SCOTUS decisions during term overturn Chevron, limit SEC adjudication proceedings scope, and more

The Checks and Balances Letter delivers monthly news and information from Ballotpedia’s Administrative State Project, including pivotal actions at the federal and state levels related to the separation of powers, due process, and the rule of law since the last edition.

This edition:

In this month’s edition of Checks and Balances, we review the following federal news stories:

• The Supreme Court’s decisions during the October 2023 term related to administrative law, including rulings overturning Chevron deference, limiting the scope of the Securities and Exchange Commission’s (SEC) in-house adjudication process, and more.
• The decision to temporarily block enforcement of new Title IX regulations in certain states by multiple federal judges.
• A district court ruling to temporarily block an Equal Employment Opportunity Commission (EEOC) rule in Louisiana and Mississippi.

At the state level, we take a look at:

• An Arizona ballot measure regarding state agency rulemaking.
• The Wisconsin Supreme Court’s decision to overturn legislative veto powers in the state.
• The expansion of Supplemental Nutrition Assistance Program (SNAP) work requirements in Florida.

We also highlight recent commentary from administrative law professor Joshua Sarnoff on addressing ambiguous laws following the Supreme Court decision to overturn Chevron deference. We wrap up with our Regulatory Tally, which features information about the 103 proposed rules and 245 final rules added to the Federal Register in June and OIRA’s regulatory review activity.

In Washington

SCOTUS issues decisions overturning Chevron, limiting SEC adjudication proceedings scope, and more

What’s the story?

The U.S. Supreme Court issued its final decisions for the October 2023 term on July 1, 2024. The Supreme Court issued decisions in nine cases related to administrative law during the term. Some of the term’s administrative state-related SCOTUS rulings limited the authority and influence of administrative agencies.

Notably, SCOTUS ruled against judicial deference to federal agency interpretations of ambiguous statutes. SCOTUS also ruled in favor of limiting the scope of in-house agency adjudication and expanding the timeframe to challenge agency actions. Here’s a snapshot of the term’s cases related to administrative law:

• SCOTUS held 7-2 on May 16 in Consumer Financial Protection Bureau (CFPB) v. Community Financial Services Association of America, Limited that Congress statutorily authorized the CFPB to draw money from the Federal Reserve System. The decision held that the agency’s funding structure aligned with the appropriations clause and was constitutional.
• SCOTUS held unanimously on June 13 in Food and Drug Administration (FDA) v. Alliance for Hippocratic Medicine that the plaintiffs did not have standing to challenge the FDA’s regulatory actions related to the approved conditions of mifepristone—a drug used in medication abortions.
• SCOTUS held 6-3 on June 14 in Garland v. Cargill that the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) exceeded its statutory authority in issuing a rule to ban bump stocks. The opinion said ATF did not have authority under the National Firearms Act to issue the rule. The ruling ended the federal bump stock ban.
• SCOTUS held 6-3 on June 27 in Securities and Exchange Commission (SEC) v. Jarkesy that when the SEC seeks civil penalties against defendants for securities fraud, the defendant is entitled to a trial by jury under the Seventh Amendment. The decision changes the SEC’s adjudication and enforcement proceeding structure and prohibits the agency from handling securities fraud cases through its in-house adjudication process.
• SCOTUS decided 5-4 on June 27 in Ohio v. Environmental Protection Agency (EPA) to grant the plaintiff states’ application to temporarily block the EPA’s Good Neighbor rule, pending review in the D.C. Circuit. The agency argued the rule would reduce air pollution from power plants and other facilities in 23 states.
• SCOTUS decided in a per curiam decision on June 27 to dismiss Moyle v. United States as improvidently granted. The case challenged the scope of the Emergency Medical Treatment and Labor Act (EMTALA)—a federal law that requires hospitals to provide necessary stabilizing treatment to pregnant women in medical emergencies. The Biden administration argued emergency abortions should be federally protected under the stabilizing treatment requirement. The court’s decision allows emergency abortions to continue in Idaho and maintains an existing temporary order blocking the state from enforcing its abortion ban. SCOTUS did not rule on the case’s merits and instead returned the case to the lower courts.
• SCOTUS held 6-3 on June 28 in Loper Bright Enterprises v. Raimondo and Relentless, Inc. v. Department of Commerce that federal courts may not defer to an agency’s interpretation of an ambiguous statute. The decision overruled the court’s 1984 decision in Chevron v. Natural Resources Defense Council.
• SCOTUS held 6-3 on July 1 in Corner Post, Inc. v. Board of Governors of the Federal Reserve System that the statute of limitations for filing an Administrative Procedure Act claim begins accruing when the plaintiff is injured by a final agency action, not when the action is promulgated.

