How to keep the courts out of administrative decisions

Tom Temin: And we should also point out that you are a fellow of the American Bar Association, specializing in regulatory affairs and administrative procedures. First of all, tell us what’s going on with you personally at CFPB. And then we’ll get into what you wrote about.

Domenic Powell: Right now, Acting Director Vought has directed CFPB employees to stop all work. I was already taking some annual leave and I just wanted to clarify quickly that these are entirely my own views. And I’m not speaking on behalf of the bureau.

Tom Temin: Sure. Understood. And let’s get to the essay that you had in The Regulatory Review. And the title is quite simply: How to court-proof the administrative state. I guess my question is what do you mean? Because shouldn’t every branch of the government be to some degree accountable to the other branches? That’s the whole way the system works.

Domenic Powell: Yeah, that’s right. That is the idea of separation of powers that are supposed to be a give and take between all three of them. Particularly, in recent years, what we’ve seen is the judicial branch sort of become elevated above the other two branches where Congress and the executive branch are sort of going through the courts and asking, ‘Mother, may I?’ And so what I’m talking about in my essay in the Regulatory Review is how both Congress and executive agencies can act in ways that get around this dynamic?

Tom Temin: And what are some of those ways? I mean, we can use the Trump administration as an example, maybe. Or you worked. During the Biden administration, they seem to rule by executive order and Fiat. And if Congress had that as its intention, it kind of doesn’t matter, because Congress can’t get its boots on to do anything about anything.

Domenic Powell: Yeah. And I think some of the challenges that we see in lawmaking in Congress and, interestingly, some of this boundary testing we’re seeing today is a dynamic that is created by judicial power, in fact, because everything sort of needs to be ruled on or tested. We see administrations throwing stuff at the wall and seeing what sticks. And that’s because the courts get to call the shots ultimately.

Tom Temin: So how do you court-proof administrative decisions? By making better decisions? Or I mean, you can’t stop the court from taking on cases, although presumably they could say, ‘You know what? That’s between you, your agency, your employees and the administration.’ It’s not the courts matter. They don’t say that. So how do you court-proof administrative action?

Domenic Powell: Well, I think there’s a few different ways. There are things that Congress can do and there are things that agencies can do. Some of the things that Congress ought to do is that when it’s developing a statutory program, when it really wants an agency to be the decision maker, it should limit the ability of courts to second guess that or commit more things to an agency’s discretion. Another way Congress could act is to sort of limit the ability of strategic litigation in the courts by randomly assigning cases throughout the federal district courts. So not every decision can be challenged in some far-flung district. And another way that agencies can regulate more creatively is, for example, using sort of public informational powers, persuasion, sort of gathering information that is then used by journalists, by Congress to motivate policy decisions by state legislatures. Another regulatory strategy I propose is and others have talked about this is providing more technical assistance to states to developing their own laws and regulatory programs.

Tom Temin: We’re speaking with Domenic Powell. He’s a fellow of the American Bar Association, specializing in administrative procedure and regulatory affairs. Congress, though, when it’s divided, seem to prefer to rely on the court. I mean, I spoke to one congressman who’s very active and well spoken. He was a Democrat. I said, ‘What are you guys going to do if you don’t like what Trump is doing?’ He said, ‘Well, we’re going to rely on the court cases because we don’t have the votes.’ So there’s zero unanimity in Congress on what the limits on agency should be or they both agree there’s no limits as long as they’re doing what I want, what my party wants, and I don’t see a way around that, do you?

Domenic Powell: Well, if we’re going to just chalk everything up to the courts, yeah, we’re certainly not going to solve this problem and that’s going to make government less and less effective. So if we really do want government to deliver for the American people, then Congress needs to be clear about who it wants making those decisions.

Tom Temin: And meanwhile, agencies do go forward with kind of extreme programs. You cite Lina Khan, the former Federal Trade Commission chairman, as being skilled at getting her agenda across, but she lost most of the major court cases and very little changed under her. A lot of people in business thought she didn’t really understand business suing in antitrust cases where the consumer prices were falling in certain markets. And so what should agency heads maybe think about? Explain why you thought Lina Khan was effective.

Domenic Powell: I don’t know that I would say that Lina Khan was ineffective. I think certainly like the pace of mergers was slowed down. And it’s how many mergers never began in the first place or abandoned. It can’t be entirely measured in court victories. And I think also drawing more attention to the ways in which, like patents are used, less in competition in the marketplace, pharmacy PBMs, the way other issues that are raising the cost of prescription drugs. I think the FTC was quite successful in its consumer protection mission there.

Tom Temin: I want to get back to the issue of what you call in your article jurisdiction shopping because there are places where you figure you can get one kind of ruling and other places where you can figure you could get another kind of ruling. And I think that the Chief Justice, John Roberts, said a couple of years ago, there’s no Obama judges and no Trump judges. They’re all judges, but not really.

Domenic Powell: Yes. And I think this is something that I think often, even when I was in law school, we used to refer to quote-unquote the political branches and the political branches were, of course, like Congress and the executive. And I don’t think anybody really believes that the judiciary is a quote-unquote nonpolitical branch. We just have three political branches there. Law and politics are inextricably linked and that’s just the world we live in.

Tom Temin: Right. So there’s really no constitutional North Star, you might say? And that doesn’t sound like a safe place for the nation.

Domenic Powell: Well, that is part of the bargain we make of living in a democracy. Democracy is not always clearly spelled out. We can’t call the manager for every time there’s a problem. We have to sort it out. And this is part of the bargain we make for freedom.