D.C. Circuit Review – Reviewed: A Special Judge Kavanaugh Edition (Co-Authored by Jenn Mascott)
You may have noticed that Notice & Comment has hosted a series of posts highlighting the administrative law views of several judges on President Trump’s list of potential Supreme Court nominees. In light of this week’s big news (and no, we aren’t talking about the D.C. Circuit’s Revised Bills of Costs), it’s time for D.C. Circuit Review — Reviewed to join the fun. And to make this post even more exciting, why not add a co-author? After all, it is not every day that a D.C. Circuit judge is reported to be on the shortlist for the Supreme Court, nor that a former clerk of said judge happens to be Notice & Comment’s own Jenn Mascott. Yup, this post will be about Judge Brett Kavanaugh. To be clear, however, we aren’t cheerleading for Kavanaugh.* Based on his body of work, we suspect that he would be a fine justice — but so would many others. We do think, however, that no discussion of administrative law is complete if he is not included.
One of us (Jenn) set out to describe Judge Kavanaugh’s most important opinions. It turns out that is a hard thing to do. In his twelve years on the bench, he has issued opinions in many well-known separation-of-powers and administrative law cases. It’s impossible to go through all of them. But here is a sample.
Even as a new judge, Judge Kavanaugh focused his attention on the constitutional accountability of the administrative state. In 2008, during his second year on the bench, Kavanaugh issued a lengthy dissenting opinion in Free Enterprise Fund v. Public Company Accounting Oversight Board. The panel in the case upheld the structure of the PCAOB, established by the Sarbanes-Oxley Act in 2002. The PCAOB was designed as an “independent” board whose members are appointed by the Securities and Exchange Commission. Was that independence—obtained by removal protections—constitutional? The panel said yes; after all, the Supreme Court has held that some restrictions on presidential removal are permissible.
Against the tide, Judge Kavanaugh concluded that PCAOB members lacked meaningful supervision because of their stringent tenure protections, meaning that the Board members were “principal officers” under Article II of the Constitution. Yet they had not been appointed by the President with Senate consent; instead, the SEC appointed them. Without a supervisor, Kavanaugh concluded they could not be inferior officers. In addition, Kavanaugh reasoned that the two layers of tenure protections restricting executive authority to remove Board members violated Article II. As he put it, the Board’s “double for-cause removal” protections were “a previously unheard-of restriction on and attenuation of the President’s authority over executive officers.”
Judge Kavanaugh’s extensive 57-page analysis explored the history of Article II and removal, looking to the original meaning of Article II to evaluate a new agency structure that, in his view, was not governed by Supreme Court precedent. He also detailed the nature and character of executive power and its role within the separation of powers. For instance, he explained:
[T]he majority opinion views this case as Humphrey’s Executor redux. But this case is Humphrey’s Executor squared. There is a world of difference between the legion of Humphrey’s Executor-style agencies and the PCAOB: The heads of the Humphrey’s Executor independent agencies are removable for cause by the President, whereas members of the PCAOB are removable for cause only by another independent agency, the Securities and Exchange Commission. The President’s power to remove is critical to the President’s power to control the Executive Branch and perform his Article II responsibilities. Yet under this statute, the President is two levels of for-cause removal away from Board members, a previously unheard-of restriction on and attenuation of the President’s authority over executive officers. This structure effectively eliminates any Presidential power to control the PCAOB, notwithstanding that the Board performs numerous regulatory and law-enforcement functions at the core of the executive power.
And he continued:
The two constitutional flaws in the PCAOB statute are not matters of mere etiquette or protocol. By restricting the President’s authority over the Board, the Act renders this Executive Branch agency unaccountable and divorced from Presidential control to a degree not previously countenanced in our constitutional structure. This was not inadvertent; Members of Congress designed the PCAOB to have ‘‘massive power, unchecked power.” Our constitutional structure is premised, however, on the notion that such unaccountable power is inconsistent with individual liberty. ‘‘The purpose of the separation and equilibration of powers in general, and of the unitary Executive in particular, was not merely to assure effective government but to preserve individual freedom.”
Two years later, Judge Kavanaugh’s dissenting opinion was vindicated by the Supreme Court’s decision in the case. Citing Kavanaugh, the Court agreed that the double for-cause removal protections for the Board members were an unconstitutional constraint on executive power. Although it is impossible to know for certain, it is likely that the Supreme Court would not have taken the case but for Kavanaugh’s dissent. To be sure, not everyone agrees with Kavanaugh’s analysis; the Supreme Court’s opinion prompted a dissent of its own. These are hard questions. But Kavanaugh’s analysis commanded assent from a majority of the Justices.
