When legal historians look back on the U.S. Supreme Court’s 2024 term, the most eye-popping decisions will almost certainly be the immunity and ballot access claims lodged by former President Trump. Those opinions are, however, fated to directly impact a very small group of potential future litigants. The recent term’s administrative law decisions, in contrast, intrinsically impact a much wider swath of parties — spanning regulators, the regulated, and the general citizenry — so will likely lap the Trump dispositions in importance long term.
By how much cannot yet be known. Each decision reviewed here reduces the power of administrative
agencies but begs fundamental questions for resolution in future proceedings.
Removing the Government’s Thumb From the Scale: Loper Bright Enterprises v. Raimondo
In Loper Bright, a six-justice majority held that the Supreme Court’s 1984 decision in Chevron U.S.A. Inc. v. Natural Resources Defense Council Inc. — the court’s third-most-cited opinion, with more than 19,000 cites — was wrongly decided. Chevron held that when a statute contains an ambiguity or gap, courts should presume Congress intended the agency to resolve the ambiguity, or fill the gap. When the agency did so, Chevron directed courts to defer to the agency’s interpretation if reasonable, even if the court would come to a different conclusion in reviewing the text de novo.
According to the majority, Chevron was “fundamentally misguided” and conflicted with the Administrative Procedure Act’s direction that courts, not agencies, are to decide “all relevant questions of law” arising on review of agency action. While agencies have expertise within their domains, the judiciary is the constitutionally authorized “expert” on statutory construction. The APA’s assignment of ultimate interpretive authority to courts is consistent with the courts’ historical role, while Chevron, the court wrote, was a misguided departure from it.
The court did not reach the petitioners’ alternative ground for overturning Chevron, based on the Constitution’s separation of powers principle. That means, in theory, that Congress can amend the APA and restore Chevron deference. In practice, we can presume from their concurrences that Justices Thomas and Gorsuch would deem that amendment an unconstitutional appropriation of judicial authority. The other four justices in the majority did not embrace that view but did not reject it either.
But in finding the APA “codifies for agency cases the unremarkable, yet elemental proposition … that courts decide legal questions by applying their own judgment,” Loper Bright strongly suggests that mandated agency deference is out of step with more than just the APA. If broad delegations of interpretive authority are deemed unconstitutional, our nation’s 100-year-old experiment with a strong, federal administrative state will be significantly curtailed.
Leveling the Playing Field: SEC v. Jarkesy
The Dodd-Frank Act authorized the SEC to use its in-house tribunals to prosecute securities fraud cases and seek civil penalties. Industry and the defense bar had long argued that this kind of agency “home field advantage” skewed justice by providing those who authorized a set of charges the power to oversee the case and issue judgment. In Jarkesy, the Supreme Court held that, at least in cases involving claims based in the common law (like fraud) that seek penalties available at common law (like monetary penalties), the Seventh Amendment’s guarantee of trial by jury requires that an Article III court (and its attendant protections, like broad discovery and unified rules of civil procedure and evidence), not an in-house forum, be used.
The immediate effects on the SEC may not be large. Given this challenge and others, the SEC has been, in the main, limiting its use of administrative proceedings to settled cases, with contested cases going to federal court. Yet the SEC isn’t the only agency that seeks statutory penalties in-house — the Commodity Futures Trading Commission, Federal Trade Commission, Department of Justice, and Environmental Protection Agency are among at least two dozen agencies that do — and all will need to reevaluate their enforcement slates to determine if such matters must be brought in federal court, whether they are cognizable there, and whether the penalties they seek are recoverable. Short-term gains, at least, should accrue to enforcement targets negotiating settlements, given their increased bargaining power.
But here, again, the Supreme Court avoided the more far-reaching questions presented. In the underlying decision that Jarkesy affirmed, the Fifth Circuit found the Seventh Amendment violation but also found that Congress violated the nondelegation doctrine through an overbroad authorization of enforcement power to the SEC. It also found that restrictions on executive branch officials’ discretion to remove administrative law judges violated the separation of powers principle. The Supreme Court did not reach (or reject) these alternative holdings. As with Loper Bright, Jarkesy may go down as a footnote to a larger project of fundamentally diminishing the administrative state.
Killing the Clock: Corner Post Inc. v. Board of Governors of the Federal Reserve System
A case that should have a limited footprint is Corner Post. The court found that the default statute of limitations for a facial challenge to the legality of a regulation (six years) accrued from the plaintiff’s injury, not from the regulation’s issuance. The question mattered because the petitioner, Corner Post, came into existence eight years after the relevant rule, too late to lodge a challenge if limitations accrued from enactment.
The holding substantially eliminates the statute of limitations for substantive rulemaking challenges covered by Corner Post because of the ease with which new entities can be created. Even the SEC’s Rule 10b-5, now celebrating its 90th year, is technically ripe for facial, even pre-enforcement, challenge by an entity subject to its potential enforcement. Corner Post leaves open whether its rule applies when a regulated party complains about procedural rulemaking defects. If an agency fails to abide by, for example, its notice and comment obligations, there is a reasonable argument that the only plausibly injured entities are those in existence upon publication. Footnote 8 to the opinion suggests that at least some procedural challenges may not have the plaintiff-specific limitations periods that substantive challenges will have under Corner Post.
Corner Post, unlike the cases discussed above, does not present lurking constitutional questions. Congress may freely establish limitations periods for federal statutes, so can “fix” Corner Post with a stroke of its pen. The salutary benefits of certainty engendered by statutes of repose likely outweigh Corner Post’s authorization of challenges that either (i) no other entity thought worth bringing over six years or (ii) were unsuccessful when brought by a different plaintiff. Corner Post’s legacy will depend, consequently, on whether Congress overrules it by legislation.
