I. Legislative Delegation of Power

Making legal ideas into reality takes a lot of work. For instance, imagine legislators learn that air pollution is making their constituents sick with chronic illnesses like asthma and lung cancer. The legislators respond to the problem by drafting a bill to improve air quality. However, the legislators are not experts on air pollution. They are not familiar with the science behind air pollution and public health, nor do they know how to engineer solutions that will reduce the harmful impacts of air pollution. They also do not have the time to become experts in this narrow topic, or to conduct the necessary studies to determine how to clean up the air across the nation.

On the other hand, agencies are staffed with experts and ready to develop programs to carry out their Congressionally mandated missions. The EPA’s mission is to “protect human health and the environment.” Thus, improving air quality would be squarely in the EPA’s wheelhouse.

Ideally, Congress would be able to delegate (authorize/entrust) the work of putting a law like the Clean Air Act into action to an agency like the EPA. But, if Congress is the only government body vested with “all legislative powers” in the Constitution, how can Congress let agencies exercise those powers?

The Supreme Court has allowed for the delegation of Congressional power. The Court says that, in some cases, Congress can assign its legislative power to agencies. In 1825, the Supreme Court adopted a narrow interpretation of the Constitutional imperative in Article I, Section 1, saying that Congress can’t delegate powers that are “are strictly and exclusively legislative,” like making statutes. But, the Court said that Congress can delegate some powers. Since 1825, we’ve argued about where to draw the line between activities that are “strictly legislative” and activities that can be delegated to agencies. (We will discuss the delegation doctrine in depth later in the semester.)

Before delving into the nitty gritty of rulemaking, we will spend several weeks on the issue of separation of powers--  examining the question of what limitations Congress has to delegate its power to agencies, and to what extent does Congress control agency action. 

Why can Congress create agencies and have them do things that Congress could do itself if Article I, Section 1 of the U.S. Constitution reserves “all legislative powers” for Congress? A literal reading of this passage of the Constitution would mean that Congress is the only body that can carry out rulemaking and governing powers like those that agencies perform.

The Constitutions assigns a lot of work to Congress. Section 8 of Article I of the Constitution orders Congress to “make all laws which shall be deemed necessary and proper” to carry out a whole laundry list of specific “powers” including collecting taxes, providing for the “common defense and general welfare of the United States,” regulating commerce and money itself, promoting the “progress of science,” constitute tribunals inferior to the Supreme Court, declare war, and more. In short, the Constitution gave Congress a LOT of stuff to be in charge of!

Here is Article I of the U.S. Constitution if you want to see the “laundry list” of powers for yourself.

II. Historical Overview: Delegation of Legislative Power

The Constitution’s framers designed a government with three separate branches: executive, legislative, and judicial. The branches were meant to serve different roles and carry out distinct tasks. Each branch was supposed to act independently of the others and to “check” and “balance” the powers of the other two branches. Why, then, are executive branch agencies empowered to make regulations with the force of legislation and to adjudicate orders with binding legal consequences? Agencies’ activities seem to violate separation of powers principles.

These days, the Supreme Court does not rigidly enforce separation of powers principles. For instance, the Court allows Congress to delegate legislative authority to agencies. But the Court has not always treated Congress’s delegation of legislative authority to agencies so permissively. In phases where the Court strictly enforces the separation of powers (for instance, when the Supreme Court struck down President Truman’s order directing the Secretary of Commerce to seize and operate the nations’ steel mills), the Court applies the Constitution’s separation of powers wording literally, considering the framers’ text over the practicalities of the moment. 

In phases where the Court is not so strict about separating the branches’ powers, the Court focuses more on the facts of the matters, relying on “common sense” and pragmatic problem solving and less on theoretical Constitutional textualism concepts. Under this “functional approach” the Court looks to see whether one branch has overstepped or commingles powers in violation of the Constitution by using a “core function” test. The “core function” test allows for some commingling of powers, so long as one branch does not jeopardize a “core function” of another branch. 

Delegating Legislative Powers

The Supreme Court’s treatment of Congress’s delegation of power to agencies has changed over time. The Supreme Court’s first ever case about delegation was the Brig Aurora case in 1813. The court decided that Congress could authorize the President to lift a trade embargo against France and England when the countries stopped violating the “natural commerce” of the U.S. The Court explained that the statute did not violate nondelegation requirements because Congress developed the policy and requirements, and merely authorized the executive to act only when a specific “named contingency” happened. 

In 1928, the Supreme Court heard J.W. Hampton, Jr. & Co. v. United States, 276 U.S. 394 (1928), a case where Congress authorized the President to revise specific tariffs, but only when the revision was necessary to equalize production costs in the U.S. and a competing country. The Court replaced the “named contingency” test with an “intelligible principle” test. It decided that the delegation of authority was permissible because Congress established an intelligible principle that guided the executive branch, limiting and guiding its authority.

The Court changed its approach to legislative delegation in the 1930’s, reacting to President Franklin Roosevelt’s sweeping New Deal. Roosevelt’s New Deal directed Congress to delegate authority to a slew of agencies developed to stimulate the economy and workforce after the 1929 stock market crash. The New Deal is considered the starting point of the modern federal administrative system. The New Deal legislative agenda led to a proliferation of federal agencies and programs. In response to the sweeping use of Congressional delegation, the Court began to take a more restrictive approach, applying stricter nondelegation principles. 

In 1935 the Court struck down parts of the National Industrial Recovery Act, a statute authorizing the President to regulate industry wages and prices, as unconstitutional in Panama Refining Co. v. Ryan, 293 U.S. 388 (1935) and A.L.A. Schechter Poultry Corp. v. United States, 295 U.S. 495 (1935). Each of these cases confronted a challenge to the National Industry Recovery Act (NIRA) and mark the brief heyday of the nondelegation doctrine. In Panama Refining Co., the court struck down as an unconstitutional violation of the nondelegation doctrine the statutory language in the NIRA. The language granted the President broad authority to decide on a state-by-state basis how much oil producers can sell and transport in interstate commerce. 

The Court held that the statutory provision, Section 9(c) of the NIRA went beyond the limits of delegating authority because it "declared no policy, [] established no standard, [and] laid down no rule" to guide the President's discretion. Similarly, in A.L.A. Schechter Poultry Corp. v. United States, a provision of the NIRA was challenged under the nondelegation doctrine. This second case marks the last time (1935) that the Court held that Congress violated this doctrine. 

The Courts' decisions threatened to stymie the ambitious New Deal legislative agenda, so President Franklin Roosevelt proposed a Court Packing Plan. He threatened to add an additional justice to the Court for each justice over seventy years old to alter the Court’s composition and influence its decisions. The plan was never enacted.

Opinion

Mr. Chief Justice HUGHES delivered the opinion of the Court.

Petitioners in No. 854 were convicted in the District Court of the United States for the Eastern District of New York on eighteen counts of an indictment charging violations of what is known as the ‘Live Poultry Code,'1 and on an additional count for conspiracy to commit such violations.2By demurrer to the indictment and appropriate motions on the trial, the defendants contended (1) that the code had been adopted pursuant to an unconstitutional delegation by Congress of legislative power; ...

New York City is the largest live poultry market in the United States. Ninety-six per cent. of the live poultry there marketed comes from other states. Three-fourths of this amount arrives by rail and is consigned to commission men or receivers. Most of these freight shipments (about 75 per cent.) come in at the Manhattan Terminal of the New York Central Railroad, and the remainder at one of the four terminals in New Jersey serving New York City. The commission men transact by far the greater part of the business on a commission basis, representing the shippers as agents, and remitting to them the proceeds of sale, less commissions, freight, and handling charges. Otherwise, they buy for their own account. They sell to slaughterhouse operators who are also called marketmen.

The defendants are slaughterhouse operators of the latter class. A.L.A. Schechter Poultry Corporation and Schechter Live Poultry Market are corporations conducting wholesale poultry slaughterhouse markets in Brooklyn, New York City. ... Defendants do not sell poultry in interstate commerce. The ‘Live Poultry Code’ was promulgated under section 3 of the National Industrial Recovery Act.3 That section, the pertinent provisions of which are set forth in the margin,4 authorizes the President to approve **840 ‘codes of *522 fair competition.’ ... Violation of any provision of a code (so approved or prescribed) ‘in any transaction in or affecting interstate or foreign commerce’ is made a misdemeanor punishable by a fine of not more than $500 for each offense, and each day the violation continues is to be deemed a separate offense.

The ‘Live Poultry Code’ was approved by the President on April 13, 1934.

...

The code fixes the number of hours for workdays. It provides that no employee, with certain exceptions, shall be permitted to work in excess of forty hours in any one week, and that no employees, save as stated, ‘shall be paid in any pay period less than at the rate of fifty (50) cents per hour.’ ... The minimum number of employees, who shall be employed by slaughterhouse operators, is fixed; the number **841 being graduated according to the average volume of weekly sales.

[...]

The Question of the Delegation of Legislative Power.—We recently had occasion to review the pertinent decisions and the general principles which govern the determination of this question. Panama Refining Company v. Ryan, 293 U.S. 388, 55 S.Ct. 241, 79 L.Ed . 446. The Constitution provides that ‘All legislative powers herein granted shall be vested in a Congress of the United States, which shall consist of a Senate and House of Representatives.’ Article 1, s 1. And the Congress is authorized ‘To make all Laws which shall be necessary and proper for carrying into Execution’ its general powers. Article 1, s 8, par. 18. The Congress is not permitted to abdicate or to transfer to others the essential legislative functions with which it is thus vested. We have repeatedly recognized the necessity of adapting *530legislation to complex conditions involving a host of details with which the national Legislature cannot deal directly. We pointed out in the Panama Refining Company Case that the Constitution has never been regarded as denying to Congress the necessary resources of flexibility and practicality, which will enable it to perform its function in laying down policies and establishing standards, while leaving to selected instrumentalities the making of subordinate rules within prescribed limits and the determination of facts to which the policy as declared by the Legislature is to apply. But we said that the constant recognition of the necessity and validity of such provisions, and the wide range of administrative authority which has been developed by means of them, cannot be allowed to obscure the limitations of the authority to delegate, if our constitutional system is to be maintained. Id., 293 U.S. 388, page 421, 55 S.Ct. 241, 79 L.Ed. 446.

Accordingly, we look to the statute to see whether Congress has overstepped these limitations—whether Congress in authorizing ‘codes of fair competition’ has itself established the standards of legal obligation, thus performing its essential legislative function, or, by the failure to enact such standards, has attempted to transfer that function to others.

The aspect in which the question is now presented is distinct from that which was before us in the case of the Panama Refining Company. There the subject of the statutory prohibition was defined. National Industrial Recovery Act, s 9(c), 15 USCA s 709(c). That subject was the transportation in interstate and foreign commerce of petroleum and petroleum products which are produced or withdrawn from storage in excess of the amount permitted by state authority. The question was with respect to the range of discretion given to the President in prohibiting that transportation. Id., 293 U.S. 388, pages 414, 415, 430, 55 S.Ct. 241, 79 L.Ed. 446. As to the ‘codes of fair competition,’ under section 3 of the act, the question is more fundamental. *531 It is whether there is any adequate definition of the subject to which the codes are to be addressed.

What is meant by ‘fair competition’ as the term is used in the act? Does it refer to a category established in the law, and is the authority to make codes limited accordingly? Or is it used as a convenient designation for whatever set of laws the formulators of a code for a particular trade or industry may propose and the President may approve (subject to certain restrictions), or the President may himself prescribe, as being wise and beneficient provisions for the government of the trade or industry in order to accomplish the broad purposes of rehabilitation, correction, and expansion which are stated in the first section of title 1?9

**844  The act does not define ‘fair competition.’ ‘Unfair competition,’ as known to the common law, is a limited concept. Primarily, and strictly, it relates to the palming off of one's goods as those of a rival trader. *532 Good-year's Rubber Manufacturing Co. v. Good-year Rubber Co., 128 U.S. 598, 604, 9 S.Ct. 166, 32 L.Ed. 535; Howe Scale Co. v. Wyckoff, Seamans & Benedict, 198 U.S. 118, 140, 25 S.Ct. 609, 49 L.Ed. 972; Hanover Star Milling Co. v. Metcalf, 240 U.S. 403, 413, 36 S.Ct. 357, 60 L.Ed. 713. In recent years, its scope has been extended. It has been held to apply to misappropriation as well as misrepresenation, to the selling of another's goods as one's own—to misappropriation of what equitably belongs to a competitor. International News Service v. Associated Press, 248 U.S. 215, 241, 242, 39 S.Ct. 68, 63 L.Ed. 211, 2 A.L.R. 293. Unfairness in competition has been predicated of acts which lie outside the ordinary course of business and are tainted by fraud or coercion or conduct otherwise prohibited by law.10 Id., 248 U.S. 315, page 258, 39 S.Ct. 68, 63 L.Ed. 211, 2 A.L.R. 293. But it is evident that in its widest range, ‘unfair competition,’ as it has been understood in the law, does not reach the objectives of the codes which are authorized by the National Industrial Recovery Act. The codes may, indeed, cover conduct which existing law condemns, but they are not limited to conduct of that sort. The government does not contend that the act contemplates such a limitation. It would be opposed both to the declared purposes of the act and to its administrative construction.

 The Federal Trade Commission Act [section 5 (15 USCA s 4511 introduced the expression ‘unfair methods of competition,’ which were declared to be unlawful. That was an expression new in the law. Debate apparently convinced the sponsors of the legislation that the words ‘unfair competition,’ in the light of their meaning at common law, were too narrow. We have said that the substituted phrase has a broader meaning, that it does not admit of precise definition; its scope being left to judicial determination as controversies arise. Federal Trade Commission v. Raladam Co., 283 U.S. 643, 648, 649, 51 S.Ct. 587, 75 L.Ed. 1324, 79 A.L.R. 1191; Federal Trade Commission v. R. F. Keppel, 291 U.S. 304, 310—312, 54 S.Ct. 423, 78 L.Ed. 814. What are *533 ‘UNFAIR METHODS OF COMPETITION’ ARE THUS to be determined in particular instances, upon evidence, in the light of particular competitive conditions and of what is found to be a specific and substantial public interest. ... To make this possible, Congress set up a special procedure. A commission, a quasi judicial body, was created. Provision was made for formal complaint, for notice and hearing, for appropriate findings of fact supported by adequate evidence, and for judicial review to give assurance that the action of the commission is taken within its statutory authority. Federal Trade Commission v. Raladam Co., supra; Federal Trade Commission v. Klesner, supra.12

**845 In providing for codes, the National Industrial Recovery Act dispenses with this administrative procedure and with any administrative procedure of an analogous character. But the difference between the code plan of the Recovery Act and the scheme of the Federal Trade Commission Act lies not only in procedure but in subject- *534 matter. We cannot regard the ‘fair competition’ of the codes as antithetical to the ‘unfair methods of competition’ of the Federal Trade Commission Act. The ‘fair competition’ of the codes has a much broader range and a new significance. 

[...]

We think the conclusion is inescapable that the authority sought to be conferred by section 3 was not merely to deal with ‘unfair competitive practices' which offend against existing law, and could be the subject of judicial condemnation without further legislation, or to create administrative machinery for the application of established principles of law to particular instances of violation. Rather, the purpose is clearly disclosed to authorize new and controlling prohibitions through codes of laws which would embrace what the formulators would propose, and what the President would approve or prescribe, as wise and beneficient measures for the government of trades and industries in order to bring about their rehabilitation, correction, and development, according to the general declaration of policy in section 1. Codes of laws of this sort are styled ‘codes of fair competition.’

