The president's pen and the bureaucrat's fiefdom.

Author:Eastman, John C.
Position::The Federalist Society's Article I Initiative
 
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"All legislative Powers herein granted shall be vested in a Congress of the United States, which shall consist of a Senate and House of Representatives." (1)

The very first provision of the Constitution beyond the preamble, quoted above, specifies that the lawmaking power of the national government is to be exercised by Congress. A necessary corollary, recognized by the Supreme Court early in our nation's history, is that purely legislative powers can be exercised only by Congress, not by the executive or judicial branches of government. (2)

Of course, where to draw the line between purely legislative power that cannot be delegated, and permissible delegations of authority to fill in the details of a legislative judgment made by Congress, has proved to be a rather difficult task. The formula eventually worked out by the Supreme Court, one that upholds delegations as long as Congress "lay[s] down by legislative act an intelligible principle to which the person or body [authorized to fill in the details] is directed to conform," (3) sounds good in theory, but has not proved very helpful in practice, for several reasons. First, the Court has approved such broad delegations as to render the "intelligible principle" limitation virtually meaningless, and has not invalidated a law on unconstitutional delegation grounds since 1935. (4) As Justice White observed in his dissent in INS v. Chadha, (5) the "intelligible principle" through which agencies have attained enormous control over the economic affairs of the country has been held to include such formulations as "just and reasonable," (6) "public interest," (7) "public convenience, interest, or necessity," (8) and "unfair methods of competition." (9) In other words, the "intelligible principle" restriction on delegations of legislative power has amounted to no restriction at all and, as Justice Thomas recently noted, the Court "has abandoned all pretense of enforcing" it. (10)

Second, various deference doctrines created by the Supreme Court have exacerbated the problem that arose from failure to enforce the non-delegation doctrine. There is Chevron deference, pursuant to which the courts defer to administrative agency interpretations of ambiguous statutes as long as the interpretation is reasonable and not contrary to law. (11) There is Skidmore deference, (12) essentially a weaker version of Chevron deference. And there is Auerz deference, (13) pursuant to which the courts defer to an agency's interpretation of its own ambiguous regulation (no doubt implementing, under Chevron deference, an ambiguous statute!). My point here is not to provide a treatise on the nuances of the various deference doctrines, only to note that they have increasingly undermined the Constitution's basic separation of powers between the legislative and executive branches (and have resulted in an abdication of the judicial duty to interpret the law as well).

Several members of the Supreme Court have recently acknowledged the problem with the Court's deference doctrines. In Perez v. Mortgage Bankers Association, (14) for example, Justice Thomas took direct aim at the Auer deference doctrine. "These cases call into question the legitimacy of our precedents requiring deference to administrative interpretations of regulations," he wrote, adding:

That line of precedents ... requires judges to defer to agency interpretations of regulations, thus, as happened in these cases, giving legal effect to the interpretations rather than the regulations themselves. Because this doctrine effects a transfer of the judicial power to an executive agency, it raises constitutional concerns. This line of precedents undermines our obligation to provide a judicial check on the other branches, and it subjects regulated parties to precisely the abuses that the Framers sought to prevent. (15) Justice Thomas also acknowledged that the practice of giving binding effect to agency interpretations of regulations runs afoul of the non-delegation principle as well. "It is difficult to see what authority the President has 'to impose legally binding obligations or prohibitions on regulated parties,'" he wrote. "That definition suggests something much closer to the legislative power, which our Constitution does not permit the Executive to exercise in this manner." (16)

Justice Thomas has also called into question the grand daddy of deference doctrines, Chevron deference. In Michigan v. EPA, (17) after noting that the EPA had asked the Court to defer to its interpretation of the statutory phrase, "appropriate and necessary," a phrase that hardly defines any principle constraining the regulatory power, much less an intelligible one, Justice Thomas expressed concern that the EPA's "request for deference raises serious questions about the constitutionality of our broader practice of deferring to agency interpretations of federal statutes," citing Chevron as the source of the problem. (18) He then issued a challenge to his colleagues to revisit the entire deference enterprise:

