THE RIGHT'S NEXT TARGET (UPDATED)

The effort to overthrow Roe v. Wade has been a campaign so central to U.S. politics around the judicial branch for so long, it is hard to imagine what issue or issues would dominate without it. If the Supreme Court does vote to overturn Roe as a leaked opinion by Justice Alito seems to show they will, the conservative legal movement will have achieved its most high-profile objective. But will it lose its reason to exist?

Many, yours truly included, have thought the movement would next set its sights on reversing the right to contraception, or same-sex marriage, or interracial marriage; these are the cases that are, like Roe, based on the constitutional right to privacy that Alito says in his opinion does not exist, and they also can be seen as “non-traditional” rights, which he also claimed as a reason for overturning the right to abortion.

While everyone has been fixated on these red herrings, the world of constitutional scholarship just had a surprise happen when conservative appellate judges from the U.S. Court of Appeals for the 5th Circuit, which covers Texas, Mississippi and Louisiana, issued a ruling on Wednesday that is far more likely to set the course and define the next generation of constitutional conflict. This is a potential fight that goes to the heart of how government has operated in this country for the past 86 years.

The decision in Jarkesy v. Securities and Exchange Commission is about the very structure of American government itself. It is the first conservative attack based on the conservative legal fiction that a runaway administrative state is the major threat to American democratic values.

For background: The SEC brought an administrative action against George Jarkesy, accusing him of fraud. The SEC official, called an “administrative law judge” (ALJ), found against him, fining him a combined roughly $1 million and banning him from ever participating in the industry again. Jarkesy appealed to the SEC commissioners, who upheld the ALJ’s finding. Then he appealed to the Fifth Circuit, saying that the agency’s whole method of adjudication is unconstitutional. This case has been ongoing for nearly 10 years. The Fifth Circuit agreed with Jarkesy, and found that the 7th Amendment entitles him to a jury trial. 

The 5th Circuit’s ruling significantly limits the powers to enforce rules on the part of the SEC. Until this decision, the SEC could accuse people or companies of financial wrongdoing and determine their responsibility in an internal “administrative proceeding” rather than through a trial in the judicial branch. These proceedings are controlled by Administrative Law Judges; they are civil servants who work for the SEC, and in such a proceeding the accused do not have the right to have a jury hear the case as would happen in a civil proceeding.

The two judges of the three-judge 5th Circuit panel attacked the administrative proceeding on three points, finding: first, those accused in SEC fraud actions have the constitutional right to a jury trial; second, that Congress had unconstitutionally granted the SEC, an executive-branch agency, “legislative” power; third, that administrative law judges are too difficult for the president to remove.

While each of those holdings presents a complicated legal basis that may or may not be upheld by the Supreme Court, together they send a clear constitutional message, one which could be applied to all federal agencies; that the executive-branch bureaucracy in its current form is distorting key features of self-government, including democratic accountability, the primacy of Congress, and the right to trial by jury.

The Constitutional division of power is considered its most important way of protecting liberty - dividing the powers of the federal government between legislative, executive and judicial branches. Conservative legal scholars have argued that bodies such as the SEC and other federal agencies bring all three powers under the control of one agency - the Executive Branch. According to the conservative “originalists,” this violates the system of checks and balances the Framers established through the division of powers.

The 5th Circuit’s opinion argues that “accountability evaporates if a person or entity other than Congress exercises legislative power,” and cites Gundy v. United States, a case decided in 2019 in which the Court came close to imposing stricter limits on Congress’s ability to delegate legislative powers to executive officials. The circuit court ruled specifically that “Congress unconstitutionally delegated legislative power to the SEC by failing to provide an intelligible principle by which the SEC would exercise the delegated power, in violation of Article I’s vesting of ‘all’ legislative power in Congress….”

Interestingly, “The majority of SEC administrative enforcement actions do not seek financial penalties — they seek other kinds of remedies, like barring you for life from participating in the securities industry,” Alex Platt, an associate professor at the University of Kentucky School of Law, said. “Had they brought this exact case against this exact defendant and just left off the financial penalties, there’d be no 7th Amendment issue.”

