Amicus Curiae Brief — Duke Bradford, et al., Petitioners v. Department of Labor, et al.
Supreme Court briefSep 27, 2024
Ask Donna
What actually matters in this document.
Text
No. 24-232
In the Supreme Court of the United States
DUKE BRADFORD AND ARKANSAS VALLEY ADVENTURE,
LLC, D/B/A AVA RAFTING AND ZIPLINE, PETITIONERS
v.
U.S. DEPARTMENT OF LABOR, ET AL., RESPONDENTS
ON PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE TENTH CIRCUIT
BRIEF FOR TEXAS, ALABAMA, ARKANSAS,
FLORIDA, GEORGIA, IDAHO, INDIANA, IOWA,
KANSAS, LOUISIANA, MISSISSIPPI, MONTANA,
NEBRASKA, NORTH DAKOTA, OHIO, SOUTH
CAROLINA, SOUTH DAKOTA, TENNESSEE, UTAH,
AND WEST VIRGINIA AS AMICI CURIAE IN
SUPPORT OF PETITIONERS
KEN PAXTON
Attorney General of Texas
BRENT WEBSTER
First Assistant Attorney
General
OFFICE OF THE
ATTORNEY GENERAL
P.O. Box 12548 (MC 059)
Austin, Texas 78711-2548
Aaron.Nielson@oag.texas.gov
(512) 936-1700
AARON L. NIELSON
Solicitor General
Counsel of Record
LANORA C. PETTIT
Principal Deputy Solicitor
General
T ABL E OF C O NT ENT S
Page
Table of Authorities ......................................................... II
Interest of Amici Curiae .................................................... 1
Summary of Argument ...................................................... 1
Background ......................................................................... 3
I. The Procurement Act ............................................. 3
A. The Act’s Modest Origins ................................ 3
B. The D.C. Circuit’s Expansion of the Act. ....... 4
C. The 2014 Minimum Wage Mandate ................ 6
II. President Biden’s Wage Mandate ........................ 6
A. Congress’s Rejection of a Wage Mandate ..... 6
B. President Biden’s Executive Order ................ 7
C. Litigation over the Mandate............................ 8
Argument ............................................................................ 9
I. The Mandate Exceeds Statutory Authority. ....... 9
A. §101 does not support the Mandate. ............... 9
B. §121 does not support the Mandate. ............... 9
C. Structure and history defeat the Mandate.... 11
II. The Close-Nexus Test is Wrong and
Irrelevant. ............................................................. 12
A. The close-nexus test is wrong. ...................... 13
B. The Mandate fails the close-nexus test. ....... 14
III. The Mandate Flunks the Major-Questions
Doctrine. ................................................................ 16
A. The major-questions doctrine helps prevent
Executive Branch usurpation. ....................... 16
B. The Mandate is a major question.................. 17
C. The Tenth Circuit’s analysis again falters. ... 19
Conclusion ......................................................................... 23
(I)
II
T ABL E OF AU T HORI T IE S
Page(s)
Cases:
AFL-CIO v. Kahn,
618 F.2d 784 (D.C. Cir. 1979) (en banc) ... 2, 5-6, 13-15, 22
Ala. Ass’n of Realtors v. HHS,
594 U.S. 758 (2021) (per curiam) ................................. 16
Allegheny Defense Project v. FERC,
964 F.3d 1 (D.C. Cir. 2020) (en banc) .....................13-14
Am. Trucking Ass’ns v. United States,
344 U.S. 298 (1953) ........................................................ 10
Biden v. Nebraska,
143 S.Ct. 2355 (2023) ............................................... 16, 21
BP PLC v. Mayor & City Council of Baltimore,
141 S.Ct. 1532 (2021) ..................................................... 14
Chrysler Corp. v. Brown,
441 U.S. 281 (1979) .......................................................... 5
Collins v. Yellen,
594 U.S. 220 (2021) ........................................................ 21
Commonwealth v. Biden,
57 F.4th 545 (6th Cir. 2023) .................. 4, 6, 9-12, 14, 18
Contractors Ass’n of E. Pa. v. Sec’y of Lab.,
442 F.2d 159 (3d Cir. 1971) ........................................... 22
Dep’t of Agric. Rural Dev. Rural Hous. Serv. v. Kirtz,
601 U.S. 42 (2024) .......................................................... 13
Epic Sys. Corp. v. Lewis,
584 U.S. 497 (2018) ........................................................ 13
FDA v. Brown & Williamson Tobacco Corp.,
529 U.S. 120 (2000) ........................................................ 11
Food Mktg. Inst. v. Argus Leader Media,
588 U.S. 427 (2019) ....................................................... 2-3
III
Cases (ctd.):
Georgia v. President of the United States,
46 F.4th 1283 (11th Cir. 2022) ................. 2-3, 5-6, 12, 14
Gulf Fishermens Ass’n v. NMFS,
968 F.3d 454 (5th Cir. 2020) ......................................... 10
Gundy v. United States,
139 S.Ct. 2116 (2019) ................................................. 9, 16
Heating, Air Conditioning & Refrigeration Distribs. Int’l v. EPA, 71 F.4th 59 (D.C. Cir. 2023) ....... 17
Indus. Union Dep’t, AFL-CIO v. Am. Petrol. Inst.,
448 U.S. 607 (1980) ........................................................ 19
Kentucky v. Biden,
23 F.4th 585 (6th Cir. 2022) ...................... 2, 9, 11, 13, 18
King v. Burwell,
576 U.S. 473 (2015) ........................................................ 22
Kisor v. Wilkie,
588 U.S. 558 (2019) ........................................................ 13
Liberty Mut. Ins. Co. v. Friedman,
639 F.2d 164 (4th Cir. 1981) ......................................... 14
Loper Bright Enterprises v. Raimondo,
144 S.Ct. 2244 (2024) ................................................. 3, 22
Louisiana v. Biden,
55 F.4th 1017 (5th Cir. 2022) ................ 2, 6, 9, 12, 14, 22
Marx v. Gen. Revenue Corp.,
568 U.S. 371 (2013) ........................................................ 12
Mayes v. Biden,
67 F.4th 921 (9th Cir. 2023), vacated as
moot, 89 F.4th 1186 (9th Cir. 2023) ............................. 14
McCulloch v. Maryland,
17 U.S. 316 (1819) .......................................................... 10
Medellin v. Texas,
552 U.S. 491 (2008) ........................................................ 22
IV
Cases (ctd.):
Merck & Co., Inc. v. HHS,
