The powers of the federal agency in the crosshairs of the Supreme Court of the United States

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Court conservatives skeptical of agency powers Cases involve securities and consumer protection agencies

WASHINGTON, July 4 (Reuters) – Despite introducing sweeping changes to American law and society – on abortion, gun rights and affirmative action – the U.S. Supreme Court has kept an eye on another issue of keen interest to his conservative majority: keeping federal regulatory power in check.

The issue will figure prominently in the court’s next term, which begins in October, as the judges have already agreed to decide several cases that could restrict the power of U.S. agencies to issue regulations and enforce laws in areas ranging from finance to fishing.

The cases involve what has come to be known as the “administrative state,” the agency bureaucracy that interprets laws, makes federal rules and implements executive action. The court’s conservatives, with a 6-3 majority, in recent years have clamped down on what they saw as government interference by the Environmental Protection Agency (EPA) and other agencies.

“The next term is going to be huge in court for cases involving the administrative state,” said Brianne Gorod, chief counsel for the liberal legal group at the Constitutional Accountability Center. “These cases all represent challenges that are part of a long-running, multifaceted conservative attack on the administrative state, and nothing less than the federal government’s ability to function effectively is at stake.”

The court, during the summer recess after its last term ended on Friday, agreed to hear cases during its next term challenging the constitutionality of the Consumer Financial Protection Bureau (CFPB) funding structure and the internal application regime of the Securities and Exchange Commission (SEC). It could also overturn a decades-old precedent that helps federal agencies defend their regulatory actions in court.

Legal experts see potential problems for agencies.

“It is more difficult for the court to rule that the composition or funding mechanism of the agency is unconstitutional without declaring illegal much of what the agency has done,” said Case Western professor Jonathan Adler. Reserve University School of Law in Cleveland.

The court’s conservatives have shown a willingness to make sweeping changes to the law. Last year, they ended recognition of women’s constitutional right to abortion and expanded gun rights. Last week, they rejected affirmative action policies used by many universities to boost enrollment of black and Hispanic students and allowed some companies to refuse same-sex marriage services.

They also blocked President Joe Biden’s student debt relief plan last week and passed a tough new test in May to declare wetlands protected under a landmark anti-pollution law – decisions that have limited the role of the executive branch of the US government and reduces its regulatory power.

PAYDAY LOANS

In the upcoming CFPB case, judges will hear the agency’s appeal against a lower court’s ruling that its funding mechanism violated a constitutional provision giving Congress power over the stock exchange. The case involves a lawsuit brought by trade groups representing the payday loan industry against the agency that enforces consumer finance laws.

In the latest legal attack on the SEC, the financial markets regulator, judges will hear an appeal by the Biden administration against a lower court’s decision quashing the agency’s enforcement proceedings as a as a violation of the constitutional right to a jury trial. The case involves a hedge fund manager whom the SEC discovered to have committed securities fraud.

The court will also assess a challenge by New Jersey-based fishing companies to a federal regulation requiring commercial fishermen to help fund a herring catch monitoring program off the coast of New England. The companies asked the court to overturn its own precedent that calls on judges to defer to the federal agency’s interpretation of U.S. laws, a doctrine called “Chevron deference.”

For conservative justices, cases like these often raise a central concern: the constitutional principle of the separation of powers between the executive, legislative, and judicial branches of the U.S. government.

“This is a court that is very interested and comfortable with separation of powers cases and is very interested in ruling on them,” said attorney Sarah Harris, an administrative law expert who has argued cases. cases before the judges.

The Court’s adoption of the “major issues” doctrine brought about a radical change in its approach to agency power. This judicial approach gives judges broad discretion to invalidate executive actions of “great economic and political significance” unless Congress clearly authorizes them.

The court’s conservatives invoked the doctrine this year to invalidate Biden’s student debt relief and last year to limit the EPA’s authority to cut carbon emissions from power plants. In a dissent in the student loans decision, liberal Justice Elena Kagan called the doctrine “fabricated.”

Thomas McGarity, a University of Texas law professor and scholarly critic, said the court’s approach narrowed “the agencies that Congress has given responsibility for protecting people, protecting the environment, and protecting consumers”.

Reporting by Andrew Chung in New York and John Kruzel in Washington; Editing by Will Dunham

Our standards: The Thomson Reuters Trust Principles.

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