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Shot-or-Test Rule ‘Dead’ as High Court Dooms Further Litigation

Jan. 14, 2022, 2:52 PM

The U.S. Supreme Court effectively killed President Joe Biden’s Covid-19 shot-or-test rule for large employers with its order blocking the measure, setting up the administration to withdraw the regulation or continue pointless litigation, legal observers said.

Although a federal appeals court in Cincinnati is poised to consider the merits of the emergency temporary standard, the high court’s six conservative justices unequivocally said Thursday that the rule was an unauthorized exercise of federal agency power. They crafted their stay order to remain in place if the regulation somehow survives judicial review by that lower court and returns to the high court.

“For practical purposes, it’s dead,” said Sean Marotta, an appellate attorney at Hogan Lovells who’s closely followed the legal challenge to the measure.

The Supreme Court doomed the shot-or-test rule—a central piece of the Biden administration’s Covid-19 vaccination effort—by applying an expanded version of a judicial doctrine that can limit agency authority to act on major issues facing the country. Three justices also signed on to a concurring opinion signaling the court could go further to pare back the administrative state in future cases.

“This is not only a major blow to the Biden administration’s Covid strategy, it’s really the first step to dismantling the regulatory state,” said Lawrence Gostin, a professor of health and constitutional law and director of Georgetown University’s O’Neill Institute for National and Global Health Law.

The Occupational Safety and Health Administration’s moribund rule calls on employers with at least 100 employees to mandate that their workers get vaccinated or be tested regularly. The agency issued the temporary standard—which is set to expire in May—under its power to protect workers from grave dangers.

OSHA published the emergency rule in early November, drawing a torrent of lawsuits from Republican-led states, business groups, and others arguing that the agency overstepped its legal and constitutional authority. The U.S. Court of Appeals for the Fifth Circuit blocked the measure a day later.

The Sixth Circuit took control of the consolidated case challenging the rule after winning a multi-circuit lottery. That Cincinnati-based court lifted the Fifth Circuit’s stay, triggering the petitions seeking immediate Supreme Court intervention. The justices agreed to consider the rule in a special session.

OSHA Regulation Path

The Supreme Court’s order blocking the shot-or-test rule likely will shift the Biden administration’s attention away from Sixth Circuit litigation and toward OSHA designing an emergency regulation that will survive judicial review, legal observers said.

The high court said the agency has the power to regulate risks related to Covid-19 that are “occupation-specific” based on a worker’s job or workplace.

“We do not doubt, for example, that OSHA could regulate researchers who work with the COVID–19 virus,” the conservative justices said. “So too could OSHA regulate risks associated with working in particularly crowded or cramped environments.”

Following the guidance from the Supreme Court, OSHA could develop an emergency temporary standard in line with its national emphasis program to protect workers in high-hazard industries from coronavirus exposure, said Phillip Russell, an attorney with Ogletree Deakins Nash Smoak & Stewart P.C.

“What’s most important isn’t what the Sixth Circuit does,” Russell said, “but what OSHA does.”

Major Questions Doctrine

The Supreme Court ruled that OSHA lacked the statutory authority to issue the shot-or-test rule, applying the major questions doctrine to say that Congress must speak clearly when empowering agencies to regulate issues of vast significance. The court’s conservative majority didn’t find clear enough language in the Occupational Safety and Health Act to allow a workplace safety regulation affecting 84 million workers.

The high court has invoked the major questions doctrine in just a handful cases since creating it about 30 years ago. Congress passed the OSH Act about 25 years before the doctrine existed.

But the justices went beyond the traditional conception of that relatively new doctrine, which had said courts don’t have to defer to an agency’s interpretation of an ambiguous law when regulating a very important issue, said Christopher Walker, an Ohio State University professor who’s written about the doctrine.

Instead, the conservative justices required specific congressional authorization for the OSHA rule because of the significance of the issue, Walker said.

‘Quite Disruptive’

Justice Neil Gorsuch penned a concurring opinion, joined by Justices Clarence Thomas and Samuel Alito, that went even further in contemplating restrictions on federal agencies, legal observers said. Gorsuch raised the non-delegation doctrine, which forbids Congress from giving agencies its authority to write legislation.

According to Gorsuch, the major questions and non-delegation doctrines similarly serve as a check on agency power and ensure democratic accountability by keeping legislative authority in the hands of elected representatives.

Gorsuch would likely conclude that Congress can only delegate minor policy details to federal agencies, said Nina Mendelson, an administrative and environmental law professor at the University of Michigan.

“This kind of strict approach to the non-delegation doctrine would be well understood to cut back powers of modern administrative state to address health, safety, and environmental issues,” Mendelson said. “It would be quite disruptive and dislodge a lot of expectations about how modern government should function.”

To contact the reporter on this story: Robert Iafolla in Washington at riafolla@bloomberglaw.com

To contact the editors responsible for this story: Jay-Anne B. Casuga at jcasuga@bloomberglaw.com; Martha Mueller Neff at mmuellerneff@bloomberglaw.com

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