THE JUDICIAL ASSAULT ON THE ADMINISTRATIVE STATE.

• Author: Seligman, Joel

TABLE OF CONTENTS I. SEPARATION OF POWERS AND THE REMOVAL POWER II. THE COMMERCE CLAUSE III. THE ASSAULT ON CHEVRON AND STATUTORY INTERPRETATION DEFERENCE TO ADMINISTRATIVE INTERPRETATION A. The Erosion of Chevron B. The Major Questions Doctrine C. The Implications of The Major Questions Doctrine CONCLUSION INTRODUCTION

The most substantial change in the United States Government has been the extraordinary growth and increased complexity of the United States Government itself. George Washington initially was President of a country with a population of about four million, eleven States, and three Cabinet Departments (State, Treasury, and War). Washington's Government had no standing army, no Social Security, Medicare or Medicaid, and no programs addressing the environment, labor, or health. In 1791, the Treasury Department had approximately 500 employees, the War Department had 12, the State Department, 8. (1)

Today, the National Government has twenty-four Cabinet members. In 2023, there are 2.89 million federal employees, with 4.1 million contract employees, 1.2 million grant employees, 1.3 million active-duty military personnel, and more than 500,000 postal service employees--or a total of approximately 10 million workers. The Federal Government is the Nation's largest employer, with approximately 6.3% of total employment in the United States. (2)

Harvard Law Professor Felix Frankfurter in 1932 characterized this transformation in government as "[t]he distinctive development of our era":

Governmental regulation of banking, insurance, public utilities, industry, finance, immigration, the professions, health and morals, in short, the inevitable response of government to the needs of modern society, is building up a body of enactments not written by legislatures and of adjudications not made by courts, and only to a limited degree subject to their revisions. These powers are lodged in a vast congeries of agencies. (3) Frankfurter's approach to the agencies was premised on his skepticism that Congress by legislative enactment could effectively administer the structure or behavior of a modern economy....

The problem of administrative law was to persuade Congress to adopt laws that both particularized substantive legal goals so specifically that these ends could survive hostile or indifferent interpretation by the courts or political appointees and were sufficiently flexible in means that a creative agency could adjust to changed or newly discovered circumstances. (4) By 1930, this instinct had grown into a theory memorialized in Frankfurter's book, The Public and Its Government:

[T]he staples of contemporary politics--the organization of industry, the control of public utilities, the well-being of agriculture, the mastery of crime and disease--are deeply enmeshed in intricate and technical facts, and must be extricated from presupposition and partisanship. Such matters require systematic effort to contract the area of conflict and passion and widen the area of accredited knowledge as the basis of action. (5) James Landis, Frankfurter's protege, would be responsible for the most memorable amplification of Frankfurter's government-by-administrative-agency. In 1938, responding to criticism that the independent administrative agencies had become "a headless 'fourth branch' of the Government, a haphazard deposit of irresponsible agencies and uncoordinated powers," Landis would defend the administrative process as essential because of "the inadequacy of a simple tripartite form of government to deal with modern problems." (6) In Landis's view, the administrative agencies experienced extraordinary growth (7) because of the limitations of the Legislative process and the Judiciary. Legislation was "forced to represent compromise" and often "does so by the use of vague phraseology." (8) The Judiciary had a broad general jurisdiction, depriving it of the ability "to maintain a long-time, uninterrupted interest in a relatively narrow and carefully defined area of economic and social activity." (9) Neither branch could regulate industry as effectively as the administrators of an agency with a specific function.

Disparaging legislation that attempted to prescribe in too great detail "the conditions of administrative action" and administrators who took "the legalistic approach" of reading "a governing statute with the hope of finding limitations upon authority," Landis argued that the appropriate relationship of the democratic legislature to the expert agency was to define the agency's area of expertise and recite the appropriate problems for it to solve, leaving it broad discretion as to means. (10)

The emergence of "vast congeries of agencies" creating the administrative state was the most fundamental transformation to have occurred in 20th century American governance. By the 21st century, it long has been commonplace to assume that most routine Executive Branch decisions in a modern democracy will be made by its Fourth Branch, the administrative agencies.

