Amicus Curiae Brief — American Bankers Association, Petitioner v. National Credit Union Administration

No. 19-1115

IN THE

Supreme Court of the United States

_________

AMERICAN BANKERS ASSOCIATION,

v.

Petitioner,

NATIONAL CREDIT UNION ADMINISTRATION,

Respondent.

_________

On Petition for a Writ of Certiorari to the

United States Court of Appeals for the District

of Columbia Circuit

_________

BRIEF OF THE NATIONAL RIGHT TO WORK

LEGAL DEFENSE FOUNDATION, INC. AS

AMICUS CURIAE SUPPORTING PETITIONER

_________

RAYMOND J. LAJEUNESSE, JR.

Counsel of Record

JAMES C. DEVEREAUX

FRANK D. GARRISON

c/o NATIONAL RIGHT TO

WORK LEGAL DEFENSE

FOUNDATION, INC.

8001 Braddock Road

Suite 600

Springfield, VA 22160

(703) 321-8510

rjl@nrtw.org

Counsel for Amicus

QUESTION PRESENTED

When a statute expressly directs an agency to define a statutory term, does the delegation expand the

scope of the agency’s authority at Chevron step two

beyond its ordinary bounds?

i

TABLE OF CONTENTS

Page

QUESTIONS PRESENTED ................................ i

TABLE OF AUTHORITIES.............................. iii

INTEREST OF AMICUS CURIAE .................... 1

INTRODUCTION AND SUMMARY OF ARGUMENT .................................................................. 2

ARGUMENT ....................................................... 3

A. Chevron step two gives executive agencies

a nearly limitless delegation of lawmaking

authority when unchecked by courts ....... 3

B. Unbridled agency discretion at Chevron

step two has serious consequences for the

regulated public that reach beyond this

case ............................................................ 8

CONCLUSION .................................................. 11

ii

TABLE OF AUTHORITIES

CASES

Chamber of Commerce of the United States of Am.

v. NLRB.,

118 F. Supp. 3d 171 (D.D.C. 2015) ...................9

Chevron, U.S.A., Inc. v. Nat. Res. Def. Council,

Inc.,

467 U.S. 837 (1984) ................................. passim

City of Arlington v. FCC,

569 U.S. 290 (2013) .......................................... 2

Commc’ns Workers of Am. v. Beck,

487 U.S. 735 (1988) .......................................... 1

Dep’t of Transp. v. Ass’n of Am. R.Rs.,

575 U.S. 43 (2015) ............................................ 5

Egan v. Del. River Port Auth.,

851 F.3d 263 (3d Cir. 2017) ............................. 2

FCC v. Fox TV Stations, Inc.,

567 U.S. 239 (2012)………………………………..5

Gundy v. United States,

U.S. , 139 S. Ct. 2116 (2019) ..................... 5

Harris v. Quinn,

573 U.S. 616 (2014) .......................................... 1

Indus. TurnAround Corp. v. NLRB,

115 F.3d 248 (4th Cir. 1997) ........................... 8

Int’l Ass’n of Machinists v. NLRB,

133 F.3d 1012 (7th Cir. 1998)………………… 1

Janus v. State, Cty. & Mun. Emps.,

U.S. , 138 S. Ct. 2448 (2018) ..................... 1

iii

TABLE OF AUTHORITIES—Continued

Page(s)

Kisor v. Wilkie,

U.S. , 139 S. Ct. 2400 (2019) ..................... 2

Knox v. SEIU, Local 1000,

567 U.S. 298 (2012) .......................................... 1

Glob. Tel*Link v. FCC,

866 F.3d 397 (D.C. Cir. 2017) .......................... 7

Michigan. v. EPA,

U.S. , 135 S. Ct. 2699 (2015) ................. 2, 4

NLRB v. Truck Drivers Local Union No. 449,

353 U.S. 87 (1957) ............................................ 8

NLRB v. Local Union No. 103,

434 U.S. 335 (1978) .......................................... 8

NLRB v. Viola Indus. Elevator Div., Inc.,

979 F.2d 1384 (10th Cir. 1992) ........................ 8

Pirlott v. NLRB,

522 F.3d 423 (D.C. Cir. 2008) .......................... 1

UC Health v. NLRB,

803 F.3d 669 (D.C. Cir. 2015) .......................... 9

United Food & Commercial Workers Union v.

