Deep Dive Episode 231 – West Virginia v. EPA and the Major Questions Doctrine

In the historic decision of West Virginia v. EPA, the Supreme Court held that the Clean Air Act doesn’t authorize EPA to force America’s electricity sector to switch to renewable sources. The Court invalidated the Obama-era Clean Power Plan, which would have limited the total allowable greenhouse gas emissions of each state’s utility sector under the banner of “performance standards” for power plants. That was the regulatory strategy the EPA had pursued for cutting emissions from electricity generation. Consequently, the decision closes the window on the most viable regulatory route for sweeping climate action by federal agencies without a clear congressional mandate, while raising the bar still higher for options such as NAAQS for greenhouse gases.

The decision’s linchpin was the Court’s holding that the Obama Administration’s novel interpretation of a 50-year old statutory provision could not be used to support the broad new powers that EPA had claimed for itself in the Clean Power Plan. Under the court’s “major question doctrine,” Congress must speak clearly to delegate “decisions of vast economic and political significance” to an agency. Together with Justice Neil Gorsuch, who in concurrence further elaborated on his view of non-delegation, the majority opinion by Chief Justice John Roberts signaled that the Court is likely to reject major regulatory innovations by federal agencies that are not based on clear statutory authority.

Transcript

Although this transcript is largely accurate, in some cases it could be incomplete or inaccurate due to inaudible passages or transcription errors.

[Music and Narration]

 

Introduction:  Welcome to the Regulatory Transparency Project’s Fourth Branch podcast series. All expressions of opinion are those of the speaker.

 

On August 15, 2022, The Federalist Society’s Regulatory Transparency Project hosted a virtual event titled, “West Virginia v. EPA and the Major Questions Doctrine.” The following is the audio from that event.

 

Steven Schaefer:  Hello and welcome to this Regulatory Transparency Project virtual event. My name is Steven Schaefer, and I am the Director of the Regulatory Transparency Project. Today, we are excited to host a discussion entitled, “West Virginia v. EPA and the Major Questions Doctrine.” 

 

We are enthusiastic to have with us a stellar panel of experts. In the interest of time, I will keep introductions brief, but you can read their full bios on RegProject.org. That is RegProject.org. After the discussion between our experts, if time allows, we will go to audience Q&A. Please enter any questions you have into the Q&A function at the bottom of your Zoom window. 

 

Note, as always, The Federalist Society and the Regulatory Transparency Project take no position on particular legal or public policy matters. All expressions of opinion are those of the speakers joining us. 

 

We are pleased to have with us our first speaker, Daniel Farber, the Sho Sato Professor of Law and Faculty Director for the Center for Law, Energy, and the Environment at the University of California, Berkeley. Professor Farber has written on West Virginia v. EPA and the major questions doctrine on legalplanet.org. That is legalplanet.org. 

 

He is a member of the American Academy of Arts and Sciences and a life member of the American Law Institute. He is the Editor of Issues in Legal Scholarship. Professor Farber is a graduate of the University of Illinois where he earned his B.A., M.A., and J.D. degrees. He graduated summa cum laude from the College of Law where he was the class valedictorian and served as editor-in-chief of the University of Illinois Law Review. He was a clerk for Judge Philip W. Tone of the United States Court of Appeals for the Seventh Circuit and for Justice John Paul Stevens of the Supreme Court of the United States.

 

We’re also happy to have with us our second speaker, Adam Gustafson, who is the Senior Counsel for Environmental and Regulatory Affairs at Boeing. Prior to joining Boeing, he served as deputy general counsel at the Environmental Protection Agency. Prior to his role at the EPA, he was a partner at Boyden Gray & Associates, where he represented states, federal judges, environmental groups, biofuel producers, agricultural interests, and public policy organizations on such issues as the constitutional separation of powers, the First Amendment, automotive regulations, environmental computer models, healthcare regulation, and judicial deference to federal agencies. 

 

Adam has working paper, “The Major Questions Doctrine Outside Chevron‘s Domain,” published at the C. Boyden Gray Center for the Study of the Administrative State at the Antonin Scalia Law School. Mr. Gustafson received his J.D. in 2009 from Yale Law School, where he was an editor of the Yale Law Journal, a managing editor of the Yale Journal of Law in the Humanities, and an executive editor of the Symposium Issue of the Harvard Journal of Law & Public Policy.

 

We are excited to host our third speaker, Mario Loyola, who is a Research Assistant Professor and Director of the Environmental Finance and Risk Management Program in the Institute of Environment, an FIU Preeminent Program. He also teaches environmental law courses at the College of Law and advises law students on environment-related matters. Loyola has worked on environmental policy and regulatory issues for many years, both in and out of government. He is a former associate director for Regulatory Reform at the White House Council on Environmental Quality and has also served at the Pentagon and in the U.S. Senate. 

 

Loyola has worked extensively in West Virginia v. EPA since litigation began. He is a Senior Fellow at the Competitive Enterprise Institute and has published extensively in National Review, the Atlantic, and the Wall Street Journal, in addition to academic and policy journals. He received his B.A. in European history from the University of Wisconsin and a J.D. from Washington University School of Law. 

