Author

Chris Nelson

Chris Nelson is a project director at Ballotpedia and can be reached at chris.nelson@ballotpedia.org

Trump to collect citizenship information through executive order instead of 2020 census

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 edition, we review President Donald Trump’s (R) move to acquire citizenship information after federal judges blocked administration efforts to add citizenship status to the 2020 census; an upcoming United States Supreme Court (SCOTUS) case challenging the Trump administration’s efforts to end the Deferred Action for Childhood Arrivals (DACA) program; and a recent SCOTUS ruling that both upheld and limited Auerdeference.

At the state level, we highlight a new Indiana law that moves the state’s administrative law judges (ALJs) from agency control to a centralized panel, as well as a ruling from the Wisconsin Supreme Court upholding the state’s regulatory reform. We also present The Wall Street Journal’s interview with Judge Andrew Oldham of the United States Court of Appeals for the Fifth Circuit on his forthcoming paper examining the Anti-Federalists’ prescience on the rise of the administrative state.

As always, we wrap up with our Regulatory Tally, which features information about the 174 proposed rules and 262 final rules added to the Federal Register in June and OIRA’s regulatory review activity.

The Checks and Balances Letter

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In Washington

Trump to collect citizenship information through executive order instead of 2020 census

What’s the story? President Trump announced on July 11, 2019, that his administration would cease efforts to add a citizenship question to the 2020 U.S. census and instead direct federal agencies through executive order to provide the information to the U.S. Department of Commerce.
Commerce Secretary Wilbur Ross approved the citizenship question for the 2020 U.S. census as necessary to improve enforcement of the Voting Rights Act. The proposed question would have asked, “Is this person a citizen of the United States?”
The citizenship question was blocked by three federal district court judges on grounds that it violated the Constitution’s Enumeration Clause and the Census Act, and that the administration failed to follow proper procedure.
By a vote of 5-4, the United States Supreme Court affirmed the legality of a citizenship question on the census but effectively barred the administration from including it by remanding the case, Department of Commerce v. New York, to the agency for review.
The ruling invoked precedent from Citizens to Preserve Overton Park v. Volpe (1971) to evaluate agency decisions beyond the scope of the administrative record.
The dissenting justices argued that the exception opens a new legal avenue for challengers to contest administrative actions based solely on alleged pretextual reasoning by agency decision-makers outside of the administrative record.
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SCOTUS agrees to decide whether administrative procedures must be followed to eliminate improperly issued rules

What’s the story? The United States Supreme Court will determine whether the Trump administration can end the Deferred Action for Childhood Arrivals (DACA) program through a memorandum rather than rulemaking procedures after it granted certiorari on June 28 in Department of Homeland Security v. Regents of the University of California.
The case could clarify whether federal agencies must follow the Administrative Procedure Act’s (APA) rulemaking procedures to end programs that were created without following APA procedures. Oral argument is scheduled for November 12, 2019.
The Obama administration created DACA in 2012 to prevent the deportation of young people who were unlawfully brought into the country as children. The program was established through a memorandum rather than APA rulemaking procedures.
The Trump administration on September 5, 2017, rescinded DACA, arguing that the program was unlawful because the Obama administration failed to follow APA rulemaking procedures.
Regents of the University of California sued the administration for failing to follow the APA in rescinding the program.
DHS argued, in part, that the decision to end DACA was exempt from APA rulemaking because it was improperly created.
The United States District Court for the Northern District of California barred the administration from rescinding DACA. The administration appealed to the United States Supreme Court.
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SCOTUS upholds and limits Auer deference

What’s the story? The United States Supreme Court on June 26 unanimously (with concurring opinions) upheld Auerdeference—the practice of federal courts deferring to administrative agencies’ interpretations of ambiguous regulations. However, the ruling also limited application of the principle.
The opinion written by Justice Kagan set the following parameters for Auer deference:
  • 1. Auer deference applies only when a regulation is ambiguous. Courts must first consider the text, structure, history, and purpose of a regulation before deferring to an agency’s reasonable interpretation.
  • 2. Whether the reasonable agency interpretation of a regulation is an authoritative or official position of the agency.
  • 3. Auer deference is only appropriate for regulatory matters that fall within agency expertise.
  • 4. An agency’s interpretation must be a “fair and considered judgment” that does not create unfair surprise for those subject to the regulation. Moreover, courts should not defer to agency interpretations that were only adopted in order to assist the agency in a lawsuit.
Justice Gorsuch authored a concurring opinion, joined by Justices Thomas, Alito, and Kavanaugh, that criticized the court for not invalidating Auer altogether, noting the court’s responsibility “to say what the law is and afford the people the neutral forum for their disputes that they expect and deserve.”
The case Kisor v. Wilkie involved a marine veteran who challenged a U.S. Department of Veterans Affairs’ (VA) interpretation of a regulation that determined the effective date of retroactive disability benefits. The United States Supreme Court unanimously vacated and remanded the judgment of the Federal Circuit Court of Appeals, which had failed to consider whether the VA’s regulation had more than one reasonable meaning. The court instructed the Federal Circuit to reconsider its application of Auer deference in the case.
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In the States

