Supreme Court Update: Michigan v. EPA (14-47) and Arizona State Legislature v. Arizona Independent Redistricting Comm'n (13-1314)

June 30, 2015 Supreme Court Update

Greetings, Court Fans!

The last day of school is always anticlimactic, with finals done and yearbooks already signed. That may have described the atmosphere on First Street yesterday, but make no mistake: The Court ended October Term 2014 term with three decisions that would likely have been the highlights of a sleepier term. In this Update, we'll provide summaries of two of these decisions: Michigan v. EPA (14-47), holding that the EPA must consider costs before it issues regulations; and Arizona State Legislature v. Arizona Independent Redistricting Comm'n (13-1314), holding that the Elections Clause of the Constitution does not bar states from delegating authority over congressional redistricting to independent commissions. We'll be back shortly with the last decision of the term, Glossip v. Gross (14-7955), which rejected an Eighth Amendment challenge to Kentucky's three-drug execution protocol and doubled down on the requirement that death-row inmates must affirmatively show that more humane means of execution are available in order to succeed on an Eighth Amendment challenge do a particular method.

In its third decision this Term on EPA regulations implementing the Clean Air Act, the Court ruled 5-4 in Michigan v. EPA that regulations governing harmful emissions from power plants—including harmful emissions of mercury—would have to be scrapped because the EPA did not consider the cost of the regulations. While the decision and dissent will generate talking points for both sides in the debate over environmental regulation, lawyers practicing in other areas may remember the case as part of a surprising trend at the end of this Term: A continued erosion of the three-decade-old Chevron doctrine, under which courts defer to an agency's reasonable interpretation of an ambiguous statute. The high water mark of that erosion may have come last week, in King v. Burwell (2015), which held that courts should not presume that Congress implicitly delegates power to an administrative agency on a matter of "deep economic and political significance," such as the tax subsidies provided by the Affordable Care Act. The erosion continued in Michigan v. EPA, in which the Court refused to defer to the EPA's interpretation of a classically vague phrase.

In Michigan, power-plant industry groups and 23 states challenged EPA regulations designed to cut power-plant air pollution, regulations that formed an important part of the Obama administration's environmental agenda. Those regulations were promulgated under the Clean Air Act, which directs the EPA to regulate emissions of hazardous air pollutants, but allows regulation of power plant emissions only if the EPA concludes that "regulation is appropriate and necessary" after studying their health hazards. To some, that phrase seems deliberately broad; rendered in N.Y. Daily News headline style, it might read: "Congress to EPA: You Decide!" But while Justice Scalia, writing for the right, found the phrase "capacious," he found that it required consideration of "all the relevant factors," which in this context included cost. The EPA had ignored cost when determining whether to regulate, even if it had later considered cost when deciding how to regulate. By ignoring a relevant factor at the threshold stage, the EPA had committed more than a technical or trivial error. It would not even be "rational, never mind ‘appropriate'" to decide to regulate when the regulation might "impose billions of dollars in eco­nomic costs in return for a few dollars in health or environmental benefits." The Court thus rejected the EPA's interpretation of the statute, which would have allowed it to consider costs later in the process.

While the Court's rejection of an agency's interpretation of a vague phrase like "appropriate and necessary" implicitly undercut Chevron, Justice Thomas went further, writing separately to express his doubts about the entirety of the Chevron doctrine. Sometimes, he notes, agency power under Chevron is understood "as an allocation of interpretive authority," while at other times it's understood as if "it were a form of legislative power." Either understanding, he believes, "raises serious separation-of-powers questions." Making laws is Congress' job, and interpreting them is the job of the courts; an agency should have no role in either endeavor.

The four liberals dissented in an opinion by Justice Kagan, who stood staunchly by Chevron. At first glance, the majority and the dissent seemed to battle not over what the legal rule should be, but over what happened. Of course the "EPA's power plant regulation would be unreasonable if ‘[t]he Agency gave cost no thought at all,'" Justice Kagan wrote for the four dissenting justices, quoting from the majority opinion (and repeating its italics). "But that is just not what happened here." The EPA had repeatedly considered costs, and though it didn't do so at the initial "appropriate and necessary" stage, that was only because it knew that it would do so later in the process, when it had more accurate cost information. In finding that the EPA had to consider costs "at the opening bell," instead of later, the Court was guilty of "micromanagement of EPA's rulemaking, based on little more than the word ‘appropri­ate,'"—a management sin compounded by the legal sin of running counter to Chevron. The EPA asked itself what was appropriate and necessary at that stage of the regulatory process, and its decision should be given deference. The dissent also noted that the EPA had ultimately found that the benefits of the pollution-control limits on power plants would be at least three to nine times as great as the costs. While the EPA had not relied on that finding in making its threshold "appropriate and necessary" finding, it knew that it would consider the costs and benefits later. The majority's refusal to consider the EPA's later cost/benefits analysis was therefore inappropriate, as the later analysis was anticipated and preserved in the threshold finding. The real cost of nixing the EPA power point emissions regulations was the rejection of lawful regulations that would have saved "many, many lives," Justice Kagan lamented.