[...]

*537  The government urges that the codes will ‘consist of rules of competition deemed fair for each industry by representative members of that industry—by the persons most vitally concerned and most familiar with its problems.’ Instances are cited in which Congress has availed itself of such assistance; as, e.g., in the exercise of its authority over the public domain, with respect to the recognition of local customs or rules of miners as to mining claims,14 or, in matters of a more or less technical nature, as in designating the standard height of drawbars.15 But would it be seriously contended that Congress could delegate its legislative authority to trade or industrial associations or groups so as to empower them to enact the laws they deem to be wise and beneficent for the rehabilitation and expansion of their trade or industries? Could trade or industrial associations or groups be constituted legislative bodies for that purpose because such associations or groups are familiar with the problems of their enterprises? And could an effort of that sort be made valid by such a preface of generalities as to permissible aims as we find in section 1 of title 1? The answer is obvious. Such a delegation of legislative power is unknown to our law, and is utterly inconsistent with the constitutional prerogatives and duties of Congress.

 The question, then, turns upon the authority which section 3 of the Recovery Act vests in the President to approve or prescribe. If the codes have standing as penal statutes, this must be due to the effect of the executive action. But Congress cannot delegate legislative power to the President to exercise an unfettered discretion to make *538 whatever laws he thinks may be needed or advisable for the rehabilitation and expansion of trade or industry. See Panama Refining Company v. Ryan, supra, and cases there reviewed.

Accordingly we turn to the Recovery Act to ascertain what limits have been set to the exercise of the President's discretion: First, the President, as a condition of approval, is required to find that the trade or industrial associations or groups which propose a code ‘impose no inequitable restrictions on admission to membership’ and are ‘truly representative.’ That condition, however, relates only to the status of the initiators of the new laws and not to the permissible scope of such laws. Second, the President is required to find that the code is not ‘designed to promote monopolies or to eliminate or oppress small **847 enterprises and will not operate to discriminate against them.’ And to this is added a proviso that the code ‘shall not permit monopolies or monopolistic practices.’ But these restrictions leave virtually untouched the field of policy envisaged by section 1, and, in that wide field of legislative possibilities, the proponents of a code, refraining from monopolistic designs, may roam at will, and the President may approve or disapprove their proposals as he may see fit. That is the precise effect of the further finding that the President is to make—that the code ‘will tend to effectuate the policy of this title.’ While this is called a finding, it is really but a statement of an opinion as to the general effect upon the promotion of trade or industry of a scheme of laws. These are the only findings which Congress has made essential in order to put into operation a legislative code having the aims described in the ‘Declaration of Policy.’

Nor is the breadth of the President's discretion left to the necessary implications of this limited requirement as to his findings. As already noted, the President in approving a code may impose his own conditions, adding to *539 or taking from what is proposed, as ‘in his discretion’ he thinks necessary ‘to effectuate the policy’ declared by the act. Of course, he has no less liberty when he prescribes a code on his own motion or on complaint, and he is free to prescribe one if a code has not been approved. The act provides for the creation by the President of administrative agencies to assist him, but the action or reports of such agencies, or of his other assistants—their recommendations and findings in relation to the making of codes—have no sanction beyond the will of the President, who may accept, modify, or reject them as he pleases. Such recommendations or findings in no way limit the authority which section 3 undertakes to vest in the President with no other conditions than those there specified. And this authority relates to a host of different trades and industries, thus extending the President's discretion to all the varieties of laws which he may deem to be beneficial in dealing with the vast array of commercial and industrial activities throughout the country.

[...]

 To summarize and conclude upon this point: Section 3 of the Recovery Act (15 USCA s 703 is without precedent. It supplies no standards for any trade, industry, or activity. It does not undertake to prescribe rules of conduct to be applied to particular states of fact determined by appropriate administrative procedure. Instead of prescribing rules of conduct, it authorizes the making of codes to prescribe them. For that legislative undertaking, section 3 sets up no standards, aside from the statement of the general aims of rehabilitation, correction, and expansion described in section 1. In view of the scope of that broad declaration and of the *542 nature of the few restrictions that are imposed, the discretion of the President in approving or prescribing codes, and thus enacting laws for the government of trade and industry throughout the country, is virtually unfettered. We think that the code-making authority thus conferred is an unconstitutional delegation of legislative power.

[...]

On both the grounds we have discussed, the attempted delegation of legislative power and the attempted regulation of intrastate transactions which affect interstate commerce only indirectly, we hold the code provisions here in question to be invalid and that the judgment of conviction must be reversed.

Since the 1930’s, the Supreme Court did change its stance on nondelegation, adopting a more accepting stance on legislative delegations of power. The Court has found that all of the legislation under its review complies with the nondelegation doctrine.  The Court’s liberal treatment of the nondelegation doctrine has resulted in tremendous power resting in administrative agencies that are tasked by Congress to carry out specific mandates that influence many aspects of our lives. 

Two cases, Whitman v. American Trucking Associations, Inc., 531 U.S. 457 (2001) and Gundy v. United States, 139 S. Ct. 2116 (2019) illustrate the current take on legislative delegations of power. These cases reflect that the Court is reluctant to invalidate a statute that delegates quasi-legislative power to a federal agency. Seems a little strange since, under separation of powers, Congress is the only branch of government that is constitutionally permitted to make laws.  

So, the key here is "quasi" legislative powers. Let's think about what "quasi" means. The dictionary describes quasi as “seemingly; apparently  but not really” or “being partly or almost.” In essence, administrative agencies seemingly or partly veer into legislatively lawmaking, with the Constitutional restraint being the nondelegation doctrine.   However, the more recent case, Gundy, reflects some cracks in the historically unified reluctance to restrict Congress's delegation of quasi-legislative power to administrative agencies.  

In response to the dissenting judges in Gundy, who hinted at the need to limit Congresses broad discretion to delegate quasi-legislative power to administrative agencies, one commentator wrote, "the movement to expand the nondelegation doctrine doesn’t seek a healthier relationship between Congress and the administrative state. Instead, it hopes to roll back the administrative state itself.” 

Whitman v. American Trucking Associations, Inc.

531 U.S. 457 (2001)

Justice Scalia, delivered the opinion of the Court.

These cases present the following [question:] Whether § 109(b)(1) of the Clean Air Act (CAA) delegates legislative power to the Administrator of the Environmental Protection Agency (EPA).

Section 109(a) of the CAA requires the Administrator of the EPA to promulgate [National Ambient Air Quality Standards] NAAQS for [certain air pollutants]. Once a NAAQS has been promulgated, the Administrator must review the standard (and the criteria on which it is based) “at five-year intervals” and make “such revisions . . . as may be appropriate.” These cases arose when, on July 18, 1997, the Administrator [Whitman] revised the NAAQS for particulate matter and ozone. American Trucking Associations, Inc. [...] challenged the new standards [...]

The District of Columbia Circuit [...] agreed with the respondents that § 109(b)(1) delegated legislative power to the Administrator in contravention of the United States Constitution, Art. I, § 1, because it found that the EPA had interpreted the statute to provide no “intelligible principle” to guide the agency’s exercise of authority. The court thought, however, that the EPA could perhaps avoid the unconstitutional delegation by adopting a restrictive construction of § 109(b)(1), so instead of declaring the section unconstitutional the court remanded the NAAQS to the agency [...]

Section 109(b)(1) of the CAA instructs the EPA to set “ambient air quality standards the attainment and maintenance of which in the judgment of the Administrator, based on [the] criteria [documents of § 108] and allowing an adequate margin of safety, are requisite to protect the public health.” The Court of Appeals held that this section as interpreted by the Administrator did not provide an “intelligible principle” to guide the EPA’s exercise of authority in setting NAAQS. “[The] EPA,” it said, “lack[ed] any determinate criteria for drawing lines. It has failed to state intelligibly how much is too much.” The court hence found that the EPA’s interpretation (but not the statute itself) violated the nondelegation doctrine. We disagree.

In a delegation challenge, the constitutional question is whether the statute has delegated legislative power to the agency. Article I, § 1, of the Constitution vests “[a]ll legislative Powers herein granted . . . in a Congress of the United States.” This text permits no delegation of those powers, and so we repeatedly have said that when Congress confers decisionmaking authority upon agencies Congress must “lay down by legislative act an intelligible principle to which the person or body authorized to [act] is directed to conform.” J. W. Hampton, Jr., & Co. v. United States, 276 U. S. 394, 409 (1928). We have never suggested that an agency can cure an unlawful delegation of legislative power by adopting in its discretion a limiting construction of the statute [...] The idea that an agency can cure an unconstitutionally standardless delegation of power by declining to exercise some of that power seems to us internally contradictory. The very choice of which portion of the power to exercise—that is to say, the prescription of the standard that Congress had omitted—would itself be an exercise of the forbidden legislative authority. Whether the statute delegates legislative power is a question for the courts, and an agency’s voluntary self denial has no bearing upon the answer.

We agree with the Solicitor General that the text of § 109(b)(1) of the CAA at a minimum requires that “[f]or a discrete set of pollutants and based on published air quality criteria that reflect the latest scientific knowledge, [the] EPA must establish uniform national standards at a level that is requisite to protect public health from the adverse effects of the pollutant in the ambient air.” Requisite, in turn, “mean[s] sufficient, but not more than necessary.” These limits on the EPA’s discretion are strikingly similar to the ones we approved in Touby v. United States, 500 U. S. 160 (1991), which permitted the Attorney General to designate a drug as a controlled substance for purposes of criminal drug enforcement if doing so was “‘necessary to avoid an imminent hazard to the public safety.’” They also resemble the Occupational Safety and Health Act of 1970 provision requiring the agency to “‘set the standard which most adequately assures, to the extent feasible, on the basis of the best available evidence, that no employee will suffer any impairment of health’”—which the Court upheld in Industrial Union Dept., AFL—CIO v. American Petroleum Institute, 448 U. S. 607, 646 (1980) [...]

The scope of discretion § 109(b)(1) allows is in fact well within the outer limits of our nondelegation precedents. In the history of the Court we have found the requisite “intelligible principle” lacking in only two statutes, one of which provided literally no guidance for the exercise of discretion, and the other of which conferred authority to regulate the entire economy on the basis of no more precise a standard than stimulating the economy by assuring “fair competition.” See Panama Refining Co. v. Ryan, 293 U. S. 388 (1935); A. L. A. Schechter Poultry Corp. v. United States, 295 U. S. 495 (1935). We have, on the other hand, upheld the validity of § 11(b)(2) of the Public Utility Holding Company Act of 1935, which gave the Securities and Exchange Commission authority to modify the structure of holding company systems so as to ensure that they are not “unduly or unnecessarily complicate[d]” and do not “unfairly or inequitably distribute voting power among security holders.” American Power & Light Co. v. SEC, 329 U. S. 90, 104 (1946). We have approved the wartime conferral of agency power to fix the prices of commodities at a level that “‘will be generally fair and equitable and will effectuate the [in some respects conflicting] purposes of th[e] Act.’” Yakus v. United States, 321 U. S. 414, 420, 423-426 (1944). And we have found an "intelligible principle" in various statutes authorizing regulation in the “public interest.” See, e. g., National Broadcasting Co. v. United States, 319 U. S. 190, 225-226 (1943) (Federal Communications Commission’s power to regulate airwaves); New York Central Securities Corp. v. United States, 287 U. S. 12, 24-25 (1932) (Interstate Commerce Commission’s power to approve railroad consolidations). In short, we have “almost never felt qualified to second-guess Congress regarding the permissible degree of policy judgment that can be left to those executing or applying the law.” Mistretta v. United States, 488 U. S. 361, 416 (1989) (majority opinion).

It is true enough that the degree of agency discretion that is acceptable varies according to the scope of the power congressionally conferred. While Congress need not provide any direction to the EPA regarding the manner in which it is to define “country elevators,” which are to be exempt from newstationary-source regulations governing grain elevators, see 42 U.S.C. § 7411(i), it must provide substantial guidance on setting air standards that affect the entire national economy. But even in sweeping regulatory schemes we have never demanded, as the Court of Appeals did here, that statutes provide a “determinate criterion” for saying “how much [of the regulated harm] is too much.” In Touby, for example, we did not require the statute to decree how “imminent” was too imminent, or how “necessary” was necessary enough, or even—most relevant here—how “hazardous” was too hazardous. Similarly, the statute at issue in Lichter authorized agencies to recoup “excess profits” paid under wartime Government contracts, yet we did not insist that Congress specify how much profit was too much. It is therefore not conclusive for delegation purposes that, as respondents argue, ozone and particulate matter are “nonthreshold” pollutants that inflict a continuum of adverse health effects at any airborne concentration greater than zero, and hence require the EPA to make judgments of degree. “[A] certain degree of discretion, and thus of lawmaking, inheres in most executive or judicial action.” Mistretta v. United States, supra. Section 109(b)(1) of the CAA, which to repeat we interpret as requiring the EPA to set air quality standards at the level that is “requisite”—that is, not lower or higher than is necessary—to protect the public health with an adequate margin of safety, fits comfortably within the scope of discretion permitted by our precedent.

We therefore reverse the judgment of the Court of Appeals remanding for reinterpretation that would avoid a supposed delegation of legislative power [...]

Justice Stevens, with whom Justice Souter joins, concurring in part and concurring in the judgment.

Section 109(b)(1) delegates to the Administrator of the Environmental Protection Agency (EPA) the authority to promulgate national ambient air quality standards (NAAQS). In Part III of its opinion, the Court convincingly explains why the Court of Appeals erred when it concluded that § 109 effected “an unconstitutional delegation of legislative power.” I wholeheartedly endorse the Court’s result and endorse its explanation of its reasons, albeit with the following caveat.

The Court has two choices. We could choose to articulate our ultimate disposition of this issue by frankly acknowledging that the power delegated to the EPA is “legislative” but nevertheless conclude that the delegation is constitutional because adequately limited by the terms of the authorizing statute. Alternatively, we could pretend, as the Court does, that the authority delegated to the EPA is somehow not “legislative power.” Despite the fact that there is language in our opinions that supports the Court's articulation of our holding, I am persuaded that it would be both wiser and more faithful to what we have actually done in delegation cases to admit that agency rulemaking authority is “legislative power.” [...]

My view is not only more faithful to normal English usage, but is also fully consistent with the text of the Constitution. In Article I, the Framers vested “All legislative Powers” in the Congress, Art. I, § 1, just as in Article II they vested the “executive Power” in the President, Art. II, § 1. Those provisions do not purport to limit the authority of either recipient of power to delegate authority to others [...] Surely the authority granted to members of the Cabinet and federal law enforcement agents is properly characterized as “Executive” even though not exercised by the President.

It seems clear that an executive agency’s exercise of rulemaking authority pursuant to a valid delegation from Congress is “legislative.” As long as the delegation provides a sufficiently intelligible principle, there is nothing inherently unconstitutional about it [...] I would hold that when Congress enacted § 109, it effected a constitutional delegation of legislative power to the EPA.

Gundy v. United States

139 S. Ct. 2116 (2019)

Justice KAGAN announced the judgment of the Court and delivered an opinion, in which Justice GINSBURG, Justice BREYER, and Justice SOTOMAYOR join.

The nondelegation doctrine bars Congress from transferring its legislative power to another branch of Government. This case requires us to decide whether 34 U.S.C. § 20913(d), enacted as part of the Sex Offender Registration and Notification Act (SORNA), violates that doctrine. We hold it does not. Under § 20913(d), the Attorney General must apply SORNA's registration requirements as soon as feasible to offenders convicted before the statute's enactment. That delegation easily passes constitutional muster.