Judge Kavanaugh sounded similar themes in PHH v. CFPB, twice, in fact. There, he read Article II to prohibit another arguably novel agency structure—this one created by the Dodd-Frank Act. Kavanaugh wrote the majority opinion for the original panel of judges that considered the case and explained:
Because the CFPB is an independent agency headed by a single Director and not by a multi-member commission, the Director of the CFPB possesses more unilateral authority—that is, authority to take action on one’s own, subject to no check— than any single commissioner or board member in any other independent agency in the U.S. Government. Indeed, as we will explain, the Director enjoys more unilateral authority than any other officer in any of the three branches of the U.S. Government, other than the President.
At the same time, the Director of the CFPB possesses enormous power over American business, American consumers, and the overall U.S. economy. The Director unilaterally enforces 19 federal consumer protection statutes, covering everything from home finance to student loans to credit cards to banking practices. The Director alone decides what rules to issue; how to enforce, when to enforce, and against whom to enforce the law; and what sanctions and penalties to impose on violators of the law. (To be sure, judicial review serves as a constraint on illegal actions, but not on discretionary decisions within legal boundaries; therefore, subsequent judicial review of individual agency decisions has never been regarded as sufficient to excuse a structural separation of powers violation.)
That combination of power that is massive in scope, concentrated in a single person, and unaccountable to the President triggers the important constitutional question at issue in this case.
Also important, as Joseph Palmore and Bryan Leitch helpfully recounted here at Notice & Comment, Judge Kavanaugh further concluded that the $109 million order imposed by Director Richard Cordray was contrary to the statute and unlawfully retroactive in violation of fair notice principles.
Although the en banc court disagreed with Judge Kavanaugh on the removal question, it agreed with his other holding, which is significant in its own right. The case did not reach the Supreme Court after PHH declined to appeal, presumably because the judgment was in its favor. But Kavanaugh’s opinion in what has been called perhaps “the most important separation-of-powers case in a generation” remains alive in the courts. Just last week, for instance, a district judge in the Southern District of New York adopted four of five sections of Kavanaugh’s opinion in finding the CFPB’s director removal protections to be unconstitutional. Again, obviously, not everyone agrees with Kavanaugh’s analysis; there are good-faith arguments on all sides. But it is safe to say that we haven’t heard the last of this Kavanaugh opinion.
These are not the only cases of note. Consider also 2014’s White Stallion Energy Center, LLC v. EPA. In that case, Judge Kavanaugh dissented in part, arguing that the Environmental Protection Agency must engage in cost-benefit analysis when considering whether to regulate emissions from power plants. He began his dissent this way:
Suppose you were the EPA Administrator. You have to decide whether to go forward with a proposed air quality regulation. Your only statutory direction is to decide whether it is ‘‘appropriate’’ to go forward with the regulation. Before making that decision, what information would you want to know? You would certainly want to understand the benefits from the regulations. And you would surely ask how much the regulations would cost. You would no doubt take both of those considerations—benefits and costs—into account in making your decision. That’s just common sense and sound government practice.
Judge Kavanaugh noted that “by EPA’s own calculation,” the costs of the new regulations would be “$9.6 billion a year—that’s billion with a b.” He concluded that it was “unreasonable for EPA to exclude consideration of costs” when “deciding whether it [was] ‘appropriate’—the key statutory term—to impose significant new air quality regulations on the Nation’s electric utilities.” He noted, “[t]o be sure,” that “EPA could conclude that the benefits outweigh the costs. But the problem here is that EPA did not even consider the costs.”
On appeal to the Supreme Court in Michigan v. EPA, Justice Scalia wrote for the Court, observing that “[o]ne does not need to open up a dictionary in order to realize the capaciousness” of the phrase “appropriate and necessary.” Scalia then quoted Judge Kavanaugh’s observation that “‘appropriate’ is ‘the classic broad and all-encompassing term that naturally and traditionally includes consideration of all the relevant factors,’” and concluded that EPA had wrongly failed to consider costs. Once more, this is a difficult case and Justice Kagan’s dissent has received a lot of attention too. For purposes here, however, it is enough to again observe that Kavanaugh correctly identified the analysis that the Supreme Court ultimately adopted.
