SCOTUS hears argument in case challenging scope of NLRB authority

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 oral argument in a U.S. Supreme Court case challenging the scope of authority of the National Labor Relations Board; a ruling from the U.S. Court of Appeals for the Federal Circuit upholding the constitutional appointment of the Merit Systems Protection Board’s administrative law judges; a review of Congressional Review Act resolutions filed so far in the 118th Congress; and bipartisan support for legislation in the U.S. House of Representatives concerning agency rulemaking and settlement agreements.

At the state level, we take a look at an agency due process challenge before the Arizona Supreme Court; a vote by Florida lawmakers to increase the governor’s authority concerning certain immigration issues; and activity in Ohio and Nevada addressing occupational licensing.

We also highlight recent commentary from William Yeatman and Adi Dynar on what the scholars view as a vertical divide on Chevron deference in the federal courts. We wrap up with our Regulatory Tally, which features information about the 168 proposed rules and 235 final rules added to the Federal Register in January and OIRA’s regulatory review activity.

In Washington

SCOTUS hears argument in case challenging scope of NLRB authority

What’s the story?

The U.S. Supreme Court on January 10, 2023, heard oral argument in Glacier Northwest Inc. v. International Brotherhood of Teamsters Local Union 174, a case that could limit the authority of the National Labor Relations Board (NLRB) to adjudicate certain labor-related disputes.

After a portion of its concrete supply spoiled due to a 2017 worker strike, concrete company Glacier Northwest Inc. sued the Teamsters union in Washington state court, arguing in part that the union violated state tort law by intentionally timing the strike to maximize property damage. The Washington Supreme Court dismissed the challenge, claiming that the labor dispute under the federal National Labor Relations Act (NLRA) preempts the state tort claim and, therefore, the case should be adjudicated before the NLRB. Glacier appealed the decision to the U.S. Supreme Court, arguing in part “that intentional property destruction falls outside the realm of lawful conduct protected by the NLRA,” according to the petition.

“The justices from the conservative wing remained relatively quiet, allowing the three more liberal justices to dominate the argument,” wrote SCOTUSblog analyst Sharon Block. The justices raised questions about the possibility of the NLRB and the state court making different legal conclusions, whether directing the case to the state court would make the NLRB’s adjudication procedures irrelevant, and whether Congress intended for the NLRB to have primary jurisdiction in such disputes.

A ruling in the case is expected in the summer of 2023. A separate unfair labor practices charge brought by the Teamsters against Glacier Northwest, which claims that the company brought the tort action in retaliation for the strike, is also pending before the NLRB.

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Federal Circuit finds MSPB judges are constitutionally appointed

What’s the story?

The U.S. Court of Appeals for the Federal Circuit on January 17, 2023, refused a rehearing in McIntosh v. Department of Defense, finalizing its November 2022 holding that the administrative law judges (ALJs) of the Merit Systems Protection Board (MSPB) are constitutionally appointed.

Former Defense Department employee Elfina McIntosh filed a complaint with the MSPB arguing that the department unlawfully fired her in 2017 in retaliation for her whistleblowing activity. The board upheld McIntosh’s removal and she appealed to the Federal Circuit. McIntosh argued in part that the MSPB ALJ assigned to her case was unconstitutionally appointed pursuant to the U.S. Supreme Court’s 2018 decision in Lucia v. Securities and Exchange Commission (SEC), which found that the SEC’s ALJs are officers of the United States and, as such, must be appointed by the president, the courts, or agency heads according to the U.S. Constitution’s appointments clause.

The three-judge panel of the Federal Circuit in November disagreed with McIntosh, finding in part that the MSPB’s ALJs do not constitute principal officers because their decisions are not final and can be reviewed by the board. Moreover, the court found that the ALJs’ protections against removal do not solely qualify them as principal officers. Since the MSPB board in March 2022 ratified all prior appointments of its ALJs, the court deemed unnecessary any further examination of whether ALJs constitute inferior officers.

McIntosh can appeal the decision to the U.S. Supreme Court but no appeal had been filed as of February 16, 2023.

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CRA resolutions seek to nullify environmental, fiduciary rules

What’s the story?

