In three decisions late this week, the Supreme Court upended American administrative law—the legal field that governs how government agencies interpret and implement legislation.
Administrative law is notoriously arcane and technical. But these cases will have enormous consequences for governmental functions as disparate as regulating pollution, guaranteeing safe workplaces, and administering Medicare. The winners won’t be average American citizens; they will be companies and private interests who know how to use the court system to their advantage.
To see why, begin with the fact that all three of the cases inflate the role of the courts. The blockbuster case of the three, Loper Bright Enterprises v. Raimondo, overturned a seminal 1984 decision known as Chevron, which called for courts to defer when agencies interpret the statutes they administer. Now courts—not agencies—will decide crucial legal questions about how to implement government programs.
The Supreme Court went out of its way to say that it wouldn’t defer “even when an ambiguity happens to implicate a technical matter.” Regardless of how complicated the statute might be or whether the question is in the agency’s wheelhouse, the courts presumptively have the final say.
The other two cases, both decided Thursday, received less attention, but they may prove even more destabilizing. In SEC v. Jarkesy, the Court said that it was unconstitutional for agencies to impose financial penalties directly on lawbreakers, at least when those penalties resemble the kinds of penalties that courts traditionally impose. Instead, agencies must go to the courts and get their blessing, and that of a jury—however hard that might be or how long that might take.
No matter that Congress thought that agency proceedings might provide, as Justice Sonia Sotomayor said, “greater efficiency and expertise, transparency and reasoned decisionmaking, as well as uniformity, predictability, and greater political accountability.” According to the majority, the courts must possess the whip hand.
And in Ohio v. EPA, the Court put a stop to a new environmental rule seeking to prevent upwind states from polluting the air of downwind states. The Court’s rationale? That the agency’s lengthy, technical explanation for its decision didn’t respond adequately to the concerns of the states and industry groups that opposed the rule.
In dissent, Justice Amy Coney Barrett—no liberal apologist—was appalled. The Environmental Protection Agency received more than 1,100 highly technical comments, none of which crisply advanced the key criticism that the majority of justices said the agency had ignored. What’s more, the agency didn’t ignore the criticism. In fact, it addressed it explicitly, just not at the level of detail that the Supreme Court wanted to see. Are courts now supposed to hammer an agency for every supposedly inadequate response to every conceivable objection raised in every single comment? Doing so risks “the sort of unwarranted judicial examination of perceived procedural shortcomings,” Justice Barrett said, that would make it impossible for agencies to do their jobs.
What unites these cases is their aggrandizement of judicial power. Do agencies get deference on legal questions? Not anymore. Can agencies go after wrongdoers directly? Nope, they have to go to court. Will courts flyspeck agency decisions for dubious reasons? You bet.
The Supreme Court says that its rulings will protect individual rights and keep agencies from overstepping. On some occasions, that’ll be true. Agencies do sometimes behave stupidly or callously. Agencies do sometimes try to regulate things they shouldn’t. If the Davids of the world sometimes use the courts to slay Goliath, that’s all to the good.
But a lot of scholarly research suggests that’s not going to be the predominant effect.
In a famous 1974 paper titled “Why the Haves Come Out Ahead,” the University of Wisconsin law professor Marc Galanter argued that litigation systematically favors repeat players with the wherewithal to take fullest advantage of the courts. Key to his argument was the point that courts are “reactive”: They only do something when someone asks them to. That favors “the claimant with the information, ability to surmount cost barriers, and skill to navigate restrictive procedural requirements.” And most repeat players, Galanter said, tend to be “larger, richer and more powerful” than single-shotters.
The paper is 50 years old, but it’s held up. Go back to Ohio v. EPA, the case about interstate air pollution. The EPA’s sin, if there was one, was failing to adequately respond to a single oblique comment that it received. Who submitted it? The Air Stewardship Coalition, an industry front group representing (among other entities) the American Petroleum Institute, ExxonMobil, and the National Association of Manufacturers.
It turns out that’s typical. As I’ve written elsewhere:
One study examined 40 rules across four agencies and found that business interests submitted nine times as many comments as did public interest groups. Those comments were also of higher quality and appeared more likely to provoke changes. Another study of 90 Environmental Protection Agency rules governing the release of air toxins found that industry submitted 81 percent of all the comments, with public interest groups submitting just 4 percent—and that EPA’s rules were more apt to be weakened as the number of comments increased. Earlier work examining the development of hazardous waste rules at EPA over a three-year period found that industry groups submitted 30 times more comments than public interest groups.
On top of that, no rules limit the length or volume of comments. As a result, the University of Texas law professor Wendy Wagner has shown, industry groups carpet-bomb agencies with thousands of pages of comments, many of which contain unstructured technical information.
Why? Sometimes, industry has important information to share. At least as often, however, comments are used strategically. (For genuinely important information, industry can usually find a back channel outside the cumbersome notice-and-comment process.) Think of a comment as a rake that an agency might accidentally step on. The more comments, the more rakes strewn across the lawn.
An agency might know that a comment is trivial or unhelpful. But who’s to say what a judge who knows nothing about the subject matter might someday think? (It’s telling that, in the initial draft of the opinion, Justice Neil Gorsuch kept referring to “nitrous oxide.” But nitrous oxide is not a pollutant. Nitrous oxide is laughing gas, and wasn’t the chemical in question.) Agencies know, too, that they get sued by industry much more often than they do by public-interest groups. Best to minimize the risk by responding at punitive length to each and every comment. You still might step on a rake, but at least you tried.
The point about Ohio v. EPA applies equally to the other two major administrative-law cases that the Court decided in the past couple of days. If you’re an agency, and you’re considering interpreting your governing statute in a way that might tick off industry, now you might think twice. They’re the ones most likely to sue, after all. Without Chevron in place, why run the risk that a court might read the law differently than you do?
Or maybe you’re an agency that’s hoping to bring an administrative case against, say, a business that fails to meet workplace-safety standards, believing that swift and sure justice will deter others. Now you may not be able to bring that case before an administrative tribunal, which can move with relative dispatch. Instead, you have to go to court, a lengthier and dicier proposition. Businesses will see that the agency’s enforcement authority has been circumscribed, and act accordingly.
The point, again, is not that industry groups are the only beneficiaries of the three decisions—far from it. Individuals, environmentalists, and unions will sometimes benefit too. Nor are these three cases abrupt departures from the kind of judicial oversight we’ve seen before. It’s more accurate to see them as an intensification of preexisting trends.
The point is that, on balance and over time, strict judicial oversight of agency action will tend to favor well-organized repeat players over the public beneficiaries of regulatory programs. Maybe that’s not such a surprise. The conservative justices at the Supreme Court were selected by Republican presidents who were sympathetic to business interests and concerned about government overreach. Administrative law turns out to be a highly effective and low-visibility way to advance that agenda. The Court likes to talk about constitutional principles and individual rights. But these cases are mostly about power.
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