1 of 2: The Imperial Judiciary

June 29, 2024

[Note: there will be a second, separate newsletter tonight on the debate follow-up.]

Chevron is now overruled. The administrative state just died. The imperial judiciary joins the imperial presidency, relegating Congress to a secondary role except when it legislates with unrealistic specificity and foresight.

       Professor Laurence Tribe, on Twitter, June 28, 2024.

You will be able to tell your grandchildren that you lived through a judicial revolution that rewrote the Constitution to suit the financial interests of corporate America and the social agenda of an extremist minority that fetishizes guns, hates government, and seeks to impose their narrow religious views on all Americans. The open question in 2024 and beyond is whether we will reverse that revolution. The first step is to understand the earth-shaking consequences of the Court’s rulings. Professor Tribe has described them succinctly. A smart person would stop here. But I can’t restrain myself.

Over the last several weeks—especially the last 48 hours—the Supreme Court has radically transformed the relationships between the judiciary, the executive, and Congress. Contrary to the finely tuned balance of the Constitution, the Roberts Court has anointed the judiciary as the ascendant branch of government. The person of the president—not the executive branch—is nearly omnipotent in Roberts’ schema. Congress has been neutered.

Rather than try to deal with multiple decisions that raise seemingly arcane issues, I want to step back to see how the Roberts Court managed this judicial revolution with such dispatch. But first, a little background is necessary. Please stick with me.

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The US economy depends on federal regulation.

The US economy is the largest in the world by a wide margin. That size is attributable in no small measure to (a) the orderly markets and business conditions created by federal regulations and (b) the comparatively corruption-free nature of the US economy (also attributable to federal regulations).

How big is the US economy? It is larger than the 27 combined economies of the EU. It is 50% larger than China’s and ten times larger than Russia’s. (All comparisons in GDP.)

Managing and maintaining the immense US economy is a monumental undertaking. We need regulations that control how and when fish stocks can be harvested, where medical waste can be stored, how thick concrete must be on bridge spans, what type and color of insulation must protect electrical wires, what temperature meat must be kept at when being transported across the country, and what type of information can be collected and stored in a retail transaction.

Multiply those issues by a million, and you will have a vague sense of the complexity and scale of the US economy.

Those millions of regulatory decisions demand broad and deep expertise by career professionals with advanced degrees and years of experience in their field of regulation. That expertise resides in the federal agencies housed in the executive branch under the president. In a literal sense, federal agencies are the sinew that binds the US economy together.

Businesses hate federal regulation because they impose a trade-off: protecting the health and safety of Americans by reducing the maximum profits unrestrained businesses could earn in the short term in an unregulated economy.

The so-called “administrative state” of federal agencies has been wildly successful. It is why all international airline pilots speak English when flying between countries across the globe. It is why the US dollar is the world’s currency. It is why the world’s science, technology, and innovation hubs are located in the US. It is why every Chinese corporation that goes public in China has the goal of transferring from the Chinese stock exchanges to the New York Stock Exchange, Nasdaq, and the Chicago Options Exchange as soon as possible.

If you work in a safe job, have medical insurance, have a retirement plan invested in the stock market, own a car or a home, have a college degree, and have access to clean water and safe food, then you owe it all to the existence of well-regulated “administrative state” that keeps the complex US economy humming along in a way that is the envy of the world.

It is true that if all regulations were repealed, corporate profits would temporarily spike—until consumers were sickened by tainted food, nuclear medical waste piled up in hospitals, drinking water aquifers were contaminated by industrial waste, crops failed because of water disputes, and airline traffic ground to a halt because of disputes between airlines over routes and access to air terminals.

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The power of the people resides in Congress

We tell ourselves that the Constitution establishes three co-equal branches of government. That is not completely accurate. The power of the people resides in Congress. It makes laws, collects taxes, spends money, declares war, regulates commerce, coins money, establishes inferior federal courts, and raises and supports an army and a navy. The president implements the laws passed by Congress. The federal judiciary has only the jurisdiction granted by Congress, except that the Supreme Court has narrowly defined original jurisdiction.

As between Congress, the president, and the Supreme Court, it is clear that Congress is the first among equals. Without Congress, there would be no government, no economy, no markets, no military, no banks, no inferior courts. The people's will cannot be frustrated by a Supreme Court that hobbles every act of Congress by demanding that it “legislate with unrealistic specificity and foresight,” (quoting Professor Tribe).

But that is exactly what has happened over this term. By limiting acts of Congress to the narrowest scope possible, the Court has reduced the plenary power of Congress to a glorified instruction manual that is valid only if the users have “Screw A” to insert into “Slot B” with the provided Phillips Head Screwdriver. We are not assembling a bicycle. We are running the greatest economy in the world.

If the Court requires Congress to specify the precise number of salmon that can be taken from the Klamath River each year rather than saying that the NOAA Fisheries Department shall establish fishing quotas to maintain healthy fish populations in inland waterways, Congress’s work will grind to a halt. Members of Congress have neither the time nor expertise to determine a healthy fish population for each inland waterway in the US. In the absence of “the administrative state,” Congress (or the courts) must serve as the regulators of the millions of daily transactions governed by federal regulations.

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Recent Supreme Court Decisions

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The Supreme Court appoints itself as the federal subject matter expert for hundreds of agencies

On Friday, the Supreme Court issued its long-awaited decision in Loper Bright Enterprises v. Raimondo. This case involved the arcane question of who pays for federal observers on fishing boats at sea—the government or the boat owner. The role of federal observers is to ensure that the boats do not “over-fish” the areas where they operate.