Whether those regulations will rise anew from the ashes of power plant emissions is still an open question. The EPA must now decide again—this time, wearing CFO glasses from the beginning—whether regulation is "appropriate and necessary." If the EPA comes to the same conclusion under the newly-clarified process, this may not be the last we see of the case. The Court noted in passing that it expressed no opinion as to whether the "ancillary benefits" of regulation tallied up by the EPA (and the dissent) count in the cost/benefit analysis. Those ancillary benefits accrue when technology designed to reduce emissions of mercury and other covered pollutants incidentally also reduce emissions of pollutants that aren't covered in the program, like particulate matter and sulfur dioxide. Another question that may be back—sooner than Michigan II—is where Chevron stands. At least three justices now seem skeptical of some or all of Chevron: the Chief (author of King v. Burwell), Justice Scalia (author of Michigan) and Justice Thomas. We'll have to wait till next Term to see if the Court is interested in boring further down into the heart of Chevron.

Echoes of the Chief's opinion in King v. Burwell were also resonant in Arizona State Legislature v. Arizona Independent Redistricting Comm'n (13-1314), where 5/6 of the Burwell majority engaged in some creative linguistics in order to save one of the purposes of the Constitution's Elections Clause (to "safeguard against manipulation of electoral rules by politicians," in the words of the majority) from its evident plain language. As a result, a 5-4 majority, led by Justice Ginsburg, held that states may delegate the power over congressional redistricting to independent commissions, notwithstanding the words of the Elections Clause, which provides that "[t]he Times, Places and Manner of holding Elections for Senators and Representatives, shall be prescribed in each State by the Legislature thereof." The majority's conclusion that "legislature" means "the people" was a bridge too far for the author of Burwell, who had so recently concluded that the words "exchange established by the State" mean "exchange established by the State or on its behalf"; the Chief led the charge for the dissent.

By way of background, the problem of partisan gerrymandering has been well-nigh intractable for nearly as long as we've had political parties. The Supreme Court has repeatedly recognized that partisan gerrymandering is icky, but has nevertheless held that the issue (unlike racial gerrymandering, which is unconstitutional) presents a nonjusticiable political question. In 2000, the people of Arizona took matters into their own hands, adopting Proposition 106, which amended Arizona's Constitution to remove redistricting authority from the State Legislature and vest that authority in an independent commission, the Arizona Independent Redistricting Commission (AIRC). The AIRC adopted redistricting maps after the 2000 and 2010 censuses for both congressional and state legislative districts. In 2012, the Arizona Legislature challenged the map the AIRC had adopted after the 2010 census. It sued in federal court seeking a declaration that the use of an independent commission to map congressional districts violates the Elections Clause of the U.S. Constitution, which provides that "[t]he Times, Places and Manner of holding Elections for Senators and Representatives, shall be prescribed in each State by the Legislature thereof; but the Congress may at any time by Law make or alter such Regulations." Because neither the AIRC, nor the voters who created it, is "the Legislature" of Arizona, the actual Arizona Legislature argued that the independent redistricting scheme is unconstitutional. A three-judge District Court rejected this argument (2-1), having first decided (3-0) that the Legislature had standing to sue.

The Supreme Court affirmed, on both points. Writing for the liberals and Kennedy, Justice Ginsburg first concluded that the Legislature had standing to sue. In order to have such standing, the Legislature must show an injury in the form of invasion of a legally protected interest, which is "concrete and particularized" and "actual or imminent." The Legislature satisfied this requirement by showing that the Arizona initiative divested it of its Constitutionally delegated prerogative over redistricting. Though the AIRC (and the U.S. as amicus curiae) argued that the Legislature's suit was premature, in that it had not put forth an alternative redistricting plan, the majority noted that Arizona's constitution effectively prohibited the legislature from attempting to adopt a competing plan and, at the very least, made such an attempt an exercise in futility. Turning to the merits, Justice Ginsburg concluded that the Elections Clause permits Arizona's use of an independent commission to adopt congressional districts. Three decisions from the early 20th Century—Davis v. Hildebrant (1916), Hawke v. Smith (1920), and Smiley v. Holm (1932)—though not directly addressing the question at hand all support the proposition that, for redistricting purposes, the term "the Legislature" does not mean the State's representative body alone. Rather, it refers to the "lawmaking power" of the State, which can be defined in different ways by the State, through its constitution. If a State empowers its people to play a direct role in the redistricting process, then the people (or an independent commission to whom the people have delegate their power) are part of "the Legislature" for purposes of the Elections Clause. The Court further noted that Title 18, Section 2a(c)—which provides that "[u]ntil a State is redistricted in the manner provided by the law thereof after any apportionment," it must follow federally prescribed redistricting procedures—itself contemplates that State law, broadly defined, may provide the manner of redistricting in the State. The Act upon which §2a(c) was based was specifically amended in 1911 to recognize the role of direct democracy in redistricting. Thus, "[s]o long as a State has ‘redistricted in the manner provided by the law thereof'—as Arizona did by utilizing the independent commission procedure called for by its Constitution—the resulting redistricting plan becomes the presumptively governing map." Turning finally to the Elections Clause, itself, Justice Ginsburg argued that its text, history, and purpose support the majority's holding that States may provide for redistricting by independent commission. Founding-era dictionaries broadly defined "legislature" to mean "the power that makes laws," without restricting the definition to representative bodies. And the purpose of the elections Clause was simply "to empower Congress to override state election rules, not to restrict the way States enact legislation." Finally, permitting states to create independent redistricting commissions is consistent with the federalist view of states as "laboratories of democracy." There is no reason why that general view should not apply in the context of redistricting. Justice Ginsburg closed with a paean to direct democracy—particularly in the redistricting context: "[I]t would be perverse to interpret the term ‘Legislature' in the Elections Clause so as to exclude lawmaking by the people, particularly where such lawmaking is intended to check legislators' ability to choose the district lines they run in, thereby advancing the prospect that Members of Congress will in fact be ‘chosen . . . by the People of the several States.'"