385 F.Supp.3d 81 (D.D.C. 2019), aff’d,
962 F.3d 531 (D.C. Cir. 2020) ....................................... 10
Mistretta v. United States,
488 U.S. 361 (1989) ........................................................ 19
RadLAX Gateway Hotel, LLC v. Amalgamated Bank,
566 U.S. 639 (2012) ........................................................ 12
Sturgeon v. Frost,
587 U.S. 28 (2019) ...................................................... 9, 13
Texas v. Biden,
694 F.Supp.3d 851 (S.D. Tex. 2023) .......................... 1, 8
Van Buren v. United States,
141 S.Ct. 1648 (2021) ....................................................... 9
West Virginia v. EPA,
597 U.S. 697 (2022) .........................................2, 16-19, 21
Whitman v. Am. Trucking Ass’ns,
531 U.S. 457 (2001) ........................................................ 17
Statutes:
29 U.S.C.:
§201 .................................................................................... 4
§206(a)(1)(C) ..................................................................... 4
40 U.S.C.:
§101 ........................................................ 4, 9, 10-11, 13, 21
§121 .................................................................... 4, 9, 10, 21
§3142 .................................................................................. 4
41 U.S.C.:
§3301 ................................................................................ 11
§6502 .................................................................................. 4
§6703(1) ............................................................................. 4
V
Other Authorities:
Increasing the Minimum Wage for Federal Contractors,
86 Fed. Reg. 67,126 (Nov. 24, 2021) .................. 1, 15, 17
Aaron Blake, Kyrsten Sinema’s Combustible Thumb,
WASH. POST (Mar. 6, 2021) ............................................. 7
Antonin Scalia & Bryan A. Garner, Reading Law:
The Interpretation of Legal Texts 217 (2012) ............. 9
Cass R. Sunstein, There Are Two “Major Questions”
Doctrines, 73 ADMIN. L. REV. 475 (2021) ................... 22
CBO, The Budgetary Effects of the Raise
the Wage Act of 2021 (Feb. 2021) .................................. 7
CBO, The Effects on Employment &
Family Income of Increasing the
Federal Minimum Wage (July 2019) ........................... 6
Dep’t of Labor, History of Executive Order 11246 .......... 8
Emily Cochrane, Top Senate Official Disqualifies
Minimum Wage From Stimulus Plan, N.Y. TIMES
(Feb. 25, 2021, updated September 10, 2021) .............. 7
Eugene Scalia & Rachel Mondl, Obama’s
Minimum-Wage Increase is on Shaky Legal
Ground, WASH. POST (Feb. 20, 2014) ..................... 2, 21
Exec. Order No. 13,658, 79 Fed. Reg. 9,851
(Feb. 12, 2014) .................................................................. 6
Exec. Order No. 13,838, 83 Fed. Reg. 25,341
(May 25, 2018) .................................................................. 6
Exec. Order No. 14,026, 86 Fed. Reg. 22,835
(April 27, 2021) .............................................................. 7-8
Gary S. Becker, The Economics of
Discrimination (1957) .................................................... 12
James F. Nagle, A History of Government
Contracting 411 (2d. ed. 1999) ....................................... 3
VI
Other Authorities (ctd.):
Minimum Wage for Federal Contracts Covered by
Executive Order 14026, Notice of Rate Change in
Effect as of January 1, 2024, 88 Fed. Reg. 66,906
(Sept. 28, 2023) ................................................................. 8
System, Webster’s New International
Dictionary (2d ed. 1959) ............................................... 11
I NT EREST OF AM IC I CU RIAE
States are often subject to the Biden Administration’s unlawful Wage Mandate, see Increasing the Minimum Wage for Federal Contractors, 86 Fed. Reg. 67,126
(Nov. 24, 2021) (“Wage Mandate” or “the Mandate”), because they contract with the federal government. Their
citizens also bear the brunt of federal overreach, especially where, as here, such overreach stands to cause significant job losses while exacerbating inflation. To prevent these harms, Texas, Louisiana, and Mississippi,
have secured an injunction against enforcement of the
Mandate against them. See Texas v. Biden, 694
F.Supp.3d 851, 874 (S.D. Tex. 2023), appeal pending No.
23-40671 (5th Cir.). Together with their sister States,
they agree this case warrants certiorari. 1
S UMMARY O F A RGUME NT
The petition raises important questions about the
Federal Property and Administrative Services Act
(“Procurement Act” or “the Act”) and the Wage Mandate. The Mandate contradicts plain statutory language.
But, at minimum, the Act does not clearly authorize the
Mandate because Congress did not clearly authorize this
major policy. In holding otherwise, the Tenth Circuit
erred—and aggravated a circuit split. The Court should
grant certiorari and reverse.
I. Enacted in 1949, the Procurement Act serves an
important but limited purpose: streamlining federal procurement. It does not empower the President to set a
minimum wage. And for most of the Act’s history, no one
No counsel for any party authored this brief, in whole or in
part. No person or entity other than amici contributed monetarily
to its preparation or submission. Counsel of record for all parties
timely received notice of amici’s intention to file this brief.
1
(1)
2
disagreed. Indeed, the notion that a president could use
the Act to set minimum wages would have been—and, in
fact, was—lampooned. Yet in 2014, President Obama imposed a nationwide minimum-wage mandate on federal
contractors and subcontractors. That 2014 executive order was controversial, and commentators warned that he
just crossed a significant line. See, e.g., Eugene Scalia &
Rachel Mondl, Obama’s Minimum-Wage Increase is on
Shaky Legal Ground, WASH. POST (Feb. 20, 2014),
https://tinyurl.com/WageWashPo.
President Biden, however, doubled down. On the
campaign trail, he promised a $15/hour minimum wage.