 

Our Moderator today is Professor James W. Coleman, the Robert G. Storey Distinguished Faculty Fellow and Professor of Law at Southern Methodist University Dedman School of Law. James Coleman received two degrees from Harvard University, a J.D. cum laude, and B.A. in biology magnum cum laude with highest honors in the field. Upon graduation from law school, he served as clerk for Eighth Circuit Judge Steven Colloton and then practiced energy, environmental, and appellate laws as an associate in the Washington, D.C. firm of Sidley Austin LLP for three years. 

 

Prior to joining SMU, he was on the faculty at the University of Calgary, where he taught at both the law school and the business school. Before Calgary, he served on the faculty at Harvard Law School as a Climenko Fellow and Lecturer on Law. Coleman’s scholarship addresses regulation of North American energy companies, focusing on how countries account for and influence regulation of fuel and electricity in their trading partners and how global energy companies respond to competing pressures from investors and regulators in multiple jurisdictions. James writes on energy law topics on his website, energylawprof.com. That’s energylawprof.com. 

 

James, I will now turn it on over to you.

 

James Coleman:  All right. Well, thank you so much. It’s wonderful to be here, and I’m just — I’m so thrilled to be here with this distinguished panel to discuss this blockbuster environmental and administrative law case, especially because all three of our panelists have written about this case and the major questions doctrine across a whole variety of media from the newspapers, magazines, blogs, the law review articles. So I’m really looking forward to their thoughts now that this case has been decided. 

 

So we’re talking today about West Virginia v. EPA, this blockbuster environmental case. And the reason this case has been so important is it really has been the center of climate regulation and, really, the key environmental case that everybody has been watching over the last six years. So this case was already the subject of an unprecedented Supreme Court stay that prevented President Obama’s regulation on greenhouse gases called the Clean Power Plan from going into effect and not one but two, seven plus D.C. Circuit — seven plus Auer D.C. Circuit argument. So we’ll focus on the Supreme Court decision today, but keep in mind, this is a culmination of a long and very well-followed saga in environmental law. 

 

So to give you the basic background of the case, under the Clean Air Act, the Environmental Protection Agency regulates greenhouse gas emissions from various sources including new cars as well as new industrial stationary sources. But a large proportion of the country’s emissions of greenhouse gases come not from new sources but from existing sources like the nation’s coal and natural gas power plants which provide over half of America’s electricity. 

 

Now, under the Clean Air Act, Section 111D or 42 USC 7411 directs EPA to—and this sounds very indirect, but this is what it says in the statute—to adopt regulations for a procedure for each state to submit a plan which establishes standards of performance for any existing source for certain air pollutants. So under that Section 111D, in 2015, the Obama administration issued a regulation for existing fossil fuel power plants, and they called this rule the Clean Power Plan. Now, it was controversial in part because it went beyond asking states to make their existing power plant run more efficiently with less pollution. Instead, it, some people would say, went beyond the fence line of the power plant to encourage non-fossil fuel sources of electricity such as wind and solar power and to shrink the fossil fuel power sector. So it said maybe the standard we want states to adopt for their fossil fuel power plants isn’t to run them more efficiently but simply not to run them at all if there are other cleaner sources of electricity available.

 

Now, that Clean Power Plan never went into effect because the Supreme Court stayed its implementation on February 9, 2016. As far as we know, that was the last official act of Justice Scalia before he died. But when that stay went in—and there had never been a stay issued before on a regulation that hadn’t even undergone D.C. Circuit review, so that was an unprecedented stay—but after that, while that stay was in effect preventing the regulation from going into effect, it was an argument in the D.C. Circuit about the validity of the Clean Power Plan. At that time, the D.C. Circuit never issued a rule because the Trump administration came into office and issued its own rule which it called the Affordable Clean Energy Rule. 

 

So the Clean Power Plan and ACER, or the Affordable Clean Energy Rule, that was limited to promoting efficiency measures at existing fossil fuel power plants. D.C. Circuit, during the Trump administration, heard nine more hours of argument on this topic and finally decided to strike it down on the day before President Biden took office, January 19, 2021. And the Court held that the agency’s authority was not so limited, and so, in effect, they could’ve adopted something like the Clean Power Plan.

 

Now, Supreme Court took that case to decide whether, in fact, EPA could go beyond the fence line and so rather than just require efficiency measures at coal and natural gas power plants, actually require more use of zero emission sources like solar and wind and also to consider a very important question in administrative law, this doctrine of the major questions doctrine, which says that agencies cannot — or rather Congress must speak clearly if it wants to have agencies decide issues of vast economic and political significance. So this major questions doctrine and certain major questions are really not for the agencies to decide, therefore, Congress to decide. 

 

In some ways, this grows out of a 1986 Justice Breyer law review article where he said well, Congress usually resolves the major questions and then the interstitial, the smaller details, are handled by the agencies. So the Supreme Court took the case and decided by 6-3 majority, majority opinion written by Chief Justice Roberts, that EPA did not have the authority to effectively cap greenhouse gas emissions from the existing power sector in each state and require more use of these zero emissions sources. And three justices dissented. The dissent was written by Justice Kagan. 