Want to go deeper?

Federal judges temporarily block Title IX regulations in certain states

What’s the story?

Federal judges have temporarily blocked enforcement of the Biden administration’s new Title IX rule in 15 states as of July 16, holding that the rule exceeds the Department of Education’s (DOE) authority.

The rule, published on April 29 and scheduled to take effect on August 1, expanded Title IX regulations prohibiting sex-based discrimination to additionally prohibit discrimination based on gender identity and sexual orientation. It requires schools to use students’ preferred pronouns and allow students to use bathrooms aligned with their gender identity instead of their biological sex.

The rule is temporarily blocked in Alaska, Idaho, Indiana, Kansas, Kentucky, Louisiana, Mississippi, Montana, Ohio, Tennessee, Texas, Utah, Virginia, West Virginia, and Wyoming. The rule is also blocked in schools attended by children of members of Moms for Liberty or the Young America’s Foundation.

Multiple lawsuits were filed following the publication of the rule, joined by Republican attorneys general in 26 states and conservative advocacy groups. Four lawsuits were ruled on by the U.S. District Court for the Western District of Louisiana, the U.S. District Court for the Eastern District of Kentucky, the U.S. District Court for the District of Kansas, and the U.S. District Court for the Northern District of Texas on June 13, June 17, July 2, and July 11 respectively, to grant preliminary injunctions and block the rule.

Judge Terry A. Doughty argued in the Louisiana district court ruling that the “case demonstrates the abuse of power by executive federal agencies in the rulemaking process.” Judge Danny C. Reeves of the Eastern District of Kentucky also wrote about the statutory authority of the DOE, arguing, “The Department’s new definition of ‘discrimination on the basis of sex’ wreaks havoc on Title IX and produces results that Congress could not have intended.”

Several lawsuits are still pending, which have been joined by Alabama, Arkansas, Florida, Georgia, Iowa, Missouri, Nebraska, North Dakota, Oklahoma, South Carolina, and South Dakota.

The Department of Education has issued notices of appeal against orders blocking enforcement in three cases as of July 16, according to EducationWeek.

Want to go deeper?

• Nondiscrimination on the Basis of Sex in Education Programs or Activities Receiving Federal Financial Assistance rule (2024)

Federal court temporarily blocks EEOC rule in Louisiana and Mississippi

What’s the story?

The U.S. District Court for the Western District of Louisiana on June 17, 2024, issued a preliminary injunction to temporarily block enforcement of an Equal Employment Opportunity Commission (EEOC) rule in Louisiana and Mississippi. The rule, effective June 18, included abortions among pregnancy-related procedures protected under the Pregnant Workers Fairness Act.

Louisiana, Mississippi, and a group of Catholic organizations filed a lawsuit challenging the EEOC rule in May, arguing against the agency’s interpretation of the Pregnant Workers Fairness Act and its conflict with laws in some states banning abortions.

Judge David C. Joseph ruled that the agency exceeded its statutory authority when issuing the rule and “both unlawfully expropriated the authority of Congress and encroached upon the sovereignty of [Louisiana and Mississippi].”

