Will the Court Tame the Administrative State?

Modern government is administrative government. And yet the administrative state remains controversial for good reason. Agencies that promulgate rules, enforce them, and adjudicate their application fit uneasily with the idea that legislative, executive, and judicial power should be separated. Unelected agency bureaucrats have views unrepresentative of the public, creating a democratic deficit. Without close supervision, the bureaucracy is a machine that has its own force, and the direction of its run in our society is leftward. Finally, a notion often associated with administration—that everything is a matter for regulatory balancing—does not comport with the founding ideal that individuals have rights that cannot be balanced away.

One of the most important developments in the Roberts Court is its attempt to address these concerns by better taming the administrative state and cabining its scope. This term showed substantial, if still only incremental, progress on three fronts. First, the Court continued to increase presidential control over the administrative state by moving toward a unitary, hierarchical executive branch. Second, the justices bolstered the separation of powers more subtly by making their own decisions about the content of administrative statutes without deferring to the interpretations of administrative agencies. Third, the Court asserted that even temporary intrusions on property rights were unconstitutional without compensation, rejecting the idea that these rights are subject to regulatory balancing.

A Unitary, Hierarchical Executive Branch

This term the Court further strengthened presidential control over the executive. In Collins v. Yellen, it ruled that the Director of the Federal Housing Finance Agency could not be insulated from presidential removal at will. The holding itself was not altogether surprising. Two terms ago, in Seila Law v. Consumer Finance Protection Bureau, the Court had held that the Director of the Consumer Finance Protection Bureau also had to be removable at the President’s discretion. The lawyer arguing on behalf of the constitutionality of the FHFA statute said the previous case was distinguishable, because the Director of the CFPB had more power than the Director of the FHFA. But the Court rightly dismissed a test that would have required it to measure the quantum of agency power. The standard for firing the Director of the FHFA was also somewhat more generous: he could be fired “for cause” rather than only for the standard of “inefficiency, neglect of duty, or malfeasance in office” that applied to the Director of the CFPB. But the Court held that Article II’s location of the executive power in the President made even “modest restrictions” unconstitutional, at least as applied to a single agency head.

Perhaps the most significant part of the opinion for the future was a footnote. In response to an amicus brief’s argument that sweeping aside the for-cause removal provision in this case might call into question similar provisions concerning the Director of the Social Security Administration or chairs of multimember agencies, the Court blandly observed that those cases were not before it. The Court appears to be inviting a legal assault on the tenure protections of such officials.

And it was a very short wait to get one: President Biden’s Office of Legal Counsel wrote an opinion just a few weeks later saying the restrictions on firing the Director of the Social Security Administration were unconstitutional and the President fired the Director forthwith. Given the decisions in Collins and Seila, other challengers can now even argue that the venerable holding of Humphrey’s Executor, the most important case defending the independence of commissioners on multimember agencies, is now out of step with the weight of modern case law—as well as the Constitution’s original meaning—and should be overruled.

The Court also made clear this term that the principal officers, like the Directors at issue in Collins and Seila, must be able to fully supervise “inferior officers” in their agencies, thus giving the President a direct chain of command over those exercising substantial authority under the laws of the United States. In United States v. Arthrex, a plaintiff losing an administrative patent case before the Patent Trial and Appeal Board complained about the decisions of the patent administrative law judges on its case. The losing company observed that these judges were inferior officers appointed by the Secretary of Commerce. Yet their decisions were not reviewable and reversible by the Director of the Patent and Trademark Office or any other official who had been appointed by the President and confirmed by the Senate. The Supreme Court agreed that such insulation from control was unconstitutional and revised the statute to permit the Director such plenary authority.

The Court argued that its precedents required full supervision of inferior officers. Thus, even if the Director had general administrative authority over the patent officers, including the ability to refuse to put wayward patent officers on future panels, that ability still did not provide him the necessary full authority over the current decisions of those officers.

The Court argued, in my view correctly, that both decisions were rooted in a restoration of the original meaning of the Constitution. All executive power is given to the President of the United States, and that implies that he has the traditional executive powers except where the Constitution has expressly provided otherwise. The King could dismiss his ministers. And the very concept of “inferior officer” implies a hierarchy. Superiors must be able to tell their inferiors what to do. Moreover, only a hierarchical executive preserves the President’s ultimate authority.

In these cases, the Court simultaneously struck a blow for the original meaning of the Constitution and against the power of a politically asymmetrical bureaucracy.

