Jun 30, 2022 - Economy

Supreme Court rulings muddy regulatory waters

Illustration of a gavel hitting the floor and generating ripples.

Illustration: Aïda Amer/Axios

The Supreme Court is reining in the power of federal regulators.

Why it matters: Companies across the board could face a patchwork of rulings by different courts, rather than one agency’s decision, former FCC official Blair Levin told the Washington Post.

Catch up quick: A Supreme Court ruling issued today questioned and limited the EPA’s authority on the nation's power industry.

  • The decision comes as cases against federal agencies are starting to pile up.
  • Meanwhile, other recent rulings — like the one against OSHA’s vaccine mandate for businesses — have already signaled where the court stands.

The argument: Conservative justices on the Supreme Court have focused on the use of federal agencies and executive orders to change policy.

  • “When Congress seems slow to solve problems, it may be only natural that those in the Executive Branch might seek to take matters into their own hands,” Justice Neil Gorsuch wrote in his concurring opinion today. 
  • “But the Constitution does not authorize agencies to use pen-and-phone regulations as substitutes for laws passed by the people’s representatives.”

The big picture: The Supreme Court in its recent rulings to rein in agencies, including the EPA and OSHA, has also used the “major questions doctrine" assertively, according to the New York Times.

  • It requires Congress to explicitly authorize agency actions that could transform the economy.
  • Using the doctrine has the potential to open up a flurry of litigation and "to put agencies on the defensive for every decision that anybody can say is major," Jody Freeman, Harvard Law School professor and former climate adviser for the Obama administration, tells Axios.

What to watch: Today's Supreme Court decision seems to preview how much more closely federal agencies will have to adhere to congressional statutes, according to sources familiar with the White House’s thinking.

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