Saving the Consumer Financial Protection Bureau (and the Constitution) from the Courts

[This piece is cross-posted and was originally published in the Yale J. on Reg.: Notice & Comment blog] Administrative law is almost certain to undergo monumental change during the Supreme Court’s current Term.  On May 16, 2024, the Court issued its first in a series of blockbuster administrative law decisions: Consumer Financial Protection Bureau v. Community Financial Services Ass’n. The Court’s 7-2 decision declaring the Bureau’s funding structure constitutional brings good news for the administrative state — Justice Thomas’s majority opinion validated the ongoing regulatory activities of not just the Bureau but also similarly funded financial regulators such as the Federal Reserve.  The decision also brings good news for originalism. Justice Thomas’s analysis centered on original public meaning and drew a strong majority of Justices, albeit in a case that may have been relatively easy once the Justices had the benefit of additional briefing on historical issues.  His opinion focused on the “narrow question whether” the Bureau’s standing and self-directed “funding mechanism complies with the Appropriations Clause.” Slip op. at 1. At the same time, concurring opinions by Justices Kagan and Jackson and a dissenting opinion by Justice Alito suggested that the Justices might adopt differing analyses of text and history when faced with more challenging issues in the future.

In the decision on appeal, the United States Court of Appeals for the Fifth Circuit found that the Bureau’s funding structure was an unconstitutional “abomination” of which the “Framers warned.” Its decision was a classic case of originalism gone awry — selective law office history which did not withstand the comprehensive historical record presented in further briefing to the Supreme Court and scholarship such as my forthcoming Virginia Law Review Article, The Founders’ Purse.  Had the Fifth Circuit invited further historical briefing on Appropriations Clause challenges (issues that the parties likely regarded as throwaway arguments for much of the litigation), one wonders if the Court of Appeals would have corrected its own mistakes without a trip to the Supreme Court. Even well-intentioned judges can go very far astray if they pluck select evidence from the historical record and forego a more comprehensive analysis. The time-intensive historical inquiries demanded by originalism pose challenges for district and court of appeals judges with many cases to decide.  It seems, however, that lawyers and historians could step up to offer enhanced historical analyses in these cases. In Community Financial Services, such enhanced historical analysis did not occur until the case reached the Supreme Court.

At the Supreme Court, additional historical briefing and a brilliant oral argument by Solicitor General Elizabeth Prelogar clarified the inherent constitutionality of the Bureau’s funding structure. Seven Justices found that the text and history of the Appropriations Clause favored the Bureau. Justice Thomas’s majority opinion focused on the original public meaning of the Appropriations Clause. Concurring opinions by Justices Kagan and Jackson aligned with this result while offering important qualifications on the use of text and history. Justice Alito’s dissent (which was joined by Justice Gorsuch) reached the exact opposite result and would have affirmed the Fifth Circuit’s decision. His conclusion rested on an exceptionally narrow analysis of history and tradition.

Text. The language of Article I, Section 9, clause 7 is simple: “No money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law.”  Justice Thomas’s majority opinion focused on the original public meaning of the term “appropriation” and drew from Founding-era dictionary definitions of this term. Slip op. at 7.  He concluded that, in “ordinary usage,” an appropriation imposed fairly simple requirements: it demanded only “a law authorizing the expenditure of particular funds for specified ends.” Id. Justice Thomas’s approach emphasized public meaning and did not incorporate additional, corroborating evidence such as Alexander Hamilton’s observation that appropriations laws must ascertain the “purpose” and the “fund” for an expenditure. See The Founders’ Purse at 18.

In his dissent, Justice Alito also focused on the term “appropriation.”  He chided the majority for “consulting a few old dictionaries” to determine the meaning of “a term of art” whose meaning ought to be “interpreted in light of legal tradition and . . . centuries of practice.” Slip op. at 6-7 (Alito, J. dissenting) (cleaned up). According to Justice Alito, collapsing text into a legal and traditional understanding of appropriations “demand[ed]” heightened “legislative control over the source and disposition of the money used to finance” the Bureau’s operations.  Id. at 17.  As the majority noted, however, Justice Alito did not translate this understanding into a competing definition of the word “appropriation.”  Slip op. at 19.

