Checks and Balances:


The Checks and Balances Letter delivers news and information from Ballotpedia’s Administrative State Project, including pivotal actions at the federal and state levels related to the separation of powers, due process and the rule of law.

This edition: 

In this month’s edition of Checks and Balances, we review three administrative law cases before the U.S. Supreme Court that could affect the scope of agency powers; the U.S. Department of Health and Human Services’ (HHS) move to roll back Trump-era rulemakings on guidance and regulatory review; and new federal legislation that seeks to relocate all federal agencies outside of Washington, D.C. 

At the state level, we take a look at state efforts to challenge the Biden administration’s vaccine requirements for certain private businesses, federal contractors, and healthcare workers; the North Carolina governor’s veto of a bill that would have limited his emergency powers; and state lawsuits challenging a provision of the American Rescue Plan and Recovery Act (ARPA) that states argue unconstitutionally seizes state taxing authority.

We also highlight a recent decision from the United States Court of Appeals for the Fifth Circuit that applies the five-part test for Auer deference established in Kisor v. Wilkie. As always, we wrap up with our Regulatory Tally, which features information about the 165 proposed rules and 244 final rules added to the Federal Register in October and OIRA’s regulatory review activity.

In Washington

SCOTUS cases challenge breadth of agency powers

What’s the story? 

Rulings in three cases on the U.S. Supreme Court’s docket for the October 2021 term could have broad effects on the scope of agency powers. The cases challenge applications of judicial deference, agency authority to interpret statutes, and the delegation of congressional authority to administrative agencies.

The first case, American Hospital Association v. Becerra, could limit future applications of Chevron deference—a doctrine that compels courts to defer to reasonable agency interpretations of unclear statutes. The case questions whether courts should defer to the U.S. Department of Health and Human Services’ (HHS) formulation of Medicare drug reimbursement rates in the absence of adequate supporting data. The court heard oral argument in the case on November 3.

Another case concerning HHS’ Medicare formulations, Becerra v. Empire Health Foundation, questions whether HHS had the authority to change its interpretation of the hospital reimbursement formula when a federal court had already ruled that the statute was clear regarding how the agency should calculate those payments. Oral argument in the case is scheduled for November 29.

The final case, West Virginia v. Environmental Protection Agency, consolidated challenges from states and coal companies questioning whether the Clean Air Act gives the EPA the authority to regulate greenhouse gases. The case could clarify the scope of Congress’ authority to delegate regulatory authority to administrative agencies. Oral argument in the case was scheduled for November 16.

Want to go deeper?

HHS rolls back Trump-era rulemakings on guidance and regulatory review

What’s the story? 

The U.S. Department of Health and Human Services (HHS) last month moved to rescind two Trump-era regulations aimed at reviewing agency regulations and curbing agency enforcement of non-binding guidance.

HHS on October 19 announced its intent to rescind rules issued under the Trump administration that implemented President Trump’s (R) Executive Order 13891, which aimed to prohibit federal administrative agencies from issuing binding guidance documents. Trump administration officials argued that the rule would prevent agencies from abusing guidance documents, which do not carry the force of law, to circumvent the rulemaking process. The Biden administration argued that the rule would make it harder for HHS to run the agency’s healthcare programs effectively.

The following week, HHS issued a proposed rule aiming to withdraw a Trump administration regulation requiring the agency to implement a retrospective review process for all agency rules. The review process, sometimes referred to as a sunset review, would have set a 10-year expiration date for each agency rule, with certain exceptions, unless the agency conducts a retrospective review to keep the rule in effect. The Trump administration argued that the review process would ensure that HHS regulations were up-to-date and effective.

Want to go deeper?

Drain the Swamp Act proposes relocating all federal agencies

What’s the story? 

U.S. Representative Warren Davidson (R-Ohio) on October 26 introduced the Drain the Swamp Act—legislation that proposes relocating all federal agency headquarters outside of Washington, D.C., by September 2026 in order to incorporate more regional perspectives into the federal workforce.

“The Drain the Swamp Act aims to diversify the federal workforce and ensure that a broader cross section of America’s population participates in federal policymaking,” Davidson said. “It would also reduce the burden on D.C. infrastructure and help development in underutilized properties across the country.”

Trump administration officials moved the headquarters of two sub-agencies of the Agriculture Department to Kansas City, Missouri, and the Bureau of Land Management to Colorado. The Biden administration later returned the BLM headquarters to Washington, D.C., while retaining a Colorado presence. 

Opponents of agency relocation proposals have argued that the moves seek to encourage the retirements or resignations of career agency staff. Supporters of the proposals contend that agency relocations would benefit agency staff by reducing their cost of living and support regional economies by investing in communities outside of the beltway.

Want to go deeper?

In the states

States push back against federal vaccine mandates

What’s the story? 

States have filed a wave of lawsuits against President Joe Biden’s (D) vaccine mandates on private businesses, federal contractors, and healthcare workers. 

27 Republican-led states as of November 11 had taken legal action to challenge the vaccine mandates for private businesses with 100 or more employees, arguing in part that the mandate exceeds the executive branch’s authority and violates the Tenth Amendment. The United States Court of Appeals for the Fifth Circuit on November 6 issued a stay to temporarily block the mandate, citing what it described as “grave statutory and constitutional issues.”

