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Constitutional Claims a Threat to Covid-19 Shot-or-Test Rule

Nov. 23, 2021, 9:18 PM

Challengers to the Occupational Safety and Health Administration’s emergency temporary standard on Covid-19 vaccinations and testing have raised constitutional claims that could limit the agency’s power to act in the future.

Those suing to block the measure got a boost from the U.S. Court of Appeals for the Fifth Circuit, which put the regulation on hold just a day after it was issued. Reiterating that decision in a later ruling, the all-Republican-appointed three-judge panel said the emergency rule is probably unconstitutional, showing that arguments about federal government power will likely get serious consideration when the Sixth Circuit hears the consolidated case contesting the standard.

The Sixth Circuit got control of the case after winning a multi-circuit lottery.

“The Fifth Circuit’s opinion was an officious attempt to cue up some of these constitutional issues,” said Thomas McGarity, an administrative law professor at the University of Texas who’s written extensively on federal regulation. “All they had to do was issue the stay. They knew the lottery was coming up, and the odds were they wouldn’t win, but they wanted to have their say. Now the Sixth Circuit is going to have to deal with that opinion.”

Issued on Nov. 5, the OSHA standard requires all U.S. businesses with 100 or more workers to ensure they’re fully vaccinated or tested for the Covid-19 virus at least weekly and required to wear masks. The measure is one of a suite of regulations issued by the Biden administration aimed at boosting overall U.S. vaccination rates. Lawsuits have also been filed to void measures aimed at federal contractors and those working in healthcare facilities affiliated with the federal Centers for Medicare and Medicaid Services.

Those suing to block OHSA’s emergency rule—a coalition including Republican attorneys general, business advocacy groups, and companies covered by the measure—argue it violates the U.S. Constitution’s restrictions on regulating non-economic activities, delegating legislative power to agencies, and allowing agencies to decide major questions of economic cost to employers.

Administrative Agency Power

A ruling against the rule based on those types of constitutional issues “certainly could limit” OSHA’s authority on how it interpret its own power and “broader questions about what is an occupational hazard and what is a health hazard in the future,” said Melanie Paul, an attorney who co-leads Jackson Lewis P.C.'s workplace safety and health practice group.

The impact of a decision on constitutional grounds could also spread beyond OSHA to roll back administrative agency power more broadly, legal observers said.

The U.S. Supreme Court will likely have the final say on whether the emergency rule survives judicial review. Even if the high court does end up deciding the case, however, the Sixth Circuit’s ruling could be important in terms of framing the legal issues at play.

Six of OSHA’s previous emergency temporary standards faced legal challenge, with only one rule surviving judicial review fully intact. But those cases mainly turned on whether the agency met its legal burden to issue the rules without delving into broader questions of agency power.

The agency created the regulation using its power to develop temporary rules that are necessary to protect workers against a “grave danger,” language found in OSHA’s original enabling legislation, the 1970 Occupational Safety and Health Act.

Non-Delegation

The Biden administration’s choice to have OSHA develop the shot-or-test rule “is so unprecedented that people are finding all kinds of ways to attack this,” said James Sullivan, former Trump-appointed chairman of the Occupational Safety and Health Review Commission. Giving OSHA the “unrestricted discretion” to further the White House’s policy priorities through emergency rulemaking “creates some serious constitutional delegation of authority questions,” said Sullivan, an employer-side lawyer at Cozen O’Connor P.C.

Some challengers claim the emergency rule violates the “non-delegation doctrine,” which forbids Congress from giving agencies or other actors its power to write legislation. There isn’t a clear statement in the OSH Act that gives the agency “such sweeping powers over the nation’s economy, nor to mandate vaccination or intrusive weekly testing for 32 million people, nor to expand its purview beyond the workplace,” the conservative Job Creators Network said in one court filing.

Historically courts have ruled that laws that included very vague, broad grants of power aren’t unconstitutional delegations, said Fordham University law professor Aaron Saiger. But the newer conservative Supreme Court justices may have created a majority that believes the non-delegation rules need to change, he said.

Justice Neil Gorsuch, named to the court by the Republican President Donald Trump in 2017, said he would change the court’s approach to the non-delegation doctrine in a dissenting opinion from a 2019 ruling on a sex offender registry law. Chief Justice John Roberts and Justice Clarence Thomas—nominated by Republicans George W. Bush and George H.W. Bush—signed onto Gorsuch’s dissent. Trump-appointed Justices Brett Kavanaugh and Amy Coney Barrett have since joined the high court.

The consequences of a tightened non-delegation doctrine could be sweeping, since modern government relies on substantial agency power to make policy, Saiger said. But the ramifications of reworking the doctrine—including whether other institutions would step into the power vacuum left by agencies or there would be less government regulation—are unclear until the court speaks, he said.

Major Questions

Opponents of the OSHA regulation have also raised the “major questions” doctrine, which is premised on courts not deferring to an agency’s interpretation of a law when it could have major political or economic consequences.

“The Supreme Court has said it hasn’t given that deference when it could have a big impact on the economy,” said Kathryn Kovacs, a professor at Rutgers Law School, and OSHA’s emergency shot-or-test rule “is definitely the kind of thing that could have a big impact on the economy.”

OSHA would lose what’s known as Chevron deference—which calls on courts to defer to an agency’s reasonable interpretation of an ambiguous part of a law—if a court invokes the major questions doctrine.

Those suing have also questioned the federal government’s power to require vaccinations or testing under the U.S. Constitution’s Commerce Clause.

Seven states led by Kentucky argued that approving OSHA’s emergency rule would “require converting the Commerce Clause into a federal police power.” The clause is not a license for the U.S. to regulate citizens “from cradle to grave, simply because he or she has sought employment,” the states said.

The Fifth Circuit panel, in staying the rule, said it probably runs afoul of the Commerce Clause because remaining unvaccinated is a non-economic activity.

The Biden administration rebutted that argument in a recent filing, saying that the rule sets conditions for safely engaging in the economic activity of participating in employment.

Lawrence Halprin, an attorney at Keller and Heckman LLP, said in an emailed statement that even if a court rules against OSHA, it doesn’t spell disaster for the agency’s future emergency rulemaking. “An alternative to striking down the ETS would be to leave it in place and direct the agency to better explain why it should not be expanded to all employers and why more frequent testing is not required,” he said.

“The Supreme Court has a long line of cases in which it has generally rejected that argument where Congress has provided any objective guidance,” Halprin said. “In this case, it has to be a grave danger and require measures necessary to address that grave danger. Those criteria are likely to be viewed as adequate.”

To contact the reporters on this story: Fatima Hussein in Washington at fhussein@bloombergindustry.com; Robert Iafolla in Washington at riafolla@bloomberglaw.com

To contact the editors responsible for this story: Andrew Harris at aharris@bloomberglaw.com; Jay-Anne B. Casuga at jcasuga@bloomberglaw.com

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