Defendants and plaintiffs alike suffer from the abuse. The only beneficiaries are the plaintiffs’ attorneys.

By David B. Rivkin, Jr., And Laurence A. Friedman

January 4, 2024, in the Wall Street Journal

Mass tort exposure has created an epidemic of bankruptcies, affecting organizations from Johnson & Johnson (talcum powder) to the Boy Scouts (sexual abuse). The way this process has unfolded is causing the federal bankruptcy system to come apart, harming the plaintiffs and bankrupt entities alike. Nobody benefits but the plaintiff lawyers.

Trial lawyers have found an opportunity to exploit the traditional bankruptcy claims process through the use of well-honed mass tort shakedown strategies. The scheme is simple but damaging. Plaintiff lawyers invest in a flurry of marketing through social media, TV and radio ads, often using professional “lead generation” companies, to identify the maximum number of potential tort claimants.

These claims can’t be fully verified, challenged or adjudicated within the framework of bankruptcy proceedings. Their proliferation siphons off tremendous resources from companies that are already in financial distress, compromising their ability to emerge from bankruptcy and short-changing established creditors, including earlier plaintiffs. As a lawyer for one of the Boy Scouts’ insurers told the press in 2021: “Allowing invalid and fraudulent claims will hurt valid survivors of sexual abuse by delaying and diluting any compensation they would receive.”

The bankruptcy reorganization process involves restructuring a company in a manner that maximizes its value, then distributes that value efficiently to creditors (including employees, bondholders and vendors) through a court-approved plan, thus staving off liquidation. This is possible because creditors and other stakeholders have predictable expectations of how the bankruptcy will proceed and their claims will be treated.

Creditors often must accept less than their original claims. But the process keeps the organization running, protecting jobs by putting its business operations on a sound financial footing again. Sometimes creditors are assigned ownership in a reorganized company, giving them a stake in a reasonably prompt and efficient resolution of bankruptcy.

But when the trial lawyers bring their “claims” to the table, all bets are off. Insurance companies, creditors, the bankrupt entity and sometimes its principals are forced back to the drawing board. The trial lawyers then typically offer an “easy” solution: create a separate bucket of cash to be held in trust as the sole source for resolution of the mass tort claims (including lawyer fees). Since the voting power in the reorganization plan approval process is driven by the aggregate amount of each creditor’s claims, claim proliferation gives disproportionate powers to the plaintiff tort lawyers.

The Boy Scouts of America bankruptcy in Delaware is a perfect example. At the time of the initial bankruptcy filings in 2020, the number of actual lawsuits filed by abuse claimants was less than 300 and expected to grow to about 2,000. Then the mass-tort lawyers brought more than 80,000 new, unadjudicated sexual-abuse claims into the case. If the judge allows final plan approval taking into account these new claims, the result will dilute the funds available to the original victims whose suits were the impetus for the bankruptcy filing in the first place. Their expected payouts could be reduced from $1.2 million to $30,000 a claim.

In the Johnson & Johnson bankruptcy case, the first set of trial lawyers objected to the original reorganization plan and extracted an agreement to increase the pot of settlement money from $4 billion to more than $9 billion. Then a different set of mass tort lawyers objected to this second attempt to resolve the claims. Result: chaos, with the second bankruptcy now on appeal, the company contemplating a third, nothing conclusively resolved, and potential for ever more filings going forward.

The mass-tort lawyers use sophisticated lead-generation algorithms to capture potential claimants by promising lottery-size payouts. A sampling of solicitations on the web for those wondering if they may have a claim against Johnson & Johnson is instructive. Preliminary questions suggest that if you have been diagnosed with cancer, you may have a claim—even if you didn’t use the product but someone in your home did.

Another site suggests that the average judgment in a talc-related claim is $4.4 million. Yet simple math tells us that if the $9 billion proposed settlement is divided by the number of current claims—60,000—the average payout is more like $150,000. Legal and administrative fees can eat up 40% of that. The Federal Trade Commission would ordinarily bring enforcement cases against businesses putting out such misleading advertisements.