 

One interesting thing that I’m going to ask all of our panelists about is that in this decision, in the majority decision by Chief Justice Roberts, he focused almost as much on what the major questions doctrine is as in what the specifics of this particular statute. And so he wrote a lot about when the major questions doctrine should apply. I think there are a lot of remaining questions about it that I’m looking forward to hearing what the panelists here have to say because this kind of a question is, is this major questions doctrine — is this kind of like an interpretive doctrine like the absurdity doctrine that we would say well, even though the words literally mean that, surely that’s not what Congress meant. Surely, it didn’t intend to allow such a massive kind of regulation, i.e., capping emissions from the greenhouse gas sector in such an obscure manner, really. This is a little used provision of the Clean Air Act.

 

On the other hand, some people might say well, this is really a limit on the Chevron doctrine, which gives the agencies the authority to interpret ambiguous statutes and says well, maybe you can interpret them but not in a way that gives you such vast economic and political power over the economy. And then maybe another way of thinking about it is a kind of nondelegation cannon that we don’t want Congress to give so much power. It’s really supposed to be deciding the major questions, so it’s not really a question of congressional intent. It’s even if Congress intended this, we don’t really want to give the agencies that kind of power. 

 

Now, I know all the panelists have different ideas of what the major questions doctrine means, what the Court has held through this decision, and also the merits of the decision. So what I would like to do is I’m going to go first to Adam, then to Dan, then to Mario. And what I’d like you to do is just give me your brief take on what the Court decided, both in the EPA decision, if there’s any parts that you’d like to amend from what I said, but also on the major questions doctrine, and whether they got it right. So starting with Adam, please. 

 

Adam Gustafson:  Thanks, James. I really appreciate the opportunity to be here and talk with my fellow panelists about this case. I also look forward to being able to answer some questions, so please think about what questions you want to raise. I should mention up front, I’m not speaking for my past or current employers. I’m just speaking for myself. 

 

And I’d like to start by looking at the dissent that James mentioned. One of the interesting aspects of the dissent is that it accuses the majority of announcing the major questions doctrine. And it’s true that this case, West Virginia v. EPA, is the first time that the Court has used the phrase “major questions doctrine,” but whatever you think of its merits, that the doctrine does have a long pedigree. As James mentioned, the name of the doctrine comes from a 1986 administrative law review article that was cited in the Supreme Court’s 2000 decision in FDA v. Brown & Williamson. And if James hadn’t already mentioned the name of the author, you might not suspect that it was then Judge Steven Breyer, then on the First Circuit, who coined the phrase. He said, “Congress is more likely to have focused upon and answered major questions while leaving interstitial matters to answer themselves in the courts of the statute’s daily administration.”

 

Now, of course, Justice Breyer was in the dissent back in FDA v. Brown & Williamson in 2000. He was also in the dissent this year in the West Virginia case, but I think the source of the name of doctrine goes to show this is a principle on which different people of different political persuasions can agree as a matter of interpretation. Precisely what it means, I think, has evolved. So while I don’t think it’s quite fair to say that the Court announced a new doctrine, I do think there are some important developments in the doctrine that are worth looking at. 

 

In particular, I think it’s noteworthy that in each of the cases in which the major doctrine has appeared, the doctrine appeared as an exception to Chevron deference. Arguably, the doctrine began before 2000 in MCI Telecomm. v. AT&T. That was a 1994 Supreme Court case in which the general idea that when Congress is delegating a big important question to an agency, it had better do so explicitly, was stated, I wouldn’t say for the first time, but it’s the first in a line of cases. And that case was a Chevron case. And the Court applied this doctrine arguably in that step one of Chevron in determining whether there was ambiguity, arguably, at step two of Chevron in determining whether the agency’s interpretation was reasonable. 

 

In any event, it was clearly a Chevron doctrine. The Court, because of the significance of the question, because of the long-standing nature of the agency’s prior interpretation, which it reversed, and because of the ancillary nature of the provision on which the agency sought to place its new found authority, the Court said no. We don’t lightly understand Congress to have delegated such a big question to an agency ambiguously.

 

And then again, in Brown & Williamson, the Court arguably, I think quite explicitly, at Chevron step one employed the major questions doctrine, citing that Judge Breyer article to say no, we’re not going to allow the FDA to interpret the Food, Drug, and Cosmetics Act to allow it to effectively ban or to regulate tobacco products because to do so would require the agency to ban the products under the Court’s reading of the statute. And this was a major political issue and a major economic issue on which Congress had opined since then.

 

So, again, we see Congress applying the major questions doctrine in the Chevron context. The same was true in Utility Air Regulatory Group v. EPA and in King v. Burwell, the other recent major questions doctrine case. All of these were Chevron cases in which questions of judicial deference to agency interpretations of ambiguous statutes were expressly in play. 

 

West Virginia v. EPA, the decision we’re talking about today, is new. It does something new because it raises the major questions doctrine, in fact, gives it its fullest expression and explicitly ties itself to this line of precedent reaching back to MCI and Brown & Williamson. But it does so entirely outside of the Chevron context. And we can talk more about why that is. There may be multiple reasons for why the Court avoided any discussion of deference to agencies under Chevron, but in any event, I think it’s noteworthy that the Court embraces the major questions doctrine outside of the Chevron domain. This is something that until now had happened a couple of times in lower courts but not in the Supreme Court. 

