06 Jul Statism and the Supreme Court

“Be careful what you wish for.” – The Lonely Realist

The American right has been celebrating a series of recent Supreme Court rulings that narrow Federal power and facilitate the dismantling of the “administrative state.” The consequences of these holdings are broad, far-reaching, and in the final analysis destabilizing. Be careful what you wish for indeed!

In the first of those decisions, Garland v. Cargill, the Court struck down former President Trump’s Executive Order banning bump stocks, a rapid-fire gun accessory that transforms an automatic weapon into the functional equivalent of a machine gun. In its 6-3 decision, the Court held that, since Congress had passed a law banning “machine guns,” neither the President nor the Courts have the Constitutional authority to ban an “accessory.” The dissenting opinion (by the Court’s three liberal justices) supported President Trump’s Executive Order, relying on the law’s intent, the public’s desire to ban machine gun equivalents and Congress’s inability to act on gun control legislation. The “originalist” majority read the Constitution as mandating an inflexible separation of powers – concluding that the President cannot issue Executive Orders that are not expressly authorized by the Constitution or Congress.

A second decision, SEC v. Jarkesy, confirms TLR‘s May 2022 support for a Supreme Court holding that Congress cannot pass laws delegating to the Executive Branch the discretion to impose fines for violations of the law (as Congress attempted in the 2010 Dodd Frank Act). Per Justice Sotomayer’s dissent, the Jarkesy decision marks “a massive sea change” in American government operations. Simply put, consistent with its decision in Garland v. Cargill, the Constitutional separation among the Executive, Legislative and Judicial branches of America’s government now is absolute. Expect multiplying “delegation” lawsuits to further swamp heavily backlogged Federal courts.

A third recent case with the same message is Loper-Bright Enterprises v. Raimondo, discussed by TLR in September 2023. Loper Bright was brought by a group of commercial fishing companies to challenge a rule of the National Marine Fisheries Service (NMFS) that required the industry to pay for the costs of observers to monitor compliance with fishery laws. Relying on the Supreme Court’s 1984 decision in Chevron v. Natural Resources Defense Council, which holds (as the Reagan Administration advocated) that courts cannot substitute their judgment for the presumptive expertise of regulatory agencies, the District and Circuit Courts deferred to the NMFS. Chevron’s rationale is that Congress often enacts ambiguous laws and sometimes explicitly directs the Executive Branch (via its agencies) to issue regulations to clarify those laws. Commentators (including TLR) have long-questioned the authority of Congress to delegate such an inherently legislative power as well as whether the final arbiter of “reasonableness” should be unelected bureaucrats the regulators or unelected political hacks the courts? The Chevron Court chose the regulators. The 6-3 Loper Bright majority reversed. In adding complexities and uncertainties, Loper Bright re-paves the way for partisan judges to strike down selective Federal regulations (precisely the outcome Reagan Era conservatives had found objectionable) [or, as Matt Levine wrote last week, “I worry that there are no rules anymore.”].

The Fifth Circuit recently did precisely that in National Association of Private Fund Managers v. SEC by striking down over 600 pages of SEC regulations, discussed by TLR here. Meanwhile, two Obama-appointed Federal judges in two separate cases canceled President Biden’s student debt-forgiveness plans (by which President Biden had been attempting to emulate President Trump by unConstitutionally ignoring the Appropriations Clause (Article I, Section 9, Clause 7)). The same outcome appears inevitable with respect to President Biden’s attempt to limit immigration via Executive Order, which the Supreme Court previously held conflicts with Congress’s law-making obligation, and a District Court this past Wednesday issued a preliminary injunction enjoining enforcement of the FTC’s proposed non-compete rule. Statism in America is in terminal decline.

The foregoing bevy of decisions makes it clear that Executive Power – and only Executive Power – may be exercised by the Executive Branch, law-making is the sole province of Congress – and not of the President, and neither the Executive Branch nor Congress may exercise Judicial Power. This is the originalist approach to Constitutional law that the Court’s 6-justice majority has re-articulated. As a practical matter, TLR hopes that such judicial inflexibility does not result in adverse consequences or render  21^st Century America nonfunctional (in whole or in part) (noting that the Supreme Court has similarly endorsed legal inflexibility in the Perdue Pharma bankruptcy, creating a potentially irreconcilable quandary for all litigants). TLR certainly hopes not, but…

The Court’s rulings effectively eliminate the ability of Congress to engage in flexible lawmaking and of Presidents to issue a broad range of Executive Orders, which recent Presidents (of both Parties) have used to take measures that otherwise are blocked by Congressional gridlock. Enacting appropriate measures requires both acute attention to detail and a desire to compromise which, although cornerstones of American democracy, have been comedic unobtainable. A Congressional disability in passing laws coupled with a Presidential inability to address pressing problems – such as immigration, national security, AI, spending, national health, etc. – invites chaos (while over-empowering America’s judiciary).

The Court’s rulings require Congress to pass laws without delegating law-making too much regulatory authority to government agencies (the “administrative state”), meaning that the interpretation of laws will first reside with regulators…, and ultimately after a period of time with judges. Can the Federal courts, already overloaded, reasonably (and timely) handle the forthcoming flood of administrative actions? How inconsistent will judges be in determining the reasonableness of laws and regulators’ interpretations? These are precisely the concerns that led to the Supreme Court’s 1984 decision in Chevron.

Will the Court’s recent decisions re-clarifying the roles of America’s three branches of government provide the necessary impetus for Congress to reach compromises that reduce increasing chaos? And, if not, how will enhanced Executive and Judicial Branch dysfunction affect Americans and their belief in democracy? We now will see, although both “conservatives” and “liberals” would find it wise to carefully reconsider what they are wishing for.

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Prior TLR commentaries can be found here.

Finally (from a good friend)