An Essay on The Fed and the U.S. Treasury: Lender of Last Resort and Fiscal Policy – Hal S. Scott

Posted by on Nov 26, 2021 in Per Curiam

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An Essay on The Fed and the U.S. Treasury: Lender of Last Resort and Fiscal Policy

Hal S. Scott[*]

 

Abstract

This essay explores the evolution of my thinking on risky emergency lending to non-banks. Like the famous 19th century British economist Ricardo, who recognized his views on machinery had undergone considerable change, the same can be said for my views on lender of last resort.[†] The Fed, in the pandemic, engaged in lending with potentially significant credit risk. While it appeared to the public that these were independent Fed programs, in fact the lending to non-banks was legally controlled, and was largely determined, by the Treasury due to their approval power. Treasury control of lending to non-banks is a fiscal decision and should be made by the elected government, not by an independent agency. And it should be the Treasury’s role, as advised by the Fed, to determine when there is significant credit risk. Once the Treasury determines there is not significant credit risk, the Fed should make the lending decision without control or approval of the Treasury, as part of its role as liquidity supplier and lender of last resort. When it comes to banks, the Fed should have more leeway.  If the Fed determines loans to banks have significant credit risk, the Fed should be required to get Treasury approval, accompanied by an indemnity protecting the Fed against loss, resulting in the government taking on the credit risk. If the Fed determines that there is not significant credit risk, the Fed should have full control of the lending operation. This approach requires new legislation. In the shorter term, there should be much fuller disclosure of the actual role of the Treasury in the design and operation of emergency lending facilities.

 

1.     Introduction 

As set forth in this essay, I have come to believe that risky emergency lending to both banks and non-banks should be done by the U.S. Treasury, with programs explicitly designed by and owned by the Treasury.[3] These should not be Federal Reserve (Fed) programs, as they have been identified in the past. The role of the Federal Reserve should only be to advise the Treasury on needed programs and to execute the Treasury’s programs in accord with the direction of the Treasury. This is actually close to the situation today for emergency lending to non-banks, despite appearances to the contrary and the lack of disclosure as to how the Treasury does control such programs.

Lending with significant credit risk is a fiscal decision that should be made by the elected government, the Congress and the Administration, not by an independent agency like the Fed. And it should be the Treasury’s role, as advised by the Fed, in lending to non-banks to determine when there is significant credit risk. When there is no significant credit risk, the Fed should make the lending decision, without the need for control or approval of the Treasury, as part of its traditional role as liquidity supplier and lender of last resort. If there is disagreement as to whether there is significant credit risk the Treasury’s view should prevail. When it comes to lending to banks, the Fed should determine whether there is significant credit risk, and if so obtain Treasury approval and an indemnity against Fed losses.  This essay explores the evolution of my thinking.

2.     The Dodd-Frank Act and Connectedness and Contagion

In my book Connectedness and Contagion,[4] I took the view that the restrictions that Congress imposed on the Federal Reserve in the 2010 Dodd-Frank Act in lending to non-banks under section 13(3) of the Federal Reserve Act[5] were ill-advised. The Fed had acted heroically and effectively in stopping the 2008 contagion but Congress wrongly, in my then view, believed it had overstepped its bounds. Indeed, Senator Dodd introduced a bill in 2009 that would have consolidated the federal regulatory structure for financial institutions, by removing the Federal Reserve’s supervisory authority over state-member banks and limiting its supervisory responsibilities to systemically important nonbank financial firms and holding companies with assets over $50 billion, as a result of its perceived failure to anticipate and prevent the financial crisis.[6] While this broader initiative was dropped, the Dodd-Frank Act curtailed the Fed’s independence in its role as lender of last resort to non-banks. The most important of the congressional restrictions were that the Secretary of the Treasury had to approve the lending and that it had to be part of a broad program with collateral and could not be used for insolvent borrowers. Clearly, the Congress had in mind the loans made during the 2008 crisis to insolvent non-bank financial institutions like AIG.[7] In the pandemic this framework was used to support the real economy, through loans to firms that were not only non-banks but also non-financial institutions.

I believed, at the time of writing my book, that the requirement of the Treasury’s approval was an undesirable infringement on the Fed’s independence as lender of last resort. Indeed, my concern was reinforced when it later came to light, in an article by Laurence Ball,[8] that then Secretary of Treasury Hank Paulson, despite having no statutory authority to prevent Fed lending, pressured the then Fed Chairman Ben Bernanke not to loan to Lehman Brothers because, according to Ball, Paulson did not want to be known as “Mr. Bailout”. In the years since Dodd-Frank, without exception, every Treasury and Fed official with whom I conversed in private, agreed that the Dodd-Frank restrictions on lending to non-banks were undesirable, but that nothing could be done about them. Instead, the Fed concentrated its efforts on resisting further restrictions, publicly saying that the existing ones were acceptable.[9] It was clear, of course, that any government official that questioned this new Dodd-Frank arrangement would be accused of wanting to again bail out Wall Street.

On the other hand, I was torn by the realization that section 13(3) loans could be made to non-creditworthy borrowers, partially due to the lack of Fed information about the credit risk they posed, so that there would be a significant likelihood that the Fed could lose money. This would not bankrupt the Fed since it can create money. Nonetheless, it might tarnish its credibility and reputation if the losses were severe enough.[10] And the Congress and the Treasury would likely, therefore, feel compelled to recapitalize the Fed. Fed losses would also directly impact the taxpayer, since the losses would reduce the amount of profit the Fed annually remits to the Treasury. At their high in 2015, remittances constituted $117 billion, including a one-time capital surplus transfer of more than $19 billion, 3.6% of U.S. general revenue.[11]

To some extent, these concerns with Fed losses were sufficiently alleviated by the Dodd-Frank section 13(3) restrictions that the borrower be solvent and that the loan be collateralized, without the necessity of going the further step of requiring the approval of the Secretary of the Treasury. One could argue that if the Fed adhered to these requirements it should still be independent in making loans to non-banks because there was no or very limited credit risk. However, a solvency determination is more art than science and very difficult to determine particularly in a crisis due to uncertain asset values. The Fed responded to pressure from Senator Warren and others to define solvency.[12] Its 2015 regulation provided that the borrower could not be in bankruptcy or “generally” in default on undisputed debts in the previous ninety days.[13] This, of course, leaves plenty of room for lending to borrowers with very substantial credit risk.

The second potential bulwark against credit loss is the collateral requirement. In 2008, the Fed bought unsecured commercial paper from highly rated issuers without real collateral.[14] While it can be argued that there was little credit risk on these purchases, there obviously was some risk, and I thought that requiring collateral would prevent the Fed from doing what needed to be done in the future. But I was, nonetheless, sympathetic to the idea that collateral should generally be required to protect the Fed from taking on credit risk. But the uncertain value of collateral, in many instances, and therefore its ability to cover credit risk, particularly for loans to risky borrowers, would leave the Fed with significant exposure to credit risk.

3.     The Fiscal Policy Concern

The basic problem, I came to appreciate, is the need to define when the Fed as lender of last resort wrongly crosses the line into making fiscal decisions which, in a democracy, rightly belong to elected government officials—the Congress and the Administration, not an independent agency like the Fed. The exercise of fiscal policy by the Fed does not just raise concerns about political accountability; it is also arguably inconsistent with the Constitution, which assigns the “power of the purse” to Congress.

Legitimate concern over the Fed’s involvement as a lender of last resort is not self-evident. After all, there is a broad consensus that the Fed’s independence from the Executive branch, and generally politics, is important for sound monetary policy and the stability of the financial system, and monetary policy has a profound influence on fiscal policy.

At the same time, in a democracy, fiscal authority should lie with political actors that are politically accountable to voters. The ultimate authority of elected officials over fiscal decisions is  required by the Constitution, which  provides that “No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law.”[15] That means that no federal agency or official, including the Fed, should engage in public spending without legislative authorization.[16] Thus, this constitutional principle could operate to restrict Congress’s ability to delegate its fiscal authority to another federal agency, such as the Federal Reserve.[17] Indeed, Congress used to adjudicate individual money claims against the United States, “on the ground that the Appropriations Clause forbade even a delegation of individual adjudicatory functions where payment of funds from the Treasury was involved.”[18] There is  no case law on point.  The closest one can come is Synar v. United States,[19] where a special three-judge panel of the U.S. District Court for the District of Columbia, in what it acknowledged was obiter dicta, held that the delegation to the Comptroller General of the power to estimate the federal deficit and impose mandatory program-by-program budget cuts, pursuant to the Gramm-Rudman-Hollings Act, did not violate the Appropriations Clause.[20]

So, what is the line between (permitted) monetary policy and (forbidden) fiscal policy when it comes to the Fed’s role as legitimate lender of last resort? Basically, the line should be  between relatively riskless liquidity provision versus riskier credit provision. If financial firms with strong balance sheets (i.e. strong credit profiles) need Fed lending simply because the financial system has pulled back private liquidity, even to solvent borrowers, then that is a liquidity problem that is more related to the traditional exercise of lender of last resort, and the Fed should remain independent. However, if the financial firms’ problems are a weak balance sheet (or weak credit profile), which contributes to their need for a Fed loan, then that is not only a liquidity problem but also a credit problem (even if there is also a concurrent pullback of private liquidity in general). In that case, the decision to provide risky credit to firms becomes a fiscal decision, given the risk of loss, and where that risk of loss is significant, the lending decision should be made by the elected government.

It is also the case that the Fed’s exercise of monetary policy can incur significant risk of loss, in the form of interest rate risk through its holdings of government obligations, principally Treasuries. However, interest rate risk is inextricably linked with the conduct of monetary policy, where there is a broad and long consensus of Fed independence. There is an important distinction between this interest rate risk, which applies to the purchase of any fixed-income securities, and credit risk. Credit risk deals with the risk of borrower default, of which there is virtually none in holding U.S. government obligations. Also, the Fed is protected against the full impact of interest rate risk since it does not mark-to-market its portfolio and only incurs gains or losses when it sells portfolio holdings.[21]

This evolution in my thinking led me to join with Charles Calomiris, Glenn Hubbard, Douglas Holtz-Eakin, and the late Allan Meltzer, a group of conservative economists, in writing a 2017 article in the Journal of Financial Economic Policy, entitled “Establishing credible rules for Fed emergency lending.”[22] The heart of the article was our recommendation to “[e]stablish specific, observable criteria, that will be used to determine whether emergency lending by the Federal Reserve becomes fiscal policy that should involve the Treasury, either exclusively or in conjunction with the Fed.”[23] We believed that “loans to insolvent institutions or loans to institutions that have a substantial likelihood of becoming insolvent should be regarded as implicating fiscal policy.” We opined that not all loans to non-banks under section 13(3) would be fiscal, i.e. loans adequately secured by collateral or highly rated, so the necessity for the Treasury approval of all non-bank loans would not be required. If a loan were to be regarded as fiscal, however, it should be approved by the Treasury with indemnification (a guarantee), and possibly backed by a pre-established fund to make the indemnification good. We did not discuss whether the same approach should be applied to lending to banks. But a potential fiscal policy concern is triggered whether loans are made to banks or non-banks.  However, as further discussed below, the adequacy of collateral is a much lesser concern for banks than non-banks.

I think a large part of my shift in thinking reflected the fact that the Fed’s willingness to take credit risk and, in effect, to engage in fiscal policy was a lasting problem even if one could justify the actions taken in the global financial crisis. The Fed may have acted in 2008 because the fiscal authorities were caught by surprise, and the unchecked contagion was a huge threat to the country, but this was not the right approach going forward. Moreover, that crisis was largely a liquidity event—lending to insolvent institutions like AIG was an exception rather than the rule.

4.     The United Kingdom Approach

The approach we recommended is close to the one currently deployed in the United Kingdom, one that emerged out of a confusion of roles between the Bank of England (BoE) and HM Treasury (Treasury) in the 2008 financial crisis, particularly as it concerned rescuing Northern Rock.[24] The United Kingdom divides central bank lending into two parts. First, there is normal lending to banks and other borrowers specified by the BoE, which now include primary dealers, broker-dealers, and central counterparties. It appears that BoE, on its own, can further expand this category. Second, there is emergency lending to banks and non-banks.[25] This is different than the U.S. approach of dividing lending authorities between banks, through the discount window, and non-banks through section 13(3), whatever the circumstances.

In the U.K., emergency lending is governed by a Memorandum of Understanding between BoE and the Treasury,[26] established after the financial crisis, which permits the BoE to make loans to solvent but “at risk” firms, with the approval of the Treasury. Note that this approval is required for making loans to at risk banks as well as non-banks. In the United States, by contrast, the Fed is permitted by statute—through its discount window authority, on its own without the Treasury approval—to make loans to at risk, and even insolvent, banks at a premium rate, if it considers the collateral sufficient (although it rarely does so).[27] Under applicable regulations, however, the Fed can only extend credit to undercapitalized banks if doing so is “consistent with a timely return to a reliance on market funding sources” or “would facilitate the orderly resolution of serious financial difficulties” of the bank.[28] It appears, despite the absence of published guidance on the point, that the U.K. Treasury’s approval would come with the Treasury’s indemnity of BoE losses.[29]

The United Kingdom’s arrangement largely leaves the judgment as to whether firms are at risk to the Bank of England. If the BoE judges they are not, the BoE is free to lend without the approval of the Treasury. That said, depending on the nature of the relationship between the BoE and the Treasury at a particular point in time, the BoE might seek informal approval from the Treasury even if it does not consider that approval strictly necessary from a legal perspective.