I

Congress has sought, for the past quarter century, to combat sex crimes and crimes against children through sex-offender registration schemes. . . . In 2006,[ ] Congress enacted SORNA.

SORNA makes "more uniform and effective" the prior "patchwork" of sex-offender registration systems. The Act's express "purpose" is "to protect the public from sex offenders and offenders against children" by "establish[ing] a comprehensive national system for [their] registration." § 20901. To that end, SORNA covers more sex offenders, and imposes more onerous registration requirements, than most States had before. The Act also backs up those requirements with new criminal penalties. Any person required to register under SORNA who knowingly fails to do so (and who travels in interstate commerce) may be imprisoned for up to ten years. See 18 U.S.C. § 2250(a).

[ . . .]

Section 20913—the disputed provision here—elaborates the "[i]nitial registration" requirements for sex offenders. §§ 20913(b), (d). Subsection (b) sets out the general rule: An offender must register "before completing a sentence of imprisonment with respect to the offense giving rise to the registration requirement" (or, if the offender is not sentenced to prison, "not later than [three] business days after being sentenced"). Two provisions down, subsection (d) addresses (in its title's words) the "[i]nitial registration of sex offenders unable to comply with subsection (b)." The provision states:

    "The Attorney General shall have the authority to specify the applicability of the requirements of this subchapter to sex offenders convicted before the enactment of this chapter ... and to prescribe rules for the registration of any such sex offenders and for other categories of sex offenders who are unable to comply with subsection (b)."

Subsection (d), in other words, focuses on individuals convicted of a sex offense before SORNA's enactment—a group we will call pre-Act offenders. Many of these individuals were unregistered at the time of SORNA's enactment, either because pre-existing law did not cover them or because they had successfully evaded that law (so were "lost" to the system). See supra, at 2121-2122. And of those potential new registrants, many or most could not comply with subsection (b)'s registration rule because they had already completed their prison sentences. For the entire group of pre-Act offenders, once again, the Attorney General "shall have the authority" to "specify the applicability" of SORNA's registration requirements and "to prescribe rules for [their] registration."

Under that delegated authority, the Attorney General issued an interim rule in February 2007, specifying that SORNA's registration requirements apply in full to "sex offenders convicted of the offense for which registration is required prior to the enactment of that Act." 72 Fed. Reg. 8897. The final rule, issued in December 2010, reiterated that SORNA applies to all pre-Act offenders. 75 Fed. Reg. 81850. That rule has remained the same to this day.

Petitioner Herman Gundy is a pre-Act offender. The year before SORNA's enactment, he pleaded guilty under Maryland law for sexually assaulting a minor. After his release from prison in 2012, Gundy came to live in New York. But he never registered there as a sex offender. A few years later, he was convicted for failing to register, in violation of § 2250. He argued below (among other things) that Congress unconstitutionally delegated legislative power when it authorized the Attorney General to "specify the applicability" of SORNA's registration requirements to pre-Act offenders. § 20913(d). The District Court and Court of Appeals for the Second Circuit rejected that claim, see 695 Fed. Appx. 639 (2017), as had every other court (including eleven Courts of Appeals) to consider the issue. We nonetheless granted certiorari.

Today, we join the consensus and affirm.

II

Article I of the Constitution provides that "[a]ll legislative Powers herein granted shall be vested in a Congress of the United States." § 1. Accompanying that assignment of power to Congress is a bar on its further delegation. Congress, this Court explained early on, may not transfer to another branch "powers which are strictly and exclusively legislative." Wayman v. Southard, 23 U.S. (10 Wheat.) 1, 42-43, 6 L.Ed. 253 (1825). But the Constitution does not "deny[ ] to the Congress the necessary resources of flexibility and practicality [that enable it] to perform its function[s]." Yakus v. United States, 321 U.S. 414, 425, 64 S.Ct. 660, 88 L.Ed. 834 (1944) (internal quotation marks omitted). Congress may "obtain[ ] the assistance of its coordinate Branches"—and in particular, may confer substantial discretion on executive agencies to implement and enforce the laws. Mistretta v. United States, 488 U.S. 361, 372, 109 S.Ct. 647, 102 L.Ed.2d 714 (1989). "[I]n our increasingly complex society, replete with ever changing and more technical problems," this Court has understood that "Congress simply cannot do its job absent an ability to delegate power under broad general directives." Ibid. So we have held, time and again, that a statutory delegation is constitutional as long as Congress "lay[s] down by legislative act an intelligible principle to which the person or body authorized to [exercise the delegated authority] is directed to conform." Ibid. (quoting J. W. Hampton, Jr., & Co. v. United States, 276 U.S. 394, 409, 48 S.Ct. 348, 72 L.Ed. 624 (1928); brackets in original).

Given that standard, a nondelegation inquiry always begins (and often almost ends) with statutory interpretation. The constitutional question is whether Congress has supplied an intelligible principle to guide the delegee's use of discretion. So the answer requires construing the challenged statute to figure out what task it delegates and what instructions it provides.

[Statutory interpretation discussion]

C

Now that we have determined what § 20913(d) means, we can consider whether it violates the Constitution. The question becomes: Did Congress make an impermissible delegation when it instructed the Attorney General to apply SORNA's registration requirements to pre-Act offenders as soon as feasible? Under this Court's long-established law, that question is easy. Its answer is no.

As noted earlier, this Court has held that a delegation is constitutional so long as Congress has set out an "intelligible principle" to guide the delegee's exercise of authority. J. W. Hampton, Jr., & Co., 276 U.S. at 409, 48 S.Ct. 348; see supra, at 2123. Or in a related formulation, the Court has stated that a delegation is permissible if Congress has made clear to the delegee "the general policy" he must pursue and the "boundaries of [his] authority." American Power & Light, 329 U.S. at 105, 67 S.Ct. 133. Those standards, the Court has made clear, are not demanding. "[W]e have `almost never felt qualified to second-guess Congress regarding the permissible degree of policy judgment that can be left to those executing or applying the law.'" Whitman, 531 U.S. at 474-475, 121 S.Ct. 903 (quoting Mistretta, 488 U.S. at 416, 109 S.Ct. 647 (Scalia, J., dissenting)). Only twice in this country's history (and that in a single year) have we found a delegation excessive—in each case because "Congress had failed to articulate any policy or standard" to confine discretion. Mistretta, 488 U.S. at 373, n. 7, 109 S.Ct. 647 (emphasis added); see A. L. A. Schechter Poultry Corp. v. United States, 295 U.S. 495, 55 S.Ct. 837, 79 L.Ed. 1570 (1935); Panama Refining Co. v. Ryan, 293 U.S. 388, 55 S.Ct. 241, 79 L.Ed. 446 (1935). By contrast, we have over and over upheld even very broad delegations. Here is a sample: We have approved delegations to various agencies to regulate in the "public interest." See, e.g., National Broadcasting Co., 319 U.S. at 216, 63 S.Ct. 997; New York Central Securities Corp. v. United States, 287 U.S. 12, 24, 53 S.Ct. 45, 77 L.Ed. 138 (1932). We have sustained authorizations for agencies to set "fair and equitable" prices and "just and reasonable" rates. Yakus, 321 U.S. at 422, 427, 64 S.Ct. 660; FPC v. Hope Natural Gas Co., 320 U.S. 591, 64 S.Ct. 281, 88 L.Ed. 333 (1944). We more recently affirmed a delegation to an agency to issue whatever air quality standards are "requisite to protect the public health." Whitman, 531 U.S. at 472, 121 S.Ct. 903 (quoting 42 U.S.C. § 7409(b)(1)). And so forth.

In that context, the delegation in SORNA easily passes muster (as all eleven circuit courts to have considered the question found, see supra, at 2122-2123). The statute conveyed Congress's policy that the Attorney General require pre-Act offenders to register as soon as feasible. Under the law, the feasibility issues he could address were administrative—and, more specifically, transitional—in nature. Those issues arose, as Reynolds explained, from the need to "newly register[ ] or reregister [] `a large number' of pre-Act offenders" not then in the system. 565 U.S. at 440, 132 S.Ct. 975; see supra, at 2124-2125. And they arose, more technically, from the gap between an initial registration requirement hinged on imprisonment and a set of pre-Act offenders long since released. See 565 U.S. at 441, 132 S.Ct. 975; see supra, at 2124-2125. Even for those limited matters, the Act informed the Attorney General that he did not have forever to work things out. By stating its demand for a "comprehensive" registration system and by defining the "sex offenders" required to register to include pre-Act offenders, Congress conveyed that the Attorney General had only temporary authority. Or again, in the words of Reynolds, that he could prevent "instantaneous registration" and impose some "implementation delay." 565 U.S. at 443, 132 S.Ct. 975. That statutory authority, as compared to the delegations we have upheld in the past, is distinctly small-bore. It falls well within constitutional bounds.[4]

Indeed, if SORNA's delegation is unconstitutional, then most of Government is unconstitutional—dependent as Congress is on the need to give discretion to executive officials to implement its programs. Consider again this Court's long-time recognition: "Congress simply cannot do its job absent an ability to delegate power under broad general directives." Mistretta, 488 U.S. at 372, 109 S.Ct. 647; see supra, at 2123. Or as the dissent in that case agreed: "[S]ome judgments ... must be left to the officers executing the law." 488 U.S. at 415, 109 S.Ct. 647 (opinion of Scalia, J.); see Whitman, 531 U.S. at 475, 121 S.Ct. 903 ("[A] certain degree of discretion[ ] inheres in most executive" action (internal quotation marks omitted)). Among the judgments often left to executive officials are ones involving feasibility. In fact, standards of that kind are ubiquitous in the U.S. Code. See, e.g., 12 U.S.C. § 1701z-2(a) (providing that the Secretary of Housing and Urban Development "shall require, to the greatest extent feasible, the employment of new and improved technologies, methods, and materials in housing construction[] under [HUD] programs"); 47 U.S.C. § 903(d)(1) (providing that "the Secretary of Commerce shall promote efficient and cost-effective use of the spectrum to the maximum extent feasible" in "assigning frequencies for mobile radio services"). In those delegations, Congress gives its delegee the flexibility to deal with real-world constraints in carrying out his charge. So too in SORNA.

It is wisdom and humility alike that this Court has always upheld such "necessities of government." Mistretta, 488 U.S. at 416, 109 S.Ct. 647 (Scalia, J., dissenting) (internal quotation marks omitted); see ibid. ("Since Congress is no less endowed with common sense than we are, and better equipped to inform itself of the `necessities' of government; and since the factors bearing upon those necessities are both multifarious and (in the nonpartisan sense) highly political ... it is small wonder that we have almost never felt qualified to second-guess Congress regarding the permissible degree of policy judgment that can be left to those executing or applying the law"). We therefore affirm the judgment of the Court of Appeals.

It is so ordered.

[ . . . ]

Justice GORSUCH, with whom THE CHIEF JUSTICE and Justice THOMAS join, dissenting.

The Constitution promises that only the people's elected representatives may adopt new federal laws restricting liberty. Yet the statute before us scrambles that design. It purports to endow the nation's chief prosecutor with the power to write his own criminal code governing the lives of a half-million citizens. Yes, those affected are some of the least popular among us. But if a single executive branch official can write laws restricting the liberty of this group of persons, what does that mean for the next?

Today, a plurality of an eight-member Court endorses this extraconstitutional arrangement but resolves nothing. Working from an understanding of the Constitution at war with its text and history, the plurality reimagines the terms of the statute before us and insists there is nothing wrong with Congress handing off so much power to the Attorney General. But Justice ALITO supplies the fifth vote for today's judgment and he does not join either the plurality's constitutional or statutory analysis, indicating instead that he remains willing, in a future case with a full Court, to revisit these matters. Respectfully, I would not wait.

[ . . . ]

While Congress has a lot of leeway to delegate legislative authority to agencies, it has little ability to disapprove of agency decisions. Imagine if Congress could both delegate authority to agencies to make decisions, and then change the outcome of those decisions after they are made. That would be a huge amount of power for one branch of government (the legislature) to have.

Congress has passed some limited legislation granting itself the ability to review agency rulemaking. The Congressional Review Act of 1996 gives Congress a chance to disapprove of an agency’s final rule. Under this law, Congress can pass a joint resolution of disapproval within sixty days after Congress receives a final rule. Congress cannot suggest amendments to the rule, but it can strike down the rule if the resolution satisfies bicameralism and presentment requirements (if both houses pass the resolution and the President signs it). Because both houses of Congress and the President have to agree to overturn regulation through the Congressional Review Act, it will likely only be invoked successfully to overturn regulations finalized after elections that hails in a Congress controlled by the same party as a new President.

For instance, before 2017, the Congressional Review Act had only been invoked once to overturn an agency regulation. However, after Trump was elected in 2016, the Republican House and Congress swiftly passed fifteen joint resolutions to overturn Obama-era regulations. In the wake of those resolutions, several legislators tried to get rid of the Congressional Review Act, but did not succeed.

While the Supreme Court has not assessed the constitutionality of the Congressional Review Act (CRA), the Supreme Court has declared legislative veto power (the ability for Congress to veto agency decisions) unconstitutional in Immigration and Naturalization Service v. Chadha, which actually led to the passage of the CRA! 

Immigration and Naturalization Service v. Chadha

462 U.S. 919 (1983)

CHIEF JUSTICE BURGER delivered the opinion of the Court.

[After the passage of the 1952 Immigration and Nationality Act, Congress delegated to the Attorney General the discretion to suspend deportation hearings. The Attorney General then delegated this duty to the then-named Immigration and Naturalization Service (INS) (INS responsibilties now belong to the Immigration and Customs Enforcement , and Customs and Border Protection, and the Citizenship and Immigration Services).

Chadha is an East Indian man was born in Kenya and holds a British passport. He overstayed his student visa and was ordered to be deported. Chadha applied for a suspension of his deportation. The INS Immigration Judge ordered Chadha’s deportation to be suspended on June 25, 1974. The Immigration Judge found that Chadha met the requirements of § 244(a)(1) of the Immigration and Nationaliaty Act: he had resided continuously in the United States for over seven years, was of good moral character, and would suffer "extreme hardship" if deported.

Congress, however, had the power to disagree with the Attorney General and overturn the AG's decision to suspend a deporation. Section 244(c) provides:

"(1) Upon application by any alien who is found by the Attorney General to meet the requirements of subsection (a) of this section the Attorney General may in his discretion suspend deportation of such alien. If the deportation of any alien is suspended under the provisions of this subsection, a complete and detailed statement of the *925 facts and pertinent provisions of law in the case shall be reported to the Congress with the reasons for such suspension . . . "

Once the Attorney General's recommendation for suspension of Chadha's deportation was conveyed to Congress, Congress  could act under § 244(c)(2) of INA to veto the Attorney General's determination to suspend Chadha's deportation. 

Section 244(c)(2) provides:

"if during the session of the Congress at which a case is reported, or prior to the close of the session of the Congress next following the session at which a case is reported, either the Senate or the House of Representatives passes a resolution stating in substance that it does not favor the suspension of such deportation, the Attorney General shall thereupon deport such alien or authorize the alien's voluntary departure at his own expense under the order of deportation in the manner provided by law. If, within the time above specified, neither the Senate nor the House of Representatives shall pass such a resolution, the Attorney General shall cancel deportation proceedings.”]

[This case] presents a challenge to the constitutionality of the provision in § 244(c)(2) of the Immigration and Nationality Act, authorizing one House of Congress, by resolution, to invalidate the decision of the Executive Branch, pursuant to authority delegated by Congress to the Attorney General of the United States, to allow a particular deportable [immigrant] to remain in the United States.

