Whooo boy. Sorry I had to skip out the last few days, work was a little crazy and then instead of writing up a summary of the Thursday’s decisions, I decided to watch the debate. (Narrator voice: he chose… poorly.) Friday got away from me a bit, and Saturday I spent with my family working on our homebuilt camper. (Narrator voice: he chose… wisely.)
As we’re winding down the term, the Court as always has saved the biggies for last. Instead of doing this by date, I’ll cover them in just general order of importance.
Loper-Bright Enterprises v. Raimondo
This is probably the biggest opinion of the last week.
Loper-Bright overruled a 40-year-old precedent in administrative law called Chevron v. Natural Resources Defense Council. Ironically, it was Justice Neil Gorsuch’s mother who won in Chevron, and her son was part of the majority to overrule it.
The Court has been particularly active the last few years and especially this term in revising a body of law known as administrative law.
Pete’s Five-Minute Law Lesson: Intro to Admin Law
There has always been bureaucracy going right on back to before the Constitution itself. You have to have bureaucracy to run a government, it’s just inherent. Even a small government with a few thousand citizens will require some bureaucracy to manage it. A government will 345 million citizens requires a substantial amount more administration and bureaucracy to administer it.
Until the Civil War, the federal government didn’t do a whole lot other than fight the War of 1812 and massacre a lot of Native Americans. There was relatively little in the way of federal regulation of anything or enforcement of federal laws. In the postwar Reconstruction Era, particularly with the advent of the 13th, 14th, and 15th Amendments, the federal government was expanded in both size and power over the individual States.
This really grew with the advent of the New Deal in the 1930’s. Congress and the FDR administration in the Great Depression and World War II years saw the need for a more nimble, more responsive federal government, and the need for experts in the developing Civil Service to have authority and the ability to craft meaningful, workable regulations. The Federal government also started taking a much more active role in regulating corporations and repudiated the laissez-faire hands-off approach of the business-class Republicans of the 1920’s.
One of the shifts in attitude was that Congress wasn’t made up of experts, and passing laws regarding specialized subjects was time consuming, and harder to change later. So, Congress began delegating some of their legislative authority to various federal agencies and empowered them to increasingly create regulations to further laws. Congress wasn’t made up of people who were experts in environmental science, so they would say “Executives! Go make an Environmental Protection Agency! Go hire some nerds! And then you there, EPA nerds! Go make the water clean and the air breathable!”
And then the EPA would hire expert people to make rules about how to have clean water and air and other expert people to go around to the people dumping things in the Cuyahoga River and say “ok, here’s a list of the things you have to stop doing.”
The Supreme Court briefly for a hot second declared this unconstitutional with what they called the “nondelegation doctrine,” and ruled that Congress couldn’t do this, but changed course quickly on this as part of the “switch in time that saved nine” in 1937 and basically forgot about it for about 80 years. (We’ll come back to that some other time.)
Federal agencies can act in a lot of different ways depending on how they’re set up. In many ways, agencies often act as a sort of fourth branch of government that combines the functions of the executive, legislative, and judicial branches all at once.
To put some guardrails around this, in 1946, Congress passed a law called the Administrative Procedures Act, or APA. The APA is probably one of the single most important laws when it comes to how government is run. The body of law that has come out of interpreting the APA (with some of the law around managing bureaucracy before that) is what makes up basically all of administrative law.
And now back to our regularly scheduled programming.
Chevron dealt with the question of what federal courts should do if a statute is ambiguous and an agency makes a rule based on its interpretation of the statute.
In the late 1950’s through the late 1970’s, the Court was very active and quite progressive. The Court under Chief Justices Earl Warren and Warren Burger (a graduate of one of the predecessor schools to my own law school Mitchell Hamline School of Law!) made enormous shifts in civil rights, due process protections in criminal proceedings, established the foundations of a right of privacy, and more.
By the Nixon administration, conservatives were clamoring to rein in the Court, and Reagan appointed several justices meant to shift the Court towards a policy of “judicial conservatism.” It wasn’t about partisan ideological conservatism, but a philosophy that judges should not be making policy and should do less legislating from the bench.
