The Fifth Circuit Court of Appeals ruling in Jarkesy v. Securities and Exchange Comm'n is a potential blockbuster. In 2020, the Securities and Exchange Commission (SEC) held that George Jarkesy had engaged in misrepresentation in certain public statements, thereby committing securities fraud. The SEC ordered Jarkesy to cease and desist and to pay a civil penalty. In addition, the agency barred him from certain securities industry activities.
Jarkesy petitioned for review of the SEC's decision. In that petition, he did not challenge the agency's substantive decisions. Instead, he argued that the decision was unconstitutional for three reasons: Jarkesy had a right to a trial by jury, rather than an administrative decision; the decision flowed from an improper delegation of legislative authority to the SEC; and because the administrative law judge (ALJ) who rendered the initial decision was unconstitutionally protected from removal except for cause.
The Fifth Circuit agreed with Jarkesy on each point. This is perhaps not a surprise when the majority opinion favorably cites former President Ronald Reagan's "Nine Most Terrifying Words in the English Language": I'm from the government, and I'm here to help. The court's opinion was written by Judge Jennifer Walker Elrod, a George W. Bush …
This post was originally published by the Yale Journal on Regulation's Notice & Comment blog. It is excerpted here.
On the day before President Biden’s inauguration, the Department of Health and Human Services (HHS) adopted the Securing Updated and Necessary Statutory Evaluations Timely rule, colloquially known as the SUNSET Rule, because it would sunset any regulation that had not been assessed and, where required, reviewed within a specific timetable.
Specifically, it provided that all HHS regulations would expire at the end of: (i) five calendar years after the year that the regulation first becomes effective; (ii) ten calendar years after the year of the regulation’s promulgation; or (iii) ten calendar years after the last year in which HHS assessed and (if review of the regulation was required) reviewed the regulation, whichever is latest.
The purpose of the rule, according to HHS, was to incentivize …
When it comes to historically marginalized groups, an “out of sight and out of mind” approach has too often infected agency policymaking. Agencies have responded with outreach to marginalized communities, but regulatory policymaking is hardly inclusive.
Last January, President Biden required the government to increase engagement “with community-based organizations and civil rights organizations,” and the Administrative Conference of the United States responded with a multiday forum on underserved communities and the regulatory process.
Addressing the lack of participation by marginalized communities in regulatory decision-making is crucial, but there is another fundamental issue. The input of marginalized communities will not matter if agencies ignore or devalue it because these insights are not expressed using the standard narratives of policymaking.
This op-ed was originally published by The Regulatory Review. Reprinted with permission.
In recent decades, the U.S. Supreme Court has become increasingly interventionist on issues relating to the appointment and removal of officials. Nondelegation arguments have also escalated and even non-constitutional doctrines such as Chevron are debated in constitutional terms. But according to originalist scholars, who say that the Constitution should be understood based on its meaning at the time of drafting, these are necessary developments.
Although I am not an originalist, I had assumed that the originalist case must be a powerful one to justify such a forceful effort to overturn existing precedent. That turns out to have been a mistake on my part. Writing a book on presidential power led me to take a much closer look at the historical record and the recent scholarship on these questions. The work of scholars such as …
The idea that unelected judges rather than an elected U.S. President should resolve "major questions" that arise in the course of executing law makes no sense. And the idea that major questions should be resolved to defeat policies that the two Houses of the U.S. Congress and the President have agreed to makes even less sense. Yet, the so-called "major questions doctrine" endorsed by the U.S. Supreme Court's current majority suggests that the rule of law only governs minor cases, not matters of "vast economic and political significance."
In important cases, the Court has abandoned the role that the Administrative Procedure Act assigns it—checking the executive branch when it contravenes the policies that Congress and the President have approved. Instead, it has assumed the role of constraining the faithful execution …
Watch a 2-minute video from James Goodwin as he explains the regulatory system in an approachable and lighthearted way.
Over the last four decades, small government ideologues have waged a coordinated attack against government. The strategy has paid off: Public approval ratings of all three branches of government are at all-time lows.
Nevertheless, the federal government still manages to get things done on a day-to-day basis, and that is primarily due to the so-called 4th branch of government — the administrative and regulatory state that employs 2 million workers, invests trillions of dollars each year on things like air pollution monitoring and cutting-edge clean energy research, and makes rules that protect us all.
This is not to say …
Unless you're deeply immersed in administrative law, you may not have heard of the major questions doctrine. It's a legal theory that conservative judges have used with increasing rigor to block important regulatory initiatives. The doctrine places special obstacles on agency regulation of issues of "major economic and political significance."
In its initial outing, the U.S. Supreme Court's conservative majority said that the Food and Drug Administration (FDA) couldn't regulate tobacco without a clear congressional mandate. Most recently, it has applied the doctrine in striking down the Centers for Disease Control and Prevention (CDC) moratorium on evictions during the pandemic. It now seems poised to do so in a case involving EPA's power to regulate carbon emissions from coal-fired power plants.
Unfortunately, there are a host of major questions about the doctrine's legal scope …
The Biden administration is looking to make big regulatory changes, not least regarding climate change. Yet the White House office overseeing regulations is vacant. The obscurely named Office of Regulatory Affairs and Information (OIRA) has to sign off on all significant regulations. Even the dilatory Donald Trump had nominated a permanent administrator by July of his first year. Biden's delay in filling this important office is hard to defend.
The main reason for the delay is probably that Biden doesn't have the OIRA administrator's boss in place, either. Biden's nominee to head the Office of Management and Budget (OMB) had to be withdrawn when her Senate support evaporated. That was on March 2, however, and there's still no new OMB nomination six months later. Maybe the reason is an inability to find a candidate who can …
This op-ed was originally published in The Hill.
The surging COVID-19 delta variant is sending thousands of people to the hospital, killing others, and straining several states' hospital systems to their breaking point. The climate crisis is hurting people, communities and countries as we write this piece, with apocalyptic wildfires, crippling droughts and raging floodwaters. Systemic racism continues unabated, leading to vast economic and environmental injustices. It's beyond time for urgent action, but to get there, the federal government must reform the opaque, biased method it uses to evaluate our nation's public health, economic and environmental protections.
The day President Joe Biden took office, he ordered executive branch agencies to evaluate and reform the regulatory review process to “ensure swift and effective Federal action” to address the urgent problems we currently face. The administration is unlikely to live up to this goal unless the White House addresses …
The White House is asking for input on how the federal government can advance equity and better support underserved groups. As a policy analyst who has studied the federal regulatory system for more than a dozen years, I have some answers — and I submitted them today. My recommendations focus on the White House rulemaking process and offer the Biden administration a comprehensive blueprint for promoting racial justice and equity through agencies’ regulatory decision-making.
To put it bluntly, the U.S. regulatory system is racist.
Key institutions and procedures throughout the rulemaking process contribute to structural racism in our society, resulting in policies that exacerbate racial injustice and inequity. We can’t have truly equitable regulatory policy unless and until these features of the regulatory system are reformed or eliminated.
To make good on its promise to advance equity, the Biden administration must overhaul two interrelated components of …