 

And I think it’s noteworthy also that the Court expands on its past understanding of the basis for the major questions doctrine. As I read the cases, the Court had understood the major questions doctrine as grounded on an understanding, an intuition about legislative intent. The idea is that Congress surely wouldn’t deliberately grant an agency broad powers to affect a big segment of the economy and on a politically salient issue without doing so explicitly. The idea is Congress is the Legislative Branch, and Congress should have an interest in the big questions. And it’s not likely that Congress would delegate those without doing so deliberately and explicitly. And that theory of legislative intent is still, I think, at least partially, driving major questions doctrine in the West Virginia case. 

 

But the thing I find most interesting about West Virginia is that it’s not limited to that. It’s also founded on constitutional nondelegation principles and not just implicitly but explicitly. And the majority opinion by Chief Justice Roberts says that — well, I don’t have the quote right in front of me, but the Chief Justice says based on principles of legislative intent but also on separation of powers grounds, and I think that’s significant. And we see much more of the separation of powers discussion in the concurring opinion of Justice Gorsuch. But I think it’s important that the majority opinion also rests the major questions doctrine on nondelegation principles.

 

Why do I think that’s important? Because as James mentioned, the doctrine operates as a nondelegation cannon. And I think that might’ve been ambiguous before. I think it’s clear after West Virginia, and I think it’s motivated in part by a concern about an upset in the separation of powers that in cases like the Clean Power Plan, I think the Court perceives the Executive Branch agency as overstepping its authority, as treading onto the legislative territory. And I’ll leave it there. 

 

James Coleman:  All right. Let me just set that up with Dan. So the quote, by the way, from the case is, “In certain extraordinary cases, both separation of powers principles and their practical understanding of legislative intent make us reluctant to read into that ambiguous statutory text the delegation claimed to be lurking there.” So that’s what Chief Justice Roberts said.

 

Now, I’m very interested to hear from Professor Farber because this — Professor Farber, on his blog, by the way, you can see, I mean, really read in Chief Justice Roberts’ opinions some potential, quote strong limitations on the major questions doctrine. So curious to hear your take, where you may disagree on what the Court held, and also what you think of the Court’s holding.

 

Daniel Farber:  Well, great. Thanks. It’s a pleasure to be here today. I agree with the majority, really, the large majority of what Adam said. Although, I think I may come at it from a different perspective.

 

So as I read the opinion, the Court relied on four factors in applying the doctrine. And I think Adam touched on them, but I want to go over them again. One is that this was a radical departure for the agency, and the Court uses terms like unprecedented fundamental change establishing an entirely different kind of regulatory scheme. The Court also views this is a sort of breathtakingly broad claim of authority. They say that EPA is grabbing, basically, sole control of national energy policy. I actually don’t think that’s an entirely fair characterization, but that’s what the Court says.

 

The opinion also mentions that this is well outside the normal expertise of EPA, that EPA is not an energy regulator, and that this is a sign that EPA is straying outside of its statutory mission. And then finally, Roberts says that this is basically a national cap-and-trade program and that Congress had given a great deal of consideration to that possibility and had not gone there, which to me almost sounds like a steel seizure analysis rather than about presidential power rather than a nondelegation argument.

 

Now, one of the things that I think is significant here is that these are narrower factors than some have seen in the major questions doctrine, for example, in Judge Walker’s dissent in the lower court. Roberts mentions in his background to the case that this would’ve been a very expensive regulation, but that fact doesn’t come up again in his actual analysis. Unlike Judge Walker, Roberts pays no attention at all to the political controversy surrounding the plan. He essentially seems to view it as a way — basically, telling agencies stick to your knitting, right. You’ve got a statutory mission. You’re there to accomplish that mission. You’re not there to leverage little minutia in the statute into taking over some whole new domain of regulation. 

 

So the reason — I view this as limiting for two reasons. One is that it very much parallels the line that Roberts and Kavanaugh drew in the vaccine mandate cases. They joined the liberals to uphold the mandate for healthcare workers from HHS but not the OSHA mandate that applied to all workers, right? So they drew a line based on the idea that HHS, it’s about health. It has an obvious concern with ensuring the patients’ get proper medical care under safe conditions, whereas OSHA is almost entirely concerned with safety and accidents in the workplace and so forth. It’s done very little to deal with toxic substances and that its mandate for the vaccination would in effect impose a nearly nationwide vaccination requirement on much of the population.

 

Now, this is clearly a less robust version of the doctrine than Gorsuch, Thomas, and Alito would like. They dissented in terms of the healthcare workers. But I read the West Virginia case as an indication that Kavanaugh and Roberts are going to stick to their guns about where they draw the line, and their votes are decisive. Gorsuch writes separately to advocate a much more robust version of the doctrine, but he only got Alito to join his concurrence. So he clearly is not — there’s not a lot of enthusiasm, it would appear, among the remaining justices for fighting over where to draw the line. 

