By Bob Needham
Michigan Law
The U.S. Supreme Court in Ohio v. Environmental Protection Agency blocked the EPA from enforcing its “Good Neighbor” rule requiring 23 states to reduce air pollution traveling to downwind states.
That decision puts the EPA’s plan on hold while it’s challenged in federal appeals court. But it’s also part of a broader group of rulings—along with Loper Bright Enterprises v. Raimondo, Securities and Exchange Commission v. Jarkesy, and Corner Post Inc. v. Board of Governors of the Federal Reserve System — in the Court’s recent term that substantially reduce the power of executive agencies to issue and enforce regulations.
The Ohio v. EPA ruling was 5-4, with a dissent from Justice Amy Coney Barrett that was joined by Justices Sonia Sotomayor, Elena Kagan, and Ketanji Brown Jackson. Barrett’s dissent cited a 2017 paper by Nicholas Bagley, the Thomas G. Long Professor of Law, titled “Remedial Restraint in Administrative Law.” Bagley—who also wrote about the Court’s recent decisions for The Atlantic—answered five questions about Ohio v. EPA, its broader implications, and the citation of his work:
—————
1. What happens now with the EPA’s “Good Neighbor” plan? The Supreme Court majority ruled that the EPA didn’t adequately respond to some of the criticisms received during its rule-making process. Could the EPA just provide that fuller response now to remedy the Court’s concern?
Agencies would love to be able to do that. Typically, what the courts will say is we only accept explanations offered at the time of the agency decision because we fear that otherwise agencies are just going to come up with contextual reasons or reasons that they didn’t really have at the time, and use that to backfill their true justifications. In order to make sure that agencies behave right in the future, we’ve got to really hold them to the fire.
So now the EPA has to go back to the drawing board, and they’ve got to think through whether they want to adopt a single plan for all of these states, like they’ve said they do, and address the concerns that the court identified; or whether they want to take a different approach. Either way, it means delay and confusion.
—————
2. Were you surprised that Justice Barrett dissented, or that she cited your work?
Justice Barrett has shown an independent streak, and when she sees arguments that frankly don’t add up, I think it bothers her. Justice Gorsuch’s opinion in Ohio v. EPA is really unpersuasive. Just as a matter of craft, I can understand why she bristled at it.
I was certainly surprised she cited my work. That’s a piece I wrote a long time ago, saying that courts should have a lot more discretion in whether they choose to strike down an agency action when there’s a fairly modest problem with it. She picked up on that suggestion, and it was really gratifying to see that.
I emphatically agree with the broad strokes of the dissent, which is that courts shouldn’t be in the business of fly-specking lengthy notice-and-comment records. Agencies often don’t address a particular comment because it doesn’t seem salient at a particular time, and it only becomes salient later. The benefit of hindsight makes it easy to castigate them, but that’s not the courts’ job. The question is whether the agency has behaved arbitrarily and capriciously, and that’s a pretty demanding standard.
—————
3. What are the broader implications of this decision and the others you’ve written about?
All four rulings represent an intensification of judicial oversight over federal agencies, and that’s not a shift that’s unique to these four cases. It’s a broader shift over the past couple of decades at the US Supreme Court, where a conservative majority has changed doctrine to reflect its skepticism about the administrative state and its concerns that the administrative state is too unaccountable and regulating too stringently without adequate safeguards.
Most of these decisions I think are wrong and reflect a pretty impoverished view about what government is for and what courts are good at. The United States faces a bunch of related challenges. We have a problem with the green energy transition. We’ve got a dearth of available and affordable housing. We’ve got crumbling infrastructure. We’ve got a raging opioid crisis. All of these problems are things that we really need government to help out with. We’re not going to be able to achieve our goals unless we’ve got a functional state with high capacity to do stuff, and the courts are custom-built to frustrate
government action and to make it much harder for agencies to do their jobs.
Courts tend to underestimate just how disruptive their interference tends to be, and the Supreme Court in particular doesn’t fully appreciate just how much its decisions reverberate in the halls of administrative agencies in counterproductive ways.