Consider also his dissent from denial of rehearing en banc in Coalition for Responsible Regulation v. EPA, issued in 2012. (Aaron, it should be noted, assisted on the rehearing petition back in his associate days.) This opinion is an example of Judge Kavanaugh’s approach to statutory interpretation. Specifically, he urged that the “EPA ha[d] exceeded its statutory authority” when it applied pre-construction permitting requirements for certain “air pollutants” to the emission of greenhouse gases. He rejected EPA’s proposed definition, which required the agency to rewrite other portions of the statute to deal with the “absurd consequences” of the “very low trigger for emissions of greenhouse gases” caused by that definition. Despite the D.C. Circuit’s decision not to consider the issue en banc, the Supreme Court took up the case. And in his majority opinion, Justice Scalia again echoed Judge Kavanaugh as the Court rejected EPA’s reading of the statute. Scalia explained: “[T]he need to rewrite clear provisions of the statute should have alerted EPA that it had taken a wrong interpretive turn. Agencies are not free to ‘adopt … unreasonable interpretations of statutory provisions and then edit other statutory provisions to mitigate the unreasonableness.’ App. 175 (Kavanaugh, J., dissenting from denial of rehearing en banc).”
Another decision worth mentioning is his 2013 decision in In re Aiken County, which granted mandamus against an agency and included this framing regarding the separate and distinct roles of the three federal branches:
This case raises significant questions about the scope of the Executive’s authority to disregard federal statutes. The case arises out of a longstanding dispute about nuclear waste storage at Yucca Mountain in Nevada. The underlying policy debate is not our concern. The policy is for Congress and the President to establish as they see fit in enacting statutes, and for the President and subordinate executive agencies (as well as relevant independent agencies such as the Nuclear Regulatory Commission) to implement within statutory boundaries. Our more modest task is to ensure, in justiciable cases, that agencies comply with the law as it has been set by Congress.
Judge Kavanaugh also has expressed concern about, in his view, overly broad applications of Chevron deference. For example, in United States Telecom Association v. FCC, he explained why Chevron cannot be applied to permit major agency actions that are not clearly authorized by statutory text. Kavanaugh wrote that “[i]f the Supreme Court’s major rules doctrine means what it says, then the net neutrality rule is unlawful because Congress has not clearly authorized the FCC to issue this major rule.” This analysis, of course was mooted by subsequent events. And similar to Justice Gorsuch’s June 2018 analysis in Wisconsin Central Ltd. v. United States, Kavanaugh has conducted Chevron analysis with a comprehensive Step One that incorporates text, statutory context, and statutory structure—all the tools that a textualist judge would use in a case of ordinary statutory interpretation (see, e.g., Loving v. IRS, decided in 2014).
His separate opinion in American Radio Relay League, Inc. v. FCC also merits a read because it shows intellectual honesty and a willingness to follow the text of a statute where it takes him. This is true when the text cuts against the agency’s view, and when it cuts in favor of agencies. Specifically, Judge Kavanaugh concluded that courts do not have authority to require agencies to use procedures beyond those set out in the text of the Administrative Procedure Act. In Perez v. Mortgage Bankers Association, the Supreme Court similarly declined to impose extra-textual requirements on APA rulemaking procedures. In short, Kavanaugh takes text seriously.
This is just a small sample of his work, of course. Since becoming a judge, Judge Kavanaugh has authored close to 300 opinions. In at least 11 cases, the Supreme Court ultimately adopted positions that Judge Kavanaugh advanced, and in at least five of those cases explicitly cited him. And although not really an administrative law opinion (though qualified immunity and administrative law have more in common than you might think), earlier this year the Supreme Court unanimously adopted Kavanaugh’s view in Wesby v. District of Columbia. When Kavanaugh speaks, the Supreme Court listens.
Finally, Judge Kavanaugh also is a scholar. If you want to better understand his views, read his speeches and writings, including his 2017 Joseph Story Distinguished Lecture on the separation of powers, his 2016 Harvard Law Review book review addressing statutory interpretation, and his 2014 article on constitutional text in the Notre Dame Law Review. These are important writings.
In sum, Judge Kavanaugh has had a lot to say about the administrative state. And as a judge on the D.C. Circuit, he has seen many, many aspects of it. By any measure, he is a serious judge with a significant voice in the federal courts.
* Well, Jenn might be a touch biased! After all, she served as a law clerk to Judge Kavanaugh during his first year on the bench from 2006 to 2007.
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