Michael McConnell
Subject: The Courts Strike Back Against the Bureaucracy
Bio: Law professor at Stanford University and Former Judge of the United States Court of Appeals for the Tenth Circuit
Transcript:
Larry Bernstein:
Welcome to What Happens Next. My name is Larry Bernstein. What Happens Next is a podcast which covers economics, politics, and law.
The topic today is The Courts Strike Back Against the Bureaucracy.
Our speaker is Stanford Law Professor Michael McConnell. The Supreme Court has just repealed the Chevron Doctrine in one of the Supreme Court’s most important rulings of the year. This decision ends judicial deference for interpretations made by bureaucrats in the Federal agencies. For the past 40 years, the Supreme Court has allowed bureaucratic experts to interpret ambiguous statutes if their analysis was reasonable. No more. Now decision making goes back to the judiciary on how to interpret the law.
I want to find out what the implications are for how the Federal Agencies will act given the broadness and ambiguity of most statutes and Congress’s inability to pass clarifying legislation.
Buckle up.
Michael, what is the Chevron doctrine and why did the Supreme Court repeal it?
Michael McConnell:
The Chevron doctrine has become the most cited Supreme Court precedent in administrative law. The essence of the Chevron case is that when an executive branch agency interprets a statute and that is challenged in court, the agency's interpretation will prevail even if the court believes that it is not the best interpretation of the statute. Now, if the court thinks the agency's interpretation is completely unreasonable, like off the charts, then they will strike it down, but not because they think the agency got it wrong.
One rather remarkable case called Brand X, the court interpreted the statute first and it said what it meant. Then the agency came along and gave a different interpretation contradicting the court's interpretation, and then the court said, well, okay, we defer to the agency. So, it's become a quite extraordinary doctrine of executive power.
That cuts different ways according to whether Republicans are in power, or Democrats are in power. It's been a bipartisan instrument of executive power, which gives the executive branch authority to interpret their own statutes. Now, at the beginning, that may not have been so strange because agencies had a habit of reasonable interpretations for a long time.
But once they discovered that they had this new tool and that almost no matter what they did, they would get away with it. The court’s agency lawyers became more and more creative. And although the original Chevron decision was quite sensible, this became what I call a superpower of the agencies to give themselves authority to do things that Congress never would've imagined. Things that were not within the scope of a statute. I think that this is one of Roberts' most persuasive and best opinions in his time as Chief Justice.
Larry Bernstein:
I too thought Robert’s opinion was excellent. As a non-lawyer, it was jargon-free. It was persuasive. It gave context to why Chevron existed and why Chevron had to go. Why did Roberts write the opinion this way and why do you think it is one of his best opinions to date.
Michael McConnell:
Chief Justice Roberts is very good at writing commonsensical opinions that have legal grounding. Elena Kagan is also quite good at this. It's interesting to see them on opposite sides of the case. Roberts is writing not just for lawyers and specialists but for the American people. Chevron is a particularly difficult case to write about because it's very much a lawyer's case. It's about how law is going to be interpreted. But it touches upon some fundamental jurisprudential questions.
Going back to the beginning of the Republic, we talk about Marbury versus Madison as being the first great opinion of the US Supreme Court. And what that held was that it is the job of the courts to interpret law. And law means the Constitution, it means statutes, it means common law. It is the job of the courts to interpret the law. And then this was carried forward most emphatically in the Administrative Procedure Act, which was passed at the height of the New Deal to bring order to the rapidly increasing power of regulatory agencies. And that statute is the fundamental law for administrative law, and it provides in no uncertain terms that it is the reviewing court that decides all questions of law. The agencies decide questions of fact, and they set policy, but the interpretation of the law, according to the Administrative Procedure Act, is in the hands of the court. The disturbing, astonishing thing about the Chevron opinion is it didn't even cite the Administrative Procedure Act. So, the law, which is most pertinent to the question being decided by the court in Chevron, wasn't even mentioned. And this is something that Chief Justice Roberts calls attention to quite effectively in his opinion.
Larry Bernstein:
Can you explain how the Administrative Procedure Act was supposed to provide the agency with guardrails and how Chevron changed that relationship?
Michael McConnell:
Chevron itself was about the Clean Air Act, and it provided that the EPA had to regulate pollution emitted by a stationary source. So, the key word is source. Now, what is the source? That could be every individual machine within the facility, or it might mean the whole facility. Congress hadn't even thought about it. But what we do know is that every source must be regulated. And so, this is clearly in the EPAs ballpark, they are doing something they're supposed to do. And the way they interpreted this, they concluded that there could be more effective if they regulated at the facility level rather than at the individual point source level, and that this would create incentives for higher levels of pollution controls.
