“Major questions”? Supreme Court ruling in climate change case impacts regulatory landscape

Key points:

  • For the first time, the Supreme Court explicitly invoked the “major issues doctrine” – which requires Congress to speak clearly when authorizing agency action in certain extraordinary cases – to strike down a rule of law. ‘agency.
  • The major issues doctrine is likely to apply in regulations of great economic and political importance, such as major regulations on climate change or other areas that Congress may not have left to the discretion of Congress. agency, especially when the agency’s action is new or when Congress has tried but failed to legislate in the same area.
  • The ruling’s ramifications extend well beyond environmental regulations, as the doctrine is likely to play an important role in major regulatory landscape regulations, including international trade, taxation, securities, immigration and health.

Insight

The United States Supreme Court’s 6-3 decision in West Virginia v. EPA announcing the “Major Issues Doctrine” threatens to limit the agency’s authority in a narrow but exceptionally wide band of administrative regulations – that is, the most important, most innovative and most important. . This alert first provides an overview of the doctrine, as elucidated by the Court. It then turns to the likely disruptive consequences of the decision, which are by no means limited to climate change regulation and are likely to affect major administrative actions in a number of areas – international trade, taxation, securities, immigration and health, to name a few.

Background

Decided on the last day of the Court’s term, West Virginia v. EPA “announces the arrival” (in the words of the dissent) of the “major issues doctrine” – a new substantive presumption that overrides ordinary principles of statutory interpretation in certain “extraordinary” cases. case. In a nutshell, the majority (drafted by Chief Justice Roberts and joined by Justices Thomas, Alito, Gorsuch, Kavanaugh, and Barrett) describe the doctrine as a “reluctance[ce] interpret in an ambiguous piece of legislation” a delegation of broad agency power – even when such “regulatory assertions have[ve] a colored text base. Based on “both the principles of the separation of powers and a practical understanding of legislative intent,” the doctrine requires Congress to legislate particularly clearly when authorizing an agency to make “decisions of great importance economic and political”. The Supreme Court had no doubt applied a form of the “major issues doctrine” in various cases over the years, it had never used that specific phrase, nor fleshed out its outlines in such detail until now. .

The application of the “major issues doctrine” is a two-step investigation: (i) does the case trigger the “major issues doctrine” and, if so, (ii) the agency can indicate “clear congressional authority” to regulate in the manner proposed?

With respect to the first investigation, the notice sets out several (seemingly non-exhaustive) considerations to help decide whether a case involves the “major issues doctrine”:

  • Whether the agency discovered in a “long-standing law an unannounced power” that greatly expands or even “transforms[s]”its regulatory authority.
  • Whether the authority claimed by the agency derives from a “collateral”, “to fill in the gaps” or otherwise “rarely used” provision of the law.
  • If the agency passed a regulatory package that Congress had “demonstrably and repeatedly refused to enact itself.”

Judge Gorsuch’s agreement, joined by Judge Alito, adds a few other “non-exclusive” factors:

  • If the agency claims authority to resolve a matter of high political importance.
  • Whether the agency is trying to regulate “a significant part of the US economy” or requiring massive spending by regulated parties.
  • That the agency’s rule-making seeks to “interfere[e] in a domain which is the particular domain of state law. »

With respect to the second inquiry, the Supreme Court did not offer much guidance on precisely how “clear” Congress must speak to enable rule-making in a “big issues” case. But he found that such a clear statement was lacking in West Virginia v. EPA despite the textual plausibility of EPA’s assertion. Specifically, the Court held that the wording of Section 111(d) of the Clean Air Act authorizing the EPA to design the “best emission control system” did not allow the EPA to “design caps of emissions based on… generational change”, i.e., diverting output from existing coal-fired power plants by forcing them to “reduce their own electricity production or subsidize the increase in production by natural gas, wind or solar sources”. For such a measure to fall within the authority of the EPA, the Court required a more specific mandate from Congress. Thus, although the Court did not overturn Massachusetts v. EPA, 549 US 497 (2007) or otherwise prohibits the agency from regulating greenhouse gases in general, it has placed real limits on the type of regulation the agency can enact.

Consequences

The implications of this decision are far-reaching, both for the development of administrative rules (whether pending or new) and for administrative litigation in federal courts. Regulated parties will no doubt invoke this case and the major issues doctrine to oppose broad assertions of executive authority during the notice and comment process and, if unsuccessful, in legal challenges. ensuing under the Administrative Procedure Act.

Admittedly, only a small number of rule-makings will fall into the category of “major issues”. But these regulations will, by definition, be “major,” that is, “extraordinary” matters involving broad or “transformative” assertions of executive power, great political significance, or large sums of money. . Moreover, such cases will arise “from all corners of the administrative state,” not just the EPA. The notice itself cites the following historical examples:

  • The US Food and Drug Administration’s attempt to regulate or ban tobacco products, see FDA v. Brown & Williamson Tobacco Corp., 529 US 120 (2000).
  • The Attorney General’s Attempt to Cancel the Licenses of Physicians Who Assisted Suicide Patients, Gonzalez v. Oregon, 549 US 243 (2006).
  • The Centers for Disease Control and Prevention’s attempt to impose a moratorium on evictions in response to the COVID-19 pandemic, Alabama Assn. of Relators v. Department of Health and Human Servs, 594 US __ (2021) (by 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 US __ (2022) (by curiam).

And it’s not hard to imagine the doctrine playing an important role in other existing, pending, or potential regulations, such as:

  • The United States Securities and Exchange Commission’s proposed rule requiring the reporting of detailed greenhouse gas emissions data among the detailed and detailed climate disclosure requirements, see Enhancement and Standardization of Climate-Related Disclosures for Investors, 87 Fed. Reg. 21334 (April 11, 2022).
  • Proposed FDA rules prohibiting 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 following Dobbs v. Jackson Women’s Health Organization, 597 US __ (2022).

At the end of the line

Since arguments about the major issues doctrine are likely to play a key role in the development of major rules – both during the notice and comment process and in subsequent litigation – it is important that regulated companies become familiar with the scope of the doctrine. Akin Gump’s regulatory attorneys and appellate litigators are available to help you understand the application of the doctrine to specific rules, its impact on your current or future regulatory burden, and potential litigation options.

About Margaret Shaw

Check Also

Top FDA tobacco official resigns to take job at Philip Morris International

OOn July 26, Matthew Holman, director of the Food and Drug Administration’s Center for Tobacco …