Congress could come up with systemic solutions to the claims-proliferation problem, but that seems unlikely given political gridlock and trial lawyers’ clout. The Judicial Conference of the U.S., which prescribes the official rules and forms governing bankruptcy practice and procedure, is a more viable avenue for reform.

The Judicial Conference could quickly change the claim forms to require greater upfront disclosures—including requiring submission of a specific diagnosis linking the claim to the alleged tort, as well as disclosure of any relationship between the doctor giving the diagnosis and the lawyers—and heightened certification requirements for lawyers and others who help file claims on behalf of tort claimants. Bankruptcy judges could appoint claims examiners in cases where large numbers of claims are brought into the proceedings to review how claims were generated and to advise judges on their findings, prior to those claims being allowed. And those judges need to be looking more closely at how lawyers are shaping the proceedings, serving as a cop on the beat in these cases.

Without such a new approach, the corporate bankruptcy system will continue to deteriorate, at the expense of troubled companies, their creditors and plaintiffs alike.

Mr. Rivkin practices appellate and constitutional law in Washington. He served at the Justice Department and the White House Counsel’s Office in the Reagan and George H.W. Bush administrations. Mr. Friedman is managing member of Friedman Partners LLC. He was director of the Executive Office for U.S. Trustees, 2002-05, and a Chapter 7 bankruptcy trustee.

Source: https://www.wsj.com/articles/trial-lawyers-are-wrecking-the-bankruptcy-system-johnson-and-johnson-boy-scouts-9f371ca2

By David B. Rivkin, Jr., and Lee A. Casey

Nov. 17, 2023, in the Wall Street Journal

If you look at the Supreme Court’s new Code of Conduct as an attempt to appease the justices’ antagonists in Congress and the media, it is a total and predictable failure. But in substance it is an important rebuke to those critics. “Congress must continue its efforts to hold the judiciary accountable,” Sen. Majority Leader Chuck Schumer tweeted in response.

The code and the justices’ accompanying commentary make clear that Congress has no such authority. The justices describe the court’s unique role in America’s constitutional system and affirm several important principles:

• The Supreme Court isn’t merely a part of the judiciary; it is its head. The Constitution vests the judicial power “in one supreme Court, and in such inferior Courts as the Congress may from time to time ordain and establish.” Congress can no more subject the court to lower-court supervision, as some lawmakers have urged, than it can authorize a federal officer to review and reverse presidential decisions.

Moreover, aside from the impeachment power, the Constitution gives neither Congress nor the court as a whole disciplinary power over individual justices. The only substantive authority Congress has over the court’s judicial function is the power to legislate exceptions and regulations of its appellate jurisdiction.

• The decision to recuse oneself from a case is an “inherently judicial function.” As such, it is at the core of the court’s constitutional function and can’t be regulated in any manner by the political branches.

• The justices have a “duty to sit.” That means it’s improper for a justice to recuse himself from a case merely for convenience or to avoid controversy. As the justices state in the commentary, this duty is stronger for them than for lower-court judges: “The absence of one Justice risks the affirmance of a lower court decision by an evenly divided Court—potentially preventing the Court from providing a uniform national rule of decision on an important issue.”

• The “rule of necessity” requires the justices to decide a case if most or all of them would ordinarily be disqualified under the code. Recusal requirements must give way when following them would deny the litigants a judicial determination to which they are otherwise entitled.

It’s significant that all nine justices signed the document. After Justice Samuel Alito told the Journal in a July interview that Congress lacks the authority to regulate the high court, legal pundits speculated that other justices might disagree. Now all the court’s members have made clear that they share the same basic understanding of their constitutional role and authority. Any justice who disagreed could have dissented, so the code and commentary carry the same institutional weight as a unanimous decision.

The code makes plain that the justices recognize the importance of ethical constraints, but it also maintains the court’s independence, including the independence of its individual members, from recent efforts by Congress to aggrandize itself at the court’s expense.

Messrs. Rivkin and Casey practice appellate and constitutional law in Washington. They served at the Justice Department and the White House Counsel’s Office in the Reagan and George H.W. Bush administrations.

