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The Checks and Balances Letter delivers news and information from Ballotpedia's Administrative State Project, including pivotal actions at the federal and state levels related to the separation of powers, due process and the rule of law.
This edition:
In this month’s edition of Checks and Balances, which delivers information from Ballotpedia’s Administrative State Project, we’re covering the important administrative state stories from the month understandably taking a backseat to the coronavirus pandemic.
We review an upcoming U.S. Supreme Court case that could allow for more religious challenges to federal regulations; the nationwide enforceability of the Trump administration’s public charge rule; and Justice Clarence Thomas’ willingness to reconsider Brand X deference. Our feature this month highlights a study by the Mackinac Center for Public Policy that examines overcriminalization in agency rules.
At the state level, we review a trio of state responses to judicial deference in Mississippi, Indiana, and Georgia; the denial of Arkansas’ Medicaid work requirements by an appellate court; and an update on the state of New York’s plastic bag ban. As always, we wrap up with our Regulatory Tally, which features information about the 203 proposed rules and 265 final rules added to the Federal Register in February and OIRA’s regulatory review activity.
In Washington
SCOTUS case could allow more opportunities to challenge federal regulations
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What’s the story? A U.S. Supreme Court case scheduled for oral argument on April 29 could clarify when notice-and-comment procedures satisfy the requirements of the Administrative Procedure Act (APA), allowing individuals to challenge more federal laws and regulations.
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The case, Little Sisters of the Poor Saints Peter and Paul Home v. Pennsylvania, concerns the Trump administration’s legal authority to issue rules providing a religious or moral exemption to the contraception mandate created under the Affordable Care Act, commonly known as Obamacare.
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The U.S. Court of Appeals for the Third Circuit in July 2019 upheld a nationwide injunction that blocked the new exemption rules from going into effect. The court held that the U.S. Department of the Treasury, the U.S. Department of Labor, the Internal Revenue Service, and the U.S. Department of Health and Human Services did not have legal permission to modify Obamacare’s contraceptive requirements.
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Congress retained the authority to exempt employers from providing contraceptive coverage under Obamacare and did not delegate exemption authority to agencies, according to the Third Circuit.
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The court also held that the agencies violated the APA’s notice-and-comment requirements by failing to issue a notice of proposed rulemaking or solicit public comments.
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SCOTUS allows nationwide enforcement of rule restricting admissibility of immigrants needing public assistance
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The U.S. Department of Homeland Security’s (DHS) public charge rule is now enforceable nationwide after the U.S. Supreme Court on February 21 voted 5-4 to stay an Illinois injunction blocking statewide enforcement of the rule. The court stayed a separate nationwide injunction on January 27 and appellate courts lifted three additional injunctions in December 2019.
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The public charge rule, issued by DHS in August 2019, authorizes the federal government to deny immigrants a visa or a green card if they rely on government assistance.
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Judge Gary Feinerman of the U.S. District Court for the Northern District of Illinois issued the statewide injunction blocking the rule in October 2019. Feinerman held that the rule would impose financial consequences on Cook County and that DHS acted arbitrarily and capriciously beyond the scope of its authority when it made the public charge rule.
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DHS requested that the U.S. Supreme Court lift the statewide injunction. The U.S. Supreme Court granted the request for a stay. Justices John Roberts, Clarence Thomas, Samuel Alito, Neil Gorsuch, and Brett Kavanaugh ruled in favor of the stay while Justices Ruth Bader Ginsburg, Stephen Breyer, Elena Kagan, and Sonia Sotomayor dissented.
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The decision allows the rule to take effect nationwide pending a final decision in Wolf v. Cook County, Ill. The U.S. Court of Appeals for the Seventh Circuit heard oral argument in the case on February 26.
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Justice Thomas labels deference doctrine inconsistent with the Constitution
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U.S. Supreme Court Justice Clarence Thomas on February 24 stated that he would reconsider his 2005 opinion in National Cable & Telecommunications Association v. Brand X Internet Services that gave rise to the Brand X deference doctrine.
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Thomas dissented from the majority’s decision not to hear Baldwin v. United States, a case challenging Brand X deference. He argued that Brand X deference appears to be “inconsistent with the Constitution, the Administrative Procedure Act (APA), and traditional tools of statutory interpretation.”
