Amicus Curiae Brief — American Hospital Association, et al., Petitioners v. Xavier Becerra, Secretary of Health and Human Services, et al.

No. 20-1114

In the Supreme Court of the United States

_____________

AMERICAN HOSPITAL ASSOCIATION, ET AL.,

Petitioners,

v.

XAVIER BECERRA, IN HIS OFFICIAL CAPACITY AS THE SECRETARY OF HEALTH AND HUMAN SERVICES, ET AL.,

Respondents.

_____________

On Writ of Certiorari to the

United States Court of Appeals

for the District of Columbia Circuit

_____________

AMICUS CURIAE BRIEF FOR THE NATIONAL

RIGHT TO WORK LEGAL DEFENSE FOUNDATION,

INC. IN SUPPORT OF PETITIONERS

_____________

September 10, 2021

RAYMOND J. LAJEUNESSE, JR.

Counsel of Record

FRANK D. GARRISON

JAMES C. DEVEREAUX

BLAINE L. HUTCHISON

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

i

QUESTIONS PRESENTED

Under federal law, the reimbursement rate paid by

Medicare for specified covered outpatient drugs is set

based on one of two alternative payment methodologies. If the Department of Health and Human Services (HHS) has collected certain required “hospital

acquisition cost survey data,” HHS sets the reimbursement rate equal to the “average acquisition cost

for the drug,” and “may vary” that rate “by hospital

group.” 42 U.S.C. 1395l(t)(14)(A)(iii)(I). If HHS has

not collected the required “hospital acquisition cost

data,” it must set a reimbursement rate equal to the

“average price for the drug,” which is “calculated and

adjusted by [HHS] as necessary for purposes of this

paragraph”—i.e., paragraph (14) of subsection (t) of

Section 1395l. 42 U.S.C. 1395l(t)(14)(A)(iii)(II).

The questions presented are:

1. Whether petitioners’ suit challenging HHS’s

“adjustments” is precluded by 42 U.S.C. 1395l(t)(12).

2. Whether Chevron deference permits HHS to set

reimbursement rates based on acquisition cost and

vary such rates by hospital group if HHS has not collected required hospital acquisition cost survey data.

ii

TABLE OF CONTENTS

Page(s)

Questions Presented .................................................... i

Table of Authorities................................................... iii

Interest of Amicus Curiae ........................................... 1

Introduction and Summary of Argument ................... 2

Argument ..................................................................... 3

I. Chevron deference violates the Constitution’s separation of powers requirement

and should be overruled ................................... 3

II. Chevron deference has serious consequences

for the regulated public that reach beyond

this case........................................................... 11

Conclusion ................................................................. 16

iii

TABLE OF AUTHORITIES

Page(s)

CASES

Caperton v. A.T. Massey Coal Co.,

556 U.S. 868 (2009) ..............................................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) ............................................11

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

FDA v. Brown & Williamson Tobacco Corp.,

529 U.S. 120 (2000) ............................................10

Gundy v. United States,

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

Harris v. Quinn,

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

In re Murchison,

349 U.S. 133 (1955) ...............................................9

IAM v. NLRB,

133 F.3d 1012 (7th Cir. 1998) ..............................2

Janus v. AFSCME, Council 31,

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

iv

TABLE OF AUTHORITIES

Page(s)

CASES

Knox v. SEIU, Loc.1000,

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

Marbury v. Madison,

5 U.S. 137 (1803) ...................................................7

MCI Telecomms. Corp. v. AT&T Co.,

512 U.S. 218 (1994) ............................................ 10

Michigan v. EPA,

135 S. Ct. 2699 (2015) ..........................................5

NLRB. v. Noel Canning,

573 U.S. 513 (2014) ...............................................4

Pereira v. Sessions,

138 S. Ct. 2105 (2018) ..........................................7

Perez v. Mortg. Bankers Ass’n,

575 U.S. 92 (2015) .............................................3, 7

Pirlott v. NLRB,

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

Republican Party of Minn. v. White,

536 U.S. 765 (2002) ..............................................9

UC Health v. NLRB,

803 F.3d 669 (D.C. Cir. 2015) .......................12, 13

UFCW, Loc. 1036 v. NLRB,

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

United States v. Mead Corp.,

533 U.S. 218 (2001) ............................................13

v

TABLE OF AUTHORITIES

Page(s)

