A recent decision by the Supreme Court delineated limits on deference to administrative agency authority and opened the door for the conservative Court to invalidate future regulatory action involving a “major question” that is of particular “economic and political significance.”
“Clear congressional authorization” needed for significant regulatory action: The majority decision authored by Chief Justice Roberts held that federal agencies must have “clear congressional authorization” for regulatory actions of great “economic and political significance,” and that the Court will be skeptical of any sweeping agency action. The case, West Virginia v. EPA, involved the Environmental Protection Agency’s authority to issue emissions caps for power plants under the Clear Power Plan. In the 6-3 decision split along ideological lines, the Court held that the EPA had exceeded its statutory mandate and authority, and in so doing offered a framework for the “major questions” doctrine to evaluate future administrative agency actions.
The exact type of agency action that presents a “major question” requiring such heightened scrutiny remains somewhat vague, although Justice Gorsuch provides some guideposts in his concurring opinion. According to Gorsuch, factors to be considered include whether the agency action is unprecedented or otherwise outside of the agency’s normal expertise, whether it is inconsistent with past actions, and the “age and focus” of the statute from which the agency claims authority.
Outlook: The opinion offers a substantial preview of what could prove to be a formidable wall against the Biden administration’s all-of-government approach to labor and employment policy. Recent efforts by the SEC and FTC to wade into labor and employment policymaking, for example, could thus be subject to significant scrutiny from the Court, and even traditional players such as the NLRB could find their regulatory efforts under the microscope.