One month after Donald Trump was sworn into office, then–White House chief strategist Steve Bannon spoke to a gathering of conservative activists about the new president’s agenda. One of the three pillars of that agenda, Bannon explained, was “the deconstruction of the administrative state,” or the system of regulations and services that carries out the bulk of government’s work, largely through administrative agencies. While the strategist may be gone, the strategy remains in place. The president’s two Supreme Court appointees delivered on that strategy in an important decision today, invalidating the governing structure of a major administrative agency, the Consumer Financial Protection Bureau. The court’s reasoning, which chips away at the validity of independent agencies rather than invalidating them wholesale, resembles how courts have eroded the legal right for abortion (though abortion providers eked out a narrow, Pyrrhic victory today in June Medical Services v. Russo). The legal reasoning in the court’s decision will cast a pall over myriad administrative agencies that Bannon and Trump set in their crosshairs, leaving them vulnerable to legal challenge.
Seila Law v. CFPB involved a constitutional challenge to the design of the CFPB, which is headed by a single director who is removable only for cause by the president. That restriction meant that a president could not remove the CFPB director merely because he disagreed with how the director was enforcing consumer protection statutes, for example. The Supreme Court has previously upheld these kinds of limitations on presidents’ authority to remove the heads of agencies. But in those cases, the agencies were led by multiple individuals rather than just one.
In Monday’s decision, the court said that the CFPB’s single-director structure was more of an intrusion on the president’s powers than a multimember commission. But as Justice Elena Kagan pointed out at argument and in her dissent, that reasoning is precisely backward. A president would have more control over an agency if he only had to deal with or convince one person than an agency where he had to go through several individuals.
Yet the Supreme Court relied on that small difference—the distinction between a single-director agency and a multimember one—to conclude that the CFPB was unconstitutionally structured. In doing so, the court mimicked the legal strategy for chipping away at legal protections for abortion. In the abortion context, rather than outright overruling decisions that say women have a constitutional right to an abortion, the court limits those decisions in seemingly technical but practically important ways that allow states to dramatically reduce the availability of abortion. For example, in the lead-up to the court’s last major abortion decision, some courts said that abortion restrictions were valid even when they had no demonstrated effect of improving the health and safety of the abortion procedure. Courts also said that abortion restrictions were constitutional so long as there was one clinic every 150 miles or so (an area larger than some states). Those principles, while not overruling the foundational cases, would render the abortion right a practical nullity for many women by allowing states to pass restrictions that close many abortion clinics.
The legal strategy of whittling away at cases or principles that are disfavored can seem more minimalist than outright overruling those cases. In the CFPB case, for example, the court said that Congress cannot limit the president’s ability to fire the director of a single-director agency rather than declaring all restrictions on presidents’ authority to remove agency heads unconstitutional. But that minimalist appearance can be deceiving. The court’s legal reasoning in striking down the CFPB provides a blueprint to invalidate the structure of many other agencies as well.
The court’s decision applies beyond the CFPB because the majority relies on a single insignificant difference between the CFPB and the agencies that it previously upheld in order to invalidate the CFPB. But there are many differences between agencies. If the court can seize on any difference, even if that difference should not matter to the constitutional question, then any number of variations can be held up as grounds for a challenge to other administrative agencies. Agencies have different powers over litigation, budgets, and adjudication; different substantive areas of focus; different numbers of directors; directors who serve for different lengths of time; and directors who are required to represent different views. Do those differences matter?
The court’s decision leaves open the possibility that any distinction between agencies—including differences that do not meaningfully change the amount of presidential control over an agency—are enough to invalidate them. Steve Bannon would approve.
Update, June 29, 2020, at 12:56 p.m.: This post was updated with the new name of June Medical Services v. Gee, June Medical Services v. Russo.