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Expanding ‘Major Questions Doctrine’ Risks Regulatory Stability

July 12, 2022, 8:00 AM

Much has been written about the US Supreme Court’s decision in West Virginia v. EPA striking down the Clean Power Plan under the court’s “major questions doctrine,” but the roadblocks this doctrine poses to the ability of administrative agencies to adopt rules to address changing circumstances already were put in place by the court a few months earlier.

When the court struck down the CDC’s eviction moratorium and later OSHA’s vaccine and mask rule, it relied on an expanded version of the “major questions doctrine” so malleable that it could be invoked to invalidate nearly any regulation of consequence.

What do I mean? The court had already said in those cases that the doctrine would apply where a rule adopted by a federal administrative agency—it could be any agency—had deep “economic and political significance.”

In such cases, it concluded, an agency’s rule could not stand unless its governing statute “clearly authorizes” it. This two-part test, however, is virtually standardless.

Every Agency Regulation Has Significance

Nearly every nationwide agency regulation has deep economic and political significance. From rules on food safety, to workplace conditions, to rules governing union elections, to false advertising, to net neutrality, to opening gas pipelines and electric transmission lines to use by the owners’ competitors —the list is almost endless.

And how many statutes governing agency rulemaking could pass the “clearly authorizes” test?

Congress intentionally words the statutes under which agencies operate broadly, so that agencies can address predictably unpredictable problems arising after enactment. Ensuring, for example, that utility rates are “just and reasonable,” or not “unduly discriminatory,” that a permit is in the “public interest,” or that agencies rules are “necessary and appropriate” to carry out the statute’s objectives are statutory directives the court has historically found sufficiently definitive.

But broad grants of agency authority now present an open invitation to reviewing courts to strike down as not “clearly authorized” rules they simply do not like. As I discussed in an article I wrote for the Energy Bar Association before the West Virginia decision, virtually every FERC rule of consequence over the last 60 years would likely have failed the “major questions doctrine’s” two-part test.

But the CDC and OSHA decisions were made in the court’s “shadow docket.” So, while there was ample reason to worry about the doctrine’s expansion, I was hopeful that decisions made in the “shadow docket” would not become entrenched and that the court -- with the benefit of full briefing in a merits case—would walk back from the cliff.

Off the Cliff

Wrong. Instead, on the last day of its term, the court reached out in West Virginia to strike down the Obama-era Clean Power Plan under the “major rules doctrine.” While the court states the doctrine applies only in “extraordinary circumstances,” it has now applied the doctrine three times in a few months.

And by “reached out,” I mean stretched to decide a case that was—except in the most hyper-technical sense—moot. The Clean Power Plan had never gone into effect, and the EPA had stated that it did not plan to reinstitute it.

As Justice Elena Kagan noted in her dissent, the court’s “docket is discretionary, and because no one is now subject to the Clean Power Plan’s terms, there was no reason to reach out to decide this case.”

And she added this:
“Some years ago, I remarked that ‘we’re all textualists now.’ It seems I was wrong. The current Court is textualist only when being so suits it. When that method would frustrate broader goals, special canons like the “major questions doctrine” magically appear as get-out-of-text-free cards. Today, one of those broader goals makes itself clear: Prevent agencies from doing important work, even though that is what Congress directed.”

Doctrine Creates Instability

I share Kagan’s concern that this newly expanded “major questions” doctrine will create great regulatory instability. Parties dissatisfied with particular regulations already have well-understood means to challenge them.

They can argue, for example, that the rule is unsupported by evidence, that the agency hasn’t followed its own precedent, ignored material comments, or that the rule exceeds the agency’s authority. But the expanded “major questions doctrine” is now a potential nuclear bomb that can be aimed not merely at a particular rule, but at crippling an agency’s ability to regulate at all.

The majority opinion offers scant guidance on the limits of its two-part test. And, while Justice Neil Gorsuch’s concurrence suggests how he might define a major case, he has also said that he would not allow “congressional delegations to agencies of authority to decide major policy questionseven if Congress expressly and specifically delegates that authority.”

One can hope that the court will provide greater clarity about the scope of the doctrine. But in the meantime, regulatory agencies are likely to become mired in legal challenges by parties claiming rules they do not like involve “major questions.” Buckle your seat belts.

This article does not necessarily reflect the opinion of The Bureau of National Affairs, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.

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Harvey L. Reiter is a partner at Stinson LLP, located in the firm’s Washington, D.C., office. He is also an adjunct professor of law at George Washington University Law School and editor-in-chief of the Energy Law Journal.