On December 12, 1975, Representative Eilberg, Chairman of the Judiciary Subcommittee on Immigration, Citizenship, and International Law, introduced a resolution opposing “the granting of permanent residence in the United States to [six] aliens,” including Chadha [...] The resolution [passed] Since the House action was pursuant to § 244(c)(2), the resolution was not treated as an Art. I legislative act; it was not submitted to the Senate or presented to the President for his action.

[On November 8, 1976, Chadha was ordered deported pursuant to the House action. After exhausting his administrative remedies, Chadha filed a petition for review of the deportation order in the United States Court of Appeals for the Ninth Circuit.]

Explicit and unambiguous provisions of the Constitution prescribe and define the respective functions of the Congress and of the Executive in the legislative process. Since the precise terms of those familiar provisions are critical to the resolution of these cases, we set them out verbatim. Article I provides:

“All legislative Powers herein granted shall be vested in a Congress of the United States, which shall consist of a Senate and House of Representatives.” Art. I, § 1. (Emphasis added.)

“Every Bill which shall have passed the House of Representatives and the Senate, shall, before it becomes a law, be presented to the President of the United States . . . .” Art. I, § 7, cl. 2. (Emphasis added.)

“Every Order, Resolution, or Vote to which the Concurrence of the Senate and House of Representatives may be necessary (except on a question of Adjournment) 946*946 shall be presented to the President of the United States; and before the Same shall take Effect, shall be approved by him, or being disapproved by him, shall be repassed by two thirds of the Senate and House of Representatives, according to the Rules and Limitations prescribed in the Case of a Bill.” Art. I, § 7, cl. 3. (Emphasis added.) [...]

These provisions of Art. I are integral parts of the constitutional design for the separation of powers. We have recently noted that “[t]he principle of separation of powers was not simply an abstract generalization in the minds of the Framers: it was woven into the documents that they drafted in Philadelphia in the summer of 1787.” Buckley v. Valeo, supra, 424 U.S., at 124, 96 S.Ct., at 684. Just as we relied on the textual provision of Art. II, § 2, cl. 2, to vindicate the principle of separation of powers in Buckley, we find that the purposes underlying the Presentment Clauses, Art. I, § 7, cls. 2, 3, and the bicameral requirement of Art. I, § 1 and § 7, cl. 2, guide our resolution of the important question presented in this case. The very structure of the **2782 articles delegating and separating powers under Arts. I, II, and III exemplify the concept of separation of powers and we now turn to Art. I.

The Presentment Clauses

The records of the Constitutional Convention reveal that the requirement that all legislation be presented to the President before becoming law was uniformly accepted by the Framers. Presentment to the President and the Presidential veto were considered so imperative that the draftsmen took special pains to assure that these requirements could not be circumvented [...] 

The decision to provide the President with a limited and qualified power to nullify proposed legislation by veto was based on the profound conviction of the Framers that the powers conferred on Congress were the powers to be most carefully circumscribed. It is beyond doubt that lawmaking was a power to be shared by both Houses and the President [...] 

The President’s role in the lawmaking process also reflects the Framers’ careful efforts to check whatever propensity a particular Congress might have to enact oppressive, improvident, or ill-considered measures [...] 

Bicameralism

The bicameral requirement of Art. I, §§ 1, 7, was of scarcely less concern to the Framers than was the Presidential veto and indeed the two concepts are interdependent. By providing that no law could take effect without the concurrence of the prescribed majority of the Members of both Houses, the Framers reemphasized their belief, already remarked upon in connection with the Presentment Clauses, that legislation should not be enacted unless it has been carefully and fully considered by the Nation's elected officials [...] 

It emerges clearly that the prescription for legislative action in Art. I, §§ 1, 7, represents the Framers’ decision that the legislative power of the Federal Government be exercised in accord with a single, finely wrought and exhaustively considered, procedure [...]

Examination of the action taken here by one House pursuant to § 244(c)(2) reveals that it was essentially legislative in purpose and effect. In purporting to exercise power defined in Art. I, § 8, cl. 4, to “establish an uniform Rule of Naturalization,” the House took action that had the purpose and effect of altering the legal rights, duties, and relations of persons, including the Attorney General, Executive Branch officials and Chadha, all outside the Legislative Branch. Section 244(c)(2) purports to authorize one House of Congress to require the Attorney General to deport an individual alien whose deportation otherwise would be canceled under § 244. The one-House veto operated in these cases to overrule the Attorney General and mandate Chadha’s deportation; absent the House action, Chadha would remain in the United States. Congress has acted and its action has altered Chadha’s status [...]

The nature of the decision implemented by the one-House veto in these cases further manifests its legislative character. After long experience with the clumsy, time-consuming private bill procedure, Congress made a deliberate choice to delegate to the Executive Branch, and specifically to the Attorney General, the authority to allow deportable aliens to remain in this country in certain specified circumstances. It is not disputed that this choice to delegate authority is precisely the kind of decision that can be implemented only in accordance with the procedures set out in Art. I. Disagreement with the Attorney General’s decision on Chadha’s deportation — that is, Congress’ decision to deport Chadha — no less than Congress’ original choice to delegate to the Attorney General the authority to make that decision, involves determinations of policy that Congress can implement in only one way; bicameral passage followed by presentment to the President. Congress must abide by its delegation of authority until that delegation is legislatively altered or revoked [...]

Clearly, when the [Constitution’s] Draftsmen sought to confer special powers on one House, independent of the other House, or of the President, they did so in explicit, unambiguous terms. These carefully defined exceptions from presentment and bicameralism underscore the difference between the legislative functions of Congress and other unilateral but important and binding one-House acts provided for in the Constitution. These exceptions are narrow, explicit, and separately justified; none of them authorize the action challenged here. On the contrary, they provide further support for the conclusion that congressional authority is not to be implied and for the conclusion that the veto provided for in § 244(c)(2) is not authorized by the constitutional design of the powers of the Legislative Branch.

Since it is clear that the action by the House under § 244(c)(2) was not within any of the express constitutional exceptions authorizing one House to act alone, and equally clear that it was an exercise of legislative power, that action was subject to the standards prescribed in Art. I [...] 

We hold that the congressional veto provision in § 244(c)(2) is severable from the Act and that it is unconstitutional.

NOTICE & COMMENT

Decolonizing Chadha, by Rebecca Bratspies 

The protest movement that coalesced this summer around #BlackLivesMatter galvanized a long overdue public conversation about race in the United States. Students across the country are demanding that their professors reexamine their textbooks and revise their course materials to grapple with the ways that structural racism has shaped our various disciplines. Administrative law is no exception to this long overdue trend. 

Many key administrative law cases have profound racial subtexts that reading the case alone would not reveal. It was not “students” who objected to corporal punishment in Ingraham v. Wright, it was the Black students who were and remain overwhelmingly more likely to be subjected to this degrading and painful punishment despite not being more likely to misbehave in school. All of the students suspended for “disobedient conduct” in Goss v. Lopez were Black, and the “widespread disturbance” for which they were suspended was actually Black History Week.  Left out of Board of Regents v. Roth is the fact that Mr. Roth was not reappointed to Oskhosh University because he spoke out against to the mass suspension of 94 Black students. Reading just the opinions, students would never know how racially fraught these cases are—the Supreme Court omitted the racial context as though it were irrelevant to the “real” legal issues at stake. This choice of ignoring the racial backstory to key cases often masquerades as even-handed legal neutrality. But editing out the lived reality of the parties and the context in which their dispute arose is actually a highly political choice, one that normalizes the perspective of the white, cis-gendered, middle class male as value-free, objective and neutral. My colleague Natalie Gomez-Velez’s contribution to this symposium documents the harm this faux neutrality inflicts on marginalized students. 

This insight is not new. Kimberlé Crenshaw has criticized what she labeled the “perspectiveless mode” of legal analysis for decades. Administrative law has been remarkably resistant to this critique. Cases and textbooks follow the Supreme Court’s lead of erasing the fraught racial and social context of key decisions. Students are introduced to administrative law not as the frontline of social struggle, but as a highly technical, arcane field whose purpose is to apply neutral, a priori rules. Class discussions can be limited to how various sets of facts should be interpreted in light of those rules. By this simple tactic of centering the discussion elsewhere, critiques raising systemic injustice can be easily shunted aside as “unlawyerly.” Students bring this mindset with them into practice, which results in a climate in which, as my colleague Julia Hernandez wrote, “raising racial inequities or unfairness in individual cases, even when specific examples exist, is highly discouraged and disfavored.”

Many of us deploy some form of this perspectiveless mode of administrative laws because it is how we were taught, and it feels comfortable and safe. Many of us, especially those who are white, may have had little experience or training discussing race and may be afraid of student reactions. Yet, we must do better. When we obscure how administrative law participates in and perpetuates white supremacy, we are ourselves ratifying that system. So I was delighted when Kati Kovacs launched a conversation about structural racism in administrative law on the administrative law prof listserv, which subsequently morphed into this series of blog posts. Law professors have a moral obligation to recognize the unique burdens the so-called perspectiveless mode of administrative law puts on our students, especially our students of color. We have an equal obligation to teach white students that systemic racism is encoded in the relationship between legal rules and social reality. 

To that end, I offer some thoughts on the 1983 Supreme Court decision INS v. Chadha. The Chadha case is discussed in just about every administrative law class to highlight the limits on Congress’s Article I powers. Interpreting the Bicameralism and Presentment Clauses, the Chadha majority concluded that one-house legislative vetoes unconstitutionally violate separation of powers. Justice Powell, who concurred in the result acknowledged that “the breadth of this holding gives one pause” because Congress had included more than 300 legislative vetoes in over 200 federal laws. Writing in dissent, Justice White accused the majority of “striking down in one fell swoop more laws than the court had cumulatively invalidated in its history.”  After the Supreme Court handed down its 7-2 ruling, Chadha commented “now, as long as the republic of the United States lives, the law students will all study my case.”

Yet, most casebooks include virtually no information about Jagdish Rai Chadha or about how he found himself in the situation that gave rise to this case. When he appeared before United States courts to defend himself against deportation, there was literally nowhere for him to go because Mr. Chadha was stateless. He had no nationality. A racist, colonial system of citizenship had expelled and disowned him.  When professors ignore that reality in favor of bicameralism and presentment they miss an opportunity to interrogate the erasure of issues of race in the administrative law setting. Chadha brings to life Ian Haney Lopez’s assertion that “law not only constructs race, race constructs law.”

Mr. Chadha could be any one of our students—a college educated, ambitious person, with no ties to anything that might make him seem “undesirable” in the eyes of a government. Reading him back into the case creates an opportunity to discuss how seemingly neutral law cloaks the racial politics surrounding articulations of citizenship, a point Ming Hsu Chen makes elegantly in her contribution to this symposium. Including Mr. Chadha’s story better prepares students to see issues of race and justice as the thread linking administrative disputes that are often presented as colorblind and unconnected. 

The Chadha opinion begins: 

Chadha is an East Indian who was born in Kenya and holds a British passport. He was lawfully admitted to the United States in 1966 on a nonimmigrant student visa. His visa expired on June 30, 1972. On October 11, 1973, the District Director of the Immigration and Naturalization Service ordered Chadha to show cause why he should not be deported for having “remained in the United States for a longer time than permitted.” 

This paragraph elides as much as it informs—leaving out the swirling drama of Kenyan independence that forms the backdrop for this case. To students in 2020, the existence of Kenya as a country is a fact that needs no interrogation. They have lived their entire lives in a world where Kenya is an independent country.  But that was not Mr. Chadha’s experience. When Mr. Chadha left Nairobi for Ohio, Kenya was a newly-minted member of the United Nations.

The Kenya Mr. Chadha was born into was a settler colony. Its residents were forced to navigate the multilayered racial hierarchies that British colonial rule used to dole out privilege. In Kenya, and elsewhere, British imperialism leveraged power by pitting ethnic, racial and religious groups against each other. My colleague Chaumtoli Huq has written about decolonial pedagogy.  Read through this decolonial lens, Chadha adds significantly to the administrative law classroom. 

Chadha’s experiences were embedded in the decolonial moment. After years of struggle, Kenya became independent in late 1963, with Jomo Kenyatta as its first president. At that moment of independence, Kenya had to address the Aristotelian question of “who is a citizen?” Reacting to the oppressive racial classifications at the heart of British imperialism, Kenya’s 1963 Constitution granted automatic citizenship to those born in Kenya so long as one parent had also been born in Kenya. That important caveat was aimed squarely at Kenya’s largely Asian mercantile class. Chadha’s family fell into this excluded group. 

Like so many others with ancestral ties to the Indian subcontinent, Mr. Chadha’s family had wound up in Kenya because it was a British colony. They were part of the forced migration of intellectual capital that Lisa Patel describes as integral to British settler colonialism. Chadha’s father had been born in South Africa, his mother in India. Thus, even though Mr. Chadha had been born and raised in Nairobi, Kenya did not automatically recognize him as a citizen. 

 (Many of the details about Mr. Chadha’s family and personal history come from the fabulous book Chadha: The Story of an Epic Constitutional Struggle. The first chapter details Chadha’s backstory).

Instead, Kenya’s Constitution gave Mr. Chadha the opportunity “upon making application before the specified date in such manner as may be prescribed by or under an Act of Parliament, to be registered as a citizen of Kenya.” Over a quarter million people found themselves in this situation—obliged either to leave the country they were born in or to try to apply for Kenyan citizenship and surrender their British passports. Mr. Chadha applied for citizenship. 

The citizenship process was lengthy and tangled. Multi-year delays were not uncommon. While his application was still pending, Mr. Chadha was admitted to Ohio Bowling Green State University. Kenyan authorities advised him to travel to the United States on his British passport rather than delay his matriculation. Once Mr. Chadha had done so, however, Kenya washed its hands of him, declaring that by using his British passport he had forfeited his opportunity to obtain Kenyan citizenship. Britain meanwhile rushed to adopt the 1968 Commonwealth Immigrants Act explicitly to prevent Kenyans with ancestral roots in the Indian subcontinent from leaving Kenya for the British Isles. By the time Mr. Chadha had completed his studies, the British Parliament had enacted the 1971 Immigration Act, which stripped most of its former colonial subjects of their right of abode in Britain. 

Because Mr. Chadha was neither black enough for Kenya, nor white enough for Britain, both disclaimed him. Mr. Chadha was rendered stateless because of his race and ethnicity. This was why Mr. Chadha found himself in a United States Immigration and Naturalization Service office seeking a United States work permit or some other means of regularizing his status. Instead, Chadha was detained, fingerprinted, and designated deportable. At his statutory hearing, the British Consulate and the Kenyan Embassy sent letters stating that neither country was willing to accept him. The Immigration Judge even inquired whether Mr. Chadha could be deported to India—a country he had never set foot in. However, India and Pakistan opposed Britain’s racist Immigration Act and insisted that British passport holders were Britain’s responsibility. No nation was willing to claim Mr. Chadha.  

Mr. Chadha was not a Kenyan citizen because of Kenya’s highly political choices; he was not a British citizen because of the United Kingdom’s different set of highly political choices—there was nothing neutral or inherent about the situation. Knowing this backstory, my students frequently express strong feelings about the legal choices Kenya and the United Kingdom made. Mr. Chadha’s experience forces them to grapple with the relevant laws and regulations as a series of intentional racialized policy choices, rather than merely viewing them as neutral a priori rules to be accepted and applied. Once made, this realization is difficult to unsee. With their “perspectiveless” bubble burst, students see how administrative laws and regulations can provide a veneer of neutrality to many other racialized and discriminatory choices. Of course, many students already bring this perspective with them into administrative law, especially students of color with first-hand experience of how neutrality can cloak discrimination. Chadha legitimizes their perspective as relevant to the ordinary discourse of an administrative law class, thereby opening space for their voices to be heard and considered. Chadha also forces their white compatriots (including me) to confront some uncomfortable truths about their own white privilege.  