The Chief Justice filed a blistering dissent, joined by Scalia, Thomas, and Alito. In the dissenters' view, "the Legislature" means the legislature and the Court can't simply redefine that term simply to advance a policy concern for non-partisan redistricting. Roberts faulted the majority for limiting its textual analysis to a single paragraph citing one incomplete definition of "legislature." Most coeval dictionaries—and more importantly, State constitutions—defined "legislature" clearly as a body that makes laws. Indeed, the court had already itself expressly held—citing these founding-era authorities—that "a legislature" is "the representative body which ma[kes] the laws of the people." The Chief went on to note that the word "legislature" is used seventeen times in the Constitution and each iteration is consistent with the ordinary meaning of the word, while many are flatly inconsistent with the majority's expansive definition. The Chief scoffed at Justice Ginsburg's argument that the word has different meanings depending on the function being described. Though a car has different functions in different contexts—mode of transport, place for storage, source of electricity—everyone understands that it's always a car. Beyond plain meaning, the history of the Elections Clause and the Court's own precedent—the very cases cited by Justice Ginsburg—amply demonstrate that when the Elections Clause referred to "the Legislature," of a State, it was referring to the State's representative lawmaking body. With respect to the majority's reliance on 18 U.S.C. § 2a(c), the Chief could hardly contain his derision, pointing out that, while Justice Ginsburg's opinion discussed the provision at length, neither the majority nor the AIRC ever actually relied on it, probably because, by its terms, it does not apply when a State has come up with its own redistricting plan (and thus has no need for Congress to step in). Ultimately, the dissenters accused the majority of playing politics, allowing a concern over partisan gerrymandering to trump the plain meaning and history of the Elections Clause. But, "[f]or better or worse, the Elections Clause of the constitution does not allow [the people of Arizona] to address those concerns by displacing their legislature."

Justice Scalia penned a separate dissent, joined by Justice Thomas, contending that the Court should not have taken this case because the Arizona Legislature lacks standing. Disputes between governmental branches or departments regarding the allocation of political power do not constitute cases or controversies under Article III § 2 of the Constitution. Instead, the job of the courts is, in the words of Justice Marshall, "solely, to decide on the rights of individuals." Standing, Scalia maintained, is not merely a matter of requiring concrete factual disputes; rather, it derives from the separation of powers. "It keeps us minding our own business" Though Scalia was forced to acknowledge that the Court had, in Coleman v. Miller (1939) suggested that a legislative body has standing to sue where its powers are stripped away, he maintained that the decision—in which two justices voted to affirm on the merits, two voted to reverse (without addressing standing), and four voted to dismiss for lack of standing—is a "pretty shaky foundation for a significant precedential ruling." He would therefore ignore or overrule Coleman and dismiss for want of jurisdiction. While that would ordinarily mean that he should express no opinion on the merits, Scalia couldn't help himself: "In the present case . . . the majority's resolution of the merits question (‘legislature' means ‘the people') is so outrageously wrong, so utterly devoid of textual or historic support, so flatly in contradiction of prior Supreme Court cases, so obviously the willful product of hostility to districting by state legislatures, that I cannot avoid adding my vote to the devastating dissent of the Chief Justice."

Justice Thomas also filed a dissent (joined by Scalia) solely for the purpose of pointing out inconsistencies in how the majority had viewed direct democracy in this case—"a paean to the ballot initiative"—compared to others, including the gay marriage cases, where the Court "cast aside state laws across the country—many of which were enacted through ballot initiative—that reflected the traditional definition of marriage."

Lingering resentment over last week's gay-marriage (or "marriage," as it's now known) decision also infected Justice Scalia's dissent in Glossip v. Gross, where he took Justices Breyer and Ginsburg to task for suggesting that the death penalty is unconstitutional. We'll bring you the summary of that case, and catch up on the Court's recent orders and cert grants, in our next Update, which will bring a close to OT14.