A Better Balance—a national legal advocacy group—issued a statement about the court’s decision, arguing “the court disregarded decades of legal precedent. ‘Related medical conditions’ to pregnancy have long been interpreted to include abortion.”

A similar lawsuit filed by a coalition of 17 states to challenge the rule was dismissed by the U.S. District Court for the Eastern District of Arkansas on June 14, arguing that the plaintiff states lacked standing.

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In the states

Arizona legislature puts measure on Nov. ballot that would establish REINS-style oversight of agency rulemaking

What’s the story?

The Arizona State Legislature on June 12, 2024, put a ballot measure on the Nov. 5 ballot that would amend state law to require legislative ratification of certain state agency rules.

If voters approve the measure, proposed rules estimated to increase regulatory costs by more than $500,000 over five years will need legislative ratification to take effect. The Arizona Office of Economic Opportunity would be responsible for confirming the estimated regulatory cost of rules that might trigger legislative oversight under the measure.

The ballot measure contains provisions modeled after the Regulations from the Executive in Need of Scrutiny (REINS) Act—a federal legislative proposal designed to increase legislative oversight of administrative agency rulemaking.

The Arizona State Legislature passed nearly identical REINS-style state laws in 2023 and 2024. Gov. Katie Hobbs (D) vetoed both bills. The legislature would have required a two-thirds vote to override the governor’s veto. Republicans hold a 53% majority in the Senate and a 52% majority in the House.

A simple majority vote is required during one legislative session for the Arizona State Legislature to place a state statute on the ballot. The governor’s signature is not required in Arizona to legislatively refer ballot measures.

Four Republican senators and three Republican representatives introduced the 2024 measure as Senate Concurrent Resolution 1012 (SCR 1012) on January 23. The Senate passed it 16-13 on February 22 in a party-line vote. The House passed it 31-29 on June 12, also along party lines.

Four states have enacted REINS-style state laws as of July 2024:

• The Kansas State Legislature voted to override Gov. Laura Kelly’s (D) veto of a REINS-style state law in April 2024
• Indiana Gov. Eric Holcomb (R) signed a REINS-style bill into law in March 2024
• Former Wisconsin Gov. Scott Walker (R) signed a REINS-style bill into law in 2017
• The Florida State Legislature voted to override former Republican Gov. Charlie Crist’s veto of a REINS-style state law in 2010

Want to go deeper?

• Arizona Proposition 315, Legislative Ratification of State Agency Rules that Increase Regulatory Costs Measure (2024)

Wisconsin Supreme Court strikes down Joint Committee on Finance’s legislative veto powers

What’s the story?

The Wisconsin Supreme Court ruled 6-1 on July 5, 2024, that the state’s Joint Committee on Finance exceeded its authority in using legislative vetoes to block land conservation purchases.

Legislative vetoes, in the context of administrative law, refer to resolutions by a legislative body that invalidate actions by the executive branch. Legislative vetoes can be issued by one or both chambers of the legislature or a congressional committee to nullify an executive action and do not require joint approval or presidential approval.

Some state governments allow for legislative vetoes in certain cases, but the extent of the authority varies. According to The State Democracy Research Initiative at the University of Wisconsin Law School, Wisconsin has strong-form legislative vetoes and temporary suspension power, which means the state legislature can veto a rule that the executive branch has approved. In Wisconsin, legislative committees tasked with reviewing rules as part of the legislative veto process can delay or suspend rules.

Gov. Tony Evers (D) filed a lawsuit in October 2023, alleging that the Republican-led committee’s legislative vetoes blocking the state Department of Natural Resources’ land conservation purchases violated the state constitution and the separation of powers. Evers argued, “[T]hese vetoes empower legislative committees to interfere with executive branch authority and exercise executive power themselves.”

The court, which has a 4-3 liberal majority, ruled that the power authorized to the legislature by Wis. Stat. § 23.0917 (6m) and 23.0917(8)(g)(3) violated the separation of powers under the state’s constitution. Judge Rebecca Bradley wrote in the court’s majority opinion, “​​By placing the power of the executive branch to carry out the law in a committee of the legislature, the legislative branch subsumed the executive power.”

