Newsletter  -  July 2024

The December 2023 newsletter of the Sonoma GOP had a very detailed outline of the administrative state and how such a construct gets started.  A number of definitions will be repeated.

The term Administrative State is the term that describes the phenomenon of administrative agencies within the executive branch exercising the power to create, adjudicate and enforce their own rules. 

Five areas encompass the administrative state.

Nondelegation:  Rulemaking authority is delegated to administrative agencies by lawmakers.  This allows agencies to promulgate rules that have the force and effect of law.

Judicial Deference:  An agency’s interpretation of a statute or regulation is accepted by a court even if the court would have arrived at a different interpretation. 

Executive Control of Agencies:  The agencies are controlled by the executive who has certain authority over the appointment and removal of agency heads, reorganization of the executive brand and regulatory review activities.

Procedural Rights:  Agency rulemaking and enforcement proceedings have implications for individual procedural rights, such as due process and standing.

Agency Dynamics: Agencies exercise authority to promulgate rules, enforce regulatory compliance and adjudicate disputes. 

Why is this topic coming up again?   Well.  Three Cheers for the Supreme Court.

In a 6-3 decision written by Justice Roberts the court abandoned a legal doctrine called Chevron deference, which has helped federal agencies defend their regulations when industry groups take them to court. 

The Chevron deference was created by the high court in a 1984 case and stood for the idea that judges should defer to executive branch agencies when it came to interpreting gaps and ambiguities in laws they implement, so long as those interpretations are reasonable.

Two areas of Chevron were determined by the Court’s 6 to 3 majority ruling. One of the cases had to do with timing of a plaintiff’s ability to challenge agency regulations.  The Court ruled that the shot clock for challenging agency regulations begins only when a party is first harmed, not when the rules become final.  (Corner Post v. Board of Governors, Federal Reserve).

The full story is this.  There was a 2011 Federal rule that capped debit-card interchange fees.                                  

Corner Post, a North Dakota truck stop opened in 2018.  Corner Post challenged the regulation in 2021 under the Administrative Procedure Act.  That 1946 law sets the process federal agencies must follow to issue rules. 

Lawsuits against the United States must generally be filed “six years after the right of action first accrues.” The government argued that for regulations this means the clock starts ticking as soon as the rules are finalized.  Therefore, to challenge the Fed’s 2011 rule, Corner Post would have needed to sue before it came into existence.  Just a little difficult. 

The six conservative Justices disagreed with the regulation.  Their statement: “A right of action accrues when the plaintiff has a “complete and present cause of action.  Justice Barret, writing for the majority stated that the meaning of the word “accrue” is well settled, citing a precedent holding that a right “accrues when it comes into existence.”

The other case was Loper Bright Enterprises v. Raimondo.  (Gina Raimondo is the Secretary of Commerce).  A group of commercial fishermen sued the National Marine Fisheries Service after the Service promulgated a rule that required industry to fund at-sea monitoring programs at an estimated cost of $710 per day.  Federal law is clear that the NMFS can require monitors to collect data on fishery conservation and management, but it does not state whether industry or the government must pay for the monitors.  The Court of Appeals for the DC Circuit relied on Chevron and held that the law was ambiguous and the agency’s decision to require the industry to pay for its monitors was reasonable.  The fishing industry asked the Supreme Court to reverse that decision and overrule Chevron.  The Supreme Court did reverse and overrule Chevron. 

In normal English, the Supreme Court decision restricts the ability of government regulators to act outside of Congressional or federal judiciary oversight.  The ruling makes it much harder for the executive branch to implement regulations that have not been approved by legislators who are the elected representatives of the people.  The Chevron deference has meant that an unelected person or persons has been making decisions that should be made by the people’s elected representative. 

The Supreme Court decision means that some Biden administration top priorities are on shaky legal footing.  Some of those priorities include cracking down on power-plant pollution and bringing back net neutrality. As an example, net-neutrality provisions were introduced during the Obama administration and scrapped during the Trump presidency.  The Biden administration is planning to bring them back.

Here is an example of how the Chevron deference works.  As regards to net-neutrality:

The FCC reclassified internet providers as public utilities under the Communications Act.  There are pending court cases challenging the FCC’s reinterpretation of the 1934 law.  The end of Chevron deference increases the likelihood of the agency losing in court. 

Of course, there are countless other issues which the average tax payer is unaware of.  Before this Supreme Court decision, office workers in the federal government were making many decisions regarding the daily lives of American citizens. 

The Washington permanent power class is in a lather about this court decision.  This ruling will have a major impact on the regulatory landscape in the United States.  Decisions will not be automatically made by Washington bureaucrats ignoring the will of the people.

Power to the people should mean just that.  The voters make the decisions, not nameless bureaucrats in Washington D.C. who are never held to account for their decisions.