 

And so from my point of view, Roberts places guard rails on the doctrine that I think agencies can work within, and I think Congress can also use for guidance going forward as opposed to these sort of more expansive major question is whatever looks like a major question, which would really give agencies almost no idea of when something might cross that line.

 

Just really briefly, I agree that Chief Justice’s both separation of powers and congressional intent, but I think it’s significant that he says separation of powers without naming the nondelegation doctrine, all right. He seems to want to gesture strongly in that direction but still not embrace that. The opinion doesn’t say anywhere that if Congress had given a broad delegation in clear language to the agency to engage in this kind of regulation, that that would’ve raised constitutional doubts. To the extent you can tell anything from the language in the opinion, it sounds like yes, Congress could do this if they wanted to, but they didn’t.

 

Now, as to where it fits into the broader scheme of things, I think one thing that’s interesting here is you think a major question would be a major question of the law like does EPA have power to regulate beyond the fence line? But in fact, the Court never articulates a specific issue of statutory interpretation that’s the major question and it doesn’t decide for sure that EPA’s power does stop at the fence line. What the Court does tell us is however you would otherwise interpret the statute, whatever meaning it would give to specific words in the statute, it can’t mean this: that this regulation and anything very much like this regulation just goes way too far. And in that way, it’s sort of like the absurdity doctrine, I think.

 

I read it as applying at Chevron step zero, that is at the point where you’re deciding whether or not to even apply the Chevron doctrine. And I think what the Court’s saying in certain kinds of extraordinary cases, you don’t even really get to the point of a normal statutory interpretation. You apply this doctrine as a screen unless there’s a clear statement. You don’t need to go further, if it’s awkwardly within the Chevron framework, but then of course, who knows what kind of staying power the Chevron framework will continue to have in this court.

 

I think I could go on almost indefinitely as I’m sure all the panelists could, but I think I better stop at that point.

 

James Coleman:  Yeah, I mean, that highlights a very interesting issue which is that both the majority here and the majority in other cases that were considered important Chevron cases really doesn’t cite Chevron at all. And there’s that kind of continuing mystery about what that actually means about the Court’s views on Chevron in the future. Anyway, I’d love to hear from Mario on your thoughts, either on that or on areas where you may differ in terms of what you think the Court held or your view of the wisdom of the opinion that we ended up with. 

 

Mario Loyola:  Thank you very much, James. And thank you to RTP for putting this on and to everyone who’s joining. I found Adam and Professor Farber’s comments really illuminating as well and James, Professor Coleman’s introduction, obviously, as well. 

 

This is a fascinating opinion, and I think this is one of those where we’ll be talking about it for months and years on end. And maybe law students well into the future will be talking about it in their administrative law and constitutional law classes, partly because like a good magazine article, at least half of what the Court seems to be saying is unstated. And there’s a lot of questions that it raises which are not very well answered. And I’ll say, as happy as a lot of us were with the outcome in the case, the case is not an admitted — I have to admit, the case is not a masterpiece of dramatic logic and precision. And so it really glides on the surface of a lot of issues that I think many of us, it’s safe to say, would have liked to see the Court go into a lot more depth about. 

 

In answer to — and I’ll just start off by noting an important question from Longs Joseph in the chat. He asked, does the doctrine apply to thorny political issues such as a smoking ban in public or private places with little economic impact? That’s a great question. What Justice Roberts does in the majority opinion is lay out, really, what I think is—I think Adam alluded to this—the most expansive set of triggers for a major question to arise which is significant political issue, regulates a significant part of the economy, or alters or intrudes on things that are a traditional area of state regulation, in other words, something that raises a major question in the realm of federalism could trigger a major question doctrine.

 

And that’s an interesting point to make because for a lot of us, originally, I felt comments for Texas Public Policy Foundation in the original rulemaking, the proposed Clean Power Plan many years ago, the main issue raised in the case was the federalism issue, right? And I think that if there had been more — I think Professor Farber and others here are quite right to point out that despite all the talk about what best systems of emissions reduction means and does it apply only to some technology that the plan adopts inside the fence line, or can it extend to the entire state’s regulation of the electricity mix? I think that that’s more easily settled on statutory grounds because the Clean Air Act is full of similar technology standards that apply to physical components of the plant. 

 

But regardless, there was a good back and forth in oral argument about you can imagine things that extend well outside the baseline that don’t have much of an economic impact, does that raise a major question? And the answer is that in this case, it should have raised a major question on federalism grounds. And the reason for that is that unlike the situation that you have normally under Section 111 and Section 112 of the Clean Air Act where you have EPA sets a new standard and then calls for state implementation plans to be filed. And then if the state implementation plan doesn’t meet its standards, then it will file a federal implementation plan. 

 

In this case, if the EPA was going to insist on this outside-the-fence-line approach, it did not have the authority or even claim the authority to do what it was asking the states to do. And that’s very different than the normal [SIP/FIP  call where what the EPA’s normally asking states to do falls within federal jurisdiction and the EPA could do directly.

And so that kind of using the ability to regulate emission from coal plants in order to force states to do things that are outside of EPA jurisdiction that are normally within state jurisdiction and that federal law reserves only in a few cases to FERC raised a major federalism issue. And we know from the context of the Obamacare case NFIB v. Sebelius that Justice Roberts is not a huge fan of using powers in one area to coerce states into doing things in other areas. So that’s an important issue moving forward, and I think Justice Roberts has laid the basis for returning to federalism or political controversy as a basis for major questions.