Source: https://www.wsj.com/articles/the-justices-ethics-code-rebukes-their-critics-f147db25

By David B. Rivkin, Jr., and Lee A. Casey

September 16, 2023, in the Wall Street Journal

Justice Samuel Alito has refused a demand from Senate Democrats that he disqualify himself from a pending case because of an interview in this newspaper. One of us (Mr. Rivkin) is on the legal team representing the appellants in Moore v. U.S. and conducted the interview jointly with a Journal editor.

In a four-page statement Sept. 8, Justice Alito noted that other justices had previously sat on cases argued by lawyers who had interviewed or written books with them. “We have no control over the attorneys whom parties select to represent them,” he wrote. “We are required to put favorable or unfavorable comments and any personal connections with an attorney out of our minds and judge the cases based solely on the law and the facts. And that is what we do.”

The recusal demand came in an Aug. 3 letter to Chief Justice John Roberts signed by Senate Judiciary Committee Chairman Dick Durbin and the committee’s other Democrats, excluding Georgia’s Sen. Jon Ossoff. It is part of a campaign against the court’s conservatives by Democratic politicians, left-wing advocacy groups and journalists whose goals include imposing a congressionally enacted code of ethics on the high court.

Although there already is a judicial ethics code, propounded by the U.S. Judicial Conference, it applies only to the lower federal courts, which Congress established. Proposals to create a Supreme Court code of conduct—including onerous and enforceable recusal requirements—raise fundamental issues of judicial independence and separation of powers. Chief Justice Roberts noted in NFIB v. Sebelius (2012) that the justices have a “responsibility to declare unconstitutional those laws that undermine the structure of government established by the Constitution.”

Congressional imposition of such rules would do precisely that. Justice Alito put the point strongly in the Journal interview. “Congress did not create the Supreme Court,” he said. “No provision in the Constitution gives them the authority to regulate the Supreme Court—period.” To be sure, Article III authorizes Congress to regulate the court’s appellate jurisdiction, and Justice Alito followed his observation with this caveat: “Now, they have the power of the purse, so they have the ability to take away all of our money if we don’t do what they want. So as a practical matter, they have a lot of authority. But as a constitutional matter, they don’t.”

The Supreme Court’s independence is critical to America’s constitutional structure. As James Madison observed in his notes of the Constitutional Convention, “if it be essential to the preservation of liberty that the Legislative Executive & Judiciary powers be separate, it is essential to a maintenance of the separation, that they should be independent of each other.”

The political branches—Congress and the president—have overlapping powers that bear on the same policy issues. They also have effective tools at their disposal to fight encroachments on their authority. By contrast, the Supreme Court has the authority only to “say what the law is,” as Chief Justice John Marshall put it in Marbury v. Madison (1803). For the rule of law to prevail, the court has to carry out its duties free of any interference from the political branches. Yet its status as a countermajoritarian institution with no popular constituency makes it vulnerable to political attack.

The Constitution protects the judiciary by conferring life tenure on the justices and other Article III judges. They can be removed from office only through impeachment and conviction, and Congress is prohibited from reducing their salaries. Although lawmakers have enacted statutes establishing procedural and evidentiary rules for the lower federal courts, there is no constitutional basis supporting such authority over the Supreme Court. And while Congress first enacted recusal rules for lower courts in 1792, it didn’t extend them to the Supreme Court until 1948.

Even with respect to the lower courts, Congress doesn’t have a free hand. Recusal involves a core judicial function—the exercise of judgment in the same manner as deciding other legal issues. All recusals are determined case by case, considering the litigants and issues raised. History supports the premise that this is an inherent part of “judicial power,” belonging exclusively to the courts. In British and colonial courts alike, recusal decisions were handled entirely by judges, with no legislative input.

Congress can no more regulate this core judicial function than it can direct the president’s exercise of his core functions. As the Supreme Court confirmed in Trump v. Mazars (2020), which involved competing presidential and congressional claims, the resolution of separation-of-powers questions must take into account whether one branch of government is using its power to “aggrandize” itself at another’s expense or to gain some “institutional advantage.” The current efforts by Senate Democrats, while clothed in a concern for ethics, are plainly designed to weaken the court and put it under Congress’s thumb.

