Leviathan
"If you lay a hand on it, you will remember the struggle and never do it again! Any hope of subduing it is false; the mere sight of it is overpowering. No one is fierce enough to rouse it. When it rises up, the mighty are terrified; they retreat before its thrashing. The sword that reaches it has no effect, nor does the spear or the dart or the javelin. Iron it treats like straw and bronze like rotten wood. Arrows do not make it flee; slingstones are like chaff to it. A club seems to it but a piece of straw; it laughs at the rattling of the lance. This morning the Supreme Court will hear two cases that strike at the heart of federal administrative agencies. As Ronald Mann reports at SCOTUS Blog "Axon Enterprise v. Federal Trade Commission and Securities and Exchange Commission v. Cochran present a frontal assault on the traditional framework under which federal courts have entertained complaints about federal agencies." The grievance of the challengers is that by forcing them to proceed before an administrative law judge (rather than a U.S. District Court) the agency is acting as lawmaker, judge, jury, and executioner. Such challenges are accompanied by much hyperbole. Unlike Cass Sunstein and Adrian Vermeule, whose Law and Leviathan defends the regulatory state, the illiberal conservative majority is sure to take the assault seriously. The subjects of the agency action launched a collateral attack, asserting a right to go to the District Court, rather than the ALJ and SEC or FTC processes. The United States simply responds that e FTC Act and Exchange Act authorize judicial review only after agency proceedings conclude. But the challengers assert that their attack on the very structure of the agency should not be heard in the first instance by the agency itself. Just two weeks ago a similar attack in Jarkesy v. SEC which won the support of a District Judge who declared that a defendant in an SEC proceeding is entitled to trial by jury. A divided 11th Circuit refused to stay that ruling. The virtue of judiciousness has many components. One is deference to the competence and understanding of the law of those specifically charged with its "faithful" execution. Kisor v. Willkie, Secretary of Veterans Affairs(2019) arose from a Vietnam Veteran's forty year! quest for disability benefits. His case became the vehicle for a concerted drive to gut the Roosevelt era administrative state. But Elena Kagan, writing for the majority, managed to stop the Court from dropping off the cliff, saving in form at least the doctrine - first formulated by Antonin Scalia but steadily eroded: This Court has often deferred to agencies’ reasonable readings of genuinely ambiguous regulations. We call that practice Auer deference, or sometimes Seminole Rock deference, after two cases in which we employed it. See Auer v. Robbins, 519 U. S. 452 (1997); Bowles v. Seminole Rock & Sand Co., 325 U. S. 410 (1945). | |
One of the principal authors of the Constitution famously wrote that the “accumulation of all powers, legislative, executive, and judiciary, in the same hands, . . . may justly be pronounced the very definition of tyranny.” The Federalist No. 47, p. 324 (J. Cooke ed. 1961) (J. Madison). Although modern administrative agencies fit most comfortably within the Executive Branch, as a practical matter they exercise legislative power, by promulgating regulations with the force of law; executive power, by policing compliance with those regulations; and judicial power, by adjudicating enforcement actions and imposing sanctions on those found to have violated their rules. The accumulation of these powers in the same hands is not an occasional or isolated exception to the constitutional plan; it is a central feature of modern American government. The administrative state “wields vast power and touches almost every aspect of daily life.” Free Enterprise Fund v. Public Company Accounting Oversight Bd., 561 U. S. ___, ___ (2010)
Neil Gorsuch in Kisor v. Willkie (2019), concurring (just barely) with Kagan, wrote that judges should not feel the need to defer to those who are charged with the faithful execution of the laws:
Overruling Auer would have taken us directly back to Skidmore, liberating courts to decide cases based on their independent judgment and “follow [the] agency’s [view] only to the extent it is persuasive.”119 By contrast, the majority’s attempt to remodel Auer’s rule into a multistep, multi-factor inquiry guarantees more uncertainty and much litigation. Proceeding in this convoluted way burdens our colleagues on the lower courts, who will have to spend time debating deference that they could have spent interpreting disputed regulations. It also continues to deny the people who come before us the neutral forum for their disputes that they rightly expect and deserve. (emphasis added - gwc)
Writing in Talking Points Memo Sara Posner discusses the issues and their implications.