CASES

Util. Air Regul. Group v. EPA,

573 U.S. 302 (2014) ............................................ 10

Whitman v. Am. Truckig Ass’ns,

531 U.S. 457 (2001) ..............................................4

U.S. CONSTITUTION

Article I § 1 .......................................................4, 5, 16

Article III ......................................................6, 7, 8, 15

Fifth Amendment ...................................................... 8

RULES & STATUTES

Supreme Court Rule 37.3(a) ..................................... 1

Supreme Court Rule 37.6 .......................................... 1

29 U.S.C. § 151-169 ................................................... 1

42 U.S.C. § 1395l(t)(12) .............................................. i

42 U.S.C. § 1395l(t)(14) ............................................. 2

42 U.S.C. § 1395l(t)(14)(A)(iii)(I) ............................... i

42 U.S.C. § 1395l(t)(14)(A)(iii)(II) .............................. i

vi

TABLE OF AUTHORITIES

Page(s)

OTHER AUTHORITIES

Douglas H. Ginsburg & Steven Menashi, Our

Illiberal Administrative Law, 10 N.Y.U. J.L. &

Liberty475 (2016) ............................................7, 12

Ernesto Dal Bó, Regulatory Capture: A Review, 22

Oxford Rev. Econ. Pol’y 203 (2006) ....................14

Gary Lawson, Delegation and Original Meaning,

88 Va. L. Rev. 327 (2002) ......................................5

George J. Stigler, The Theory of Economic Regulation, 2 Bell J. Econ. & Mgmt. Sci. 3 (1971) ........14

John F. Manning, Lawmaking Made Easy, 10 Green

Bag 2d 191 (2007) .................................................6

Kent Barnett & Christopher J. Walker, Chevron in

the Circuit Courts, 116 Mich. L. Rev. 1 (2017).....8

Philip Hamburger, Chevron Bias, 84 Geo. Wash. L.

Rev. 1187 (2016) ................................................7, 8

Philip Hamburger, Law and Judicial Duty,

(2008) ...............................................................7, 14

Rebecca L. Brown, Separated Powers and Ordered

Liberty, 139 U. Pa. L. Rev. 1513 (1991). ..............4

State Necessity Considered as a Question of Law,

6 (London:1766)...................................................14

Stephen Breyer, Judicial Review of Questions of

Law and Policy, 38 Admin.L.Rev. 363 (1986) ......9

vii

TABLE OF AUTHORITIES

Page(s)

The Federalist No. 10 (James Madison) (Clinton

Rossiter ed., 1961) ...............................................14

The Federalist No. 47 (James Madison) (Clinton

Rossiter ed., 1961) .................................................4

The Federalist No. 51 (James Madison) (Clinton

Rossiter ed., 1961) .......................................... …. 3

The Federalist No. 78 (James Madison) (Clinton

Rossiter ed., 1961) ...............................................15

The Federalist No. 84 (James Madison) (Clinton

Rossiter ed., 1961) .......................................... …. 4

William N. Eskridge Jr., Interpreting Law: A Primer

on How to Read Statutes and the Constitution

(2016) .....................................................................9

1

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 this

case because its staff attorneys currently represent

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, including the D.C. Circuit, have

applied deference under Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc.3 in several cases

involving the rights of individual employees under the

NLRA.4 For that reason, whether this Court should

Under Supreme Court Rule 37.3(a), Amicus provided the parties timely notice of its intent to file this brief and the parties

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 Amicus made a monetary contribution to its preparation or submission.

1

2 E.g., Janus v. AFSCME, Council 31, 138 S. Ct. 2448 (2018);

Harris v. Quinn, 573 U.S. 616 (2014); Knox v. SEIU, Loc. 1000,

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

735 (1988).

3 467 U.S. 837 (1984).

4 29 U.S.C. §§ 151–169; see, e.g., Pirlott v. NLRB, 522 F.3d 423,

433–34 (D.C. Cir. 2008) (“The general chargeability issue is a

matter for the Board to decide in the first instance.”); UFCW,

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

2

overrule or limit the Chevron doctrine is important to

the Foundation’s mission.