There is no evidence that the Supreme Court needs new recusal rules or has an ethics problem at all. Corruption inherently doesn’t loom large as a problem for the federal judiciary. The president and members of Congress must run for election, which requires them to raise campaign money. Both political branches provide tangible benefits to private parties through the creation or administration of spending programs and the letting of government contracts. This creates possibilities for corrupt influence.

Federal judges, by contrast, have life tenure and, as per Article III, hear only “controversies” that are brought before them. Like the president and other executive-branch officials, they are subject to impeachment for bribery or other corrupt acts. But fewer than a dozen jurists have been removed from office in more than two centuries. Recent accusations of “corruption” against conservative justices mostly involve their social activities with friends who have no pending cases before the court and likely never will. The critics seem untroubled (and rightly so) by similar behavior from liberal justices.

As Justice Alito’s statement notes, “recusal is a personal decision for each Justice.” Justices may look to the Judicial Conference’s Code of Conduct for guidance when considering whether to recuse themselves from a case. Although the federal statute requiring recusal in certain defined circumstances applies to the high court, the justices have never ruled on whether that application is constitutional.

The law, known as Section 455, incorporates standards anchored in traditional common law, so that they are arguably consistent with the original public meaning of Article III’s term “judicial power, exercised by the Supreme Court.” They mostly involve financial or family interests in a particular case. A judge might recuse himself, for instance, if a relative or a company in which he owns stock is a party to a case. Justices interpret and apply the law’s provisions in a flexible enough way to preserve judicial independence.

That flexibility is illustrated by U.S. v. Will (1980), in which the justices rejected the proposition that Section 455 obligated the entire court to recuse itself from hearing an appeal of a lawsuit, brought by 13 federal district judges, challenging the validity of statutes that repealed previously enacted cost-of-living pay increases for the judiciary. The decision by Chief Justice Warren Burger invoked “the ancient Rule of Necessity”: Because every judge had a financial interest in the outcome, a ruling by disinterested judges was a logical impossibility. Although Justice Harry Blackmun recused himself, the court held 8-0 that the repeal was constitutional only when it took effect before the increase did.

Even a single justice’s recusal can be harmful. Justice Alito’s statement related to Moore v. U.S. cited his “duty to sit,” a principle Justice William Rehnquist elucidated in a memorandum rejecting a motion to recuse himself from Laird v. Tatum (1972). Rehnquist noted a consensus among federal circuit courts of appeals “that a federal judge has a duty to sit where not disqualified which is equally as strong as the duty to not sit where disqualified.” That duty, he argued, is even stronger for a justice, whose recusal “raises the possibility of an affirmance of the judgment below by an equally divided Court. The consequence attending such a result is, of course, that the principle of law presented by the case is left unsettled.”

When a judge serving on a lower court is recused, another judge is assigned to the case and the litigation goes forward. That’s impossible when a member of the high court is recused. No one can sit in for a justice. Thus, while lower federal judges generally resolve doubts by recusing themselves, the opposite presumption is appropriate for the Supreme Court.

In addition, if the duty to sit were weakened, there is a real danger that litigants would use recusal motions strategically to affect the outcomes of cases. Public-policy litigation often comes before the court through test cases, in which litigants have been selected with a view toward the current or likely position of the federal circuit courts with jurisdiction over their place of residence or operations. In contentious areas of the law, those positions may be markedly different, reflecting the balance of judges with different judicial philosophies on the circuits.

A circuit split is one of the principal reasons why the Supreme Court will agree to hear a case. In this context, two justices’ recusals could turn a losing case into a winning one. A single recusal and a tie vote would leave the split unresolved, so that different parts of the country would be governed under different interpretations of federal law. The Supreme Court Ethics, Recusal and Transparency Act, which Mr. Durbin’s committee advanced along party lines in July, would subject the justices’ recusal decisions to review by either their colleagues or a panel of lower-court judges, creating temptations within the judiciary itself to game the system.