Quite unlike our system, the United Kingdom gives the Treasury the further authority, in exceptional circumstances, with parliamentary oversight, to direct the BoE to make risky loans to entities that the BoE does not judge to be solvent, on terms the Treasury dictates.[30] In the event of such direction, the BoE is considered to be acting as the Treasury’s agent. The funds are placed in a special purpose vehicle (SPV) that is segmented from the BoE balance sheet, and the SPV and the BoE are indemnified by the Treasury for losses. This authority has been used in the COVID-19 pandemic. The COVID Corporate Financing Facility (CCFF), established by the Bank of England at the behest of the Treasury, directs the Bank to purchase eligible commercial paper in the primary and secondary market, including from middle-market firms that have not previously issued commercial paper, on terms comparable to those prior to the crisis.[31]

In the U.S. system, a section 13(3) facility for non-banks can only be adopted if five members of the Federal Reserve Board (of the seven total) find that there are “exigent circumstances” justifying the facility.[32] So even if the Treasury wanted the Fed to adopt a facility, it could not be done without the consent of five members of the Fed. If the Fed resists adoption, the Congress would have to authorize the facility, overriding the requirements of section 13(3).

5.     Lessons from the Pandemic Facilities

The United States entered the pandemic crisis with the new Dodd-Frank framework, which I believe has been found greatly wanting and further underscores the need for revision.

a.     The First Three Facilities

As previously noted, Dodd-Frank requires the Treasury to approve all lending programs to non-banks. So when on March 17-18, 2020, the Fed announced its first three facilities to deal with the pandemic, modeled after similar facilities used in 2008, to buy highly-rated commercial paper (CPFF), to make loans to primary dealers (PDCF), and to make loans to banks to buy money market fund assets (MMLF) it was required to and did obtain the approval of the Secretary of the Treasury.[33] As in 2008, the Fed used the SPV technique to buy commercial paper to circumvent asset purchase restrictions. [34]

There was an important difference in the 2020 deployment of the CPFF and MMLF as compared with 2008. Both facilities in 2020 were backed by the Treasury’s Exchange Stabilization Fund (ESF), the CPFF with a $10 billion equity contribution and the MMLF with $10 billion of credit protection. Because the MMLF did not use a special purpose vehicle that could accept an equity contribution—it involved direct loans to banks secured by assets purchased from money market mutual funds—the Treasury provided its backing in the form of credit protection. The Treasury provided no such backing for the equivalent facilities in 2008.

Why did the Treasury provide this backing in 2020? To a large extent, it was required to do so by the Dodd-Frank requirement of collateral. There was no real collateral provided in the CPFF, as discussed above. This was also the case for the MMLF since the Fed only had the assets purchased by the banks from the money market funds as security for their loans to the banks, for example, unsecured commercial paper. The facility further provided there was no recourse back to the banks if the obligors on the purchased paper defaulted. Thus, in 2020, Treasury backing served as the substitute for the collateral required by Dodd-Frank. Backing was not needed for PDCF, however, because the dealers provided real collateral to the Fed to secure their loans and there was recourse back to them in the case of default.

The amount of purchase or lending the Fed could do through the SPVs was, however, not capped, even though the riskiness of the facilities  was dependent on their amounts. Such caps would come later for other facilities after enactment of the CARES Act.

For these three facilities, modeled after the 2008 facilities, it may have appeared to the public that the Fed designed the facilities and that the Treasury’s approval of their terms was merely nominal, except for the Treasury’s concern with losses signaled by its investments. So, if these facilities failed or were successful, blame or credit would go to the Fed, not the Treasury. But the reality is that the Treasury, due to its approval power, ultimately called the tune. The Treasury might have decided to defer entirely to the Fed’s design of the facilities, but it maintained the sole power to approve them, and consequently, the power to dictate their terms. I strongly believe that the Treasury did in fact dictate the important facets of the facilities.

b.    The CARES Act Facilities

The relationship between the Treasury and the Fed, with respect to Fed facilities, evolved significantly with the enactment of the CARES Act on March 27, 2020. Section 4003 of the Act appropriated $454 billion to the Secretary of the Treasury to make loans, investments, or guarantees to the Fed to support Fed lending to eligible businesses, states, or municipalities by purchasing obligations or making loans.[35] The bill specifically ordered the Treasury to endeavor to seek Fed programs for such borrowers. Remarkably, the legislation further stated that if there was any doubt, the provisions of Section 13(3) should apply to any Fed facilities created under the CARES Act.

i.     The Structure of the Facilities

The Fed announced, with the required Treasury approval, four principal facilities: (1) to purchase asset-backed securities (TALF);[36] (2) to purchase corporate bonds and ETFs in the primary and secondary markets (PMCCF and SMCCF);[37] (3) to purchase bank loans to small- and medium-sized businesses (MSNLF, MSELF, and MSPLF)[38] and nonprofits (NONLF and NOELF);[39] and (4) to purchase state and municipal obligations (MLF).[40] Each of these facilities had a similar structure, an SPV that was capitalized with a Treasury equity investment, and a cap on the amount it could lend. So, for example, the two corporate credit facilities operated through the same SPV, which was capitalized with a Treasury investment of up to $75 billion (though the Treasury actually only made a $37.5 billion equity contribution)[41] and had a $750 billion cap on combined primary and secondary market purchases.[42] The five Main Street facilities, for small and mid-size businesses and nonprofits, operated through a joint SPV capitalized with a Treasury investment of up to $75 billion (though the Treasury actually only made a $37.5 billion equity contribution to the Main Street SPV) and had a cap of $600 billion on aggregate loan purchases.[43] The cap/equity investment ratio represents the leverage of the facility: ten times for the corporate credit facilities, and eight times for the Main Street facilities.

In addition, the facilities had detailed requirements with respect to the qualifications and riskiness of the assets purchased and the eligible borrowers. These requirements were not set by Congress; they were set by either the Treasury or the Fed, or some combination of the two. Thus, for example, the corporate credit facilities specified the minimum credit ratings of the issuers: issuers had to have been rated at least BBB-/Baa3, a relatively low risk rating, as of March 22, 2020, and an issuer that was subsequently downgraded had to be rated at least BB-/Ba3 as of the date of purchase.[44] Detailed requirements were provided in the term sheets for Main Street’s three for-profit business facilities, which were revised several times, and for the last time on October 30, 2020, when the minimum loan size for new loans was lowered from $250,000 to $100,000.[45]

The Main Street Expanded Loan Facility (MSELF), which permitted for-profit bank customers to increase the size of existing loans, can serve as an example of how the Main Street facilities worked. MSELF allowed a business borrower (1) with up to 15,000 employees or revenue of $5 billion or less in 2019 and (2) that had an existing loan from the bank that received an internal risk rating equivalent to a “pass” (the highest rating) in the supervisory rating system as of the end of 2019 (or upon origination or purchase, if the loan was originated or purchased in 2020), to increase the size of that loan by borrowing a minimum of $10 million and a maximum of the lesser of (i) $300 million or (ii) an amount that, together with the borrower’s existing debt, did not exceed six times the borrower’s 2019 EBITDA.[46] The Fed’s Main Street SPV then bought 95% of the new tranche of the loan.[47]

The interest rate on the new tranche of the loan was adjustable LIBOR plus 300 basis points and had a maturity of five years.[48] The new loan might also have included up to 150 basis points of origination and transaction fees.[49] The borrower could not use the proceeds of the new tranche of the loan to repay or reduce existing debt but could make mandatory principal and interest payments.[50] The lender was specifically required to do a credit assessment of the borrower’s financial condition, although the lender would do so anyway since it would be on the hook for 5% of the loan.[51] The borrower had to certify both that it would make commercially reasonable efforts to keep its employees and that it could pass a solvency test, meaning it had the ability (with the loan) to meet its financial obligations and did not anticipate going into bankruptcy in the next ninety days.[52]

ii.     Priorities: Minimize Credit Loss over Broader Help to Business

A major driving force behind the structure and terms of all the CARES Act facilities was the Treasury’s desire to minimize losses on its investments that were funded by Congress. To begin with, this can be seen clearly in the Treasury’s desire to not fully use the entire $454 billion Congress appropriated for the CARES Act facilities. Second, all the investments made by the Treasury, after CARES, were structured through SPVs with Treasury investment and a cap on lending. The leverage of each facility was set based on its perceived riskiness. Thus, as noted above, the corporate facilities were leveraged at ten times while the riskier small business facilities were leveraged at eight times. The limit on leverage permitted by the Treasury protected its investment.

When the CARES Act facilities stopped extending new credit on January 8, 2021, the Treasury had only invested $102.5 billion of the CARES Act $454 billion appropriation (although it had committed $195 billion), together with $11.5 billion from the ESF that it had invested before passage of the CARES Act to back the Commercial Paper Funding Facility ($10 billion) and the Money Market Mutual Fund Liquidity Facility ($1.5 billion).[53] So, the Treasury had $351.5 billion of CARES Act funding that was never put at risk. Secondly, the actual amount of lending under the CARES Act facilities was very small. While combined lending under all the facilities was capped at about $2 trillion, actual loans as of January 8, 2021, when the last of the facilities stopped purchasing loans, were about $40.5 billion, approximately 2% of the cap.[54] Indeed, the Congressional Budget Office (CBO) in its April 16, 2020, report on the CARES Act estimated that the income from the Fed facilities (in the form of interest payments and fees) would roughly offset any losses.[55] The facilities  were clearly designed to avoid credit risk.

In the Wall Street Journal op-ed  titled “Main Street Needs More Fed Help,” Glenn Hubbard and I criticized an earlier version of the Main Street facilities, in which the credit protections for the Treasury were weaker, for prioritizing credit risk limits over getting funds to needy but risky borrowers.[56] The desire to avoid loss became even stronger when the Main Street facilities were revised. The term sheets for the original Main Street facilities (the MSNLF and MSELF), for example, originally contained no “pass” rating requirement for existing loans and neither directed the bank to make creditworthiness judgements nor included any borrower solvency requirements.[57] The Wall Street Journal’s Editorial Board, in its own editorial on the initial April 30 revisions entitled, “The Main Street Fakeout,” criticized the Fed and the Treasury for doubling down on credit risk limits.[58] Glenn Hubbard and I subsequently published two additional op-eds in the Wall Street Journal, arguing that the Main Street facilities’ design would hamper their ability to save small and mid-size businesses.[59] Specifically, we noted that the terms of the for-profit Main Street facilities were too onerous for borrowers and insufficiently attractive to lenders.[60]

iii.     Collateral and Solvency Considerations

As already discussed, Treasury backing was in part necessitated by the Dodd-Frank collateral requirement. The actual Section 13(3) requirement is:

[T]he Board shall establish . . . policies and procedures governing emergency lending . . . . Such policies and procedures shall be designed to ensure that . . . the security for emergency loans is sufficient to protect taxpayers from losses . . . . The policies and procedures established by the Board shall require that a Federal reserve bank assign, consistent with sound risk management practices and to ensure protection for the taxpayer, a lendable value to all collateral for a loan executed by a Federal reserve bank under this paragraph in determining whether the loan is secured satisfactorily for purposes of this paragraph.[61]

Since many small business borrowers do not have any collateral, backing by the Treasury could serve as a substitute. The Congress recognized this problem in the CARES Act by giving the Treasury $454 billion to back Fed lending. The Treasury could use all the appropriated funds as collateral to back Fed loans, and was given leeway to judge the adequacy of collateral in relation to the permissible leverage, both matters of fiscal policy. While Congress gave the funds to the Treasury to back Fed loans, it did not actually order that all of the appropriated money be so used—this decision was left to the Treasury.

Section 13(3) also requires borrower solvency:

The Board shall establish procedures to prohibit borrowing from programs and facilities by borrowers that are insolvent. Such procedures may include a certification from the chief executive officer (or other authorized officer) of the borrower, at the time the borrower initially borrows under the program or facility (with a duty by the borrower to update the certification if the information in the certification materially changes), that the borrower is not insolvent. A borrower shall be considered insolvent for purposes of this subparagraph, if the borrower is in bankruptcy, resolution under title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act, or any other Federal or State insolvency proceeding.[62]

As previously discussed, the Fed issued a regulation in 2015 setting forth its solvency test: that the borrower is neither (A) the subject of any bankruptcy or insolvency proceeding nor (B) “generally not paying its undisputed debts as they become due during the 90 days preceding the date of borrowing under the program or facility.”[63] The Fed regulation also allows the borrower to self-certify based on his or her reasonable belief that the solvency requirement as set forth in the regulation has been satisfied.[64]

The revised Main Street facilities made this certification tougher than required by the Fed’s regulation. All three facilities required the borrower to certify that, after giving effect to the loan, the borrower reasonably believed “it ha[d] the ability to meet its financial obligations for at least the next 90 days and [did] not expect to file for bankruptcy during that time period.”[65] The Fed’s pre-existing regulation looked to the past and only required the borrower to “generally” meet its obligations.[66] Further, the borrower under the Fed’s regulation actually knows whether or not it is in bankruptcy, whereas under Main Street it was required to certify as to a more uncertain future. This appears to be the work of the Treasury. Why would the Fed otherwise insist –- indeed, can it even do so lawfully—on a tougher and different standard than set forth in its own regulation, which by its terms applies to any Section 13(3) lending?

