Some important (and promising) news that otherwise might be missed: last week President Trump signed executive orders curtailing the use of subregulatory guidance, such as Dear Colleague letters and informal field advice, to create binding law [Susan Dudley, Forbes (guidance should be shield for regulated, not sword for regulators), Michael P. DeGrandis, Reason; first (rules for development of guidance and transparency) and second (use of guidance in civil enforcement) executive orders; background here and here]
My new post at Cato finds some real progress in grappling with a longstanding problem of the administrative state:
Since my update post last year, there have been a number of new developments. Soon after then-Attorney General Jeff Sessions’s announcement of the new policy, followed by the revocation of dozens of existing guidance documents, then-Associate Attorney General Rachel Brand issued a January 2018 directive telling Department of Justice attorneys not to rely on allegations of noncompliance with agency guidance, in and of themselves, as reason to initiate civil enforcement actions. And this past winter, DOJ updated its Justice Manual to limit the use of guidance as a basis for direct liability in both civil and criminal enforcement. “Guidance is not law. It’s not binding. And it shouldn’t be given the force or effect of law,” said Deputy Assistant Attorney General Charles Cox in a January speech.
Plus OMB guidance on the Congressional Review Act (it applies to some guidance documents) and a new study by Prof. Nicholas Parrillo for the Administrative Conference, which found that
regulated parties are most likely to feel that they have no real choice but to obey guidance 1) when they need to obtain preapproval before doing business, 2) when repeat interactions with regulators are inevitable and full compliance all the time is unlikely no matter how hard they try; 3) when the consequences of agency enforcement, or even the opening of an enforcement action, are severe; and 4) when the regulated party employs a large dedicated compliance staff.
These might serve as interesting guideposts in looking for ways to revamp regulatory schemes in such a way that agencies’ whims will no longer be received as law.
Although the Supreme Court in yesterday’s case of Kisor v. Wilkie did not overturn its Auer deference precedent, as Justice Neil Gorsuch and three colleagues wanted it to do, it did adjust the law in a promising direction. Ilya Shapiro explains:
All nine justices agreed that courts need to work harder to ensure that a regulation truly is ambiguous before giving the agency re-interpreting it any sort of deference.
In other words, the Court limited the number of cases where judges defer to agencies, while setting out standards for evaluating those cases that boil down to “when the agency is correct and brings its expertise to bear, having considered the reliance interests of those being regulated” rather than just making legal or political judgment calls willy-nilly. That sounds like reining in the administrative state!…
At bottom, Kavanaugh makes the perfect analogy that sums up the unanimous Court’s position: “Umpires in games at Wrigley Field do not defer to the Cubs manager’s in-game interpretation of Wrigley’s ground rules.” Administrative agencies are now on notice that it’s not “anything goes” when they decide to rewrite their own rules, that judges will hold their feet to the statutory fire.
In short, while Kisor didn’t overturn Auer, it represents a pretty good start at limiting executive-agency overreach….
If you’re looking for the enduring legacy of famed Yale law professor Charles Reich, I argue in a new Cato piece, it’s not so much to be found in his bestselling daydream of liberation The Greening of America as in his hugely influential work on government benefits as the “new property” of the administrative state. Excerpt:
Part of its ingenuity was in couching in seemingly sober and cautious terms an idea whose implications (especially welfare rights) were otherwise controversial, so as to appeal to moderates and also to the sorts of thinkers who would soon be termed libertarian. (The New York Times, in its obituary, says that “The New Property” article “defended an individual’s right to privacy and autonomy against government prerogative,” which sounds either Cato-ish or positively anodyne.) …
Reich’s remedies did not really operate to curtail big government, while they did advance the power and role within it of lawyers and those comfortable with legal process. In that way too, Reich outran his peers at capturing the spirit of his era.
Included: a discussion of the seeming, but in the end illusory, parallels between Reich’s early-1960s writing interests and those of economist Milton Friedman. More: anecdotes of Reich at Yale from Supreme Court Justice Sam Alito, via Josh Blackman. And a personal anecdote: classmates told me about this guy who’d roam the Old Campus engaging freshmen in long conversations, who was this famous author — but when he talked with my entryway-mates I happened not to be there, so I missed him.