The DC Circuit District of Columbia Circuit, which is the Washington-based appellate court that decides most administrative appeals disagreed with the EPA on the policy question. The court explicitly said that the statute didn't resolve the question, but the court said that in their opinion, the purposes of the statute would be better met if the word source were interpreted to mean point source. Well, the Supreme Court comes along and says the court had to defer to the reasonable interpretation of the statute.
Larry Bernstein:
After the Supreme Court created the Chevron Doctrine, what happened next?
Michael McConnell:
Well, this then turns into the idea that the agency can interpret statutes in ways which a court might think is improper and get away with it. And the most important implication of that is that they can come up with new powers and give them the scope to regulate matters that Congress never intended them to be able to regulate. So, for example, in one very famous case the Food and Drug Administration had been given power to regulate food and drugs, and they decided to regulate tobacco, which is neither food nor a drug. But the agency said, well, it looks like a food or a drug to us, and so we are going to regulate tobacco when Congress had never intended them to do that.
And the Supreme Court said no. It was one of the first cases to refuse to apply a Chevron deference. And the case that just came down that overruled Chevron is called Loper Bright Enterprises. And in that case, Congress passed a statute requiring commercial vessels to allow a federal monitor to be on board to make sure that they comply with the complicated rules of commercial fishing. The agency decided we'll make the ship owner pay for those monitors. Congress never gave the agency that authority, but Congress also didn't say otherwise. And so, two of the three judges in the lower court said that under Chevron deference, it's not unreasonable to read the statute as allowing that.
And the court reversing says no. It's a fundamental principle of our government that executive agencies can only exercise power that has been given to them by Congress, that they can't conjure up power themselves. And if you let agencies simply have fanciful interpretations of their organic statutes, you are letting them decide what the scope of their power is going to be. Whereas in our system, that's supposed to be done by the representatives of the people.
Larry Bernstein:
In 1984 when the Chevron ruling came down by the Supreme Court, you were working for the US government and were concerned that the DC Circuit Court was overbearing and too involved in decision making. At the time of the Chevron decision, you had mixed feelings. Tell us about when Chevron was first introduced by the court.
Michael McConnell:
This was a different era, and the DC Circuit, which had jurisdiction to review administrative action had adopted an aggressive approach in which it seemed to see itself as the principal supervisor of the administrative of the executive branch rather than the president. The constitution says it's the President who shall take care that the laws be faithfully executed. The DC Circuit acted as if the Constitution said, well, the DC Circuit shall take care that the laws be faithfully executed. The most important one being procedural, that the court would impose new procedures on the agency. They were not in the original statutes saying, you must have different kinds of hearings. You must allow expert witnesses to be cross-examined. And then the second thing that they were doing was that they were interpreting statutes according to what they thought their purpose was, and that if the agency was doing something that they didn't think was the best way to achieve the purposes as the statute, they would say that the agency was violating the statute.
The procedural half was reversed in a case called Vermont Yankee versus Nuclear Regulatory Commission in the 70s, and it held that the courts do not have power to impose new procedures that whatever procedures are in the statute apply and no more.
Chevron at first looked like it was simply a response to the second problem, and it looked like what it meant was that courts had no authority to read new substantive requirements into statutes that weren't there. The courts didn't have the authority to rewrite the statute according to what they thought it would be a better way to effectuate its purposes.
But as we've already said, this morphed into the idea that the agencies are free to give creative reinterpretations of the statute that gave them power to do things that they had never been given by Congress. And it also has this strange jurisprudential effect, which is the statutes don't change, but if one administration will say, the law means this, and the next administration will say, the law means that, and then the next administration will go back and say, oh no, the law means this.
This has happened so many times, especially the Trump and Biden administrations, where they simply, in the early days of the administration, the president issues a bunch of executive orders, reversing earlier interpretations of statutes.
Well, this means that they aren't really statutes at all. What we have is a series of presidential political determinations that are masquerading as interpretations of the law. Now sometimes the interpretation of the law changes. But that's quite different from having each administration decide what the law means for itself and thus conjuring up new powers.
Larry Bernstein:
In Chief Justice Roberts' opinion, he highlights that the courts over the past decades had stripped Chevron of a lot of its powers. And then finally he says, this court has recognized that Chevron is dead, and it's hereby repealed.
Michael McConnell:
Well, this is true. The most bizarre aspect of this was that the Supreme Court itself had lost faith in Chevron many years ago. Chevron has not employed in the Supreme Court since 2016. If the case got up to the Supreme Court, they would not defer to the agency interpretation. They would look to see what they thought the best interpretation of the law was, but lower courts were still stuck with it. I speak here as a former 10th Circuit Appellate Judge, and when the Supreme Court itself follows one methodology but insists that the lower courts follow a different one. It's a recipe for disaster. It's a bad practice for the Supreme Court to leave doctrines in place when they no longer believe in them because it just leaves lower courts in a terrible position.