INTRODUCTION AND

SUMMARY OF ARGUMENT

The Court need not decide here whether administrative agencies are entitled to judicial deference under Chevron. As petitioners forcefully argue, 42 U.S.C.

§ 1395l(t)(14)’s plain meaning unambiguously bars

HHS’s statutory construction. Thus, this Court should

reverse the D.C. Circuit’s decision. See Pet.Br. 31–46.

But if this Court determines Chevron deference grants

HHS the massive power to alter a federal statute

based on a thin reed of ambiguity—affecting billions

of dollars in statutory benefits—then the Court should

“confront whether Chevron continues to be good law.”

Id. at 46.

If the Court confronts that question, it should unceremoniously overrule Chevron for two reasons.

First, Chevron violates the Constitution’s separation

of powers requirement by delegating core legislative

and judicial power to the executive branch. It allows

executive agencies to exercise core legislative power

by rewriting laws without going through bicameralism and presentment, which, in turn, creates serious

fair notice problems. Chevron also violates the separation of powers mandate by allowing executive agencies to exercise core judicial power that the Constitution delegates to the judiciary alone. When a court defers to an executive agency’s statutory construction, it

(“Courts are required to defer to the NLRB on statutory interpretation under Chevron.”); IAM v. NLRB, 133 F.3d 1012, 1015 (7th

Cir. 1998).

3

hands the executive the judicial power to interpret the

law. That creates serious due process problems by depriving a litigant of a fair hearing in court.

Second, overruling Chevron deference is important

for petitioners and the many thousands of people and

entities federal agencies regulate. Deference to executive interpretations of law, and Chevron deference in

particular, is a ubiquitous problem in administrative

law—reaching into almost every statute in the federal

code. Federal agencies like the NLRB routinely use

Chevron deference to change the meaning of federal

statutes—eroding the rights and liberties of the regulated public. This circumvention of the rule of law

must stop.

ARGUMENT

I. Chevron deference violates the Constitution’s separation of powers requirement and

should be overruled.

The Framers constructed the Constitution to provide safeguards for people’s liberty by separating governmental powers.5 This design emerged from “centuries of political thought and experiences”6 that taught

the Framers that delegating to each separate federal

5 See The Federalist No. 51 (James Madison) (Clinton Rossiter

ed., 1961) (“In the compound republic of America, the power surrendered by the people is first divided between two distinct governments, and then the portion allotted to each subdivided

among distinct and separate departments. Hence a double security arises to the rights of the people.”).

6 Perez v. Mortg. Bankers Ass’n, 575 U.S. 92, 116 (2015) (Thomas,

J., concurring) (citation omitted).

4

branch certain limited, specified powers would protect

the republic and its citizens better than any enumeration of rights ever could.7 Alexander Hamilton recognized from the outset that the separation of powers

was the primary weapon to protect individual liberty

against a tyrannical federal government: “[T]he Constitution is itself, in every rational sense, and to every

useful purpose, A BILL OF RIGHTS.”8 Indeed, the

abandonment of the separation of powers, the Framers knew, would lead directly to the “loss of due process and individual rights.”9 Chevron deference is an

anathema to this design, undermines individual liberty, and thus this Court should abandon it.

1. When the people ratified the Constitution, they

delegated “[a]ll” legislative power to Congress—not

7 See NLRB v. Noel Canning, 573 U.S. 513, 570–71 (2014) (Scalia,

J., concurring) (“[T]he Constitution’s core, government-structuring provisions are no less critical to preserving liberty than are

the later adopted provisions of the Bill of Rights. Indeed, so convinced were the Framers that liberty of the person inheres in

structure that at first they did not consider a Bill of Rights necessary.”) (cleaned up).

8 The Federalist No. 84, at 515 (Alexander Hamilton) (Clinton

Rossiter ed.,1961).