Students use this experience to explore the racial subtexts throughout administrative law more thoroughly, which creates a natural opportunity to consider alternative choices and structures. Having seen Mr. Chadha’s citizenship constructed and deconstructed before their eyes, students approach the DACA cases, Trump v. Hawaii, and so many other administrative law cases with new appreciation for the artificiality of absolute regulatory lines. Moreover, by fostering student appreciation for the racialized nature of citizenship, the magnitude of deportation’s consequences, and the unequal burdens of whose citizenship needs proving, Chadha can lay the groundwork for a richer discussion of the litigation over the proposed inclusion of a citizenship question in the 2020 census case. Without appreciating the racialized context, and the overtly racist intentions behind the question, it is more difficult for students to understand the Supreme Court’s decision. 

The fact that Mr. Chadha was lawfully admitted to the United States in 1966 on a nonimmigrant student visa provides another opportunity to dig deeper into the intersection between administrative law, politics, and racial injustice. On July 7, ICE announced that all students on nonimmigrant student visas must leave the country if their schools did not provide in-person classes. Mr. Chadha’s status as holder of such a visa offers a window to discuss what this new rule would have meant for him and offers a gateway to discussing what it meant for the one million affected students whose lives were thrown into chaos, over half of whom come from China and India. A significant portion of these students faced travel restrictions that would have made it impossible for them to return home, putting them in a situation analogous to Mr. Chadha. Moreover, this new ICE rule (subsequently rescinded in the face of legal challenge) was issued as an “interim final rule,” offering the instructor the opportunity to review the ramifications of agency misuse of exceptions to Section 553 rulemaking to shut off discussion of important social consequences of discretionary agency decisions.   

Post-script: In 1984, Chadha became a citizen of the United States. He and his wife settled in in Northern California and raised their children there. As far as I know, they are still living something close to happily ever after. It is important to remind students that there can be happy endings. 

Rebecca Bratspies is a professor at CUNY School of Law where she runs the Center for Urban Environmental Reform (CUER). Follow her on Twitter here.  Follow CUER on Twitter here. 

A. Appointment Powers 

The President is responsible for appointing Officers of the United States. Article II, Section 2, clause 2 of the U.S. Constitution distinguishes “Officers of the United States” from “inferior Officers.” It is sometimes referred to as the "Appointments Clause." In this class, we will see how courts differentiate between Officers of the United States, which must be nominated by the President and confirmed by the Senate, and inferior Officers, who can be appointed by the President, Courts, or Department Heads, depending on what Congress decides.

Article II, Section 2 of the U.S. Constitution defines the two categories of Officers this way:

-Officers of the United States: The President “shall nominate, and by and with the Advice and Consent of the Senate, shall appoint Ambassadors, other public Ministers and Consuls, Judges, of the Supreme Court, and all other Officers of the United States, whose appointments are not herein otherwise provided for, and which shall be established by law.”

- Inferior Officers:  Do not need Senate Confirmation-- “Congress may by Law vest the appointment of such inferior Officers, as they think proper, in the President alone, and in the Courts of Law, or in the Heads of Departments.”

In this class, we cover Lucia v. SEC, 138 S.Ct. 2044 (2018), which addresses the issue of  whether Administrative Law Judges are inferior officers under the Appointments Clause. There may be students in the class who have been in front of, represented clients before, or have had some legal interaction with an ALJ. Without question, ALJ's are a solid foundation in poverty law advocacy and wield a tremendous amount of power. 

Administrative Law Judges are independent decision-makers within an agency who only preside over claims or disputes that involve administrative law. In sum, they preside over  administrative hearings in which parties adversely affected by particular regulations can raise objections. They act as both the judge and the trier-of-fact. The power and scope of ALJs vary by state (most states use the APA to mirror its state law that governs ALJs—so states can give ALJs a greater/less scope or more/less power than is prescribed by the APA). 

ALJs are not appointed under Article III of the Constitution (meaning they are not lifetime-tenured federal judges), but share many of the same powers, as enumerated in  APA § 556 (e.g. issuing subpoenas, conferring with parties, regulate hearings, hold settlement conferences). There are state and federal ALJs. ALJs are technically employees of the agency (yes, seems strange), who are tasked with making impartial decisions. The APA provides guidelines designed to ensure the impartiality and independent judgement of ALJs. 5 U.S.C. §§ 554a, 1305, 3105, 3344, 5372, 7521.

Despite statutory guidance to more strongly ensure ALJ independence, there is long-standing critique around ALJ bias. ALJ bias disproportionately impacts people who live at the intersection of race, disability, and poverty:  Social Security Administration ALJs make up 86% of all ALJs: this article refers to non-ALJ judges. We do not discuss non-ALJ judges this semester. Commonly referred to as "Administrative Judges," AJs do not have to follow the APA. Yet, they also wield a tremendous about of power. AJs, for example, include, Immigration Judges. 

B. Removal Powers

While the Constitution explicitly assigns appointment powers, it is silent about the power to remove Officers of the United States (“executive officers”) and inferior Officers. The Supreme Court has interpreted Article II, Section 2 to imply that the President has more power to remove officers without the advice and consent of Congress than to appoint them. However, the President’s removal power is not unlimited, and Congress can limit the President’s removal power by statute when there is good cause to do so.
 

Two cases in the early 1900’s grappled with the President’s removal powers. (These cases lay the groundwork for the cases we will read today.): 

 Myers v. United States (1926) determined whether President Wilson could dismiss a postmaster without the Senate’s concurrence despite language in a federal law that provided that postmasters could only be removed with “the advice and consent of the Senate.” The Court decided that the law unconstitutionally limited the President’s removal power, and that a postmaster could be dismissed without the advice and consent of the Senate. In its opinion, the Court reasoned that “the power to prevent the removal of an officer who has served under the President is different from the authority to consent or reject his appointment. When a nomination is made, it may be presumed that the Senate is, or may become, as well advised to the fitness of the nominee as the President, but in the nature of things the defects in ability or intelligence or loyalty in the administration of the laws of one who has served as an officer under the President are facts as to which the President, or his trusted subordinates, must be better informed than the Senate [...]” 

Myers seemed to grant unlimited removal power to the President. The Supreme Court Limited this power in Humphrey’s Executor v. United States (1935).   When President Franklin Roosevelt removed Commissioner William Humphrey of the Federal Trade Commission who had been appointed by the previous President, the Commissioner’s estate sued for back pay, alleging that Humphrey’s dismissal was illegal. 

In Humphrey’s Executor, the Court limited Roosevelt’s removal power, holding that he’d acted beyond his constitutional powers. President Roosevelt dismissed Humphrey because their views about trade diverged, and the President felt “the work of the Commission [could] be carried out most effectively” with personnel that he chose himself. However, the statute said that a Commissioner could only be removed for “inefficiency, neglect of duty or malfeasance in office.” 

The Humphrey Court distinguished this case from Myers, explaining that a postmaster is solely an executive office, where an FTC Commissioner has duties and powers related to legislative and judicial powers. The FTC was “created by Congress to carry into effect legislative policies embodied in the statute in accordance with the legislative standard therein prescribed, and to perform other specific duties as a legislative or as a judicial aid. Such a body cannot in any proper sense be characterized as an arm or an eye of the executive. It’s duties [...] must be free from executive control.” The Court reasoned that, in this case, the Commissioner’s role was both quasi-legislative and quasi-judicial. The Court must consider the “nature of the office” and limit the President’s removal powers when an office is performing duties that are legislative or judicial in nature.

We will read four cases that evoke the nuanced analyses SCOTUS provides in determining removal powers: Morrison v. Olson, 487 U.S. 654 (1988), Free Enterprise Fund v. Public Company Accounting Oversight Board, 561 U.S. 477 (2010), and Seila Law v. Consumer Financial Protection Bureau, 140 S. Ct. 2183 (2020), that demonstrate the limitations on the President’s removal powers.

Lucia v. Securities and Exchange Commission

138 S.Ct. 2044 (2018)

Justice KAGAN delivered the opinion of the Court.

[The Securities and Exchange Commission (“SEC” or “Commission”) has statutory authority to enforce the nation’s securities laws. One way it can do so is by instituting an administrative proceeding against an alleged wrongdoer. Typically, the Commission delegates the task of presiding over such a proceeding to an administrative law judge (ALJ). The SEC currently has five ALJs. Other staff members, rather than the Commission proper, selected them all. An ALJ assigned to hear an SEC enforcement action has the “authority to do all things necessary and appropriate” to ensure a “fair and orderly” adversarial proceeding. After a hearing ends, the ALJ issues an initial decision. The Commission can review that decision, but if it opts against review, it issues an order that the initial decision has become final. 

The SEC charged Raymond Lucia with violating certain securities laws and assigned ALJ Cameron Elliot to adjudicate the case. Following a hearing, Judge Elliot issued an initial decision concluding that Lucia had violated the law and imposing sanctions. On appeal to the SEC, Lucia argued that the administrative proceeding was invalid because Judge Elliot had not been constitutionally appointed. According to Lucia, SEC ALJs are “Officers of the United States” and thus subject to the Appointments Clause. Under that Clause, only the President, Courts of Law, or Heads of Departments can appoint such “Officers.” But none of those actors had made Judge Elliot an ALJ. The SEC and the Court of Appeals for the D.C. Circuit rejected Lucia's argument, holding that SEC ALJs are not “Officers of the United States,” but are instead mere employees—officials who are not subject to the Appointments Clause.]

The Appointments Clause of the Constitution lays out the permissible methods of appointing “Officers of the United States,” a class of government officials distinct from mere employees. Art. II, § 2, cl. 2. This case requires us to decide whether administrative law judges (ALJs) of the Securities and Exchange Commission (SEC or Commission) qualify as such “Officers.” In keeping with Freytag v. Commissioner, 501 U.S. 868 (1991), we hold that they do.

The SEC has statutory authority to enforce the nation’s securities laws. One way it can do so is by instituting an administrative proceeding against an alleged wrongdoer. By law, the Commission may itself preside over such a proceeding. But the Commission also may, and typically does, delegate that task to an ALJ. The SEC currently has five ALJs. Other staff members, rather than the Commission proper, selected them all. 

An ALJ assigned to hear an SEC enforcement action has extensive powers— the “authority to do all things necessary and appropriate to discharge his or her duties” and ensure a “fair and orderly” adversarial proceeding. Those powers “include, but are not limited to,” supervising discovery; issuing, revoking, or modifying subpoenas; deciding motions; ruling on the admissibility of evidence; administering oaths; hearing and examining witnesses; generally “[r]egulating the course of" the proceeding and the “conduct of the parties and their counsel”; and imposing sanctions for “[c]ontemptuous conduct” or violations of procedural requirements. As that list suggests, an SEC ALJ exercises authority “comparable to” that of a federal district judge conducting a bench trial. 

After a hearing ends, the ALJ issues an “initial decision.” That decision must set out “findings and conclusions” about all “material issues of fact [and] law”; it also must include the “appropriate order, sanction, relief, or denial thereof.” The Commission can then review the ALJ’s decision, either upon request or sua sponte. But if it opts against review, the Commission “issue[s] an order that the [ALJ's] decision has become final.” At that point, the initial decision is “deemed the action of the Commission.”

This case began when the SEC instituted an administrative proceeding against petitioner Raymond Lucia and his investment company. Lucia marketed a retirement savings strategy called “Buckets of Money.” In the SEC’s view, Lucia used misleading slideshow presentations to deceive prospective clients. The SEC charged Lucia under the Investment Advisers Act and assigned ALJ Cameron Elliot to adjudicate the case. After nine days of testimony and argument, Judge Elliot issued an initial decision concluding that Lucia had violated the Act and imposing sanctions, including civil penalties of $300,000 and a lifetime bar from the investment industry. In his decision, Judge Elliot made factual findings about only one of the four ways the SEC thought Lucia's slideshow misled investors. The Commission thus remanded for factfinding on the other three claims, explaining that an ALJ’s “personal experience with the witnesses” places him “in the best position to make findings of fact” and “resolve any conflicts in the evidence.” Judge Elliot then made additional findings of deception and issued a revised initial decision, with the same sanctions. 

On appeal to the SEC, Lucia argued that the administrative proceeding was invalid because Judge Elliot had not been constitutionally appointed. According to Lucia, the Commission's ALJs are “Officers of the United States” and thus subject to the Appointments Clause. Under that Clause, Lucia noted, only the President, “Courts of Law,” or “Heads of Departments” can appoint “Officers.” And none of those actors had made Judge Elliot an ALJ. To be sure, the Commission itself counts as a “Head[ ] of Department[ ].” But the Commission had left the task of appointing ALJs, including Judge Elliot, to SEC staff members. As a result, Lucia contended, Judge Elliot lacked constitutional authority to do his job.

The Commission rejected Lucia’s argument. It held that the SEC’s ALJs are not “Officers of the United States.” Instead, they are “mere employees”—officials with lesser responsibilities who fall outside the Appointments Clause’s ambit. The Commission reasoned that its ALJs do not “exercise significant authority independent of [its own] supervision.” Because that is so (said the SEC), they need no special, high-level appointment. 

Lucia’s claim fared no better in the Court of Appeals for the D.C. Circuit. A panel of that court seconded the Commission’s view that SEC ALJs are employees rather than officers, and so are not subject to the Appointments Clause [...] That decision conflicted with one from the Court of Appeals for the Tenth Circuit. 

Lucia asked us to resolve the split by deciding whether the Commission’s ALJs are “Officers of the United States within the meaning of the Appointments Clause.” Up to that point, the Federal Government (as represented by the Department of Justice) had defended the Commission’s position that SEC ALJs are employees, not officers […] We now reverse.

II

The sole question here is whether the Commission’s ALJs are “Officers of the United States” or simply employees of the Federal Government. The Appointments Clause prescribes the exclusive means of appointing “Officers.” Only the President, a court of law, or a head of department can do so [...] 

Two decisions set out this Court’s basic framework for distinguishing between officers and employees. Germaine held that “civil surgeons” (doctors hired to perform various physical exams) were mere employees because their duties were “occasional or temporary” rather than “continuing and permanent.” Stressing “ideas of tenure [and] duration,” the Court there made clear that an individual must occupy a “continuing” position established by law to qualify as an officer. Buckley then set out another requirement, central to this case. It determined that members of a federal commission were officers only after finding that they “exercis[ed] significant authority pursuant to the laws of the United States.” The inquiry thus focused on the extent of power an individual wields in carrying out his assigned functions.

[…] In Freytag v. Commissioner, 501 U.S. 868 (1991), we applied the unadorned “significant authority” test to adjudicative officials who are near-carbon copies of the Commission’s ALJs. As we now explain, our analysis there (sans any more detailed legal criteria) necessarily decides this case.

The officials at issue in Freytag were the “special trial judges” (STJs) of the United States Tax Court. The authority of those judges depended on the significance of the tax dispute before them. In “comparatively narrow and minor matters,” they could both hear and definitively resolve a case for the Tax Court. In more major matters, they could preside over the hearing, but could not issue the final decision; instead, they were to “prepare proposed findings and an opinion” for a regular Tax Court judge to consider. The proceeding challenged in Freytag was a major one, involving $1.5 billion in alleged tax deficiencies. After conducting a 14-week trial, the STJ drafted a proposed decision in favor of the Government. A regular judge then adopted the STJ's work as the opinion of the Tax Court. The losing parties argued on appeal that the STJ was not constitutionally appointed.

