E.P.A. Ruling Is Milestone in Long Pushback to
Regulation of Business
The decision created greater opportunities for
business interests to challenge regulations, reflecting conservative legal
theories developed to rein in administrative agencies.
The Supreme Court’s decision shifts power back to
Congress, which could pass a law to regulate carbon emissions from power
plants, but is unlikely to do so.
Charlie
Savage
By Charlie
Savage
June 30,
2022, 7:27 p.m. ET
https://www.nytimes.com/2022/06/30/us/supreme-court-epa-administrative-state.html
WASHINGTON
— The Supreme Court ruling in the Environmental Protection Agency case on
Thursday was a substantial victory for libertarian-minded conservatives who
have worked for decades to curtail or dismantle modern-style government
regulation of the economy.
In striking
down an E.P.A. plan to reduce carbon emissions from power plants, the court
issued a decision whose implications go beyond hobbling the government’s
ability to fight climate change. Many other types of regulations might now be
harder to defend.
The ruling
widens an opening to attack a government structure that, in the 20th century,
became the way American society imposes rules on businesses: Agencies set up by
Congress come up with the specific methods of ensuring that the air and water
are clean, that food, drugs, vehicles and consumer products are safe, and that
financial firms follow the rules.
Such
regulations may benefit the public as a whole, but can also cut into the
profits of corporations and affect other narrow interests. For decades, wealthy
conservatives have been funding a long-game effort to hobble that system, often
referred to as the administrative state.
“This is an
intentional fight on the administrative state that is the same fight that goes
back to the New Deal, and even before it to the progressive era — we’re just
seeing its replaying and its resurfacing,” said Gillian Metzger, a Columbia
University professor who wrote a Harvard Law Review article called “1930s
Redux: The Administrative State Under Siege.”
When the
United States was younger and the economy was simple, it generally took an act
of Congress to impose a new, legally binding rule addressing a problem involving
industry. But as complexity arose — the Industrial Revolution, banking crises,
telecommunications and broadcast technology, and much more — this system began
to fail.
Congress
came to recognize that it lacked the knowledge, time and nimbleness to set
myriad, intricate technical standards across a broad and expanding range of
issues. So it created specialized regulatory agencies to study and address
various types of problems.
While there
were earlier examples, many of the agencies Congress established were part of
President Franklin D. Roosevelt’s New Deal program. Wealthy business owners
loathed the limits. But with mass unemployment causing suffering, the political
power of elite business interests was at an ebb.
The
Eisenhower-style Republicans who returned to power in the 1950s largely
accepted the existence of the administrative state. Over time, however, a new
backlash began to emerge from the business community, especially in reaction to
the consumer safety and environmental movements of the 1960s. Critics argued
that government functionaries who were not accountable to voters were issuing
regulations whose costs outweighed their benefits.
In 1971, a
lawyer who had represented the tobacco industry named Lewis F. Powell Jr. —
whom President Richard M. Nixon would soon put on the Supreme Court — wrote a
confidential memo for the U.S. Chamber of Commerce titled “Attack on American
Free Enterprise System.” It is seen as an early call to action by corporate
America and its ideological allies.
Mr. Powell
acknowledged that “the needs and complexities of a vast urban society require
types of regulation and control that were quite unnecessary in earlier times.”
But he declared that the United States had “moved very far indeed toward some
aspects of state socialism” and that “business and the enterprise system are in
deep trouble, and the hour is late.”
His memo
set out a blueprint to fund a movement to turn public opinion against
regulation by equating “economic freedom” for business with individual freedom.
In line with that vision, wealthy elites financed a program to build political
influence, including steering funding to organizations that develop and promote
conservative policies like the American Enterprise Institute and the Heritage
Foundation.
In 1980,
the billionaire David H. Koch ran a quixotic campaign as the Libertarian
Party’s nominee for vice president on a platform that included abolishing the
range of agencies whose regulations protect the environment and ensure that
food, drugs and consumer products are safe.
His ticket
failed to win many votes. But with his brother Charles G. Koch, he would become
a major funder of like-minded conservative causes and candidates and built a
campaign funding network that pushed the Republican Party further in a
direction it had already started to move with the election in 1980 of President
Ronald Reagan.
The “Reagan
Revolution” included appointing officials to run agencies with a tacit mission
of suppressing new regulations and scaling back existing ones — like Anne
Gorsuch Burford, the mother of Justice Neil M. Gorsuch, whom critics accused of
trying to gut the E.P.A. when she ran it.
In
parallel, the conservative legal movement, whose origins also trace back to the
1970s and spread with the growth of the Federalist Society in the 1980s, has
focused its long game as much on a deregulatory agenda as on higher-profile
goals like ending abortion rights.
That
movement has now largely taken control of the federal judiciary after President
Donald J. Trump appointed three Supreme Court justices. The chief architect of
Mr. Trump’s judicial appointments, Donald F. McGahn II, the first Trump White
House counsel and a Federalist Society stalwart, made skepticism about the
administrative state a key criterion in picking judges.
Adherents
of the movement have revived old theories and developed new ones aimed at
curbing the administrative state.
To give
(usually Republican) presidents more power to push deregulatory agendas in the
face of bureaucratic resistance, they have put forward the “unitary executive
theory” under which it ought to be unconstitutional for Congress to give
agencies independence from the White House’s political control — even though
the Supreme Court upheld that arrangement in 1935.