Nineteen states as of November 11 had filed lawsuits challenging the vaccine mandate for federal contractors, arguing that the mandate constitutes an overreach of federal power, violates federal procurement law, and failed to follow notice-and-comment rulemaking procedures, among other claims.

A 10-state coalition on November 10 filed a lawsuit in the United States District Court for the Eastern District of Missouri challenging Biden’s vaccine mandate for healthcare workers in facilities that receive federal funding. The states claim in part that the federal mandate unlawfully seeks to coopt state police powers.

Want to go deeper?

North Carolina governor vetoes bill limiting executive emergency powers

What’s the story? 

In the last edition of Checks and Balances, we reviewed North Carolina Governor Roy Cooper’s (D) veto of legislation that would have transferred executive powers over certain agency lawsuit settlements to the state legislature. Cooper exercised his veto authority again this month in another power struggle with the state legislature over the extent of the governor’s emergency powers.

Cooper on November 1 vetoed the Emergency Powers Accountability Act, which had passed the state legislature with majority Republican support. The bill would have required the governor to gain approval from the Council of State—a constitutional body of 10 state elected officials—before issuing emergency declarations lasting longer than seven days. Emergency declarations over 45 days would have required state legislative approval.

“Critical decisions about stopping deadly diseases, or responding to any other emergency, should stay with experts in public health and safety, not a committee of partisan politicians,” said Cooper in his veto statement.

State Representative Keith Kidwell (R), the bill’s sponsor, argued that Cooper’s veto “further shows the dangers of when power is centralized in the hands of one person.”

Want to go deeper?

States accuse feds of unconstitutional taxing power grab 

What’s the story? 

A case before the U.S. District Court for the Northern District of Texas questions whether a provision of the American Rescue Plan and Recovery Act of 2021 (APRA) that prohibits states from redirecting ARPA funds to reduce state taxes violates federalism principles and infringes on state sovereignty. In State of Texas, State of Louisiana, and State of Mississippi v. Yellen, et al., the plaintiff states claim that the ARPA provision, known as the Tax Cut Ban, unconstitutionally seizes state taxing authority.

The Tax Cut Ban prevents states from applying ARPA funds to “either directly or indirectly offset a reduction in the net tax revenue.” In addition to raising concerns about state sovereignty, the plaintiffs further argue that the language of the Tax Cut Ban is ambiguous and that any resulting regulations issued by the U.S. Department of the Treasury lack clear statutory parameters in violation of the nondelegation doctrine.

Two other court rulings have enjoined enforcement of the Tax Cut Ban in Ohio, Tennessee, and Kentucky. U.S. District Court Judge Gregory Van Tatenhove in June found in Commonwealth of Kentucky, et al. v. Yellen et al., that ARPA’s Tax Cut Ban provision constituted an unconstitutionally “coercive grant of federal money.” U.S. District Court Judge Douglas Cole in July held in ​​State of Ohio v. United States Department of the Treasury, et al. that the statutory language of the Tax Cut Ban was too ambiguous for Spending Clause legislation and that subsequent regulations could not remedy the ambiguity. 

Want to go deeper?

____________________________________________________________________________

Kisor’s five-part test, applied

The United States Court of Appeals for the Fifth Circuit in Johnson v. BOKF National Association recently applied the five-part test for granting Auer deference established by the U.S. Supreme Court in the 2019 case Kisor v. Wilkie. The court’s September opinion provided the following reasoning according to the five-part framework:

Step 1: Are the regulations in question ambiguous?

“[W]e conclude that the regulations at issue here, §§ 7.4001(a) & 7.4002—which define ‘interest’ and non-interest charges under the NBA, respectively—are genuinely ambiguous.”

Step 2: Is the agency’s regulatory interpretation reasonable?

“We conclude that OCC’s determination … is reasonable, and indeed, Johnson does not argue otherwise. After all, OCC’s position is consonant with the majority view on the subject based on the public comment submissions.”

Step 3: Is the agency interpretation of a regulation is an authoritative or official position of the agency?

“Interpretive Letter 1082 appears to be an authoritative statement rather than a ‘m[e]re ad hoc statement not reflecting the agency’s views.’”

Step 4: Does the question fall within the agency’s expertise?

“OCC’s interpretation of §§ 7.4001(a) and 7.4002 also falls squarely within the agency’s substantive expertise. As noted above, OCC is administering the NBA and regulations promulgated thereunder.”

Step 5: Is the agency’s interpretation a fair and considered judgment?

“Interpretive Letter 1082 reflects OCC’s ‘fair and considered judgment.’ Kisor, 139 S. Ct. at 2417. There is no indication that the interpretive letter was merely a ‘convenient litigating position’ or ‘post hoc rationalization advanced to defend past agency action against attack.’”

The court ultimately concluded that Auer deference was warranted in the case because the challenged agency interpretation represented a “reasonable interpretation of genuinely ambiguous regulations that it is charged with administering.”

Want to go deeper

Regulatory tally

Federal Register

Office of Information and Regulatory Affairs (OIRA)

OIRA’s October regulatory review activity included the following actions:

  • Review of 42 significant regulatory actions. 
  • Two rules approved without changes; recommended changes to 40 proposed rules; no rules withdrawn from the review process.
  • As of November 1, 2021, OIRA’s website listed 81 regulatory actions under review.
  • Want to go deeper?