For those of you who may have missed it last week, I had a chance to talk with Senator Elizabeth Warren for about 25 minutes. (Excuse the VHS-quality video, the shaky audio at the start, my dog barking in the background, and the hasty change of scenery as I searched for better internet service in my house—we are still ironing these things out here at The Bully Pulpit.) I recommend watching the whole video. She brings her typical energy and knack for explanation to a conversation about her new housing bill, her plans for reforming the Federal Reserve, and how Democrats should think about their priorities going forward.
But today, I want to focus on our exchange that begins at the 11:40 mark, which is about how Republican appointees on the federal bench—from the Supreme Court down—have closed off most avenues for federal agency action that protects consumer rights, empowers workers, or reins in corporate abuses. This is an under-the-radar issue that deserves far more attention from anyone interested in addressing these core economic issues.
In my question to the Senator, I namechecked a few Biden-era rules that Republican judges struck down, but in the interest of time, I only mentioned a fraction of them. Here’s a longer (but still non-exhaustive) list. I don’t think most people realize just how large a blow these rulings dealt to the typical American:
Student debt relief: The Department of Education plan to provide $10,000 in debt relief for middle-class borrowers—with an additional $10,000 in debt relief to any such borrower who was a Pell Grant recipient—was struck down by the Supreme Court, with all 6 Republican appointees in the majority and all 3 Democratic appointees in dissent. The plan would have delivered nearly 90% of its benefits to people making under $75,000 a year, reduced outstanding debt for about 43 million people, and wiped out existing student debt completely for about 20 million people.
Cap on credit card late fees: The Consumer Financial Protection Bureau rule to cap credit card late fees at $8—which is proportional to the cost to the credit card companies of processing a late payment—was struck down by a Republican appointee in the Northern District of Texas. The rule would have brought typical late fee charges down from $32, saving Americans an estimated $10 billion in charges annually.
Ban on noncompete clauses in employment contracts: The Federal Trade Commission rule banning the use of noncompete clauses was struck down by a Republican appointee in the Northern District of Texas. The rule would have freed roughly 30 million American workers from these restrictions on switching jobs within their fields, and resulted in more new businesses, lower health care costs, and an average $500 a year increase in annual earnings.
Expansion of overtime pay: A Department of Labor rule to raise the salary threshold under which salaried workers are eligible for overtime pay was struck down by a Republican appointee in the Eastern District of Texas. The rule would have raised the salary threshold by about $20,000, up to $58,656, which would have given 4 million new workers overtime pay protections.
Ban on inclusion of medical debts on credit reports: The Consumer Financial Protection Bureau rule removing millions of unpaid medical debts from credit reports because they are not accurate predictors of creditworthiness was struck down by a Republican appointee in the Eastern District of Texas. The rule would have helped approximately 15 million Americans who have medical debts on their credit reports now.
Mandatory upfront disclosure of flight change and baggage fees: A Department of Transportation rule requiring airlines and ticketing agents to disclose, at the point of itinerary search, all ancillary fees (like checked bags, carry-ons, change or cancellation fees) was blocked by Republican appointees on the Fifth Circuit Court of Appeals. The rule would have made it easier for consumers to compare the actual full cost of ticket options before making a purchase.
Minimum nursing home staffing requirements: A Department of Health and Human Services rule to increase minimum staffing requirements for nursing homes was blocked by a Republican appointee in the Northern District of Texas. The rule would have improved the quality of care at thousands nursing homes across the country, reducing neglect, chronic illness, and death among the 1.2 million people who rely on nursing homes, while also addressing burnout among nursing home staff. A recent analysis from public health researchers estimated that reversing the rule would lead to 13,000 additional deaths annually.
I won’t go into great detail on the legal analysis in each of these cases, but trust me when I say the quality of analysis ranges from ludicrous to questionable. The court found the FTC noncompete ban unacceptably “arbitrary,” for example, even though the FTC had received and analyzed 26,000 public comments about the rule, reviewed dozens of empirical studies, conducted its own economic modeling, and painstakingly described and defended each aspect of the rule’s design. Even the student debt relief action, which was seen as legally controversial in some quarters, was struck down on shaky ground. Take a few minutes and read Justice Kagan’s evisceration of the majority opinion (starting at page 48 here) and see whether you think the Republican Justices’ reasoning holds up.
We are now in an era in which motivated right-wing judges have far more leeway to strike down federal agency actions they don’t like. In the last few years, the Roberts Supreme Court has created the “Major Questions Doctrine,” which states that if an agency takes an action with vast economic or political significance, it needs especially clear and specific authorization from Congress to do so. The judges in the noncompetes case and the nursing home staff case relied on this doctrine to reverse those rules. You can imagine how easy it is for a judge to find that there’s just not quite enough specificity in the law to support the particular action they are reviewing, even if the broad language Congress enacted clearly permits it. It’s an open invitation to judges to block ageny actions they disagree with.