The Court might think that they’re disciplining agencies from when they act arbitrarily, and that will encourage them to behave better in the future. Yet the real message that agencies get is, we’re just going to lose sometimes for reasons we can’t possibly anticipate. In response, they get defensive and sclerotic. In the long run, I don’t think that’s actually good for business or for the values that the conservative legal movement professes to stand for.
—————
4. The business community and conservative politicians have been wanting this change for a long time. What leads you to say it would be bad for them?
Many business leaders are locked into a world of the 1980s and ’90s, with lots of examples of agency overreach. Now, those concerns and complaints have some force–agencies do sometimes overreach. What I struggle with is the assumption that if you dislike the administrative state, it’s a good idea to make it work less well. That will eventually blow up in your face, because you’re going to have agencies that are defensive, that are slow to change, that can’t respond to your particular needs, that end up making bad decisions. An ineffective public sector ends up making it hard for businesses to do their jobs effectively.
—————
5. What’s the best way to address these issues going forward?
I think lawyers need to be humbler about our ability to encourage good governance through the enforcement of procedural rules in the courts. I think strict court oversight over every aspect of agency decision-making is bad for government and bad for the American public, and we would be better off with a public sector that has a little bit more freedom—where we turn to democratic institutions, to our elected leaders, and to Congress to respond to the excesses of what agencies might do.
Part of the reason that you’re seeing so much court frustration with agencies is that our politics seems not very well designed to keep agencies on track and doing what we want them to do. A lot of our statutes are very old. Congress seems unable or unwilling to update them. The filibuster makes it extraordinarily difficult to get anything passed, together with highly polarized politics and a splintered American public.
Put all that together, and you have an unresponsive Congress and an Executive Branch that is under a lot of pressure to get things done. That’s a recipe for bureaucratic overreach, and the Court thinks that the right solution is to ride herd on agencies even more. I think that will prove counterproductive in the long run. It displays a distrust of our democratic institutions, which although slow and balky can and sometimes do respond.
Michigan Law
The U.S. Supreme Court in Ohio v. Environmental Protection Agency blocked the EPA from enforcing its “Good Neighbor” rule requiring 23 states to reduce air pollution traveling to downwind states.
That decision puts the EPA’s plan on hold while it’s challenged in federal appeals court. But it’s also part of a broader group of rulings—along with Loper Bright Enterprises v. Raimondo, Securities and Exchange Commission v. Jarkesy, and Corner Post Inc. v. Board of Governors of the Federal Reserve System — in the Court’s recent term that substantially reduce the power of executive agencies to issue and enforce regulations.
The Ohio v. EPA ruling was 5-4, with a dissent from Justice Amy Coney Barrett that was joined by Justices Sonia Sotomayor, Elena Kagan, and Ketanji Brown Jackson. Barrett’s dissent cited a 2017 paper by Nicholas Bagley, the Thomas G. Long Professor of Law, titled “Remedial Restraint in Administrative Law.” Bagley—who also wrote about the Court’s recent decisions for The Atlantic—answered five questions about Ohio v. EPA, its broader implications, and the citation of his work:
—————
1. What happens now with the EPA’s “Good Neighbor” plan? The Supreme Court majority ruled that the EPA didn’t adequately respond to some of the criticisms received during its rule-making process. Could the EPA just provide that fuller response now to remedy the Court’s concern?
Agencies would love to be able to do that. Typically, what the courts will say is we only accept explanations offered at the time of the agency decision because we fear that otherwise agencies are just going to come up with contextual reasons or reasons that they didn’t really have at the time, and use that to backfill their true justifications. In order to make sure that agencies behave right in the future, we’ve got to really hold them to the fire.
So now the EPA has to go back to the drawing board, and they’ve got to think through whether they want to adopt a single plan for all of these states, like they’ve said they do, and address the concerns that the court identified; or whether they want to take a different approach. Either way, it means delay and confusion.
