attention.¹ At some point this summer, we should get a routine, housekeeping Order List from the Court—but that won’t be for awhile. Instead, it ought to be a pretty quiet week at One First Street, N.E.

We were due.

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The One First “Long Read”:
The Uncertain Future of Administrative Law

Most of the headlines surrounding the Supreme Court and administrative law have focused on the Court’s June 28 decision in Loper Bright Enterprises and Relentless—in which a 6-2/6-3² Court overruled “Chevron deference.” (I wrote about some of the flaws in that ruling, in particular, for MSNBC.) But to me, understanding just how much the Supreme Court has thrown a wrench into how administrative agencies do their job requires accounting for the justices’ rulings in three other cases—Corner Post, as described above; Ohio v. EPA; and SEC v. Jarkesy. (The last two were both decided on June 27.) Other than Justice Barrett in Ohio, these cases split the justices right down the same ideological lines. And it’s what they do to agencies when added together that really ought to give readers pause.

Start with Loper Bright and Relentless. The upshot of that ruling, as I’ve explained elsewhere, is to take ambiguous language in statutes delegating power to agencies, and to give the conclusive authority to resolve the ambiguity to judges, rather than the agencies. Unlike what is now true under the so-called “major questions doctrine,” ambiguity is not necessarily fatal to the agency’s claimed authority. Post-Loper Bright, it just means that the agency’s reasonable resolution of the ambiguity is not necessarily going to be upheld by the courts—and, indeed, may not be. That’s a significant transfer of power from agencies to courts, but not necessarily one that puts the entire administrative state into jeopardy all by itself.

Then there’s Jarkesy, in which the Court reinvigorated a long-since-rejected reading of the Jury Trial Clause of the Seventh Amendment to hold that, at least some civil enforcement proceedings have to be tried to civil juries unless the defendant consents to agency adjudication. In practice, this will make it much harder (and more onerous) for agencies to seek civil fines and other penalties in contexts in which they have, in some cases for decades, done so through internal proceedings in front of administrative law judges. To be clear, this is not about due process; there’s no real argument that the administrative proceedings had failed to provide offenders with a meaningful opportunity to be heard. Rather, it’s about a structural argument that no amount of due process can override the right to a civil jury—even though the Court, for decades, has pared back the Seventh Amendment in other contexts. As with Loper Bright, the point is not that this destroys agency enforcement power. Rather, it’s the chaos it creates, because it’s not clear which agency enforcement proceedings now have to be brought before juries, or whether the enforcement of different types of rules (e.g., fraud versus insider trading) can be split between the agency and civil juries. Who needs certainty, anyway?

My own vote for the most quietly sinister ruling of the term is Ohio v. EPA. That case isn’t about agency powers in general. Rather, it’s about how agencies are supposed to comply with their statutory obligation to consider public comments when they engage in notice-and-comment rulemaking. What is so galling about Justice Gorsuch’s majority opinion (as Justice Barrett points out in her … unsparing … dissent) is how it basically invents a reason to hold that the EPA acted arbitrarily—when the record is entirely to the contrary. The problem with Ohio isn’t that it forces agencies to be more careful; it’s that it makes clear that agencies will sometimes be unable to please their judicial masters—no matter how many i’s they dot and t’s they cross. So instead of trying harder, agencies might just give up. The implications were well-captured by Michigan professor Nick Bagley over at The Atlantic:

The lesson that agencies actually learn tends to be very different. They lose so regularly, and for such a wild and whirling array of reasons, that the outcome of a lawsuit, from their perspective, looks pretty random. No matter how many pages they spend defending their rule or how carefully they conduct their legal analysis, they may still lose, and often for reasons that strike experts in the field as idiosyncratic or baffling. You don’t correct a dog’s behavior if you smack it at random intervals. You just make it cower in the corner.

And as if all of this wasn’t enough, the last ruling of the quartet that the Court handed down over its last three days of sitting is the one that ensures that this Brave New World of administrative law doesn’t just apply going forward; it can also be used to dig up the roots from under long-settled administrative understandings. After all, if the six-year statute of limitations for challenging “final agency action” doesn’t start to run until a specific plaintiff is injured, nothing is to stop those hostile to an old rule from literally creating a new plaintiff out of thin air solely so that the plaintiff can be injured anew by the old agency action. At that point, unless the Supreme Court has specifically upheld the old agency action (at which point, stare decisis might do some work), the challengers can simply file their lawsuit in a circuit in which that action was never challenged—and then avail themselves of the new post-Loper Bright approach to deference, the post-Ohio approach to agency arbitrariness, and the post-Jarkesy hostility to administrative enforcement.

