The big winners of this term of the Supreme Court

In a trio of rulings late this week, the Supreme Court invalidated U.S. administrative law — a field of law that governs how government agencies interpret and implement legislation.

Administrative law is commonly complex and technical. But these cases will have enormous consequences for government functions as diverse as regulating pollution, guaranteeing safe workplaces and administering Medicare. The winners will not be average American citizens; these will be companies and private entities that know how to use the court system to their advantage.

To understand why, let’s start with the fact that all three cases exaggerate the role of the courts. The hit case of the three, Loper Bright Enterprises v. Raimondooverturned the landmark 1984 decision known as Chevronwhich urged courts to defer agencies’ interpretation of the statutes they administer. Now courts—not agencies—will decide key legal questions about how government programs are implemented.

The Supreme Court went to great lengths to state that it would not adjourn “even if it happens that the ambiguity is related to technical issues.” No matter how complex the statute may be or whether the matter falls within the agency’s purview, the final say presumably rests with the courts.

The other two cases, both decided Thursday, have attracted less attention but could prove even more destabilizing. SEC vs. JarkesyThe court said it is unconstitutional for agencies to impose financial penalties directly on criminals, at least when those penalties resemble the kinds of penalties that courts traditionally impose. Instead, agencies must go to the courts and get their blessing, as well as the blessing of a jury—however difficult or time-consuming that may be.

Never mind that Congress believed that agency proceedings could provide, in the words of Justice Sonia Sotomayor, “greater efficiency and expertise, transparency and reasoned decision-making, and uniformity, predictability and greater political accountability.” The courts, the majority said, must have the final say.

And in Ohio v. EPAThe court struck down a new environmental rule that was supposed to prevent air pollution in upwind states. The court’s reasoning? The agency’s lengthy, technical explanation of its decision failed to adequately address the concerns of states and industry groups that opposed the rule.

Dissenting, Justice Amy Coney Barrett – who is not a liberal apologist – was appalled. The EPA received more than 1,100 highly technical comments, none of which specifically addressed key criticisms that a majority of the judges said the agency ignored. Moreover, the agency did not ignore the criticism. In fact, he addressed the issue explicitly, but not at the level of detail the Supreme Court wanted to see. Should the courts now hammer the agency for every supposedly inappropriate response to every possible objection raised in every comment? Doing so creates the risk of “unwarranted judicial review of perceived procedural lapses,” Judge Barrett said, which would prevent agencies from doing their jobs.

What these cases have in common is their elevation of judicial power. Do agencies get deference in legal matters? Not anymore. Can agencies prosecute criminals directly? No, they have to go to court. Will courts ignore agency decisions on questionable grounds? Sure.

The Supreme Court says its rulings will protect individual rights and prevent agencies from overstepping their bounds. In some cases, that will be true. Agencies sometimes behave foolishly or callously. Agencies sometimes try to regulate things they shouldn’t. If the Davids of the world sometimes use the courts to kill Goliaths, that’s all well and good.

However, many scientific studies suggest that this will not be the dominant effect.

In a famous 1974 article titled “Why the Haves Come Out Ahead,” University of Wisconsin law professor Marc Galanter argued that litigation systematically favors repeat players who can take full advantage of the courts. Key to his argument was the fact that courts are “reactive”: they only do something when someone asks them to do it. This favors “a plaintiff with information, the ability to overcome cost barriers, and the ability to navigate restrictive procedural requirements.” Galanter said most repeat players tend to be “bigger, richer and more powerful” than solo players.

The newspaper is 50 years old, but it stands. Return to Ohio v. EPAa case involving interstate air pollution. The EPA’s sin, if any, was its failure to respond adequately to a single, indirect comment it received. Who filed that? The Air Stewardship Coalition, a leading industry group representing (among others) the American Petroleum Institute, ExxonMobil, and the National Association of Producers.

It turns out this is typical. As I wrote elsewhere:

Moreover, there are no rules limiting the length or volume of comments. As a result, as University of Texas law professor Wendy Wagner has shown, the industry groups carpet bombing agencies with thousands of pages of comments, many of which contain unstructured technical information.

Why? Sometimes the industry has important information to share. But at least as often, comments are used strategically. (For truly important information, the industry can usually find a back channel outside the cumbersome notice-and-comment process.) Think of a comment as a rake that an agency might accidentally step on. The more comments, the more rakes are scattered across the lawn.

The agency may know that the comment is trivial or unhelpful. But who can say what a judge who doesn’t know anything about the subject will think someday? (It’s telling that in the original draft opinion, Justice Neil Gorsuch kept referring to “nitrous oxide.” But nitrous oxide is not a pollutant. Nitrous oxide is laughing gas and was not the chemical in question.) Agencies know that, and they know that they are much more likely to be sued by industry than by public interest groups. The best way to minimize the risk is to respond fully to each comment. You may still step on a rake, but at least you tried.

Thing about Ohio v. EPA and so do two other important administrative law cases that the Court has decided in the past few days. If you are an agency considering interpreting your statute in a way that could upset the industry, you may want to think twice now. They are the ones most likely to sue. Without Chevron Why risk that the court might read the law differently than you?

Or perhaps you represent an agency hoping to bring an administrative case against, say, a company that fails to meet workplace safety standards, believing that quick and certain justice will serve as a deterrent. Now you may not be able to bring this case to the administrative court, which may refer the case under urgent procedure. Instead, you must go to court, which is a longer and more difficult proposition. Companies will see that the agency’s enforcement authority has been limited and will take appropriate action.

Again, this is not to say that industry groups are the only beneficiaries of these three decisions – quite the contrary. Sometimes individuals, environmentalists and trade unions will also benefit. Nor do these three cases represent a sudden shift away from judicial oversight that we have seen before. It is more accurate to see them as an intensification of pre-existing trends.

The point is that, on balance and over time, strict judicial oversight of agency activities will favor well-organized, repeat actors rather than the public beneficiaries of regulatory programs. Maybe this isn’t such a surprise. Conservative Supreme Court justices were chosen by Republican presidents who sympathized with business interests and were concerned about government overreach. Administrative law turns out to be a very effective and invisible way to achieve this goal. The Tribunal likes to talk about constitutional principles and individual rights. But these matters are mainly about power.