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:

Does the Wisconsin Constitution recognize an administrative fourth branch of government? That’s just one of the stories you’ll be puzzling over in this month’s edition of Checks and Balances. We also review multiple injunctions blocking the Trump administration’s public charge rule; two federal cases that raise Appointments Clause challenges; the United States Supreme Court’s (SCOTUS) decision to rule on the constitutionality of the Consumer Financial Protection Bureau (CFPB); a coalition of automakers’ support for uniform national carbon emissions standards; a new SCOTUS case challenging the authority of the Securities and Exchange Commission (SEC) to issue penalties; and a federal judge’s move to block President Donald Trump’s proclamation on immigration and health care.

At the state level, we review a challenge to the New Jersey attorney general’s directive limiting cooperation between law enforcement and Immigration and Customs Enforcement (ICE); a Florida lawsuit challenging the constitutionality of automatic license plate readers; an unconstitutional vaping ban in Massachusetts that remains in effect; Wisconsin’s potential administrative fourth branch of government; and a proposal to limit the Michigan governor’s power to transfer funds between agencies.

As always, we wrap up with our Regulatory Tally, which features information about the 205 proposed rules and 274 final rules added to the Federal Register in October and OIRA’s regulatory review activity.

The Checks and Balances Letter

In Washington

Federal district judges issue injunctions blocking public charge rule

What’s the story? Three federal district judges in New York, California, and Washington issued temporary injunctions on October 11 blocking the Trump administration’s public charge rule from taking effect on October 15. A fourth federal judge in Chicago issued a similar injunction on October 14.

The judges—Judge George Daniels of the United States District Court for the Southern District of New York, Judge Phyllis Hamilton of the United States District Court for the Northern District of California, Judge Rosanna Malouf Peterson of the United States District Court for the Eastern District of Washington, and Judge Gary Feinerman of the United States District Court for the Northern District of Illinois—argued that the rule was arbitrary and capricious under the Administrative Procedure Act, failed to consider potential costs to state and local governments, and constituted an unsupported congressional delegation of authority to DHS, among other claims.

Read more about this story in the September 2019 edition of Checks and Balances

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Two cases raise Appointments Clause challenges

What’s the story? The United States Supreme Court heard oral arguments on October 15 in Financial Oversight and Management Board for Puerto Rico v. Aurelius Investment LLC, a case arguing that the appointment of members to the Financial Oversight and Management Board for Puerto Rico violated the Appointments Clause of the U.S. Constitution.

The seven-member board is made up of one member chosen at the president’s discretion and six other members selected by the president from a list compiled by members of Congress. The appointees selected from the congressional list are not subject to Senate confirmation.

Aurelius Investment LLC and the Unión de Trabajadores de la Industria Eléctrica y Riego challenged the board’s authority, arguing that the board members are Officers of the United States who must all be nominated by the president and confirmed by the Senate. The board argued that its members do not qualify as Officers of the United States because its activities are primarily local in nature.

The court’s decision in the case could determine whether certain territorial officers can also be classified as federal officers for purposes of the Appointments Clause.

On October 31, a three-judge panel of the United States Court of Appeals for the Federal Circuit on October 31 held in Arthrex Inc. v. Smith & Nephew Inc. et al. that the appointment of the Patent Trial and Appeal Board’s (PTAB) administrative patent judges (APJs) by the U.S. secretary of commerce violates the Appointments Clause of the United States Constitution.

Judges Kimberly Moore, Raymond Chen, and Jimmie V. Reyna held that APJs exercise significant authority that qualifies them as Officers of the United States. Instead of changing their method of appointment, however, the court cited precedent set forth in Free Enterprise Fund v. Public Company Accounting Oversight Board to propose removing APJs’ for-cause removal protections in order to classify them as inferior officers, who can be appointed by department heads.

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SCOTUS to determine constitutionality of CFPB structure

What’s the story? On Oct. 18, the U.S. Supreme Court agreed to hear Seila Law v. Consumer Financial Protection Bureau (CFPB), a case challenging the constitutionality of the bureau’s structure.

Seila Law, a national law firm, argued that the CFPB’s single director is only removable for cause. The firm contended that the director’s cause removal protections unconstitutionally prevent the president from unilaterally firing the agency’s head. The firm said in its petition, “the importance of the [separation of powers] question presented [by this case] cannot be overstated.”

In a brief filed with the court on Sept. 17, Solicitor General Noel Francisco on behalf of the CFPB agreed with Seila Law, claiming that the bureau’s structure violates the separation of powers doctrine because it prevents the president from unilaterally firing the agency’s single director.

Read more about this case in the October 2019 edition of Checks and Balances.

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Automakers side with Trump over California in carbon emissions fight

What’s the story? A coalition of automakers, including General Motors and Toyota, on October 28 sided with the Trump administration in a power struggle between California and the federal government over the authority to set carbon emissions standards.