After Congress refused to enact one, he issued an executive order purporting to set wages for millions of workers—again misusing “pen-and-phone regulations as substitutes for laws passed by the people’s representatives.”
West Virginia v. EPA, 597 U.S. 697, 753 (2022) (Gorsuch,
J., concurring). Nor is this the only time that he has misused the Procurement Act. He also claimed it allowed
him to unilaterally impose a vaccine mandate. Numerous
courts properly rejected such overreach. See, e.g., Louisiana v. Biden, 55 F.4th 1017 (5th Cir. 2022); Georgia v.
President of the United States, 46 F.4th 1283 (11th Cir.
2022); Kentucky v. Biden, 23 F.4th 585 (6th Cir. 2022).
This Court should do the same here because the Mandate—and the theory on which it rests—contradicts
basic rules of interpretation.
II. Because the federal government has no good answer for what the Procurement Act says, its defense of
the Mandate rests largely on the D.C. Circuit’s “close
nexus” test. AFL-CIO v. Kahn, 618 F.2d 784, 792 (D.C.
Cir. 1979) (en banc); see also App.21a. Yet that test is another “relic from a bygone era of statutory construction.”
Food Mktg. Inst. v. Argus Leader Media, 588 U.S. 427,
3
437 (2019). Courts today focus on what Congress wrote
and do not put their thumbs on the scale in favor of agencies. See, e.g., Loper Bright Enterprises v. Raimondo,
144 S.Ct. 2244 (2024). Regardless, the Mandate flunks
the close-nexus test.
III. The unlawfulness of the Mandate is underscored
by the major-questions doctrine. Imposing a wage mandate on hundreds of thousands of companies who employee millions of workers is an issue of vast economic
and political significance. This is even clearer because
the federal government’s reading of the Act has no limiting principle and raises significant nondelegation concerns. The Tenth Circuit failed to properly apply the major-questions doctrine, and it produced its own majorquestions test that departs from this Court’s precedent.
Especially combined with its erroneous reading of the
Procurement Act, the Tenth Circuit’s ruling regarding
the major-questions doctrine warrants review.
BA CK G ROU ND
I. The Procurement Act
A. The Act’s Modest Origins
During World War II, federal procurement was as a
“free-for-all” with “many kinks to work out.” James F.
Nagle, A History of Government Contracting 411 (2d. ed.
1999). The Hoover Commission thus sought to improve
the Executive Branch’s efficiency in procurement,
among other areas. Georgia, 46 F.4th at 1293. 2 “In line
with the Hoover Commission’s recommendations, the
Procurement Act consolidated several procurement-related agencies into the newly created General Services
Administration.” Id. at 1293.
All citations to Georgia refer to Judge Grant’s opinion, which
is designated “Opinion of the Court.” 46 F.4th at 1287.
2
4
Two sections of the Act are particularly relevant
here. First, §101—the Act’s statement of purpose—says
“[t]he purpose of this subtitle is to provide the Federal
Government with an economical and efficient system,”
for, inter alia, “[p]rocuring and supplying property and
nonpersonal services.” 40 U.S.C. §101. Second, §121—
one of the Act’s grants of implementing authority—says
the “President may prescribe policies and directives that
the President considers necessary to carry out this subtitle.” 40 U.S.C. §121(a). Such policies or directives “must
be consistent with this subtitle.” Id.
Neither of these provisions speaks to minimum
wages. That is because other laws govern that issue. Enacted in 1938, for example, the Fair Labor Standards Act
requires nearly all U.S. employers to pay a minimum
wage and overtime. 29 U.S.C. §201 et seq. The current
minimum wage is $7.25/hour. Id. §206(a)(1)(C). Congress
has also prescribed wages for some government contractors. The Davis–Bacon Act requires at least the locally
prevailing wages on construction contracts. 40 U.S.C.
§§3142(a)-(c). The McNamara–O’Hara Service Contract
Act requires at least locally prevailing wages or collective-bargaining agreement wages for services. 41 U.S.C.
§6703(1). And the Walsh–Healey Public Contracts Act
also requires local prevailing wages for materials, supplies, articles, or equipment. 41 U.S.C. §6502.
B. The D.C. Circuit’s Expansion of the Act.
Since 1949, presidents have generally read the Act
narrowly. For example, “President Eisenhower prescribed rules for the establishment and maintenance of
interagency motor-vehicle pools, and directed agencies
to obtain new flags upon Hawaii’s admission as a State.”
Commonwealth v. Biden, 57 F.4th 545, 549 (6th Cir.
2023) (citations omitted). And when this Court first
5
addressed the Act, it “suggested that the President’s authority should be based on a ‘specific reference’ within
the Act,” and viewed “the Act as a limited grant of authority, empowering the President to carry out the Act’s
specific provisions—but not more.” Georgia, 46 F.4th at
1294-95 (quoting Chrysler Corp. v. Brown, 441 U.S. 281,
304 n.34 (1979)).
Presidents, however, have not always been able to resist the temptation to abuse the federal government’s
awesome purchasing clout—especially after the D.C.
Circuit’s decision in Kahn. There, that court addressed
whether presidents can prevent contractors from raising
wages and prices as an anti-inflation tool. Id. at 1299. The
Kahn majority upheld such authority by announcing a
“close nexus” test that asks not whether a specific provision of the Procurement Act authorizes a president’s directive, but instead whether a directive has a “close
nexus” with the Act’s “values of ‘economy’ and ‘efficiency.’” 618 F.2d at 792.
A dissent in Kahn mocked that flabby test and suggested—as part of a parade of horribles—that it would
allow presidents to “seize control of the oil companies” or
require “government contractors [to] pay a certain minimum wage.” Id. at 806 (MacKinnon, J., dissenting). The
majority, however, disagreed that its test “write[s] a
blank check for the President,” and emphasized that permissible uses of the Act must at least “likely have the direct and immediate effect of holding down the Government’s procurement costs.” Id. at 792-93. The majority
also suggested presidents cannot use the Act for policies
Congress refused to “enact[].” Id. at 793 n.50.