The Reagan administration was also big into the idea of deregulation. Agencies all over the federal government started rolling back or narrowing regulations passed by previous agencies, including the EPA, which issued a new rule regarding pollution that let companies start polluting a whole bunch more than under the old rules. The NRDC argued that the EPA’s new interpretation of the statute was wrong and it should go back to the old rules, since the point of the mandate of the Environmental Protection Agency was to, you know, protect the environment instead of making easier to pollute it. Then DC Circuit judge Ruth Bader Ginsberg ruled in favor of the NRDC, and the Chevron corporation (the big oil guys) intervened to take it to the Supreme Court.
The Court ruled unanimously 6-0 (Justices Thurgood Marshall, William Rehnquist, and Sandra Day O’Connor sat this decision out) in favor of Chevron as a matter of judicial conservatism. Chevron held that judges really aren’t experts and agencies are, so if a statute is ambiguous and the agency interprets the statute plausibly and reasonably and issues a rule based on that interpretation, the courts should defer to that interpretation. This was very much meant to rein in an activist federal judiciary.
This deference didn’t come entirely out of nowhere. In 1945, the Court decided Skidmore v. Smith and Co., which already gave some deference to agency interpretations of statutes. Chevron really just made this more formal.
Corporations were pretty happy with this when the government was in deregulatory mode, but when more regulatorily active administrations came to power, they were pointedly less happy.
The Court first started targeting Chevron in the early 2000’s with Clinton-era regulations.
In 2000, the Court handed down Christensen v. Harris County, which held that agencies should only get that deference if the regulation had the “force of law.”
In 2001, the Court handed down United States v. Mead Corporation which held, “hey remember that force of law thing from last year? Just kidding!” and changed it to more of like a “force of lawziness,” or does this seem like kind of authoritative something Congress would have had wanted us to defer to?
In 2002, the Court handed down Barnhart v. Walton, which held, “hey, remember that force of lawziness thing from last year? JUST KIDDING AGAIN!” and identified five factors for the courts to consider about whether something should or should not get Chevron deference: (1) the interstitial nature of the legal question, (2) the related expertise of the agency, (3) the importance of the question to administration of the statute, (4) the complexity of that administration, and (5) the careful consideration of the agency of the question over a long period of time. (Sandra Day O’Connor was really really big into balancing tests.)
That kind of settled things, ish, for a little while, because George W. Bush’s administration was doing a lot of deregulating in the 2000’s. But then Barack Obama was elected in 2008 and an obstructionist Congress took over in 2010. Obama, unable to get literally anything passed through Congress, began turning to executive agencies to start implementing policy changes, which infuriated conservatives. By this time, Sandra Day O’Connor had been replaced by Samuel Alito and William Rehnquist had been replaced by John Roberts, both of whom tended to talk about judicial conservatism, but also were highly critical of Chevron. However, Justices Scalia and Kennedy were highly supportive of it, and so there were not even four justices willing to grant cert to revisit the decision, much less five justices to overrule it.
That is, until Scalia died in 2016 and in a pure power move, Senator Mitch McConnell refused to even hold a vote on a replacement until after the election. Scalia was replaced by Neil Gorsuch, and within a few years, Kennedy was replaced by Kavanaugh and Ginsberg was replaced by Barrett. All three were chosen in no small part because of their opposition to Chevron.
Loper-Bright was pretty much inevitable once Kavanaugh joined the Court and frankly, I’m surprised it took this long.
I’ll dig into Loper-Bright in the near future, because I think people are panicking over this case for all the wrong reasons.
SEC v. Jarkesy
The short, short version of this is that the Court threw a wrench into prosecuting white collar crime by holding that if the SEC wants to go after you, they have to do it in federal court with a right to a trial by jury.
Jarkesy tackles this administrative law issue a bit sideways.
One of these agencies that gets some authority delegated to it is the Securities and Exchange Commission, formed in the Great Depression to combat the abuses of the stock market that led to the crash of 1929 and ensuing Depression. Various Congressional acts since the SEC’s creation have expanded or modified the SEC’s authority and mandates.
