Posts Tagged ‘administrative law’

How late the Auer

“Auer deference,” announced by the U.S. Supreme Court in Auer v. Robbins (1997), requires courts to accord deference to a federal agency’s interpretation of its own statute. The U.S. Department of Education, contradicting some earlier statements, has lately taken the view that “collection costs may not be assessed against [student loan] borrowers who sign rehabilitation agreements,” thus turning unlawful in retrospect thousands of instances in which lenders have done that. The Seventh Circuit has now denied en banc rehearing in the case of Bryana Bible v. United Student Aid Funds, which — invoking Auer deference — let a suit go forward on that theory. Judge Frank Easterbrook, concurring in that denial of rehearing en banc (h/t Ted Frank), noted that Supreme Court justices including Auer’s original author have lately expressed doubts about the doctrine’s ongoing viability. Easterbrook:

…deference has set the stage for a conclusion that conduct, in compliance with agency advice when undertaken (and consistent with the district judge’s view of the regulations’ text), is now a federal felony and the basis of severe penalties in light of the Department’s revised interpretation announced while the case was on appeal.

Federal court: SEC cannot use employees as judges

The Securities and Exchange Commission practice of trying many complaints before administrative law judges (ALJs) who are its own employees, rather than before federal courts, has grown increasingly controversial lately and now one defendant’s challenge to the practice has prevailed — at least for the moment. A federal judge in Atlanta has ruled that because ALJs are “inferior officers” under the constitution, they cannot be simply employed like other federal workers by an agency like the SEC. Writes Thaya Knight at Cato, “there is a fairly easy fix available to the SEC: the five commissioners can simply appoint the existing ALJs to their current positions…. [but] other agencies could face greater difficulties.” But Daniel Fisher quotes Prof. Philip Hamburger as saying the ruling could still prove “profoundly important,” leading to the unraveling of other aspects of administrative law arrangements within agencies. More: W$J (commission fighting off at least seven legal challenges; in one instance it “asked one of its own judges to submit a formal statement about whether he has ever felt pressure to favor the agency”), Adam Zimmerman/PrawfsBlawg.

Beyond the U. Va. scandal: will courts disallow feds’ rule by “Dear Colleague” letter?

The crackdown on college grievance procedures by the U.S. Department of Education’s Office for Civil Rights (OCR) paved the way for such developments as the administrative panic at the University of Virginia following Rolling Stone’s bogus assault article. I’ve got some thoughts at Cato about how the OCR crackdown grows out of a type of federal agency power grab — rule by “Dear Colleague” letter, sometimes known as sub-regulatory guidance or stealth regulation — that did not begin with this issue. As federal agencies have learned how to wield broad regulatory power without having to go through the formal regulatory process with its legal protections for affected parties, the courts have begun to apply skeptical scrutiny — which could open up one avenue of challenging the federal guidelines. Earlier on subregulatory guidance/stealth regulation here, here, etc. More: related from John Graham and James Broughel, Mercatus.

Supreme Court roundup

  • In a new Cato podcast, I talk with Caleb Brown about the Court’s pending case on “disparate impact” liability in housing and finance, Texas Dept. of Housing vs. The Inclusive Communities Project [earlier, more]
  • Amicus briefs urge Court to recognize regulatory taking in raisin marketing order requisition case Horne v. Department of Agriculture [Trevor Burrus, Ilya Somin, earlier]
  • Organized campaign to disrupt Supreme Court sittings is sure to raise the concern of groups devoted to backing judicial independence. Right? [Orin Kerr, Legal Times, earlier on selective vision of some of the latter groups here, here, etc.]
  • Under the surface, routine decision in Perez indicates Justices’ changing attitudes toward Chevron, Auer, and agency deference in administrative law [Sasha Volokh]
  • Vong v. Aune, arising from Arizona cosmetology board ban on Asian “fish pedicure” techniques, could enable Court to examine economic rationality of regulation [Ilya Shapiro]
  • “Justices stick to middle of the road in Omnicare securities opinion” [Alison Frankel/Reuters, Bainbridge]
  • Sequel to Harris v. Quinn? In Center for Individual Rights’s Friedrichs v. California Teachers Association case Court could revisit Abood question of public sector agency shop [On Labor, Larry Sand/City Journal]

Supreme Court roundup

Very Cato-centric this time:

  • Perez v. Mortgage Bankers: yes, agencies can dodge notice and comment requirements of Administrative Procedures Act by couching action as other than making new rule [SCOTUSBlog and more links, earlier; Michael Greve and followup; Daniel Fisher on concurrence by Justices Scalia, Thomas, and Alito and related on Thomas, Alito concurrences in Amtrak case]
  • New Jersey high court is unreasonably hostile to arbitration clauses, which raises issues worthy of review [Shapiro on Cato cert petition]
  • “When Wisconsin Officials Badger Their Political Opponents, It’s a Federal Case” [Ilya Shapiro, earlier here, here, etc.]
  • Richard Epstein on King v. Burwell oral argument [Hoover, earlier]
  • With Profs. Bill Eskridge and Steve Calabresi, Cato files probably its last same-sex marriage brief before SCOTUS [Shapiro; Timothy Kincaid, Box Turtle Bulletin]
  • On Abercrombie (religious headscarf) case, Jon Hyman sees an edge for plaintiff at supposedly pro-business Court [Ohio Employer Law Blog, earlier]
  • A different view on Fourth Amendment challenge to cops’ warrantless access to hotel guest registries [James Copland on Nicholas Quinn Rosenkranz brief; earlier Cato amicus]
  • “Why the Court Should Strike Down the Armed Career Criminal Act as Unconstitutionally Vague” [Trevor Burrus]