9 Rebecca L. Brown, Separated Powers and Ordered Liberty, 139

U. Pa. L. Rev. 1513, 1538 (1991); see also The Federalist No. 47,

at 301 (James Madison) (Clinton Rossiter ed., 1961) (“No political

truth is . . . stamped with the authority of more enlightened patrons of liberty” than dividing the powers of government because

“[t]he accumulation of all powers, legislative, executive, and judiciary in the same hands . . . may justly be pronounced the very

definition of tyranny.”).

5

some. “All.”10 Ideally, Article I’s plain meaning would

prevent the legislative branch from sub-delegating its

legislative power to another branch.11 Even so, this

Court has rarely policed that line.12

Chevron is the inevitable upshot of abandoning Article I’s text. This Court created Chevron deference

based on a legal fiction. That fiction assumes Congress

implicitly delegates its power through ambiguous

statutory language (or no statutory language) so that

an administrative agency can make legislative rules.13

The effect is that a law’s meaning is never fixed but

becomes a malleable standard that the executive

branch can change on a dime.

The Chevron 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.”14 Article I requires a law to

“win the approval of two Houses of Congress—elected

See U.S. Const. art. I, § 1. (emphasis added); Whitman v. Am.

Trucking Ass’ns, 531 U.S. 457, 472 (2001) (“Article I, § 1 . . . permits no delegation of those powers.”) (citations omitted).

10

11 See Gundy v. United States, 139 S. Ct. 2116, 2133 (2019) (Gor-

such, J., dissenting); see also Gary Lawson, Delegation and Original Meaning, 88 Va. L. Rev. 327, 336–37 (2002).

12 Dep’t of Transp. v. Ass’n of Am. R.Rs., 575 U.S. 43, 84 (2015)

(Thomas, J., concurring).

13 See Chevron, 467 U.S. at 844; see also Michigan v. EPA, 135 S.

Ct. 2699, 2713 (2015) (Thomas, J., concurring) (“Statutory ambiguity … becomes an implicit delegation of rule-making authority,

and that authority is used 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.”).

14 Gundy, 139 S. Ct. at 2134 (footnote omitted).

6

at different times, by different constituencies, and for

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

his veto.”15 This gauntlet, the Framers thought, was a

“bulwark[] of liberty.”16

When the judicial branch no longer enforces this

framework, and makes lawmaking easy through congressional delegation, the regulated public is susceptible to having life, liberty, or property taken 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.”17 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.”18 Yet Chevron turns this fundamental

principle on its head, because an executive agency can

decide what an ambiguous law means after a person

has acted and haul that person into court.

2. Chevron likewise violates Article III and creates serious due process problems. Judicial review is

essential to the broader “liberal tradition, which is the

15 Id.

16 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

Ass’n of Am. R.Rs., 575 U.S. at 60–61 (Alito, J., concurring).

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

(citations omitted).

18 Id. (cleaned up).

7

dominant tradition in American constitutional law,

‘emphasiz[ing] limited government, checks and balances, and strong protection of individual rights.’”19

The Framers thus entrusted judges with judicial

power under Article III to “say what the law is.”20 This

power, in turn, came with a judicial duty to “exercise

its independent judgment in interpreting and expounding upon the laws.”21

This duty requires judges to interpret the laws before them and “to decide cases in accordance with the

law of the land, not in accordance with pressures

placed upon them through either internal or external

sources.”22 The judiciary, the Framers thought, would

thus provide a “check” against the other branches—

including administrative agencies—when they try to

expand their delegated powers.23

Yet, when it comes to administrative law, the federal judiciary has essentially abandoned its duty to

check the legislative and executive branches. Federal

courts reflexively defer to agencies under Chevron and

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

istrative Law, 10 N.Y.U.J.L. & Liberty 475, 477 (2016) (cleaned

up).

20 Marbury v. Madison, 5 U.S. 137, 177 (1803).

21 Perez, 575 U.S. at 118–19 (Thomas, J., concurring); see also P.

Hamburger, Law and Judicial Duty 316–326 (2008).