Further, both Justice Thomas’s and Justice Alito’s initial focus on the meaning of the term “appropriation” detracted from other significant textual evidence of temporal limits on spending.  When the Framers wanted to impose a time limit on spending they did so expressly, such as the two-year time limit for army appropriations in Article I, Section 8, clause 12. The lack of similar language in Article I, Section 9, Clause 7’s Appropriations Clause strongly suggests that there was no time limit for general appropriations.  Justice Thomas emphasized this point only in rebuttal, and Justice Alito did not address it.

Perhaps because of these divergent analyses of a relatively simple clause, Justice Jackson’s concurrence emphasized the proper role of judges in constitutional interpretation. As she noted, “[w]hen the Constitution’s text does not provide a limit to a coordinate branch’s power, we should not lightly assume that Article III implicitly directs the Judiciary to find one.” Slip op. at 1 (Jackson, J., concurring).  While Justice Jackson’s concerns about courts finding “unstated limits in the Constitution’s text” and “undercut[ing] considered judgements of a coordinate branch” (id. at 3) were easy for the majority to avoid here, they will be important in future cases.  In the Court’s upcoming decisions in SEC v. Jarkesy and Trump v. United States, litigants have also asked the Court to find presidential removal powers and immunities that lack an explicit basis in the Constitution’s text.  Justice Jackson’s concurrence reiterates the importance of judicial modesty when deciding these separation-of-powers issues.  The removal issues in Jarkesy may tee up an additional set of related interpretive concerns – whether judges who emphasize unrepresentative statements from Framers like James Madison have erroneously read removal powers into Article II. See Jed Handelsman Shugerman, The Indecisions of 1789: Inconstant Originalism and Strategic Ambiguity, 171 U. PA. L. REV. 753 (2023); Lorianne Updike Toler, Un-fathering Executive Removal, 57 CONN. L. REV. (forthcoming 2025); Brief Amicus Curiae of Jed H. Shugerman, SEC v. Jarkesy (2023) (No. 22-859). (For additional historical perspectives on Jarkesy see Brief Amicus Curiae of Professor Ilan Wurman, SEC v. Jarkesy (2023) (No. 22-859); Brief Amici Curiae of Constitutional Originalists Edwin Meese III, Steven G. Calabresi, and Gary S. Lawson.)

History. Justice Thomas’s majority opinion set forth a lengthy Founding-era history that the Fifth Circuit missed. He began with pre-constitutional history in England, the colonies, and the states and concluded that “early legislative bodies exercised a wide range of discretion” whether or not to impose temporal limits or specific parameters on spending. Slip op. at 8-12; see generally Josh Chafetz, Congress’s Constitution: Legislative Authority and the Separation of Powers (2017). Another important body of evidence missed by the Fifth Circuit involved post-ratification spending laws that operated outside of annual appropriations.  As I note in The Founders’ Purse (pp. 31-36), one of the most generous early spending laws granted the Sinking Fund Commission indefinite authorization to self-direct spending from an initial sum that in today’s terms would exceed $400 billion.  Many other laws afforded field officers standing, self-directed funding based on fees for their services.  Id. at 36-44. Justice Thomas relied on some of these post-ratification practices including statutes in which early congresses authorized expenditures of “sums not exceeding” capped amounts and extended pre-constitutional practices of funding customs and postal officers through indefinite and independently determined fees. Slip op. at 12-15; see generally Nicholas Parrillo, Against the Profit Motive: The Salary Revolution in American Government 1780–1940 (2013).   He found that “early appropriations displayed significant variety in their structure,” and that the “Bureau’s funding mechanism fits comfortably within the First Congress’s appropriations practice.” Slip op. at 15.

