The Supreme Court rules not to end DACA in this month's _Checks and Balances_ from Ballotpedia.
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_THE CHECKS AND BALANCES LETTER_ delivers news and information from Ballotpedia's Administrative State Project ([link removed]) , 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_, we review the U.S. Supreme Court’s decision not to end the Deferred Action for Childhood Arrivals (DACA) program; the culmination of Raymond Lucia’s eight-year challenge of the U.S. Securities and Exchange Commission (SEC); the U.S. Supreme Court’s holding that the director of the Consumer Financial Protection Bureau’s (CFPB) protections against removal by the president were unconstitutional; and new legislation that aims to make temporary regulatory suspensions due to the coronavirus pandemic permanent.

At the state level, we review updates to judicial deference practices in Mississippi and Georgia; a failed Separation of powers challenge to block a Maine ballot initiative; and the creation of a new central office for state administrative law judges (ALJs) and administrative proceedings in Indiana. 

We also highlight new scholarship examining the effect of agency automation practices on the administrative state as well as new findings from Ballotpedia’s survey of all 50 state constitutions and administrative procedure acts regarding limits on who can challenge agency actions in state courts. As always, we wrap up with our Regulatory Tally, which features information about the 188 proposed rules and 281 final rules added to the _Federal Register_ in June and OIRA’s regulatory review activity.
 
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** IN WASHINGTON
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** SUPREME COURT RULES DACA ENDED IMPROPERLY; DISSENTING OPINION ARGUES RULING CREATES DOUBLE STANDARD 
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* What’s the story? The U.S. Supreme Court on June 18 ruled ([link removed]) 5-4 in _DHS v. Regents of the University of California_ that the U.S. Department of Homeland Security (DHS) did not properly follow Administrative Procedure Act (APA) procedures when it sought to end the Obama-era Deferred Action for Childhood Arrivals (DACA) program in 2017. DHS started the program in 2012 with a memo that itself did not follow the APA rulemaking process.
* The court held that DHS’ decision to end DACA was arbitrary and capricious under the APA because DHS failed to analyze all of the relevant factors associated with ending the program. The court remanded the case to DHS, which can reattempt to end the program by providing a more thorough explanation for its decision.
* Chief Justice Roberts delivered the majority opinion of the court, writing, “The dispute before the Court is not whether DHS may rescind DACA. All parties agree that it may. The dispute is instead primarily about the procedure the agency followed in doing so.” 
* Justices Ruth Bader Ginsburg, Stephen Breyer, and Elena Kagan joined the full opinion. Justice Sotomayor agreed with the majority that DHS improperly followed the APA, but argued in a separate opinion that the court should have allowed the respondents to develop claims that the agency violated the Fifth Amendment’s equal protection guarantee.
* Justices Clarence Thomas, Samuel Alito, and Brett Kavanaugh filed dissenting opinions. Thomas’ dissent, joined by Justices Samuel Alito and Niel Gorsuch, argued that an administration should be able to rescind policies not lawfully implemented. He also claimed that the decision creates incentives for outgoing administrations to bind their successors to unlawfully created programs. An agency is now "not only permitted, but required, to continue administering unlawful programs that it inherited from a previous administration," according to Thomas.

* Want to go deeper?

* Department of Homeland Security v. Regents of the University of California ([link removed])
* Administrative Procedure Act ([link removed])

 
** LUCIA SETTLES WITH SEC AFTER EIGHT YEARS OF LITIGATION
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* What’s the story? Raymond Lucia, the plaintiff in the 2018 U.S. Supreme Court case _Lucia v. SEC_, reached a settlement with the U.S. Securities and Exchange Commission (SEC) on June 17 after eight years of litigation. The settlement requires Lucia to pay a $25,000 fine and allows him to reapply for reinstatement as an investment advisor. 
* The _Lucia_ case challenged the constitutionality of the SEC’s appointment of its administrative law judges (ALJs). The U.S. Supreme Court ruled in June 2018 that the agency's ALJ appointments violated the Appointments Clause of the U.S. Constitution. The court found that the SEC’s ALJs are inferior officers (rather than agency employees) who must be appointed by the agency’s commissioners as required by the Appointments Clause. The court sent Lucia’s case back to the SEC for a new hearing before a different, constitutionally appointed ALJ.