Powhatan’s zingers in FERC case

We’ve noted (here and here) the battle between Powhatan Energy Fund and the Federal Energy Regulatory Commission over a FERC investigation of Powhatan for vaguely defined “market manipulation.” A filing earlier this month by Powhatan in FERC proceedings (represented by Drinker Biddle) has some subheads taking a not-exactly-respectful tone seldom met with in high-stakes administrative proceedings (Response in Opposition To Order To Show Cause and Notice of Proposed Penalty, PDF):

  1. “Dr. Chen’s ‘Home Run’ Trading Strategy Is Not A ‘Post Hoc Invention’ Because, Among Other Things, 35 Is Less Than 50”
  2. “Dr. Chen’s Trades Were Not ‘Wash-like’ Or ‘Wash-type’ – Whatever The Heck That Means”
  3. “The Staff’s Stubborn Reliance On The Unpublished, NonPrecedential Amanat Case Is Just Lame”
  4. “Uttering the Phrase ‘Enron’ Or ‘Death Star’ Does Not Magically Transform The Staff’s Investigation”

The full document is here.

Supreme Court roundup

  • Perez v. Mortgage Bankers: can agency escape notice-and-comment requirements for new rulemaking by couching edict as other than a rule? [The Hill]
  • Contrary to imaginings in some quarters, anti-business side doesn’t lack for access to front-rank Supreme Court advocates [Tom Goldstein, SCOTUSBlog]
  • Speaking of which, Alison Frankel’s profile of Prof. Samuel Issacharoff’s work on behalf of class actions illuminates little-seen world of cert practice [Reuters]
  • After two near misses, it’s time for Justices to turn thumbs down on housing disparate impact theory [Ilya Shapiro and Gabriel Latner, Cato]
  • Integrity Staffing v. Busk: Court unanimously rules Fair Labor Standards Act does not require overtime pay for security screening after work [SCOTUSBlog, Michael Fox, On Labor, Daniel Fisher, Dan Schwartz]
  • “Religious Liberties for Corporations? Hobby Lobby, the Affordable Care Act, and the Constitution” [Cato panel discussion with Roger Pilon, Ilya Shapiro, Randy Barnett, David Gans]
  • Some local governments presume to license local tour guides, which amounts to requiring a license to speak [Shapiro and Latner, Cato]
  • More: 1997 flap over sculpture of Muhammad in Supreme Court building mostly subsided after Islamic scholar interpreted it as gesture of goodwill [Jacob Gershman, WSJ Law Blog]

“American Law Is In A State Of Crisis”

James DeLong, lawyer, author, astute analyst of regulation and longtime friend of Overlawyered, has begun writing for Forbes and this is his inaugural post. It’s short — go read it now. His second post is on “ObamaCare, Chevron, and Congressional Delegation.”

Way back in 1997 I reviewed Jim’s book Property Matters for the Wall Street Journal.

Banking and finance roundup

  • “How Operation Choke Point Hurts the Unbanked” [former FDIC chairman William Isaac, American Banker]
  • A nation of snitches: “U.S. rules would expand white collar crime informers” [Reuters]
  • Courts should stop giving deference to agency interpretations of criminal law: “Justice Scalia’s shot across the SEC’s bow re insider trading” [Bainbridge] Judge Rakoff criticizes SEC for bringing so many enforcement proceedings to in-house adjudicators [Reuters, earlier]
  • Monitor envy: “The biggest U.S. banks have 100 or more on-site examiners from an array of regulators” and now New York’s financial regulator wants to get into the act [WSJ]
  • Seventh Circuit finds Bank of America entitled to ask loan applicants about expected continuing entitlement to disability benefits, but in the mean time bank agrees in DoJ settlement to cease such inquiries [Easterbrook opinion in Wigginton v. Bank of America, see last page]
  • Two SEC commissioners warn that campaigned-for “fair fund” to compensate investors in CR Intrinsic inside trading case “likely to benefit only class-action attorneys and the fund’s administrators” [Daniel Gallagher and Michael Piwowar, WSJ]
  • “U.S. veterans sue [major European] banks, claim they should pay for Iraq attacks” [Alison Frankel, Reuters]

Judge rules against housing disparate impact theory

The Obama Administration has repeatedly dodged cases in fear of judicial review of its controversial application of the disparate impact theory to mortgage lending and other aspects of the housing market, but its position has now met with a stiff rebuke from district court judge Richard Leon [Insurance Journal]:

“This is yet another example of an administrative agency trying desperately to write into law that which Congress never intended to sanction,” Leon wrote.

He called the rule “nothing less than an artful misinterpretation of Congress’s intent that is, frankly, too clever by half.”