Secretary Mnuchin revealed his desire to avoid losses when he told the Wall Street Journal and other reporters in late April, in response to a question about my first op-ed with Glenn Hubbard: “If Congress wanted me to lose all the money, that money would have been designed as subsidies and grants as opposed to credit support.”[67] He further stated: “We’re looking at it in a base case scenario that we recover our money.”[68] However, in response to criticism from lawmakers, Secretary Mnuchin stressed that that Treasury did “expect to take losses” on lending through the Main Street facility.[69]

iv.      The Termination of the Facilities

On November 19, 2020 Secretary Mnuchin sent a letter to Chairman of the Federal Reserve Jerome Powell ordering the Fed to close down, at the end of the year, all the facilities that had received Treasury backing with funds appropriated under the CARES Act.[70] The fact that the Treasury Secretary resorted to unilateral action through a letter, ordering the Fed to comply, was an extraordinary and historic economic confrontation, given the Fed’s repeated statements that these facilities should remain in place past the end of the year. If the Fed had agreed with Treasury’s demand letter, this action would have been accomplished through a joint Treasury and Fed statement. Instead, the Fed immediately objected to the closure of these facilities.[71]

The Treasury Secretary was given the authority, under the 2010 Dodd-Frank amendments to Section 13(3) of the Federal Reserve Act, to approve facilities to support the non-bank financial sector, and the CARES Act explicitly reinforced this authority. The power to approve encompasses the power to disapprove, so the Secretary was within his rights to terminate any and all of the facilities. If there was any doubt as to who called the shots on these facilities, the order to close them down removed it. However, for the record, the argument in the Secretary’s letter that he was compelled to close the facilities down, based on his being “personally involved in drafting the relevant part of the legislation,”[72] was untrue. A plain reading of the CARES Act fails to support that claim.[73] The CARES Act only set a deadline of the end of this year for the Secretary to make new investments in the Fed facilities.[74] His decision to close the facilities was one of public policy, not one compelled by law.

The Secretary’s letter went further than just terminating new lending or purchases under the CARES Act facilities. It also requested that the Fed return $429 billion in “unused” Treasury funds.[75] While the Treasury deposited at the Fed the entire CARES Act appropriation of $454 billion that might have been used to back Fed facilities, it had only actually invested $102.5 billion in the CARES Act facilities. And the Fed, pursuant to these facilities, had at the time less than $25 billion in loans outstanding.[76] Thus, the Secretary, in requesting the return of only $429 billion, allowed the Fed to keep backing for its then-existing loans on a 1:1 basis. On the next day, November 20, 2020, the Fed acceded to the Treasury’s requests—noting that the Fed would work with the Treasury to return the unused portion of the CARES Act funds in connection with the facilities’ year-end termination—although the authority of the Secretary to order the return of his investments was unclear under the CARES Act.[77]

Although the Secretary refused to renew the CARES Act facilities, the CARES Act itself left open the possibility that a new Treasury secretary could restart them, albeit without the funds that had already been returned by the Fed. The coronavirus relief legislation passed in late December, however, prevented the CARES Act facilities from making any new loans or purchasing new assets after December 31, 2020 (except for the Main Street facilities, which were allowed to continue to purchase certain loan participations until January 8, 2021).[78] The new legislation also rescinded the CARES Act appropriation to the ESF, save for $42.5 billion that might be needed to absorb losses on the Treasury’s $2 billion in direct loans and the $40.5 billion in commitments of the CARES Act facilities.[79]

Finally, the relief legislation prevents the Treasury from using the ESF to back any new Fed program or facility, except for the TALF, “that is the same as any such program or facility in which the [Treasury] Secretary made an investment pursuant to” the CARES Act.[80] Concerned that the incoming Biden administration might reopen the CARES Act facilities, Senator Toomey proposed language that would not only have shut down the CARES Act facilities but also prevent the Fed from restarting those or any “similar” program or facility. Ultimately, the legislation that passed only prevents Treasury from using the ESF to back a facility that is the “same” as one of the CARES Act facilities. That provision therefore leaves open the possibility that Treasury could use the ESF’s remaining “core funds”—which stood at approximately $238 billion[81] as of September 30, 2021—to back Fed lending facilities that are sufficiently different from the CARES Act facilities.[82]

6.     Who is Responsible?

Currently, responsibility for the success and failure of Fed facilities designed and approved by the Treasury is murky. If these programs had failed and we had been plunged into a Depression (fortunately this did not occur), who would have been held responsible? And who will be held responsible for future programs? I fear that given that these are “Fed” programs, the Fed could unfairly take the blame for programs that are actually approved and dictated by the Treasury, with the result that its future independence, even for traditionally independent functions like monetary policy, could be threatened.

The lack of clarity about responsibility for the success and failure of the emergency lending facilities stems from the ambiguity over who was actually responsible for their design.[83] On the one hand, the Fed may have actually agreed with the program design, or even suggested it, and been willing to step into fiscal territory as it had in the past. Vice-Chair Quarles testified before the Senate Banking Committee:

We are required by law that we structure these facilities so that they are loans to entities that we expect to be repaid and that the various measures and metrics that we have included in the Main Street facility are designed to try to balance as broad a reach as we can while maintaining fidelity to the statutory requirements.

One might indeed argue that if these Fed facilities were, in reality, those of the Treasury, and the Fed was fearful that that they would not work or were not consistent with the intent of Congress to take more risk, then the Fed could just refuse to adopt them, and that their failure to do so indicates their support. Reports indicate that the Fed sought to soften the terms of the facilities and take more credit risk.[84] While some of the terms were, in fact, softened in the various revisions of the facilities, they were not softened enough to make them attractive to borrowers.

Expecting the Fed to say either do it my way or we will not adopt the program is unrealistic—one can just imagine the blowback by the Treasury and the President if the Fed resisted implementing the Administration’s program in the midst of a crisis. It is one thing to resist direction from the government on monetary policy, where the Fed is independent, it is another to resist direction where it is no longer independent due to Dodd Frank. Indeed, the shutdown order by the Treasury of the CARES Act facilities indicates the Treasury was in charge. Moreover, Chairman Powell’s accession to the Treasury’s demand for the return of its investments, though not required by law, further indicated the Fed’s subservience.

7.     Facilities with Credit Risk Should Be Treasury’s and not the Fed’s, and be so Identified

I have expressed my disagreement with the Secretary’s policy of not taking credit risk, and the Fed’s accession to this position, if they did in fact do so. I believe the Congress authorized the Secretary to risk all of the $454 billion to save the economy from even greater loss. But whether the Treasury was following the intent of Congress was a matter to be resolved between those two government branches. I want to make clear, however, that control of these programs, as between the Treasury and the Federal Reserve, should be the Treasury’s, given the inevitable losses from making many of the authorized loans, particularly to small businesses under the Main Street facility. Whatever the line between normal lender of last resort and fiscal policy, lending to small businesses, especially in a crisis involving their widespread collapse, is on the fiscal side.

This brings me to the punch line of this piece. Since all of these non-bank facilities were probably designed by the Treasury—and in any event could be solely designed due to the Treasury’s approval power—in the future the Treasury, and not the Fed, should be wholly responsible for them. And this should be made clear in legislation. These fiscal programs should be labeled as Treasury and not Federal Reserve facilities, and responsibility for their success or failure should lay squarely with the Treasury and the Congress that authorized them. The Fed should only be responsible for informing the Treasury of market conditions and the need for action, but then only serve as an agent of the programs devised by the Treasury.

Under the existing section 13(3) structure, where the Fed asks approval for a program, it looks like the Fed’s program even though the right of approval gives the Treasury the actual power to ultimately dictate the program’s terms. My proposed framework would dispense with the misleading requirement of the Fed to request approval for a program.

Instead, the Treasury should be responsible for adopting any lending program, whether for banks or non-banks, whenever there is a significant risk of loss (emergency lending) if such program is authorized by Congress and deemed necessary by the Treasury. Something very close to this procedure, as noted above, already exists in the United Kingdom.

a.     “Unusual and Exigent Circumstances”

A threshold question that arises in connection with the use of any lending facility, whether established by the Fed or the Treasury, is the standard for when it can be used. Under current law, the Fed can use the discount window to support banks without any triggering criteria. In contrast, the Fed (upon the vote of at least five of the seven board members) is only permitted to establish a section 13(3) facility for non-banks in “unusual and exigent circumstances.”[85] The term “unusual and exigent circumstances” is not defined by statute or regulation and there is virtually no legal authority interpreting what conditions might meet that standard. But the history of the Fed’s invocation of section 13(3) indicates that it was never interpreted to require an emergency of potential systemic risk to the financial system.[86]

Section 13(3) was enacted on July 21, 1932 to provide funding to businesses that were unable to get bank loans.[87] Compared to other provisions of section 13(3), there is no legislative history to interpret the “unusual and exigent circumstances” language—the language was included in the original legislative proposal to broaden the Fed’s lending powers and remained unchanged afterward.[88]

Once President Hoover and the Fed turned to implementing section 13(3), they began to discuss how the “unusual and exigent circumstances” requirement should be interpreted. Hoover, for example, argued that the condition was satisfied because of the number of borrowers who reported being refused for loans by banks, noting that “the unwillingness of the banks to take advantage of the facilities provided by the government” (referring to the discount window) gave rise to the kind of situation envisioned by section 13(3).[89]  The Fed Board appears to have taken as a given that “unusual and exigent circumstances” existed since the meeting minutes focus on the type of lending authorized and eligible counterparties, rather than whether the lending was authorized in the first place.[90]

The Fed periodically authorized section 13(3) lending to nonmember banks (which at the time were not eligible for discount window loans) between 1936 and 2008, although no emergency existed.  In the summer of 1966, the Board authorized Reserve Banks to lend to nonmember banks because of “the possibility that during the period ahead some nonmember depositary-type institutions … might be subjected to unusual withdrawals of funds,”[91] a far cry from an emergency.  The Board authorized lending to nonmember banks again in December 1969, on the ground that “the sharp further advance in market yields …, unusually large net savings withdrawals at depositary institutions …, and preliminary reports of rather poor savings experience in some areas … had all created some concern about the possibility of substantially enlarged savings attrition at such institutions.”[92] In 1980, section 13(3) was activated again, but not used, to grant a loan to a Michigan nonmember bank to pay for cash letters presented to it.[93] The Fed did not authorize section 13(3) lending again until the 2008 financial crisis. Clearly, the Fed has not seen the “unusual or exigent circumstances” as much of a limitation.

Under my approach, the appropriate standard governing when lending facilities could be established for either banks or non-banks would depend on the type of lending. For liquidity facilities with limited credit risk, which are designed and implemented solely by the Fed, the standard should be relatively forgiving. Like the Fed’s discount window authority, which is not subject to any threshold for market conditions, the Fed’s ability to provide liquidity support for non-banks should be very broad.

On the other hand, lending facilities that pose significant credit risk—and are under the control of Treasury, whether for banks or non-banks—should be subject to a higher threshold. Ultimately, that threshold would have to be set by Congress. However, that threshold should not require a credit crisis that threatens the stability of the U.S. financial system. Rather, Treasury should be empowered to act (and direct the Fed to act as its agent) in the event that economic conditions disruptions in lending markets severely impair access to credit by borrowers in general or by borrowers in a broad-based sector of the economy, even if short of an emergency. That standard is consistent with the Fed’s historical interpretation of the “unusual and exigent circumstances” threshold.

b.    Determining Whether There is a Significant Risk of Loss: Real and Adequate Borrower Collateral

An important question concerns when a facility does or does not involve a significant risk of loss and thus should or should not be the responsibility of the Treasury. This is a difficult line to draw.

As a general matter, the first criterion should be whether the lending takes place in an economic turndown or crisis where there are serious questions about the ability of borrowers to repay. Possible objective criteria can be used to determine whether this is the case.

A second consideration is whether there is adequate security, while recognizing that the existence of collateral does not by itself necessarily ensure lack of credit risk. In all of the pandemic crisis facilities, only one—the Primary Dealer Credit Facility—met the collateral requirement. This was due to the fact that these dealers were able to post collateral and because there was recourse back against them in the event the collateral was insufficient to cover Fed losses.[94] The lack of credit risk in this facility was also underscored by the fact that one must meet high standards to qualify as a primary dealer.[95] The fact that there was no Treasury backing of this facility indicates that the Treasury believed the dealer collateral was adequate to protect against credit risk. Therefore, although this facility had been rolled out as part of the crisis response, this kind of facility could be part of the Fed’s independent responsibility in the future due to the lack of significant credit risk.

