Articles
Flips and Splits in Administrative Law
Daniel J. Hemel | PDF
In Loper Bright Enterprises v. Raimondo, the Supreme Court discarded the four decades old Chevron deference regime and circumscribed the authority of federal agencies to choose among multiple interpretations of ambiguous statutes. In justifying its ruling, the Loper Bright majority argued that Chevron deference had generated unnecessary regulatory uncertainty by allowing agencies to switch from one interpretation of an ambiguous statute to another. In this respect, Loper Bright marks a move toward temporal uniformity in federal law: Once the courts recognize a certain reading of a statute as “best,” that reading will reign under Loper Bright unless and until Congress repeals or amends the relevant provision.
Yet the temporal uniformity of the new Loper Bright regime comes at the cost of greater spatial disuniformity: Loper Bright will predictably produce more frequent conflicts among the regional courts of appeals regarding the reading of ambiguous statutes. Previously, courts applying Chevron asked only whether the agency’s interpretation of an ambiguity was “reasonable”; now, courts must decide whether the agency’s interpretation is correct—a question more likely to generate intercircuit disagreements. Given the Supreme Court’s limited certiorari docket, many of these disagreements are likely to persist for years—in some instances, indefinitely. Loper Bright thus reflects a decision to tolerate fewer “flips” across administrations but more “splits” across circuits. That result, along with the more obvious shift in interpretive authority from agencies to courts, is likely to be among Loper Bright’s most significant long term consequences.
Analysis of the flip–split tradeoff sheds light not only on Loper Bright’s lasting effects but also on other debates in public law, including debates over the Supreme Court’s certiorari practice, circuit court confirmations, district court nationwide injunctions, agency nonacquiescence, and—even more broadly—the choice between centralized and decentralized governance of a geographically polarized polity. This Article contributes to those debates by comparing the costs—and potential benefits—of flips and splits along four key dimensions: economic efficiency, regulatory efficacy, learning, and individual choice. A cost benefit analysis of temporal and spatial disuniformity yields the tentative conclusion that Loper Bright, insofar as it recalibrated the balance away from flips and toward splits, shifted administrative law in a desirable direction. More generally, rigorous examination of Loper Bright’s temporal and spatial dimensions can yield lessons that travel well beyond the U.S. administrative law context—lessons that apply to the design of legal institutions in a wide range of narrowly divided societies.
Scientific and Technical Expertise After Loper Bright
Sapna Kumar | PDF
Courts once trusted federal agencies for their expertise in administering complex statutory schemes, particularly regarding science and technology. Unlike judges, agency officials can narrowly focus on a specific area of law and have access to experts to inform their decision making. In Chevron U.S.A., Inc. v. Natural Resources Defense Council, the Supreme Court created a presumption that, absent language to the contrary, Congress intends for agencies to interpret statutory ambiguities. Chevron allowed agencies to utilize their varied forms of expertise while ensuring oversight from generalist judges. This court–agency partnership abruptly ended, however, in Loper Bright Enterprises v. Raimondo. The Court distinguished between legal and scientific expertise, noting that the former receives no deference while the latter has merely the power to persuade. Although the Court ultimately ruled on statutory grounds, it invoked Article III to support the argument that judges have an affirmative obligation to independently interpret statutes. But by shifting primary interpretive authority from agencies to reviewing courts, the Court has forced generalist judges to grapple with complex scientific and technical concepts that they are ill-equipped to understand. Loper Bright could result in a heavier workload for judges—or worse, could cause them to fall back on partisan preferences. Congress is not wholly without power, however. Beyond expressly delegating interpretive authority to agencies where constitutionally permissible, Congress could give appellate courts access to neutral experts with relevant backgrounds. By enabling appellate courts to hire and use neutral experts in administrative law cases, Congress would reduce judges’ workload, improve the quality of judicial decision making, and ensure that judges independently interpret statutes.