- U.S. Department of Justice files brief in Kisor v. Wilkie somewhat critical of Auer deference, i.e. of deference to the federal government’s own positions. That’s pretty special, and commendable [William Yeatman, Cato; Jonathan Adler, earlier here and here]
- Parsonage exemption (i.e., favored treatment of allowance for religious housing) does not violate Establishment Clause, rules Seventh Circuit panel [Gaylor v. Mnuchin; background, Kelsey Dallas, Deseret News; earlier]
- Showing middle finger to police officer counts as constitutionally protected speech, and Sixth Circuit says every reasonable officer should know that already [Eugene Volokh]
- Home-share hospitality is here to stay, unless regulators get it very wrong [Federalist Society video with Gwendolyn Smith, Matthew Feeney, and Pete Clarke]
- “Tens of thousands of people in Missouri cannot drive as a result of their licenses being suspended over child support they are unable to pay.” A newly filed lawsuit challenges that practice [Hans Bader]
- Only Congress can make new law, and administration can’t reach desired ban on “bump stock” firearms accessories just by reinterpreting existing federal law [Ilya Shapiro and Matthew Larosiere on Cato amicus brief in D.C. Circuit case of Guedes v. BATFE]
- Sports betting: best to ignore the leagues’ special pleadings and let federalism work [Patrick Moran, Cato, related podcast]
- Everything you thought you knew about corporate personhood in the law is wrong [David Bernstein reviews Adam Winkler’s We the Corporations]
- Federal judge John Kane, on lawyer’s filings: “I have described them as prolix, meandering, full of unfounded supposition and speculation, repetitive and convoluted almost to the point of being maddening.” And he’s just getting started [Scott Greenfield]
- “Florida Voters Join Chevron Revolt And Strike A Blow Against Judicial Bias” [Mark Chenoweth, Federalist Society Blog] Plus video panel on “The States and Administrative Law” with Nestor Davidson, Chris Green, Miriam Seifter, Hon. Jeffrey Sutton, and Hon. Michael Scudder;
- Argument that Congressionally extended extension of copyright on (among other works) Atlas Shrugged violates Ayn Rand’s own ethical code [Edward Sisson]
- “More Legislation, More Violence? The Impact of Dodd-Frank in the Democratic Republic of the Congo” [Nik Stroop and Peter van der Windt, Cato; our longstanding coverage of the conflicts mineral fiasco]
Last week the Supreme Court heard oral argument in Return Mail Inc. v. USPS, posing the patent law issue (to quote SCOTUSBlog) of “Whether the government is a ‘person’ who may petition to institute review proceedings under the Leahy-Smith America Invents Act.” On pp. 30-31 of the transcript, Justice Sonia Sotomayor referred favorably to the Cato Institute’s brief on the unique dangers that can arise when federal agencies litigate before tribunals operated by federal agencies.
And that wasn’t even the best part! This was, from her comments immediately afterward, on the failure of the law to specify whether the word “person” includes the government:
It does seem like the deck is stacked against a private citizen who is dragged into these proceedings. They’ve got an executive agency acting as judge with an executive director who can pick the judges, who can substitute judges, can reexamine what those judges say, and change the ruling, and you’ve got another government agency being the prosecutor at the same time.
In those situations, shouldn’t you have a clear and express rule?
- Supreme Court could help rein in the administrative state by overruling Auer v. Robbins (1997), which directs courts to defer to agencies’ interpretations of their own regulations [Ilya Shapiro, Trevor Burrus, and William Yeatman on Cato amicus brief in Kisor v. Wilkie, earlier] “Does Kisor Really Threaten the Foundations of Administrative Law?” [William Yeatman]
- “What Is Regulation For?” [video panel from Federalist Society National Lawyers’ Convention with Richard Epstein, Philip Hamburger, Kathryn Kovacs, Jon Michaels, moderated by Hon. Britt Grant] Plus, panel on the use of adjudication in place of rulemaking [Jack Beermann, Allyson Ho, Stephen Vaden, Chris J. Walker, moderated by Hon. Gregory Katsas; Antonin Scalia, “Making Law Without Making Rules,” Regulation magazine 1981]
- “Businesses in regulated industries rely on the regulating agency’s advice to make decisions.” But if advice from agency staff can neither be relied upon for legal purposes nor be subject to judicial review, isn’t it worse than getting no advice at all? [Ilya Shapiro on Cato cert amicus brief in Soundboard Association v. FTC]
- “Administrative Law’s Assault On Civil Liberty: Lucia Vs. SEC” [Margaret Little, Federalist Society, earlier]
- Identifying regulations that disproportionately harm the poor [Cato Daily Podcast with Ryan Bourne, Vanessa Brown Calder, Diane Katz, and Caleb Brown]
- Seek permission to innovate, or innovate first and then seek forgiveness? How startups manage regulators [Sam Batkins, Regulation reviewing Regulatory Hacking by Evan Burfield with J.D. Harrison] Sides tend to switch on this each time White House changes partisan hands, so now it’s the left-liberals who see a silver lining in agencies’ procedural ossification [Stuart Shapiro, Regulation]
- “Scott Gottlieb’s FDA Is Moving Toward a Stealth Ban on Cigarettes and Cigars” [Jacob Grier, Reason]
- Supreme Court should take Melissa and Aaron Klein cake-refusal case from Oregon and resolve the issues of free expression it dodged in Masterpiece [Ilya Shapiro and Patrick Moran, ABA Journal, earlier on Melissa and Aaron Klein cake-refusal case including oppressive $135,000 fine levied by Oregon BOLI (Bureau of Labor and Industries)]
- “Administrative Law Is Bunk. We Need a Bundesverwaltungsgericht” [Michael Greve, responses from Mike Rappaport, Philip Wallach, and Ilan Wurman, and rejoinder from Greve]
- New York’s family court system is failing children and their families [Naomi Riley/City Journal, thanks for quote]
- “The Emmys People Are Opposing A Pet Products Company Named After A Dog Named ‘Emmy'” [Tim Geigner, TechDirt]
- Metaphor alert: “Lawmaker Injured by Flying Constitution” [Kevin Underhill, Lowering the Bar, and funny throughout]