Justice Alito’s dissent relied on largely the same history to reach the opposite conclusion.  He found that key historical funding practices, such as fee-based funding for customs officers, were not sufficiently analogous to the Bureau’s funding structure.  For example, Justice Alito noted that customs officers had to return excess funding while the Bureau could retain unspent funds. Slip op. at 20 (Alito, J., dissenting). But he did not explain why this distinction crossed a constitutional line. His description of more recent precedent suffered from the same flaw.  When describing the Federal Reserve Board as “a unique institution with a unique historical background” (id. at n. 16), Justice Alito never clarified a constitutional sense in which the Bureau’s funding differed from the near-identical funding structure for the Fed.

The majority criticized Justice Alito’s dissent for adopting a selective historical approach.  “The dissent [did] not meaningfully grapple with the many parliamentary appropriations laws that preserved a broad range of fiscal discretion for the King,” including “’sums not exceeding’ appropriations.”  Slip op. at 20 (cleaned up).  While the dissent “engage[d]” with post-ratification history, the majority found it “unclear why” the “differences” Justice Alito identified would “matter under the dissent’s theory.” Id. at 21.  One wonders whether Justice Alito’s objections to the Bureau’s “novel,” “unprecedented,” and “never before seen” funding structure (slip op. at 1, 3, 22 (Alito, J., dissenting)) are so strong that they exceed Bruen’s originalist requirement that the government supply “a well-established and representative historical analogue” but “not a historical twin.”  New York State Rifle & Pistol Ass’n v. Bruen, 142 S.  Ct. 2111, 2133 (2022).

As Professor Leah Litman has aptly explained, anti-novelty arguments of the sort made by Justice Alito can be quite problematic when assessing the constitutionality of legislatively established structures.  “[G]iven the sheer number of policies that [Congress] could conceivably pursue, Congress may not have tried out all forms of constitutionally permissible regulation.” Leah M. Litman, Debunking Antinovelty, 66 DUKE L.J. 1407, 1444 (2017). And yet Justice Alito seemed to expect this type of legislative precedent when he demanded that the Bureau show a precise historical analogue for its funding structure.  While Professor Litman did not offer an originalist analysis, her points align with prominent originalists’ related concerns about reducing constitutional meaning to a narrow and potentially unrepresentative or factual erroneous subset of original applications or “constitutional references.” See Lawrence B. Solum, Original Public Meaning, 2023 MICH. STATE L. REV. 807, 841-43; Christopher R. Green, Originalism and the Sense-Reference Distinction, 50 ST. LOUIS U. L. J. 555, 591 (2006). Justice Alito seemed to offer an even more fraught variant of an original applications problem — he suggested that a funding structure must have a preceding, original identical application (and perhaps one that is grounded in centuries of practice) before it can be considered constitutional.  Justice Alito’s apparent requirement is novel, narrow, and has so little to do with constitutional meaning that it should not be considered originalist.

Justice Kagan’s concurrence offered a far more accommodative approach to history and was joined by Justices Sotomayor, Kavanaugh, and Barrett.  Justice Kagan agreed with the majority that the Bureau’s funding scheme “would have fit right in” during the late-18th century. Slip. Op. at 1 (Kagan, J., concurring).  In addition, she endorsed the consideration of an extended historical timeline and an “unbroken congressional practice” showing significant variety in appropriations practices that continued “for more than  two centuries.”  Id. at 5.   She further emphasized the need to ease up on the level of specificity required of historical evidence. As Justice Kagan pointed out, “[w]hether or not the CFPB’s mechanism has an exact replica, its essentials are nothing new.”  Id.  In contrast to Justice Alito’s strict anti-novelty test, Justice Kagan’s more general approach makes it easier for judges to ground modern regulatory structures in history.  The Justices’ differing approaches to the use of history will likely loom large in upcoming decisions ranging from the Second Amendment issues presented by United States v. Rahimi to separation-of-powers concerns presented by SEC v. Jarkesy.