Indiana moves ALJ supervision to centralized panel

What’s the story? A new Indiana law shifted oversight of the state’s administrative law judges (ALJs) from state agency supervision to the Office of Administrative Law Proceedings (OALP), housed under the State Personnel Office.
Proponents of Senate Enrolled Act 1223 say that the change protects the independence of ALJs by removing them from agency control.
The OALP has the authority to hire and train ALJs, assign them to cases, and create and enforce a judicial code of conduct.
Eleven agencies have ALJ systems that are governed by separate statutes and, therefore, are exempt from the change.
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Wisconsin Supreme Court affirms state REINS Act

What’s the story? The Wisconsin Supreme Court on June 25 ruled 4-2 in Koschkee v. Taylor to affirm that the state’s Department of Public Instruction (DPI) must submit new rules to the governor for approval before they take effect.
Wisconsin’s Regulations from the Executive in Need of Scrutiny (REINS) Act, the first state-level REINS Act signed into law in August 2017 by Governor Scott Walker (R), requires state agencies to obtain gubernatorial approval for proposed regulations.
The Wisconsin Institute for Law and Liberty (WILL) sued former Superintendent of Public Instruction Tony Evers (D) and the DPI in November 2017 for allegedly violating the state REINS Act by failing to submit statements of scope for proposed rules to the State Department of Administration for approval.
Evers and DPI argued that the state superintendent is a constitutional office not subject to gubernatorial control under the REINS Act.
Koschkee v. Taylor affirmed that DPI exercises delegated legislative power when it promulgates rules and, therefore, its rulemaking activities are subject to control by the state legislature. By passing the REINS Act, the state legislature required DPI to obtain gubernatorial approval prior to promulgating new rules.
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How the Anti-Federalists foretold the rise of the administrative state

Judge Andrew Oldham of the United States Court of Appeals for the Fifth Circuit spoke to The Wall Street Journal for a July 3 article examining the Anti-Federalists’ views on the evolution of executive power. The Anti-Federalists, Oldham explained, were uneasy about far-reaching executive power. Oldham argues that, in many ways, the Anti-Federalists foresaw the development of the administrative state:

“Judge Oldham is impressed by the prescience of Anti-Federalist concerns ‘about the way executive power would evolve over time.’ In a forthcoming paper for the New York University Journal of Law & Liberty, he quotes the Anti-Federalist Cato (thought to be future Vice President George Clinton), who wrote that the presidency would ‘create a numerous train of dependents’ in the executive branch, so that the president would end up ‘surrounded by expectants and courtiers’—an aristocracy, which might be compared to today’s Washington elite.
“No one in the 18th century could predict the form the federal bureaucracy would take in the 20th century. Yet the Anti-Federalists’ concerns are telling. They worried about ‘the capaciousness of executive power,’ Judge Oldham says, comparing it to ‘the abuses of the past that they’d seen in England.’ The Federalists countered that the separation of powers would prevent any part of the new federal government from becoming too powerful. The legislative, executive and judicial branches were coequal and would check and balance one another.
“Yet in recent decades, as Christopher DeMuth has written, ‘Congress has delegated its lawmaking powers: voting by lopsided margins for goals such as clean air and equality of the sexes, while leaving the hard choices—the real legislating—to specialized executive-branch agencies.’ These administrative agencies not only make rules but enforce and adjudicate them—carrying out the functions of all three governmental branches with nary a check.”

Click here to read the full article.