A 2020
ruling by the five Republican appointees then on the Supreme Court was a step
toward that goal. They struck down a provision of the law Congress enacted to
create the Consumer Financial Protection Bureau that had protected its head
from being fired by a president without a good cause, like misconduct.
And to
invalidate regulations even when (usually Democratic) presidents support them,
movement conservatives have argued for narrowly interpreting the power Congress
has given or may give to agencies.
Some of
those theories have to do with how to interpret statutes. The E.P.A. ruling,
for example, entrenched and strengthened a doctrine that courts should strike
down regulations that raise “major questions” if Congress was not explicit
enough in authorizing such actions.
“In certain
extraordinary cases,” Chief Justice John G. Roberts Jr. wrote, the court needed
“something more than a merely plausible textual basis” to convince it that an
agency has the legal ability to issue specific regulations. “The agency,” he
wrote, “instead must point to ‘clear congressional authorization’ for the power
it claims.”
The strict
version of that doctrine signaled by the ruling will give businesses a powerful
weapon with which to attack other regulations.
The ruling
was foreshadowed by short, unsigned rulings last year in which the court
blocked the Centers for Disease Control and Prevention’s moratorium on
evictions to prevent overcrowding during the coronavirus pandemic, and the
Occupational Safety and Health Administration’s requirement that large
employers get workers vaccinated or provide testing.
But both of
those decisions involved tangential exercises of authority by agencies trying
to address the pandemic emergency: The C.D.C., a public health agency, was
getting into housing policy, and OSHA, a workplace safety agency, was getting
into public health policy.
The ruling
on Thursday involved the E.P.A.’s primary mission: to curb pollution of harmful
substances, which the court previously ruled included carbon dioxide emissions.
Moreover, the text of the Clean Air Act empowers the agency to devise the “best
system of emission reduction.” Even so, the majority ruled that the agency
lacked authorization for its Clean Power Plan.
In dissent,
one of the court’s three remaining Democratic appointees, Justice Elena Kagan —
who once wrote a scholarly treatise about the administrative state — accused
the majority of having discarded the conservative principle of interpreting
laws based closely on their text to serve its “anti-administrative state”
agenda.
“The
current court is textualist only when being so suits it,” she wrote. “When that
method would frustrate broader goals, special canons like the ‘major questions
doctrine’ magically appear as get-out-of-text-free cards. Today, one of those
broader goals makes itself clear: Prevent agencies from doing important work,
even though that is what Congress directed.”
Conservatives
have also developed other legal theories for attacking the administrative
state.
They have
argued, for example, that the Supreme Court should end so-called Chevron
deference, named for the case that established it. Under that doctrine, judges
defer to agencies’ interpretations of the authority that Congress gave them in
situations where the text of a law is ambiguous and the agency’s interpretation
is reasonable.
Conservatives
have also argued for a more robust version of the so-called nondelegation
doctrine, under which the Constitution can bar Congress from giving regulatory
power to agencies at all — even if lawmakers unambiguously sought to do so.
Chief
Justice Roberts’s majority opinion, in keeping with his preference for
incremental approaches to major issues, left those other theories and arguments
for another day. But a concurring opinion by Justice Gorsuch, joined by Justice
Samuel A. Alito Jr., discussed the nondelegation doctrine with apparent relish.
“While we
all agree that administrative agencies have important roles to play in a modern
nation, surely none of us wishes to abandon our Republic’s promise that the
people and their representatives should have a meaningful say in the laws that
govern them,” Justice Gorsuch wrote.
In theory,
undercutting the administrative state does not necessarily subtract from the
government’s ability to act when a new problem — or a better way of solving an
old one — arises. Rather, it shifts some of the power and responsibility from
the agencies to Congress.
For
example, lawmakers could theoretically enact a law explicitly declaring that
the E.P.A.’s power to curb air pollution under the Clean Air Act includes
regulating carbon dioxide pollution from power plants in the way the agency had
proposed. Congress could even pass a law directly requiring the detailed system
for reducing emissions.
As a matter
of political reality, however, agencies’ issuing of new rules based on old laws
is often the only way the government remains capable of acting.
Congress is
increasingly polarized and dysfunctional, sometimes too paralyzed to pass even
basic spending bills to keep the government operating. And the ideology of the
contemporary Republican Party, combined with the Senate’s filibuster rule,
which allows a minority of senators to block votes on substantive legislation,
means that it is unlikely that Congress will enact new laws expanding
regulations.
The
prospect that the Republican-appointed supermajority on the court may be just
getting started in assaulting the administrative state over the coming years is
alarming those who say the United States needs regulations to have a civilized
society.
“If you
don’t have regulations, then the only people who will benefit will be those
who, with no rules, will make more money,” said Marietta Robinson, a former
Obama appointee on the Consumer Product Safety Commission who teaches about
administrative agencies at George Washington University’s law school. “But it
will be to the great detriment to the rest of us.”
Charlie
Savage is a Washington-based national security and legal policy correspondent.
A recipient of the Pulitzer Prize, he previously worked at The Boston Globe and
The Miami Herald. His most recent book is “Power Wars: The Relentless Rise of
Presidential Authority and Secrecy.” @charlie_savage • Facebook
