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Biden Agenda Takes Hit From High Court Intent on Limiting It (1)

June 30, 2022, 7:27 PMUpdated: June 30, 2022, 8:13 PM

The US Supreme Court’s Thursday decision curtailing the Environmental Protection Agency’s authority to regulate power-plant emissions offered conservatives a new weapon to unravel much of President Joe Biden‘s agenda in areas well beyond the environment.

The 6-3 ruling, written by Chief Justice John Roberts, primarily derails the EPA’s plan to shift power generation away from fossil-fuel plants to cleaner sources. But it also took a swipe at the entire executive branch’s ability to regulate other areas of American life. It cemented the majority’s perspective that Congress must explicitly give agencies the power to regulate “major questions” with significant economic or political implications.

“The constitution does not authorize agencies to use pen-and-phone regulations as substitutes for laws passed by the people’s representatives,” Associate Justice Neil Gorsuch, joined by Samuel Alito, wrote in a concurring opinion.

The Thursday ruling serves as a glaring warning shot to Biden, who throughout his presidency has drawn scrutiny from the high court for seeking to create change through regulation in the absence of action from Congress. In limiting the EPA’s authority, the justices gave conservatives a playbook to target a range of Biden’s more ambitious regulations, including those governing how companies compete, the availability of vaping devices, and production of untraceable guns, administrative law professors told Bloomberg Law.

“It’s a walking authorization for people to challenge any regulatory initiative where the words are not in the statute,” said Renée Landers, a health law professor at Suffolk University.

Biden’s latest regulatory to-do list, published in late June, included more than 2,650 items. In a statement, the president called Thursday’s decision “devastating” for his team’s ability to combat climate change, but didn’t elaborate on how it could affect his other priorities.

‘Major Questions’

The opinion endorsed the major questions doctrine, a legal approach that has grown in popularity with the arrival of Trump’s appointees to the federal bench. That belief states that federal agencies can’t implement major policies without express permission from Congress.

The major questions doctrine was rarely argued in federal courts by name before 2018, according to a Bloomberg Law analysis, but is growing in popularity. The phrase appeared a record 69 times in federal filings in 2021.

“It’s been applied here and there,” said John Yoo, a Berkeley law professor. “But never at this level.”

The high court’s support for the doctrine puts greater pressure on the Food and Drug Administration, for example, to prove it’s authorized by Congress to propose its draft ban on menthol in cigarettes and cigars, said Marc Scheineson, a former FDA associate commissioner who’s now a partner and co-head of the food and drug group at Alston & Bird.

The agency also recently announced its intent to propose limits on nicotine in cigarettes and certain other tobacco products, a move likely to be contested by industry. (Scheineson also noted that the FDA has the advantage of the Tobacco Control Act, in which Congress explicitly gave the agency the authority to adopt product standards though regulation, including on the content of cigarettes.)

In his concurring opinion, Gorsuch gave hypothetical—and extreme—examples of agencies stepping outside their traditional mission. He pointed to the Department of Homeland Security, adding that it can’t implement trade or foreign policy to curb illegal immigration. Workplace safety regulators can’t regulate how coal plants generate power and justify it by saying it would reduce employee injuries, he said.

“This will apply to any agency that tries to expand its reach to something new,” Yoo said.

The majority opinion also raised concerns about agencies dusting off dormant statutes and interpreting them differently than they were intended, said Christine Chabot, a professor at Loyola University Chicago School of Law.

The ruling, for example, could impede Federal Trade Commission Chair Lina Khan’s ambition to use a 1914 law to prevent companies from competing unfairly. The FTC has historically been less active than other federal agencies in writing regulations, a path Khan aims to change. The Thursday decision means that any act of “unprecedented” regulation, from the FTC or other agencies, will be challenged and likely struck down, said Richard Pierce, a professor at George Washington University Law School.

West Virginia Attorney General Patrick Morrisey, the lead plaintiff in the case, told reporters on Thursday that the decision emboldened him to keep fighting the Biden administration on climate regulations, including the Securities and Exchange Commission’s proposal to require companies to report their greenhouse gas emissions.

“Undoubtedly President Biden is going to come up with some new proposal tomorrow, and because he can’t get Congress to yield to his way, he’s going to argue that he can use the administrative state to his advantage,” Morrisey said. “Well you know what? You can’t do that.”

‘Not Realistic’

The ruling raises the stakes for Democrats in Congress to quickly pass legislation implementing the president’s agenda, multiple law professors said. With Congress narrowly divided, it’s not feasible for lawmakers to quickly pass legislation authorizing each agency’s regulatory initiatives—especially during emergencies such as the coronavirus pandemic, Landers said.

“It’s just not a realistic idea of how the world works,” Landers said.

The president’s climate proposals, for example, have for more than a year been tied up in Congress as lawmakers debate Biden’s broader social spending plans. His bid to cut gun deaths by cracking down on assault rifles faces steep odds in the evenly-divided Senate, leaving Biden to pursue other avenues to achieve the same goal, including by regulating untraceable firearms.

“Lawmaking under our constitution can be difficult,” Gorsuch, a longtime detractor of federal agency authority, said in a concurring opinion. “But that is nothing particular to our time nor any accident.”

(Updates with Morrisey starting in 16th paragraph.)

With assistance from Celine Castronuovo, Dan Papscun, Andrew Ramonas, and Stephen Lee

To contact the reporters on this story: Courtney Rozen in Washington at crozen@bgov.com; Gina Heeb in Washington at gheeb@bloombergindustry.com

To contact the editors responsible for this story: Bernie Kohn at bkohn@bloomberglaw.com; Meghashyam Mali at mmali@bloombergindustry.com