Regulatory Tally

Federal Register

  • The Federal Register in June reached 31,170 pages. The number of pages at the end of each June during the Obama administration (2009-2016) averaged 37,979 pages.
  • The Federal Register included 174 proposed rules and 262 final rules during June 2019. The regulations included new car title loan regulations, restrictions on flights to Cuba, and updated international mail prices, among other rules.
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Office of Information and Regulatory Affairs (OIRA)

OIRA’s June regulatory review activity included:
  • Review of 37 significant regulatory actions. Between 2009-2016, the Obama administration reviewed an average of 47 significant regulatory actions each June.
  • Recommended changes to 36 proposed rules.
  • Agencies withdrew one rule from the review process.
  • As of July 1, 2019, the OIRA website listed 125 regulatory actions under review.
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U.S. Supreme Court fails to resuscitate nondelegation doctrine

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 edition, we review the United States Supreme Court (SCOTUS) decision declining to uphold the nondelegation doctrine, a SCOTUS decision requiring notice-and-comment rulemaking for changes to Medicare policy, an effort to standardize cost-benefit analysis procedures at the Environmental Protection Agency, and two recent SCOTUS cases demonstrating the reluctance to apply Chevron deference.

At the state level, we highlight an Idaho proposal to simplify or retire roughly one-third of the state’s regulatory code, a new Michigan law that seeks to protect citizens against civil asset forfeiture, a ruling from the Texas Supreme Court aimed at protecting citizens’ due process rights in spite of agency misinformation, and the Texas governor’s executive order to prevent the expiration of the state’s plumbing regulations. As always, we wrap up with our Regulatory Tally, which features information about the 220 proposed rules and 264 final rules added to the Federal Register in May and OIRA’s regulatory review activity.

The Checks and Balances Letter

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In Washington

U.S. Supreme Court fails to resuscitate nondelegation doctrine; Alito concurrence, however, suggests a change in precedent might be forthcoming

  • What’s the story? In Gundy v. United States, the U.S. Supreme Court ruled 5-3 that the Sex Offender Registration and Notification Act (SORNA) did not violate the nondelegation doctrine, the constitutional principle forbidding Congress from delegating its legislative powers to the executive.
  • Justice Elena Kagan’s plurality opinion noted that the court has only declared delegations of authority unconstitutional twice in its history and that past courts have upheld broader delegations with less guidance from Congress. Justice Alito, however–who voted to uphold SORNA–wrote a separate opinion stating his willingness to reconsider how the court approaches future nondelegation doctrine challenges, suggesting changes in precedent might still be coming. Justice Kavanaugh did not vote on the case, which was heard before he joined the court.
  • Justice Gorsuch filed a dissenting opinion arguing that SORNA is unconstitutional because it gives the U.S. attorney general the power to write and enforce his own criminal code. He argued, “The Constitution promises that only the people’s elected representatives may adopt new federal laws restricting liberty. Yet the statute before us scrambles that design. It purports to endow the nation’s chief prosecutor with the power to write his own criminal code governing the lives of a half-million citizens. Yes, those affected are some of the least popular among us. But if a single executive branch official can write laws restricting the liberty of this group of persons, what does that mean for the next?”
  • Herman Gundy was convicted for failing to register as a sex offender under SORNA even though his offense occurred before SORNA passed. He argued that Congress improperly gave away legislative power to the attorney general when it allowed him to decide whether and how to apply SORNA to sex offenders who were convicted earlier.
  • The last time the U.S. Supreme Court found that Congress violated the nondelegation doctrine was in two 1935 cases involving the National Industrial Recovery Act passed during the New Deal.
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SCOTUS reins in HHS by requiring notice-and-comment rulemaking; declines to draw line between substantive and interpretive rules

  • What’s the story? The United States Supreme Court on June 3 declined to draw a defining line between substantive rules and interpretive rules in a 7-1 decision in Azar v. Allina Health Services. Instead, the court narrowly held that the Medicare Act requires the U.S. Department of Health and Human Services (HHS) to follow notice-and-comment rulemaking procedures when it makes substantive changes to Medicare policy, including substantive changes issued through interpretive rules.
  • Justice Brett Kavanaugh was recused from the case because he authored the appellate court opinion while serving on the United States Court of Appeals for the District of Columbia Circuit. Justice Stephen Breyer dissented.
  • A group of hospitals that provide healthcare to low-income Medicare patients and challenged HHS’ method of calculating the disproportionate share hospital adjustments for the 2012 fiscal year. These adjustments serve to increase reimbursement payments to hospitals that treat a disproportionately high number of low-income patients. The hospitals argued that the Medicare Act required HHS to provide “the public with notice and opportunity for comment” before changing the formula.
  • The district court ruled that HHS was not required to follow notice-and-comment rulemaking procedures because the formula change to calculate the 2012 adjustments was instituted through an interpretive rule, a type of agency guidance document. Unlike substantive rules, interpretive rules lack the force and effect of law. The district court held that the Medicare Act incorporated the Administrative Procedure Act’s (APA) exemption of interpretive rules from notice-and-comment rulemaking.
  • The United States Court of Appeals for the District of Columbia Circuit reversed the district court in finding that the Medicare Act does not except interpretive rules from notice-and-comment requirements.
  • In an opinion by Justice Neil Gorsuch, the United States Supreme Court affirmed the D.C. Circuit ruling, arguing that the Medicare statutes of 1987 require notice-and-comment rulemaking for changes to substantive legal standards, including those issued via interpretive rules.
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Cost-benefit analysis overhaul at EPA in response to Trump executive order