Although the D.C. Circuit continues to apply Kahn,
other courts disagree. In rejecting President Biden’s
vaccine mandate, the Fifth and Eleventh Circuits both
6
cast significant doubt on the close-nexus test. See, e.g.,
Louisiana, 55 F.4th at 1026 n.25 (citing Georgia, 46
F.4th at 1297-1300). And the Sixth Circuit now outright
rejects Kahn as contrary to the Act’s “textual delegation
of authority.” Commonwealth, 57 F.4th at 553.
C. The 2014 Minimum Wage Mandate
In Kahn, the notion that the Act could be used to
mandate a minimum wage was ridiculed by the dissent
and nowhere defended by the majority, and for good reason. After all, nothing in the Act addresses minimum
wages; that is the province of different statutes. By contrast, the Procurement Act is a poor fit for such policies,
which do not “have the direct and immediate effect of
holding down the Government’s procurement costs”—a
key requirement of even the close-nexus test. 618 F.2d at
792 (emphasis added).
Nonetheless, in 2014, President Obama directed the
Department of Labor to impose a minimum wage on federal contractors, see Exec. Order No. 13,658, 79 Fed.
Reg. 9,851 (Feb. 12, 2014)—right after his party lost control of Congress. In 2018, President Trump cut back on
that order by exempting recreational services. See Exec.
Order No. 13,838, 83 Fed. Reg. 25,341 (May 25, 2018).
II. President Biden’s Wage Mandate
A. Congress’s Rejection of a Wage Mandate
In 2019, the Congressional Budget Office concluded
that raising the minimum wage to $15/hour would increase unemployment and causes prices to rise. See
CBO, The Effects on Employment & Family Income of
Increasing the Federal Minimum Wage (July 2019),
https://www.cbo.gov/system/files/2019-07/CBO-55410MinimumWage2019.pdf. During the 2020 campaign,
however, then-candidate Biden pledged to raise the
7
minimum wage to $15/hour. The New York Times described this policy as “a crucial plank of Mr. Biden’s
plan.” Emily Cochrane, Top Senate Official Disqualifies
Minimum Wage From Stimulus Plan, N.Y. TIMES
(Feb. 25, 2021, updated September 10, 2021), https://tinyurl.com/nhf47bvv.
At first, President Biden turned to Congress. On January 26, 2021, members of Congress reintroduced a bill
to increase the minimum wage. In February 2021, however, the CBO threw cold water on that plan. See CBO,
The Budgetary Effects of the Raise the Wage Act of 2021
(Feb. 2021), https://www.cbo.gov/system/files/202102/56975-Minimum-Wage.pdf. According to the CBO,
“employment would be reduced by 1.4 million workers,”
which number “could be much higher.” Id. at 8-9. Unwilling to impose such a burden on the American people, a
bipartisan group of Senators in March 2021 killed that
legislation, prompting extreme displeasure among the
President’s “most passionate activists.” Aaron Blake,
Kyrsten Sinema’s Combustible Thumb, WASH. POST
(Mar. 6, 2021), https://tinyurl.com/SinemaWages.
B.
President Biden’s Executive Order
After that defeat, President Biden shifted course. In
April 2021, he issued Executive Order 14,026, which ordered agencies to ensure that their contracts and “contract-like instruments” provide that contractors and any
covered subcontractors pay a $15/hour minimum wage
(with inflation adjustments) to workers “employed in the
performance of the contract or any covered subcontract.” Exec. Order No. 14,026, 86 Fed. Reg. 22,835, 22835-36 (April 27, 2021).
The Department of Labor issued a final rule to that
effect. It initially calculated that the Mandate would
cause $18 billion in transfer payments over ten years,
8
serve as a wage floor for up to 1.8 million workers, and
affect more than 500,000 private firms. Id. at 67,204. The
Department has since admitted, however, that those figures undersell the Mandate’s true effects, see U.S. Reply
Br. 20-21, Texas v. Biden, No. 23-40671 (5th Cir. Apr. 26,
2024), which is hardly surprising given that “workers
employed by federal contractors” comprise “approximately one–fifth of the entire U.S. labor force,” Dep’t of
Labor,
History
of
Executive
Order
11246,
https://perma.cc/6ZXJ-WGR8. And as the petition explains, the Mandate captures small businesses that are
not even federal contractors. Due to inflation, the Mandate’s minimum wage currently is $17.20/hour. See Minimum Wage for Federal Contracts Covered by Executive
Order 14026, Notice of Rate Change in Effect as of January 1, 2024, 88 Fed. Reg. 66,906 (Sept. 28, 2023).
C. Litigation over the Mandate
The Mandate has prompted litigation in three circuits. The Tenth Circuit initially enjoined it pending appeal with respect to seasonal recreational services because the challengers’ “right to relief [was] clear and unequivocal.” Order at 2, Bradford v. U.S. Dep’t of Labor,
No. 22-1023 (10th Cir. Feb. 17, 2022) (quotation omitted).
It later reversed course and upheld the mandate over the
dissent of Judge Eid, prompting this petition.
Meanwhile, the Southern District of Texas has enjoined enforcement of the Wage Mandate with respect to
Texas, Louisiana, and Mississippi. Texas, 694 F.Supp.3d
at 874. The federal government has appealed that decision and the Fifth Circuit held oral argument last month.
The Ninth Circuit is also considering a separate challenge after a district court refused to enjoin the Mandate. Nebraska v. Walsh, No. 23-15179 (9th Cir.) (oral argument held Feb. 6, 2024).
9
A RGUMENT
I. The Mandate Exceeds Statutory Authority.
The Tenth Circuit upheld the Wage Mandate using a
deferential standard. Statutory interpretation, however,
must begin where it “always” does: “with the text of the
statute.” Van Buren v. United States, 141 S.Ct. 1648,
1654 (2021). The Tenth Circuit focused on two provisions
of the Act—§101 and §121. Neither supports the Mandate.
A. §101 does not support the Mandate.
No statute authorizes the Mandate. Instead, the
Tenth Circuit, echoing the federal government, relied on
the Act’s statement of purpose in §101. 40 U.S.C. §101;
see also, e.g., App.22a. But just five years ago, this Court
unanimously held that “statements of purpose … cannot
override a statute’s operative language.” Sturgeon v.
