Supreme Court NonTax Opinion Applying the Major Questions Doctrine with Sound Bites (7/9/22)

There has been a lot of buzz in the legal community about the Supreme Court's most recent attack on the administrative state in West Virginia v. EPA, 597 U. S. ____, 142 S. Ct. 2587 (6/30/22), SC here, and GS here. The case is not a tax procedure case but deals with fundamental statutory interpretation concepts related to agency rulemaking, which implicates Treasury and IRS rulemaking. The Supreme Court majority deployed what has become known as the "major questions doctrine," naming it for the first time although using the concept was used in cases such as FDA v. Brown & Williamson Tobacco Corp., 529 U. S. 120 (2000) and King v. Burwell, 576 U. S. 473 (2015) (a tax sort of case). 

 The majority opinion was authored by Chief Justice Roberts, joined by 5 other Justices (the conservative Justices, with a concurring opinion by Justice Gorsuch). Chief Justice Roberts frames the issue:

             The Clean Air Act authorizes the Environmental Protection Agency to regulate power plants by setting a "standard of performance" for their emission of certain pollutants into the air. 84 Stat. 1683, 42 U. S. C. §7411(a)(1). That standard may be different for new and existing plants, but in each case it must reflect the "best system of emission reduction" that the Agency has determined to be "adequately demonstrated" for the particular category. §§7411(a)(1), (b)(1), (d). For existing plants, the States then implement that requirement by issuing rules restricting emissions from sources within their borders.

            Since passage of the Act 50 years ago, EPA has exercised this authority by setting performance standards based on measures that would reduce pollution by causing plants to operate more cleanly. In 2015, however, EPA issued a new rule concluding that the "best system of emission reduction" for existing coal-fired power plants included a requirement that such facilities reduce their own production of electricity, or subsidize increased generation by natural gas, wind, or solar sources.

            The question before us is whether this broader conception of EPA's authority is within the power granted to it by the Clean Air Act.

Readers might want to consider Chevron v. NRDC, 467 U.S. 487 (1984) where the Supreme Court applied deference to agency interpretation of the statutory term "stationary source." As readers of this blog surely know, deference to reasonable agency interpretations of ambiguous statutory terms in some cases has been a feature of statutory interpretation since well before the APA in 1946. Chevron just offered a framework for determining when deference to reasonable agency interpretations would apply. 

In WV v EPA, Justice Roberts' majority opinion did not get to the Chevron deference framework because it concluded that the agency interpretation was beyond any delegation Congress could have intended. Basically, the agency interpretation was a leap too far for the majority, who apparently wanted to avoid the Chevron framework. (Because the major questions doctrine is predicate to deploying Chevron, some call this Chevron Step Zero.)

Justice Kagan's dissent (joined by the two liberal Justices) would hold that the statutory language "best system" was sufficiently capacious to permit the authority the agency exercised in adopting the rule. 

Just a difference of "opinion" as to the scope of interpretive authority implicit in the statutory text "best system." The conservative Justices said the EPA's construction, while perhaps within the interpretive ambiguity of the statute, effected requirements that were so major that Congress cannot have intended to delegate that authority to the EPA. (Yes, there's that pesky congressional "intent" issue that conservatives sometimes claim to avoid.)  The liberal justices disagreed, opining that the rule was well within the authority conferred by the statutory text.

 In terms of the application of the major questions doctrine, named for the first time in WV v EPA although applied in earlier cases, the majority seems to treat the doctrine as a stand-alone statutory interpretation doctrine, something like a gut feeling that, however capacious the statutory text could be, Congress just did not intend the agency to exercise the authority. Kristin Hickman offers a more complex standard than gut feeling in Kristin Hickman, Thoughts on West Virginia v. EPA (Of Interest Blog 7/1/22), here.:

Many passages in Chief Justice Roberts's opinion for the majority were dedicated to offering guideposts and guardrails for the applicability of the major questions doctrine as a canon of statutory interpretation. If I had to pull a standard out the Court's opinion today, I would say that whether the major questions doctrine applies depends upon (1) "the 'history and the breadth of the authority that [the agency] has asserted,'" (2) "the 'economic and political significance' of that assertion," and (3) the extent to which the agency is relying on "‘modest words,’ ‘vague terms,’ or ‘subtle device[s]'” rather than more direct delegations from Congress. To put it more colloquially, the major questions doctrine applies to curtail agency discretion when an agency stretches the boundaries of statutory interpretation to claim new authority to address big problems that weren’t obviously under the agency’s jurisdiction previously. 

The dissent urges instead that, rather than a stand-alone inquiry, the considerations behind the major questions doctrine are just part of the normal statutory interpretation process. I am not sure the outcome should really turn upon that difference. Indeed, under either approach in WV v EPA, the Justices would have ended up with the same outcome.

The opinions offer sound bites and slogans that will warm the hearts and fill the writings of scholars and judges for a long time. I could list those, but I don't think doing so will contribute to a more productive life for the readers of this blog. I will end, however, with a quote from Justice Kagan's dissent that has some sound bites/slogans that resonated with me (Kagan dissenting Slip Op. 28-29):

            Some years ago, I remarked that "[w]e're all textualists now." Harvard Law School, The Antonin Scalia Lecture Series: A Dialogue with Justice Elena Kagan on the Reading of Statutes (Nov. 25, 2015). It seems I was wrong. The current Court is textualist only when being so suits it. When that method would frustrate broader goals, special canons like the "major questions doctrine" magically appear as get-out-of-text-free cards. n8 Today, one of those broader goals makes itself clear: Prevent agencies from doing important work, even though that is what Congress directed. That anti-administrative-state stance shows up in the majority opinion, and it suffuses the concurrence. See ante, at 19, 25-26; e.g., ante, at 3-6 (GORSUCH, J., concurring).
    n8 The majority opinion at least addresses the statute's text, though overstating its ambiguity and approaching the action taken under it with unwarranted "skepticism." Ante, at 28; see ante, at 28-31. The concurrence, by contrast, concludes that the Clean Air Act does not clearly enough authorize EPA's Plan without ever citing the statutory text. See ante, at 13-16. Nowhere will you find the concurrence ask: What does the phrase "best system of emission reduction" mean? §7411(a)(1). So much for "begin[ning], as we must, with a careful examination of the statutory text." Henson v. Santander Consumer USA Inc., 582 U. S. 79, ___ (2017) (slip op., at 3).

1. Added 7/9/22 5:15pm:  I recommend to readers Professor Craig Greens Just Security article: Craig Green, Greenhouse Gaslighting: Deceptive Moderation and West Virginia v. EPA (Just Security 7/5/22), here.  This is a relatively short analysis of a complex issue.