Larry Bernstein:
Let's go to the dissent. In this case, this was a 6-3 decision, and the minority were the liberal judges. The dissent was written by Kagan. Sotomayor, and Jackson also dissented in that opinion. Kagan's main point was that Congress has empowered the federal agencies to do certain things. They are the experts in these fields. She says, we judges aren't experts in anything. We need to rely on experts and to give them reasonable deference. What do you think of Kagan's dissent?
Michael McConnell:
Elena Kagan is an excellent justice in her opinions, always have this beautiful tone of reason to them. In this case, she's relying upon a view of administrative agencies popular and credible 40 years ago. But political scientists and Congress don’t believe it anymore. The idea that agencies are simply experts giving nonpartisan answers to technological questions is quaint. So much of what they do is just presidential politics. If these agencies were expert, then Trump administration, agency officials would not be interpreting statutes differently than Biden administration experts. It's not that there's expertise, it's that they are combing old statutes to come up with justifications for doing things that they want to do for political reasons.
Don't get me wrong, a lot of what they do is technocratic. I think you'll find that the courts still defer to them, but not because it's the meaning of the statute. They're going to be deferring to them because the agency has been given the authority by Congress to make the decision. And when they do that, their expert judgment should not be overturned. Justice Kagan is entirely right about that, but the Chevron cases are something else altogether, because they're not about whether the agency got the expert stuff right. It's about whether the agencies have the power to act in a particular area.
Larry Bernstein:
There's frustration that Congress is incapable of doing its job, namely writing clear unambiguous statutes, and that when the world changes and we need clarification from Congress. It doesn't do its job, therefore it's incumbent upon the bureaucracy to fill that hole and make law. If Congress doesn't like what the agency is doing, then Congress can then fix it by passing new legislation.
I should step back a second and go to Justice Thomas's concurrence. What he says in his opinion is what's going on here is a clear violation of the separation of powers in the Constitution and the duty to make law is only in the hands of the legislative branch and the executive branch is to implement and execute those laws.
If agencies are starting to make laws that's not their job. We were rejecting the Chevron doctrine because it's a violation of that separation of powers that the agencies are overstepping into the role of the congressional legislative responsibilities. What I thought was interesting was that none of the other justices signed on to Thomas's opinion.
Michael McConnell:
Thomas makes several very good points, and I don't see them as inconsistent with what was in the Chief Justice's opinion. And I don't even see them as terribly inconsistent with the dissenters, although there is more difference there. When we look at the current situation of Congress, it is a bit depressing because they don't seem to be able to do anything. Whose fault is that? Well, the American people have put one party in charge of one house of Congress and the other party in charge of another house of Congress. It makes things difficult to do because we're not in agreement about what should be done.
But when Congress chooses not to do something, this should not be taken as an invitation to the executive branch to do it. Take, for example, immigration reform, Congress debated it. They came very close to a compromised position, then they backed away from it, and then President Obama decided just to do it anyway without Congress acting.
When Congress doesn't do something, when it votes something down, that is a decision which is entitled to just as much respect under our system of government as voting the other way. And this idea that we solve the problems of a dysfunctional Congress by just acting as if what they do doesn't matter and regulating and governing entirely from the executive branch makes things worse. Chevron is not a solution to a dysfunctional Congress.
To reverse Chevron is to put Congress back in the driver's seat and to say, things are not going to happen unless you make them happen. And maybe that is the message that Congress needs.
Larry Bernstein:
In Kagan's dissent, there's another aspect of outrage in that was a violation of stare decisis that this rule had been around for 40 years. We should respect previous opinions and those 18,000 citations to this case had built up a body of law. How do you think about this court and its willingness to repeal 40-year-old decisions?
Michael McConnell:
The statistics indicate that this court does not overrule cases at any more rapid rate than the past courts. It's been roughly two cases overruled every term for the last 50 years. And there's just so much hypocrisy about all of this. There are lists running around in academic circles of all the conservative decisions that should be overruled as soon as there's a liberal majority on the court, and as soon as that happens, and it will happen. Majorities are not forever. As soon as it happens, all the people who've been supporting stare decisis are going to flip, and everybody who's been advocating overruling things are suddenly going to become the defenders of stare decisis. Stare decisis is the rhetorical re-do of those who are on the losing side of a vote.
Larry Bernstein:
There were a lot of court decisions that relied on Chevron. What happens to that body of law now? Are those decisions going to be reopened or is that settled?
Michael McConnell:
The opinion addresses this. They're not all to be reopened. It is a little odd to say you overrule a case which is just about methodology as opposed to an actual judgment. Chevron itself is still good law. It's the methodology described in Chevron, which is going to be different.
