Prof. Bainbridge flags this disturbing Wall Street Journal piece:
The Securities and Exchange Commission is increasingly steering cases to hearings in front of the agency’s appointed administrative judges, who found in its favor in every verdict for the 12 months through September, rather than taking them to federal court.
Previously, the agency had tended to use the ALJs (administrative law judges) for relatively cut-and-dried enforcement actions, while taking more complex or cutting-edge disputes to federal court. Now, following the Dodd-Frank expansion of its powers, it prefers ALJs even for many complex and demanding cases arising from charges such as insider trading. Defendants enjoy a range of protections in federal court that are not provided in administrative litigation, including juries as well as the presence of federal judges who are independent of agency control, held to a more demanding ethical code, and drawn generally from higher and more sophisticated circles within the legal profession. Read the entire Bainbridge commentary, with followups linking Henry Manne (adjudicatory actions are ways to avoid the more demanding process of rulemaking) and Keith Bishop (current system open to constitutional challenge?).
“The agency is dodging the courts by turning to its own administrative law judges to decide its cases.” [Russell Ryan (King & Spalding), WSJ op-ed, paywalled]
Now this is lovely: the Environmental Protection Agency intends to assert for the first time a power to garnish your wages without a court order to cover fines or other sums it may assess. The new “administrative wage garnishment” power is fueled by a 1996 federal law, the Debt Collection Improvement Act (DCIA), which authorizes more direct means for the seizure of “fines, penalties or fees assessed by federal agencies” and other moneys owed them. The EPA is taking comments through August 1. [Robert Gordon, Daily Signal]
More, a semi-defense of the agency from Brent Fewell: since Congress has pushed these new collection methods on many agencies besides the EPA, the most suitable course for critics would be to press lawmakers to change the debt collection law, the EPA’s underlying statutes, or both.
In a 4-2 decision, New York’s highest court agreed with two lower courts that New York City’s attempted ban on sugary drink portions over 16 ounces exceeded the powers of the city’s Department of Health. [Bloomberg News coverage]
That’s exactly in line with what I wrote at earlier stages of the case. At the time, some national commentators did not seem to have checked out the actual reasoning of Judge Milton Tingling’s decision, which rested squarely on a distinctive 1987 New York precedent called Boreali v. Axelrod which had struck down the state health department’s attempt to regulate smoking in public places as beyond its properly delegated authority. The soda case was (as they say) on all fours with Boreali, and although the Court of Appeals could have overturned Boreali, as some academics urged, or found grounds to dodge its effect, as the two dissenters did, the court instead chose to apply the precedent as it stood. That confirms that the Bloomberg-appointed Board of Health, in its eagerness to assert powers not rightly its own, had casually broken the law.
One of the two dissenters was Chief Judge Jonathan Lippman, the latest of many indications that he is inclined to pull the Court of Appeals away from many of the positions and habits that have given it a centrist reputation among state courts.
In a complex decision yesterday, the Supreme Court struck down in part and upheld in part the Environmental Protection Agency’s attempt to regulate large emitters of carbon dioxide and other greenhouse gases (GHGs) [McClatchy/Federalist Society]. A key portion of the holding, writes Jonathan Adler at Volokh, is the finding that the EPA
is not permitted to rewrite the applicable statutory emission thresholds. The latter conclusion, in particular, is an important reaffirmation that agencies are not allowed to rewrite the statutes that they administer. But today’s decision was not a total loss for the EPA, however, as the Court also concluded that it was reasonable for the EPA to interpret the Act to allow for the regulation of GHG [greenhouse gas] emissions from sources already subject to regulation under the PSD and Title V [large stationary source] program. What this means is that large stationary sources (think big power plants and industrial boilers) that are already regulated as major stationary sources under these programs will have to control GHG emissions when they control other emissions. But sources that only emit large amounts of GHGs will not become subject to EPA’s regulatory authority under these provisions.
From my colleague Andrew Grossman at Cato:
At issue was one of the Obama Administration’s earliest efforts to skirt Congress and achieve its major policy goals unilaterally through aggressive executive action….
The Court, in a lead opinion by Justice Scalia, called it “patently unreasonable—not to say outrageous.” EPA, it held, must abide by the statute: “An agency has no power to ‘tailor’ legislation to bureaucratic policy goals by rewriting unambiguous statutory terms.” And if such tailoring is required to avoid a plainly “absurd result” at odds with congressional intentions, then obviously there is obviously something wrong with the agency’s interpretation of the statute. To hold otherwise, the Court recognized, “would deal a severe blow to the Constitution’s separation of powers” by allowing the executive to revise Congress’s handiwork. …
The Court’s decision may be a prelude of more to come. Since the Obama Administration issued its first round of greenhouse gas regulations, it has become even more aggressive in wielding executive power so as to circumvent the need to work with Congress on legislation. That includes recent actions on such issues as immigration, welfare reform, and drug enforcement.