You also might notice that each of these rulings came from courts in Texas, which sit within the Fifth Circuit. (One of the student debt challenges came up through a district court in Texas and the Fifth Circuit before reaching the Supreme Court.) The courts currently give corporations, trade groups, and other interest groups broad discretion on where to file their challenges. The Institute for Policy Integrity at New York University School of Law has compiled data showing that a disproportionate number of challenges to Biden-era rules were filed in the courts of the Fifth Circuit, where the plaintiffs were much more likely (and in some places, guaranteed) to get a Republican appointee for a judge:
The Institute for Policy Integrity found a massive disparity in the success rate between the Fifth Circuit and elsewhere: “The Biden Administration lost 79% of cases decided by the courts making up the Fifth Circuit, but won 68% of cases decided by all other courts.” The Biden Administration’s win rate in the Fifth Circuit was much lower (predictably) than the Trump Administration’s win rate in the Fifth Circuit:
To recap: the current system allows corporate interests to choose where to file suit to challenge pro-consumer or pro-worker administrative actions; they can select courts with Republican appointees who are politically opposed to Democratic policy priorities[1]; and the Supreme Court has concocted a legal doctrine that allows any motivated judge to find enough fault with major agency actions to block them. The result is that even straightforward assertions of legal authority by a Democratic administration are unlikely to survive legal review.
With the composition of the Fifth Circuit and the district courts within it unlikely to change for the next decade or longer, this dynamic will continue to be a problem for the next Democratic president. Put that alongside the fact that many Democratic legislative priorities are subject to a 60-vote threshold in the Senate because of the filibuster, and the net effect is a shrinking set of options for Democrats to address the many problems facing America’s working class. If you can’t leverage existing laws and you can’t pass new ones, you’re pretty much sunk.
That brings us back to Senator Warren’s response to my question. She makes a few points.
First, she points out that in Trump v. CASA, Inc., the Supreme Court recently limited the ability of a single district court judge to issue a nationwide injunction—that is, it limited the ability of a judge to issue an order that blocks an agency from enforcing a rule in general rather than just in relation to the party directly involved in the case. The Senator is right that that is a step in the right direction, but the new ruling has exceptions that can relatively easily be exploited by the types of groups that tend to challenge pro-consumer or pro-worker actions. For one, the Supreme Court didn’t stop courts from universally wiping economic regulations off the books via “vacatur,” which has the same functional effect as a “nationwide injunction” (check out footnote 10 on page 11 of the CASA decision). For another, if the group bringing the case claims to have a broad, nationwide membership—as many corporate trade groups claim—then right-wing judges could determine that a nationwide injunction should be issued to address the “harms” to the broad swath of businesses purportedly represented by that trade group. Indeed, Trump-appointed judges already have a history of doing that. I suspect CASA will ultimately result in even more cases filed by national trade groups, rather than individual corporations, and will not stop right-wing judges from providing universal, effectively nationwide relief from economic regulation of entire industries.
Second, the Senator notes that Congress can always respond to a blocked rule by legislating. That is true, but as noted above, the filibuster in the Senate would require 60 votes to ban noncompete clauses, or cancel some amount of student debt, or improve staffing requirements for taxpayer-funded nursing homes. And those are simply not things enough Republican Senators want to do.
Third, the Senator argues we should expand the Supreme Court, as Congress can do without a constitutional amendment and has in fact done in the past. However, that too would require 60 Senate votes under the current filibuster rules, and no Republican would imagine voting for such a change under a Democratic president.
There simply aren’t many good answers without ending the filibuster and adopting a 50-vote threshold for all legislation. Democrats cannot count on being able to use administrative authority to pursue their policy goals in the current environment. Ending the filibuster is needed not only to protect a woman’s right to choose, strengthen the Voting Rights Act, and pass meaningful gun safety legislation, but also to enact the kind of pro-worker and pro-consumer reforms that the Biden Administration attempted to achieve through administrative action. It should be non-negotiable the next time Democrats control Congress and the White house.
Eliminating the filibuster also opens pathways to judicial reform that can make future administrative actions more likely to survive. Congress could require all administrative law cases to be filed in the federal courts in DC, which are much more balanced than the Fifth Circuit. Congress could also cut back on the rules of associational standing, which allow member organizations like the business trade groups to file suit and get effectively nationwide injunctions. And, of course, Congress could reform the Supreme Court directly, including by adding seats or by stripping the Court of review of challenges to administrative action.
As someone who spent an inordinate amount of time in both the Senate and the White House trying to use existing legal authority to address some of the many problems working-class Americans face, it pains me to declare that approach a dead end. But we must be clear-eyed about how hostile the current judiciary is to core elements of the Democratic policy platform, and how writing slightly less ambitious rules or engaging in additional rounds of notice-and-comment process is highly unlikely to get a more favorable outcome in the courts. We need to eliminate the filibuster, pass strong new pro-consumer and pro-worker laws, and rein in the courts—including the Supreme Court—that see any action threatening corporate interests as illegal. Otherwise we’ll just keep running into the same brick wall.
[1] I’m only covering primarily economic cases in this piece. These judges also reversed Democratic governance on a host of other issues—including immigration policy, gun safety rules, and voting-related issues.