- GWC
November 7, 2022 8:00 AM
The Right-Wing Plan To Bring Down The Regulators Reaches The Supreme Court Talking Points Memo
By Sara Posner
On Monday, the Supreme Court will hear arguments in a SEC v. Cochran, a case in which the conservative majority could further erode the ability of the Securities and Exchange Commission to regulate financial markets — and, depending on how the justices decide the case, potentially deal a powerful blow to other agencies’ ability to carry out their regulatory and enforcement mandates as well.
At issue in the case is whether Michelle Cochran, a certified public accountant, can challenge the constitutionality of the administrative law judge who presided over a proceeding the SEC brought against her for allegedly violating accounting standards of the Public Company Accounting Oversight Board. In the Sarbanes Oxley Act of 2002 Congress created the PCAOB in a 2002 law to protect investors by ensuring accurate audits of publicly traded companies.
That may sound like an in-the-weeds dispute of interest only to financial services professionals and the federal officials Congress has tasked with regulating them. But far from being an exercise in legal minutiae, the case exemplifies a right-wing push to destroy what conservatives derisively call “the administrative state,” or the federal government agencies that protect the environment, food safety, financial markets, public health, and much more.
A deeper look inside the Cochran litigation shows how right-wing ideologues are succeeding in shaping negative judicial — and, along the way, public — assessments of federal government agencies as unconstitutional perpetrators of infringements on civil liberties. They do this not only by bringing cases that challenge the agencies’ constitutionality, but by injecting those cases with extra-legal arguments intended to portray the federal bureaucracy in the worst possible light, as an anti-democratic, tyrannical behemoth bent on stripping Americans of their freedom. These arguments are getting a more receptive hearing as the federal bench is increasingly stacked with judges hand-picked by conservative activists during the Trump era, who are similarly steeped in this ideology.
The Cochran case represents just one line of attack on federal agencies, in particular the SEC’s authority to regulate financial services professionals. “Professionals getting in trouble with their licensing regulators for violating professional conduct rules — and then complaining about having professional licensing consequences for those violations — is what we’re talking about,” said James Tierney, a professor at the Nebraska College of Law who previously worked at the SEC. “That’s the consequence of being in a licensed profession,” Tierney said. But, he added, “There are judges and litigants who think professional occupational licensing is the most foul intervention into civil liberties that we’ve ever seen.”
By Sara Posner
On Monday, the Supreme Court will hear arguments in a SEC v. Cochran, a case in which the conservative majority could further erode the ability of the Securities and Exchange Commission to regulate financial markets — and, depending on how the justices decide the case, potentially deal a powerful blow to other agencies’ ability to carry out their regulatory and enforcement mandates as well.
At issue in the case is whether Michelle Cochran, a certified public accountant, can challenge the constitutionality of the administrative law judge who presided over a proceeding the SEC brought against her for allegedly violating accounting standards of the Public Company Accounting Oversight Board. In the Sarbanes Oxley Act of 2002 Congress created the PCAOB in a 2002 law to protect investors by ensuring accurate audits of publicly traded companies.
That may sound like an in-the-weeds dispute of interest only to financial services professionals and the federal officials Congress has tasked with regulating them. But far from being an exercise in legal minutiae, the case exemplifies a right-wing push to destroy what conservatives derisively call “the administrative state,” or the federal government agencies that protect the environment, food safety, financial markets, public health, and much more.
A deeper look inside the Cochran litigation shows how right-wing ideologues are succeeding in shaping negative judicial — and, along the way, public — assessments of federal government agencies as unconstitutional perpetrators of infringements on civil liberties. They do this not only by bringing cases that challenge the agencies’ constitutionality, but by injecting those cases with extra-legal arguments intended to portray the federal bureaucracy in the worst possible light, as an anti-democratic, tyrannical behemoth bent on stripping Americans of their freedom. These arguments are getting a more receptive hearing as the federal bench is increasingly stacked with judges hand-picked by conservative activists during the Trump era, who are similarly steeped in this ideology.
The Cochran case represents just one line of attack on federal agencies, in particular the SEC’s authority to regulate financial services professionals. “Professionals getting in trouble with their licensing regulators for violating professional conduct rules — and then complaining about having professional licensing consequences for those violations — is what we’re talking about,” said James Tierney, a professor at the Nebraska College of Law who previously worked at the SEC. “That’s the consequence of being in a licensed profession,” Tierney said. But, he added, “There are judges and litigants who think professional occupational licensing is the most foul intervention into civil liberties that we’ve ever seen.”
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