* Want to go deeper?

* Lucia v. SEC ([link removed])
* Administrative law judge ([link removed])
* Adjudication ([link removed]))

 
** CFPB STRUCTURE RULED UNCONSTITUTIONAL, AGENCY SURVIVES
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* What’s the story? The U.S. Supreme Court on June 29 ruled 5-4 in _Seila v. Consumer Financial Protection Bureau (CFPB)_ that limiting the power of the president to remove the CFPB director violates the separation of powers of the U.S. Constitution. Congress created the CFPB under the 2010 Dodd-Frank Act as an independent agency with a single director who could only be removed by the president for cause.
* The court recognized historical limitations on the president's removal power in _Humphrey's Executor v. United States_ (1935) and _Morrison v. Olson_ (1988), but refused to apply those precedents to the CFPB because, unlike the actors involved in the prior cases, the court argued the CFPB exercises significant executive power. The court also held that the unconstitutional removal restrictions could be severed from the Dodd-Frank Act—leaving the rest of the agency intact.
* Chief Justice John Roberts delivered the opinion of the court. Justices Clarence Thomas, Samuel Alito, Neil Gorsuch, and Brett Kavanaugh joined the first three parts of Roberts’s opinion concerning the unconstitutional removal restrictions. 
* Part IV of Roberts’ opinion, which argued in favor of severing the removal power restriction and leaving the rest of the law intact, was joined by Justices Alito and Kavanaugh and supported in a separate opinion by Justices Elena Kagan, Ruth Bader Ginsburg, Stephen Breyer, and Sonia Sotomayor.
* In an opinion concurring in part and dissenting in part, Justice Thomas, joined by Justice Gorsuch, agreed with the majority’s limitations on the scope of the _Humphrey’s Executor_ precedent. However, Thomas stated that he would vote to overrule the _Humphrey’s Executor_ precedent in a future case. He also disagreed with the decision to sever the removal restrictions, arguing that severability could exceed the scope of the judicial power by allowing judges to speculate on the legislative branch’s preferred remedy.
* Justice Kagan, joined by Justices Ginsburg, Breyer, and Sotomayor, wrote a separate opinion concurring with the judgment that the removal power provision was severable from the rest of the law, but dissenting from the holding that the removal power restrictions were unconstitutional. Kagan argued that the majority's decision could stagnate the government’s ability to respond to changing circumstances. 

* Want to go deeper?

* Seila Law v. Consumer Financial Protection Bureau ([link removed])
* Humphrey’s Executor v. United States ([link removed])
* Appointment and removal power ([link removed]))

 
** LEGISLATION SEEKS TO MAKE CORONAVIRUS REGULATORY SUSPENSIONS PERMANENT
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* What’s the story? Representative Chip Roy (R-Texas) and Senator Rand Paul (R-Ky.) introduced legislation in Congress during May and June, respectively, aimed at making the temporary suspension of federal regulations due to the coronavirus pandemic permanent.
* The Coronavirus Regulatory Repeal Act would require Congress to reaffirm any temporarily suspended regulations within 60 days of the end of the national emergency before they could take effect again.
* In May, President Donald Trump’s (R) Executive Order 13924 directed federal administrative agency heads to determine whether regulations modified or waived during the pandemic should be repealed permanently. 

* Want to go deeper?

