Briefly Noted: SCOTUS Undermines Administrative State

I’d been waiting to see some commentary on this recent SCOTUS decision from some of my usual go-to legal analysts, but the decision seems to have gotten lost in the other news. Nevertheless, this appears to be an important, if incremental, decision going forward. The WSJ did pick up on it in an editorial and this is what I can copy without a subscription.

Supreme Court 9, Administrative State 0
The Wall Street Journal ^ | April 14, 2023 | The Editorial Board (WSJ)

The Supreme Court on Friday dealt the administrative state another blow with a 9-0 decision holding that individuals and businesses harpooned by an independent agency don’t have to suffer a torturous government adjudication to challenge its constitutionality in federal court (Axon Enterprise v. FTC and SEC v. Cochran).

The private litigants in these cases want to challenge Federal Trade Commission and Securities and Exchange Commission actions on grounds that the agencies are unconstitutionally structured. But the discrete question before the Court was whether they had to run through the agencies’ long and costly administrative process before they could go to federal court.

This decision is somewhat typical of the Roberts court—it was very narrowly decided. Too narrowly for Gorsuch, who complained in a concurring opinion. Nevertheless, this incremental approach, covered by a broad consensus—the 9-0 breakdown (Kagan writing the opinion) was a surprise to me—moves things along. I won’t pretend to understand the jungle that is administrative law, nor will I read the whole opinion. What was at issue in this decision was whether the plaintiffs would be required to go throught the full administrative appeals process before they could turn to the federal courts. The importance of the holding is that these two cases, which challenge the constitutionality of the way the FTC and the SEC are set up, can now go forward in the federal courts rather than languishing in the administrative appeal processes. It may seem like a small thing, but in the world of federal admin law litigation this constitutes “fast-tracking”. These cases will undoubtedly end up before the SCOTUS a year or two down the road, but that time frame will have been shortened by this move.

The general opinion is that there is a majority on the SCOTUS to clip the wings of the administrative state in a significant way—even Roberts is said to be on board with that. That would be a major move, and taking these cases out of the administrative process and letting them proceed in the federal courts is a good start toward that end. I can’t begin to guess what the outcome will be in the end, likely a couple years down the road. However, any trimming back of the power of the administrative state will, ipso facto, almost certainly force Congress to get more involved in actually passing laws rather than deferring to agency “expertise”—a restoration of constitutional government. Anything along those lines would be revolutionary in post New Deal America. It’s interesting to me that the SCOTUS, with all the political upheaval going on currently, seems to be holding to its federalist agenda. The process is frustratingly slow, but undoing generations of constitutional abuse can’t reasonably be considered a task to be accomplished overnight. Part of that process is, precisely, the process: giving the issues a thorough hearing in the courts so that reform of the administrative state will have a solid foundation in constitutional law as interpreted by the SCOTUS.

Now, if you follow the link and read some of the comments you’ll see that some commenters are pooh-poohing the decision. My response is that, while it’s true that no major change in the status of administrative agencies is necessarily effected by this decision, nevertheless the fact that these cases have been “fast-tracked”—in the sense that the administrative appeals process has been straightforwardly circumvented—seems to me to be significant. I can’t imagine that the SCOTUS acted as it did without an eye to the future. We shall see.