All the other pandemic facilities—the corporate credit facilities, the Main Street Facilities, CPFF, TALF, and MLF—lacked real collateral, since the loans to the SPV were merely backed by the assets purchased by the SPV and there was only recourse back to the SPV (which held the purchased assets) and no recourse back to the actual sellers of the assets. In the case of the MMLF, where no SPV was involved, and the Fed made loans directly to banks to purchase money market assets, including unsecured commercial paper, there was also effectively no collateral (since the underlying assets that served as collateral were unsecured) and no recourse back to the banks in the event the banks defaulted on these loans. Therefore, those loans to banks also lack collateral.

i.     Emergency Lending to Banks

Currently, emergency lending to banks is governed not by Section 13(3) of the Federal Reserve Act, but by Section 10B, the so-called “discount window.” Under Section 10B, emergency lending to banks must be secured by collateral  “to the satisfaction” of the Fed.[96] Interestingly this same discretionary language was the standard in Section 13(3) for non-banks before Congress amended that provision in Dodd-Frank to require collateral that is sufficient to protect taxpayers from losses and is assigned a lendable value by the Fed.

I think the right approach to dealing with banks is twofold: (1) amend section 10B to specifically require collateral along the lines of the current section 13(3) requirement; and (2) as in the United Kingdom, require the Fed to seek Treasury approval of any loans to banks which the Fed believes involve significant credit risk, despite the collateral. Where Treasury approves such loans, it would indemnify the Fed for any losses. To ensure that Treasury exercises this authority responsibility, any decision by Treasury approving loans with such credit risk should be reported to Congress.

Within this framework, with discount window lending to banks, a facility where there is normally collateral and rarely significant credit risk, the Fed would remain independent and normally determine the terms of such loans, except where it believes individual loans to pose significant credit risk despite the collateral. In that  case, the Fed would need Treasury approval. Unlike the case for non-banks, the Fed would have the final say as to whether the loans are risky, and thus would itself determine whether it needed to get Treasury approval. The same approach should apply to PDCF and other non-bank facilities that might be established in the future with collateral standards that are equivalent to those used by the Fed for discount window lending.[97] This would require a further change of section 13(3) because all loans to non-banks, whether or not collateralized, are now currently controlled by the Treasury.

ii.     Emergency Lending to Non-Banks

As with bank emergency lending, I think that non-bank emergency lending under Section 13(3) of the Federal Reserve Act should also be bifurcated into two categories, but different categories than apply to banks: (i) if the Treasury determines that non-bank emergency lending would pose significant credit risk, then the Treasury would determine whether to lend and the terms of such loans; and (ii) if the Treasury determines that non-bank emergency lending would not pose significant credit risk, then the Fed would have the sole authority to determine whether to lend and the terms of such lending.

Where a facility for non-banks does not provide for real collateral then the entire establishment and design of the facility should lie with the fiscal authorities, the Congress and the Treasury, and should be identified as a Treasury facility.

I am not suggesting, however, that the Treasury necessarily design and take responsibility for all facilities, without adequate collateral, in which it determines there could be credit risk. It might well decide that the credit risk is tolerable and let the Fed design and establish its own facility. For example, take the corporate credit facilities. The Treasury might well decide that that facility posed little credit risk even in the absence of real collateral since very few actual loans would have to be made (as was the case in the pandemic). So, the Treasury would determine that the Fed could establish and design this facility, subject only to a general lending cap and some Treasury backing. Or take the commercial paper funding facility, again a facility without real collateral. The Treasury could decide that since the facility was going to be used to buy AAA rated paper, there would be no significant credit risk, and thus again let the Fed establish and design the facility, subject only to a lending cap and backing.

However, where the Treasury believes that the facility poses significant credit risk for non-banks, the Treasury would establish its own facility, identified as belonging to, and designed and controlled by, the Treasury.

iii.     Emergency Lending to Non-Financial Companies

If emergency lending authority is to be based on the presence of significant credit risk, then this has important implications for Fed lending to non-financial companies (as under the Main Street Lending facilities) or Fed purchasing the securities of non-financial companies (as under the CPFF, the Secondary Market Corporate Credit Facility, and the Municipal Liquidity Facility).[98]

The assets of non-financial companies tend to be less liquid than those of non-financial companies; they are also less diversified than financial companies. As a result, they are more likely than financial companies to pose credit, rather than liquidity risk.

Consequently, I believe that lending to non-financial companies should be regarded per se as involving significant credit risk, and I recommend an outright prohibition on Fed lending to non-financial companies, which should be the sole purview of the Treasury.

c.     Funding and Leverage

Under my approach, the Treasury’s own identified facilities could be deployed through the Fed, permitting such leverage as the Treasury deems compatible with its willingness to take risk, as it has done with the pandemic facilities (however much I might disagree with its lack of risk appetite). But the Treasury would fully guarantee the Fed against all losses, either during the operation or the unwinding of its programs. In fiscal matters, all the risk should be with the elected government.

Any funds or guarantees provided by the Treasury would have to be authorized by Congress. The Congress would, therefore, be able to limit the appropriation or guarantee however it sees fit. From a budgetary perspective, there is little difference between either approach. Under the Federal Credit Reform Act of 1990, both direct loans and loan guarantees by the federal government must be accounted for in the budget on an accrual, net-present-value basis.[99] That is how the $454 billion appropriation to the ESF under the CARES Act was scored; the CBO estimated that the budgetary impact of that appropriation would be zero, since income from the facilities would basically offset any losses.[100] The treatment of a loan guarantee that, in the view of the CBO, exposed Treasury to an equivalent level of credit risk would receive the same treatment.

Whatever course of action Congress takes, it should be done in advance, as a crisis can quickly materialize requiring immediate action. This was more the case in 2008, with the widespread contagious run following the Lehman bankruptcy, than it was in the gradually evolving economic impact of the pandemic. If action is taken in advance, it is far more likely that it would be in the form of a guarantee, likely with a cap, rather than an appropriation that might never be used.

To the extent Congress caps the Treasury’s ability to guarantee Fed losses, for example, at a specific dollar figure, then the Treasury must be careful to limit guaranteed Fed lending to its best conservative estimate of losses that would be within the limits set by Congress. Nonetheless, if the losses did exceed the guarantee limit, there would likely still be an implicit guarantee, as there currently is under the deposit insurance system, to cover excess losses, with the clear expectation that Congress would cover the overrun.

d.    Fed as executing agent of Treasury’s pre-prepared programs

Whether or not Fed leverage is used, the Fed will likely be needed to execute Treasury programs, due to its connection to the bank distribution channels. The Fed would only be responsible for its failure to execute in accord with Treasury directions. The Fed should rightly insist that it be operationally equipped to run any emergency lending program it is being required to administer. This, of course, was  a problem for the Small Business Administration in operating the Paycheck Protection Program authorized by the CARES Act.[101]

It is essential that the Treasury designs its crisis game plan so that it can be quickly rolled out when crisis strikes. The roll out time under a system of sole Treasury responsibility could actually be reduced compared to what it is today. In the Pandemic, unlike 2008, the Fed had to get Treasury approval, which probably caused some delay as the Fed formulated the programs which were reviewed by Treasury, with several iterations. The current system where the Fed requires Treasury approval slows down the response time.

The Treasury can act just as quickly as the Fed to implement a program, if so authorized by the Congress, as long as it prepares its programs in advance. Of course, the Treasury should fully utilize the expertise of the Fed in implementing the program, but again the responsibility of the program should be with the Treasury.

e.     Loans vs. Purchases

Under existing law, the Fed is only authorized to buy U.S. Treasury securities or government guaranteed debt, like mortgage-backed securities issued by government-sponsored enterprises.[102] During the global financial crisis, the Fed used its Section 13(3) authority to circumvent these restrictions on direct purchases by lending to Fed-created SPVs that in turn purchased assets, like commercial paper, that the Fed could not purchase directly.[103] The Fed repurposed this SPV structure for its pandemic lending facilities, albeit then explicitly authorized by the CARES Act appropriation which has now expired.[104]

Pursuant to the proposed framework, Congress should clarify that the Fed’s emergency lending authority, when acting independently or as an agent of the Treasury, is not limited to lending but also extends to the purchase of debt or other interests directly from issuers or on the secondary market. In other words, the Fed’s ability to provide emergency support should depend on the substance of that support, not its form.

f.      Accountability

A significant motivation underlying my proposals is that responsibility for the structure and terms of emergency lending programs be made clear. Responsibility for the design choices made with respect to the CARES Act facilities was unclear, which made ultimate responsibility for their effectiveness hard to determine.

My approach to this problem is structural—define in law the relative responsibility of the Treasury and Fed. Where the Fed lends to banks or non-banks without significant credit risk, then the Fed is entirely responsible. Where the Fed asks for Treasury to approve risky loans to banks (and such approval is given), or the Treasury directs the Fed to make risky loans to non-banks, then the Treasury is responsible.

Pending the structural reforms I advocate in this piece,  there should be full disclosure under the existing framework as to whom, as between the Treasury and the Fed, is responsible for the design of the facilities. How would such disclosure be made? This would be difficult to do during the actual crisis, but it could be done after the crisis has subsided. At that time, the Treasury and Fed could be required to issue a joint statement, laying out responsibility for major decisions about the structure and terms of the facility.

It is the case already that all Section 13(3) loans have to be disclosed within a week to the chairs of the Senate Banking and House Financial Services Committee.[105] Putting aside whether the prospect of such prompt disclosure deters timely and needed borrowing, due to stigma concerns, disclosure of the borrowers does not address the concern with responsibility as between the Fed and Treasury for permitting such loans.

g.    Danger to the Fed of Picking Winners and Losers

Apart from being blamed for the failure of a program that it did not design, there is a further potential risk to the Fed when it operates programs in which it exercises its discretion to choose specific borrowers or loans, rather than setting generally applicable terms and allowing borrowers to access liquidity or credit on those terms: the risk of picking winners and losers. Although the Fed will always exercise some discretion when determining program eligibility, the more it does so, the greater the concern that it has  favored some prospective borrowers over others.

This was, to some extent, a problem with all of the pandemic facilities. Most of those facilities involved the Fed setting generally applicable terms for all willing borrowers. Thus, each of the PDCF, MMLF and TALF involved the Fed (or SPVs controlled by the Fed) lending to private entities—banks, primary dealers, and other financial institutions—that use the proceeds of those loans to purchase eligible assets.[106] In the case of the CPFF, PMCCF, and MMLF, only eligible issuers could  sell commercial paper or newly issued corporate or municipal debt to the Fed on general terms set by the Fed, rather than based on the Fed’s exercise of discretion. Still, whenever the Fed sets generally applicable terms, it must decide which types of borrowers or assets are eligible for participation and which are not. And wherever the Fed decides to draw the line, it can create the perception that the Fed is helping or penalizing certain sectors or industries.[107]

Another potential issue of picking winners and losers arose in connection with the operation of the Fed’s secondary market corporate credit facility (the SMCCF), since the Fed exercised its discretion to determine which ETFs and bonds the SMCCF would buy and at what price.[108] The Fed attempted to minimize this problem by initially only purchasing highly diversified ETFs, but it still had to decide which ones to buy. The Fed tried later to further eliminate this problem by constructing its own broad bond index composed of all secondary market issues that met the SMCCF’s eligibility criteria. But the Fed still set the eligibility requirements.

A similar concern might arise if demand for an emergency credit program exceeds supply and the Fed were forced to choose between different eligible participants—for example, if the demand exceeds a cap set by the Fed (under the current framework) or Treasury (under my proposed framework). Because of the limited take-up of the pandemic facilities, this particular concern did not actually arise. For instance, the CPFF, the PDCF and MMLF were not capped, and the amount lent under all three facilities has been relatively small, with the aggregate amount outstanding peaking at a total of about $86 billion in early April (as of year-end 2020, the three facilities had less than $4.7 billion still outstanding).[109] The readiness of the Fed to supply funds through the CPFF and MMLF steadied the markets, so that funding could be obtained in private markets and actual large-scale Fed lending was unnecessary. This was also the case with the corporate credit facilities and TALF—their announcement steadied the market even before they became operational. Because the corporate credit facilities and TALF stabilized markets without large-scale purchases, and take-up of the Main Street and municipal facilities has been so limited, the capped CARES Act facilities have engaged in even less lending than the uncapped liquidity facilities. When they were shut down in January 2021, the CARES Act facilities had purchased only $40.5 billion worth of loans (the maximum amount outstanding over time), or approximately 2% of the $1.95 trillion cap established by the Fed and Treasury.[110]

Some might argue that the Fed did not object strongly to the Treasury’s unwillingness to make the Main Street facilities more attractive because it believed that high credit standards would dampen demand and therefore protect it against the need to pick winners and losers. I do not think that is likely. First, the Fed has a lot more to lose in the future by failing to rescue the economy than it does from the winners-and-losers problem. Second, more importantly, the Fed does not really have to exercise discretion with respect to the Main Street facilities; it can just buy loans on a first-come, first-serve basis. The Paycheck Protection Program of the Small Business Administration (SBA) was  vastly oversubscribed, but the SBA  operated on first-come, first-serve basis and was  not, like the banks making the loans,  accused of favoritism. Obviously, SBA  had operational issues, in terms of bad computer systems and poor guidance, but that is another matter.

