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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, we review an Appointments Clause challenge to administrative patent judges; new final rules from the Office of Personnel Management regarding the discipline and removal of poor-performing federal employees; and President Trump’s (R) new executive order that aims to increase agency control of policy-related employees.
At the state level, we examine a ruling from the Arkansas Supreme Court that reiterates the court’s prohibition on deference to state agency interpretations of statutes, and a call from New Jersey lawmakers to disband a state agency.
We also highlight a new essay that examines the nondelegation doctrine at the state level and new findings from Ballotpedia’s survey of all 50 state constitutions and administrative procedure acts examining what qualifies as a guidance document. As always, we wrap up with our Regulatory Tally, which features information about the 177 proposed rules and 305 final rules added to the Federal Register in October and OIRA’s regulatory review activity.
In Washington
U.S. Supreme Court agrees to hear Appointments Clause challenge to administrative patent judges
- What’s the story? The U.S. Supreme Court on October 13 agreed to hear United States v. Arthrex Inc., a case that questions whether administrative patent judges (APJs) are principal officers of the United States who must be appointed by the president and confirmed by the U.S. Senate.
- After losing a patent dispute before three APJs, Arthrex Inc. appealed the decision to the U.S. Court of Appeals for the Federal Circuit. Arthrex argued that APJs are principal officers and, therefore, their appointment by the secretary of commerce violates the Appointments Clause in Article II of the U.S. Constitution.
- The Federal Circuit ruled in Arthrex’s favor, holding that APJs’ protections against removal qualify them as principal officers who must be appointed by the president.
- To resolve what they saw as an unconstitutional process, the Federal Circuit ruled that the removal protections could not apply to APJs moving forward. The court’s opinion stated that making the APJs removable at-will reclassifies them as inferior officers who can be appointed by the secretary of commerce.
- The U.S. government appealed the decision to the U.S. Supreme Court. Former Solicitor General Noel Francisco argued in part that the U.S. Supreme Court should review the case since the Federal Circuit’s decision found "a constitutional infirmity in the statutory framework that governs more than 200 agency adjudicators, in an agency that administers intellectual-property rights affecting vast swaths of the Nation’s economy."
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Office of Personnel Management implements Trump administration order regarding poor-performing federal employees
- What’s the story? The Office of Personnel Management (OPM) on October 16 issued final rules that revise federal agency methods for addressing poor-performing employees in the civil service. The rules implement President Donald Trump’s (R) Executive Order 13839, which aims to streamline the discipline and dismissal processes for poor-performing federal employees.
- The regulations implement the following changes to agency management practices:
- Reduce the time for employees to improve their performance, allowing agencies to more quickly initiate disciplinary actions against employees deemed poor-performing.
- Reduce the time period for employees to respond to allegations of poor performance.
- Reiterate that agencies are not obligated to help employees improve.
- Prohibit agencies from entering into settlement agreements that modify an employee’s personnel record.
- Mandate that agencies remind supervisors of expiring employee probationary periods.
- Establish procedures for agencies to discipline supervisors who retaliate against whistleblowers.
- President Trump issued three executive orders on May 25, 2018, aimed at improving efficiency and accountability within the federal civil service. E.O. 13839, titled "Promoting Accountability and Streamlining Removal Procedures Consistent with Merit System Principles," proposed several principles, management tactics, and reporting procedures for agency supervisors to incorporate in order to address issues of employee accountability. OPM’s final regulations aim to fully implement the order.
- Supporters of E.O. 13839 have argued that the order will improve the federal civil service by allowing agency supervisors to more efficiently address poor performance and misconduct in the workforce. Opponents of the order have argued that the management changes are unnecessary and will fail to bring about the stated goal of improved employee performance.
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Trump executive order aimed at increasing agency control of policy-related employees
- What’s the story? President Donald Trump (R) on October 21 issued Executive Order 13957, "Executive Order on Creating Schedule F in The Excepted Service," that directs agencies to reclassify federal civil service employees in the competitive service who serve in policy-related roles as members of the excepted service. Supporters of the order claim that the change will increase agency oversight of staff members who perform policymaking functions while opponents argue that the order will politicize policy-related civil service positions.
- The order directs agencies to reclassify competitive service employees who serve in "confidential, policy-determining, policy-making, or policy-advocating positions and that are not normally subject to change as a result of a Presidential transition” as members of the newly created Schedule F within the excepted service.
- The classification change, according to the order, aims to give agency heads greater flexibility in the appointment of staff members who serve in policy-related positions. The order also claims that the change will make it easier for agency management to remove poor-performing employees. Though the change makes the qualifying employees ineligible for the adverse action protections of the competitive service, the order directs agencies to develop rules that create similar protections for Schedule F employees. The order also instructs the Federal Labor Relations Authority to determine whether Schedule F positions should be eligible for union membership.
- Opponents of the order, including union groups and lawmakers, argue that the order could potentially politicize a large portion of the civil service. The National Treasury Employees’ Union on October 23 filed suit in the United States District Court for the District of Columbia to block implementation of the order. Four days later, U.S. Representative Gerry Connolly (D-Va.) introduced the Saving the Civil Service Act aimed at nullifying the order.
- It is unclear how many positions will meet the order’s criteria for Schedule F. Agencies have 90 days from the date of the order to conduct a preliminary review of qualifying staff and must conduct a complete review within 210 days.