Although we today hold that EPA exceeded even the extremely permissive limits on agency power set by our own precedents, we should be extremely alarmed that it felt sufficiently emboldened by those precedents to make the bid for deference that it did here.... We seem to be straying further and further from the Constitution without so much as pausing to ask why. We should stop to consider that document before blithely giving the force of law to any other agency "interpretations" of federal statutes. (19) Even Justice Scalia, long an advocate for judicial deference to executive agencies as a remedy for judicial overreach, (20) had called into question several of the Court's deference doctrines:

Heedless of the original design of the APA, we have developed an elaborate law of deference to agencies' interpretations of statutes and regulations. Never mentioning [section] 706's directive that the "reviewing court ... interpret ... statutory provisions," we have held that agencies may authoritatively resolve ambiguities in statutes. And never mentioning [section] 706's directive that the "reviewing court ... determine the meaning or applicability of the terms of an agency action," we have--relying on a case decided before the APA [Seminole Rock]--held that agencies may authoritatively resolve ambiguities in regulations. (21) Justice Scalia seemed to join Justice Thomas in inviting a rethinking of Chevron itself: "The problem is bad enough, and perhaps insoluble if Chevron is not to be uprooted, with respect to interpretive rules setting forth agency interpretation of statutes." (22) But he was positively hostile to the Auer deference doctrine, named after a case for which he himself had authored the opinion for the Court. "[A]n agency's interpretation of its own regulations," which the Administrative Procedures Act exempts from notice and comment rulemaking," is another matter," he wrote, adding:

By giving that category of interpretive rules Auer deference, we do more than allow the agency to make binding regulations without notice and comment. Because the agency (not Congress) drafts the substantive rules that are the object of those interpretations, giving them deference allows the agency to control the extent of its notice-and-comment-free domain. To expand this domain, the agency need only write substantive rules more broadly and vaguely, leaving plenty of gaps to be filled in later, using interpretive rules unchecked by notice and comment. The APA does not remotely contemplate this regime. (23) Justice Scalia concluded his criticism of Auer deference by announcing that he would be "abandoning Auer," (24) though he passed away before he could make good on that promise. (25)

The third reason that the Constitution's separation of the lawmaking power from the enforcement power has not held is that Presidents have increasingly found it expedient to bypass even the relatively easy path to lawmaking via delegated regulatory authority implemented through the procedures of the Administrative Procedure Act, by issuing Executive Orders or interpretative guidance memoranda to directly implement what amounts to legislative policy. Here I want to explore a sampling of Executive Orders and guidance memoranda from the past two Presidential administrations that I believe have crossed the line from constitutionally permissible orders directing the conduct of the executive branch to unconstitutional orders that have intruded on the legislative power.

First, let me take up President Bush's re-write of the Troubled Asset Relief Program ("TARP") in 2008. The law adopted by Congress authorized the Secretary of the Treasury "to purchase ... troubled assets from any financial institution, on such terms and conditions as are determined by the Secretary, and in accordance with this chapter and the policies and procedures developed and published by the Secretary." (26) As the text of the law makes clear, the authority conferred on the Treasury Secretary by Congress extended only to the purchase of troubled assets "from any financial institution." (27) When President Bush decided that the automotive industry also needed bailout relief, he asked Congress to amend the TARP law to authorize auto industry bailouts as well. (28) President Bush's proposal, the Auto Industry Financing and Restructuring Act, (29) passed the House of Representatives on largely party lines (Democrats in support, Republicans against), (30) but died after the bill to which it was attached in the Senate failed to garner enough support to overcome a filibuster. (31) Nevertheless, President Bush unilaterally extended TARP loans to the auto industry a week later, the very thing he had sought to do via his proposed but defeated legislation. (32)

Although candidate Barack Obama was critical of President Bush's use of executive power when he was campaigning for President in 2008, (33) President Obama took the precedent established...

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