NLRB,

307 F.3d 760 (9th Cir. 2002) ............................ 1

White City Shopping Ctr., LP v. PR Rests., LLC,

21 Mass. L. Rptr. 565 (2006) ........................... 6

CONSTITUTION

U.S. CONST. art. I. ..............................................4, 5

iv

TABLE OF AUTHORITIES—Continued

Page(s)

OTHER AUTHORITIES

Douglas H. Ginsburg & Steven Menashi, Our

Illiberal Adminstrative Law,

10 N.Y.U. J.L. & LIBERTY 475 (2016) ................10

Raymond M. Kethledge, Ambiguities and Agency

Cases: Reflections After (Almost) Ten Years on

the Bench,

70 Vand. L. Rev. En Banc 315 (2017) ................ 4

John F. Manning, Lawmaking Made Easy,

10 GREEN BAG 2d 191 (2007) ...............................5

Antonin Scalia, Judicial Deference to

Administrative Interpretations of Law,

1989 Duke L.J. 511 (1989).................................. 3

MISCELLANEOUS

Janine Puhak, Ruth Bader Ginsburg rules that

hot dogs are sandwiches, Mar. 23, 2018,

https://www.foxnews.com/food-drink/ruth-baderginsburg-rules-that-hot-dogs-are-sandwiches ... 6

Josh Scherer, A Bro And A Philosopher Debate

The True Meaning of a Sandwich, Apr., 21 2015,

https://firstwefeast.com/eat/2015/04/philosophyof-meat-bread ...................................................... 6

Merriam-Webster’s Collegiate Dictionary (10th

ed. 1994) ............................................................. 6

v

INTEREST OF AMICUS CURIAE1

The National Right to Work Legal Defense Foundation, Inc. has been the nation’s leading litigation advocate for employee free choice since 1968. To advance

this mission, Foundation staff attorneys have represented individual employees in many cases before this

Court.2

The Foundation has a particular interest in the

Court granting certiorari on the question presented

because it currently represents hundreds of employees across the nation whose free choice to refrain from

unionization and monopoly bargaining depends on the

National Labor Relations Board’s proper implementation of the National Labor Relations Act. Courts have

applied Chevron3 deference in several cases involving

such individual employees’ rights.4 Thus, whether this

Under Supreme Court Rule 37.3(a), both parties received

timely notice of amicus curiae’s intent to file this brief and consented to its filing. Under Supreme Court Rule 37.6, no counsel

for any party authored this brief in whole or in part, and no person or entity other than the amicus curiae made a monetary contribution to its preparation or submission.

1

E.g., Janus v. AFSCME, 138 S. Ct. 2448 (2018); Harris v.

Quinn, 573 U.S. 616 (2014); Knox v. SEIU, Local 1000, 567 U.S.

298 (2012); Commc’ns Workers of Am. v. Beck, 487 U.S. 735

(1988).

2

3 Chevron, U.S.A., Inc. v. Nat. Res. Def. Council, 467 U.S. 837

(1984).

4 See, e.g., Pirlott v. NLRB, 522 F.3d 423, 434 (D.C. Cir. 2008)

(“The general chargeability issue is a matter for the Board to decide in the first instance.”); United Food & Commercial Workers

Union, Local 1036 v. NLRB, 307 F.3d 760, 766 (9th Cir. 2002) (en

banc) (“Courts are required to defer to the NLRB on statutory

interpretation under Chevron.”); Int'l Ass’n of Machinists & Aerospace Workers v. NLRB, 133 F.3d 1012, 1015 (7th Cir. 1998).

1

Court should limit Chevron step two is important to

the Foundation’s mission.

INTRODUCTION AND

SUMMARY OF ARGUMENT

Members of this Court and others have repeatedly

acknowledged the serious separation of powers problems with Chevron deference.5 Despite these reservations, the Court has not found occasion to reexamine

whether to overrule the doctrine. And the band plays

on: courts continue to skirt their constitutional duty

to neutrally review agency action and thereby continue to allow executive lawmaking through broad

congressional delegations.

The question presented here does not ask the

Court to overrule Chevron, but does present the Court

with the chance to plug a hole in the sinking ship. It

can do so by establishing clear limits to agency discretion at Chevron step two. Whether to do so is not only

important for Petitioner’s rights, but is also an important issue of federal law for all those subject to arbitrary agency decision-making. Thus, the question

presented warrants this Court’s review.

A. When Congress delegates to an agency the

power to define a statute’s terms, Chevron step two

5 See e.g., Kisor v. Wilkie, 139 S. Ct. 2400, 2433 (2019) (Gorsuch,

J., concurring in judgment); City of Arlington v. FCC, 569 U.S.