This Court held that the Tax Court’s STJs are officers, not mere employees. Citing Germaine, the Court first found that STJs hold a continuing office established by law. They serve on an ongoing, rather than a “temporary [or] episodic[,] basis”; and their “duties, salary, and means of appointment” are all specified in the Tax Code. The Court then considered, as Buckley demands, the “significance” of the “authority” STJs wield. In addressing that issue, the Government had argued that STJs are employees, rather than officers, in all cases (like the one at issue) in which they could not “enter a final decision.” But the Court thought the Government’s focus on finality “ignore[d] the significance of the duties and discretion that [STJs] possess.” Describing the responsibilities involved in presiding over adversarial hearings, the Court said: STJs “take testimony, conduct trials, rule on the admissibility of evidence, and have the power to enforce compliance with discovery orders.” And the Court observed that “[i]n the course of carrying out these important functions, the [STJs] exercise significant discretion.” That fact meant they were officers, even when their decisions were not final.

Freytag says everything necessary to decide this case. To begin, the Commission’s ALJs, like the Tax Court’s STJs, hold a continuing office established by law. Indeed, everyone here—Lucia, the Government, and the amicus—agrees on that point. Far from serving temporarily or episodically, SEC ALJs “receive[ ] a career appointment.” And that appointment is to a position created by statute, down to its “duties, salary, and means of appointment.” 

Still more, the Commission’s ALJs exercise the same “significant discretion” when carrying out the same “important functions” as STJs do. Both sets of officials have all the authority needed to ensure fair and orderly adversarial hearings—indeed, nearly all the tools of federal trial judges. Consider in order the four specific (if overlapping) powers Freytag mentioned. First, the Commission's ALJs (like the Tax Court's STJs) “take testimony.” More precisely, they “[r]eceiv[e] evidence” and “[e]xamine witnesses” at hearings, and may also take pre-hearing depositions. Second, the ALJs (like STJs) “conduct trials.” As detailed earlier, they administer oaths, rule on motions, and generally “regulat[e] the course of” a hearing, as well as the conduct of parties and counsel. Third, the ALJs (like STJs) “rule on the admissibility of evidence.” They thus critically shape the administrative record (as they also do when issuing document subpoenas). And fourth, the ALJs (like STJs) “have the power to enforce compliance with discovery orders.” In particular, they may punish all “[c]ontemptuous conduct,” including violations of those orders, by means as severe as excluding the offender from the hearing. So point for point— straight from Freytag’s list—the Commission’s ALJs have equivalent duties and powers as STJs in conducting adversarial inquiries.

And at the close of those proceedings, ALJs issue decisions much like that in Freytag—except with potentially more independent effect. As the Freytag Court recounted, STJs “prepare proposed findings and an opinion” adjudicating charges and assessing tax liabilities. Similarly, the Commission’s ALJs issue decisions containing factual findings, legal conclusions, and appropriate remedies. And what happens next reveals that the ALJ can play the more autonomous role. In a major case like Freytag, a regular Tax Court judge must always review an STJ’s opinion. And that opinion counts for nothing unless the regular judge adopts it as his own. By contrast, the SEC can decide against reviewing an ALJ decision at all. And when the SEC declines review (and issues an order saying so), the ALJ’s decision itself “becomes final” and is “deemed the action of the Commission.” That last-word capacity makes this an a fortiori case: If the Tax Court’s STJs are officers, as Freytag held, then the Commission’s ALJs must be too. […]

For all the reasons we have given, and all those Freytag gave before, the Commission’s ALJs are “Officers of the United States,” subject to the Appointments Clause.

[...]

We accordingly reverse the judgment of the Court of Appeals and remand the case for further proceedings consistent with this opinion.

Morrison v. Olson

487 U.S. 654 (1988)

CHIEF JUSTICE REHNQUIST delivered the opinion of the Court.

[The Ethics in Government Act allows for the appointment of an “independent counsel” to investigate and, if appropriate, prosecute certain high-ranking Government officials for violations of federal criminal laws. The Act requires the Attorney General to investigate any person covered by the Act, when there is sufficient reason to do so. The Attorney General must conduct a preliminary investigation. When the Attorney General has completed this investigation, or 90 days has elapsed, they must report their findings to a special court (the Special Division) created by the Act “for the purpose of appointing independent counsels.” 

If the Attorney General finds that there are “reasonable grounds to believe that further investigation or prosecution is warranted,” then they “shall apply to the division of the court for the appointment of an independent counsel.” Upon receiving this application, the Special Division “shall appoint an appropriate independent counsel and shall define that independent counsel’s prosecutorial jurisdiction.” The independent counsel has “full power and independent authority to exercise all investigative and prosecutorial functions and powers of the Department of Justice, the Attorney General, and any other officer or employee of the Department of Justice.”]

In 1982, two Subcommittees of the House of Representatives issued subpoenas directing the Environmental Protection Agency (EPA) to produce certain documents relating to the efforts of the EPA and the Land and Natural Resources Division of the Justice Department to enforce the “Superfund Law.” At that time, Olson was the Assistant Attorney General for the Office of Legal Counsel (OLC) [...] Acting on the advice of the Justice Department, the President ordered the Administrator of EPA to invoke executive privilege to withhold certain documents on the ground that they contained “enforcement sensitive information.” The Administrator obeyed this order and withheld the documents. In response, the House voted to hold the Administrator in contempt, after which the Administrator and the United States together filed a lawsuit against the House. The conflict abated in March 1983, when the administration agreed to give the House Subcommittees limited access to the documents.

The following year, the House Judiciary Committee began an investigation into the Justice Department’s role in the controversy over the EPA documents. During this investigation, appellee Olson testified before a House Subcommittee on March 10, 1983 [...] In 1985, the majority members of the Judiciary Committee published a lengthy report on the Committee’s investigation. The report [...] suggested that appellee Olson had given false and misleading testimony to the Subcommittee on March 10, 1983 [...] thus obstructing the Committee’s investigation. The Chairman of the Judiciary Committee forwarded a copy of the report to the Attorney General with a request that he seek the appointment of an independent counsel to investigate the allegations against Olson [...]

On April 23, 1986, the Special Division appointed James C. McKay as independent counsel [...] McKay later resigned as independent counsel, and on May 29, 1986, the Division appointed appellant Morrison as his replacement, with the same jurisdiction.

[Morrison] caused a grand jury to issue and serve subpoenas ad testificandum and duces tecum on [Olson]. [Olson] moved to quash the subpoenas, claiming, among other things, that the independent counsel provisions of the Act were unconstitutional and that appellant accordingly had no authority to proceed [...] 

V.

We now turn to consider whether [...] provision of the Act restricting the Attorney General’s power to remove the independent counsel to only those instances in which he can show “good cause,” taken by itself, impermissibly interferes with the President’s exercise of his constitutionally appointed functions [...]

Two Terms ago we had occasion to consider whether it was consistent with the separation of powers for Congress to pass a statute that authorized a Government official who is removable only by Congress to participate in what we found to be “executive powers.” Bowsher v. Synar, 478 U. S. 714, 730 (1986). We held in Bowsher that “Congress cannot reserve for itself the power of removal of an officer charged with the execution of the laws except by impeachment.” A primary antecedent for this ruling was our 1926 decision in Myers v. United States, 272 U. S. 52. Myers had considered the propriety of a federal statute by which certain postmasters of the United States could be removed by the President only “by and with the advice and consent of the Senate.” There too, Congress’ attempt to involve itself in the removal of an executive official was found to be sufficient grounds to render the statute invalid. As we observed in Bowsher, the essence of the decision in Myers was the judgment that the Constitution prevents Congress from “draw[ing] to itself . . . the power to remove or the right to participate in the exercise of that power. To do this would be to go beyond the words and implications of the [Appointments Clause] and to infringe the constitutional principle of the separation of governmental powers.”

Unlike both Bowsher and Myers, this case does not involve an attempt by Congress itself to gain a role in the removal of executive officials other than its established powers of impeachment and conviction. The Act instead puts the removal power squarely in the hands of the Executive Branch; an independent counsel may be removed from office, “only by the personal action of the Attorney General, and only for good cause.” There is no requirement of congressional approval of the Attorney General’s removal decision, though the decision is subject to judicial review. In our view, the removal provisions of the Act make this case more analogous to Humphrey’s Executor v. United States, 295 U. S. 602 (1935) [...] than to Myers or Bowsher.

[...]

We undoubtedly did rely on the terms “quasi-legislative” and “quasi-judicial” to distinguish the officials involved in Humphrey’s Executor and Wiener from those in Myers, but our present considered view is that the determination of whether the Constitution allows Congress to impose a “good cause”-type restriction on the President’s power to remove an official cannot be made to turn on whether or not that official is classified as “purely executive.” The analysis contained in our removal cases is designed not to define rigid categories of those officials who may or may not be removed at will by the President, but to ensure that Congress does not interfere with the President’s exercise of the “executive power” and his constitutionally appointed duty to “take care that the laws be faithfully executed” under Article II. Myers was undoubtedly correct in its holding, and in its broader suggestion that there are some “purely executive” officials who must be removable by the President at will if he is to be able to accomplish his constitutional role [...]

[W]e cannot say that the imposition of a “good cause” standard for removal by itself unduly trammels on executive authority. There is no real dispute that the functions performed by the independent counsel are “executive” in the sense that they are law enforcement functions that typically have been undertaken by officials within the Executive Branch. As we noted above, however, the independent counsel is an inferior officer under the Appointments Clause, with limited jurisdiction and tenure and lacking policymaking or significant administrative authority. Although the counsel exercises no small amount of discretion and judgment in deciding how to carry out his or her duties under the Act, we simply do not see how the President’s need to control the exercise of that discretion is so central to the functioning of the Executive Branch as to require as a matter of constitutional law that the counsel be terminable at will by the President.

Nor do we think that the “good cause” removal provision at issue here impermissibly burdens the President's power to control or supervise the independent counsel, as an executive official, in the execution of his or her duties under the Act. This is not a case in which the power to remove an executive official has been completely stripped from the President, thus providing no means for the President to ensure the “faithful execution” of the laws. Rather, because the independent counsel may be terminated for “good cause,” the Executive, through the Attorney General, retains ample authority to assure that the counsel is competently performing his or her statutory responsibilities in a manner that comports with the provisions of the Act [...] 

Finally, we do not think that the Act “impermissibly undermine[s]” the powers of the Executive Branch [] or “disrupts the proper balance between the coordinate branches [by] prevent [ing] the Executive Branch from accomplishing its constitutionally assigned functions,” []. It is undeniable that the Act reduces the amount of control or supervision that the Attorney General and, through him, the President exercises over the investigation and prosecution of a certain class of alleged criminal activity.

The Attorney General is not allowed to appoint the individual of his choice; he does not determine the counsel's jurisdiction; and his power to remove a counsel is limited. Nonetheless, the Act does give the Attorney General several means of supervising or controlling the prosecutorial powers that may be wielded by an independent counsel. Most importantly, the Attorney General retains the power to remove the counsel for “good cause,” a power that we have already concluded provides the Executive with substantial ability to ensure that the laws are “faithfully executed” by an independent counsel.

No independent counsel may be appointed without a specific request by the Attorney General, and the Attorney General's decision not to request appointment if he finds “no reasonable grounds to believe that further investigation is warranted” is committed to his unreviewable discretion. ... In addition, the jurisdiction of the independent counsel is defined with reference to the facts submitted by the Attorney General, and once a counsel is appointed, the Act requires that the counsel abide by Justice Department policy unless it is not “possible” to do so. 

[...]

In sum, we conclude today that it does not violate the Appointments Clause for Congress to vest the appointment of independent counsel in the Special Division [...] The decision of the Court of Appeals is therefore Reversed.

JUSTICE SCALIA, [scathing] dissenting.

[...] The Court concedes that “[t]here is no real dispute that the functions performed by the independent counsel are ‘executive’,” though it qualifies that concession by adding “in the sense that they are law enforcement functions that typically have been undertaken by officials within the Executive Branch.” The qualifier adds nothing but atmosphere [...] 

The utter incompatibility of the Court's approach with our constitutional traditions can be made more clear, perhaps, by applying it to the powers of the other two branches. Is it conceivable that if Congress passed a statute depriving itself of less than full and entire control over some insignificant area of legislation, we would inquire whether the matter was “so central to the functioning of the Legislative Branch” as really to require complete control, or whether the statute gives Congress “sufficient control over the surrogate legislator to ensure that Congress is able to perform its constitutionally assigned duties”? Of course we would have none of that. Once we determined that a purely legislative power was at issue we would require it to be exercised, wholly and entirely, by Congress [...] 

Is it unthinkable that the President should have such exclusive power, even when alleged crimes by him or his close associates are at issue? No more so than that Congress should have the exclusive power of legislation, even when what is at issue is its own exemption from the burdens of certain laws. [...]

Having abandoned as the basis for our decisionmaking the text of Article II that “the executive Power” must be vested in the President, the Court does not even attempt to craft a substitute criterion — a “justiciable standard,” however remote from the Constitution — that today governs, and in the future will govern, the decision of such questions. Evidently, the governing standard is to be what might be called the unfettered wisdom of a majority of this Court, revealed to an obedient people on a case-by-case basis. This is not only not the government of laws that the Constitution established; it is not a government of laws at all [...]

Seila Law v. Consumer Financial Protection Bureau

140 S. Ct. 991 (2020)

Chief Justice ROBERTS delivered the opinion of the Court with respect to Parts I, II, and III.

Under our Constitution, the “executive Power”—all of it—is “vested in a President,” who must “take Care that the Laws be faithfully executed.” Because no single person could fulfill that responsibility alone, the Framers expected that the President would rely on subordinate officers for assistance. Ten years ago, in Free Enterprise Fund v. Public Company Accounting Oversight Bd., 561 U. S. 477 (2010), we reiterated that, “as a general matter,” the Constitution gives the President “the authority to remove those who assist him in carrying out his duties.” “Without such power, the President could not be held fully accountable for discharging his own responsibilities; the buck would stop somewhere else.”

[...] Our precedents have recognized only two exceptions to the President’s unrestricted removal power. In Humphrey’s Executor v. United States, we held that Congress could create expert agencies led by a group of principal officers removable by the President only for good cause. And in Morrison v. Olson, 487 U. S. 654 (1988), we held that Congress could provide tenure protections to certain inferior officers with narrowly defined duties.

We are now asked to extend these precedents to a new configuration: an independent agency that wields significant executive power and is run by a single individual who cannot be removed by the President unless certain statutory criteria are met. We decline to take that step [...] 

I

In the summer of 2007, then-Professor Elizabeth Warren called for the creation of a new, independent federal agency focused on regulating consumer financial products. Warren, Unsafe at Any Rate, Democracy (Summer 2007). Professor Warren believed the financial products marketed to ordinary American households—credit cards, student loans, mortgages, and the like—had grown increasingly unsafe due to a “regulatory jumble” that paid too much attention to banks and too little to consumers. To remedy the lack of “coherent, consumer-oriented” financial regulation, she proposed “concentrat[ing] the review of financial products in a single location”—an independent agency modeled after the multimember Consumer Product Safety Commission [...]

