And does it seem fair that a truck stop and convenience store along the highway in North Dakota, finding it was paying hundreds of thousands of dollars in interchange bank fees because it must accept customers’ debit cards in payment, should not be able to go to court to challenge the Federal Reserve Board regulation that arbitrarily set those payments so high?
In each of these two cases, the Supreme Court ruled against the government and in favor of the complaining small business. And for that reason, the Progressive Left Democrats (but I repeat myself) have been loudly wailing and gnashing their teeth, proclaiming the end of the world (if not Our Democracy (TM) — that would be the supposed result of certain other pro-Trump court rulings discussed elsewhere).
A sense of excitement swelled in the ranks of law nerds and Court watchers as the end of June approached this year. The case of Loper Bright Enterprises v, Raimondo (coupled with a companion case, Relentless, Inc. v. Department of Commerce) promised an epic showdown over a forty year precedent in court interpretation of administrative agency rules. (Reach now for that coffee or other source of caffeine…)
Congress never in fact specified in law the particular requirements detailed above, for the imposition of fish inspectors on commercial boats and passing the costs on to the boat owners. Congress rarely specifies anything these days in the federal laws it passes, but deliberately, when not negligently, foists that responsibility off to the respective government departments and agencies who enforce the law. Why bother fighting over the details when there are so many more fundraisers and parties they must attend? Just vote for whatever the lobbyists have written.
Congress knows that a well entrenched body of so-called “experts,” populating across those agencies as career civil servants, are standing by to make good on the vagueness and lacunae of the laws. Congress need only direct that fishermen should not take too many fish, and don’t take the smaller ones. The regulators — here, the National Marine Fisheries Service — will take the baton, and decree in eye-glazing small print of The Federal Register: which fish, how many, what species and subspecies, in what weather conditions, waters and seas, and on which days of the week, those fish may be caught. And, more to our point today, they will place those inspectors on the fishing boats to be on the spot, lest scofflaws catch the wrong fish.
The agencies could do this in full confidence, because a 1984 Supreme Court opinion in the case of NRDC v Chevron, Inc. (aka “Chevron”) set a rule of judicial review, that when people sue to challenge the agency rules, federal courts reviewing the decrees that fill the gaps in Congressional laws should defer to any reasonable interpretation of that law put forward by the agency. Regardless of whether the judge viewed the law differently, when the law’s language can be called ambiguous, courts were to give the agencies “Chevron deference” and abide in the agency’s different opinion and rule.
The Reagan Administration in 1984 believed that such deference would constrain the many judges appointed by LBJ and Jimmy Carter from going wild and emanating in the penumbras of the Constitution and Congressional laws (which admittedly had fewer of these deliberate omissions back then). As you might have guessed, the succeeding forty years showed the opposite to be true. Once the agencies realized the free rein they had been given, they ran amok.
In the forty years that followed, the building consensus on the right and in conservative legal circles arose that federal agency overreach must stop. And that meant courts should once again determine what the law is and what the law permits.
Loper Bright/Relentless presented the vehicle to make that correction at the Supreme Court. And the Court in a 6-3 majority undid its mistake of 1984. Chief Justice Roberts wrote the opinion that declared forthrightly, “Chevron is overruled.” The Court based that ruling on the Administrative Procedure Act and stated that courts must do their job, and not let agencies take it from them. Justice Clarence Thomas, concurring, wrote further that the Constitution itself and the separation of powers doctrine meant that courts alone should exercise the federal judicial power, and not the unelected and unaccountable bureaucracy. Justice Neil Gorsuch concurred to state that longstanding principles of Anglo-American law supported the overruling of a forty year precedent, despite its longevity, because after all, a mistaken ruling is just that — mistaken.
Reenacting the opening scene of Macbeth, the Court’s Three Ladies of the Left dissented. Justice Elena Kagan decried the ruling’s disregard of a “cornerstone of administrative law” which would only portend more toil and trouble. But she ignored the underlying problem that “administrative law” as such is unconstitutional, extraneous to the three stated branches of government in the Constitution. Which fact many others now proclaim, as first Professor Phillip Hamburger did in his magisterial work, Is Administrative Law Unlawful?
Now that courts once again may do their job and exercise the judicial power of the United States, that renewed authority means little to nothing, if the maligned citizen cannot get his case into the federal courts. That was the focus of the case of Corner Post, Inc. v. Board of Governors of the Federal Reserve System. The North Dakota convenience store and truck stop Corner Post had a problem with the debit card interchange fees it had to pay under the Federal Reserve Bank’s (FRB) rules and regulations. So it sued the FRB to seek relief from the federal court.
The same Administrative Procedures Act (APA), enacted by a Republican Congress in 1946 to rein in the agencies created by the New Deal Progressives, provides that we may sue a government agency when its rules or decisions cause us harm. But another federal statue sets the limitations period, or the deadline within which you have to file your suit or else you are out of time and barred, at six years. But when does the clock start to run?
The FRB promulgated its rule in 2011, the date of the “final agency action.” Within four months, an industry retail trade association sued to challenge the rule; they won in the trial court, but lost in the D.C. Circuit appeals court. So the FRB rule survived and persisted.
But Corner Post was not yet in existence; the company was incorporated in 2017 and opened for business in North Dakota in 2018. The six year limitations period had expired in 2017, if we start the clock with the agency final rule in 2011. Was Corner Post out of luck and had to suck it up? Both the trial court in North Dakota and the Eight Circuit court of appeals thought so.
Because other courts of appeals had ruled the opposite, there was a “circuit split,” and the Supreme Court saw fit to settle the dispute. And the 6-3 majority again ruled in favor of the private party contesting the bureaucratic Leviathan.
The Court, speaking through Justice Barrett, reasoned that an injured party can’t sue the agency unless and until it has suffered harm from the agency rule. Corner Post couldn’t suffer harm or injury before the company came into being. Therefore the clock couldn't properly start running, or run out of time to file, before Corner Post came into being and first encountered the harm of paying too high fees for debit card processing. So, Corner Post avoids the Catch-22 the statists would have imposed; the Court reversed the lower court opinions and sent Corner Post’s lawsuit back to the trial court for resolution.
The same three Macbeth Sisters shrieked their disapproval of the majority opinion. Junior Justice Jackson complained that the ruling was contrary to the way things have always been done for agencies before, and why, if this continues, agencies might have a hard time doing whatever they want to do, with “far reaching” results. Exactly.
A moral in these two cases can be drawn in the general observation that under the Constitution, there are some clear lanes and every player should stay in their lane. Each of the three coordinate branches, Legislative, Executive, and Judiciary, has a distinct, particular role to play. They shouldn't try to do some one else’s job, nor should they let or seek for a different branch to do their job. The past one hundred years of creating and advancing the administrative agencies and their unaccountable, faceless power in our lives has exacerbated this perversion of the Constitution.
The time has come to sit each player down, especially the Congress and each agency, and channel The Two Bobs:
“What exactly is it you would say that you do here?”