After the 2008 financial crisis, Congress passed a set of laws called the Dodd-Frank Act, which was meant to address some of the bad things that the financial sector was doing and give the SEC more power to go after bad actors creating toxic and fraudulent securities. One of the things that Dodd-Frank did was give the SEC a choice: they could bring enforcement actions either in Federal court, or they could pursue the matter in-house. The enforcement division would bring a case, and it would be adjudicated by a specialized judge called an Administrative Law Judge (ALJ).
ALJs are pretty much indispensable to administrative law. A massive amount of claims are adjudicated not by the overworked Federal courts (known as Article III courts), but by these ALJs. ALJs are specialized and deal with very specific claims that they are experts in. It’s a very efficient system for adjudicating specific claims. ALJs handle things like immigration cases, social security disability claims, and more.
Part of the reason for this is because litigation is expensive. Jury trials are expensive and take a long time. Taking it to an ALJ saves a lot of time and hassle and streamlines the whole process.
This wasn’t a new thing. Congress had been giving agencies the option to bring claims either in an Article III court or to an ALJ for over 150 years. Usually there is a trade off of some kind. If you’re the SEC and you want to bring criminal charges or get fines, for example, usually you have to go to an Article III court. If you want disgorgement or a clawback of ill-gotten profits, on the other hand, or monetary damages for securities violations, it might be fine to go to an ALJ to have it adjudicated. They’ll be specialists in securities law; judges aren’t and juries REALLY aren’t for the most part.
And for a lot of white collar crooks like the SEC goes after, the crooks don’t really care about or are deterred by jail time, and the SEC really cares about making them pay back money they shouldn’t have (which is hard to do from prison). Litigating against billionaires is even more tiring: they can afford to bog the Feds down with a team of lawyers filing endless bullshit forever to stall things. It can literally take a decade to bring an enforcement claim in federal court. You can get this through an ALJ in a year or so or less if they’re not too booked up.
But people who want to break the federal government and people who want to make it easier to get away with white collar crimes (the Venn diagram of which is a nearly completely overlapping circle lately in my experience), don’t like this at all. People looking to break the government (or return it to what they think it was like in 1789) absolutely hate this administrative state. And people who commit a lot of white collar crime generally have been bankrolling a lot of the other people.
So, in walks George Jarkesy, Jr., and his firm, Patriot28, LLC. Jarkesy started up some hedge funds in 2008 and 2009, including Patriot28. Jarkesy fudged some numbers and made other false claims, and lost a bunch of money. Regular ol’ run of the mill white collar crime.
The SEC used its new enforcement mechanism against him in 2013 to try to claw back a bunch of Jarkesy’s fraudulently gotten cash. After some trips around the federal circuit courts of appeals and a 2018 Supreme Court case about the nature of ALJs, Jarkesy finally found himself a willing ear in the Fifth Circuit Court of Appeals, who entertained a novel legal theory that had been soundly rejected for 170 years that this kind of enforcement action is unconstitutional under the Seventh Amendment’s right to a trial by jury in civil cases “at law.”
Pete’s Five Minute Law Lesson: Courts of Law and Equity
The United States inherited the English judiciary system, including two important aspects of things.
First was the idea of “common law.” Common law is a body of law made up by judges, not legislators or kings, where by analyzing fact patterns (cases) and coming up with rules to govern them, the court system starts to establish common rules over time on a case-by-case basis. Like cases are decided alike, and past cases guide future decisions. A vast array of claims arose out of the common law tradition: most of our property law, contract law, tort law, and more are derived from cases dating back centuries.
The second was the difference between courts of law, and courts of equity. In England after the Norman conquest of 1066, if you thought your neighbor wronged you, you could go to the court system. However, the courts had a very specific set of what they could do. They could only award money damages to you, and you had to fit into a VERY narrow set of circumstances and plead things VERY specifically or you’d lose.
If you wanted something other than money, you had to go to the King. You’d plead your case as to why you should get what you want, and the King would grant it or deny it. Eventually, as the kingdom grew and more people wanted the King’s time, he delegated that adjudication to a Chancellor and a Court of Equity.