In 2010, Congress acted on these proposals and created the CFPB as an independent financial regulator within the Federal Reserve System. Congress tasked the CFPB with “implement[ing]” and “enforc[ing]” a large body of financial consumer protection laws to “ensur[e] that all consumers have access to markets for consumer financial products and services and that markets for consumer financial products and services are fair, transparent, and competitive.” [...] The CFPB’s rulemaking and enforcement powers are coupled with extensive adjudicatory authority [...] 

Congress’s design for the CFPB differed from the proposals of Professor Warren and the Obama administration in one critical respect. Rather than create a traditional independent agency headed by a multimember board or commission, Congress elected to place the CFPB under the leadership of a single Director. The CFPB Director is appointed by the President with the advice and consent of the Senate. The Director serves for a term of five years, during which the President may remove the Director from office only for “inefficiency, neglect of duty, or malfeasance in office.”

Seila Law LLC is a California-based law firm that provides debt-related legal services to clients. In 2017, the CFPB issued a civil investigative demand to Seila Law to determine whether the firm had “engag[ed] in unlawful acts or practices in the advertising, marketing, or sale of debt relief services.” The demand (essentially a subpoena) directed Seila Law to produce information and documents related to its business practices.

Seila Law asked the CFPB to set aside the demand, objecting that the agency’s leadership by a single Director removable only for cause violated the separation of powers. The CFPB declined to address that claim and directed Seila Law to comply with the demand.

When Seila Law refused, the CFPB filed a petition to enforce the demand in the District Court. In response, Seila Law renewed its defense that the demand was invalid and must be set aside because the CFPB's structure violated the Constitution [...]

We granted certiorari to address the constitutionality of the CFPB’s structure [...] 

III

We hold that the CFPB’s leadership by a single individual removable only for inefficiency, neglect, or malfeasance violates the separation of powers.

Article II provides that “[t]he executive Power shall be vested in a President,” who must “take Care that the Laws be faithfully executed.” The entire “executive Power” belongs to the President alone. But because it would be “impossib[le]” for “one man” to “perform all the great business of the State,” the Constitution assumes that lesser executive officers will “assist the supreme Magistrate in discharging the duties of his trust.” 

These lesser officers must remain accountable to the President, whose authority they wield. As Madison explained, “[I]f any power whatsoever is in its nature Executive, it is the power of appointing, overseeing, and controlling those who execute the laws.” That power, in turn, generally includes the ability to remove executive officials, for it is “only the authority that can remove” such officials that they “must fear and, in the performance of [their] functions, obey.” Bowsher, 478 U. S., at 726. 

[...] We recently reiterated the President’s general removal power in Free Enterprise Fund. “Since 1789,” we recapped, “the Constitution has been understood to empower the President to keep these officers accountable—by removing them from office, if necessary.” Although we had previously sustained congressional limits on that power in certain circumstances, we declined to extend those limits to “a new situation not yet encountered by the Court”—an official insulated by two layers of for-cause removal protection. In the face of that novel impediment to the President’s oversight of the Executive Branch, we adhered to the general rule that the President possesses “the authority to remove those who assist him in carrying out his duties.” 

Free Enterprise Fund left in place two exceptions to the President’s unrestricted removal power. First, in Humphrey’s Executor, decided less than a decade after Myers, the Court upheld a statute that protected the Commissioners of the FTC from removal except for “inefficiency, neglect of duty, or malfeasance in office.” In reaching that conclusion, the Court stressed that Congress’s ability to impose such removal restrictions “will depend upon the character of the office.” [...] 

In short, Humphrey’s Executor permitted Congress to give for-cause removal protections to a multimember body of experts, balanced along partisan lines, that performed legislative and judicial functions and was said not to exercise any executive power. Consistent with that understanding, the Court later applied “[t]he philosophy of Humphrey’s Executor” to uphold for-cause removal protections for the members of the War Claims Commission—a three-member “adjudicatory body” tasked with resolving claims for compensation arising from World War II. Wiener v. United States, 357 U. S. 349, 356 (1958).

While recognizing an exception for multimember bodies with “quasi-judicial” or “quasi-legislative” functions, Humphrey’s Executor reaffirmed the core holding of Myers that the President has “unrestrictable power . . . to remove purely executive officers.” The Court acknowledged that between purely executive officers on the one hand, and officers that closely resembled the FTC Commissioners on the other, there existed “a field of doubt” that the Court left “for future consideration.”

We have recognized a second exception for inferior officers in Morrison v. Olson. [In] Morrison, we upheld a provision granting good-cause tenure protection to an independent counsel appointed to investigate and prosecute particular alleged crimes by high-ranking Government officials. Backing away from the reliance in Humphrey’s Executor on the concepts of “quasi-legislative” and “quasi-judicial” power, we viewed the ultimate question as whether a removal restriction is of “such a nature that [it] impede[s] the President’s ability to perform his constitutional duty.” Although the independent counsel was a single person and performed “law enforcement functions that typically have been undertaken by officials within the Executive Branch,” we concluded that the removal protections did not unduly interfere with the functioning of the Executive Branch because “the independent counsel [was] an inferior officer under the Appointments Clause, with limited jurisdiction and tenure and lacking policymaking or significant administrative authority.”

These two exceptions—one for multimember expert agencies that do not wield substantial executive power, and one for inferior officers with limited duties and no policymaking or administrative authority—”represent what up to now have been the outermost constitutional limits of permissible congressional restrictions on the President’s removal power.” 

Neither Humphrey’s Executor nor Morrison resolves whether the CFPB Director’s insulation from removal is constitutional. Start with Humphrey’s Executor. Unlike the New Deal-era FTC upheld there, the CFPB is led by a single Director who cannot be described as a “body of experts” and cannot be considered “non-partisan” in the same sense as a group of officials drawn from both sides of the aisle. Moreover, while the staggered terms of the FTC Commissioners prevented complete turnovers in agency leadership and guaranteed that there would always be some Commissioners who had accrued significant expertise, the CFPB’s single-Director structure and five-year term guarantee abrupt shifts in agency leadership and with it the loss of accumulated expertise.

In addition, the CFPB Director is hardly a mere legislative or judicial aid. Instead of making reports and recommendations to Congress, as the 1935 FTC did, the Director possesses the authority to promulgate binding rules fleshing out 19 federal statutes, including a broad prohibition on unfair and deceptive practices in a major segment of the U. S. economy. And instead of submitting recommended dispositions to an Article III court, the Director may unilaterally issue final decisions awarding legal and equitable relief in administrative adjudications. Finally, the Director's enforcement authority includes the power to seek daunting monetary penalties against private parties on behalf of the United States in federal court—a quintessentially executive power not considered in Humphrey’s Executor.

The logic of Morrison also does not apply. Everyone agrees the CFPB Director is not an inferior officer, and her duties are far from limited. Unlike the independent counsel, who lacked policymaking or administrative authority, the Director has the sole responsibility to administer 19 separate consumer-protection statutes that cover everything from credit cards and car payments to mortgages and student loans. It is true that the independent counsel in Morrison was empowered to initiate criminal investigations and prosecutions, and in that respect wielded core executive power. But that power, while significant, was trained inward to high-ranking Governmental actors identified by others, and was confined to a specified matter in which the Department of Justice had a potential conflict of interest. By contrast, the CFPB Director has the authority to bring the coercive power of the state to bear on millions of private citizens and businesses, imposing even billion-dollar penalties through administrative adjudications and civil actions.

In light of these differences, the constitutionality of the CFPB Director’s insulation from removal cannot be settled by Humphrey’s Executor or Morrison alone.

The question instead is whether to extend those precedents to the “new situation” before us, namely an independent agency led by a single Director and vested with significant executive power. We decline to do so [...]

“The Framers recognized that, in the long term, structural protections against abuse of power were critical to preserving liberty.” Bowsher, 478 U. S., at 730. Their solution to governmental power and its perils was simple: divide it. To prevent the “gradual concentration” of power in the same hands, they enabled “[a]mbition . . . to counteract ambition” at every turn. At the highest level, they “split the atom of sovereignty” itself into one Federal Government and the States. They then divided the “powers of the new Federal Government into three defined categories, Legislative, Executive, and Judicial.” Chadha, 462 U. S., at 951.

They did not stop there. Most prominently, the Framers bifurcated the federal legislative power into two Chambers: the House of Representatives and the Senate, each composed of multiple Members and Senators. Art. I, §§2, 3.

The Executive Branch is a stark departure from all this division. The Framers viewed the legislative power as a special threat to individual liberty, so they divided that power to ensure that “differences of opinion” and the “jarrings of parties” would “promote deliberation and circumspection” and “check excesses in the majority.” By contrast, the Framers thought it necessary to secure the authority of the Executive so that he could carry out his unique responsibilities. As Madison put it, while “the weight of the legislative authority requires that it should be . . . divided, the weakness of the executive may require, on the other hand, that it should be fortified.” [...]

The Framers [...] gave the Executive the “[d]ecision, activity, secrecy, and dispatch” that “characterise the proceedings of one man.”

To justify and check that authority—unique in our constitutional structure—the Framers made the President the most democratic and politically accountable official in Government. Only the President (along with the Vice President) is elected by the entire Nation [...]

The CFPB’s single-Director structure contravenes this carefully calibrated system by vesting significant governmental power in the hands of a single individual accountable to no one. The Director is neither elected by the people nor meaningfully controlled (through the threat of removal) by someone who is. The Director does not even depend on Congress for annual appropriations. Yet the Director may unilaterally, without meaningful supervision, issue final regulations, oversee adjudications, set enforcement priorities, initiate prosecutions, and determine what penalties to impose on private parties. With no colleagues to persuade, and no boss or electorate looking over her shoulder, the Director may dictate and enforce policy for a vital segment of the economy affecting millions of Americans [...]

Because the CFPB is headed by a single Director with a five-year term, some Presidents may not have any opportunity to shape its leadership and thereb y influence its activities. A President elected in 2020 would likely not appoint a CFPB Director until 2023, and a President elected in 2028 may never appoint one. That means an unlucky President might get elected on a consumer-protection platform and enter office only to find herself saddled with a holdover Director from a competing political party who is dead set against that agenda. To make matters worse, the agency’s single-Director structure means the President will not have the opportunity to appoint any other leaders—such as a chair or fellow members of a Commission or Board—who can serve as a check on the Director’s authority and help bring the agency in line with the President’s preferred policies [...]

Because we find the Director’s removal protection severable from the other provisions of Dodd-Frank that establish the CFPB, we remand for the Court of Appeals to consider whether the civil investigative demand was validly ratified [...]

Justice KAGAN, with whom JUSTICE GINSBURG, JUSTICE BREYER, and JUSTICE SOTOMAYOR join, concurring in the judgment with respect to severability and dissenting in part.

[...] The text of the Constitution, the history of the country, the precedents of this Court, and the need for sound and adaptable governance—all stand against the majority’s opinion. They point not to the majority’s “general rule” of “unrestricted removal power” with two grudgingly applied “exceptions.” Rather, they bestow discretion on the legislature to structure administrative institutions as the times demand, so long as the President retains the ability to carry out his constitutional duties. And most relevant here, they give Congress wide leeway to limit the President’s removal power in the interest of enhancing independence from politics in regulatory bodies like the CFPB.

What does the Constitution say about the separation of powers—and particularly about the President’s removal authority? (Spoiler alert: about the latter, nothing at all.)

The majority offers the civics class version of separation of powers—call it the Schoolhouse Rock definition of the phrase. See Schoolhouse Rock! Three Ring Government (Mar. 13, 1979), http://www.youtube.com/watch?v=pKSGyiT-o3o (“Ring one, Executive. Two is Legislative, that's Congress. Ring three, Judiciary”). The Constitution’s first three articles, the majority recounts, “split the atom of sovereignty” among Congress, the President, and the courts. 

[The majority fails to] recognize that the separation of powers is, by design, neither rigid nor complete. Blackstone, whose work influenced the Framers on this subject as on others, observed that “every branch” of government “supports and is supported, regulates and is regulated, by the rest.” So as James Madison stated, the creation of distinct branches “did not mean that these departments ought to have no partial agency in, or no controul over the acts of each other.” To the contrary, Madison explained, the drafters of the Constitution—like those of then-existing state constitutions—opted against keeping the branches of government “absolutely separate and distinct.” [...]

The majority relies for its contrary vision on Article II’s Vesting Clause, but the provision can’t carry all that weight. Or as Chief Justice Rehnquist wrote of a similar claim in Morrison v. Olson, 487 U. S. 654 (1988), “extrapolat[ing]” an unrestricted removal power from such “general constitutional language”—which says only that “[t]he executive Power shall be vested in a President”—is “more than the text will bear.” [...] Historical understandings thus belie the majority’s “general rule.” [...]

As the majority explains, the CFPB emerged out of disaster. The collapse of the subprime mortgage market “precipitat[ed] a financial crisis that wiped out over $10 trillion in American household wealth and cost millions of Americans their jobs, their retirements, and their homes.” In that moment of economic ruin, the President proposed and Congress enacted legislation to address the causes of the collapse and prevent a recurrence. An important part of that statute created an agency to protect consumers from exploitative financial practices. The agency would take over enforcement of almost 20 existing federal laws. And it would administer a new prohibition on “unfair, deceptive, or abusive act[s] or practice[s]” in the consumer-finance sector. 

No one had a doubt that the new agency should be independent. As explained already, Congress has historically given—with this Court's permission—a measure of independence to financial regulators like the Federal Reserve Board and the FTC. And agencies of that kind had administered most of the legislation whose enforcement the new statute transferred to the CFPB. The law thus included an ordinary for-cause provision—once again, that the President could fire the CFPB’s Director only for “inefficiency, neglect of duty, or malfeasance in office.” That standard would allow the President to discharge the Director for a failure to “faithfully execute[ ]” the law, as well as for basic incompetence. But it would not permit removal for policy differences.

[...] In the midst of the Great Recession, Congress and the President came together to create an agency with an important mission. It would protect consumers from the reckless financial practices that had caused the then-ongoing economic collapse. Not only Congress but also the President thought that the new agency, to fulfill its mandate, needed a measure of independence. So the two political branches, acting together, gave the CFPB Director the same job protection that innumerable other agency heads possess. All in all, those branches must have thought, they had done a good day’s work. Relying on their experience and knowledge of administration, they had built an agency in the way best suited to carry out its functions. They had protected the public from financial chicanery and crisis. They had governed.

And now consider how the dispute ends—with five unelected judges rejecting the result of that democratic process. The outcome today will not shut down the CFPB: A different majority of this Court, including all those who join this opinion, believes that if the agency’s removal provision is unconstitutional, it should be severed. But the majority on constitutionality jettisons a measure Congress and the President viewed as integral to the way the agency should operate. The majority does so even though the Constitution grants to Congress, acting with the President’s approval, the authority to create and shape administrative bodies. And even though those branches, as compared to courts, have far greater understanding of political control mechanisms and agency design [...]

The executive branch has several methods for overseeing and managing its agencies. Presidential directives instructing agencies on how to carry out their work are called Executive Orders. Executive orders are management instructions to agency administrators, similar to instructions bosses give their employees in private companies. Like other employees, agency administrators follow Executive Orders to avoid being fired. Executive Orders generally persist until another President issues a new Order to replace the old one.