Liberals should be as concerned as conservatives with maintaining the court’s integrity and independence, and at least on the bench they appear to be. All nine justices have signed a “Statement on Ethical Principles and Practices,” which affirms, among other things, that the justices have a duty to sit and that the decision to recuse or not is up to each individually: “If the full Court or any subset of the Court were to review the recusal decisions of individual Justices, it would create an undesirable situation in which the Court could affect the outcome of a case by selecting who among its Members may participate.”

None of this is to deny that the justices should clearly define their recusal standards or that they should make public the reasoning for their decisions, as the Statement on Ethical Principles and Practices says they are free to do. There is value in assuring the public that these decisions are taken based on rational standards, honestly applied. But that is a matter for the justices, not Congress.

Messrs. Rivkin and Casey practice appellate and constitutional law in Washington. They served at the Justice Department and the White House Counsel’s Office in the Reagan and George H.W. Bush administration.

Source: https://www.wsj.com/articles/the-supreme-court-and-the-duty-to-sit-recusal-standards-ethics-durbin-alito-93c4dbb6

By David B. Rivkin, Jr., and Lee A. Casey

20 February 2023 in the Wall Street Journal

Headlines last week claimed that the Congressional Budget Office had warned the U.S. “could default on its debt” as early as July if Congress didn’t raise the statutory debt limit. What the CBO director actually said was that “the government would have to delay making payments for some activities, default on its debt obligations, or both.” In reality, the U.S. can’t default on its debt.

Section 4 of the 14th Amendment is unequivocal on that point: “The validity of the public debt of the United States, authorized by law, . . . shall not be questioned.” This provision was adopted to ensure that the federal debts incurred to fight the Civil War couldn’t be dishonored by a Congress that included members from the former Confederate states.

The Public Debt Clause isn’t limited to Civil War debts. As the Supreme Court held in Perry v. U.S. (1935), it covers all sovereign federal debt, past, present and future. The case resulted from Congress’s decision during the Great Depression to begin paying federal bonds in currency, including those that promised payment in gold. Bondholders brought an action in the Court of Claims demanding payment in currency equal to the current gold value of the notes. The justices concluded that Congress had violated the Public Debt Clause and that its reference to “the validity of the public debt” was broad enough that it “embraces whatever concerns the integrity of the public obligations.”

That means the federal government can’t legally default. The Constitution commands that creditors be paid. If they aren’t, they can sue for relief, and the government will lose and pay up.

Those who warn of default confuse debt payments with other spending obligations. “A failure on the part of the United States to meet any obligation, whether it’s to debt holders, to members of our military or to Social Security recipients, is effectively a default,” Treasury Secretary Janet Yellen said in January.

That’s nonsense. Authorized and even appropriated spending isn’t “the public debt.” For constitutional purposes, promised benefits from Social Security, Medicare and other entitlements aren’t even property, as the Supreme Court held in Flemming v. Nestor (1960), and Congress has as much authority to reduce them as to increase them. When lawmakers were drafting the 14th Amendment, they revised Section 4’s language to replace the term “obligations” with “debts.” If the Treasury ran out of money, the constitutional obligation to pay bondholders would trump all statutory obligations to spend.

Ms. Yellen also said that “Treasury’s systems have all been built to pay all of our bills when they’re due and on time, and not to prioritize one form of spending over another.” But as the Journal has reported, department officials conceded in 2011 that the government’s fiscal machinery certainly could prioritize payments to bondholders, and the Federal Reserve prepared for such a contingency. There’s no question enough money would be available: The government collects roughly $450 billion a month in tax revenue, more than enough to cover the $55 billion or so in monthly debt service.

These basic facts should inform decisions by credit-rating agencies in establishing the U.S. government’s creditworthiness. Those agencies have traditionally acted favorably when heavily indebted countries have significantly cut public spending rather than default on their debt.

Like Ulysses binding himself to the mast, the Public Debt Clause ties the government’s hands in a way that ultimately serves its interests. Around the world, public defaults are ubiquitous. Since 1960, 147 governments, including some Western democracies, have defaulted—many repeatedly—on their sovereign debt. The U.S. isn’t among them, in large part because of the Constitution’s restriction, buttressed by the rule of law. That’s why the nation is able to borrow so easily, and so much, at such favorable rates. If the Biden administration and other default doomsayers convince the world that U.S. debt isn’t secure, they will drive up the cost of borrowing—at least until the courts set things straight.