Any Treasury program that delegates user eligibility to the Fed should require the Fed to make its terms clear and transparent. The Fed should then seek to operate the program to reduce the need to pick winners and losers by delegating authority to do so to a third party to pick qualified individual borrowers, or choose eligible borrowers on a strict first-come, first-serve basis.

h.    Enabling the Treasury to order the Fed to be a fiscal lender of last resort

As previously discussed, unlike the U.K. system, the Treasury cannot order the Fed to open a facility as lender of last resort. Congress should empower the Treasury to do so. As long as the Treasury has the ability to protect the Fed from loss—as it could do by use of the Exchange Stabilization Fund—the Fed should accede to the Treasury’s wishes. Such order would be public, and the Treasury would be held responsible for the success or failure of the facility.

i.      Implications for Fed Regulatory Authority

One final point, albeit relatively minor in the big picture of this essay. The Fed is the most important bank regulator. In order to incentivize banks to use some of its facilities, the MMLF and its financing of bank loans to small businesses under the PPP Liquidity Facility, it specified that banks need not maintain risk-weighted capital or leverage capital to support assets the banks acquire pursuant to these programs.[111] In addition, it exempted these assets from normal liquidity requirements under the Liquidity Coverage Ratio.[112]

Theoretically, relaxation of these requirements increases exposure of the Fed to losses from riskier banks. While this may be unlikely in present circumstances, given what appears to be the strong capital and liquidity positions of the banks, together with the relatively small share of bank assets generated by these programs, there is the conceptual concern that such actions do increase Fed credit risk. However, these are actions clearly within the Fed’s general regulatory responsibility. While one could argue that the Treasury should call the shots on regulatory relief to accompany its own programs, I would leave regulatory decisions where they normally lie, with the Fed.

j.      Summary

So, going forward when we have hopefully moved on from the pandemic, what would I recommend? In general, the  Federal Reserve should have wide discretion to carry out its traditional function as the lender of last resort, providing liquidity to the financial system through lending that carries liquidity, but not credit risk. The Treasury, by contrast, should bear responsibility for designing and owning fiscal programs, including lending programs that carry significant credit risk. To the extent that the Fed is involved in these programs, it should be as an agent of Treasury.

The following summarizes my structural recommendations for different categories of emergency lending.

  • The threshold governing when lending facilities could be established would depend on the type of lending. In general, the Fed’s ability to provide liquidity support for banks and non-banks should be very broad. By contrast, lending facilities to banks and non-banks that pose significant credit risk should be subject to a higher threshold. However, that threshold should not require a credit crisis that threatens the stability of the U.S. financial system.
  • When determining whether loans pose significant credit risk, the relevant authorities should consider whether loans are adequately collateralized and whether the lending takes place in an economic turndown or crisis where there are serious questions about the ability of borrowers to repay.
  • For emergency lending to banks under Section 10B of the Federal Reserve Act: (i) if the Fed determines that lending does not pose significant credit risk, then the Fed should remain independent in designing and implementing the lending program; and (ii) if the Fed determines that lending does pose significant credit risk despite the collateral provided, then the lending program should require Treasury approval together with indemnification for any losses incurred.
  • For emergency lending to non-banks under Section 13(3) of the Federal Reserve Act: (i) if the Treasury determines that lending would not pose significant credit risk, then the Fed would have the sole authority to determine whether to lend and the terms of such lending; and (ii) if the Treasury determines that lending would pose significant credit risk, then the Treasury should determine whether to lend and the terms of such loans.
  • Emergency lending to non-financial companies should be regarded per se as involving significant credit risk and be the sole purview of the Treasury.
  • When lending to banks or non-banks has been deemed to pose significant credit risk, then programs should be clearly identified as Treasury and not Fed programs. The Fed’s role would then be merely advisory and operational.
  • To allow the Treasury to serve this function, Congress should approve standing authority for the Treasury to engage in, or backstop, emergency lending. This authority could take the form of a standing emergency lending fund, funded with a fixed appropriation by Congress. Alternatively, it could take the form of congressional approval for the Treasury to guarantee loans made by the Fed, acting in its capacity as an agent of Treasury. Since the Fed’s role in such a program would be merely advisory and operational, Congress should also empower the Treasury to order the Fed to engage in Treasury-backed risky credit provision if the Treasury determines that such a program is necessary.
  • As an initial step, the Treasury and Fed should be required to issue a joint statement, laying out responsibility for major decisions about the structure and terms of the emergency lending facility, if not during the actual crisis then promptly after the crisis has subsided.

8.     Conclusion

I recognize that my proposal requires that the Treasury be responsible for risky lending. I reach this conclusion with a certain amount of regret. If I were to choose which party, as between Congress, the Treasury, and the Fed, would be likely to adopt the best policies in an emergency, it would be the Fed because they are independent and expert. Indeed, that is why I was critical in my book of the restrictions imposed on the Fed by Dodd-Frank. And there is a lot to complain about how the Treasury dealt with the CARES Act. But we do not have a government entrusting action to experts or philosopher kings. Nor should we.

 

[*] Emeritus Nomura Professor of International Financial Systems, Harvard Law School, Director, Committee on Capital Markets Regulation

[†] David Ricardo, On the Principles of Political Economy and Taxation, Chapter XXXI, On Machinery (3d ed. 1821).

[3] See Committee on Cap. Mkts. Reg., Revising the Legal Framework for Non-Bank Emergency Lending (Sept. 2021), https://www.capmktsreg.org/wp-content/uploads/2021/09/Revising-the-Legal-Framework-for-Non-Bank-Emergency-Lending-09.21.2021.pdf.

[4] Hal S. Scott, Connectedness and Contagion: Protecting the Financial System from Panics 94 (2016).

[5] Fed. Reserve Act § 13(3), 12 U.S.C § 343 (2012).

[6] See Walter W. Eubanks, Cong. Research Serv., R41176, Federal Financial Services Regulatory Consolidation: Structural Response to the 2007-2009 Financial Crisis 17–20 (2010).

[7] Matthew Karnitschnig, Deborah Solomon, Liam Pleven & Jon E. Hilsenrath, U.S. to Take Over AIG in $85 Billion Bailout; Central Banks Inject Cash as Credit Dries Up, Wall St. J. (Sep. 16, 2008), https://www.wsj.com/articles/SB122156561931242905 [https://perma.cc/L2EF-C4VJ].

[8] Laurence Ball, The Fed and Lehman Brothers 14 (2016), https://www.nber.org/data-appendix/w22410/The%20Fed%20and%20Lehman%20Brothers.pdf [https://perma.cc/7QTQ-6AGT].

[9] See Ben Bernanke, Final Keynote Address at the Brookings Institution Liquidity and the Role of the Lender of Last Resort Event (Apr. 30, 2014), https://www.brookings.edu/events/liquidity-and-the-role-of-the-lender-of-last-resort/ [https://perma.cc/35PB-XSMQ]; Janet Yellen, Chair, Fed. Reserve, Opening Statement on the draft final rule implementing amendments enacted by the Dodd-Frank Act to the Federal Reserve’s emergency lending authority under section 13(3) of the Federal Reserve Act (Nov. 30, 2015), https://www.federalreserve.gov/newsevents/press/bcreg/yellen-opening-statement-20151130.htm [https://perma.cc/663D-CR98].

[10] See Martin F. Hellwig, Financial Stability and Monetary Policy, MPI Collective Goods Preprint, No. 2015/10, 12–13 (Aug.  2015), http://ssrn.com/abstract=2639532 [https://perma.cc/DTB4-XEFW].

[11] Table 5. Gross Collections, by Type of Tax and State, Fiscal Year 2015, Internal Revenue Serv. (2016), https://www.irs.gov/pub/irs-soi/15db05co.xls [https://perma.cc/F5M6-ZJ36].

[12] See Letter from Janet Yellen, Chair, Federal Reserve, to Elizabeth Warren, Senator (Nov. 30, 2015), https://www.federalreserve.gov/foia/files/warren-letter-20151130.pdf [https://perma.cc/8UEP-5343].

[13] Extensions of Credit by Federal Reserve Banks, 80 Fed. Reg. 78959, 78961­–62 (Dec. 18, 2015) (to be codified at 12 C.F.R. 201).

[14] Since the Fed was not authorized by the Federal Reserve Act to buy commercial paper, it set up a SPV to do so. The Fed lent to the SPV and the SPV bought the unsecured commercial paper which was pledged, together with issuer fees, to the Fed. Of course, if issuers defaulted on the commercial paper, this “collateral” would be worthless, and the fees represented a small part of the Fed’s exposure. See U.S. Gov’t Accountability Office, GAO-11-696, Federal Reserve System: Opportunities Exist to Strengthen Policies and Processes for Managing Emergency Assistance 92–93, 192–98 (2011), https://www.gao.gov/assets/gao-11-696.pdf [https://perma.cc/ZH3L-B5SD]; Eric Posner, What Legal Authority Does the Fed Need During a Financial Crisis?, 101 Minn. L. Rev. 1529, 1552–53 (2017).

[15] U.S. Const. art. I, § 9, cl. 7.

[16] For an extended analysis of Congress’s constitutional authority over fiscal decisions, see Kate Stith, Congress’ Power of the Purse, 97 Yale L.J. 1343 (1988).

[17] See id. at 1381–86. Stith argues that the grant of spending authority by Congress to another agency is only consistent with the constitutional requirement that Congress control appropriations if Congress “clearly defines the activity being funded, provides a time limitation on the spending program, implicitly or explicitly decides the total amount of spending authority, and undertakes periodic legislative review.” Id. at 1383.

[18] See Office of Pers. Mgmt. v. Richmond, 496 U.S. 414, 430 (1990) (citing Wilson Cowen, Philip Nichols & Marion Bennett, The United States Court of Claims: A History (1978)).

[19] 626 F. Supp. 1374, 1383 (D.D.C. 1986), aff’d on other grounds in Bowsher v. Synar, 478 U.S. 714, 721 (1986).

[20] Id. at 1385–86 (“The appropriations power is not functionally distinguishable from other powers successfully delegated by Congress.”).

[21] Bd. of Governors of the Fed. Reserve Sys., Financial Accounting Manual for Federal Reserve Banks 104 (2021).

[22] Charles W. Calomiris, Douglas Holtz-Eakin, R. Glenn Hubbard, Allan H. Meltzer & Hal S. Scott, Establishing credible rules for Fed emergency lending, 9 J.Fin. Econ. Pol’y 260 (2017), https://www.capmktsreg.org/wp-content/uploads/2017/08/JFEP-01-2017-00065b35d.pdf [https://perma.cc/2NCD-433U].

[23] Id. at 263.

[24] See Ian Plenderleith, Review of the Bank of England’s provision of emergency liquidity assistance in 2008–09 84 (2012), https://www.bankofengland.co.uk/-/media/boe/files/news/2012/november/the-provision-of-emergency-liquidity-assistance-in-2008-9 [https://perma.cc/BMS3-FS27] (“The purpose of this review is to learn lessons to inform the way the Bank conducts ELA operations for individual financial institutions. Such support operations will, in due course, be conducted under the new Crisis Management Memorandum of Understanding, which was published in January 2012. The review will build on the lessons learned in relation to the ELA provided to Northern Rock in 2007, as set out in the Treasury Committee’s report ‘The Run on the Rock’”); see also Press Release, Bank of Eng., Court of the Bank of England commissions a set of reviews to learn lessons (May 21, 2012), https://www.bankofengland.co.uk/-/media/boe/files/news/2012/may/court-of-the-boe-commissions-a-set-of-reviews-to-learn-lessons [https://perma.cc/J3EH-VZ7R].

[25] Financial Services Act of 2012, c. 21, Part 4, http://www.legislation.gov.uk/ukpga/2012/21/part/4/enacted [https://perma.cc/FVX8-6ZYD]; HM Treasury, Bank of England and Prudential Regulation Authority, Memorandum of understanding on financial crisis management § 1 (2012), https://www.bankofengland.co.uk/-/media/boe/files/memoranda-of-understanding/resolution-planning-and-financial-crisis-management.pdf?la=en&hash=57D8302D2AE09F004E 67BEF19A554547CAD2D47B [https://perma.cc/RT6M-XYDG].

[26] HM Treasury, Bank of England and Prudential Regulation Authority, Memorandum of understanding on financial crisis management, supra note 24.

