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Key Points:
- For the first time, the Supreme Court has invoked explicitly
the “major questions doctrine”—which requires
Congress to speak clearly when authorizing agency action in certain
extraordinary cases—to strike down an agency rule. - The major questions doctrine is likely to apply in rulemakings
of vast economic and political significance, like major climate
change regulation or other areas Congress arguably did not leave to
agency discretion, particularly where the agency action is novel or
where Congress has tried but failed to legislate in the same
area. - The decision’s ramifications extend far beyond
environmental regulations, as the doctrine is likely to play an
important role in major rulemakings across the regulatory
landscape, including international trade, tax, securities,
immigration, and health.
Overview
The U.S. Supreme Court’s 6-3 decision in West Virginia
v. EPA announcing the “major questions doctrine”
threatens to limit agency authority in a narrow but exceptionally
significant band of administrative rulemakings—i.e., the
biggest, most innovative, and most consequential ones. This alert
first provides an overview of the doctrine, as elucidated by the
Court. It then turns to the decision’s likely disruptive
consequences, which are by no means limited to climate change
regulation and are likely to affect major administrative actions in
any number of fields—international trade, tax, securities,
immigration, and health, to name a few.
Background
Decided on the final day of the Court’s term, West
Virginia v. EPA “announces the arrival” (in the
dissent’s words) of the “major questions
doctrine”—a new substantive presumption that overrides
ordinary statutory construction principles in certain
“extraordinary” cases. In a nutshell, the majority
(authored by Chief Justice Roberts, and joined by Justices Thomas,
Alito, Gorsuch, Kavanaugh, and Barrett) describes the doctrine as a
“reluctan[ce] to read into ambiguous statutory text” a
delegation of broad agency authority—even where such
“regulatory assertions ha[ve] a colorable textual basis.”
Founded on “both separation of powers principles and a
practical understanding of legislative intent,” the doctrine
thus requires Congress to legislate particularly clearly when
authorizing an agency to make “decisions of vast economic and
political significance.” Although the Supreme Court had
arguably applied a form of the “major questions doctrine”
in various cases over the years, it had never used that specific
phrase, nor had it fleshed out its contours in such detail until
now.
Application of the “major questions doctrine” is a
two-step inquiry: (i) does the case trigger the “major
questions doctrine,” and, if so, (ii) can the agency point to
“clear congressional authorization” to regulate in the
proposed manner?
As to the first inquiry, the opinion sets forth several
(apparently non-exhaustive) considerations to help decide whether a
case implicates the “major questions doctrine”:
- Whether the agency discovered in a “long-extant statute an
unheralded power” that significantly expands or even
“transform[s]” its regulatory authority. - Whether the agency’s claimed authority derives from an
“ancillary,” “gap-filler,” or otherwise
“rarely used” provision of the statute. - Whether the agency adopted a regulatory program that Congress
had “conspicuously and repeatedly declined to enact
itself.”
Justice Gorsuch’s concurrence, joined by Justice Alito, adds
a few other “non-exclusive” factors:
- Whether the agency claims the power to resolve a matter of
great political significance. - Whether the agency attempts to regulate “a significant
portion of the American economy” or require massive spending
by regulated parties. - Whether the agency’s rulemaking seeks to “intrud[e]
into an area that is the particular domain of state law.”
As to the second inquiry, the Supreme Court did not offer much
guidance on precisely how “clear” Congress must speak to
permit a rulemaking in a “major questions” case. But it
found such a clear statement lacking in West Virginia v.
EPA despite the textual plausibility of EPA’s assertion.
Specifically, the Court held that language in Section 111(d) of the
Clean Air Act authorizing EPA to devise the “best system of
emission reduction” did not permit EPA to “devise
emissions caps based on . . . generation shifting,” i.e.,
shifting generation away from existing coal-fired power plants by
requiring them to “reduce their own production of electricity,
or subsidize increased generation by natural gas, wind, or solar
sources.” For such a measure to fall within EPA’s
authority, the Court demanded a more-specific congressional
mandate. Thus, although the Court did not overturn
Massachusetts v. EPA, 549 U.S. 497 (2007) or otherwise bar
the agency from regulating greenhouse gases generally, it did place
real limits on the type of regulations the agency can
promulgate.
Implications
The implications of this decision are far-reaching, both for
administrative rulemakings (whether pending or new) and for
administrative litigation in the federal courts. Regulated parties
will undoubtedly invoke this case and the major questions doctrine
to argue against broad assertions of Executive Branch authority
during the notice-and-comment process and, if unsuccessful, in
ensuing court challenges under the Administrative Procedure
Act.
To be sure, presumably only a small number of rulemakings will
fall within the “major questions” bucket. But those
rulemakings are, by definition, going to be “major”
ones—i.e., “extraordinary” matters implicating
broad or “transformative” assertions of Executive Branch
power, great political significance or large sums of money.
Moreover, such cases will arise “from all corners of the
administrative state,” not just from EPA. The opinion itself
cites the following historical examples:
- The U.S. Food and Drug Administration’s attempt to regulate
or ban tobacco products, see FDA v. Brown & Williamson
Tobacco Corp., 529 U.S. 120 (2000). - The Attorney General’s attempt to rescind licenses of
physicians who assisted patient suicides, Gonzalez v.
Oregon, 549 U.S. 243 (2006). - The Centers for Disease Control and Prevention’s attempt to
impose an eviction moratorium in response to the COVID-19 pandemic,
Alabama Assn. of Relators v. Department of Health and Human
Servs, 594 U.S. __ (2021) (per curiam). - The Occupational Safety and Health Administration’s attempt
to impose a vaccine or testing mandate, National Federation of
Independent Business v. Occupational Safety and Health
Administration, 595 U.S. __ (2022) (per curiam).
And it is not hard to imagine the doctrine playing a significant
role in other existing, pending or potential rulemakings, such
as:
- The U.S. Securities and Exchange Commission’s proposed rule
requiring extensive greenhouse gas emissions data reporting among
the extensive, granular climate disclosure requirements, see
Enhancement and Standardization of Climate-Related Disclosures
for Investors, 87 Fed. Reg. 21334 (April 11, 2022). - Proposed FDA rules banning the manufacture and sale of menthol
cigarettes, see Tobacco Product Standard for Menthol in
Cigarettes, 87 Fed. Reg. 26454 (May 4, 2022). - Potential rules protecting access to abortion rights in the
wake of Dobbs v. Jackson Women’s Health Organization,
597 U.S. __ (2022).
Bottom line
Because arguments over the major questions doctrine will likely
play a key role in major rulemakings—both during the
notice-and-comment process and in follow-on litigation—it is
important for regulated businesses to become acquainted with the
scope of the doctrine. Akin Gump’s regulatory lawyers and
appellate litigators are available to help you understand the
doctrine’s application to specific rules, how it might impact
your existing or future regulatory burden, and potential litigation
options.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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