  • What’s the story? Environmental Protection Agency (EPA) Administrator Andrew Wheeler issued a memo on May 13 directing agency leadership to develop new rules standardizing the agency’s application of cost-benefit analysis in the rulemaking process.
  • The EPA is instituting the new rules in response to President Trump’s Executive Order 13777, which directed agencies to identify regulations with costs that exceed benefits. The memo lists the following guidelines for the new cost-benefit analysis rules:
  • The EPA should evaluate and consider both costs and benefits in regulatory decision-making.
  • The EPA should have consistent interpretations of key terms and concepts, such as “practical,” “appropriate,” “reasonable,” and “feasible.”
  • The EPA should explain the factors considered in a regulatory analysis and their role in shaping the regulatory outcome.
  • Analyses should follow best practices as well as sound economic and scientific principles.
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Recent SCOTUS cases avoid Chevron doctrine

  • What’s the story? The U.S. Supreme Court has not overturned the Chevron doctrine, but two recent cases demonstrate the court’s reluctance to apply it.
  • The court on May 20 rejected a petition to hear United Parcel Service v. Postal Regulatory Commission, a case in which the United Parcel Service challenged the appellate court’s application of Chevron deference to the Postal Regulatory Commission’s (PRC) method of setting postal rates.
  • In the court’s May 28 decision in Smith v. Berryhill, the justices unanimously rejected the argument that Chevron deference should apply when Congress gave no clear instructions about the availability of judicial review for those seeking disability benefits before the Social Security Administration. Justice Sonia Sotomayor stated in the opinion that the scope of judicial review “is hardly the kind of question that the Court presumes that Congress implicitly delegated to an agency.”
  • The Chevron doctrine—named for the 1984 United States Supreme Court decision in Chevron v. Natural Resources Defence Council—compels courts to defer to agencies’ reasonable interpretations of the unclear laws that they administer.
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In the States

Idaho governor proposes dramatic reductions to state regulatory code

  • What’s the story? Idaho Governor Brad Little (R) on May 21 proposed simplifying or allowing for the expiration of 139 full chapters and 79 partial chapters—roughly 34%—of the state’s regulatory code.
  • Idaho’s entire regulatory code was effectively repealed as of July 1 after the state legislature failed to reauthorize the 8,200 pages of rules.
  • Regulations in Idaho must be reauthorized each year, but lawmakers failed to do so by the end of the legislative session.
  • Little directed agencies to submit their regulations to the Division of Financial Management by May 10 for temporary approval in order for the rules to remain in effect until the legislature reconvenes in January.
  • Little’s proposal was open for public comment through June 11. Approved rules were published in the June 19 edition of the Idaho Administrative Bulletin, followed by a 21-day comment period.
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New Michigan law protects against civil asset forfeiture

  • What’s the story? Michigan Governor Gretchen Whitmer (D) signed a law on May 9 that prevents law enforcement from permanently keeping property under $50,000 acquired through civil asset forfeiture until the owner is convicted in a court of law.
  • Under civil asset forfeiture, law enforcement routinely seize cars, cash and other property as alleged proceeds of crime.
  • The new law aims to protect individuals’ property and due process rights against civil asset forfeiture and expedite the process for individuals seeking to recover seized property.
  • The law is the latest in a series of civil asset forfeiture reforms approved by Michigan lawmakers in recent years. Legislation passed in 2015 raised the standard of evidence for civil asset forfeiture and established transparency requirements. A 2016 bill repealed the bond requirements for individuals challenging forfeitures.
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Texas Supreme Court upholds due process in the face of agency misinformation