* Executive Order 13924 ([link removed]))
* Rand Paul ([link removed])
* Chip Roy ([link removed])

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** IN THE STATES
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** MISSISSIPPI SUPREME COURT REAFFIRMS END OF STATE-LEVEL _CHEVRON_ DEFERENCE; GEORGIA LEGISLATION TO END DEFERENCE TO STATE TAX AGENCY FAILS TO PASS
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* What’s the story? The Mississippi Supreme Court on May 28 unanimously held in a tax and gambling case ([link removed]) that a state tax statute requiring judicial deference to a state agency’s interpretation of an unclear law—a doctrine known as _Chevron_ deference at the federal level—was unconstitutional because it prohibited the court from exercising its constitutional duty to interpret the law.
* The court reaffirmed its 2018 ruling in _King v. Mississippi Military Department_, which ended the state-level _Chevron_ deference doctrine on the grounds that the practice violated the separation of powers prescribed by the state constitution. The _King_ decision instituted a new standard of _de novo_ review. 
* The court further clarified in the tax case that the _King_ decision applied to any state statute requiring the _Chevron_ deference doctrine.
* In Georgia, legislation that would have ended judicial deference to the state Department of Revenue’s interpretations of constitutional provisions, state statutes, and agency regulations failed to pass the state Senate in the final days of the legislative session. The state House of Representatives approved the bill by a 158-8 vote on February 18.

* Want to go deeper?

* Find out more about the Georgia legislation in the March 2020 edition of Checks and Balances ([link removed])
* State responses to judicial deference ([link removed])
* Mississippi Supreme Court ([link removed])

 
** SEPARATION OF POWERS CHALLENGE FAILS TO BLOCK MAINE BALLOT INITIATIVE
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* What’s the story? Cumberland County Superior Court Justice Thomas Warren on June 29 held ([link removed]) that a Maine ballot initiative seeking to overturn a state agency decision to allow construction of a high-voltage power line can remain on the November 2020 ballot despite a separation-of-powers challenge. 
* Opponents of the initiative argued in _Avangrid Networks v. Matthew Dunlap_ that the ballot measure violates the separation of powers provision in Article III of the Maine Constitution because it would allow Maine citizens to exercise executive authority by reversing an agency order and judicial authority by overturning a related court decision.
* Warren held that the separation of powers challenge presented in the case was not ripe for review because the initiative might fail to pass. However, Wagner stated that “the court does not mean to suggest that the plaintiffs have not raised a significant separation of powers issue.”

* Want to go deeper?

* Maine NECEC Transmission Project Certificate Initiative (2020) ([link removed]))
* Maine Public Utilities Commission ([link removed])
* Cumberland County Superior Court, Maine ([link removed])
* Separation of powers ([link removed])

 
** INDIANA MOVES ADMINISTRATIVE LAW JUDGES TO CENTRAL PANEL
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* What’s the story? The state of Indiana on July 1 launched the new Office of Administrative Law Proceedings (OALP) to serve a central hub for the state’s administrative law judges (ALJs) and agency adjudicative proceedings.
* The Indiana General Assembly passed legislation in 2019 authorizing the creation of the OALP.
* The new central office transitions ALJs away from direct employment or contractual relationships with state agencies. The OALP seeks to promote the independence of ALJs by ensuring that ALJs serve as neutral adjudicators in administrative proceedings, according to the office.
* Twenty-seven other states centralize their ALJ corps and provide ALJs to state agencies on request. ALJs in the remaining states—and the federal government—are appointed by agency heads or hired as employees to conduct administrative proceedings at specific agencies.

* Want to go deeper?

* State administrative law judge ([link removed])

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** FEATURE SECTION
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** DOES AGENCY AUTOMATION CONTRIBUTE TO A CRISIS OF LEGITIMACY?
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New scholarship from law professors Ryan Calo and Danielle Keats Citron argues that increased automation in agency processes has resulted in inconsistent outcomes that, according to the authors, have eroded faith in agency expertise and contributed to what they call a crisis of legitimacy surrounding the administrative state. The authors claim that poor automation practices deployed by agencies have undermined the confidence in agency expertise that justifies their existence. In response, the authors propose that agencies should limit their use of automation to only those practices that deliver positive outcomes in order to retain their subject-matter expertise:

“The question we ask in this article is not how to restore the status quo ex ante given that machines have supplanted people. We ask instead whether technology obligates a fundamental reexamination of why Congress is permitted to hand off power to agencies in the first place. 