Frost, 587 U.S. 28, 57 (2019) (cleaned up); see also Commonwealth, 57 F.4th at 551.
Sturgeon thus confirms the important rule that purpose statements are “not part of the congressionally legislated or privately created set of rights and duties.” Antonin Scalia & Bryan A. Garner, Reading Law: The Interpretation of Legal Texts 217 (2012). This is not to say
that purpose statements are irrelevant, for they can be
“an appropriate guide to the meaning of the statute’s operative provisions.” Louisiana, 55 F.4th at 1023 n.17
(quoting Gundy v. United States, 139 S.Ct. 2116, 2127
(2019) (plurality opinion)) (cleaned up). But they are not
operative provisions, much less “latent well[s] of authority.” Kentucky, 23 F.4th at 606.
B. §121 also does not support the Mandate.
Equally unavailing is §121, which says the “President
may prescribe policies and directives that the President
10
considers necessary to carry out this subtitle,” but only
if “consistent with this subtitle.” 40 U.S.C. §121(a); see
also, e.g., App.30a. Such a general grant of authority
must be “geared to and bounded by the limits of the regulatory system of the Act which it supplements.” Am.
Trucking Ass’ns v. United States, 344 U.S. 298, 313
(1953). Because a “grant of authority to promulgate ‘necessary’ regulations cannot expand the scope of the provisions the agency is tasked with ‘carrying out,’” courts do
not “read such provisions to expand the agency’s power
beyond the statute’s terms.” Gulf Fishermens Ass’n v.
NFMS, 968 F.3d 454, 465 (5th Cir. 2020) (cleaned up).
The notion that a gap-filling power requires a
connection to a specific operative provision is deeply
rooted in American law. See, e.g., McCulloch v.
Maryland, 17 U.S. 316, 423 (1819). As relevant here,
“general rulemaking authority plus statutory silence
does not … equal congressional authorization.” Merck &
Co., Inc. v. HHS, 385 F.Supp.3d 81, 92 (D.D.C. 2019),
aff’d, 962 F.3d 531 (D.C. Cir. 2020). Here, “[t]hrough
dozens of operative provisions, Congress chose the
means by which to pursue the ends declared in § 101,”
and it is not for courts “to construe § 121(a) as
authorizing the President to ignore the limits inherent in
the [Procurement] Act’s operative provisions in favor of
an ‘anything-goes’ pursuit of a broad statutory purpose.”
Commonwealth, 57 F.4th at 552.
This is basic statutory interpretation that applies
across the U.S. Code. Indeed, when the Sixth Circuit
asked counsel for the federal government “to provide
examples (outside of the [Procurement] Act) of a court
countenancing an agency’s attempt to carry out a
purpose provision, in addition to its operative provisions,
the government could not provide a single one.” Id.
11
C. Structure
Mandate.
and
history
also
defeat
the
Statutory structure and history—both within the Act
and across provisions dealing with government contracting—reinforce what the Procurement Act says.
1. “It is a ‘fundamental canon of statutory construction that the words of a statute must be read in their context and with a view to their place in the overall statutory
scheme.’” FDA v. Brown & Williamson Tobacco Corp.,
529 U.S. 120, 133 (2000) (citation omitted). “A court must
therefore interpret the statute as a symmetrical and coherent regulatory scheme, and fit, if possible, all parts
into a harmonious whole.” Id. (cleaned up).
The Procurement Act concerns an “economical and
efficient system” to “procure[]” property and services. 40
U.S.C. §101 (emphasis added). “‘System,’ in context, refers to ‘[a] formal scheme or method of governing organization, arrangement.’” Kentucky, 23 F.4th at 604 (quoting System, Webster’s New International Dictionary
(2d ed. 1959) (alteration in original)). The Act thus is directed at the economy and efficiency of the government,
not contractors. Id. Because the Act focuses on improving the federal government’s efficiency, it is not a license
to direct how contractors manage their own affairs. Id.;
Commonwealth, 57 F.4th at 553. To the contrary, the Act
emphasizes “full and open competition.” 41 U.S.C. §3301.
Because the object of such a system is lower prices, inflating prices inherently frustrates Congress’s statutory
scheme.
Examination of government contracting more
broadly confirms that the Act was not designed to address a minimum wage. “It is a commonplace of statutory
construction that the specific governs the general. That
is particularly true where … Congress has enacted a
12
comprehensive scheme and has deliberately targeted
specific problems with specific solutions.” RadLAX
Gateway Hotel, LLC v. Amalgamated Bank, 566 U.S.
639, 645 (2012) (cleaned up). Here, Congress has enacted
minimum-wage laws—just not in the Procurement Act.
Yet “when Congress wants to further a particular economic or social policy among federal contractors through
the procurement process—beyond full and open competition—it enacts explicit legislation.” Georgia, 46 F.4th
at 1297. “Congress knows how to” assure that federal
contractors and subcontractors are paid a minimum
wage but chose not to do so here. Marx v. Gen. Revenue
Corp., 568 U.S. 371, 384 (2013).
2. Decades of practice also confirm that the Act is
not a font of broad presidential power to set wages.
“Presidents’ earliest invocations of the Property Act
matched its relatively modest scope,” Commonwealth,
57 F.4th at 549, and recognized that they had to connect
directives regarding anti-discrimination initiatives with
cost reduction—“a significant limitation on the President’s authority,” Louisiana, 55 F.4th at 1024; see also
Gary S. Becker, The Economics of Discrimination 8
(1957) (employment discrimination raises costs by limiting supply of available labor). Here, the Mandate goes
much further, asserting a theory that making federal
procurement more expensive will somehow lower the
federal government’s costs. Such an upside-down view of
the statute is a modern invention.
II. The Close-Nexus Test is Wrong and Irrelevant.
As the petition explains, the Tenth Circuit barely engaged with the Procurement Act’s text, structure, or historical use—despite contrary holdings from the Fifth,
Sixth, and Eleventh Circuits. Instead, the Tenth Circuit
followed the D.C. Circuit’s close-nexus test. That was
13
error in two respects. Not only is the close-nexus test
wrong, but the Mandate fails even that test.