290, 315 (2013) (Roberts, C.J., dissenting); Michigan. v. EPA, 135

S. Ct. 2699, 2712 (2015) (Thomas, J., concurring) (noting Chevron

forces judges “to abandon what they believe is ‘the best reading

of an ambiguous statute’ in favor of an agency’s construction”);

Egan v. Del. River Port Auth., 851 F.3d 263, 279 (3d Cir. 2017)

(Jordan, J., concurring) (calling Chevron an “aggrandizement of

federal executive power at the expense of the legislature”).

.

2

instructs courts to defer to the agency’s reasonable

construction of those terms. Yet, as this case shows,

an agency often will not stay within the bounds of reason when construing the statute. When courts do not

police the line of reasonableness, it creates separation

of powers problems. Moreover, reflexive deference allows executive agencies to exercise legislative power

by rewriting laws without going through bicameralism and presentment and creates serious fair notice

problems.

B. Placing a limiting principle on Chevron step two

is an important issue of federal law not only for Petitioner, but also for all parties regulated by federal

agencies. Federal agencies like the NLRB routinely

use Chevron deference to change a federal statute’s

meaning—causing serious damage to the regulated

public’s rights and liberties.

ARGUMENT FOR GRANTING

THE PETITION

A. Chevron step two gives executive agencies a

nearly limitless delegation of lawmaking authority when unchecked by courts.

In a world with Chevron, courts should ideally use

all the tools of statutory construction to determine the

meaning of a statute before declaring it ambiguous.

This “step one” analysis, if done, would, in many cases,

constrain the constitutional problems with the doctrine.6 But that is not the reality. Often, courts skirt

their judicial duty by prematurely declaring a statute

ambiguous with little to no analysis. Indeed, “the persistence and willingness of judges to work hard before

6 See Antonin Scalia, Judicial Deference to Administrative Inter-

pretations of Law, 1989 DUKE L.J. 511, 521 (1989).

3

declaring statutes ambiguous is an important but perhaps overlooked difference between judges.”7

Worse, Congress sometimes, as in this case, directs

an agency to define a statutory term by regulation.

This, in essence, is congressionally mandated ambiguity. This raises a question of scope. Does that directive

merely activate the agency’s authority at Chevron

step two to make reasonable policy choices based on

limiting principles within the statutory scheme? Or,

does that delegation go further by expanding an

agency’s scope of authority to change the law’s meaning to fit its policy goal? If a court takes the latter,

more deferential position—as it did in this case—then

there is no limiting principle to executive lawmaking.

This lack of a limiting principle at Chevron step

two creates serious constitutional problems and undermines the rule of law. Indeed, without such a limitation, Chevron step two becomes a legislative act

cloaked in justifications of ambiguity. “[A]gencies ‘interpreting’ ambiguous statutes typically are not engaged in acts of interpretation at all. Instead, as Chevron itself acknowledged, they are engaged in the ‘formulation of policy.’”8 This in turn allows an agency to

use Chevron, “not to find the best meaning of the text,

but to formulate legally binding rules to fill in gaps

based on policy judgments made by the agency rather

than Congress.”9 In other words, it allows an agency

to rewrite laws in violation of Article I of the Constitution, U.S. CONST. art. I.

Raymond M. Kethledge, Ambiguities and Agency Cases: Reflections After (Almost) Ten Years on the Bench, 70 VAND. L. REV. EN

BANC 315, 319 (2017).

7

8 Michigan v. EPA, 135 S. Ct. at 2712–13 (citations omitted).

9 Id. at 2713.

4

This regime undercuts the Framers’ design to prevent excessive lawmaking—which the Framers

thought was one of “the diseases to which our governments are most liable.”10 Article I requires a law to

“win the approval of two Houses of Congress—elected

at different times, by different consistencies, and for

different terms in office—and either secure the President’s approval or obtain enough support to override

his veto.”11 This gauntlet, the Framers thought, was a

“bulwark[] of liberty.”12

When lawmaking is made easy through congressional delegation, moreover, the regulated public is

susceptible to having life, liberty, or property taken

from them without fair notice. A fundamental tenet of

the Due Process Clause requires that laws “which regulate persons or entities must give fair notice of conduct that is forbidden or required.”13 A punishment

will thus violate due process when a “regulation under

which it is obtained fails to provide a person of ordinary intelligence fair notice of what is prohibited, or

is so standardless that it authorizes or encourages seriously discriminatory enforcement.”14 Chevron turns

10 Gundy v. United States, 139 S. Ct. 2116, 2134 (2019) (Gorsuch,

J., dissenting) (footnote omitted).