Underlying this transformation to government-by-administrative-agencies was a fundamental shift in the Supreme Court's interpretation of the Constitution. In 1905, the Court had decided in Lochner v. New York (11) that a state could not adopt a sixty-hour maximum work week because of the doctrine soon known as substantive due process. "There is no reasonable ground for interfering with the liberty of person or the right of free contract, by determining the hours of labor," (12) in this case, for the occupation of baker. The Court viewed this substantive due process interpretation of the Constitution to supersede the power of a legislature to enact labor laws. As Justice Peckham memorably wrote: are we "at the mercy of legislative majorities?" (13)

Between 1934 and 1936, the Supreme Court struck down twelve New Deal economic programs including the National Industrial Recovery Act and the initial Agricultural Adjustment Act. (14) The Court's actions came to their culmination just before the 1936 election, when it ruled that there was no power in either States or Nation to enact a minimum wage law. (15) The New Deal appeared stymied by what Roosevelt characterized as a "horse and-buggy" Supreme Court. (16)

The narrow interpretation of governmental power in these decisions was catastrophic. "We have ... reached the point as a Nation," President Roosevelt declared, "where we must take action to save the Constitution from the Court." (17) Elimination of manufacturing, mining, and agriculture from the reach of federal power had rendered Congress powerless to deal with problems in those fields, however pressing they might become. From April 1937 on, however, the Supreme Court upheld every New Deal law presented to it--including some that were similar to those earlier struck down. (18)

The Court's reversal of its strict interpretation of congressional and state powers to regulate the economy was epitomized by decisions such as United States v. Carolene Products Co., (19) which in 1938 declared that the will of the legislature in any instance with "some rational basis" was presumed constitutional, and Wickard v. Filburn, (20) which in 1942 held that under the Commerce Clause of the Constitution, Congress had the power even to regulate farm products consumed on the premises because of their potential impact on market prices and market conditions that were interstate.

The enduring consequence of the post-1938 interpretation of federal and state legislative powers was to fortify the New Deal economic programs, including the Social Security Act, (21) enacted in 1935, the Fair Labor Standards Act of 1938, (22) which created federal minimum wage and maximum work hour standards, the National Labor Relations Act, (23) and the new Agricultural Adjustment Act. (24)

Two leading constitutional law scholars, Harvard Law Professor Noah Feldman and former Stanford Law School Dean Kathleen Sullivan, found: "For nearly sixty years after the New Deal, the Court did not strike down a single federal statute as exceeding Congress's power under the Commerce Clause," (25) a principal basis of regulatory agency authority.

Today, both the judicial basis for government-by-administrative-agency and the existence of the administrative agencies is in question.

This assault recently occurred in the Supreme Court's decision in West Virginia v. EPA, (26) which amplified the major questions doctrine (27)--a recent basis to limit the Chevron doctrine, (28) with its judicial deference to administrative agency reasonable interpretations of statutes, or kindred cases such as Auer v. Robbins, which articulated a similar deference to administrative agency interpretation of regulations. (29)

This article urges that the judicial assault on the administrative agencies ultimately seeks not merely to limit agency regulation, but to eviscerate congressional creation of specific administrative agencies or programs in whole or in part. This judicial assault on the administrative agencies began earlier than the Trump Presidency Supreme Court appointments and is based on a wider variety of claims. This article explores the three most likely claims in the near term: (I) the Separation of Powers and presidential removal powers; (II) the Commerce Clause; and (III) the assault on Chevron and kindred cases and judicial deference to agency reasonable interpretations of statutes or rules.

1. SEPARATION OF POWERS AND THE REMOVAL POWER

   The Constitution in Article II Section 2 specifies presidential appointments power for officers of the United States with the advice and consent of the Senate and authorizes Congress to vest the appointment of inferior officers as Congress thinks proper in the President alone, in the Courts of Law, or in the Heads of Department. (30) The Constitution is silent on the President or Congress's removal powers.

   Following debate in 1789 on the President's power to remove the Secretary of Foreign...