For the past 86 years, the enforcement of federal laws has been accomplished by the executive branch agency charged with enforcing that law writing the regulations that administer the enforcement of the law.

At a minimum, if the Supreme Court were to affirm this decision, it would require all enforcement actions be accomplished through civil actions in the federal courts. Given the existing workload of the federal courts and the resulting delays, this would make an already slow-moving enforcement mechanism even slower. Also, getting the congress in the current polarization it exists in to take affirmative action to solve the problem would be close to impossible with Republicans blocking everything, especially if they re-take the majority in Congress.

We can expect this - the campaign to overthrow the “administrative state” - to be the conservative legal movement’s next battleground. There will be many more appeals to the Supreme Court in cases aimed at blocking the federal bureaucracy in the coming years. The movement wants to force Congress to take responsibility for legislative decisions, rather than passing the buck to unelected civil servants; with potential Republican majorities controlling the Legislative branch, this would effectively bring modern government to a halt.

Progressives have prioritized “structural reform” to reinvigorate American democracy, such as the liberalization of voting rules, adding states to the union, the eliminating or making moot the electoral college, prohibiting gerrymandering and expansion of the Supreme Court. All these are intended to make the U.S. government more responsive to democratic majorities.

Conservatives view “structural reform” differently. They’re less concerned with expanding democracy in the abstract, and more concerned with structuring governmental power it in such a way that the power of the government power can be constrained, claiming that this will mean constitutional rights are protected. By neutering the administrative agencies, the result would be a return to the pre-New Deal governmental form, with business free to operate as they wish.

What makes this so important is c legal theory called the “nondelegation doctrine,” which claims that Congress - the legislative branch of the government - cannot delegate legislative authority to the executive branch. This theory of nondelegation was invented by conservative opponents of the New Deal in 1935 to undercut the business regulations being created by the New Deal. Most of the regulatory bodies in our government since then have been part of the executive branch. So the nondelegation doctrine would hamstring the modern regulatory state.

Using this doctrine, the Supreme Court stepped in and - most famously in the decision that found the National Recovery Administration to be unconstitutional - ruled Congress could not delegate its authority to administrative agencies. FDR’s threat to “pack” the court and the public support he had for so doing convinced the Republican justices on the court that they were on the wrong side of public opinion and brought about a reversal in their subsequent rulings. The nondelegation theory was then ignored for 50 years until the 1980s, when “movement conservative” Federalist Society lawyers and judges began to look for ways to overthrow the administrative state.

In 2001, the Supreme Court unanimously rejected the argument in a decision written by Justice Antonin Scalia, who said the court must trust Congress to take care of its own power. However, once Justice Clarence Thomas suggested he might be open to the argument presented in the “nondelegation doctrine,” conservative scholars began to say that the framers of the Constitution did not want Congress to delegate authority because they said nothing in favor of allowing that. More importantly, Republican appointees on the current court have embraced this.

In 2019 Justice Kavanaugh sided with Justice Gorsuch in Gundy to say the Court should reexamine whether or not Congress can delegate authority to administrative agencies. Chief Justice John Roberts and Justice Thomas both appear to believe the Constitution forbids such delegation. Should Justice Amy Coney Barrett side with them in a future case - like this one on appeal, the resurrection of the nondelegation doctrine would end the modern administrative state.

As Justice Elena Kagan pointed out, the nondelegation doctrine would mean that “most of Government is unconstitutional.”

Reagan began the process of dismantling the New Deal government; it has become a goal of the far right, as Steve Bannon first pointed out, in his speech at CPAC in 2017, when he said the goal of the Trump Administration was the overthrow of the administrative state. This ruling by the Fifth Circuit will be appealed. If the court is now ready to overthrow all precedent that stands in the way of the far right consolidation of power, achieving the goal of stymying government seems now to be at hand.

The court’s willingness to consider overturning long-held precedent on ideological grounds is a grave threat to maintaining democratic majoritarian government in this country, and such an overthrow isn’t limited to cases on voting.

UPDATE: The Lawyers Guns and Money Blog takes note that the author of this decision of the Fifth Circuit was a G.W. Bush nominee, reminding us all that this conservative campaign to overthrow the modern state has been a long long road and a long long time a’ comin’.

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