California joined with 23 states to sue the Trump administration in September after the U.S. Department of Transportation issued a final rule revoking California’s waiver allowing the state to set carbon emissions standards lower than the national average.

California’s waiver authority was established under the Clean Air Act of 1970. The state’s most recent waiver was approved in 2013 under the Obama administration and aimed to reduce carbon emissions by 2025.

The Trump administration withdrew California’s waiver with the intent of setting the stage for a legal challenge that could be resolved prior to the 2020 election.

The coalition, including members of the Association of Global Automakers and the Coalition for Sustainable Automotive Regulation, joined with the Trump administration in support of a uniform national fuel economy standard, arguing that multiple standards drive up costs for manufacturers and consumers.

The states challenging the waiver withdrawal claim that lower standards protect public health and safety.

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SCOTUS to decide limits of SEC penalties

What’s the story? The United States Supreme Court on November 2 agreed to hear Liu v. Securities and Exchange Commission, a case that questions when the Securities and Exchange Commission (SEC) may ask courts to impose certain penalties on rulebreakers.

The defendants in the case question whether the SEC has the legal authority to ask courts to issue disgorgement orders instructing those who break securities laws to relinquish all money related to the illegal activity.

In a 2017 case, Kokesh v. SEC, the court held that such orders were penalties, which could prevent the SEC from requesting them unless Congress changes the law.

The court’s decision in the case could limit how the SEC and other administrative agencies can penalize those who violate laws and regulations.

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Federal judge blocks Trump’s proclamation on immigration and health care

What’s the story? Judge Michael Simon of the United States District Court for the District of Oregon granted a temporary restraining order on November 3 to prevent President Trump’s proclamation on immigration and health care from taking effect.

The proclamation, issued on October 4, requires immigrants to demonstrate that they can either acquire health insurance coverage within 30 days of entering the country or pay for foreseeable medical care outright prior to receiving a visa.

Seven U.S. citizens joined with the nonprofit organization Latino Network on October 30 to file a lawsuit challenging the proclamation, arguing that the requirement would prevent two-thirds of legal immigrants from receiving visas and reduce the number of immigrants who can receive family-sponsored visas.

White House Press Secretary Stephanie Grisham responded to the order, stating, “Once again, a nationwide injunction is permitting a single judge to thwart the President’s policy judgment on a matter where Congress expressly gave the President authority.”

Presidential proclamations are official announcements of policy from the president that are generally directed toward the activities of private citizens, rather than government actors. Many proclamations are honorary or ceremonial, but some carry the weight of law if they fall within the scope of presidential authority.

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In the States

Justices on the Wisconsin Supreme Court want to know if there is a fourth branch of government

What’s the story? The Wisconsin Supreme Court on October 21 heard oral arguments in Service Employees International Union (SEIU), Local 1 v. Robin Vos, prompting some justices to question whether the Wisconsin Constitution provides for an administrative fourth branch of government.

The case challenges legislation passed during the December 2018 extraordinary session that made changes to administrative processes in the state, including a requirement that the state legislature’s Joint Committee on Finance approve any legal settlements reached by the state’s Department of Justice. The change is aimed at ending sue-and-settle in the state—a practice by which outside groups sue an agency in order to reach a settlement on terms favorable to the regulatory goals of both.

Plaintiffs in the case, led by the Service Employees International Union (SEIU), argued that the legislation is unconstitutional because it violates the state’s separation of powers doctrine. The legislative committee’s approval of legal settlements, according to the plaintiffs, represents an unconstitutional exercise of executive—rather than legislative—power.

State lawmakers, on the other hand, claimed that the attorney general is part of a fourth branch of administrative government with no constitutional authority of his own. Instead, the attorney general’s authority is prescribed through laws passed by the legislature. Lawmakers, therefore, argued that the legislation is in line with the separation of powers because the attorney general is not part of the executive branch and receives his authority directly from lawmakers.

Justices Brian Hagedorn and Dan Kelly asked questions seeking to clarify whether the role of the attorney general fits within the executive branch. Justice Rebecca Bradley voiced skepticism of lawmakers’ characterization of the attorney general as an office outside of the executive branch, stating, “We’ve never recognized a fourth branch of government.”

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New Jersey sheriff challenges constitutionality of attorney general’s ICE directive

What’s the story? New Jersey Sheriff Robert Nolan and the Cape May County Board of Chosen Freeholders on October 15 filed a federal lawsuit challenging a directive from New Jersey Attorney General Gurbir Grewal (D) that bars law enforcement in the state from cooperating with U.S. Immigration and Customs Enforcement (ICE). The Ocean County Board of Freeholders filed a similar lawsuit in September.

Grewal’s Immigrant Trust Directive took effect in March 2019. The directive limits the type of voluntary assistance that state and local police officers, correctional officers, and state and county prosecutors can provide to ICE. The directive aims to improve public safety by strengthening immigrant trust in local law enforcement, according to Grewal.