Rather than issue baseless warnings of default, the Treasury should tout the Public Debt Clause as a reason why investments in U.S. bonds are rock solid and entail no meaningful risk of default. That could help secure more-favorable credit terms for Treasury instruments than those paid by other Western countries. The strategy is well worth pursuing, given the sharp increase in rates at which Treasury is currently selling its benchmark 10-year notes—from 2% to 3.6% over a single year—resulting in a major escalation in U.S. debt-servicing obligations.

The real risk we face is out-of-control federal spending, not default. But spending cuts and tax hikes are politically unpopular. That leaves borrowing, which explains the recurring tumult over the debt ceiling. How the U.S. covers its spending tab is a debate worth having, as is whether that tab should be so high. Fear-mongering about default is a way to avoid these debates and avoid confronting the hard choices we face as a result of decades’ worth of overspending.

Those who vote against raising the debt ceiling will take a political risk, perhaps a substantial one, as payments many Americans reasonably anticipate may not arrive. Whether to proceed with this strategy if the Biden administration persists in refusing to accept any deal on future federal spending is a difficult question. But it should be debated honestly, unclouded by specious warnings of default.

Messrs. Rivkin and Casey practice appellate and constitutional law in Washington. They served at the Justice Department and the White House Counsel’s Office in the Reagan and George H.W. Bush administrations.

Source: https://www.wsj.com/articles/default-on-u-s-debt-is-impossible-deficit-treasury-cbo-janet-yellen-supreme-court-constitution-public-debt-clause-federal-reserve-328dafe5

By David B. Rivkin, Jr., and Andrew M. Grossman

7 December 2022 in the Wall Street Journal

The Supreme Court considers on Wednesday whether the Constitution’s Elections Clause means what it says—that “the times, places and manner of holding elections for senators and representatives, shall be prescribed in each state by the legislature thereof.” That question arises from a litigation blitz seeking to override state election laws. Unless the justices get the answer right, elections for Congress and president could become a free-for-all with judges being the ultimate deciders.

At issue in Moore v. Harper is North Carolina’s congressional map. In 2021 the state legislature—the General Assembly—enacted a redistricting plan. Lawmakers expressly rejected partisan considerations in drawing district lines. Nonetheless, groups aligned with the Democratic Party sued, arguing that the map was a partisan gerrymander and violated the state constitution.

The precise nature of that violation is an interesting question. Unlike some state constitutions, North Carolina’s doesn’t forbid partisan redistricting. Lacking any textual hook for their claim, the challengers cited a potpourri of state constitutional clauses, including ones guaranteeing “free elections,” equal protection and even free speech. The North Carolina Supreme Court ruled in their favor, despite having rejected a similar claim a few years earlier, and ultimately a court-imposed congressional map was used for this year’s elections.

The U.S. Supreme Court’s task in Moore is straightforward. The Elections Clause directs “the legislature” to regulate congressional elections, which includes drawing district maps. State courts aren’t part of the legislative process, and thus the North Carolina Supreme Court was obligated to uphold the General Assembly’s map.

It really is that simple. Many other constitutional clauses refer to a “state,” but the Elections Clause singles out a state “legislature.” In so doing, it conveys a unique legislative power to make a type of federal law. Like all federal laws, these can’t be trumped by state constitutional provisions. State courts have the power to interpret election regulations, but they can’t override the legislature’s handiwork unless it conflicts with the U.S. Constitution or a statute enacted by Congress.

The historical record of litigation involving federal election laws is straightforward, too. Of the bushels of briefs supporting the Moore plaintiffs, not one identifies a state-court decision striking down a law governing federal elections until 70 years after the founding. When disputes arose during the Civil War over whether state legislatures could permit absent Union soldiers to vote by mail despite in-person voting requirements in state constitutions, state supreme courts split on the question. The U.S. Supreme Court never heard an appeal in these cases.