A. The close-nexus test is wrong.
The D.C. Circuit upheld anti-inflationary cost
measures in Kahn because it believed there was a “sufficiently close nexus” between those measures and the federal government’s “‘economy’ and ‘efficiency.’” 618 F.2d
at 792. The close-nexus test, however, rests on interpretative tools that courts today reject. For example, it
treats the Act’s purpose as a “well of authority.” Kentucky, 23 F.4th at 606. Nothing in the Act, however, authorizes decision-making based on §101 at all. Kahn cannot be reconciled with this Court’s decision in Sturgeon.
The D.C. Circuit also emphasized “legislative history.” Kahn, 618 F.2d at 792. Yet not only did it fail to
identify history that would support a close-nexus test,
see e.g., id. at 788 (emphasizing “the leadership role of
the President,” which is relevant at most to the holder
rather than scope of authority), but courts no longer use
legislative history this way, see e.g., Dep’t of Agric. Rural
Dev. Rural Hous. Serv. v. Kirtz, 601 U.S. 42, 58 (2024).
After all, “legislative history is not the law.” Epic Sys.
Corp. v. Lewis, 584 U.S. 497, 523 (2018).
The close-nexus test is also manipulable. A recurring
feature of administrative law is that deference doctrines
metastasize over time. For example, Seminole Rock deference began modestly, but agencies eventually abused
it—prompting the Court to step in, see Kisor v. Wilkie,
588 U.S. 558 (2019). A similar if-you-give-a-mouse-acookie dynamic helped doom Chevron. And the D.C. Circuit has experienced buyer’s remorse regarding one of
its own agency-empowering tests. See Allegheny Defense
Project v. FERC, 964 F.3d 1 (D.C. Cir. 2020) (en banc).
It concluded that stare decisis was no obstacle because
14
“intervening … precedent” from this Court “emphatically establishes that courts must take statutory language at its word.” Id. at 18. Experience teaches all too
well that “an agency given an inch might be tempted to
take a mile.” Id. at 21 (Griffith, J., concurring).
The federal government insists that because Congress recodified the Act in 2002, Congress incorporated
Kahn’s close-nexus test. Not so. The First, Second,
Third, Seventh, and Eighth Circuits have never cited
Kahn, and the Fourth, Fifth, and Eleventh Circuits have
declined to adopt it. See Liberty Mut. Ins. Co. v. Friedman, 639 F.2d 164, 170 (4th Cir. 1981); Louisiana, 55
F.4th at 1026 n.25; Georgia, 46 F.4th at 1300. The Sixth
Circuit, moreover, flatly rejects it. See Commonwealth,
57 F.4th at 553. True, the Ninth Circuit adopted it, but in
a case that was vacated, Mayes v. Biden, 67 F.4th 921,
940 (9th Cir. 2023), vacated as moot, 89 F.4th 1186 (9th
Cir. 2023), and the Mandate’s legality is now pending before the Ninth Circuit. Suffice it to say, it is “most unlikely … that a smattering of lower court opinions could
ever represent the sort of ‘judicial consensus so broad
and unquestioned that we must presume Congress knew
of and endorsed it,’” especially “where, as here, ‘the text
and structure of the statute are to the contrary.’” BP
PLC v. Mayor & City Council of Baltimore, 141 S.Ct.
1532, 1541 (2021) (citation omitted).
B. The Mandate fails the close-nexus test.
Even if the close-nexus test were the law, the Mandate would fail. As the Fourth Circuit has explained,
when the connection between cost savings and a presidential directive becomes “too attenuated,” the directive
exceeds statutory authority. Friedman, 639 F.2d at 171.
Even Kahn emphasized the “likely savings to the Government” and “the direct and immediate effect of holding
15
down the Government’s procurement costs.” 618 F.2d at
792-93. Kahn also stressed that its test does “not write a
blank check for the President” and suggested it would
not uphold a directive that conflicted with a policy that
Congress refused to enact. Id. at 793 & n.50.
Whatever one may think about the Mandate as a policy matter, it rests on a causation chain that does not
have “the direct and immediate effect of holding down
the Government’s procurement costs.” Id. at 792 (emphasis added). In fact, the Department admits “Government expenditures may rise.” 86 Fed. Reg. at 67,206. To
offset those increased costs, the Department’s reasoning
seems to be something like the following: (i) higher
wages will improve employee morale; (ii) improved morale will lead to longer-term employment; (iii) longerterm employment will lead to more talented workers;
(iv) more talented workers will do higher quality work;
and (v) that higher quality work will so offset any price
increases that overall the government will get a better
deal than just purchasing higher-quality goods elsewhere to begin with. See, e.g., id. at 67,212-15.
There are a host of problems with the federal government’s counterintuitive (but politically convenient) analysis, but it is enough here to observe that is not a “direct
and immediate” causation chain, Kahn, 618 F.2d at 792.
And the Tenth Circuit’s contrary ruling did nothing to fill
the gap. It did not require the federal government to actually show a “direct and immediate” connection between
the Mandate and lower federal procurement costs. But
see id. Nor did it put weight on the fact that Congress
refused to enact a $15/hour minimum wage just weeks
before the President created one by executive fiat. But
see id. at 793 n.50. The Tenth Circuit thus turned the
16
close-nexus test into the very “blank check” the D.C. Circuit rejects.
III. The Mandate
Doctrine.
Flunks
the
Major-Questions
Although the Court need not reach the issue to
reverse, “this is a major questions case.” West Virginia,
597 U.S. at 724. Like the vaccine mandate that three
circuits rejected, the Mandate is a breathtaking exercise
of authority that implicates nationally pressing issues
without clear authorization from Congress.
A. The major-questions doctrine helps prevent
Executive Branch usurpation.
The major-questions doctrine serves two purposes.
First, it “is a tool for discerning—not departing from—
the text’s most natural interpretation.” Biden v.
Nebraska, 143 S.Ct. 2355, 2376 (2023) (Barrett, J.,
concurring). It thus starts from the premise that
Congress “speak[s] clearly when authorizing an agency
to exercise powers of vast economic and political
significance.” Ala. Ass’n of Realtors v. HHS, 594 U.S.
758, 764 (2021) (per curiam) (cleaned up).