 

Now, another unanswered question in this case is what is this major questions doctrine? I’m not sure I, myself, can even answer that question. I’ve been waiting to hear others on this webinar offer their definitions of major questions doctrine. Yeah, it seems to me that it certainly functions as an exception to Chevron or it reverses the valence of Chevron actually because where Chevron says we’re going to defer to agency interpretations of law, even on questions of the scope of the agency’s authority, this decision appears to be saying, and others before it, appear to be saying no, no, no, wait a second. if the impact is to raise a major question with impacts across American society, then maybe we are not going to defer to the agency and maybe we will actually have the opposite presumption of presuming that the agency’s interpretation is not correct unless Congress spoke clearly, which is, again, not just an exception to Chevron but actually reverses the valence of Chevron with respect to cases that arrive at step two. 

 

And there’s an interesting — and I’m tempted to go into this, and I know we’re talking about the case, but there’s an interesting aspect of the D.C. Circuit opinion below where it went through what I thought were a series of extraordinary somersaults saying — because one question is why didn’t the D.C. Circuit defer to the Trump EPA’s interpretation of the Clean Air Act? 

 

And the reason is that the Trump administration’s — the Trump EPA said well, this isn’t an ambiguity at all. The best systems of emissions reduction has never meant all this stuff that the EPA said in the Clean Power Plan that it means, and so we’re going to go back to what we think it always meant. And the D.C. Circuit said no, that’s not right. If you don’t admit that there’s an ambiguity here, then we’re not going to defer to your interpretation, so we’re remanding to now-Biden’s EPA to admit that there is an ambiguity here so that then we can defer to whatever they tell us the statutory thing then. This is one of those things where the Chevron doctrine may be dying death by a thousand cuts just by these kinds of reductio ad absurdum exercises. 

 

Professor Farber mentions that he’s not sure how much staying power Chevron has with this particular Supreme Court. And I think that’s probably true because you’ve heard, again, in the oral argument I think, and you’ll hear it again, that there’s a lot of justices, certainly Justice Coney Barrett thinks that resolving ambiguities is what judges are supposed to do. Every statute has some ambiguity at the margins. As Professor Richard Epstein says, ambiguity is in the eye of the beholder. You can always say something’s ambiguous and then defer to the agency or deny that it’s ambiguous and then substitute the court’s opinion for that.

 

I think the Administrative Procedure Act is very clear on this. Section 706 says that questions of law are supposed to be resolved by the courts, and so I think that one way, which we’re getting into tomorrow in the RTP webinar tomorrow on Jarkesy v. Securities and Exchange Commission, we have an example where Chevron may be in danger of being whittled down by the simple refusal of judges to say that there’s an ambiguity in the statute. And therefore, everything should and can be resolved at step one. 

 

Finally, I’ll just close by saying that there’s a very interesting tension between the majority opinion and the very friendly concurrence by Justice Gorsuch. And I think that Professor Farber is right that you have Justices Kavanaugh and Roberts are not as sympathetic to the exercise that Justice Gorsuch has been trying for a number of years to rope the rest of his colleagues into on the Court, which is the effort to develop a nondelegation doctrine. Of course, the most important to know about the nondelegation doctrine, as Justice Kagan says, is that we don’t have one and never have had one with the exception of a pair of cases that really take you sort of nowhere or not very far in the late 1930s. 

 

And if you go back to Justice Gorsuch’s dissent in Gundy v. United States, which is not so much an elaboration of a nondelegation doctrine, but it is a sort of Wikipedia article on possible nondelegation doctrines that you could have there given the Court’s prior history. And then you look at Justice Gorsuch had just been confirmed but took no part in the decision of that. Justice Kavanaugh took no part in the decision of that case but wrote in on a grant of certiorari in a subsequent case to say I don’t know about nondelegation but I’m very interested in the major questions doctrine. So I think that moving forward, one of the questions, and I’ll end here, one of the questions for the Supreme Court to resolve is whether it’s going to give further teeth to this idea that there are limits to what Congress can delegate in the first place, right? Because if it’s only an exception to Chevron, then it’s only a limitation on what the agencies can do with a statute written by Congress.

 

The nondelegation doctrine goes significantly further because it says even if Congress intended to do something, it’s not allowed to do it. And that’s a very important distinction where I think that the Courts got a lot of work to do and this Federal Judiciary will have a lot of doctrinal development. It has a lot of opportunities for doctrinal development in the years ahead.

 

And with one final point, I will close by saying that a lot of the problems in administrative law, it seems to me, have arisen because of despite how clearly Section 706 of the Administrative Procedure Act is written, courts have been able to turn both the arbitrary and capricious standard on its head and the de novo review of legal questions on its head because the Administrative Procedure Act doesn’t provide clearly for things that are actually executive action that are within the vested Article II authority. And I think that the Court may be resolving these questions in the years ahead by starting to distinguish between things that are legislative, executive, or judicial in the more formalistic way.