11 Id.

12 Id. Indeed, it is a feature and not a bug of our constitutional

structure that laws are hard to enact. See John F. Manning, Lawmaking Made Easy, 10 GREEN BAG 2d 191, 202 (2007); see also

Dep’t of Transp. v. Ass’n of Am. R.Rs., 575 U.S. 43, 61 (Alito, J.,

concurring).

13 FCC v. Fox Television Stations, Inc., 567 U.S. 239, 253 (2012)

(citations omitted).

14 Id. (citations and quotation marks omitted).

5

this fundamental principle on its head because an executive agency can decide—after a person has acted in

some cases—what an ambiguous law means and haul

that person into court.

To illustrate, suppose Congress enacts a statute

that allows an agency to regulate the interstate sale

of sandwiches. It delegates to an agency the authority

to define what “sandwich” means. The dictionary definition of sandwich reads: “two or more slices of bread

or a split roll having a filling in between.”15 Of course,

many food items could meet this definition. In this

way, the term “sandwich” is ambiguous. Does “sandwich” include a hot dog? A burrito? A hot dog could fit

within this definition.16 A burrito less likely does.17

But either could be within reasonable bounds of what

“sandwich” means.

Yet what if the agency then decided that the same

policy goals Congress sought in the legislation regulating sandwiches applied to ice cream sandwiches?

15 Merriam-Webster’s Collegiate Dictionary (10th ed. 1994) at

1035.

16 See Janine Puhak, Ruth Bader Ginsburg rules that hot dogs

are sandwiches, Mar. 23, 2018, https://www.foxnews.com/fooddrink/ruth-bader-ginsburg-rules-that-hot-dogs-are-sandwiches;

but see, Josh Scherer, A Bro And A Philosopher Debate The True

Meaning of a Sandwich, Apr. 21 2015, https://firstwefeast.com/eat/2015/04/philosophy-of-meat-bread (stating “the

history of the hot dog is different than the history of sandwiches

. . . . When history’s first Frankfurter was made in Central Europe and stuck in a roll of bread, it was done outside the modern

concept of a sandwich . . . they likely are sandwiches, but only in

the same sense that benches are also chairs”).

17 See White City Shopping Ctr., LP v. PR Rests., LLC, 21 Mass.

L. Rptr. 565 *3 (2006) (finding a burrito is, in fact, not a sandwich).

6

Sandwiches and ice cream, after all, are both food

items. Suppose then, that the agency charged with administering the statute brought an adjudicatory enforcement action against an ice cream maker for not

complying with the statute.

Ideally, a court would have little trouble dispatching the agency’s “ice cream sandwich rule.” Yet Petitioner’s case shows courts do not always strike down

unreasonable agency interpretations. How can a “local

community” or “rural district” mean vast distances

and significant chunks of populated territory?18

* * *

As one circuit court judge has noted, “[m]uch of

the recent expressed concern about Chevron ignores

that Chevron’s second step can and should be a meaningful limitation on the ability of administrative agencies to exploit statutory ambiguities, assert farfetched

interpretations, and usurp undelegated policymaking

discretion. This case presents just one example of

those kinds of agency tactics.”19

This case presents another. The Court should

therefore grant the petition and provide the lower

courts with a meaningful limiting principle at Chevron step two.

As Petitioner points out, this case provides a textbook example

of how Chevron step two permits limitless discretion in defining

and enforcing terms beyond their common meaning and in manner that alters the law and does not hinge on expertise. See Pet.

Br. 5–7, 9–10.

18

19 Glob. Tel*Link v. FCC, 866 F.3d 397, 418 (D.C. Cir. 2017). (Sil-

berman, J. concurring) (footnote omitted)

7

B. Unbridled agency discretion at Chevron step

two has serious consequences for the regulated public that reach beyond this case.

Petitioner’s case is not an anomaly. Delegated ambiguities leave individuals and entities at the mercy of

regulatory discretion in many areas of federal law.

This case is just one example of how Chevron deference works to deprive litigants of their rights. The doctrine will continue to do so if the Court does not place

limiting principles on it.

Take the NLRB’s implementation of the NLRA.

This Court has recognized that balancing conflicting

interests in the labor context is a difficult task assigned to the NLRB. Yet employees’ vital interests

thus are “subject to limited judicial review.”20 Indeed,

deference doctrines—including Chevron—give the

NLRB great lawmaking power.21 Deference of this

sort is a barrier to judicial oversight and leaves important legislative power in unelected bureaucrats’

hands.