The Courts of Law and Equity remained separate things in the United States until 1938 and the merger of law and equity with the Rules of Civil Procedure. In 1789, when the Seventh Amendment was passed, they were separate things.
And now back to our regularly scheduled programming.
So, in 1789, when the Bill of Rights starts getting tacked on to the Constitution, the Seventh Amendment is passed that provides for a right for a civil jury in cases “at law.” Not in equitable cases. If someone wanted money from you in a Federal court, you got a jury. This was a sticking point for the Framers, because it was something they believed strongly in with due process when it came to people taking property from you, and the English had specifically denied to them but granted to other English subjects! This was one of the grievances in the Declaration of Independence.
However, the Supreme Court has pretty much always recognized an exception for what was called the Public Rights Doctrine. If the Feds wanted to sue you to enforce a federal statute that wasn’t just a claim under the old English common law, you didn’t have a right to a jury. That was bedrock law dating back as far as 1856 and reaffirmed time and time again.
Until Jarkesy.
Roberts’ majority opinion denies that it overrules cases such as Atlas Roofing v. OSHA, one of the most recent key cases on the Public Rights Doctrine, but held that because what the government wanted was money and fraud was one of those common law claims for money damages, the Public Rights Doctrine doesn’t apply here and Jarkesy constitutionally had a right to trial.
It’s not like this Court is some major champion of the Seventh Amendment when it comes to someone who isn’t a hedge fund manager. The Court has happily limited the right to jury trial in plenty of other contexts including forced arbitration.
It’s hard not to see it at least a little cynically that the Court will go out of its way to protect a billionaire hedge fund manager who just happens to be a major Republican donor and conservative radio show host. Especially in light of its recent decisions making it all but impossible to prosecute out-and-out bribery short of a crook literally saying on tape “here is a bag of money for your vote, my good sir,” and this particular conservative majority’s tendency to accept (and not disclose as required by law!) lavish gifts and trips by billionaires and hedge fund managers.
Fischer v. United States
Another hotly watched case for this term is Fischer v. United States, which deals with one of the ways that the Department of Justice pursued some January 6 rioters. The DOJ charged some individuals with a felony under 18 U. S. C. § 1512(c)(2), which was added to the Federal criminal statutes as part of the Sarbanes-Oxley Act in the mid-2000’s to close loopholes exploited in the Enron accounting scandal. § 1512(c)(2) gave the DOJ more authority to go after people who destroyed documents or otherwise obstructed Congressional proceedings or investigations. § 1512(c) covers various ways that destruction of documents is obstruction, and (c)(2) is a catchall provision to cover any other corrupt conduct that obstructs Congress or congressional investigations.
§ 1512(c)(2) was used to charge a number of January 6th rioters, including Fischer. All but one of the DC District Court judges ruled that § 1512(c)(2) applied to their actions to corruptly stop Congress from proceeding under the Electoral Count Act as part of a plan to soft-coup Donald Trump back to the presidency by throwing the election to the House of Representatives. Only Judge Carl Nichols, a Trump appointee, interpreted § 1512(c)(2) as limited only to acts relating to documents. A divided panel of the DC Circuit disagreed with Nichols and affirmed the convictions. Fischer took his up to the Supreme Court.
A 6-3 opinion by Roberts, joined by Thomas, Alito, Gorsuch, Kavanaugh, and Jackson, with Justice Barrett dissenting joined by Kagan and Sotomayor, took Nichols’ side and narrowed the scope of this charge to those who specifically did something with documents. Barrett took her conservative colleagues to task and noted that if they were going to hold themselves to be textualists, they should actually do it instead of jumping over the plain and unambiguous meaning of “otherwise” and into legislative intent.
This decision really only impacts a relatively small number of January 6th defendants. Most took plea deals that will prevent them from fighting about this. Likely only a few dozen cases at best relied solely on this charge, or this charge was the only felony charge. It’s also unlikely to affect Trump’s DC case, as Jack Smith has already argued that the charges already fit the narrower interpretation that the Court adopted today.