Second, it also helps effectuate the nondelegation
doctrine. “Much as constitutional rules about retroactive
legislation and sovereign immunity have their corollary
clear-statement rules, Article I’s Vesting Clause has its
own: the major questions doctrine.” West Virginia, 597
U.S. at 740 (Gorsuch, J., concurring). A delegation “is
permissible if Congress has made clear to the delegee
‘the general policy’ he must pursue and the ‘boundaries
of [his] authority.’” Gundy, 139 S.Ct. at 2129 (citation
omitted). Further, “the degree of agency discretion that
is acceptable varies according to the scope of the power
congressionally conferred,” and Congress “must provide
17
substantial guidance” with respect to “standards that
affect the entire national economy.” Whitman v. Am.
Trucking Ass’ns, 531 U.S. 457, 475 (2001).
By requiring a clear statement from Congress before
the Executive Branch makes decisions of vast political
and economic significance, the major-questions doctrine
prevents usurpation of legislative power and safeguards
the liberty-protecting benefits of bicameralism and
presentment.
B. The Mandate is a major question.
The Wage Mandate is a major question by any measure. For one, imposing a new wage floor for hundreds of
thousands of employers and millions of employees is economically significant. The Department estimated that
the Mandate would cost $18 billion and act as a wage
floor for over half a million employers, 86 Fed.Reg.
67,194-95, and now seems to admit that even those astronomical numbers are undercounts, supra p. 8. Nor, critically, has the federal government offered any reason
why, if a $15/hour minimum wage is permissible, a
$150/hour minimum wage would not be. 3
The Mandate also has vast political significance. The
nation routinely engages in contentious debates over
minimum wages. Indeed, this issue was a focal point of
the 2020 election. Congress too repeatedly has considered, but rejected, such legislation, thus demonstrating
the “importance of the issue.” West Virginia, 597 U.S. at
732; see also id. at 743 n.4 (Gorsuch, J., concurring).
Even if the major-questions doctrine did not apply, the Department’s claim to such expansive power would still fail under the
elephants-in-mouseholes doctrine, which is not limited to major
questions. See, e.g., Heating, Air Conditioning & Refrigeration
Distribs. Int’l v. EPA, 71 F.4th 59, 67-68 (D.C. Cir. 2023).
3
18
The Mandate therefore requires clear congressional
authorization. Yet the Act says nothing about a minimum-wage mandate, and “the age and focus of the statute” does not align with “the problem the” President
“seeks to address.” Id. at 747 (Gorsuch, J., concurring).
The Procurement Act was passed in 1949 to make procurement more efficient; it was not designed for social
policies that make procurement more expensive.
“[S]kepticism may be merited when there is a mismatch
between … [the] challenged action” and the “congressionally assigned mission and expertise.” Id. at 748.
The federal government’s contrary arguments
depart from “common sense.” Id. at 722 (maj. op.)
(quotation omitted). In its view, the Act only has two
conditions: (i) a President must consider a directive
appropriate to fulfill the Act’s purposes; and (ii) the
directive must not be inconsistent with any substantive
provisions of the Act. See U.S. Br. 22, 24, Texas v. Biden,
No. 23-40671 (5th Cir. Jan. 22, 2024). Yet under such a
test, the White House could unilaterally:
• Implement a vaccine mandate, but see, e.g., Commonwealth, 57 F.4th at 555;
• Require “wear[ing] masks in perpetuity,” but see
Kentucky, 23 F.4th at 608;
• Mandate contractors to invest in—or divest
from—fossil-fuel interests;
• Mandate government contractors to only use—
or never use—electric vehicles;
• Mandate contractors to relocate to—or away
from—pro-union States; or
• Impose virtually any condition on a permittee accessing federal lands.
Congress did not empower presidents to impose
national social policies in a statute designed to
19
streamline procurement. And if Congress did do such a
thing, it would violate the nondelegation doctrine. “A
construction of the statute that avoids this kind of openended grant should certainly be favored.” Indus. Union
Dep’t, AFL-CIO v. Am. Petrol. Inst., 448 U.S. 607, 646
(1980) (plurality). Constitutional avoidance thus requires
reading the Act narrowly. See Mistretta v. United States,
488 U.S. 361, 373 n.7 (1989).
C. The Tenth Circuit’s analysis again falters.
The Tenth Circuit incorrectly applied the majorquestions doctrine and diverged from the Fifth Circuit
which applied the doctrine just two years ago with
respect to the vaccine mandate. Without correction, it is
likely to continue misapplying the doctrine.
This Court applies the major-questions doctrine by
first determining whether the agency action concerns a
“major question,” and then looking for clear
congressional authorization. E.g., West Virginia, 597
U.S. at 746 (Gorsuch, J., concurring). As discussed above,
this approach ensures a proper respect for federalism
and the separation of powers and keeps the Executive
Branch within its constitutional bounds.
The Tenth Circuit took a different approach. Instead
of asking whether the Mandate is a major question and
then looking for clear authorization, it appears to have
treated the doctrine as an arbitrary, technical test
unconnected to any constitutional rationale. It noted
situations in which this Court has applied the majorquestions doctrine and looked for similarities with the
Mandate. App.29a. In so doing, the Tenth Circuit
departed from principles this Court has articulated.
Specifically, its test seems to be that the “so-called
Major Questions Doctrine” only applies when an agency:
(i) “seeks to locate expansive authority in modest words,
20
vague terms or ancillary provisions”; (ii) seeks a
“transformative expansion in ... regulatory authority
without clear congressional authorization”; (iii)
“claim[s] to discover regulatory authority for the first
time in a long-extant statute”; and (iv) “lacks expertise
in the relevant area of policymaking.” App.29a-34a.
(citations omitted). Applying that test, the Tenth Circuit
decided that the Mandate did not fall cleanly within those
boxes. App. 35a.
That analysis is wrong, both conceptually and even on
the Tenth Circuit’s own terms. The Tenth Circuit’s test
mixes up the two aspects of the doctrine—the “majorness” of the question and whether clear authorization
exists—and seemingly analyzes them simultaneously.
