The Constitution as understood since John Marshall has made the last word of the Supreme Court on the Constitution an unreviewable fact. The new administration will find a Supreme Court super majority of ideologically cohesive judges chosen by a political party historically hostile to the regulatory administrative state which was built largely by Democratic Presidents and Congressional majorities. It is vulnerable to constitutional interpretation via concepts such as due process of law, and the allocation of powers
The modern regulatory state like the seminal Civil Rights Act of 1964 has been constitutionally grounded not in protection of the general welfare but rather in the national government’s power to regulate commerce between the states. The Supreme Court’s majority in the Affordable Care Act case NFIB v. Sebelius, would have declared unconstitutional the 2,000 page restructuring of the national health insurance system. The Chief Justice opined that the law “would open a new and potentially vast domain to congressional authority” if seen solely as a commerce clause exercise. Four other justices agree on that point. But John Roberts saved the Act by declaring its penalties as within the federal tax authority.
Lest the charge of hostility to the regulatory state seem hyperbolic we turn to the words of the conservative justices. Chief Justice Roberts’s 2013 City of Arlington v. FCC opinion deplored the Federal Communications Commission for “as a practical matter” exercising “legislative power by promulgating regulations”, “executive power by policing compliance..and judicial power by adjudicating enforcement actions act imposing sanctions”. Such an “accumulation of all powers...may justly be pronounced the very definition of tyranny”, he wrote, citing the gospel according to James Madison in The Federalist No. 47. Nor is this an oddity according to Roberts as such “accumulation...is a central feature of modern American government.”
Another threat to the administrative state is seen in Seila LLC v. Consumer Finance Protection Board (2020). John Roberts, for the majority, declared that the CFPB Director could not be protected by Congress from discharge by the President. The Chief Justice said that the principle of Humphrey's Executor v. U.S. (1935) [upholding the Federal Trade Commissioners’ staggered seven year terms] could not be extended to the single director CFPB. But Justice Clarence Thomas was not satisfied with Roberts's narrow ruling, saying:
The decision in Humphrey’s Executor [upholding the FTC as an expert agency without substantial executive power] poses a direct threat to our constitutional structure and, as a result, the liberty of the American people.
The Court concludes that it is not strictly necessary for us to overrule that decision. But with today’s decision, the Court has repudiated almost every aspect of Humphrey’s Executor. In a future case, I would repudiate what is left of this erroneous precedent.
The multi-member executive branch “alphabet agencies” [e.g. SEC, FEC, CPSC, NLRB, Federal Reserve] whose members serve terms of years are designed to be both quasi-independent of executive control and bi-partisan. They are impending targets of Justices Roberts, Thomas, and Gorsuch at least.
Of particular importance is the doctrine of judicial “Auer deference” to agencies’ interpretations of their statutes and regulations. Enunciated in 1989 by Antonin Scalia, but later renounced by him, the doctrine hangs by a thread. The thin majority adhering to precedent in Kisor v. Wilkie (2019) is likely to be lost with the accession of Amy Coney Barrett who has described the late Justice Scalia as her mentor and his philosophy as her own. Justice Neil Gorsuch complained in Kisor that the Auer rule creates “a systematic bias in favor of the federal government, the most powerful of parties, and against everyone else.” Gorsuch looks forward eagerly to “overruling Auer” which would take us “directly back to Skidmore [v. Swift & Co. 1944], liberating courts to decide cases based on their independent judgment and `follow [the] agency’s [view] only to the extent it is persuasive.”
We expect that the new administration will move as quickly as it can to reverse the de-regulatory measures of the departed. Environmental regulations regarding air and water pollution will presumably be a principal focus, as will workplace safety, wage and hour laws, and regulation of the financial industry. The ability of the alphabet agencies to implement such measures as the new administration will propose is much in doubt given the high court’s skeptical view of their place in the constitutional regime as the Chief Justice and his allies see it.
The new administration and federal regulators may be looking at forty miles of bad road.
GWC
November 8, 2020
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