  • What’s the story? The Texas Supreme Court unanimously ruled on May 21 in Mosley v. Texas Health and Human Services Commission and Texas Department of Family and Protective Services that state agencies can’t provide erroneous information to citizens and later deny them due process after they follow the government’s inaccurate instructions.
  • The case concerned a decision by the Texas Department of Aging and Disability Services to add Patricia Mosley, a home health care provider, to the department’s Employee Misconduct Registry. Mosley challenged the decision but lost in a hearing before a state administrative law judge (ALJ).
  • The department sent Mosely a letter after the hearing instructing her to file a petition for judicial review in district court within 30 days in order to appeal the decision. The letter, however, failed to instruct Mosley to first file a motion for rehearing before seeking judicial review as required by statute. As a result, Mosley’s petition for judicial review was dismissed by the district and appellate courts for failing to first file a motion for rehearing.
  • The Texas Supreme Court disagreed, arguing that “the government can’t hold [Mosley] responsible for the consequences of its own ignorance.” The court ordered the department to reinstate Mosely’s case and allow her the opportunity for a rehearing.
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Texas governor issues executive order to extend plumbing oversight

  • What’s the story? Texas Governor Greg Abbott (R) issued an executive order on June 13 to continue the existence of the Texas Board of Plumbing Examiners and the state’s plumbing regulations through May 2021 without the need for a special legislative session.
  • Texas plumbers asked Abbott to call a special legislative session after the Texas State Legislature failed to approve sunset review legislation last month that would have continued regulatory oversight of plumbers in the state.
  • Lawmakers disagreed over the sunset bill’s proposal to move the responsibilities of the plumbing board under the Texas Department of Licensing and Regulation. Supporters of the bill argued that the move would improve efficiency, such as reducing the state’s eight-month processing period for issuing a plumbing license. Opponents claimed that the lengthy licensing period and other alleged inefficiencies of the plumbing board served to protect public health and safety in a specialized industry.
  • Without Abbott’s intervention, the legislative inaction would have resulted in the expiration of the state’s plumbing code on September 1, 2019, and the end of the plumbing board operations by September 2020.
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New study breaks down scope and impact of federal regulations

The Competitive Enterprise Institute (CEI) in May released a new issue of the Ten Thousand Commandments—the group’s annual report detailing the scope of federal regulatory activity and its economic impact. Below is a selection of the report’s conclusions:

The Pacific Legal Foundation provided the following summary of the report’s key findings:

  • “Each U.S. household’s estimated regulatory burden is at least $14,615 annually on average. That amounts to 20 percent of the average pre-tax household budget and exceeds every item in that budget, except housing.”
  • “In 2018, Washington bureaucrats issued regulations at a rate of 11 for every one law Congress enacted. The average for this “Unconstitutionality Index” for the past decade has been 28 to one. The five agencies issuing the most rules are the Departments of Commerce, Defense, Health and Human Services, Transportation, and the Treasury.”
  • “In the pipeline now, 67 federal departments, agencies, and commissions have 3,534 regulatory actions at various stages of implementation … according to the fall 2018 ‘Regulatory Plan and the Unified Agenda of Federal Regulatory and Deregulatory Actions.’”
  • “Of the 3,534 regulations in the Agenda’s pipeline, 174 are ‘economically significant’ rules, which the federal government describes as having annual economic effects of $100 million or more. Of those 174, 38 are deemed ‘deregulatory’ for purposes of E.O. 13,771.”

Click here to read the full report.

Regulatory Tally

Federal Register

  • The Federal Register in May reached 25,492 pages. The number of pages at the end of each May during the Obama administration (2009-2016) averaged 31,268 pages.
  • The Federal Register included 220 proposed rules and 264 final rules during May 2019. The regulations included new rules for Medicare Part D, an electronic signature option for U.S. Postal Service deliveries, and an increase in H-2B visas, among other rules.
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Office of Information and Regulatory Affairs (OIRA)

OIRA’s May regulatory review activity included:
  • Review of 36 significant regulatory actions. Between 2009-2016, the Obama administration reviewed an average of 46 significant regulatory actions each May.
  • Recommended changes to 34 proposed rules.
  • Agencies withdrew two rules from the review process.
  • As of June 2019, the OIRA website listed 113 regulatory actions under review.
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Manafort sentenced to almost 4 years in bank fraud case

Former Trump campaign chairman Paul Manafort was sentenced to 47 months in prison in what was the first of two rounds of sentencing. He was convicted last year of five counts of tax fraud, two counts of bank fraud, and one count of failure to disclose a foreign bank account. Manafort’s convictions did not relate to his involvement in the 2016 presidential campaign.
 
After his conviction in September 2018, Manafort pleaded guilty to one count of conspiracy against the United States and one count of conspiracy to obstruct justice by witness tampering, and he agreed to cooperate with special counsel Robert Mueller’s investigation into Russian interference in the 2016 presidential election. Manafort also agreed to forfeit several of his properties and money in several of his bank accounts. The crimes Manafort pleaded guilty to did not relate to his involvement in the 2016 presidential campaign.


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