But there is also a more realist perspective on what the Roberts Court is doing. Creating a unitary executive branch under the President’s control provides a greater counterweight to the bureaucracy, which leans decidedly to the left, as measured, for instance, by donations to Democrats rather than Republicans.

As a result, Republican appointees face much greater difficulty getting things done than Democratic appointees. They cannot just ignore their bureaucrats, because they need their expertise and manpower to issue regulations and bring enforcement actions. As a result, political officials tend to compromise with the bureaucracy to have an easier life. The President’s power to remove his subordinates creates a counterbalancing force.

The problem with unaccountable inferior officers is much the same. Administrative law judges, like the patent officers, become part of the permanent bureaucracy, and are likely to imbibe its values regardless of the administration that appoints them. Here too there will be a natural leftward drift unless arrested by an appointee of a Republican president who feels continuing pressure from above. Thus, in these cases, the Court simultaneously struck a blow for the original meaning of the Constitution and against the power of a politically asymmetrical bureaucracy.

The Court’s Supervision of the Administrative State

It is not only the President that rides herd on the administrative state. The separation of powers requires the judiciary to declare what the law is and thus keep administrative government within its statutory limitations. But the famous case of Chevron requires the Court to defer to administrative agencies whenever a statute is ambiguous.

What was remarkable this term is that the Court had several highly contested issues of interpretation in statutes administered by agencies, in which the justices comprehensively disagreed, but none cited Chevron, and none argued for deference to the administrative agency. For instance, in HollyFrontier Cheyenne Refining, LLC v. Renewable Fuels Association, the EPA granted an extension of an exemption from certain environmental regulations to the refining company. But the association argued that EPA’s action was illegal because the refiner had not been in operation under the exemption for some time and the statute did not permit “extensions” of exemptions that had already lapsed. Justice Neil Gorsuch wrote an intricate opinion of statutory analysis for a six-person majority and Justice Amy Coney Barrett dissented with a no less elaborate dissection, but Gorsuch did not rely on the agency’s interpretation, and Barrett gave it no deference.

In Alaska Native Village Corporation v. Confederated Tribes of Chehalis Reservation, there was a similarly vigorous debate about whether an Alaska Native Corporation met the definition of a tribe for the purposes of a statutory definition that the Interior Department administered. Justice Sonia Sotomayor agreed with the Interior Department and Justice Gorsuch disagreed, but neither gave the Department any deference. Instead, they both treated the statutory question as a matter for the court to decide, making arguments with traditional legal methods.

Thus, these cases show that sharp disputes about interpretation even at the level of the Supreme Court do not imply that statutes lack a meaning for the court to resolve. Disagreement is not indeterminacy. And to the degree that Court can use traditional legal methods to resolve ambiguities, the importance of Chevron shrinks, because courts will then defer to agencies only when these ambiguities cannot be resolved. And that, in turn, cabins the power of agencies because they then no longer enjoy special interpretative powers over their own statutes.

Once again, insofar as the bureaucracy leans left and influences interpretation regardless of the political party of the President, a realist view suggests that this development is also good for friends of liberty. The judiciary is much more mixed ideologically than the bureaucracy, being carefully and individually selected by Presidents of different parties.

Rights as a Limitation on the Administrative State

Beyond the question of the procedures and structure of the administrative state, there remains the more fundamental question of its scope. The Roberts Court constrained that scope in an important takings case, Cedar Point Nursery v. Hassid. California had granted a labor union the right to “take access” to an agricultural company’s property in order to solicit support for organization of its employees. The question was whether California must pay for that access because of the right provided by the Takings Clause of the Constitution. Chief Justice Roberts argued in the affirmative because the right to exclude was at the traditional core of a property right. Justice Breyer suggested in his dissent, however, that since the union’s occupation was temporary, the question was whether the regulation went too far. He thought it did not.

Here the dispute goes to the core of our system of government. Once one decides that a question is not one of rights but merely of regulatory administration, the government is empowered at the expense of the individual citizens’ liberty. To be sure, the citizen may be protected by procedures and structure and even by decisions of administrators and courts (acting much like administrators) who hold that a regulation fails a version of a cost-benefit test. But the citizen remains nevertheless in the maw of administration. By relying on rights, the Court puts the citizen’s freedom beyond regulatory calculation and diminishment.

The administrative state will not be transformed by a single term of the Supreme Court. But in three important areas—structure, procedure, and scope—the Court has moved us toward the Constitution’s original meaning and cut down the power of a bureaucracy that tends to be unfriendly to liberty.