Last week, the Supreme Court handed down an administrative law blockbuster in Department of Homeland Security v. Regents of the University of California (DHS v. Regents). Below, I add my thoughts to those already posted by Aaron Nielson, Chris Walker, Daniel Deacon, and Anya Bernstein. 

Immediate Doctrinal Impact: The Rise of Reliance Interests 

In Admin Law 101, every student learns the (nonexclusive) State Farm factors for discerning “arbitrary and capricious” agency action:

• Did the agency rely on factors which Congress has not intended it to consider? 
• Did the agency entirely fail to consider an important aspect of the problem?
• Does the agency’s explanation for its decision run counter to its evidence? 
• Is the agency’s decision implausible?

But after DHS v. Regents, law school curriculums need to be updated. At the top of the State Farm list—in bold face font—textbooks should add a new criterion: “Did the agency consider reliance interests?” 

Let’s unpack this important doctrinal development, which has been years in the making during the Roberts Court. 

It started in 2009 with FCC v. Fox Studios, when the Court indicated (in dicta) that an agency “must” provide enhanced justifications whenever “its prior policy has engendered serious reliance interests that must be taken into account.” 

Six years later, in Perez v. Mortgage Bankers Association, the Court “underscored” its holding in Fox Studios that “the APA requires an agency to provide [a] more substantial justification” when reliance interests are involved. As with Fox Studios, the Perez Court addressed these matters only in dicta. 

A year after Perez, in Encino Motors v. Navarro, the Court employed this reasoning in a holding—but *not* to review under APA § 706. Instead, the Encino court grafted consideration of reliance interests onto reasonableness review atChevron step two.  

Last week, in DHS v. Regents, the Court finally applied its new “reliance interests” criterion in the context of hard look review. In so doing, the Court took the opportunity to flesh out how the inquiry should proceed in practice. According to the Regents Court, an agency “[is]required to assess whether there were reliance interests, determine whether they were significant, and weigh any such interests against competing policy concerns.” 

The wide-ranging scope of the Court’s analysis is eye-popping (at least to this blogger). The Regents Court called for the agency to consider how the “consequences” of agency action would “radiate outward” from the regulated parties (immigrant youth) and thereby affect the interests of non-regulated parties (schools and employers). That’s broad! 

In sum, the most immediate doctrinal effect of DHS v. Regents is the elevation of “reliance interests” within the “hard look” framework of judicial review for agency action. 

Speculative Doctrinal Fallout: Overton Park Redux? 

Almost fifty years ago, in Citizens to Preserve Overton Park v. Volpe, the Supreme Court established what is now known as “hard look” review 

In that famous case, the Court interpreted APA § 706(A)(2) to require “probing, in-depth” judicial review of an agency’s decision making. And to facilitate such review, the Overton Park Court required the agency to produce an administrative record—even though neither the agency’s enabling act nor the APA demanded as much. 

Overton Park sounded a clarion call for judicial supervision of administrative policymaking. Indeed, the message resonated too well. During the 1970s, lower courts—particularly CADC—routinely required agencies to undertake extra-statutory procedures to build the administrative record. The Supreme Court, of course, put a stop to these procedural fiats in Vermont Yankee (1978). 

Although “hard look” review survived the Court’s course-correction in Vermont Yankee, the doctrine gradually became less hard over the ensuing decades. By 2016, Adrian Vermeule, reported that agencies won 92 percent of the time under the standard. Setting aside *why* this occurred, the important point is that “hard look” review evolved into a highly deferential standard. Let’s call it “not-so-hard look” review.  

All this background brings me to my point: Are we seeing history repeat itself? 

I suspect that the Court’s recent decisions—DHS v. Regents and Department of Commerce v. New York—emit an Overton Park-like signal to lower courts. In Commerce v. New York, the Court performed a novel analysis of agency “pretext” under APA § 706(2)(A). I discuss DHS v. Regents above. Taken together, these two cases seemingly set forth “harder look” review (to borrow Chris’s turn of phrase).

Only time will tell how these decisions play out in the lower courts. But I wouldn’t be surprised to see a significant decrease in the government’s win rate under “hard look” review, as lower courts probe for “pretext” and consideration of “reliance interests.” If the lower courts take the message too much to heart, we might even see SCOTUS eventually hand down a Vermont Yankee version 2.0. 

Is Roberts Playing 3D Chess on Admin Law?

Chief Justice Roberts wrote the Court’s opinions in DHS v. Regents and Department of Commerce v. New York. If my speculation about hard look review is correct, then the Chief deserves all the credit or blame (depending on your values). 

This got me thinking: Has he fooled everyone about his intentions? 

Conventional wisdom holds that CJR cares a great deal about the Court’s legitimacy—so much so that he’s willing to tie himself into jurisprudential knots to maintain the Court’s high approval rating. 

I wonder if this standard account isn’t lacking. Have you ever noticed that when Roberts sides with “liberal” Justices on big cases, the opinion tends to make “conservative” administrative law? 

King v. Burwell, for example, engendered the ‘big question” carveout for the Chevron doctrine. Kisor v. Wilkie shredded Auer deference while ostensibly upholding it. 

Even if it’s true that Chief Justice Roberts abides his sense of the Court’s legitimacy, I think there’s more to the story. Specifically, I think he’s also guided by his concerns about the administrative state’s current role in society (as set forth in his dissent to City of Arlington v. FCC). 

William Yeatman is a research fellow at the Cato Institute