[27] 12 C.F.R. § 201.4(a) (“A Federal Reserve Bank may extend primary credit on a very short-term basis, usually overnight, as a backup source of funding to a depository institution that is in generally sound financial condition in the judgment of the Reserve Bank.”); § 201.4(b) (“A Federal Reserve Bank may extend secondary credit on a very short-term basis, usually overnight, as a backup source of funding to a depository institution that is not eligible for primary credit . . . .”); Id. §§ 201.104–110 (describing eligible collateral for discount window loans). In nearly two decades, the highest average weekly usage of the Fed’s secondary credit facility was less than $1 billion. See Assets: Liquidity and Credit Facilities: Loans: Secondary Credit: Week Average, https://fred.stlouisfed.org/series/WSC [https://perma.cc/7ZVT-KBJY](last visited Oct. 31, 2021).

[28] 12 C.F.R. § 201.4(b).

[29] Hal S. Scott, Connectedness and Contagion: Protecting the Financial System from Panics 115 (2016).

[30] HM Treasury, supra note 24.

[31]See Letter from Rishi Sunak, Chancellor, Exchequer, to Andrew Bailey, Governor, Bank of Eng. (Mar. 17, 2020), https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/873222/20200317_-_CX-Gov_Letter_re_CCFF_vF.pdf [https://perma.cc/Y2VJ-57ND]; see also Covid Corporate Financing Facility, Bank of England, https://www.bankofengland.co.uk/markets/covid-corporate-financing-facility [https://perma.cc/VY62-5P97](last visited Oct. 4, 2020).

[32] Fed. Reserve Act § 13(3)(A), 12 U.S.C § 343 (2012).

[33] Press Release, Bd. of Governors of the Fed. Reserve Sys., Federal Reserve Board announces establishment of a Commercial Paper Funding Facility (CPFF) to support the flow of credit to households and businesses (Mar. 17, 2020), https://www.federalreserve.gov/newsevents/pressreleases/monetary20200317a.htm [https://perma.cc/ZP38-TP5F]; Press Release, Bd. of Governors of the Fed. Reserve Sys., Federal Reserve Board announces establishment of a Primary Dealer Credit Facility (PDCF) to support the credit needs of households and businesses (Mar. 17, 2020), https://www.federalreserve.gov/newsevents/pressreleases/monetary20200317b.htm [https://perma.cc/MSP2-EMXR]; Press Release, Bd. of Governors of the Fed. Reserve Sys., Federal Reserve Board broadens program of support for the flow of credit to households and businesses by establishing a Money Market Mutual Fund Liquidity Facility (MMLF) (Mar. 18, 2020), https://www.federalreserve.gov/newsevents/pressreleases/monetary20200318a.htm [https://perma.cc/ME5L-YYJR].

[34] Press Release, Bd. of Governors of the Fed. Reserve Sys., Federal Reserve Board announces establishment of a Commercial Paper Funding Facility (CPFF) to support the flow of credit to households and businesses, supra note 35.

[35] Coronavirus Aid, Relief, and Economic Security Act (CARES Act), H.R. 748, 116th Cong. § 4003 (2020).

[36] See Press Release, Bd. of Governors of the Fed. Reserve Sys., Federal Reserve announces extensive new measures to support the economy (Mar. 23, 2020), https://www.federalreserve.gov/newsevents/pressreleases/monetary20200323b.htm [https://perma.cc/42A8-GUT4].

[37] See id.

[38] Main Street Lending Program, Bd. of Governors of the Fed. Reserve Sys., https://www.federalreserve.gov/monetarypolicy/mainstreetlending.htm [https://perma.cc/42ZF-9GTQ](last visited Dec. 7, 2020).

[39] See Main Street Lending Program, Bd. of Governors of the Fed. Reserve Sys., https://www.federalreserve.gov/monetarypolicy/mainstreetlending.htm [https://perma.cc/5DCK-EB4T] (Oct. 13, 2021).

[40] See Press Release, Bd. of Governors of the Fed. Reserve Sys., Federal Reserve takes additional actions to provide up to $2.3 trillion in loans to support the economy (Apr. 9, 2020), https://www.federalreserve.gov/newsevents/pressreleases/monetary20200409a.htm [https://perma.cc/9ZTD-AV6C].

[41] H.4.1 Factors Affecting Reserve Balances, Bd. of Governors of the Fed. Reserve Sys. (Dec. 28, 2020), https://www.federalreserve.gov/releases/h41/20201228/.

[42] Term Sheet for Secondary Market Corporate Credit Facility, Bd. of Governors of the Fed. Reserve Sys. (Apr. 9, 2020), https://www.federalreserve.gov/newsevents/pressreleases/files/monetary20200409a2.pdf [https://perma.cc/VT98-2FAH].

[43] Term Sheet for Main Street New Loan Facility, Bd. of Governors of the Fed. Reserve Sys. (Apr. 9, 2020), https://www.federalreserve.gov/newsevents/pressreleases/files/monetary20200409a7.pdf [https://perma.cc/5TCP-P94P].

[44] Primary Market Corporate Credit Facility, Bd. of Governors of the Fed. Reserve Sys. (July 28, 2020), https://www.federalreserve.gov/newsevents/pressreleases/files/monetary20200728a9.pdf [https://perma.cc/L2QP-BE8M]; Secondary Market Corporate Credit Facility, Bd. of Governors of the Fed. Reserve Sys. (July 28, 2020), https://www.federalreserve.gov/newsevents/pressreleases/files/monetary20200728a1.pdf [https://perma.cc/XUU4-QC6T].

[45] Press Release, Bd. of Governors of the Fed. Reserve Sys., Federal Reserve Board adjusts terms of Main Street Lending Program to better target support to smaller businesses that employ millions of workers and are facing continued revenue shortfalls due to the pandemic (Oct. 30, 2020), https://www.federalreserve.gov/newsevents/pressreleases/monetary20201030a.htm [https://perma.cc/GM53-S9S6].

[46] Term Sheet for Main Street Expanded Loan Facility, Bd. of Governors of the Fed. Reserve Sys. (June 8, 2020), https://www.federalreserve.gov/newsevents/pressreleases/files/monetary20200608a3.pdf [https://perma.cc/R4BA-4VSV].

[47] Id.

[48] Id.

[49] Id.

[50] Id.

[51] Id.

[52] Id.

[53] See H.4.1 Factors Affecting Reserve Balances, Fed. Reserve Statistical Release (Jan. 14, 2021), https://www.federalreserve.gov/releases/h41/20210114/[https://perma.cc/XVA4-EZJB]; Dept. of Treasury, Audit of the Exchange Stabilization Fund’s Financial Statements for Fiscal Years 2020 and 2019, 23 (March 20, 2021), https://home.treasury.gov/system/files/206/ESF-Annual-Audit-FY2020.pdf.

[54] Id.

[55] Phillip L. Swagel, Cong. Budget Off., Preliminary Estimate of the Effects of H.R. 748, the CARES Act, Public Law 116-136, Revised, With Corrections to the Revenue Effect of

the Employee Retention Credit and to the Modification of a Limitation on Losses for Taxpayers Other Than Corporations, 2 (Apr. 27, 2020), https://www.cbo.gov/system/files/2020-04/hr748.pdf [https://perma.cc/WT3V-CBDT].

[56] See Glenn Hubbard & Hal Scott, Editorial, Main Street Needs More Fed Help, Wall St. J. (Apr. 16, 2020), https://www.wsj.com/articles/main-street-needs-more-fed-help-11587055459 [https://perma.cc/WSD4-75NA].

[57] Term Sheet for Main Street New Loan Facility, supra note 42 ; Term Sheet for Main Street Expanded Loan Facility, supra note 45.

[58] See Editorial, The Main Street Fakeout, Wall St. J. (Apr. 30, 2020), https://www.wsj.com/articles/the-main-street-fakeout-11588288799 [https://perma.cc/TUF9-28GS].

[59] See Glenn Hubbard & Hal Scott, Who’s Looking Out for Main Street?, Wall St. J. (May 17, 2020),  https://www.wsj.com/articles/whos-looking-out-for-main-street-11589741411 [https://perma.cc/298D-J48S]; Glenn Hubbard & Hal Scott, ‘Main Street’ Program Is Too Stingy to Banks and Borrowers, Wall St. J. (July 20, 2020), https://www.wsj.com/articles/main-street-program-is-too-stingy-to-banks-and-borrowers-11595284266 [https://perma.cc/8T5R-HDDE].

[60] See ‘Main Street’ Program Is Too Stingy to Banks and Borrowers, supra note 55.

[61] Fed. Reserve Act, § 13(3)(B)(i).

[62] Fed. Reserve Act, § 13(3)(B)(ii).

[63] 12 C.F.R. § 201.4(d)(5)(iii) (emphasis added).

[64] See 12 C.F.R. § 201.4(d)(5)(iv)(A).

[65] Term Sheet for Main Street New Loan Facility, Bd. of Governors of the Fed. Reserve Sys. (Dec. 29, 2020), https://www.federalreserve.gov/newsevents/pressreleases/files/monetary20201229a1.pdf [https://perma.cc/DJ6E-TV5Q].

 

[66] 12 C.F.R. § 201.4(d)(5)(iii).

 

[67] Kate Davidson & Richard Rubin, Steven Mnuchin Says U.S. Aims to Get Back Its Money From Fed Programs, Wall St. J. (Apr. 29, 2020), https://www.wsj.com/articles/mnuchin-says-u-s-not-aiming-to-lose-money-on-fed-lending-facilities-11588178749 [https://perma.cc/8LV8-RPWB].

[68] Id.

[69] Hybrid Hearing: Oversight of the Treasury Department’s and Federal Reserve’s Pandemic Response Before the H. Fin. Services Comm., 116th Cong. (2020) (statement of Steven Mnuchin, Secretary, U.S. Department of the Treasury), https://financialservices.house.gov/calendar/eventsingle.aspx?EventID=406869 [https://perma.cc/L7BZ-UAGM]; see also Victoria Guida & Zachary Warmbrodt, Mnuchin, Powell face new demands to rescue economy, Politico (May 19, 2020), https://www.politico.com/news/2020/05/19/mnuchin-powell-face-new-demands-to-rescue-economy-268331 [https://perma.cc/7R5M-LMGB] (“There are scenarios within Main Street where we could lose all of our capital, and we’re prepared to do that.”).

[70] Letter from Steven T. Mnuchin, Secretary, U.S. Dep’t of the Treasury, to Jerome Powell, Chair, Fed. Reserve (Nov. 19, 2020), https://home.treasury.gov/system/files/136/letter11192020.pdf [https://perma.cc/DL7V-65J5].

[71] James Politi & Colby Smith, US Treasury refuses to extend some of Fed’s crisis-fighting tools, Fin. Times (Nov. 19, 2020), https://www.ft.com/content/e4b3a063-db44-4e6c-b998-74a29d70b136 [https://perma.cc/4X89-KKNU] (“The Federal Reserve would prefer that the full suite of emergency facilities established during the coronavirus pandemic continue to serve their important role as a backstop for our still-strained and vulnerable economy.”).

[72] See supra note 66.

[73] See Memorandum from Jay B. Sykes on Section 4029 of the Coronavirus Aid, Relief, and Economic Security (CARES) Act and the Extension of the Federal Reserve’s Emergency-Lending Programs to the House Select Subcommittee on the Coronavirus Crisis (Dec. 17, 2020), https://coronavirus.house.gov/sites/democrats.coronavirus.house.gov/files/Memo%20re%20CARES%20Act%20Section%204029.pdf [https://perma.cc/6V4T-28BP].

[74] Id. at 5–7.

[75] See supra note 66.

[76] H.4.1 Factors Affecting Reserve Balances, Bd. of Governors of the Fed. Reserve Sys. (Nov. 19, 2020), https://www.federalreserve.gov/releases/h41/20201119/ [https://perma.cc/KU6K-JZZY].

[77] Letter from Jerome Powell, Chair, Fed. Reserve, to Steven Mnuchin, Secretary, Department of the Treasury, on emergency lending facilities (Nov. 20, 2020), https://www.federalreserve.gov/foia/files/mnuchin-letter-20201120.pdf [https://perma.cc/44GM-JY4F]; Sykes, supra note 69, at 6–7.

[78] Consolidated Appropriations Act, 2021, H.R. 133, 116th Cong., § 1005 (2020), https://rules.house.gov/sites/democrats.rules.house.gov/files/BILLS-116HR133SA-RCP-116-68.pdf [https://perma.cc/JB9F-67G3].

[79] Id. at § 1003.

[80] Id. at § 1005.

[81] See U.S. Dept. of Treasury, Exchange Stabilization Fund: Statement of Financial Position as of Sept. 30, 2021 (last accessed Nov. 4, 2021), https://home.treasury.gov/system/files/206/Trunc_Notes.pdf.

[82] See Hal Scott, Here’s How the Fed Can Do More To Support US Small Business, Fin. Times (Jan. 11, 2021), https://www.ft.com/content/0d0b0f48-df3c-4b2f-97b8-d2da0415d8d6 [https://perma.cc/7K4P-R8M6].

