Scary Decision By The 5th Circuit Court Wednesday

Supreme Court, Washington, D.C.

A story that should have caused all the cable messers to break out their largest and brightest “Breaking News” banners was barely reported on Wednesday night. That story would be a decision handed down by the US Fifth Circuit Court of Appeals. The Fifth Circuit covers Texas, Louisiana and Mississippi.

Heather Cox Richardson in her daily sub stack newsletter   covers this story extremely well:

“There was big news today from a quarter that made it easily overlooked. In a decision about the power of the Securities and Exchange Commission to judge those accused of engaging in securities fraud, the United States Court of Appeals for the Fifth Circuit ruled that “Congress unconstitutionally delegated legislative power to the SEC by failing to provide an intelligible principle by which the SEC would exercise the delegated power, in violation of Article I’s vesting of ‘all’ legislative power in Congress….”

Congress created the Securities and Exchange Commission in 1934, after the Great Crash of 1929 revealed illegal shenanigans on Wall Street. The SEC is supposed to enforce the law against manipulating financial markets. The Fifth Circuit covers Louisiana, Texas, and Mississippi, and its judges lean to the right. Today’s decision suggests that the leaked draft of the decision that would overturn Roe v. Wade has empowered other judges to challenge other established precedents.

What is at stake with this decision is something called the “nondelegation doctrine,” which says that Congress, which constitutes the legislative branch of the government, cannot delegate legislative authority to the executive branch. Most of the regulatory bodies in our government since the New Deal have been housed in the executive branch. So the nondelegation doctrine would hamstring the modern regulatory state.

According to an article in the Columbia Law Review by Julian Davis Mortenson and Nicholas Bagley, the idea of nondelegation was invented in 1935 to undercut the business regulation of the New Deal. In the first 100 days of his term, President Franklin Delano Roosevelt set out to regulate the economy to combat the Great Depression. Under his leadership, Congress established a number of new agencies to regulate everything from banking to agricultural production.

While the new rules were hugely popular among ordinary Americans, they infuriated business leaders. The Supreme Court stepped in and, in two decisions, said that Congress could not delegate its authority to administrative agencies. But FDR’s threat of increasing the size of the court and the justices’ recognition that they were on the wrong side of public opinion undercut their opposition to the New Deal. The nondelegation theory was ignored until the 1980s, when conservative lawyers began to look for ways to rein in the federal government. “

The wealthy on the right have claimed that regulatory agencies were unconstitutionally handed powers by congress through ‘delegation.’ The extreme conservative Court of the early days of the New Deal shot down this delegation, but as justices from that Court died or moved on and were replaced, FDR began winning. Regulating agencies then became legalized and became major factors in our society from the late 1930s forward.

Heather Cox Richardson continued:

“In 2001, the Supreme Court unanimously rejected the argument in a decision written by Justice Antonin Scalia, who said the court must trust Congress to take care of its own power. But after Justice Clarence Thomas suggested that he might be open to the argument, conservative scholars began to say that the framers of the Constitution did not want Congress to delegate authority. Mortenson and Bagley say that argument “can’t stand…. It’s just making stuff up and calling it constitutional law.” Nonetheless, Republican appointees on the court have come to embrace the doctrine.

In November 2019, Justice Brett Kavanaugh sided with Justice Neil Gorsuch-—Trump appointees both—to say the Court should reexamine whether or not Congress can delegate authority to administrative agencies. Along with Chief Justice John Roberts and Justice Thomas, they appear to believe that the Constitution forbids such delegation. If Justice Amy Coney Barrett sides with them, the resurrection of that doctrine will curtail the modern administrative state that since the 1930s has regulated business, provided a basic social safety net, and promoted infrastructure.

As Justice Elena Kagan pointed out, the non-delegation doctrine would mean that “most of Government is unconstitutional.”

Justice Kagan points out that if this decision is allowed to stand then “most of Government is unconstitutional.” If this should come to pass, most of the regulations put in place by agencies such as the SEC, the FDA, OSHA, the FEC, the FCC on and on would become no longer constitutional as the decision is applied across the government.

In its place would be Congress passing law after law after law to replace current regulations. Most of us could see some of the problems that situation would bring on:

  • First, it is very doubtful that unless one party or another (maybe I should say ideology) dominates congress few laws would be passed. Based on recent closely divided congresses it should be very apparent that congress passing a raft of laws on regulation is quite unlikely.
  • Second, the amount of laws that would have to be passed would be monumental.
  • Third, how specific would such laws have to be to pass a court’s tests on specificity? And what about new industries such as the cyber world? How could congress anticipate such huge changes?
  • Fourth, if the president is of a different ideology laws passed by congress could be easily be vetoed.

I am sure there are many other problems with a non-delegation world. These are just off the top of my head.

This has been a wet dream of the wealthy and corporate world for a long time. Now with a Court that has no care for precedent, this is yet another “it will never happen” that may happen. 

This would be a good time to learn the words “chaos” and “anarchy.” Oh and by the way, remember those voters who stayed home in 2016 because they didn’t like Hillary. This is the cost of not voting.

About Dave Bradley

retired in West Liberty
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