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In the states
Arkansas Supreme Court reiterates its deference prohibition
- What’s the story? The Arkansas Supreme Court on October 29 clarified in American Honda Motor Co. v. Walther that state courts should not exercise deference to state agency interpretations of statutes. Instead, the court held that Arkansas state courts should review agency statutory interpretations de novo.
- The court’s decision reiterated its May 2020 holding in Meyers v. Yamato Kogyo Co. that the court should determine the meaning of state laws and not defer to state agency interpretations of statutes.
- In an opinion by Justice Karen Baker, the court cited its earlier holding in Meyers, stating that “it is the province and duty of this Court to determine what a statute means. In considering the meaning and effect of a statute, we construe it just as it reads, giving the words their ordinary and usually accepted meaning in common language. An unambiguous statute will be interpreted based solely on the clear meaning of the text. But where ambiguity exists, the agency’s interpretation will be one of our many tools used to provide guidance.”
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New Jersey lawmakers call to disband state agency
- What’s the story? New Jersey lawmakers have issued a call to disband the state’s School Development Authority (SDA) following corruption and misconduct allegations.
- The state agency, which builds and maintains schools in poor areas of the state, faces multiple lawsuits alleging that agency heads fostered a corrupt and hostile work environment. A recent investigation by the State Commission of Investigation found that the agency suffered from what it described as “questionable administrative actions, suspect hires and outright managerial malfeasance.”
- The agency’s former head, Lizette Delgado-Polanco, resigned in April 2019 amid allegations that she pushed out agency staff in order to hire friends and family members.
- State Senate President Stephen Sweeney (D) called for the agency to be disbanded.
- "This agency is the epitome of what gives State workers and their bosses a bad name,” state Senator Declan O’Scanlon (R) in a statement. O’Scanlon co-sponsored legislation that would transfer the agency’s construction responsibilities to the New Jersey Economic Development Authority.
- Governor Phil Murphy (D) stated that while he did not agree with all of the findings from the State Commission of Investigation, he looks forward “to working with all the parties to continue to improve the SDA.”
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Is the Nondelegation Doctrine Alive in the States?
Randolph J. May, president of the Free State Foundation, authored an essay in The Regulatory Review that examines applications of the nondelegation doctrine at the state level. In “The Nondelegation Doctrine is Alive and Well in the States,” May examined state-level case law— including the recent decision from the Michigan Supreme Court to strike down Governor Gretchen Whitmer’s (D) coronavirus-related executive actions on nondelegation grounds—to conclude that state courts invalidate statutes in violation of the nondelegation doctrine more often than federal courts. The nondelegation doctrine, according to May, is “alive and well in the states.”
May provided the following summary of his claim:
“Although there has not been a successful nondelegation doctrine challenge at the federal level since 1935, when the Supreme Court struck down two New Deal laws, state courts, invoking separation of powers principles under their own constitutions, have not been nearly so reticent to sustain nondelegation doctrine challenges. One does not have to reach back into ancient history to find such cases.
In a 2018 article, Edward Stiglitz examined state supreme court decisions from 1990 to 2010 in which the nondelegation doctrine was implicated. Based on a close reading of the 163 nondelegation cases, Stiglitz found that, in 22 of these, the state courts held that the challenged state statutes violated the nondelegation doctrine. So, the nondelegation doctrine is alive and well in the states.
This essay is not the place to examine the body of successful state nondelegation challenges, but a representative sample of a few of them, for a sense of the language used, includes the following: Florida Department of State, Division of Elections v. Martin; Board of Trustees of the Judicial Form Retirement System v. Attorney General; and Guillou v. State of New Hampshire, Division of Motor Vehicles. In each instance, in one way or the other, the courts refer to the lack of sufficient guidance in the challenged law as an invitation for the exercise of arbitrary power or abuse of discretion by the administrative body.”
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Ballotpedia study shows that shows that 12 state APAs define what qualifies as a guidance document
A Ballotpedia survey of all 50 state constitutions and administrative procedure acts (APAs) concluded that 12 state APAs include provisions that define what qualifies as a guidance document, as of October 2020.
- 12 states have APAs with provisions that define what qualifies as a guidance document.
- 38 states have APAs and constitutions that do not appear to define what qualifies as a guidance document.
Ballotpedia also examined state APAs and constitutions that require administrative agencies to conduct cost-benefit analysis before implementing rules. View those results here.
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Regulatory tally
Federal Register
- The Federal Register in October reached 69,118 pages. The number of pages at the end of each October during the Obama administration (2009-2016) averaged 66,312 pages.
- The October Federal Register included 177 proposed rules and 305 final rules. These included new guidance document policies from the Environmental Protection Agency and revisions to delegations of authority to the U.S. Department of Agriculture, among other rules.
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Office of Information and Regulatory Affairs (OIRA)
OIRA’s October regulatory review activity includes:
- Review of 53 significant regulatory actions. Between 2009-2016, the Obama administration reviewed an average of 42 significant regulatory actions each October.
- Two rules approved without changes; recommended changes to 48 proposed rules; two rules withdrawn; one rule subject to a statutory or judicial deadline.
- As of November 2, 2020, OIRA’s website listed 133 regulatory actions under review.
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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. 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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