[83] There was also lack of clarity about legal authority over the duration of the lending facilities. The term sheets of the CPFF and the MMLF, both of which invoked the Fed’s section 13(3) authority, suggested that the duration of each facility could be extended unilaterally by the Fed—even though Section 13(3) requires the terms of any lending facility to be approved by both the Fed and the Treasury Secretary. See Commercial Paper Funding Facility 2020: Program Terms and Conditions (Mar. 17, 2020), https://www.federalreserve.gov/newsevents/pressreleases/files/monetary20200317a1.pdf [https://perma.cc/JV3F-C5U2]; Money Market Mutual Fund Liquidity Facility (Mar. 18, 2020), https://www.federalreserve.gov/newsevents/pressreleases/files/monetary20200318a1.pdf [https://perma.cc/XN2G-KCUE]. Subsequent revisions to the term sheets, issued several months later, corrected this mistake. Commercial Paper Funding Facility 2020: Program Terms and Conditions (Nov. 30, 2020), https://www.federalreserve.gov/newsevents/pressreleases/files/monetary20201130a1.pdf [https://perma.cc/3MBU-76PN]; Money Market Mutual Fund Liquidity Facility (Jul. 28, 2020), https://www.federalreserve.gov/newsevents/pressreleases/files/monetary20200728a4.pdf [https://perma.cc/P3CA-7SU7].

[84] Victoria Guida & Aubree Eliza Weaver, We’re In a Recession, By the Way, Politico (Jun. 9, 2020), https://www.politico.com/newsletters/morning-money/2020/06/09/were-in-a-recession-by-the-way-788358 [https://perma.cc/SU6Q-TXZW](“People familiar with the matter tell [Morning Money] that the Treasury Department has been more cautious on taking risk than the Fed. They’re the ones ponying up taxpayer dollars, so this makes some sense.”).

[85] Fed. Reserve Act, §13(3).

[86] Adam J. Levitin, In Defense of Bailouts, 99 Geo. L.J. 435, 496 (2011) (“[E]ven the ‘unusual and exigent circumstances’ requirement does not necessarily indicate systemic risk, just market disruption.”).

[87] Partinitha Sastry, The Political Origins of Section 13(3) of the Federal Reserve Act, FRBNY Econ. Policy Rev., Sept. 2018, at 23, https://www.newyorkfed.org/medialibrary/media/research/epr/2018/epr_2018_political-origins_sastry.pdf [https://perma.cc/LJ3C-TA9U].

[88] Id. at 19–23.

[89] Id. at 23–24.

[90] Id. at 24.

[91] Board of Governors of the Federal Reserve System, Fifty-Third Annual Report: Covering Operations for the Year 1966 92 (1967).

[92] Board of Governors of the Federal Reserve System, Fifty-Sixth Annual Report: Covering Operations for the Year 1969 92 (1970).

[93] Thomas C. Baxter, Jr., General Counsel and Executive Vice President, Fed. Reserve of N.Y., Presentation to Regulatory Response to the Financial Crisis on The Legal Position of the Central Bank, The Case of the Federal Reserve Bank of New York 6 (Jan. 19, 2009), https://web.archive.org/web/20130511222423/http://lse.ac.uk/fmg/documents/events/conferences/2009/regulatoryResponse/1160_Baxter.pdf.

[94] See Term Sheet for Primary Dealer Credit Facility, Bd. of Governors of the Fed. Reserve Sys. (Jul. 28, 2020), https://www.federalreserve.gov/newsevents/pressreleases/files/monetary20200728a8.pdf [https://perma.cc/YUY6-B43V]

[95] See Primary Dealers, Expectations and Requirements, Fed. Reserve Bank of NY, https://www.newyorkfed.org/markets/primarydealers#:~:text=Be%20either%20(1)%20a%20broker,2)%20a%20state%20or%20federally [https://perma.cc/48CW-HZRN ](last visited Oct. 4, 2020).

[96] Fed. Reserve Act, § 10B(a), 12 U.S.C. § 347b(a).

[97] See, e.g., Term Sheet for Primary Dealer Credit Facility (PDCF), Bd. of Governors of the Fed. Reserve Sys.  (Nov. 30, 2020), https://www.federalreserve.gov/newsevents/pressreleases/files/monetary20201130a3.pdf [https://perma.cc/54JE-58TM ](“The pledged collateral will be valued by Bank of New York Mellon according to a schedule designed to be similar to the margin schedule for lending by the discount window, to the extent possible.”).

[98] The kind of lending the Fed engaged in through TALF would be more difficult to classify. On the one hand, the asset-backed securities to which the Fed was exposed through TALF included non-financial debt such as student and equipment loans; on the other hand, the loans made by TALF were to financial companies that were independent of the Fed.

[99] Fed. Credit Reform Act of 1990, Pub. L. No. 101-508, § 504 (1990). Previously, they were accounted for on a cash-flow basis. See Mindy R. Levit, Cong. Research Serv., R42632, Budgetary Treatment of Federal Credit (Direct Loans and Loan Guarantees): Concepts, History and Issues for Congress 4–5 (2014).

[100] See supra note 51.

[101] Stephanie Ruhle & Ben Popken, Thousands of applicants, zero loans: Trump’s small businesses lending program is a failure to launch, NBC News (Apr. 4, 2020), https://www.nbcnews.com/business/business-news/thousands-applicants-zero-loans-trump-s-small-businesses-lending-program-n1176766 [https://perma.cc/3TDG-DKW8]; Lauren Fox, Glitches hamper second round of small business loan funding, CNN (Apr. 27, 2020), https://www.cnn.com/2020/04/27/politics/state-of-play-paycheck-protection-program-small-business-administration/index.html [https://perma.cc/Z97J-5ZJG].

[102] Fed. Reserve Act § 13(2), 12 U.S.C § 343.

[103] See Federal Reserve, Commercial Paper Funding Facility: Frequently Asked Questions (October 27, 2008), https://www.newyorkfed.org/markets/cpff_faq_081027.html; Eric A. Posner, What Legal Authority Does the Fed Need During a Financial Crisis?, 101 Minn. L. Rev. 1529, 1551-52 (2017); Alexander Mehra, Legal Authority in Unusual and Exigent Circumstances: The Federal Reserve and the Financial Crisis, 13 U. Penn. J. Bus. L. 221, 235-36 (2011).

[104] See CARES Act, § 4003(b)(4); § 4029(b)(4). See also Letter from Treasury Secretary Steven Mnuchin to Federal Reserve Chairman Jerome Powell (Nov. 19, 2020), https://home.treasury.gov/system/files/136/letter11192020.pdf [https://perma.cc/K5YS-72KC ]

[105] Fed. Reserve Act, § 13(3)(C), 12 U.S.C. § 347d(3)(C).

[106] TALF also limited this problem by excluding single-asset, single-borrower commercial mortgage-backed securities as eligible collateral. See Term Sheet for Term Asset-Backed Securities Loan Facility, Bd. of Governors of the Fed. Reserve Sys. (Jul. 28, 2020), https://www.federalreserve.gov/newsevents/pressreleases/files/monetary20200728a6.pdf [https://perma.cc/8E8U-NBHY].

[107] See, e.g., Victoria Guida & Zack Colman, Fed’s expansion of lending program sparks oil bailout worries, Politico (April 30, 2020), https://www.politico.com/news/2020/04/30/feds-expansion-of-lending-program-sparks-oil-bailout-worries-227545 [https://perma.cc/RB45-8ZS5]; Robert Schmidt, Jesse Hamilton, & Sally Bakewell, Private Equity to Get Squeezed Out of Another Stimulus Program, Bloomberg News (April 23, 2020) (private equity owned companies concerned that they would not qualify for Main Street facilities), https://www.bloomberg.com/news/articles/2020-04-23/private-equity-to-get-squeezed-out-of-another-stimulus-program?sref=2lCQoM0A.

[108] Federal Reserve, Secondary Market Corporate Credit Facility (July 28, 2020), https://www.federalreserve.gov/newsevents/pressreleases/files/monetary20200728a1.pdf [https://perma.cc/2252-AX5C].

[109] Committee on Capital Markets Regulation, Treasury and Fed Lending Programs: An Assessment and Call for Continued Support for SMEs, 2 (Dec. 2020), https://www.capmktsreg.org/wp-content/uploads/2020/12/CCMR-Report-Treasury-Fed-Programs-Assessment-and-Recommendations-12.29.2020.pdf [https://perma.cc/VBL9-PJFR].

[110] Federal Reserve, Factors Affecting Reserve Balances, Federal Reserve Statistical Release H.4.1 (Jan. 14, 2021).

[111] Office of the Comptroller of the Currency, Treasury, the Board of Governors of the Federal Reserve System & Federal Deposit Insurance Corporation, Regulatory Capital Rule: Money Market Mutual Fund Liquidity Facility, 85 Fed. Reg. 16232 (Mar. 23, 2020); Office of the Comptroller of the Currency, Treasury, the Board of Governors of the Federal Reserve System & Federal Deposit Insurance Corporation, Regulatory Capital Rule: Paycheck Protection Program Lending Facility and Paycheck Protection Program Loans, 85 Fed. Reg. 20387 (Apr. 13, 2020).

[112] Joint Press Release, Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation & Office of the Comptroller of the Currency, Federal bank regulatory agencies modify liquidity coverage ratio for banks participating in Money Market Mutual Fund Liquidity Facility and Paycheck Protection Program Liquidity Facility (May 5, 2020), https://www.federalreserve.gov/newsevents/pressreleases/bcreg20200505a.htm [https://perma.cc/X7UZ-CL25].

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The Sturm und Drang of the CDC’s Home Eviction Moratorium – Paul J. Larkin

Posted by on Nov 26, 2021 in Per Curiam

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The Sturm und Drang of the CDC’s Home Eviction Moratorium

Paul J. Larkin*

 

Damn the torpedoes! Full speed ahead!

Admiral David Glasgow Farragut at the Battle of Mobile Bay, 1864¨

 

Introduction

The pandemic that has roiled the globe since late in 2019 has begun to have the same effect on the law. Beginning in March 2020, Congress, former President Donald Trump, and current President Joe Biden have engaged in a pas de trois, taking turns directing the U.S. Centers for Disease Control and Prevention (CDC) to issue nationwide moratoria preventing qualifying tenants from being evicted for not paying their rent. Most recently, Biden, bowing to political pressure to prevent evictions from restarting after more than a year’s delay, ordered the CDC to issue yet another moratorium, and, on August 3, 2021, the CDC did so. As it had done for some of its earlier orders, the CDC relied on a 1944 statute, the Public Health Service Act.[1] The CDC did so even though, prior to 2020, the CDC had never before invoked that law as a rental protection device or an indirect form of rent control.[2]

Not surprisingly, the legality of the CDC’s most recent moratorium has generated considerable public policy debate.[3] Some of that debate has taken place in court. Landlords, real estate companies, and trade associations have brought a series of lawsuits challenging both the CDC’s statutory authority to issue those orders and their constitutionality.[4] One case reached the Supreme Court of the United States, twice in fact.[5] The first time, by a 5-4 vote the Court seemed to agree with the plaintiffs that the CDC had exceeded its statutory authority but nonetheless denied them injunctive relief pending appeal because one justice guessed that the few remaining weeks of the moratorium would enable an orderly distribution of appropriated but undisbursed federal rental assistance funds.[6] By contrast, when the case reached the Court a second time, the Court, by a 6-3 vote, granted the plaintiffs interim relief and went out of its way to belittle the government’s argument, sending a strong message of displeasure at having to revisit the issue. [7]

This Article will address the legality of the CDC’s August 3 moratorium: Part I will describe the steps that Congress and the President have taken to prevent a new and often fatal virus from engulfing the nation and killing a large part of its population. That discussion will include a history of the different CDC eviction moratoria. Part II will summarize the litigation that has unfolded since the moratoria went into effect, focusing on the Supreme Court’s two orders in Alabama Association of Realtors v. Department of Health and Human Services.[8] The Supreme Court did not issue a final ruling on the meaning of the statute, so Part III will analyze whether the CDC has the power to issue its August 3 order. Part IV asks why Biden directed the CDC to enter that order and what the long-term consequences might be for him by having done so.

I. The COVID-19 Pandemic

Late in 2019, as if witnessing the resurrection of the Spanish or 1918 Flu that killed millions globally a century ago, the world saw the entry of another highly contagious, infectious, and potentially fatal influenza virus: Severe Acute Respiratory Syndrome Coronavirus-2, or SARS-CoV-2.[9] The disease it causes—COVID-19—first appeared in Wuhan, China. The virus is spread from person to person by infected airborne respiratory droplets that enter through the mouth or nasal passages or across another mucous membrane by a recipient’s own hands.[10] It rapidly spread across the globe, reaching this country in 2020.[11] Since the virus’s onset, more than 279 million people have suffered from COVID-19 worldwide, with more than 5 million fatalities, and counting.[12] In this country, more than 46.4 million people have been infected and 752,000-plus have died.[13]

In the United States, the federal, state, and local governments, as well as the private sector, immediately took a host of complementary responses.[14] Their short-term goals were to treat infected people and shut down or reduce the number of interpersonal interactions normally seen in a modern-day society in the hope of preventing further spread of the virus and the collapse of the nation’s medical systems.[15] To do so, Trump and state governors urged or ordered businesses to close and people to remain at home except to obtain necessities, such as food and medicine, and with or for with exceptions for emergency personnel, such as physicians and law enforcement officers.[16] The result, however, was a cascading series of adverse events: numerous small businesses collapsed, leaving their employees without a paycheck, putting them at risk of eviction for nonpayment of rent. The prospect was a human and economic tragedy unseen since the Dust Bowl that occurred during the Great Depression.

