Jackson Highlights Dangers Should Supreme Court Again Curtail Agency Power

The Supreme Court heard two cases Monday that give it an opportunity to limit agency power, a theme for the right-wing bench throughout recent terms. 

One is a challenge to the Securities and Exchange Commission (SEC) and the other to the Federal Trade Commission (FTC). Both center on arguments about how the agencies deal with violations, with the challengers pushing for an easier route to bring those cases before federal judges rather than the agencies’ in-house adjudication system.

There are some good-faith concerns about the in-house system: that it lets an administration act as “judge, jury and executioner,” or that the agencies have a home-court advantage in front of their own judges. 

There are also highly ideological arguments against it, an extension of the right-wing legal world’s crusade against powerful agencies. These conservatives oppose robust regulation, and often lodge constitutional challenges to weaken it. The tagline for the right-wing legal group that brought the SEC challenge is “Protecting Americans From the Administrative State.”

And then there are good-faith arguments against sending more of these cases to federal courts rather than keeping them in the purview of the agencies themselves. They include a judiciary suddenly awash with cases agencies previously dealt with, forcing federal judges to weigh in on matters while lacking the technical expertise of agency judges. It also raises the possibility that a person or business under regulatory scrutiny could land an anti-agency, anti-regulation federal judge, encouraging defendants to venue shop and creating an effective loophole through which to escape regulators.

Justice Ketanji Brown Jackson clearly had some of those arguments in mind Monday. 

“The thing that is bugging me about your argument is that we could look at the statute that’s here and discern that Congress intended to allow the agency to do its work and then have judicial review,” she said to one of the agency challenger’s lawyers. “At a minimum, the fact that the statute requires the court of appeals to wait, in general, before it gets involved — you have to have a person who’s been aggrieved by a final order from the commission before the court of appeals gets involved.” 

She added that she’s “worried” that a section of U.S. code could be used “to undermine congressional intent about the finality of agency action before the courts come in.” 

Jackson’s argument here is also the inverse of the one her right-wing peers have repeatedly made in their quest to limit agency power: that Congress was not explicit enough in its legislative delegation of authority, so the agency lacks power to do whatever it’s trying to do. That idea takes shape to an extent in the major questions doctrine and to an even more sweeping degree in the nondelegation theory, both of which require extremely high levels of specificity — levels which Congress, by design, often doesn’t meet — to give agencies authority. 

Jackson is arguing that Congress was very clear here: agencies would adjudicate these disputes internally, and if the subject of the agency scrutiny doesn’t like the result, then she can appeal the decision in federal court. 

“When the agency decides to go forward, you’re in the channel, then, of agency review,” she said. “I’m concerned about people using the district court jurisdiction to stay the agency process or do end run around it.” 

Paul Clement, one of the attorneys for the side opposing the agencies, ended his remarks by saying: “If there were a case of a true tie or toss-up, I’d like to think the tie would go to the citizen and to judicial review…And that the tie wouldn’t go to being sucked into administrative action that you’re challenging as unconstitutional.” 

The right-wing justices have routinely argued that it’s more constitutional to hack away agency power and let Congress rewrite the laws with “proper specificity” since the people have more of a hand in electing lawmakers than they do appointing agency officials. 

Of course, that skates over a lot of compelling arguments that go the other way: that Congress, thanks in part to the Senate filibuster, can only rarely pass major legislation, and nowhere near at the pace needed to, say, regulate polluters. That agency appointments come from the President, who is elected by the citizens. That even a well-functioning Congress lacks the time and expertise to pass regulation on the granular level that agencies do, which is why it gives them fairly broad writs of authority to begin with. 

Nevertheless — the right-wing justices have shown an affinity for shackling agencies in the name of democracy. Clement’s kind of argument may give them another opportunity to do so.