Federal lawmakers in the 118th Congress have filed Congressional Review Act (CRA) resolutions aimed at nullifying certain administrative rules issued under the Biden administration and preventing agencies from issuing similar rules in the future. The selection of CRA resolutions below addresses rules on topics ranging from environmental to fiduciary regulation:

  • ESG in retirement plans: A bipartisan coalition of 50 U.S. senators led by U.S. Senator Mike Braun (R-Ind.) introduced a CRA resolution on February 7, 2023, aiming to nullify a rule from the U.S. Department of Labor allowing retirement plans to consider certain environmental, social, and corporate governance (ESG) factors in investment-related decisions. “President Biden is jeopardizing retirement savings for millions of Americans” by encouraging “fiduciaries to make decisions with a lower rate of return for purely ideological reasons,” argued Braun in a statement.
  • Waters of the United States: U.S. Senator Shelley Moore Capito (R-W.Va.), joined by 48 Republican cosponsors, filed a CRA resolution on February 2, 2023, aiming to nullify the Environmental Protection Agency’s (EPA) revised Waters of the United States rule, which largely restores the Obama-era regulatory framework under the Clean Water Act. “With its overreaching navigable waters rule, the Biden administration upended regulatory certainty and placed unnecessary burdens” on Americans, argued Capito in a statement.
  • Federal funding of non-citizen voting: U.S. Senators Tom Cotton (R-Ark.) and Ted Cruz (R-Texas) filed separate CRA resolutions, joined by Republican cosponsors, that both aim to nullify a law enacted by the council of the District of Columbia (D.C.) allowing certain non-citizens to vote in local elections. “Allowing illegal immigrants to vote is an insult to every voter in America,” Cotton told Fox News Digital.
  • Solar tariff waiver: U.S. Representative Bill Posey (R-Fla.), joined by a bipartisan coalition, introduced a CRA resolution on January 26, 2023, aimed at nullifying a rule from the U.S. Department of Commerce that suspends certain import tariffs on solar panels from four Southeast Asian countries that use Chinese-manufactured components. “We cannot allow foreign solar manufacturers to violate trade law, especially when it comes at the expense of American workers and businesses,” said Representative Dan Kildee (D-Mich.) in a statement.

The CRA as of February 2023 has been used to repeal 20 administrative agency rules, including one rule repealed under President George W. Bush (R), 16 rules repealed under President Donald Trump (R), and three rules repealed under President Joe Biden (D).

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House bills on agency rulemaking, settlement agreements garner bipartisan support

What’s the story?

U.S. Representative Ben Cline (R-Va.), joined by Rep. Jared Golden (D-Maine ) and five Republican cosponsors, on January 13, 2023, filed the Ensuring Accountability in Agency Rulemaking Act—a bill that aims to require that all agency rules be initiated and issued by Senate-confirmed agency officials. 

Cline states that the bill is a response to a 2019 study by the Pacific Legal Foundation (PLF) finding that the majority of rules promulgated by the Food and Drug Administration (FDA) and other agencies between 2001 and 2017 were issued by lower-level, non-Senate-confirmed officials. U.S. Supreme Court precedent in Buckley v. Valeo (1976) and Edmond v. United States (1977), according to PLF, requires that only principal agency officers can issue rules with the force and effect of law.

Cline told Fox News that he and Golden “share an outlook on overreaching executive branch authority, and I think we’re trying to solve a problem here that’s … affecting the daily lives of Americans.”

In other bipartisan action, the House on January 24, 2023, unanimously approved the Settlement Agreement Information Database (SAID) Act (H.R. 300)—legislation that would make all agency settlement agreements, such as those issued in a process known as sue and settle, publicly available. ​​Rep. Jamie Raskin (D-Md.) told Government Executive that the bill would help prevent agencies from entering into “secret sweetheart settlements with certain litigants.”

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In the states

Arizona Supreme Court considers whether state agency procedures satisfy due process

What’s the story? 

A case pending before the Arizona Supreme Court questions whether proceedings before the Arizona Citizens Clean Election Commission satisfy due process if the commission can act as the judge in its own case.