My guess is that most of those specific interpretations that were upheld as a result of Chevron are going to be undisturbed.
Larry Bernstein:
Agencies write interpretations of a statute, and industry participants rely on that interpretation. Does the repeal of Chevron change those statutory interpretations?
Michael McConnell:
Agency lawyers will have to become more cautious and less adventurous in their interpretations, but an agency still needs to interpret the statute that it operates under. Instead of being confident that no matter what they say they'll get upheld, they're going to be looking over their shoulder and thinking, well, is what we're saying here accord with what Congress intended? And if not, we might get overturned. And it's going to be a salutary caution to agency lawyers not to overreach.
Larry Bernstein:
Some commentators have said that this is the most important Supreme Court decision of this term. Do you agree?
Michael McConnell:
It's one of the most important. It is quite possible that the Jarkesy versus SEC decision will have even more importance.
What that decision says is that many matters that strongly affect private rights, meaning life, liberty and property, need to go to juries and Article III courts rather than to be decided by agency tribunals. Chevron is very important, but the thing is it's been on its way out now for 10 years. The Loper Bright Enterprise decision, just sticking a fork in it, it's not a surprise. The Jarkesy decision is more startling.
Larry Bernstein:
An agency has been able to interpret a statute and then be the judge as well. Judges who work for the agency are likely to vote with the agency in almost every case. It would be fairer to have an independent judge decide a case rather than an agency tribunal.
Michael McConnell:
Chevron is about the relationship between the executive agencies and Congress, and it requires that executive agencies exercise power only when given by Congress and not conjured up by their own creative interpretations.
Jarkesy is about the relationship between executive agencies and the courts. It has to do with whether due process assigned to the courts are decided instead by interested agency entities. A lot of agencies do have the power to fine individuals for violation of regulations and under Jarkesy, all of that may be illegitimate.
Larry Bernstein:
I like to end each podcast with a note of optimism. What are you optimistic about as it relates to Chevron?
Michael McConnell:
I'm quite optimistic about the court in general. There's been a lot of partisan attacks on the court, and I don't agree with every decision that the court has been rendering, but I think that this court has been more lawful, has based its decisions more on actual considerations of law than has been true in the past when I was a law clerk. I think the dissenters are also better, that their dissents are more often grounded in real law questions rather than emotional appeals. I am quite optimistic about the judicial system.
Larry Bernstein:
I want to ask one last question. The other decision that came down related to whether there could be judicial review of official acts of the president himself. This Trump criminal case caused hand wringing in the press. Any insight on that case?
Michael McConnell:
The immunity decision has to do with whether there can be punishment of the president personally after the fact for acts that he took as president, and that has never been part of our system. The immunity decision leaves the status quo the way it was. Now, it is true that there had never been a formal decision saying that former presidents are immune, but they had never been prosecuted. And so, the overall effect is to leave things pretty much as they were and to protect the presidents in much the way the judges have absolute immunity from prosecution or civil suit for their judicial acts, and so do prosecutors and so do members of Congress. Extending that to former presidents for official acts is, I think, not as revolutionary as people want to pretend that it is. And it also doesn't even protect Mr. Trump from most of the things that he has been charged with, which strike me as being private matters. There were a few official acts that are part of the Jack Smith's DC January 6th indictment, but most of it is private.
Larry Bernstein:
Can you give an example?
Michael McConnell
All the ways to try to persuade electors to do things. The president has no legal responsibility for administering the elections. He was operating through private attorneys, which is also pretty good evidence that this was not an official act. These were the private acts of a candidate for president, not the official acts of the president.
Larry Bernstein:
Thanks Michael, for joining us today.
If you missed our previous podcast, check it out. The topic was, has Woke Peaked? Our speaker was Eric Kaufmann who is a Professor of Politics at The University of Buckingham and the author of the book entitled, The Third Awokening: a 12 Point Plan for Rolling Back Progressive Extremism. Eric gave a history of the woke movement and explained its core philosophies. Eric also explained how the woke movement is dealing with political pushback.
I would now like to make a plug for next week’s podcast with Richard Fontaine who is the CEO of the foreign policy think tank The Center for New American Security. Richard is also the author of a new book entitled Lost Decade: The US Pivot to Asia and the Rise of Chinese Power. I want to find out from Richard about how to contain Chinese economic and military power in conjunction with our allies in the region as well as reducing China’s role in international organizations.
You can find our previous episodes and transcripts on our website whathappensnextin6minutes.com. Please subscribe to our weekly emails and follow us on Apple Podcasts or Spotify. Thank you for joining us today, good-bye.
Check out our previous episode, Has Woke Peaked, here.
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