A 1981 Executive Order from President Reagan directed executive agencies to assess the benefits and costs of “major” rules. Reagan directed the Office of Information and Regulatory Affairs (“OIRA”) to oversee agency compliance with the Order. OIRA was created by Congress as part of the Office of Management and Budget (“OMB”) in the Paperwork Reduction Act of 1980. The OMB and OIRA are in the Executive Office of the President and considered closely connected to the policies of the President. OIRA was created to assess agencies’ proposed information collection schemes to ensure that regulated parties don’t get mired in paperwork. In 1993, President Bill Clinton ordered OIRA to focus on reviewing “economically significant” agency rules in Executive Order 12866. Clinton told OIRA to follow certain principles in its regulatory assessment, like ensuring agencies 1) considered economic incentive schemes as alternatives to direct regulation, 2) designed regulations in the most cost-effective manner to achieve its objectives, and 3) assessed both the costs and the benefits of the regulation and determined that the benefits of the justify the costs. 

To comply with OIRA requirements, agencies were required to submit proposed rules to OIRA before they were published for notice and comment in the Federal Register and again before they publish a final rule. In the article below, Lisa Heinzerling, an EPA administrator from the Obama Administration, describes her experiences with OIRA review.

Lisa Heinzerling, Inside EPA: A Former Insider’s Reflections on the Relationship Between the Obama EPA and the Obama White House

The Nineteenth Annual Lloyd K. Garrison Lecture

31 Pace Envtl. L. Rev. 325 (2014)

I will be discussing the relationship between the Environmental Protection Agency (“EPA”) and the White House. I will focus specifically on the role that the Office of Information and Regulatory Affairs (“OIRA”), within the Office of Management and Budget (“OMB”), plays in reviewing the EPA’s regulatory output.

As I will explain, OIRA’s actual practice in reviewing agency rules departs considerably from the structure created by the executive order governing OIRA’s process of regulatory review. The distribution of decision-making authority is ad hoc and chaotic rather than predictable and ordered; the rules reviewed are mostly not economically significant but rather, in many cases, are merely of special interest to OIRA staffers; rules fail OIRA review for a variety of reasons, some extra-legal and some simply mysterious; there are no longer any meaningful deadlines for OIRA review; and OIRA does not follow - or allow agencies to follow - most of the transparency requirements of the relevant executive order.

Describing the OIRA process as it actually operates today goes a long way toward previewing the substantive problems with it. The process is utterly opaque. It rests on assertions of decision-making authority that are inconsistent with the statutes the agencies administer. The process diffuses power to such an extent - acceding, depending on the situation, to the views of other Cabinet officers, career staff in other agencies, White House economic offices, members of Congress, the White House Chief of Staff, OIRA career staff, and many more - that at the end of the day, no one is accountable for the results it demands (or blocks, in the case of the many rules stalled during the OIRA process). And, through it all, environmental rules take a particular beating, from the number of such rules reviewed to the scrutiny they receive to the changes they suffer in the course of the process [...]

Misunderstandings of the OIRA process abound. Too often these misunderstandings are perpetuated by, or not contradicted by, the very personnel who have been involved in the process. Indeed, after I finished a stint as the head of the EPA office responsible for acting as the primary EPA liaison to OIRA, I did not write at any length about my experiences with OIRA review. Partly out of continuing loyalty to the administration that had made my time in government possible, partly out of respect for the sensitivity of interactions between high-level government officers, and partly out of a sense of sheer futility, I had resolved to move on to other topics. But when accounts of OIRA’s role in the Obama administration began to emerge from other quarters, and when these accounts, in many respects, did not jibe with my own experience, I decided to resurface and to describe the OIRA process from my perspective. Hence the account that follows.

I. THE HISTORY OF WHITE HOUSE REVIEW

It will be useful first to give a brief history of White House review of agencies’ regulatory actions. Some form of centralized review of agency action has been with us for decades. Such review took place episodically in the Nixon, Ford, and Carter administrations. But, it was during the presidency of Ronald Reagan that the practice of regulatory review began to take on the shape it has today.

A. Executive Order 12,291

In one of his earliest acts as President, Ronald Reagan issued an executive order - Executive Order 12,291- that gave centralized review more systematized form in two respects, First, Executive Order (“EO”) 12,291 put a specific office - OMB - in charge of reviewing agency actions. Second, it adopted cost-benefit analysis as the governing framework for this review [...]

[The] order’s legality rested on the premise that the centralized reviewers (OMB and a newly created Task Force on Regulatory Relief) would only supervise, and not displace, the exercise of discretion given to the agencies by statute. Office of Legal Counsel [legal advisor to the President] wrote: “[T]he fact that the President has both constitutional and implied statutory authority to supervise decision-making by executive agencies . . . suggest[s] . . . that supervision is more readily justified when it does not purport wholly to displace, but only to guide and limit, discretion which Congress has allocated to a particular subordinate official. A wholesale displacement might be held inconsistent with the statute vesting authority in the relevant official. . . The order does not empower the [OMB] Director or the Task Force to displace the relevant agencies in discharging their statutory functions or in assessing and weighing the costs and benefits of proposed actions.”

OLC’s opinion does not state that an order displacing the agencies’ discretion would certainly be illegal. But it does interpret EO 12,291 not to permit such displacement and it does suggest a potential legal problem with such displacement. Reading only EO 12,291 and the OLC’s opinion on it, one would conclude that agencies retained the decision-making discretion they were given by the statutes they are charged with administering.

In practice, though, it was not that simple. During the Reagan years, critics charged that OIRA did indeed displace - and not merely supervise - agencies’ decision-making discretion. In addition, OIRA’s process of review frequently delayed agency rules for extended periods. The process also at times degenerated into one in which OIRA served as a conduit for the views of industry on particular regulatory actions. This feature of the process was especially troubling insofar as the process was opaque. Only in 1986 did OIRA begin to make public the documents shared by outside parties with OIRA during its review. Even so, the bulk of the process - which agency actions went to OIRA, what happened to them while they were there, who made the decisions - was closed off to the public. Moreover, the cost-benefit lens through which OIRA viewed agency rules proved to skew against some kinds of rules, in particular environmental rules, since so many of the benefits of environmental rules are difficult or impossible to quantify and monetize, and since so many of these benefits occur in the future while the settled practice of cost-benefit analysis is to steeply discount future consequences.

Such critiques dogged the OIRA review process under EO 12,291 through the Reagan years and into the presidency of George H.W. Bush. By the time Bill Clinton came into office in 1993, many were hoping for change. Within months of taking office, President Clinton responded with a new executive order on regulatory review, EO 12,866.

B. Executive Order 12,866

Although EO 12,866 preserved the status quo in that it continued to require centralized White House review of agency actions under a cost-benefit framework, it also reformed several specific features of this review that had proved troublesome. Taking on the issue of displacement, an early passage in EO 12,866 “reaffirm[ed] the primacy of Federal agencies in the regulatory decision-making process.” At the same time, however, the order for the first time explicitly stated that if a conflict arose between OIRA and an agency over a particular matter that could not be resolved by the OMB Director and the agency head, it would be the President (or the Vice-President acting on the President’s behalf) who would settle the dispute - and make the “decision with respect to the matter.” [...] 

C. Executive Order 13,563

In January 2011, a new executive order on regulatory review finally emerged. The single most notable fact about the new order, EO 13,563, is how not-new it was; much of the order simply repeats, verbatim, the language of EO 12,866.

Another striking fact about the order is how weakly responsive it is to President Obama’s own directives in his presidential memorandum of January 2009: EO 13,563 does not say a word about “the relationship between OIRA and the agencies” or “methods of ensuring that regulatory review does not produce undue delay.” On “disclosure and transparency,” the order says nothing about disclosure and transparency related to OIRA, but focuses only on the agencies and here simply advises them to place materials online and in an open format wherever possible [...]

II. THE COMMON LAW OF EXECUTIVE ORDER 13,563

The common law of EO 13,563 determines the most important features of the current process of regulatory review: who is the decision maker, what is reviewed, why particular actions fail regulatory review, when actions emerge from review, and what is disclosed about the process. If one has read EOs 12,866 and 13,563, which in theory govern this process, surprises are in store once we look at the way the process actually operates.

A. Who Decides?

[...] EO 12,866 puts OIRA initially in charge of the process of regulatory review. But if, according to EO 12,866, a dispute arises between OIRA and the action agency, the dispute is to be resolved through a highly specified process that involves recommendations from the Vice-President and an ultimate decision by the President or by the Vice-President acting on his behalf.

This is not how regulatory review works today. In my two years at EPA, I do not recall ever hearing of Vice-Presidential involvement in a regulatory matter. Moreover, the OIRA process in the Obama administration was not structured to funnel disputes between OIRA and the agencies to Vice-President Biden for his recommendations. It was far messier and more ill-defined than that. From my perspective, it was often hard to tell who exactly was in charge of making the ultimate decision on an important regulatory matter.

A recent account of the OIRA process by former OIRA Administrator Cass Sunstein helps to explain this confusion as to some regulatory matters, but leaves a puzzle as to others. Sunstein states that OIRA’s primary role in the regulatory process is as an “information-aggregator” - compiling information from many actors in the executive branch and using that information to help get at the right regulatory result [...] Beyond the White House, Sunstein asserts that agencies other than the agency proposing a particular regulatory action also have a large influence on regulatory policy. Sometimes it is another Cabinet secretary who might have such influence; often, Sunstein says, it is career staff at another agency. Sometimes it is the Chief of Staff of the White House who plays the major role; sometimes it is a member of Congress. Sunstein extols the virtues of this system, arguing that the aggregation of input from all of these different sources produces better regulatory results [...] 

Sunstein’s account of the OIRA process at least helps me to understand why we were all so confused about exactly what the process was.

B. What Is Reviewed?

One domain in which OIRA’s powerful role is quite clear, however, is in the decisions about which regulatory actions OIRA will review. EO 12,866 states that OIRA may review not only economically significant actions, but also actions with a significant potential for interagency conflict or inconsistency and actions that raise “novel legal or policy issues.” In fact, most of the rules OIRA reviews are not economically significant. In the Obama administration so far, some 80 percent of the EPA rules that have been reviewed were not economically significant. Moreover, many of the rules under review lack any obvious interagency dimension. So how does OIRA come to review them?

While I was at EPA, we had a routinized process for determining what went to OIRA. Every three months or so, the Assistant Administrators of the program offices (air, water, solid waste and emergency response, chemical safety and pollution prevention) and I met with representatives from OIRA to go over the regulatory actions EPA planned to announce in the coming months. We offered our own opinion as to whether any given item warranted OIRA review. But the bottom line was that it was not our decision to make. If OIRA wanted to review something, OIRA reviewed it [...] 

C. Why Do Rules Fail?

One of the most vexing questions concerning regulatory review has to do with the basis on which regulatory actions fail this review. When a regulatory action goes to OIRA for review, it goes fully formed, reflecting the agency’s best judgment about the proper path in the relevant circumstances. EPA rules go to OIRA after an extensive period of internal development and review. In many cases, the rules have been under development for years, with dozens or more agency personnel working on them. In the case of the most significant rules, they have gone to the Administrator herself for initial selection of options and later for final review. It is a matter of some consequence, then, when OIRA does not allow such rules to issue, or requires substantial changes before they may issue.

One reason why OIRA might disapprove of an agency’s planned action is that it disagrees with the agency’s interpretation of the statute the agency is charged with administering. Notably, neither EO 12,866 nor EO 13,563 gives OIRA the authority to second-guess agencies’ interpretations of the statutes they administer. Indeed, both executive orders explicitly state that nothing in them permits a departure from existing law. Yet, in a post-Chevron world, that disclaimer means less than it seems. If a statute is ambiguous - or if OIRA believes that a statute is ambiguous - then perhaps OIRA has room to press an agency to change its interpretation of a statute it administers, without running afoul of the EOs’ injunction to follow existing law [...] 

I have argued elsewhere that agencies should not get deference under Chevron when an interpretation is foist upon them by OIRA; OIRA is not charged by Congress with interpreting the statutes the agencies administer, and OIRA does not have the expertise of the relevant agencies. But whatever one thinks about the legal consequences of an OIRA-driven agency interpretation, one must take note of the large degree of influence wielded by OIRA when one of the powers it asserts is to embed cost-benefit default principles into the regulatory process.

Another way rules can fail the OIRA review process is to fail cost-benefit analysis [...] 

If EPA [proposes] a rule that has much higher costs than benefits, that rule may not make it past OIRA. Among environmental rules, non-air rules fare the worst in a cost-benefit framework. Rules governing air pollution often produce relatively (or even very) high benefits in relation to costs on account of reductions in particulate matter. Indeed, according to OMB, in the last decade clean air rules have produced a majority of the total monetized benefits conferred by all of the major regulations in the federal government. Rules on water pollution, toxics, and hazardous waste contamination do not have a single category of benefits - like reductions in human mortality due to reductions in particulate matter - that makes it possible for them to clear the cost-benefit hurdle. These programs fare poorly in OIRA’s process of review. EPA’s proposal to regulate coal ash changed markedly while at OIRA, and has not seen the light of day since it was proposed. EPA initiatives on toxics have stalled at OIRA for years [...] 

D. When Does Review End (and Begin)?

The common law of 13,563 also determines the timelines under which OIRA operates. As discussed above, EO 13,563 explicitly reaffirms EO 12,866, which is the executive order that sets forth timelines for OIRA review: 10 days for pre-rule actions, 45 days for final rules on subjects already reviewed and little changed, 90 days for everything else [...] 

This is not the way the OIRA process now works. Many, many rules linger at OIRA long past the 90- or 120-day deadline. Many pre-rule actions stay long past 10 days. Some rules have been at OIRA for years [...]

To sum up, on the matter of deadlines, OIRA has broken entirely free from the constraints of EO 12,866. The 10-day, 45-day, and 90-day time limits on OIRA review perhaps survive as benchmarks, but nothing more. To maintain the fiction that deadlines still exist, OIRA extends review indefinitely at the “request” of agency heads - but these requests, in my experience, often are instigated by OIRA itself. To make matters worse, OIRA has fudged its own failure to meet the deadlines imposed by EO 12,866 by simply not “receiving” some regulatory packages until long after they are sent.

E. What Are We Told?

The last facet of the common law of EO 13,563 compounds the problems created by OIRA’s other innovations to the regulatory review process prescribed in EO 12,866: OIRA follows, and allows the agencies to follow, almost none of the disclosure requirements of EO 12,866 [...] 

OIRA does not explain in writing to agencies that items on their regulatory agenda do not fit with the President’s agenda. OIRA does not keep a publicly available log explaining when and by whom disputes between OIRA and the agencies were elevated. Indeed, when the first elevation of an EPA rule occurred in President Obama’s first term, I drafted a brief memo for the EPA’s docket explaining that elevation had occurred and noting the outcome. OIRA told me in no uncertain terms that the memo must not be made public. Moreover, except in one instance - President Obama’s direction to then-EPA Administrator Lisa Jackson to withdraw the final rule setting a new air quality standard for ozone - OIRA has not returned rules to agencies with a written explanation about why they have not passed OIRA review. Instead, as discussed above, OIRA simply hangs onto the rules indefinitely, and they wither quietly on the vine. This is how it comes to pass that a list of chemicals of concern or a workplace rule on crystalline silica lingers at OIRA for years.

Some agencies do post “before” and “after” versions of rules that have gone to OIRA. These redlined documents often feature hundreds of changes. There is nothing here like the “complete, clear, and simple manner” of disclosure contemplated by the Executive Order. There is also often no document that explains which changes were made at OIRA’s behest. Where, as Sunstein explains, changes might come from OIRA, from another White House office, from another Cabinet head, or from a career staffer in a separate agency, the failure to follow the Executive Order’s rules on transparency means that no one is ultimately accountable for the changes that occur. Who is responsible, for example, for the hundreds of technical changes made to the EPA’s scientific analyses of air quality rules? We simply do not know.