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The Brand X case concerned an application of the Chevron deference doctrine. Under Chevron deference, federal courts must defer to a federal agency's interpretation of an ambiguous or unclear statute. Brand X built on Chevron’s foundation by requiring courts to defer to agency interpretations of statutes even when courts previously held contrary views.
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Justice Thomas argued that both deference precedents undermined the requirements of the United States Constitution. He wrote, “Regrettably, Brand X has taken this Court to the precipice of administrative absolutism. Under its rule of deference, agencies are free to invent new (purported) interpretations of statutes and then require courts to reject their own prior interpretations. Brand X may well follow from Chevron, but in so doing, it poignantly lays bare the flaws of our entire executive-deference jurisprudence. Even if the Court is not willing to question Chevron itself, at the very least, we should consider taking a step away from the abyss by revisiting Brand X.”
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In the states
Mississippi Supreme Court justices call for end to state deference doctrine
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Mississippi Supreme Court Justice Josiah Coleman on February 13 wrote a dissenting opinion in Central Mississippi Medical Center v. Mississippi Division of Medicaid calling for an end to the state’s judicial practice of deferring to agency interpretations of regulations. The opinion was joined by Justice T. Kenneth Griffis and joined in part by Justices Leslie King and Jim Kitchens.
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Court precedent from a 2006 case established the state’s deference standard that “an agency’s interpretation of a rule governing the agency’s operation is a matter of law that is reviewed de novo, but with great deference to the agency’s interpretation.”
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Coleman argued in part that the deference practice violates the Mississippi Constitution’s separation of powers provision. “In ceding the rule-interpreting power of the courts to the executive branch by giving deference to agency interpretation of regulations,” wrote Coleman, “the Court in the past has put all or part of all three functions of government—rule making, rule enforcement, and rule interpretation—in the hands of one branch.”
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The practice of deferring to agency interpretations of regulations is known as Auer deference at the federal level. The U.S. Supreme Court limited the types of agency interpretations that qualify for Auer deference in the 2019 case Kisor v. Wilkie.
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The Mississippi Supreme Court issued a 2008 opinion that ended the state’s judicial practice of deferring to agency interpretations of ambiguous statutes—known as Chevron deference at the federal level—in a 2008 opinion.
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Georgia lawmakers vote to limit judicial deference
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The Georgia House of Representatives voted 158-8 on February 18 to approve legislation that would end the practice of judicial deference to tax regulations in the state. House Bill 538—sponsored by state Representatives Todd Jones (R), Mitchell Scoggins (R), and Brett Harrell (R)—would require the Georgia Tax Tribunal to decide all questions of law without deference to the regulations or policy interpretations of the state’s Department of Revenue.
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If the legislation becomes law, Georgia would join a group of other states that have addressed judicial deference practices in recent years. Since 2008, Wisconsin, Florida, Mississippi, Arizona, and Michigan have taken executive, judicial, or legislative action to prohibit some form of judicial deference to state agencies.
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Indiana Supreme Court justice questions state’s judicial deference requirements
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Justice Geoffrey Slaughter of the Indiana Supreme Court wrote a separate note from the court’s February 24 order denying the transfer of Indiana Department of Natural Resources v. Possner that questioned the state’s judicial deference requirements.
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The Indiana Administrative Orders and Procedures Act requires a reviewing court to defer to an agency’s factfinding if the agency provides sufficient evidence on the record.
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Slaughter wrote, “Under the current system, a government agency both finds the facts and interprets the statutes that supply the rules of decision, and the courts’ only role (as we have interpreted AOPA) is to defer to all aspects of the agency’s decision-making.”
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Slaughter stated that he was open to hearing legal challenges to the deference requirements. “In a future case, where the issues are raised and the arguments developed, I am open to entertaining legal challenges to this system for adjudicating the legal disputes that our legislature assigns agencies to resolve in the first instance, subject only to a highly circumscribed right of judicial review as set forth in AOPA.”
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State-level Medicaid work requirements dealt blow by federal court panel
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A three-judge panel of the United States Court of Appeals for the District of Columbia Circuit on February 14 blocked a waiver from the Trump administration that would have allowed the state of Arkansas to institute work requirements for Medicaid recipients.