Putting this all together, the result is to throw into doubt a stunning array of prior administrative action. Under Loper Bright, reasonable agency interpretations of ambiguous statutory language now only have a chance of surviving judicial review; they’re not guaranteed to do so. Under Jarkesy, agency efforts to enforce their rules now only have a chance of surviving judicial review if they’re conducted without jury trials (as most are). Under Ohio v. EPA, courts will be free to second-guess even how agencies did their own internal review of public comments on proposed rules. And Corner Post takes all of those holdings and opens the door to applying them retroactively—not just to actions taken five years ago, but to actions taken fifty years ago.

The result is not, contra some commentators, the demise of the administrative state; we’ll still have more than 400 federal agencies tomorrow, and those agencies will keep exercising their delegated statutory responsibilities. There may be other cases coming down the pike that invite the Court to actually throw out certain agency structures altogether, but these aren’t they. Instead, the result is to unsettle a staggering array of agency actions—be they rules, adjudications, or other formal proceedings. Maybe the relevant rules or adjudications will be sustained by courts, but maybe they won’t be. Maybe the agency’s internal handling of public comments will satisfy a reviewing judge, but maybe they won’t. In other words, we’ve gone from a world in which those within and without government could take at least some solace that, whatever the wisdom of agency actions, one could at least tend to rely upon them to a world in which it is very hard for anyone to say with confidence that agency actions, new or old, will withstand judicial scrutiny.

What makes this pivot that much more destabilizing is the reality of the contemporary civil litigation landscape—in which well-funded, well-supported interest groups can steer challenges to nationwide policies to those courts, or even those specific judges, most likely to be ideologically or politically sympathetic to the challenge or hostile to the agency action being challenged. In a world in which litigants can challenge virtually any federal policy in Amarillo, Texas (or San Francisco, California), that only raises the odds of at least initial rulings against the challenged agency actions—even if those rulings might eventually be reversed on appeal.

The point is not that this will result in the long-term cabining of all administrative agencies. It’s in some respects worse than that: It will result in the short-, medium-, and long-term destabilization of administrative regulatory regimes—which will now become subject to the views of the most ideologically or politically unsympathetic judge that challengers can find. Given the increasing polarization of the federal judiciary, that’s a recipe for a whole lot of uncertainty going forward—even if many of these administrative actions ultimately withstand this new gauntlet of judicial review.

Of course, it would be one thing if voters had, for whatever reason, voted for this kind of chaotic, unpredictable, and, it should be said, woefully inefficient system. But of course they didn’t. This is coming from unelected judges for whom no one ever cast a ballot. And although democratic institutions can reclaim at least some of this power and abate at least some of the chaos, it’s hard to see that as a priority for any Congress anytime soon. Instead, the new administrative law that will result from the Court’s major OT2023 rulings will be, in the main, a robust employment program for administrative lawyers.

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SCOTUS Trivia:
Oral Arguments in the Watergate Tapes Case

Given last week’s ruling in the Trump immunity case, it seems like a somewhat inauspicious moment to note this, but today marks 50 years to the day of the oral arguments before the Supreme Court in United States v. Nixon—the Watergate tapes case. (Nixon was, unsurprisingly, the last time the Supreme Court heard oral arguments in the month of July.)

You can listen to the audio of the argument yourself via the fantastic Oyez! website. Suffice it to say, the tenor of the discussion and debate between the justices and counsel is a bit less … pro-executive … than what we saw in Trump v. United States. As folks likely know, 16 days after argument, the Court handed down an 8-0 ruling holding that President Nixon had to turn over the remaining tapes. And 16 days after that ruling, Nixon resigned.

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Until then, happy Monday, everyone. I hope that you have a great week!

1. Now that the Court has risen for its summer recess, the Clerk’s Office has reset all of the docket numbers. And no, that timing, which I discussed in the trivia to an issue this time last year, still makes no sense.

2. Justice Jackson was recused in Loper Bright but not in Relentless. So it’s not technically correct to say that Loper Bright itself was 6-3, even though I think it’s fair to say that the consolidated rulings were. But also, why can’t the Court just hand down a ruling in the case in which she’s not recused and then summarily resolve the other one?