22 Perez, 575 U.S. at 120–21 (Thomas, J., concurring).

23 See id. at 124–25.

8

give one party an advantage over the other during litigation.24 This abandonment of judicial duty has real

world effects—including undermining the political legitimacy of our system of laws.25

More to the point, the deference judges give an

agency during litigation, favoring one party over another, creates serious Fifth Amendment Due Process

problems. Indeed, “[w]hat is at stake here is the due

process of law in Article III courts.”26 The Constitution

tasks judges to provide a fair and neutral process and

not favor one party. However, under Chevron, courts

have become participants “in systematic bias.”27

A recent study bears out this conclusion. In an

analysis of 1,558 agency interpretations reviewed

from 2003 to 2013, courts applied Chevron deference

77% of the time and upheld the agency interpretation

71% of the time.28 This study shows that “[d]eference

to administrative interpretation is a systematic pre-

24 See Pereira v. Sessions, 138 S. Ct. 2105, 2120–21 (2018) (Ken-

nedy, J., concurring); see also Philip Hamburger, Chevron Bias,

84 Geo. Wash. L. Rev. 1187, 1209–10 (2016).

25 See Hamburger, Chevron Bias, 84 Geo. Wash. L. Rev. at 1236

(“[I]ndependent judgment of unbiased judges is the basis of the

government’s political legitimacy . . . especially [in] those [cases]

concerning the power of government or the rights of the people,

it is essential that the people have confidence that the judges are

not biased toward government, but are exercising independent

judgment.”) (footnote omitted).

26 Id. at 1231.

27 Id.

28 Kent Barnett & Christopher J. Walker, Chevron in the Circuit

Courts, 116 Mich. L. Rev. 1 (2017).

9

commitment in favor of the interpretation or legal position of the most powerful of parties”—the federal

government.29

Judges thus fail in their duty to be the natural arbiters of the law when they apply Chevron. They are

no longer the impartial decision-maker due process requires—an essential element of individual liberty.30

3. The D.C. Circuit’s decision here provides a case

study in how Chevron deference undermines the separation of powers and the rule of law. In applying

Chevron, the panel below reflexively sanctioned

HHS’s administrative rewrite of a federal statute

based on an ambiguity that did not exist. See Pet.Br.

31–46. It did so without exhausting the traditional

tools of statutory construction. Id. at 48. And, in the

process, the panel allowed HHS to exercise a supposed

delegation from Congress that collectively cost petitioners upwards of a billion dollars in reimbursements

they were entitled to under federal law. Id. at 2.31

29 See Hamburger, Chevron Bias, 84 Geo. Wash. L. Rev. at 1231.

30 Despite this breakdown when it comes to administrative agen-

cies, this Court has repeatedly affirmed that a neutral decisionmaker is essential to a fair process: “It is axiomatic that ‘[a] fair

trial in a fair tribunal is a basic requirement of due process.’”

Caperton v. A.T. Massey Coal Co., 556 U.S. 868, 876 (2009) (quoting In re Murchison, 349 U.S. 133, 136 (1955)). And when a judge

fails to “apply the law to [a party] in the same way he applies it

to any other party,” he has failed in his duty. Republican Party

of Minn. v. White, 536 U.S. 765, 776 (2002).

31 If the Court does not want to overrule Chevron, then, as peti-

tioners argue, it should reverse the D.C. Circuit’s decision for erroneously applying Chevron to HHS’s newly found power to

change the way Medicare subsidies are calculated. Pet. Br. 46–

50. When determining whether to apply Chevron deference to

10

agency interpretations of statutes, this Court does not apply deference when an agency is regulating beyond mere “interstitial

matters” without clear congressional approval. In such cases,

non-delegation is the presumption because Congress is “more

likely to have focused upon, and answered, major questions.” Stephen Breyer, Judicial Review of Questions of Law and Policy, 38

Admin. L. Rev. 363, 370 (1986); see also, William N. Eskridge Jr.,

Interpreting Law: A Primer on How to Read Statutes and the

Constitution 288 (2016) (“[The] Supreme Court has carved out a

potentially important exception to delegation, the major questions cannon. Even if Congress has delegated an agency general

rulemaking or adjudicatory power, judges presume that Congress does not delegate its authority to settle or amend major

social and economic policy decisions.”)