Many cases reveal the breadth of discretion provided to the NLRB. In Chamber of Commerce of the

United States of America v. National Labor Relations

20 NLRB. v. Truck Drivers

Local Union No. 449, Int’l Bhd. of

Teamsters, Chauffeurs Warehousemen & Helpers of Am. A.F.L.,

353 U.S. 87, 96 (1957).

21 See, e.g., NLRB v. Local Union No. 103, Int’l Ass’n of Bridge,

Structural & Ornamental Iron Workers, AFL-CIO, 434 U.S. 335,

350 (1978); Indus. TurnAround Corp. v. NLRB, 115 F.3d 248, 251

(4th Cir. 1997) (“Although we ordinarily review questions of law

de novo, the NLRB’s interpretation of the Act is entitled to deference if it is reasonably defensible.”); NLRB. v. Viola Indus.-Elevator Div., Inc., 979 F.2d 1384, 1392 (10th Cir. 1992).

8

Board,22 for example, the court held that “[o]nce a reviewing court reaches [Chevron’s] second step, it must

accord ‘considerable weight’ to an executive agency’s

construction of a statutory scheme it has been ‘entrusted to administer.’”23

In UC Health v. NLRB,24 the D.C. Circuit upheld a

Regional Director’s authority to direct and certify a

union election even while the NLRB itself had no

quorum. Citing Chevron’s second step, the court found

the term “quorum” was ambiguous because it did not

speak to the exact and unlikely circumstances of the

case—the statute was silent about the issue. The majority ruled: “the structure of the statute supports the

Board’s interpretation just as well as it might support

UC Health’s construction.”25 Tie goes to the home

team.

The dissent, however, recognized the NLRB’s statutory interpretation was “flatly” unreasonable and incompatible with the statute.26 In finding the NLRB’s

construction unreasonable, the dissent cautioned that

“[w]e must bear in mind that even if we are following

Chevron’s second step, we are construing a Congressional act—the second step is not open sesame for the

Agency.”27 Yet, often, that is exactly how courts treat

agency interpretations.

22 Chamber of Commerce of the United States of Am. v. NLRB,

118 F. Supp. 3d 171 (D.D.C. 2015).

23 Id. at 183 (citations omitted).

24 UC Health v. NLRB, 803 F.3d 669 (D.C. Cir. 2015).

25 Id. at 675.

26 See id. at 687 (Silberman, J. dissenting).

27 Id.

9

Much of the rationale for this excessive deference

to the NLRB and other agencies is supposedly justified by agency expertise and therefore the experts

should make the rules. Yet the definitions of labor law

terms are often legal and not scientific questions.

What the NLRB engages in is not “expertise” so much

as political will. This puts the law’s status in flux all

without going through the constitutionally prescribed

political process.28

Indeed, aided in large part by Chevron deference,

agencies across the federal government, like the

NLRB, for decades have abruptly changed legal and

policy positions on dozens of major issues affecting the

regulated public’s individual liberties. They have done

so not by using the statute Congress passed, but by

using supposedly ambiguous statutory language to instill their political preferences—political preferences

enacted without going through the democratic processes prescribed by the Constitution.

* * *

Applying a limiting principle at Chevron step two

may sometimes contribute to the law’s ossification.

The petition here involves long ago enacted banking

schemes that may require overhaul because of eco-

28 Douglas H. Ginsburg & Steven Menashi, Our Illiberal Admin-

istrative Law, 10 N.Y.U. J.L. & LIBERTY 475, 482–83 (2016) (footnote omitted) (“Sometimes the claim to expertise is entirely

fraudulent; the most well-documented case is that of the National Labor Relations Board . . . . The permanent staff of an

agency may have a great deal of technical expertise, but the

agency’s ultimate decisions are made by the experts’ political

masters, who have sufficient discretion that they can make decisions based upon their own policy preferences[.]”)

10

nomic and technological developments. Many regulatory frameworks operate under dated economic, political, and technological policy rationales, and many

federal statutes likely need a fresh legislative look.

However, that is a job for Congress and the democratic

process—not unelected bureaucrats.

CONCLUSION

For foregoing reasons, and those stated by the Petitioner, the Court should grant the petition.

Respectfully submitted,

RAYMOND J. LAJEUNESSE, JR.

Counsel of Record

JAMES C. DEVEREAUX

FRANK D. GARRISON

CC/o NATIONAL RIGHT TO

WORK LEGAL DEFENSE

FOUNDATION, INC.

8001 Braddock Road

Suite 600

Springfield, VA 22160

(703) 321-8510

rjl@nrtw.org

April 10, 2020

11