“How many unconstitutional administrative trials must one endure before getting the chance to argue your case in an Article III court? According to the U.S. Securities and Exchange Commission, the answer is at least two.” [Russell Ryan, Ashley Parrish, Ilya Shapiro, and William Yeatman on Cato amicus brief in Lucia v. SEC, a case that has already made a trip to the Supreme Court]
- “Is ‘Most of Government’ Unconstitutional?” Battle over nondelegation continues after Gundy v. U.S. [Robert VerBruggen, Federalist Society panel video with Ronald Cass, David Schoenbrod, Kristin Hickman, Alan Morrison, Hon. Ryan Nelson]
- Order requiring independent agencies to notify OIRA of major regulations might prove a big step [Sam Batkins and Ike Brannon, Regulation; Cato Daily Podcast with Brannon and Caleb Brown]
- Biestek v. Berryhill: Supreme Court holds agencies can rely on expert witness’s opinion even when witness refuses to provide data underlying it [Federalist Society teleforum with Kent Barnett and Richard Pierce]
- “The Congressional Review Act in an Election Year” [Federalist Society teleforum with Paul Larkin, Amit Narang, and Jonathan Wood]
- “The Need for Humility in Policymaking: Lessons from Regulatory Policy” [Cato event video with Stefanie Haeffele, Anne Hobson, and Chelsea Follett]
- If Chevron doctrine falls, will major regulatory precedents fall with it? [Christopher Marraro and Gary Marfin, WLF, Federalist Society panel video with Mark Chenoweth, David Doniger, Kristin Hickman, David Schoenbrod, Jennifer Mascott]
Among the most feared federal regulators, and one created largely through presidential strokes of the pen rather than by Congressional blueprint, is the Department of Labor’s Office of Federal Contract Compliance Programs, or OFCCP. The agency’s investigators go on wide-ranging fishing expeditions seeking evidence of discrimination at large companies, most of which hold federal contracts of one sort or another. “Instead of holding firms accountable when they engage in real discrimination against their employees, the agency has become a government arm for securing high-dollar settlements on dubious grounds.” In its audits demanding large back pay sums, for example, the “government fails to compare like employees to like, and it doesn’t control for perfectly innocent variables that explain pay differences.”
As OFCCP has turned into a combination social engineer and extractor of big-ticket settlements, few big companies are willing to fight back, given the breadth of arbitrary power the agency holds over them as well as the distant threat of debarment or other sanctions. But recently two big tech firms have stepped forward as exceptions: Google, in a dispute we wrote about in 2017 on demands for employee documents, and now Oracle, which is suing rather than accept what it considers an unreasonable settlement demand. [Veronique de Rugy, syndicated/Casper Star Tribune; WSJ editorial; Kate Cox, ArsTechnica; Anthony Kaylin, ASE; Pamela Wolf, CCH]
- Case over harsh IRS handling of lost-in-mail filing reflects worst practices on judicial deference [William Yeatman, Yale Journal on Regulation on Cato certiorari amicus brief in Baldwin v. U.S.] “Congressional Delegation of Regulatory Authority and Time” [Cato podcast with Yeatman and Caleb Brown]
- “Baseball, Legal Doctrines, and Judicial Deference to an Agency’s Interpretation of the Law: Kisor v. Wilkie” [Paul J. Larkin Jr., Cato Supreme Court Review; earlier on Kisor; Cato podcast with Ilya Shapiro (“Auer deference could become minute deference”), William Yeatman and Caleb Brown]
- “Gundy and the (Sort-of) Resurrection of the Subdelegation Doctrine” [Gary Lawson, Cato Supreme Court Review, earlier on Gundy v. U.S. here, here]
- “From Chevron to ‘Consent of the Governed'” [David Schoenbrod, Cato Regulation magazine; Cato panel discussion video with Adam White, David Doniger, Shapiro and Yeatman; Federalist Society panel discussion video with Mark Chenoweth, Doniger, Kristin Hickman, Schoenbrod, Jennifer Mascott]
- “Recognizing the Congressional Review Act’s Full Potential” [Jonathan Wood, Federalist Society, earlier]
- “Idaho is the only state in the nation where the elected representatives of the people must affirmatively act at regular intervals to continue the existence and operation of their regulatory system.” When a lapse in reauthorization threw the regulatory code into question, a remarkable struggle began [J. Kennerly Davis, Federalist Society]
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]