The Court has applied this principle in several cases. See MCI

Telecomms. Corp. v. AT&T Co., 512 U.S. 218, 231 (1994) (withholding deference where it was “highly unlikely that Congress

would leave the determination of whether an industry will be entirely, or even substantially, rate regulated to agency discretion.”); FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120,

160 (2000) (withholding deference when the Court was “confident

that Congress could not have intended to delegate a decision of

such economic and political significance to an agency in so cryptic

a fashion”); Util. Air Regul. Grp. v. EPA, 573 U.S. 302, 324 (2014)

(“When an agency claims to discover in a long extant statute an

unheralded power to regulate a significant portion of the American economy, we typically greet its announcement with a measure of skepticism. [The Court] expect[s] Congress to speak clearly

if it wishes to assign to an agency decisions of vast economic and

political significance.”) (cleaned up).

Although there has been no set standard for when this “major questions” principle applies, the cases have provided a basic

understanding of the doctrine. Deference to an agency interpretation is inappropriate when Congress has not clearly spoken on

an issue and a regulation implicates questions of “vast economic

or political significance,” or where an agency aggrandizes its

11

If this Court determines that the D.C. Circuit correctly applied Chevron to allow this result, the Court

should use this case to overrule Chevron. The D.C.

Circuit’s holding undermines the principle that Congress makes the laws and that litigants are entitled to

a neutral magistrate to adjudicate their rights in federal court.

II. Chevron deference has serious consequences

for the regulated public that reach beyond

this case.

The D.C. Circuit’s decision is not an anomaly giving extensive and reflexive deference to administrative agencies. Indeed, Chevron is a virus spread

throughout federal law to the detriment of countless

members of the regulated public. The Court should

overrule it for that reason, too.32

For example, Chevron deference has allowed administrative agencies like the National Labor Relations Board to make federal law—sometimes retroactively—for years based on political considerations.

One of the primary rationales for Chevron deference

is that agency “experts” are better equipped than

power though new interpretations of long standing statutory provisions to bring about an enormous and transformative expansion of regulatory authority. If any case warrants the Court applying this doctrine, this case is it.

32 See City of Arlington v. FCC, 569 U.S. 290, 313 (2013) (“The

administrative state wields vast power and touches almost every

aspect of daily life. The Framers could hardly have envisioned

today’s vast and varied federal bureaucracy and the authority

administrative agencies now hold over our economic, social, and

political activities.”) (cleaned up).

12

courts to determine the evolving policy for the nation.33 But the lawmaking in which administrative

agencies like the NLRB engage is often not based on

“expertise.” Indeed, 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.

As two federal judges have highlighted, in many

cases, “the [agency’s] claim to expertise is entirely

fraudulent.”34 The agency notorious for this is the

“National Labor Relations Board, the partisan majority of which routinely displaces the previous majority’s psychological assertions about what employer

tactics do or do not coerce workers when they are deciding whether to vote for union representation.”35 Yet

that claim to expertise is often “a euphemism for policy judgments.”36 Although some agency staff might

have some, or a great deal of, technical expertise, the

heads of agencies are typically political actors. Indeed,

“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, fearing neither that the expert

33 See Chevron, 467 U.S. at 865.

34 Ginsburg &

Menashi, Our Illiberal Administrative Law, 10

N.Y.U. J.L. & Liberty at 482 (footnote omitted).

35 Id. at 482–83.

36 Id. at 483.

13

staff will not support them nor that a court will undo

their handiwork.”37

Take UC Health v. NLRB,38 in which the D.C. Circuit upheld a Regional Director’s authority to direct

and certify a union election although the NLRB itself

did not have the statutorily required quorum. Citing

Chevron’s second step, the majority 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. But instead of engaging in a statutory analysis using the traditional

tools of statutory construction, the majority deferred

to one litigant’s view of the law: “the structure of the

statute supports the [NLRB’s] interpretation just as

well as it might support UC Health’s construction.”39

Tie goes to the home team.

The dissent, however, recognized the NLRB’s statutory interpretation was “flatly” unreasonable and incompatible with the statute.40 In finding the NLRB’s

construction unreasonable, the dissent cautioned,

“[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.”41 Yet, often, that is exactly how courts treat

agency interpretations.