Nolan’s lawsuit claims that the directive violates the U.S. Constitution’s Supremacy Clause because it is preempted by two federal laws that prevent state and local governments from restricting communication with immigration authorities. The lawsuit also argues that the directive violated the rules and procedures of the New Jersey Administrative Procedure Act.

A spokesman for Grewal stated that the federal Criminal Justice Act of 1970 grants the attorney general broad authority to set statewide law enforcement policies.

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Florida judge greenlights lawsuit challenging automatic licence plate readers

What’s the story? Judge Abby Cynamon of Florida’s 11th Judicial Circuit Court on October 16 issued an order allowing a Florida lawsuit challenging the constitutionality of automatic license plate readers (ALPR) to proceed through the courts.

The New Civil Liberties Alliance, a public interest law firm focused on the administrative state, filed the lawsuit in October 2018. NCLA claims that the unconstrained use of ALPR technology by Florida law enforcement violates the Fourth Amendment by monitoring the vehicular movement of private citizens without probable cause.

In Virginia, Fairfax County Circuit Court Judge Robert J. Smith issued an injunction in April barring the use of automatic license plate readers on the grounds that the technology violates Virginia’s Government Data Collection and Dissemination Practices Act.

Nine states have enacted legislation that limits the retention of ALPR data, according to the National Conference of State Legislatures. Seven other states have passed laws that restrict the use of ALPR technology.

Read more about this story in the November 2018 edition of Checks and Balances.

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Massachusetts vaping ban remains effective despite unconstitutional ruling

What’s the story? Suffolk Superior Court Judge Douglas Wilkins on October 21 held that Governor Charlie Baker’s (R) executive order banning the sale of vaping products in the state overstepped his authority by failing to afford citizens their constitutionally protected right to due process.

Baker in September declared a public health emergency and issued a temporary, four-month ban on the sale of vaping products after 61 cases of vaping-related lung disease had been reported in the state. The Vaping Technology Association filed suit against the order, arguing in part that Baker had overstepped his authority.

Wilkins ruled that the executive order violated citizens’ right to due process because the state failed to hold a public hearing on the issue or perform small business impact analysis. Wilkins allowed the ban to stay in effect but ordered Baker to re-issue the ban and allow for public comment.

The state appealed Wilkins’ ruling. The Supreme Judicial Court is scheduled to hear oral arguments in the case on December 9.

Meanwhile, the Massachusetts House approved a bill on November 13 by a vote of 126-31 that would ban the sale of flavored nicotine products in the state and impose a 75% excise tax on vaping products.

Governors in Michigan, Montana, and Oregon issued similar vaping bans that were subsequently blocked by the courts. Vaping bans issued by governors in New York, Rhode Island, and Washington remained in effect as of November 14.

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Michigan legislators propose to limit governor’s budget powers

What’s the story? Republican lawmakers in Michigan on November 5 asked Democratic Governor Gretchen Whitmer to agree to limit the State Administrative Board’s authority to transfer funds tied to specific directives in legislative spending bills. The proposed change is part of a broader negotiation to pass a supplemental spending bill for the fiscal year.

The State Administrative Board is made up of the governor, lieutenant governor, secretary of state, attorney general, state treasurer, superintendent of public instruction, and the director of the Department of Transportation. The board has general supervisory authority over state administrative activities. The state legislature granted transfer authority to the board in 1931 and it was upheld by the Michigan Supreme Court in 1993.

Whitmer on September 29 became the first governor in 28 years to transfer funds between departments under the authority of the State Administrative Board. Whitmer transferred $625 million of funds, including a transfer of funds to public transit that the legislature had approved for roads.

Republicans legislators want to limit the power of the State Administrative Board to transfer funds designated for certain purposes by the legislature.

Whitmer on October 29 sent a letter to Republican lawmakers agreeing to negotiate a supplemental spending bill and restore some transferred funds as long as the legislature did not vote to “gut state executive authority that’s been around for 98 years.”

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Regulatory Tally

Federal Register

• The Federal Register in October reached 58,594 pages. The number of pages at the end of each October during the Obama administration (2009-2016) averaged 66,312 pages.
• The October Federal Register included 205 proposed rules and 274 final rules. These included the listing of the Barrens topminnow as an endangered species, the removal of the Kirtland’s warbler from the endangered species list, and updated guidelines for federal workplace drug testing, among others.

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Office of Information and Regulatory Affairs (OIRA)

OIRA’s October regulatory review activity included:

• Review of 45 significant regulatory actions. Between 2009-2016, the Obama administration reviewed an average of 42 significant regulatory actions each October.
• Approved three proposed rules without changes.
• Recommended changes to 39 proposed rules.
• Agencies withdrew three rules from the review process.
• As of November 4, 2019, the OIRA website listed 154 regulatory actions under review.

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