 

So with that, thank you all very much. Look forward to —

 

James Coleman:  All right. Thank you. And we will get to Q&A, but I want to just have a little bit of more discussion back and forth right now. So let me start with Adam, and I’ll have a question for each of you, but Adam, in your article, one of the things that you focus on is you view King v. Burwell as an outlier to the major questions doctrine because, really, the effect there—that was the second big Obamacare case—was to give more power to the federal government. So it didn’t really have, in some sense, a constraining fact. Although, it did constrain the choice of the federal government, so it wasn’t a suggestion that this wasn’t within agencies’ discretion. 

 

I’m just curious, do you view the major questions doctrine as constraining the federal government? Because for me, one difficulty with that is not just King v. Burwell, but also — I mean, this all kind of grows out of MCI v. AT&T where the government was trying to deregulate, and the court said no, you can’t do that. You can’t take these words and use them to give you the discretion to either choose to regulate or not. Congress directed you to regulate, and so therefore, you are required to. So do you view the major questions doctrine as currently it is stated as deregulatory? And if not, do you think it should be? How do you deal with the suggestion that it’s a little bit broader a read of intent rather than a thumb on the scale against regulation? 

 

Adam Gustafson:  That’s a great question. I guess I would say most of the major questions doctrine cases, when you read them together, and I do separate King v. Burwell, but the other cases are not deregulatory or regulatory in nature as you point out. It can work either way. They are, I would say, all legislation forcing. In other words, on these questions of big political and economic significance where the agency is claiming its authority, whether deregulatory authority or regulatory authority, based on a thin read in the statute, that that’s not sufficient, but Congress should speak clearly in such circumstances. 

 

But that line of argument is legislation forcing in that it puts the ball back in Congress’s court. It says Congress, you’re not powerless to require regulation here, but if you want agencies to enter this field, you need to speak clearly. And so I think that’s the way that the doctrine has operated consistently with the exception of King v. Burwell. I think that case was problematic because while noting the political and economic significance of the issue, the Court did not kick the ball back to Congress. Rather, the Court stepped into the place of the legislator and made its own determination of what the statute should say, in effect, which was the opposite of what the statute, in fact, did say. 

 

And so I see King v. Burwell as an aberration in the major questions doctrine cases, but it remains to see how the doctrine is going to continue to develop. But I do think the legislation forcing aspect of the doctrine is key to the majority’s decision and to the concurrence. I don’t read that much into the difference between those two. I think the majority decision reads like a majority decision. And the concurrence reads more like a law review article because it’s a concurrence. And when you’re writing concurrences, you have more freedom to get into these theoretical questions. And I think that’s what we see there. I think if you look at Justice Kavanaugh’s major questions doctrine cases, he called it a major rules doctrine from back when he was on the D.C. Circuit, I think you see a very robust application of the doctrine. And I agree with Dan that there are lots of different factors the Court considered here, and I agree it remains to be seen exactly how these factors weigh against each other. 

 

In this case, there wasn’t really a need to analyze that closely because all of the factors from all of the precedent as the Court read it weighed in favor of applying the doctrine, that is of forcing the legislation in saying no to the agency’s effort. But I do read the majority opinion to cite the political salience of the issue. Justice Roberts’ opinion said we also find it highly unlikely that Congress would leave to agency discretion the decision of how much coal-based generation there ought to be over the coming decades and then immediately quoted Brown & Williamson which says, “We are confident that Congress could not have intended to delegate a decision of such economic and political significance to an agency in so cryptic a fashion.” So I do think majority could be faulted for not thoroughly analyzing that question, but I think they do firmly root the fact pattern in the political and economic situation that the major questions doctrine cases have always relied on. 

 

James Coleman:  Okay, great. And I apologize, we’re going to have to go really fast because we have about 15 questions and we have eight minutes. So let’s — but just a brief question for each of you. So first, for Dan, does the $370 billion that Congress now authorized for climate and energy, is that a proof that the major questions doctrine was exactly the way to go? It was legislative. It was legislative forcing. Now, there’s more political accountability for the climate policy of the U.S. than we would’ve had without this decision.

 

Daniel Farber:  Well, I think that’s an interesting question. I do think that it’s hard to know whether Congress was responding to West Virginia. They had been considering this legislation for a long time anyway. Did this close the deal with Manchin because of the West Virginia case? Who knows? I do think, in a sense, it is a congressional response. It’s not exactly responsive to the question that the court set essentially remanded to Congress, which was EPA authority, but it is a big step on behalf of Congress in addressing the issue. So I think to that extent, it was successful.

 

On the other hand, it happened in this case that spending and tax sorts of policies were available options in the typical case. Sending something back to Congress may just be a polite way of saying you’re never going to be allowed to do this because you’re never going to have 60 bucks. 

 

James Coleman:  Yeah, it could be quite contingent. All right. Well, let’s keep it moving. Mario, I wanted to give you a chance to respond to Justice Kagan says in 2015, I said we’re all textualist now, but apparently, I was wrong and in fact, if you wanted to put it in humorous terms, maybe you would say the major questions doctrine says we’ll be textualist as long as it’s not important. But if it’s important, then all bets are off. So how would you respond to, I think as you said, many people, I think Jonathan Handler said that the majority kind of skimps on their textual analysis and basically focused on this major questions doctrine, still without answering a lot of our questions about what that might be. But I’m curious, how would you — what would be your response to Justice Kagan’s criticism of the opinion? 