37 Id.

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

39 Id. at 675.

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

41 Id.

14

To be sure, granting agencies like the NLRB deference to say what the law is prevents “ossification of

large portions of our statutory law.”42 However, although “expertise” and legislative flexibility may appear appealing, those rationales often yield results

that under deliver. Besides imperiling constitutional

structure, agency discretion lends itself to temptations that threaten individual liberty and legislative

prerogative.

For example, regulatory capture poses a genuine

threat to the rule of law and undermines justifications

for heavy reliance on deference to agencies. Regulatory capture occurs when commercial, ideological, or

political interests—be it by an industry, profession,

geographic area, or political group—conscript a regulatory agency to implement a preferred policy outcome.43 Agency capture permits special interests outsized influence in the regulatory process, or to borrow

from James Madison, regulation becomes subject to

the “mischiefs of faction.”44 Though regulatory capture does not explain every incident of agency action,

United States v. Mead Corp., 533 U.S. 218, 247–48 (2001)

(Scalia, J., dissenting).

42

43 Ernesto Dal Bó, Regulatory Capture: A Review, 22 Oxford Rev.

Econ. Pol’y 203 (2006); George J. Stigler, The Theory of Economic

Regulation, 2 Bell J. Econ. & Mgmt. Sci. 3, 13–17 (1971); Richard

A. Posner, Theories of Economic Regulation, 5 Bell J. Econ. &

Mgmt. Sci. 335, passim (1974).

44 See The Federalist No. 10 (James Madison) (Clinton Rossiter

ed., 1961) (Madison explained faction as “a number of citizens,

whether amounting to a majority or a minority of the whole, who

are united and actuated by some common impulse of passion, or

15

the possibility of undue and undemocratic influence

predicted by this economic theory warns against the

deferential attitude Chevron condones.

Deferring to special interests or factions violates

the first principles of judicial neutrality Article III

adopts as part of the judicial power.45 One early observer noted the simplest definition of constitutional

government is “comprised in three words, government

by law.”46 In contrast, the exercise of arbitrary, lawless power is the “erroneous will of one man, or a few

men, in whom the executive power resides” that “is

substituted instead of law.”47

Government by law protects against arbitrary conduct benefiting the few able to leverage government

in their favor. Hamilton stressed the importance of

the judiciary in maintaining law. He explained “that

inflexible and uniform adherence to the rights of the

Constitution, and of individuals, [i]s indispensable in

the courts of justice,” i.e., “a reliance that nothing

would be consulted but the constitution and the

laws.”48 Deference to administrative agencies like the

NLRB via Chevron violates these principles and prevents the courts from serving as “an intermediate

body” charged with a duty to interpret the law as their

of interest, adversed to the rights of other citizens, or to the permanent and aggregate interests of the community.”).

45 Phillip Hamburger, Law and Judicial Duty, 316–26 (2008).

46 State Necessity Considered as a Question of Law, 6 (London:

1766).

47 Id.

48 See The Federalist No. 78 (Alexander Hamilton) (Clinton Ros-

siter ed., 1961).

16

“proper and peculiar province.”49 The regulated public

bears the cost of this to the benefit of the few.

At bottom, Chevron deference allows agencies

throughout the federal government, like the NLRB, to

change abruptly legal and policy positions on dozens

of major issues affecting the regulated public’s liberty.

Agencies 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 the Constitution

prescribes. This regime undermines a fundamental

underpinning of the rule of law, and the Constitution’s

separation of powers requires that only Congress, acting through Article I, change the law.

CONCLUSION

If this Court finds that the D.C. Circuit correctly

applied Chevron deference to allow the HHS to ignore

Congress’s clear commands and rewrite the applicable

federal statute, then the Court should reconsider

Chevron. It should revert to the first principle that

Congress makes the law, the executive enforces the

law, and the judiciary interprets the law and overrule

Chevron.

For these reasons, and those stated by petitioners,

the Court should reverse the decision below.

* * * * *

49 Id.

17

Respectfully submitted,

RAYMOND J. LAJEUNESSE, JR.

Counsel of Record

FRANK D. GARRISON

JAMES C. DEVEREAUX

BLAINE L. HUTCHISON

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

September 10, 2021