In Legacy Foundation Action Fund v. Arizona Citizens Clean Election Commission, the state’s election commission (headed by five appointed members) alleged that certain political advertisements run by the Legacy Foundation violated state law. The foundation disagreed, arguing that the commission lacked jurisdiction in the case. A state administrative law judge (ALJ) agreed with the foundation but the commission overrode the ALJ’s ruling in favor of the commission’s view. The foundation attempted to challenge the ruling but the commission cited the principle of res judicata to argue that its decision constituted a final administrative order.

The foundation later moved to challenge the commission’s jurisdictional claim in the Arizona state courts, but lower courts dismissed the case on the grounds that the foundation had missed the deadline to appeal the commission’s final order. The Arizona Supreme Court heard oral argument in November 2022 and, according to the public policy legal organization Goldwater Institute, has since asked the group “for a new set of briefs to discuss whether the Commission’s actions in overriding the original judge and declaring itself the winner violated the basic principles of due process.”

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Florida lawmakers increase governor’s immigration authority

What’s the story? 

Florida lawmakers on February 10, 2023, voted along party lines to approve special session legislation that expands executive authority in the state by granting the governor’s office the power to use taxpayer funds to transport individuals residing in the United States without legal permission. Governor Ron DeSantis (R) signed the bill into law on February 15, 2023. 

The law established the Unauthorized Alien Transport Program within the governor’s office. The program allows the governor to use taxpayer funds to transport individuals residing anywhere in the United States without legal permission—not only individuals in Florida. The law aimed to clarify gubernatorial authority in the state after DeSantis used funds in September 2022 to transport a group of such individuals located in San Antonio, Texas, to Massachusetts. The move prompted legal action questioning whether DeSantis had violated state law, which limited the governor’s authority at the time to the transportation of individuals residing in Florida without legal permission.

State Sen. Blaise Ingoglia (R), the sponsor of the bill, argued that the legislation aims to relocate such individuals “to areas that have sanctuary policies so that they can get the services that they need” and to demonstrate their belief “that the federal government needs to get their act together and solve this problem,” according to NPR.

Democratic lawmakers objected to the bill, arguing in part that immigration policy falls under the purview of the federal government. “There’s no one at this table who will say Joe Biden is doing a great job with immigration,” state Rep. Jason Pizzo (D) told CNN. “However, it’s their authority.”

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Ohio and Nevada take action on occupational licensing

What’s the story? 

Ohio and Nevada in January took legislative and executive action, respectively, aimed at addressing state occupational licensing requirements. 

After nearly unanimous passage by the Ohio General Assembly, Governor Mike DeWine (R) signed Senate Bill 131 on January 2, 2023, requiring state licensing authorities to recognize occupational licenses issued in other states. Ohio’s action raised the total number of states that recognize out-of-state occupational licenses to 20, according to research by the Cato Institute.

Nevada Governor Joe Lombardo (R) issued two executive orders on January 12, 2023, aimed at freezing and suspending new regulations related to occupational licensing in the state. The orders demonstrate Lombardo’s “commitment to streamlining regulations and licensing processes in Nevada,” according to a statement issued by the governor’s office.

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A vertical divide on Chevron deference

William Yeatman and Adi Dynar of the Pacific Legal Foundation argued in a recent post for the Yale Journal on Regulation’s Notice and Comment blog that inconsistent approaches to Chevron deference by the U.S. Department of Justice have created what the authors refer to as a vertical divide on Chevron in the federal courts:

“Irrespective of whether the Justice Department is coordinating these inconsistent Chevron claims at different stages of litigation, the important point is that the dichotomous arguments facilitate a vertical split over Chevron. In the lower courts, Justice Department lawyers abet overbroad readings of Chevron. Yet if one of these Chevron controversies comes before the Supreme Court, the Solicitor General tries to take deference off the table. That, in turn, increases the likelihood that the doctrine will remain unchecked below, where judges remain receptive to calls for generous Chevron deference. Thus, the Justice Department is driving a vertical deference divide in the federal courts.”

Want to go deeper

  • Click here to read the full text of “The Justice Department Is Driving a Vertical Split over Chevron” by William Yeatman and Adi Dynar

Regulatory tally

Federal Register

Office of Information and Regulatory Affairs (OIRA)

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

  • Review of 39 significant regulatory actions. 
  • Thirty-nine rules approved with recommended changes
  • As of February 1, 2023, OIRA’s website listed 111 regulatory actions under review.
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