Supreme Court to Administrative State: Enough is Enough

I’ve only flipped through the opinions in Perez v. Mortgage Bankers Association and Department of Transportation v. Association of American Railroads. But I’ve read enough to see that they merit close study—very close study.

Result-wise, it looks like there’s not much to see here. In Perez, the Supreme Court dinged (as predicted here and elsewhere) the D.C. Circuit’s so-called Paralyzed Veterans doctrine, which held that sometimes, agencies must go through notice-and-comment proceedings to change an existing “interpretive” rule—even if that rule was initially adopted without notice and comment. That doctrine was obviously at odds with the text of the APA and the Supreme Court’s Vermont Yankee doctrine: courts can’t require agencies to adopt procedures in excess of the APA and the agencies’ organic statutes. In Department of Transportation, the Court set aside the D.C. Circuit decision that had declared certain regulatory arrangements governing Amtrak unconstitutional, on the grounds of a delegation of lawmaking power to Amtrak—a private corporation– by the lights of Congress. For constitutional purposes, the Supreme Court held, it doesn’t matter what Congress chooses to call Amtrak because it’s plainly a government entity. The Court remanded the case to the D.C. Circuit for a determination of delegation and Appointments Clause issues in that light.

Both decisions were unanimous. (Justice Sotomayor wrote in the first case, Justice Kennedy in the second.) Both seem plainly right. But that’s not the half of it: both decisions come with extended separate opinions by the conservative justices. While the opinions are technically “concurrences,” they read like so many calls to arms.

Perez involves something called Seminole Rock or Auer deference. I’ll spare you the cites: the doctrine says that courts owe deference (very similar in degree to Chevron deference) to an agency’s interpretation of its own regulations. The suspicion that this opens the door to all kinds of mischief isn’t new. (See my earlier post—link above.)[1] Justice Scalia first explained the point in a concurring opinion in a 2011 case called Talk America, and in a 2013 case (Decker v. Northwest Environmental Defense Center), two additional justices (Justice Alito and Chief Justice Roberts) expressed their interest in revisiting the Auer doctrine in an appropriate case. Justice Alito has now done so again in Perez. Justice Scalia goes further: that form of deference, he writes, makes a complete mockery of the entire APA. Justice Thomas—the author of Talk America, which applied Auer deference—goes further still: Auer deference makes mincemeat of the Constitution and the judiciary’s solemn duty to say what the law is. (Oh, yes: Justice Thomas cites Marbury. Also Philip Hamburger.)

The Amtrak case comes with a concurrence by Justice Alito that is best described as a superb road map for the railroad lawyers’ briefing on remand: here are three, four, five serious separation of powers and delegation issues, and at least some look fatal to the regulatory arrangements at issue. And another concurrence by Justice Thomas starts on the observation that “We have come to a strange place in our separation of powers jurisprudence” (no kidding) and then supplies a 27-page plea to return to first principles. That disquisition starts with Bracton, motors through Locke and Blackstone and again Philip Hamburger, and ends on a bracing note:

We have overseen and sanctioned the growth of an administrative system that concentrates the power to make laws and the power to enforce them in the hands of a vast and unaccountable administrative apparatus that finds no comfortable home in our constitutional structure.

It’s fair to say that the concurring justices’ opinions are out of any proportion to the stakes in these particular cases. I’m no fan of Auer deference, but its only one of n misguided AdLaw doctrines. I’m no fan of Amtrak, either, and the regulatory regime at issue is probably unconstitutional. But unlike some other arrangements I could think of, it’s screwy rather than malignant; unique rather than systemic. Very plainly, these opinions are meant to be markers and signals.

For what, I don’t know. But I suspect we’ll find out sooner rather than later.

[1] As several of the concurring justices in Perez note, the Paralyzed Veterans doctrine aimed to curb precisely that mischief: if we appellate judges have to give agencies deference (because we can’t depart from Auer), at least we’ll insist on notice and comment. The argument is actually a bit more involved and better: a rule that gets deference sure looks like a rule with legal force (and not merely “interpretive”), and we can’t let agencies circumvent the APA procedures that are ordinarily required for such rules. The concurring justices in Perez note that the D.C. Circuit had the analysis right; it just chose the wrong “fix.” The correct fix, unavailable to the appeals courts, is to ditch Auer deference.