 

Mario Loyola:  Well, yeah. Well, I would say that a purely textual analysis, just as a matter of statutory interpretation, doesn’t help the Clean Power Plan anymore, and the case could’ve been easily decided on the basis of just statutory interpretation. Section 111D can’t be used for this. It’s used for solid waste incinerators, not to revolutionize — not to require reorganization of the state’s electricity mix. That’s a much easier — for example, it’s much easier to come to that conclusion than to come to the conclusion that source means a single facility which was at issue in the Chevron case. And that was fairly easy, actually, on policy grounds, right, policy grounds and statutory interpretation to come to that conclusion.

 

I want to note, and I know we’ve got some important questions online, but I want to note in response to a question by Timothy Harker here in the Q&A and something that Professor Farber said, there actually was a provision in the IRA that was struck on a point of order that would’ve appropriated $50 million here and little pots of money for the EPA to regulate greenhouse gas emissions under Section 111 and several other sections of the Clean Air Act. 

 

And we’ve been having a back and forth, me and my cool friends I mean, about what this means and what the impact would’ve been. And I am of the opinion that this is something that if now the next shoe to drop is that the current EPA drops a new rule and it can point to even one sentence like that where Congress clearly intended for greenhouse gases to be regulated under Section 111, it wouldn’t revive the Clean Power Plan. 

 

But then I think that this court or a court would look at it and say, you know what? Now, Section 111 means something — with this amendment, Section 111 means something different than it meant before we decided West Virginia v. EPA. And now we do have a much clearer statement of congressional intent, at least as of September or August of 2022 moving forward, that these provisions are to be used to regulate greenhouse gases, and the only way to regulate greenhouse gases here is to adopt an outside the fence line approach under VSER. And so all of these things could easily follow from just a single amendment along these lines. So people who care about West Virginia v. EPA should be monitoring potential amendments to the Clean Air Act and potential statements of congressional intent very, very carefully. Thank you.

 

James Coleman:  All right. So we have a question in the Q&A from Danielle Achesky (sp) who says where do you see the major questions doctrine being most and having most impact in the future? Are there any issues or other regulations specifically on climate and other areas? Adam, would you like to — were you raising your hand? 

 

Adam Gustafson:  Sure. I think any question where an agency finds in a long text and statute some new power, especially if it’s one of great political and economic significance, I think we’re going to see major questions arguments. I think one rule on the horizon in which these arguments are definitely going to come up is the SEC’s climate disclosure rule. The major questions doctrine has already been cited with regard to that rulemaking by one of the SEC commissioners, dissenting Commissioner Hester Peirce, who has said that her commission does not have authority from Congress to do that. And I think the comments are in on that rule, and I think there are many commenters who have raised arguments like that. So that’s one example. 

 

James Coleman:  Yes, please, Dan. 

 

Daniel Farber:  So I would say if you look at the cases, I don’t apply to all of them, but I think the times where we’re more likely to see the major question doctrine really applying are cases where there’s some big, new or newly recognized problem that agencies or the Executive Branch as a whole are trying to deal with like climate change, like, I don’t know, the development of the internet, other big — like a pandemic, right, the kind not seen for a century. And because that’s when agencies turn to these obscure provisions because the statute’s main provisions don’t apply to something this new so they are trying other things. And so I think the, probably, most important effect is to limit the ability of the Executive Branch to respond to new problems and require Congress to take a hand.

 

I’d also say I view the major question doctrine as primarily a restriction on the president, even though it also applies to independent agencies. But I think basically, we’re cutting back on the president’s policy making rule. 

 

James Coleman:  Well, thank you so much for doing this panel. This has been incredibly informative and valuable, and I just really value being able to speak with you all about this. Steve, do we have to do anything here before we close? 

 

Steven Schaefer:  I was just going to thank all of you for sharing your expertise on West Virginia v. EPA and the major questions doctrine and to thank the audience for joining us. 

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Conclusion:  On behalf of The Federalist Society’s Regulatory Transparency Project, thanks for tuning in to the Fourth Branch podcast. To catch every new episode when it’s released, you can subscribe on Apple Podcasts, Google Play, and Spreaker. For the latest from RTP, please visit our website at www.regproject.org.

 

[Music]

 

This has been a FedSoc audio production.

 

Daniel Farber

Sho Sato Professor of Law and Faculty Director, Center for Law, Energy, and the Environment

University of California, Berkeley


Adam Gustafson

Senior Counsel for Environmental and Regulatory Affairs

Boeing


Mario Loyola

Senior Fellow

Competitive Enterprise Institute


James W. Coleman

Robert G. Storey Distinguished Faculty Fellow and Professor of Law

Southern Methodist University Dedman School of Law


Energy & Environment

The Federalist Society and Regulatory Transparency Project take no position on particular legal or public policy matters. All expressions of opinion are those of the speaker(s). To join the debate, please email us at [email protected].