* * * * *

Once the Court had the benefit of a more complete historical record, Consumer Financial Protection Bureau v. Community Financial Services Ass’n became a relatively easy decision for Justices across the ideological spectrum.  While seven Justices signed on to Justice Thomas’s analysis of original public meaning, a closer examination of the Justices’ opinions reveals methodological pluralism even within the relatively narrow originalist modalities of text and history.  Only time will tell how the Justices will sort out their underlying methodological concerns in future separation-of-powers cases.  Consumer Financial Protection Bureau v. Community Financial Services Ass’n has set the stage for the Court to decide what may well become some of the most important decisions ever in the areas of administrative law and separation of powers.

Continue ReadingSaving the Consumer Financial Protection Bureau (and the Constitution) from the Courts

A Noteworthy Omission in the Texas Border Litigation

[This post is cross-posted on Lawfare.]

Since 2021, the Justice Department has filed multiple lawsuits against the State of Texas to block measures aimed at reducing illegal immigration across the southern border. One lawsuit focuses on Executive Order GA-37, which Texas Gov. Greg Abbott (R) issued to prohibit private contractors from transporting immigrants who were previously detained or subject to expulsion. Another opposes the state’s placement of buoys on the Rio Grande. Still another, filed in January, seeks declaratory and injunctive relief against SB 4—a Texas statute that purports to create a state immigration crime for unlawful entry and permit the state’s judges to order the removal of noncitizens from the United States. 

These lawsuits are noteworthy not only for the state immigration measures they challenge but also for several they ignore. In April 2022, Abbott signed a memorandum of understanding (MOU) with each of the four Mexican states that border Texas—ChihuahuaCoahuila de ZaragozaNuevo León, and Tamaulipas. Each MOU provides that the parties “will work cooperatively to stop the flow of migrants who illegally enter Texas” through Mexico. Each MOU further provides that the Mexican state party will “enhance border security enforcement measures” to “prevent illegal immigration” into Texas. In the case of Coahuila, the specified measures include the operation of checkpoints to detect the arrival of immigrants into that state from elsewhere in Mexico. In the case of Chihuahua, the measures include the construction of a $200 million surveillance platform that will share intelligence with Texas officials. For its part, Tamaulipas has committed to enhance and operate checkpoints to detect arrivals, devote resources to prevent illegal crossings in low-water areas, surveil high-traffic routes along the Rio Grande, and share alerts with the Texas Department of Public Safety. Texas and Tamaulipas have also pledged to designate “special teams of personnel and motor equipment” to prevent the crossing of immigrants and promised to establish “joint and recurrent river operations” along the Rio Grande to curb human trafficking, drug smuggling, and other illegal activities. All provisions operate indefinitely and still appear to be in effect. 

These MOUs are highly unusual. States have entered hundreds of written commitments with foreign governments in recent decades, but almost all have addressed traditional issues of state governance, such as local investment, teacher exchanges, and drivers’ licenses. As far as I am aware, no state other than Texas has ever entered an international agreement to control immigration into the United States. In fact, the MOUs appear to be a first even for Texas.

The Justice Department, moreover, could virtually copy and paste its arguments against SB 4 into a new complaint about the MOUs. One claim against SB 4 relies on the doctrine of field preemption to contend that the statute is invalid because it “intrudes on the federal government’s exclusive authority to regulate the entry … of noncitizens.” A second claim, based on conflict preemption, asserts that SB 4 is invalid because it “purport[s] to empower state officials to police unlawful entry” and thereby “interferes with the federal government’s statutory authority to enforce the entry … provisions of federal law.” A third claim invokes the Foreign Commerce Clause to argue that SB 4 is unconstitutional because it seeks to regulate “the movement of noncitizens across an international boundary into Texas.” MOUs and statutes are obviously different modes of regulation, but that distinction is not necessarily helpful for Texas. If anything, the fact that the MOUs are international diplomatic attempts to restrict entry would seem to place them at greater risk of objection, given federal control over foreign relations. 