In Loper Bright, the Supreme Court overturned a decades-old judicial doctrine of deference by courts to federal agencies when those agencies interpret federal statutes. (That deference was known as the “Chevron deference” doctrine. See Ian Millhiser in Vox, The Supreme Court just rewrote America's separation of powers, in Loper Bright v. Raimondo.

As Millhiser notes, Justice Roberts wrote in Loper Bright,

The framers “envisioned that the final ‘interpretation of the laws’ would be ‘the proper and peculiar province of the courts.

So, in the future, when an agency implements a federal law by regulation and a business challenges the regulation, federal judges will replace the experts at the agencies in interpreting and applying the statute and regulation.

Again, Millhiser writes:

Loper Bright transfers a simply astonishing amount of policymaking authority from federal agencies that collectively employ tens of thousands of people, to a judiciary that lacks the personnel to evaluate the overwhelming array of policy questions that will now be decided by the courts. This problem will be felt most acutely by the Supreme Court itself, which has only nine justices staffed by a bare handful of law clerks and a skeletal administrative staff.

How many salmon can commercial fishermen take from the Klamath River? The nine justices on the Supreme Court will decide that question if a commercial fisherman challenges a regulation that sets the catch limit at “40% of the five-year trailing average of juvenile coho salmon past trap site in the South Fork Umpqua River (Oregon Coast) during spring and summer.”

I made up that regulation, but you get the point. The nine justices have no expertise to second-guess the catch limit on salmon in the Klamath River set by NOAA fisheries.

In a single decision, the Supreme Court has appointed itself as the final arbiter of regulations established by hundreds of federal agencies. Federal judges are currently overworked and understaffed and lack the subject matter expertise to make such determinations.

Every federal regulation challenged by an aggrieved business owner will now be reviewed anew by a federal judge. The Loper Bright decision is a historic shift in the balance of power that the Supreme Court will come to regret—but not until chaos has engulfed the US economy and stretched federal courts to the breaking point.

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The Supreme Court invalidates enforcement proceedings before administrative law judges

On Thursday, the Supreme Court ruled in SEC v. Jarkesy that the SEC could not use administrative proceedings to impose civil penalties for securities fraud. The Securities and Exchange Commission—and dozens (hundreds?) of other agencies—employ “administrative” proceedings to determine whether respondents have violated federal regulations.

Those administrative proceedings occur before the relevant agency commissioners and are tried by administrative law judges (ALJs). ALJs are not federal judges appointed under the Constitution; they are civil service employees.

Justice Roberts wrote that administrative proceedings seeking civil penalties tried before administrative law judges violate the Seventh Amendment right to trial. As a result, many agencies will be required to file such suits in federal district court. Per Chris Geidner on Substack, Law Dork,

The 6-3 decision in Securities and Exchange Commission v. Jarkesy could upend the ability of executive agencies to enforce decades of law, forcing them to bring virtually any enforcement actions that seek fines in court.

Justice Sotomayor wrote (in her dissent) that the ruling in Jarkesy was an attack on the modern administrative state:

Make no mistake: Today’s decision is a power grab. Once again, “the majority arrogates Congress’s policymaking role to itself.” It prescribes artificial constraints on what modern-day adaptable governance must look like.

In short, administrative proceedings previously held before ALJs must now be filed in federal court—again increasing the federal judiciary's power (and workload) and diminishing federal agencies' ability to enforce regulations.

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The reactionary majority second-guesses ATF on definition of machine gun

Last Friday, the reactionary majority disagreed with the Department of Alcohol, Tobacco and Firearms (ATF) regarding the definition of “machine gun.” In Garland v. Cargill, the reactionary majority ignored the plain language of a federal law banning machine guns. It ruled that a semiautomatic rifle equipped with a bump stock did not meet the congressional definition of a machine gun. In so ruling, Justice Thomas substituted his judgment for that of ATF experts in firearms.

By overruling the expertise and judgment of the ATF, Justice Thomas has arrogated to the Supreme Court future questions regarding the nature and definition of firearms in a rapidly evolving technology environment.

Rather than giving Congress’s laws broad interpretation to ensure they achieved their intended legislative goal, the reactionary majority gave the law the narrowest possible interpretation. Congress is thus forced to “legislate with unrealistic specificity and foresight.”

Under the Court’s new regime, congressional legislation is effective only when it precisely maps onto evolving technology and predicts future developments. That is an impossible task. Legislation will always lag behind technological developments. That is why Congress should be permitted to enact broad laws covering all conduct that reasonably meets the statutory definitions. The Roberts Court has now taken away that ability from Congress—with no basis in the Constitution for doing so.

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Concluding Thoughts

In the last three weeks, the Supreme Court has transferred large swaths of regulatory and administrative authority and rulemaking to itself. The federal courts were not authorized and are not equipped to serve as roving regulators of last resort for hundreds of federal agencies. But it has been a decades-long goal of the Federalist Society to dismantle the administrative state. This week, the Federalist Society has materially advanced that goal—to the detriment of three hundred million Americans and the US economy.

I recognize that this newsletter turned out to be more technical than I had intended. However, it is important to have a sense of these issues, even if they seem abstract and complex. The Supreme Court fundamentally altered how the US economy will be regulated by elevating the judiciary and diminishing Congress. That should concern all Americans because the Supreme Court and the Federalist Society are acting as surrogates for corporations and white religious fundamentalists. Yet another reason to turn out in record numbers in November 2024.

I have written a separate newsletter this evening on debate follow-up. Check your email for that newsletter.

Talk to you on Monday. Stay strong!