Indeed, the Tenth Circuit addressed the issue by (it
appears) “assum[ing]” the economic effect of the
Mandate makes it a major question. App. 29a. But in the
next part of its analysis, the Tenth Circuit all but
nullified that assumption by claiming the Mandate is not
an expansion of regulatory authority because it is not an
exercise of regulatory authority at all. App.31a.
All the while, other parts of the Tenth Circuit’s
analysis seemingly examine whether clear authorization
exists, but the Tenth Circuit never actually found such
authorization here. Instead, it looked to three indicia—
“elephants in mouseholes,” a “long-extant statute
[justifying] an unheralded power,” and a lack of agency
expertise—and apparently concluded that where these
indicia are absent, clear authorization must exist.
App.29a-35a. Yet there cannot be clear authorization
unless the statute’s language provides it. The Tenth
Circuit’s test also fails to respect the federalism and
separation-of-powers concerns that inform the majorquestions doctrine, which will never be properly applied
21
in the Tenth Circuit if it continues to use this test.
In all events, the Tenth Circuit’s analysis fails on its
own terms. Indeed, each of the reasons it gave for not
applying the major-questions doctrine is mistaken.
First, the Tenth Circuit contended that the
Procurement Act’s language is broad—yet it could only
point to §101 (an inoperative provision) and §121 (a
necessary-and-proper clause, which must be tied to an
operative provision). App.30a. Under ordinary rules of
interpretation, the first provides the President with no
authority, and the second with only incidental authority
that must be tied to other operative provisions in the Act.
They are also the “vague statutory grant[s]” that come
nowhere “close to the sort of clear authorization
required.” West Virginia, 597 U.S. at 732.
Second, the Tenth Circuit emphasized that the
Procurement Act does not involve regulation but instead
government contracts. App.31a-32a. Yet this Court “has
never drawn” such a “line” because “[i]t would be odd to
think that separation of powers concerns evaporate”
whenever the government is not “imposing obligations.”
Nebraska, 143 S.Ct. at 2374-75. Rather, the separation of
powers “serves important purposes regardless of
whether the agency in question affects ordinary
Americans by directly regulating them or by taking
actions that have a profound but indirect effect on their
lives.” Collins v. Yellen, 594 U.S. 220, 255 (2021). The
Tenth Circuit said nothing about Nebraska or Collins.
Nor does its distinction make sense, as not every
significant policy issue involves regulatory power.
Third, the Tenth Circuit observed that President
Obama created a wage mandate, and President Trump
only narrowed it. App.32a-33a. Leaving aside that this
assertion of power was never free from controversy, e.g.,
22
Scalia & Mondl, supra, this “Court has been careful to
note that ‘[p]ast practice does not, by itself, create
power.’” Medellin v. Texas, 552 U.S. 491, 531-32 (2008)
(citation omitted). The Mandate not only raised the wage
by essentially 50% (and growing), but President Biden
picked a number that happened to match his campaign
promise and Congress rejected just weeks earlier. The
major-questions doctrine does not allow presidents to
refashion statutes in this self-serving manner.
That is particularly so here given that 2014 is hardly
contemporaneous with a statute passed in 1949. And
although Kahn missed the mark, it at least pointed the
right way: A policy’s “direct and immediate effect” must
be to lower costs. 618 F.2d at 792. Here, by contrast, the
effect will be to raise procurement costs. The Wage
Mandate thus is not an extension of Kahn; it is a
revolutionary inversion. And anti-discrimination
policies—which have existed since before the Act, see
e.g., Louisiana, 55 F.4th at 1030—cut against the
Mandate because, again, discrimination raises prices,
see, e.g., id., at 1024 (quoting Contractors Ass’n of E. Pa.
v. Sec’y of Lab., 442 F.2d 159, 171 (3d Cir. 1971)).
Finally, the Tenth Circuit observed that the
Department has expertise regarding wages. App.34a–
35a. Yet it relied on King v. Burwell, 576 U.S. 473 (2015),
which is not a clear-statement case at all but instead
created a “Chevron carve-out.” Cass R. Sunstein, There
Are Two “Major Questions” Doctrines, 73 ADMIN. L.
REV. 475, 482-83 (2021). The question here, however, is
not whether Chevron applies (indeed, that will never be
the question again), but rather whether Congress clearly
authorized the President to resolve this major question.
Especially after Loper Bright, the Tenth Circuit’s bow to
supposed agency expertise warrants correction.
23
C O NCL USI O N
The Court should grant the petition.
Respectfully submitted.
KEN PAXTON
Attorney General of Texas
BRENT WEBSTER
First Assistant Attorney
General
OFFICE OF THE
ATTORNEY GENERAL
P.O. Box 12548 (MC 059)
Austin, Texas 78711-2548
Aaron.Nielson@oag.texas.gov
(512) 936-1700
SEPTEMBER 2024
AARON L. NIELSON
Solicitor General
Counsel of Record
LANORA C. PETTIT
Principal Deputy Solicitor
General
24
ADDITIONAL COUNSEL
STEVE MARSHALL
Attorney General
State of Alabama
LYNN FITCH
Attorney General
State of Mississippi
TIM GRIFFIN
Attorney General
State of Arkansas
AUSTIN KNUDSEN
Attorney General
State of Montana
ASHLEY MOODY
Attorney General
State of Florida
MICHAEL T. HILGERS
Attorney General
State of Nebraska
CHRISTOPHER M. CARR
Attorney General
State of Georgia
DREW WRIGLEY
Attorney General
State of North Dakota
RAÚL LABRADOR
Attorney General
State of Idaho
DAVE YOST
Attorney General
State of Ohio
THEODORE E. ROKITA
Attorney General
State of Indiana
ALAN WILSON
Attorney General
State of South Carolina
BRENNA BIRD
Attorney General
State of Iowa
MARTY JACKLEY
Attorney General
State of South Dakota
KRIS KOBACH
Attorney General
State of Kansas
JONATHAN SKRMETTI
Attorney General
State of Tennessee
ELIZABETH B. MURRILL
Attorney General
State of Louisiana
SEAN D. REYES
Attorney General
State of Utah
25
PATRICK MORRISEY
Attorney General
State of West Virginia
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.