Yet even while contesting SB 4, the Biden administration has done nothing to challenge the MOUs in court. In moving for an injunction against SB 4 last month, the Justice Department included a declaration from a State Department official who noted the existence of the MOUs, but that official declined to take a position on whether they are permissible under U.S. law. The MOUs have not otherwise attracted attention.

Whatever one’s view of conditions at the southern border or the appropriate policy response, this inaction raises a series of questions: Does the Biden administration view the MOUs as lawful? If so, what distinguishes them from the related state measures that have triggered federal litigation? And if the administration does not believe the MOUs to be lawful, why has it not sued to enjoin their implementation? If we place ourselves into the position of the Justice Department and assume that the case against SB 4 is meritorious, there are several plausible explanations, but all of them encounter problems. 

#1: Absence of Binding Effect: A Defense on the Merits?

The first possibility is that the Justice Department has declined to challenge the MOUs because they are nonbinding. Each repeatedly uses the word “will” to prescribe the actions of the parties, rather than “shall” or other standard indicia of legal obligation, and each lacks an enforcement provision. There is no option for either party to resort to adjudication, arbitration, or other binding mechanisms in the event of a dispute over implementation. 

The fact that the MOUs are nonbinding almost certainly eliminates some constitutional risks. It is sufficient to resolve any concern that the MOUs violate the Article I Treaty Clause, which applies only to certain types of binding arrangements in prohibiting Texas from entering “any Treaty.” It is also sufficient, in my view, to remove any concern under the Compact Clause, which requires the state to obtain congressional consent to enter any “Agreement or Compact” with a foreign power. Although the issue is not settled, most authorities maintain that only a binding commitment can qualify as an “Agreement or Compact.”

It is far less clear, however, that the nonbinding character of the MOUs negates the possibility of preemption. On the one hand, it might: Preemption claims overwhelmingly focus on state statutes, regulations, judicial decisions, and executive orders that create legal entitlements or obligations, so the Supreme Court has never squarely held that state measures are preemptable even when they are advisory. There is also a line-drawing problem. If nonbinding MOUs are preemptable, then the same may be true of all other nonbinding but official state acts, including single-chamber and concurrent resolutions from state legislatures and various forms of official statements from state executives. Such a robust brand of preemption would leave very little room for state governments to criticize federal law or policy. In a federal republic with a strong tradition of open debate, that is a significant defect.

On the other hand, there are several reasons to believe that the absence of binding effect is immaterial. First, a categorical exemption for nonbinding measures would create a risk of uncontrollable state and local interference in foreign relations. States could officially encourage and politically commit to actions that jeopardize the president’s leverage in international negotiations, threaten the coherence of U.S. policy in the eyes of foreign governments, or otherwise undermine federal law or foreign policy without restriction. Such interference would compromise the nation’s capacity to speak with “one voice” in international affairs. The one-voice doctrine has many critics, but the Supreme Court has repeatedly invoked it, including in modern preemption cases such as Crosby v. National Foreign Trade Council and American Insurance Association v. Garamendi. Those cases involved state measures that were binding, but there is no reason to think that communicative dissonance is consequential only in that context. 

Second, many Supreme Court cases refer to the preemption of state “action,” rather than law per se. In Oneok, Inc. v. Learjet, Inc., for example, the Court explained that Congress “may implicitly preempt a state law, rule, or other state action.” Such expansive language seems to leave open the possibility that any official act is preemptable, even if nonbinding. 

Third, the executive branch has previously taken the position that nonbinding arrangements may implicate the Constitution. In 2001, Sen. Byron Dorgan (D-N.D.) requested an analysis from the State Department on the constitutionality of an MOU between Missouri and Manitoba on interbasin water transfers. In response, Legal Adviser William Taft did not offer any definitive conclusions on the MOU itself, but he suggested that nonbinding agreements may be preemptable in some circumstances.

