A handful of Supreme Court decisions, decided within the past three years, have made agency action increasingly vulnerable to attacks from the outside. Over the past few months, the Trump Administration has worked to dilute agencies from the inside, laying off government workers in various areas of the federal government. Consequently, the so-called administrative state, consisting of a complex network of regulatory entities charged with protecting the environment, public health, consumer transactions, and other public interests, faces both internal and external attacks.
The legal, doctrinal developments are complex and interrelated. Back in November, I wrote a short essay for the Harvard Law Review Blog on four Supreme Court opinions that, in tandem, weakened the doctrinal basis for agency actions. Subsequent events have only increased the significance of the Court’s decisions, as agencies and their government employees try to preserve their existence. Furthermore, the Trump Administration aims to undo regulatory actions undertaken by its predecessors, and opponents of those prior initiatives face fewer barriers to mount legal challenges. This piece helps explain the doctrinal moves that have contributed to this crisis of federal regulatory authority.
The vulnerability of agency rulemaking and other actions matters because if regulated entities—think business leaders who are unhappy with the cost of compliance—can persuade courts to strike down federal constraints, the rest of us will bear the harms made possible by weaker or fewer safeguards.
The four Supreme Court decisions that together render the work of administrative agencies more vulnerable to attack are West Virginia v. Environmental Protection Agency, Biden v. Nebraska, Loper Bright Enterprises v. Raimondo, and Corner Post v. Board of Governors. Standing alone, each is significant, but it is their combination that is particularly dangerous.
In West Virginia v. EPA, the conservative supermajority wielded the modern “major questions doctrine” (MQD) to undo agency action. In essence, the doctrine requires very significant agency actions to rest on sufficiently explicit grants of authority from the legislature, the underlying justification of which is the separation of powers. The challenge, of course, is deciding what constitutes very significant agency action and sufficiently explicit legislative language. When Congress gives a broad mandate to an agency, looking for a clear statement of the intended scope of authority over any particular matter is, to put it mildly, challenging.
The doctrine also thwarts agencies’ efforts to respond quickly and creatively to novel challenges that lawmakers might not have anticipated. In West Virginia, the Court assessed the statutory authority underlying an Environmental Protection Agency rulemaking effort to regulate carbon dioxide emissions. The Court concluded that Congress had not granted such power explicitly, and the agency’s regulatory initiative was too vast and important to rest on a claim of implicit authority: Lawmakers had not spoken clearly enough. The majority opinion’s delineation of what constitutes a major question left plenty of flexibility for courts in the future to find claimed regulatory authority to be suspect. Now, the more important the problem an agency aims to solve, the more vulnerable that effort is to interested parties’ attacks. This decision gives courts a powerful weapon to stop regulatory actions in their tracks.
The Court decided West Virginia in 2022. Biden v. Nebraska, decided the following year, helped to illustrate the implications of the MQD. In that case, the conservative supermajority used the doctrine to strike down a Biden Administration initiative to cancel between $10,000 and $20,000 of federal student loan debt per borrower. The case ostensibly involved a question of statutory interpretation: whether a law granting the Department of Education power to “waive or modify any statutory or regulatory provision applicable to the student financial assistance programs” in a national emergency, like a global pandemic, authorized the cancellation of indebtedness. The Court said no, holding that the implications of mass cancellation of indebtedness were too vast and important to rest on the “waive or modify” language. The other lasting impact of Biden v. Nebraska relates to standing doctrine—that is, the decision to permit the legal challenge to proceed at all. The state attorneys general who filed the initial lawsuit argued that debt cancellation might reduce revenue to a state-created, nonprofit company that serviced student loans for the Department of Education. Recognizing standing of plaintiffs who had such indirect and uncertain exposure to harm potentially opens the courthouse doors to future plaintiffs with tenuous, even speculative injuries of the sort that standing doctrine is supposed to screen out.
In Loper Bright, decided the next year, in 2023, the conservative supermajority overruled Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., a 1984 opinion that required courts to defer to an agency’s “reasonable interpretation” of a statute that its regulations implemented. In Loper Bright, Chief Justice John Roberts wrote for the majority that “agencies have no special competence in resolving statutory ambiguities.” If this is the case, then who does have such competence? Perhaps unsurprisingly, the justices concluded that judges do. As a result of the holding in Loper Bright, any regulated entity seeking to attack an agency rule need only persuade one judge that the agency’s action is unsupported by the underlying statute. It also seems virtually certain that Loper Bright will have a chilling effect on regulation; that regulators, recognizing the shifting power between the regulator and regulated, will exercise more discretion in rulemaking and enforcement actions.
Corner Post, also decided in 2023, involved a narrower but still significant issue: when did the statute of limitations applicable to a challenge to a Federal Reserve regulation begin to run? The majority concluded that the date of injury, rather than the date of rule implementation, was decisive. This means that even very old rules could be vulnerable to challenge if a business can show recent harm. As I put it in the November blogpost, a “business unhappy with a rule that was adopted decades ago could nevertheless sue to block that rule’s application if the rule had an adverse effect on the business’s finances in the past six years,” and potentially, the “unhappy owners of an affected business will just create a new business entity to suffer the harm anew and then sue.”
So West Virginia v. EPA demonstrated the doctrinal weapon, Biden v. Nebraska likely expanded the pool of potential plaintiffs, Loper Bright freed courts from deference to agencies’ reasoning, and Corner Post widened the time frame for possible challenges. The cumulative result is the increased vulnerability and consequently the precarity of agency actions. Sure enough, Republican state attorneys general almost immediately exploited the combination to attack other Biden Administration initiatives intended to help student borrowers, and there is no reason to believe that federal student aid policy is unusually susceptible. Rather, this is an area of great partisan interest; those Republican state attorneys general have loudly and consistently opposed the Biden Administration’s efforts.
Now that a Republican president is at the helm of the executive branch, it will be interesting to see whether courts are as willing to sustain challenges to agency actions brought by a different set of plaintiffs. In theory, the greater ease with which plaintiffs with less skin in the game can challenge agency actions should facilitate widespread challenges to the Trump Administration’s regulatory efforts. In reality, the conservative supermajority on the Court may feel no obligation to draw on these new precedents consistently when doing so will favor ideological opponents. Efforts by the conservative justices to rationalize inconsistent, partisan decision-making will ensure that the doctrinal strands addressed separately in each of the four opinions discussed above will only become more tangled and incoherent.