Four liberal justices dissented, while Justices Alito and Thomas argued that the Scalia-led plurality were too accommodating of the EPA’s assertion of power.
Columbia lawprof Philip Hamburger is out with a book of high importance on the administrative state and the legality of its actions, and Cato had him in to speak earlier this month, with D.C. Circuit Judge Stephen Williams commenting and Cato’s Roger Pilon moderating (video, podcast links). The event description:
When law in America can be made by executive “pen and phone” alone — indeed, by a White House press release — we’re faced starkly with a fundamental constitutional question: Is administrative law unlawful? Answering in the affirmative in this far-reaching, erudite new treatise, Philip Hamburger traces resistance to rule by administrative edict from the Middle Ages to the present. Far from a novel response to modern society and its complexities, executive prerogative has deep roots. It was beaten back by English constitutional ideas in the 17th century and even more decisively by American constitutions in the 18th century, but it reemerged during the Progressive Era and has grown ever since, regardless of the party in power.
Earlier here, etc.
“…Most companies roll over.” [Tim Lynch, Cato; WSJ; related on Federal Energy Regulatory Commission enforcement]
On this coming Monday, May 19, the Cato Institute is hosting a lunch on the subject of “Mugged by the State: When Regulators and Prosecutors Bully Citizens,” featuring Kevin Gates, Vice President, Powhatan Energy Fund; William Hurwitz, M.D., Pain Treatment Specialist; Lawrence Lewis, Engineer and Building Manager; and William Yeatman, Senior Fellow, Competitive Enterprise Institute; moderated by Tim Lynch, Director, Project on Criminal Justice, Cato Institute. You can watch live online at http://www.cato.org/live.
More: Cato podcast, brothers’ website, Philly.com (with an additional story of a man resisting the Delaware insurance commission after it took over his nightclub insurer). And: WSJ via John Cochrane on another FERC case.
The Federal Trade Commission acting simultaneously as lawmaker, judge, prosecutor, appellate panel, bailiff, clerk of the court, and many other public servants probably up to and including executioner [Gary Lawson via Steven Hayward, Power Line]
Douglas Walburg faces potential liability of $16-48 million. What heinous acts caused such astronomical damages? A violation of 47 C.F.R. § 16.1200(a)(3)(iv), an FCC regulation that enables lawsuits against senders of unsolicited faxes.
Walburg, however, never sent any unsolicited faxes; he was sued under the regulation by a class of plaintiffs for failing to include opt-out language in faxes sent to those who expressly authorized Walburg to send them the faxes.
The Federal Communications Commission has now taken the position that a federal enactment known as the Hobbs Act “prevents federal courts from considering challenges to the validity of FCC regulations when raised as a defense in a private lawsuit.” The Cato Institute has joined the National Federation of Independent Business in an amicus brief seeking Supreme Court certiorari, supporting Walburg’s position “that the Eighth Circuit was wrong to deny him the right to judicial review without having to initiate a separate (and impossible) administrative review.” [Ilya Shapiro, Cato]
In this video from Cato’s Constitution Day, the Baker & Hostetler attorney (and friend of this site) discusses the Supreme Court’s recent decision according deference to agencies’ determinations of their own jurisdiction. The case, which split the conservative justices, was one of the rare defeats for a Cato Institute amicus position last term.
Related: Michael Greve, John Yoo and Mike Rappaport on rethinking administrative law and the era of deference.
The new four-judge decision is unanimous, which means every judge to consider the matter has now agreed that the NYC Department of Health overstepped its legal powers. And they’re right, as I explain here at Cato. Earlier here, here, here, etc.
One person who presumably had not expected today’s result is Emily Bazelon at Slate, who has claimed that Judge Milton Tingling’s trial-court decision was somehow a venture into conservative activism. None of the New York appellate judges heard from today give evidence of sharing that view.
By a 6-3 vote yesterday, the Supreme Court decided that agencies deserve deference in determining the scope of their own jurisdiction. Bad move, argues Ilya Shapiro at Cato:
…why should courts defer to agency determinations regarding their own authority? … Whether a government body uses its power wisely or not, it cannot possibly be the judge of whether it has that power to begin with. Yet Justice Scalia, writing for the majority, essentially says that there’s no such thing as a dispute over whether an agency has power to regulate in a given area, just clear congressional lines of authority and ambiguous ones, with agencies having free rein in the latter circumstance unless their actions are “arbitrary and capricious” (what lawyers call Chevron deference, after a foundational 1984 case involving the oil company).
That makes no sense. As Cato explained in our brief, since the theory of deference is based on Congress’s affirmative grant of power to an agency over a defined jurisdiction, it’s incoherent to say that the failure to provide such power is an equal justification for deference. Furthermore, granting an agency deference over its own jurisdiction is an open invitation for agencies to aggrandize power that Congress never intended them to have. One doesn’t need a doctorate in public choice economics to recognize that we need checks on those who wield power because it’s in their nature to husband and grow that power.
Read the whole thing here.