Presidential Administration and the Accountability Illusion
Brian D. Feinstein | PDF
For over a decade, the Supreme Court has upended executive-branch structures that insulated administrative agencies from the White House. Judges and scholars justify this project in part by claiming that presidential control over administration boosts agencies’ accountability to the American people. Yet, despite the importance of “the people” as this endeavor’s asserted beneficiaries, public attitudes concerning this foundational claim are unknown.
This Article puts this claimed connection to the test. Grounded in a set of novel experiments involving over five thousand participants, it presents the first evidence of Americans’ views regarding whether greater presidential authority over agencies enhances accountability to people like them. These experiments reveal that participants presented with an agency over which the president possesses the authority to appoint decision-makers, remove them for any reason, or review the agency’s proposed regulations are no more likely to perceive the agency as accountable than are participants presented with a politically insulated agency.
Whereas prominent judges and scholars claim that these presidential-control mechanisms—that is, appointment, removal, and review authority—bolster agencies’ accountability to the people, the people do not agree. In a politically divided country, Americans do not experience presidential power over agencies as fostering accountability. This finding challenges the ongoing judicial project of tethering agencies to the president for the supposed benefit of the American people.
Jarkesy’s Stakes for the SEC
James Fallows Tierney | PDF
This Article examines the implications of the Supreme Court’s decision in SEC v. Jarkesy for the Securities and Exchange Commission (“SEC” or “Commission”). In Jarkesy, the Court held that Congress cannot assign the adjudication of securities antifraud violations seeking civil penalties to an administrative agency without a jury trial, for such punitive actions involve “private rights.” Although this ruling might suggest a reduction in SEC enforcement actions due to the higher costs of federal jury trials, the SEC had already adjusted its practices following Lucia v. SEC in 2018. The Commission shifted away from using administrative law judges for civil penalties, focusing instead on cases less susceptible to constitutional challenges.
Jarkesy presents both immediate and long-term challenges for the SEC. Its direct impact is limited because it affects a type of case the SEC has nearly abandoned. However, it poses significant long-term risks because litigants may attempt to extend its applicability to other enforcement actions, increasing litigation and uncertainty in administrative law. The decision also affects the SEC’s enforcement and settlement practices, potentially hindering its ability to address violations efficiently and serve the public interest. Using a novel dataset, this Article explores these institutional dynamics, analyzing the SEC’s adjudication program and assessing the broader implications of Jarkesy for administrative enforcement.
Lecture
Our Marbury: Loper Bright and the Administrative State
Cass R. Sunstein | PDF
Loper Bright, overruling Chevron, is unmistakably part of administrative law’s current “Grand Narrative,” which sees contemporary administrative agencies with suspicion, as a product of successive breaches of Article I, II, and III of the Constitution. The decision should be seen as our Marbury v. Madison—an effort to insist that it is emphatically the province and duty of the judicial department to say what the law is. But will the decision produce large changes? The answer depends, of course, on the meaning of both Chevron and Loper Bright. Under Chevron, courts hardly gave a blank check to agencies; on the contrary, they frequently invalidated agency interpretations of law. How much will invalidation rates rise? We cannot give a confident answer, in part (1) because Loper Bright retains Skidmore (which calls for respectful attention to agency interpretations); in part (2) because Loper Bright recognizes that Congress sometimes explicitly or implicitly delegates interpretive authority to agencies; and in part (3) because (and these must be counted as some of its effects) Loper Bright will (a) increase litigants’ incentive to attack agency interpretations and (b) reduce agencies’ incentive to adopt adventurous interpretations (though agencies may have other incentives to do that). Any numerical projection would be hazardous, but Loper Bright gives a clear signal, a green light to federal courts where Chevron gave a yellow light—which means that it is reasonable to predict a nontrivial increase in judicial invalidations (other things being equal). It is also safe to predict that in the near future, the combination of Loper Bright with increasing judicial skepticism about the administrative state will result in a nontrivial increase in invalidation of regulations designed to protect health, safety, and the environment. In the near future, Loper Bright will also lead to a significant increase in ideological divisions in the lower courts. Still, Loper Bright is our Marbury, and will, sooner rather than later, be seen as such in mounting conflicts between agencies and courts.