The new direction we advocate is critical but ultimately constructive. We do not recommend the dissolution of the administrative state, which has turned to automation largely in response to a hostile political economy. Nor do we hope to foreclose the use of technology by state or federal agencies. Our ultimate recommendation is that agencies should consciously select technology to the extent its new affordances enhance, rather than undermine, the rationale that underpins the administrative state. This would be so even absent a looming legitimacy crisis. We observe that, far from demand a return to the status quo, new technology invites us to heighten and extend our expectations of what government can offer its citizens. Such examples exist in the literature and media; we believe they deserve greater attention and collect them here."

* Want to go deeper?

* Click here ([link removed]) to read the full paper.

 
** 50-STATE SURVEY REVEALS STATE LIMITS ON WHO CAN CHALLENGE AGENCY ACTIONS IN COURT
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A Ballotpedia survey of all 50 state constitutions and administrative procedure acts (APAs) concluded that 42 states place limits on access to state courts to challenge agency actions. 

* 42 states limited who was eligible to appeal agency adjudication actions to a state court
* The New Jersey Administrative Procedure Act banned third parties (those not directly denied a permit) from appealing permit decisions and blocked state agencies from making rules allowing third-party appeals
* 33 states, 66%, had constitutions that allow anyone who suffers an injury or wrong to their person, property, or character, to have recourse in the state court system.
* 8 states had no clear limits on who could challenge agency adjudication actions in state court (Ariz., Calif., Ill., Kan., Miss., N.H., N.J., N.Y.) 

Some states limited appeals from agencies to state courts until after the plaintiffs had exhausted all available administrative remedies at the agency. Ballotpedia examined those provisions here ([link removed]) .

* Want to go deeper? 

* Click here ([link removed]) to view the full results.

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** REGULATORY TALLY
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** FEDERAL REGISTER
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* The _Federal Register_ in June reached 39,454 pages. The number of pages at the end of each June during the Obama administration (2009-2016) averaged 37,979 pages.
* The June _Federal Register_ included 188 proposed rules and 281 final rules. These included regulations concerning small business loan forgiveness ([link removed]) under the Paycheck Protection Program, new methods ([link removed]) to eliminate robocalls, and student eligibility ([link removed]) for funds under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, among other rules.

* Want to go deeper? 

* Click here to find more information about weekly additions to the Federal Register in 2019, 2018, and 2017 ([link removed])  
* Click here to find yearly information about additions to the Federal Register from 1936 to 2016 ([link removed])  

 
** OFFICE OF INFORMATION AND REGULATORY AFFAIRS (OIRA)
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OIRA’s June regulatory review activity includes:

* Review of 56 significant regulatory actions. 
* Thirteen rules approved without changes; recommended changes to 40 proposed rules; three rules withdrawn.
* As of June 1, 2020, OIRA’s website listed 139 regulatory actions under review.
* Want to go deeper? 
* Every month, Ballotpedia compiles information about regulatory reviews conducted by OIRA. To view this project, visit: Completed OIRA review of federal administrative agency rules ([link removed])

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This Checks and Balances newsletter is part of Ballotpedia's Administrative State Project, a nonpartisan encyclopedic resource that also features the latest data on federal regulatory activity, including a rolling page count of the Federal Register and the volume of rulemaking.

You can view an index of these pages here ([link removed]) . View the pages and you will come away knowing the difference between the _administrative state_, the _regulatory state_, and the _dark state_—and so much more. New entries to our encyclopedia are added weekly.
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The Lucy Burns Institute, publisher of Ballotpedia, is a 501(c)(3) nonprofit organization. All donations are tax deductible to the extent of the law. Donations to the Lucy Burns Institute or Ballotpedia do not support any candidates or campaigns.
 

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