Not until this century did state judges presume to override federal-election legislation when it violated their notions of how best to conduct “free,” “fair” or “equal” elections, in litigation brought mostly by Democrats. The Pennsylvania Supreme Court, for instance, in 2018 imposed its own congressional redistricting plan (drawn in secret) and held in 2020 that a Tuesday statutory ballot-receipt deadline could become a Friday deadline, viewing Friday as more “free” and “equal” than Tuesday.

The Moore plaintiffs cite Supreme Court precedents that read “the legislature” to mean “the state’s lawmaking process.” In Smiley v. Holm (1932), the justices held that a congressional redistricting plan didn’t take legal effect without the governor’s signature because the governor had “a part in the making of state laws” through the veto power. In Arizona State Legislature v. Arizona Independent Redistricting Commission (2015), the court approved of an independent redistricting commission adopted in a ballot initiative by the people as citizen-legislators.

Yet neither of these cases read the word “legislature” as a mere synonym for “state.” While the former term may be broader than state houses and senates, it is narrow enough to encompass only those people and institutions involved in making laws. The job of North Carolina’s courts is to interpret the laws; they have no role in the legislative process.

The Moore plaintiffs also argue that Election Clause legislation is subject to state-court review because Congress is subject to federal judicial review when it acts under the Elections Clause to “make or alter” congressional election laws. That’s a faulty analogy. Acts of Congress are always subject to review for compliance with the U.S. Constitution, but never under state constitutions. The U.S. Constitution’s Supremacy Clause privileges the Constitution over federal statutes and federal statutes over all state laws, including state constitutions. Importantly, that clause defines “the laws of the United States” as those “made in pursuance” of “this Constitution,” which includes the Elections Clause and its delegation to “the Legislature” of each state. By logical consequence, the U.S. Constitution constrains state legislatures exercising their authority under the Elections Clause, but state constitutions don’t.

The Moore plaintiffs also make political arguments. They contend that a plain-text reading of the Elections Clause would be “damaging for American democracy.” Legal commentators pillory state legislatures as partisan bodies and lionize state courts as guardians of democracy—even in states like North Carolina and Pennsylvania, where judges are selected in partisan elections. They also insist that it would jeopardize minority voting rights, which are protected under federal law that won’t be affected by Moore.

The core of American democracy is rule by the people through their elected representatives—not by judges, whether elected or appointed. Legislation can be good, and court decisions can be bad, as easily as the reverse. No one would contend that legislation permitting deployed Union soldiers to vote in federal elections was harmful to democracy, yet fidelity to the Elections Clause made that possible in some states while a theory of state-court supremacy disfranchised them in others. Those who loudly profess the need to “save” democracy are dead-set against it when it stands in the way of their partisan objectives.

Mr. Rivkin served at the Justice Department and the White House Counsel’s Office in the Reagan and George H.W. Bush administrations. Mr. Grossman is a senior legal fellow at the Buckeye Institute. Both practice appellate and constitutional law in Washington. They filed an amicus brief on behalf of state legislators supporting Moore challengers.

Source: https://www.wsj.com/articles/judges-arent-part-of-the-legislature-supreme-court-gerrymandering-redistricting-partisan-map-sue-constitution-11670351278

By David B. Rivkin, Jr., and Mark Wendell DeLaquil

July 11, 2022, in the Wall Street Journal

In a case last month upholding religious liberty, Justice Neil Gorsuch announced that an old precedent had ceased to be good law: “This Court long ago abandoned Lemon.” One day the Supreme Court may issue a similarly belated death notice for Chevron v. Natural Resources Defense Council, the 1984 ruling that vastly expanded the power of administrative agencies. If so, the beginning of the end will have come on the closing day of this year’s term, when the high court decided West Virginia v. Environmental Protection Agency.

In Chevron, the justices held that when Congress enacts an “ambiguous” statute, courts are obliged to defer to any “reasonable” interpretation offered by an executive-branch agency. The Chevron doctrine assumes that agency personnel have expertise that judges lack and that agencies are more democratic than courts because the former answer to the president. Chevron deference allowed the EPA to set national carbon-dioxide standards, the Transportation Department to prescribe automobile safety features and numerous other agencies and departments to regulate virtually every aspect of American life.