State Senator Howard Marklein (R) and State Representative Mark Born (R), co-chairs of the Joint Committee on Finance, issued a statement following the ruling arguing, “This decision removes our current legislative oversight process. Our entire stewardship program is now in jeopardy.”

Want to go deeper?

Florida expands work requirements for SNAP

What’s the story?

Florida Gov. Ron DeSantis (R) signed House Bill 1267 on June 13, 2024, expanding work requirements for Supplemental Nutrition Assistance Program (SNAP) participants. The legislation mandates that individuals aged 18-59 must participate in the SNAP Employment and Training program for 40 hours per week, with exemptions for those living with children or who qualify for other specified reasons.

The new law exceeds federal minimum SNAP work requirements, which mandate that individuals between 18-52 must work 80 hours per month. The Florida Department of Children and Families first amended the SNAP program requirements in November 2023, which were then formally codified by HB 1267.

The bill passed the Florida House of Representatives on February 22, 2024, with a vote of 114-1, and passed the Florida Senate unanimously on March 6, 2024. Representative Adam Anderson (R), the bill’s sponsor, argued the bill would encourage workforce participation and self-sufficiency among SNAP recipients.

The Florida Policy Institute—a nonpartisan, nonprofit organization that conducts research and analysis on Florida public policies—argued, “‍Imposing work requirements on older Floridians will cause enormous hardship to people whose food assistance is cut off as a sanction. Aging Floridians already experience significant food insecurity.”

The law went into effect on July 1.

Want to go deeper?

Addressing legislative ambiguity post-Chevron

In a recent post for the Yale Journal on Regulation’s Notice and Comment blog, administrative law professor Joshua Sarnoff wrote about the Supreme Court decision to overturn Chevron deference in Loper Bright Enterprises v. Raimondo and Relentless, Inc. v. Department of Commerce. Sarnoff argued that the Constitution should be amended to create a framework for legally addressing and interpreting legislative ambiguities:

We will have to see how ‘workable’ will turn out to be the politicization of law through imposition of judicial preferences when interpreting statutes, by comparison to that of agency expertise and democratic accountability. But the power grab for the judiciary that Loper Bright reflects should not get a pass by going unremarked or unnoticed. And if this is where originalism leads (although it need not), it is time for us to change the Constitution (as any legislative effort to restrict such judicial discretion would likely be held by the current Supreme Court conservative majority to violate non-textual constitutional separation of powers limits or the non-delegation doctrine) and impose a new method of legal interpretation on our judiciary both for how to address inevitable legislative ambiguity and to assure that administrative expertise and democracy prevail over judicial policy-specifying supremacy.

Want to go deeper?

• Click here to read the full text of “Supreme Court Confirms Judicial Supremacy Over Democracy and Expertise” by Joshua Sarnoff.

Regulatory tally

Federal Register

• The Federal Register in June reached 54,328 pages.
• The June Federal Register included 103 proposed rules and 245 final rules. These included updated marine engineering standards and energy conservation standards for refrigerators, refrigerator-freezers, and freezers.
• Want to go deeper?

• Click here to find more information about weekly additions to the Federal Register since 2017
• Click here to find yearly information about additions to the Federal Register from 1936 to 2023

Office of Information and Regulatory Affairs (OIRA)

OIRA’s June regulatory review activity included the following actions:

• Review of 27 significant regulatory actions.
• Recommended changes to 25 proposed rules; one rule withdrawn from the review process; one rule subject to a statutory or judicial deadline.
• As of July 1, 2024, OIRA’s website listed 138 regulatory actions under review.
• Want to go deeper?

Every month, Ballotpedia compiles information about regulatory reviews conducted by OIRA. To view this project, visit: Completed OIRA review of federal administrative agency rules.