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Judges Cornelia Pillard, Harry Edwards, and David Sentelle (appointed by Presidents Barack Obama (D), Jimmy Carter (D), and Ronald Reagan (R), respectively) ruled in Gresham v. Azar that U.S. Department of Health and Human Services (HHS) Secretary Alex Azar failed the arbitrary-or-capricious test when he approved a waiver request from Arkansas requiring its Medicaid beneficiaries to work at least 80 hours per month.
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The judges held that Azar was wrong not to consider whether the Arkansas work requirements would prevent some people from receiving health care coverage. Congress intended Medicaid to provide health care coverage, according to the panel, and that HHS must uphold that purpose when approving state coverage plans.
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The Trump administration announced in January 2018 that it would allow states to implement work requirements for Medicaid recipients by obtaining waivers from HHS. Judge James Boasberg of the United States District Court for the District of Columbia in 2019 blocked waivers for Arkansas, Kentucky, and New Hampshire from going into effect. He later blocked Michigan’s work requirements from taking effect on March 4.
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New Hampshire’s appeal is pending before the D.C. Circuit and Michigan could follow suit. Newly elected Kentucky Governor Andy Beshear (D) issued an executive order rescinding the state’s work requirements in December 2019.
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Arkansas Governor Asa Hutchinson (R) told the Associated Press that he hopes the case reaches the U.S. Supreme Court. “It is difficult to understand how this purpose is inconsistent with federal law,” he said. “The court’s ruling undermines broad public support for expanded health care coverage for those struggling financially.”
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New York agency plastic bag ban leaves New Yorkers holding the bag
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New York's ban on single-use plastic bags took effect March 1, and for state residents, that means they must switch to reusable bags, or pay a five-cent per bag fee for paper bags.
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Governor Andrew Cuomo (D) signed the ban into law in August 2019. Similar prohibitions are currently in effect in California, Hawaii, and Oregon. Additional bans in Maine and Vermont take effect in April and July, respectively.
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The New York State Department of Environmental Conservation (NYSDEC) released final regulations to administer the measure in late February. The rules prohibit the use of single-use plastic bags by any retailer that collects sales tax, with certain exceptions, and gives counties and cities the option to charge shoppers a five-cent fee on paper bags. Retailers in violation of the rules face a $250 fine for the first offense and a $500 fine for each subsequent violation.
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Report examines overcriminalization in agency rules
The Mackinac Center for Public Policy issued a recent report highlighting the overcriminalization that results from allowing administrative agencies to issue regulations that define criminal behavior. The report argues that lawmakers’ delegations of authority to administrative agencies to promulgate binding rules result in innumerable, overly precise regulations that overcriminalize society and reduce respect for the law:
“One of the largest problems with creating crimes through administrative agencies is that it leads to an increase in criminally liable behavior — in other words, the overcriminalization of society. Overcriminalization is the idea that there are so many laws carrying criminal sanctions that a reasonably well-informed, well-intentioned person could not presume to know whether their actions were legal or not. ...
Having so many administrative rules also makes it impossible for law enforcement and administrative agencies to enforce all of them. The state has limited resources and limited knowledge and must ultimately choose which rules it will devote resources to enforcing and which ones it will not. From the viewpoint of the average citizen, then, enforcement appears arbitrary.
This lowers citizens’ respect for the law and weakens the rule of law. One consequence is that the Legislature’s ability to guide citizens’ behavior through the use of the law diminishes. Moreover, arbitrarily enforced rules may lead citizens to believe that those charged with crimes are targeted by the government for some reason unrelated to its duty to uphold the law and protect public safety. This contributes to distrust in government, in particular to its ability to impartially enforce the law.”
Regulatory Tally
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The Federal Register in February reached 12,206 pages. The number of pages at the end of each February during the Obama administration (2009-2016) averaged 11,074 pages.
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The February Federal Register included 203 proposed rules and 265 final rules. These included a rule approving a landfill emission plan in Delaware, a rule adjusting Copyright Office fees for inflation, and a rule imposing restrictions on archaeological imports from Jordan, among others.
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OIRA’s recent regulatory review activity includes:
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Review of 44 significant regulatory actions. Between 2009-2016, the Obama administration reviewed an average of 40 significant regulatory actions each February.
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One rule approved without change; recommended changes to 36 proposed rules; seven rules withdrawn.
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OIRA reviewed 23 significant rules in February 2019, 20 significant rules in February 2018, and three significant rules in February 2017.
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As of March 2, 2020, OIRA’s website listed 114 regulatory actions under review.
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