But this approach corroded democratic accountability by freeing lawmakers from the duty to legislate clearly. West Virginia is an important step in returning responsibility for solving the nation’s problems where it belongs, to Congress. It will shape resolution of the key policy issues in the remainder of the Biden administration and beyond.

Under Chevron, as Chief Justice John Roberts noted for the court in West Virginia, the absence of a political consensus to address difficult problems led to undertake extravagant regulatory efforts. Among them were the Centers for Disease Control and Prevention’s attempting to dictate housing policy, the Occupational Safety and Health Association’s driving vaccination policy, and, in this case, the Environmental Protection Agency’s creating national energy policy by updating the Obama administration’s anti-fossil-fuel Clean Power Plan.

In these cases, the agencies acted outside their expertise and certainly didn’t promote political accountability. The legislative process of political compromise was bypassed and democracy subordinated to government lawyers stalking dusty library shelves in search of vague and outmoded statutes. The West Virginia decision buttressed legislative authority yet led to strident criticism from legislators, dramatizing how comfortable Congress has become in abdicating its responsibility for difficult policy decisions.

Chevron also dramatically weakened the judiciary’s ability to check agencies’ regulatory overreach. Before 1984, the judiciary took a “hard look” approach in assessing the legality of federal regulations. Chevron was more of a rubber stamp. Judges blessed specific regulations and countenanced agency actions that Congress had never authorized. It made a mockery of Chief Justice John Marshall’s declaration in Marbury v. Madison (1803): “It is emphatically the duty of the Judicial Department to say what the law is.”

West Virginia limits Chevron by fleshing out the “major questions doctrine,” a longstanding judicial presumption that when an administrative agency asserts authority over questions of great economic and political significance, it may act only if Congress has clearly authorized it to do so. Or, as the Constitution puts it: “All legislative powers herein granted shall be vested in a Congress of the United States.

West Virginia’s critics focus on its policy impact because its legal merit is so compelling. By proscribing ambiguous congressional delegation where it matters most, the major questions doctrine re-establishes judicial authority and legislative responsibility. Absent a clear statutory delegation of the power to regulate, the executive branch can’t regulate at all. Where statutory language is clear enough to grant regulatory authority, it should eliminate substantial ambiguity about how that authority can be exercised. This effectively strips agencies of much of their regulatory willfulness, compelling them to regulate only as Congress intended. The domain of Chevron deference is limited to filling in the interstitial details of statutes in which Congress has decided the policy stakes.

West Virginia and the major questions doctrine are certain to surface again soon. Take the Securities and Exchange Commission’s proposed climate-change disclosure regulations. The SEC has a statutory directive to protect investors, facilitate capital formation, and maintain the efficient operation of capital markets. It has neither the expertise nor the statutory authority to regulate greenhouse-gas emissions. In light of West Virginia, the SEC ought to withdraw its proposal.

The Federal Trade Commission is contemplating a regulation that, without any clear statutory authority and departing from well-established FTC practices, purports to ban mergers even when no anticompetitive harms are visited on consumers. The Education Department proposes to eliminate basic mandatory procedural due-process requirements, such as a live hearing and cross-examination, in Title IX regulations that govern disciplinary procedures in universities.

Going forward, the first question in any important case concerning agency power is whether Congress actually intended for the agency to be regulating at all, not whether agency attorneys were clever enough to find a vague statute to justify a new rule. The power of the administrative state is certain to recede, bolstering democratic accountability, economic growth and liberty.

Mr. Rivkin was lead outside counsel in the case brought by 27 states challenging the Obama administration’s Clean Power Plan, in which the Supreme Court issued a 2016 stay. Mr. DeLaquil is lead counsel for Westmoreland Mining Holdings, a party to a case the court decided last month with West Virginia v. EPA.

Source: https://www.wsj.com/articles/no-more-deference-to-the-administrative-state-west-virginia-v-epa-chevron-major-questions-john-roberts-regulation-democracy-congress-11657475255