City of Grants Pass v. Johnson
This was another closely watched case from this term. Grants Pass, Oregon tried to deal with a homelessness issue by basically just criminalizing homelessness. They passed a city ordinance against “camping on public property” that basically allowed them to arrest anyone sleeping on public grounds. The ordinance started with fines and increased to jail time for repeat offenders. The Ninth Circuit ultimately issued an injunction against the ordinance, holding that it was cruel and unusual punishment and amounted to criminalizing the status of being homeless.
In a 6-3 decision, the Court reversed along the usual ideological lines. The Court found the ordinance to be a broadly and neutrally applicable law that did not amount to cruel and unusual punishment. The Court went out of its way to distinguish a 1962 case, Robinson v. California, which held that it was unconstitutional to criminalize a state of being (in that case, being a narcotics addict), and said this is not criminalizing being homeless, just, you know… the main things that homeless people do.
Justice Sotomayor filed a scathing dissent noting that this ordinance was arbitrarily enforced (it’s not like the police were picking up folks just visiting the park having a snooze, they were clearly just going after homeless people), and that this really just strips homeless people of dignity and humanity.
Justice Thomas filed a concurring opinion saying Robinson should be overruled and states should totally be allowed to criminalize just being homeless if they want, because when you’ve taken four million dollars in undisclosed bribes gifts and travel the country in a giant RV that you were given for basically peanuts, why not?
Harrington v. Purdue Pharma
This case dealt with the Sixth Circuit’s signing off on a bankruptcy plan for Purdue Pharma, which is owned by the Sackler family. The company came up with Oxycontin, which was fraudulently marketed as non-addictive and is widely credited as kicking off the opioid epidemic in the US. As the company started facing billions of dollars in damage awards against them, the Sacklers drained the company of money and sought to discharge its debts through bankruptcy. To avoid getting held liable themselves, the Sacklers proposed giving a couple billion back to the company to be distributed to the states and other plaintiffs affected in exchange for a release from all other liability. The bankruptcy court signed off on it, but the district court refused to. The Sixth Circuit then stepped in and reversed the district court and reinstated the plan. The Supreme Court held 5-4 in an opinion written by Justice Gorsuch that the bankruptcy code doesn’t permit this kind of a plan. Justice Kavanaugh, joined by Roberts, Kagan, and Sotomayor disagreed.
Ohio v. EPA
This case dealt with the Biden administration’s “Good Neighbor Rule” intended to deal with the fact that pollution doesn’t stop at state lines. The Court put back in place a preliminary injunction against the rule while it’s being litigated by the lower courts, which means they think the challenge to the rule is likely to succeed.
As with Loper-Bright and Sarkesy, this Court is increasingly hostile to agency action, particularly around climate change provisions, which they believe are not covered by the EPA’s current mandate. Absent clear legislation from Congress authorizing the EPA to combat climate change, this case is likely yet another example of this particular Court’s willingness to just insert itself in policy where they don’t like what agencies are doing.
Moyle v. United States
Last up was Moyle v. United States, which is the EMTALA case dealing with whether Federal law requiring emergency rooms to provide stabilizing treatment regardless of ability to pay supersedes state law prohibiting almost all abortions if an abortion would be stabilizing care.
The short order dismissed the cert petition as “improvidently granted.” This happens from time to time when the Court thinks that something either has changed at the lower court level, the status of the law has changed while the case is pending, or there’s some other reason they just shouldn’t be hearing the case right now. This order kicks it back down to the lower courts for further development.
Justice Kagan joined by Sotomayor and Jackson issued a hot concurrence and noted that this is not a win for abortion rights, just a delay, and that the Court damn well shouldn’t have taken this in the first place.
Justice Alito being his usual whiny self when he doesn’t get his way wrote a lengthy dissent about how much he dislikes abortion and federal pre-emption in the first place. C’est le vive.
We’ve got one more day left on Monday where we’ll for sure get Trump immunity, the Netchoice cases on whether states can regulate social media on their own which I personally think is going to be fascinating but for reasons I suspect relatively few others will, and another case most people probably won’t find interesting but I really will on statutes of limitations when it comes to suing the government.
I’ve got plans to dig into Loper-Bright and several other major cases from this term in the near future, but that’s what it is for now.