—————
2. Were you surprised that Justice Barrett dissented, or that she cited your work?
Justice Barrett has shown an independent streak, and when she sees arguments that frankly don’t add up, I think it bothers her. Justice Gorsuch’s opinion in Ohio v. EPA is really unpersuasive. Just as a matter of craft, I can understand why she bristled at it.
I was certainly surprised she cited my work. That’s a piece I wrote a long time ago, saying that courts should have a lot more discretion in whether they choose to strike down an agency action when there’s a fairly modest problem with it. She picked up on that suggestion, and it was really gratifying to see that.
I emphatically agree with the broad strokes of the dissent, which is that courts shouldn’t be in the business of fly-specking lengthy notice-and-comment records. Agencies often don’t address a particular comment because it doesn’t seem salient at a particular time, and it only becomes salient later. The benefit of hindsight makes it easy to castigate them, but that’s not the courts’ job. The question is whether the agency has behaved arbitrarily and capriciously, and that’s a pretty demanding standard.
—————
3. What are the broader implications of this decision and the others you’ve written about?
All four rulings represent an intensification of judicial oversight over federal agencies, and that’s not a shift that’s unique to these four cases. It’s a broader shift over the past couple of decades at the US Supreme Court, where a conservative majority has changed doctrine to reflect its skepticism about the administrative state and its concerns that the administrative state is too unaccountable and regulating too stringently without adequate safeguards.
Most of these decisions I think are wrong and reflect a pretty impoverished view about what government is for and what courts are good at. The United States faces a bunch of related challenges. We have a problem with the green energy transition. We’ve got a dearth of available and affordable housing. We’ve got crumbling infrastructure. We’ve got a raging opioid crisis. All of these problems are things that we really need government to help out with. We’re not going to be able to achieve our goals unless we’ve got a functional state with high capacity to do stuff, and the courts are custom-built to frustrate
government action and to make it much harder for agencies to do their jobs.
Courts tend to underestimate just how disruptive their interference tends to be, and the Supreme Court in particular doesn’t fully appreciate just how much its decisions reverberate in the halls of administrative agencies in counterproductive ways.
The Court might think that they’re disciplining agencies from when they act arbitrarily, and that will encourage them to behave better in the future. Yet the real message that agencies get is, we’re just going to lose sometimes for reasons we can’t possibly anticipate. In response, they get defensive and sclerotic. In the long run, I don’t think that’s actually good for business or for the values that the conservative legal movement professes to stand for.
—————
4. The business community and conservative politicians have been wanting this change for a long time. What leads you to say it would be bad for them?
Many business leaders are locked into a world of the 1980s and ’90s, with lots of examples of agency overreach. Now, those concerns and complaints have some force–agencies do sometimes overreach. What I struggle with is the assumption that if you dislike the administrative state, it’s a good idea to make it work less well. That will eventually blow up in your face, because you’re going to have agencies that are defensive, that are slow to change, that can’t respond to your particular needs, that end up making bad decisions. An ineffective public sector ends up making it hard for businesses to do their jobs effectively.
—————
5. What’s the best way to address these issues going forward?
I think lawyers need to be humbler about our ability to encourage good governance through the enforcement of procedural rules in the courts. I think strict court oversight over every aspect of agency decision-making is bad for government and bad for the American public, and we would be better off with a public sector that has a little bit more freedom—where we turn to democratic institutions, to our elected leaders, and to Congress to respond to the excesses of what agencies might do.
Part of the reason that you’re seeing so much court frustration with agencies is that our politics seems not very well designed to keep agencies on track and doing what we want them to do. A lot of our statutes are very old. Congress seems unable or unwilling to update them. The filibuster makes it extraordinarily difficult to get anything passed, together with highly polarized politics and a splintered American public.
Put all that together, and you have an unresponsive Congress and an Executive Branch that is under a lot of pressure to get things done. That’s a recipe for bureaucratic overreach, and the Court thinks that the right solution is to ride herd on agencies even more. I think that will prove counterproductive in the long run. It displays a distrust of our democratic institutions, which although slow and balky can and sometimes do respond.
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