Fourth, the Supreme Court arguably embraced a similar view in the 1968 case of Zschernig v. Miller. At issue there was an Oregon probate statute that barred nonresident aliens from inheriting property unless they enjoyed a right under the law of their own country to do so without government confiscation. Zschernig held that the Oregon courts’ application of the statute in cases involving individuals from communist countries had generated more than an “incidental or indirect effect” on U.S. foreign relations and was therefore preempted. The problem was not so much that judges had relied on the statute to deny inheritance but, rather, as the Court put it, the anti-communist “attitudes” they expressed in doing so. Some judges questioned the credibility of communist leaders while others launched into blistering critiques of communist ideology. To the extent that those rhetorical practices were unnecessary to the decisions in the underlying cases, Zschernig indicates that judicial dicta and other forms of nonbinding state action are preemptable. There is evidence that the Court no longer views Zschernig as good law, and the decision has many detractors, but most objections seem to target the notion that state acts are preemptable even in the absence of contrary federal law or policy, rather than the implication that they are preemptable even if nonbinding. 

Finally, the line-drawing problem is not insurmountable. Nonbinding measures might be preemptable only when they implicate foreign relations, for example, or require negotiation with a foreign government. Such limits would leave ample room for state dissent on internal affairs and be consistent with the Supreme Court’s traditional inclination to treat foreign relations as a field in which federal power is unusually robust. 

(Similar considerations are likely to affect whether nonbinding arrangements can implicate the Foreign Commerce Clause, but I will bracket that issue here, given limited space.) 

#2: Absence of Binding Effect: A Justiciability Problem?

A separate but related possibility is that the Justice Department considers the constitutionality of the MOUs to be nonjusticiable. The logic here would be that their nonbinding character is significant not because it affects the analysis under the law of preemption but, rather, because it suggests the absence of standing on the part of the federal executive branch. Standing generally requires injury, the argument would go, but federal injury is absent because the MOUs are mere statements of intent. Creating neither rights nor obligations and lacking any mechanism for enforcement, they are unlikely to change the behavior of the parties or otherwise affect conditions on the ground.

Yet the standing of the federal executive branch is expansive. Federal courts frequently hear and decide cases brought by the United States without insisting on any evidence of injury. In 2019, for example, the Justice Department sued the State of California for entering into an agreement on CO2 emissions with Quebec, claiming that that the agreement was preempted and violated the Article I Treaty Clause, the Compact Clause, and the Foreign Commerce Clause. California responded in part by arguing that the United States failed to show that the agreement was binding, but the state never questioned the government’s standing to sue, and the district court did not hesitate to decide the case on the merits, including by finding that the agreement lacked binding effect. As Tara Grove has argued, this practice appears to be grounded in the Take Care Clause, which requires the executive to assert federal interests in the enforcement of federal law. If one starts from the assumption that preemption claims against the MOUs would be meritorious, the Biden administration has standing to pursue them.

In addition, the premise that the MOUs are inconsequential appears to be false. Chihuahua broke ground on the surveillance platform identified in its MOU a little over a year after signature, thereby indicating that at least one Mexican state party is taking concrete steps to fulfill its commitments. The existence of the MOUs helped to facilitate the enactment of SB 4, as the bill’s supporters cited them to argue that Mexican states would accept noncitizen removal by Texas. And it is at least plausible that the MOUs adversely affect national interests by signaling internal discord and federal incompetence to foreign audiences. These considerations suggest that the Justice Department might have standing even if a typical “injury in fact” were required.

#3: A Concern About Inconsistency?

Finally, it is conceivable that the Justice Department has chosen not to challenge the MOUs because it is concerned about a perception of inconsistency. As explained above, the United States sued California in 2019 for entering into an agreement with Quebec on CO2 emissions. That agreement was more formal than the MOUs, exhibited at least some of the common indicia of binding effect, and operated in tension with the Trump administration’s decision to limit U.S. participation in international efforts to reduce emissions. Nevertheless, the Biden administration dropped the case in 2021. Now faced with other subnational agreements that are informal and unmistakably nonbinding, government lawyers may worry that a legal challenge would come across as unprincipled. If California’s agreement posed no issue, then surely a series of MOUs are unobjectionable. 

There are problems, however, with this possibility as well. One is that California’s agreement was more consistent with federal policy in 2021 than the Texas MOUs are today. The Biden administration openly supports state and local participation in global efforts to reduce CO2 emissions but just as openly opposes state attempts to regulate immigration into the United States. This difference is significant because inconsistency with the foreign policy of the executive branch is an independent basis for preemption. Another problem is that the MOUs seem more vulnerable to field preemption. Environmental protection is an area of concurrent federal and state authority, while immigration is one of federal prerogative.


There is no question that the Justice Department is willing to challenge Texas’s efforts to curb illegal immigration and believes its own case against SB 4 to be meritorious. Nor is there any question that Texas’s MOUs are highly unusual in practice and comparable to SB 4 in purpose and content. Nor is there any reason to doubt that other states will pursue their own nonbinding commitments with foreign governments on issues of national concern, especially if the actions of Texas go unchallenged. 

In these circumstances, the absence of litigation over the MOUs is puzzling. All of the potential explanations have serious defects, but each could, if accurate, have significant implications. If the Biden administration views nonbinding commitments as non-preemptable and is correct in that view, then the federal government is incapable of controlling a major form of subnational engagement in foreign relations. If the administration assesses the constitutional questions to be nonjusticiable and is correct in that assessment, then courts are unavailable to enforce federal law in this context, at least in the absence of intervention by Congress. And if the Justice Department is boxed in by its earlier decision to withdraw the challenge to California’s agreement with Quebec, then Texas’s freedom to cooperate with Mexican states on illegal immigration is an unintended consequence of California’s freedom to cooperate with Quebec on climate change. Whether or not the Biden administration responds going forward, the MOUs seem likely to become an important precedent in the law of foreign affairs federalism.

Continue ReadingA Noteworthy Omission in the Texas Border Litigation

State Supreme Courts and the “Major Questions” Doctrine

When a legislative body delegates authority to an administrative agency, it cannot envision every future scenario, and often uses language that is regrettably—but necessarily—imprecise. Take, for example, the power given the Wisconsin Department of Natural Resources to exercise “general supervision and control over the waters of the state.”[1] Or consider the United States Environmental Protection Agency’s authority to select the “best system of emission reduction” for certain entities emitting air pollution. (The United States Supreme Court analyzed the scope of the latter provision earlier this summer in West Virginia v. EPA). Operationalizing such vaguely worded authority has proven difficult for agencies. Disputes about the true extent of the delegation arise when the agency takes action near the limit of the delegation.

In the legal skirmishes that result, courts sometimes find the agency has gone too far. The most recent, high-profile example of this is the West Virginia case, in which the Court endorsed the “major questions” doctrine. The Court examined EPA’s authority to enact a plan to cut emissions of carbon dioxide from power plants. To some extent, the plan required a “generation shifting” approach mandating a transition from fossil fuels to renewable energy sources such as solar and wind. The Court took a skeptical view of the plan. It held that in certain “extraordinary cases” raising a “major question” of “economic and political significance,” there is good reason to restrain the scope of an administrative agency’s power, especially if Congress had not clearly delegated authority for the agency to take the questioned action. The Court further explained that the doctrine flows from traditional separation of powers principles inherent in the federal constitution. The holding seems likely to restrict the reach of just about any federal agency’s authority.

In light of West Virginia, will state courts adopt state-level equivalents of the “major questions” doctrine, based on the parallel separation of powers principles in state constitutions? In Wisconsin, the answer is not as clear as you might think, particularly in light of two recent Wisconsin Supreme Court opinions rejecting constraints on agency power, even when based on murky conferrals of legislative authority.

Continue ReadingState Supreme Courts and the “Major Questions” Doctrine