To avert that outcome, Congress included in a law enacted in March 2020—the Coronavirus Aid, Relief, and Economic Security Act, also known as the CARES Act[17]—a 120-day nationwide moratorium on the eviction of nonpaying tenants from rental properties receiving federal financial assistance.[18] That moratorium expired on July 25, but President Trump directed Alex Azar, the Secretary of Health and Human Services, and Robert Redfield, Director of the Centers for Disease Control and Prevention, to “consider whether any measures temporarily halting residential evictions of any tenants for failure to pay rent are reasonably necessary” to prevent the interstate spread of the virus.[19] In response, on September 4, the CDC issued a temporary eviction moratorium suspending execution of eviction orders for nonpayment of rent.[20]

The CDC estimated that, absent a moratorium, 30–40 million people could be at risk of eviction, which could spread the SARS-CoV-2 virus as evicted parties moved in with family members or friends, or moved to “congregate settings” (such as homeless shelters and transitional housing) or other locations involving close interpersonal contact and the use of shared items.[21] Some evicted parties would become homeless, which could also exacerbate the spread of the virus and worsen the condition of infected and uninfected parties given their “inadequate access to hygiene, sanitation facilities, health care, and therapeutics.”[22] Eviction would not confine any problem to the state where parties had lived, because approximately 15 percent of the people who move each year relocate in another state.[23] Accordingly, the CDC prohibited landlords from evicting a qualifying party[24] for nonpayment of rent during the duration of the order.[25] The order did not, however, relieve anyone of the obligation to pay rent.[26]

As authority, the CDC relied on the Public Health Act of 1944. Among other things, a provision in that statute entitled “Regulations to control communicable diseases” empowers the CDC to issue and enforce such rules that the Director deems “necessary to prevent the introduction, transmission, or spread of communicable diseases” from foreign nations or from one state or possession to another.[27] For “purposes of carrying out and enforcing such regulations,” the act states that the CDC “may provide for such inspection, fumigation, disinfection, sanitation, pest extermination, destruction of animals or articles found to be so infected or contaminated as to be sources of dangerous infection to human beings, and other measures, as in his judgment may be necessary.” The CDC argued that the last portion of the statute—“other measures, as in his judgment may be necessary”—justified the agency’s eviction moratorium.

The CDC’s order was scheduled to expire on December 31, 2020.[28] Days beforehand, Congress passed the Consolidated Appropriations Act, 2021, which extended the CDC’s order through January 31, 2021.[29] Thereafter, Congress did not renew a statutory moratorium. Acting on its own, the CDC extended its order in January, February, and June 2021.[30] That last extension expired on July 31.

II. Litigation Challenging the CDC’s Moratorium

A. The Lower Federal Court Litigation

Individual landlords, trade associations, and other parties challenged the moratoria. Some lower federal courts held that Section 264 of the Public Health Act authorized the CDC’s orders, some held to the contrary, and some punted, deciding only whether to issue a preliminary injunction pending a final decision.[31] The difference in the courts’ analyses is largely a matter of a difference in their focus. Some judges homed in on the phrase allowing the CDC to “take such measures to prevent such spread of the diseases as he deems reasonably necessary,” and read it to grant the CDC plenary authority to decide how best to halt the spread of the virus.[32] The courts that held the moratoria exceeded the CDC’s Section 264 power approached the issue from a different perspective. They took a step back and read that phrase in conjunction with the remainder of the statute, particularly the sentence that immediately follows, specifying that, “[f]or the purpose of enforcing” the CDC’s regulations, the Director’s power “includ[es] inspection, fumigation, disinfection, sanitation, pest extermination, and destruction of animals or articles believed to be sources of infection.” Those courts limited the “catch-all” phrase in the preceding sentence to measures akin to the ones it specified.[33]

One case—Alabama Realtors—made its way through the lower courts to the Supreme Court—twice—in a few months. That case merits a detailed discussion.

B. The Alabama Realtors Case

1. Alabama Realtors Round 1

Two individual plaintiffs, the corporate entities they use to manage their rental properties, and two trade associations brought suit in federal court in the District of Columbia against the CDC, claiming that the moratoria it imposed after the 2021 appropriations act expired exceeded the agency’s statutory authority and was unconstitutional to boot.[34] On cross-motions for summary judgment, the district court ruled in the plaintiffs’ favor, holding that the Public Health Service Act did not authorize the agency to halt evictions.[35] The court acknowledged that the Public Health Service Act “grants the [CDC] broad authority to make and enforce regulations necessary to prevent the spread of disease,” but added that that the CDC Director’s “authority is not limitless.”[36] The “broad grant of rulemaking authority in the first sentence of § 264(a) is tethered to—and narrowed by—the second sentence,” which identifies specific mechanisms that the CDC Director may use to protect the public health.[37] So read, the CDC’s order exceeded the agency’s Section 246 regulatory power because the “other measures” it authorizes must resemble or be closely analogous to the ones specified in the statute.[38] That is, they “must be directed toward” infected items, like animals or clothing, and the infected items must be the “sources” of  a dangerous infection to humans.[39] “In other words, any regulations enacted pursuant to § 264(a) must be directed toward “specific targets ‘found’ to be sources of infection.”[40]

The court rejected the government’s argument that the first sentence in Section 264 empowered the CDC to adopt any measures necessary it deemed necessary to prevent the spread of an infectious disease.[41] That interpretation “goes too far,” the court concluded, because it “would ignore the text and structure” of Section 264 and renders “superfluous” the specific designation of mechanisms elsewhere in the next sentence.[42] “If the first sentence empowered the [CDC Director] to enact any regulation that, in his ‘judgment,’ was ‘necessary’ to prevent the interstate spread of communicable disease,” the court reasoned, “there would be no need for Congress to enumerate the ‘measures’ that the [Director] ‘may provide for’ to carry out and enforce those regulations.”[43] In the court’s view, several considerations bolstered its reading of the text. One was the canon directing courts to give effect to every portion of a statute, if possible.[44] Another was the injunction to avoid construing a statute in a manner that needlessly raises “serious constitutional problems,” such as Commerce Clause and Delegation Doctrine problems,[45] “unless such a construction is contrary to the clear intent of Congress.”[46] And the last factor was the “major questions doctrine,” which presumes that Congress does not intend to make major revisions to our economic and social welfare in murky statutory terms.[47] Indeed, the court noted that the CDC had never used this authority in the nationwide manner that it sought to do so here, which provided strong evidence that Congress had never empowered the agency to do so.[48] “The Court is “confident that the enacting Congress did not intend to grow such a large elephant in such a small mousehole.”[49]

The government urged the district court to stay its ruling pending appeal, and the district court granted the government’s request.[50] The court ruled that “the Department has not shown a substantial likelihood of success on the merits,”[51] but concluded that the other equitable factors to be considered on a stay application justified granting the government’s motion. The government “made a showing of irreparable injury,” some of the damages that would be suffered by the plaintiffs from a stay might be recoverable later, and the public interest justified a stay.[52]

The plaintiffs asked the D.C. Circuit Court of Appeals to vacate the district court’s stay, but the court rejected the request.[53] At the outset, the appellate court completely disagreed with the district court’s reading of Section 264. First, the court found that the text of the first sentence was itself sufficiently broad to justify the moratorium.[54] Second, Congress had endorsed the CDC’s reading of the statute in the 2021 appropriations bill by extending the CDC’s moratorium, rather than adopting a new law with that effect.[55] Third, even apart from the “other measures” phrase, the breadth of the text of Section 264 as a whole evidenced Congress’s intent to empower the CDC Director to protect the public against harmful communicable diseases.[56] Fourth, none of the concerns that had troubled the district court—viz., the potential Commerce Clause problem from allowing Congress to regulate local evictions, the rule that Congress should not be deemed to have disrupted longstanding federalism principles absent clear language to the contrary, and the novelty of the CDC’s use of Section 264 to regulate landlord-tenant relations—justified cabining the breadth of the power that Congress gave the CDC Director.[57] By contrast, the circuit court agreed with the district court’s treatment of the equitable factors justifying a stay of its judgment and injunction.[58] Accordingly, the court denied the request to lift the stay.

The plaintiffs then asked the Supreme Court to lift the stay, and they came within a hair’s breadth of succeeding.[59] Technically, the vote was 5-4 to deny the plaintiffs’ motion, as reflected in the order entered in the case.[60] But the outcome was much closer than that.

Four justices—Chief Justice Roberts, as well as Justices Breyer, Sotomayor, and Kagan—voted to deny the plaintiffs’ request for an injunction pending appeal.[61] They did not offer any reasons for their vote. It is possible that they voted to deny the plaintiffs the interim equitable relief of an injunction pending appeal for either of two reasons: One is that they saw no need to overturn the concurrent decision of two lower courts to stay any injunction until the D.C. Circuit had resolved the merits of the appeal. The other reason is that they agreed with the government’s reading of the statute. Four members—Justices Clarence Thomas, Samuel Alito, Neil Gorsuch, and Amy Coney Barrett—voted to grant the application.[62] They also did not offer any reasons for their votes. At a minimum, however, their vote to grant the plaintiffs interim relief means that those justices saw no reason to defer to the lower courts’ concurrent refusal to enjoin the CDC’s order. It also is likely that they saw no merit in the CDC’s reading of the statute because the equities seemed to balance out in favor of denying the plaintiffs’ request. That explanation is a sensible one, given the opinion issued by Justice Brett Kavanaugh explaining why he voted against a stay.

In a short concurring opinion, Justice Kavanaugh explained that “I agree with the District Court and the applicants that the Centers for Disease Control and Prevention exceeded its existing statutory authority by issuing a nationwide eviction moratorium.”[63] As support for that conclusion, Justice Kavanaugh cited Utility Air Regulatory Group v. EPA,[64] a 2014 Supreme Court decision in which the Environmental Protection Agency argued that its authority to regulate the emission of pollutants by motor vehicles also empowered the agency to regulate stationary sources and thereby demand “permits for the construction and modification of tens of thousands, and the operation of millions, of small sources nationwide.”[65] The Court unanimously rejected that argument. Justice Kavanaugh’s reliance on Utility Air Regulatory Group shows that he thought the CDC was running on fumes.

But (admit it, you knew that there was a “but” coming), Justice Kavanaugh then concluded that the plaintiffs should not receive interim relief they were seeking. Why?—Because in relatively short order the entire matter would become macht nichts. “Because the CDC plans to end the moratorium in only a few weeks, on July 31, and because those few weeks will allow for additional and more orderly distribution of the congressionally appropriated rental assistance funds.”[66] Having performed his Solomonic role, Justice Kavanaugh then returned to the law, saying that, “In my view, clear and specific congressional authorization (via new legislation) would be necessary for the CDC to extend the moratorium past July 31.”[67] Given Justice Kavanaugh’s internal 5-4 vote and the four votes to grant a stay cast by Justices Thomas, Alito, Gorsuch, and Coney Barrett, the better reading of the Supreme Court’s order is that five justices concluded that the CDC lacks authority for an eviction moratorium.[68]

2. Alabama Realtors Round 2

The Supreme Court issued its ruling on June 29, giving Congress ample time to pass a third statutory moratorium before the CDC’s order expired on July 31. The Biden Administration did not publicly urge Congress to enact a new moratorium for quite some time.[69] On July 29, however, the White House finally did so, taking the position that the CDC could not act without new statutory authorization.[70] Nonetheless, Congress recessed without empowering the CDC to issue a new moratorium, and July 31 came and went without one.[71]

Two days later, in response to heavy lobbying from members of Congress, including Speaker of the House Nancy Pelosi,[72] Biden changed his position. He directed the CDC to issue a new moratorium while acknowledging that it likely would not pass legal muster.[73] Being a good soldier, CDC Director Rochelle Walensky that day issued a new order effective through October 31.[74] The new order has a slightly narrower scope than the recently expired order, but the August 3 order “includes roughly ninety-one percent of U.S. counties.”[75]

Never saying die, the Alabama Realtors plaintiffs returned to the District of Columbia district court and once again urged the judge to lift the stay pending appeal in light of the Supreme Court’s order and the Biden Administration’s confession that its new rule was likely unlawful. The judge declined the request, ruling that her hands were tied by the D.C. Circuit’s earlier order and the law-of-the-case doctrine.[76] The plaintiffs renewed their motion in the D.C. Circuit, which denied the request for interim relief in a one-paragraph opinion that offered no reason for its ruling and did not discuss the meaning of Supreme Court’s earlier order.[77] The plaintiffs then returned to the Supreme Court, where they finally obtained their sought-after relief by a 6-3 vote.[78]

In a brief per curiam opinion, the Supreme Court vacated the district court’s stay pending appeal, enabling the plaintiffs to secure relief against nonpaying tenants. The majority reasoned that the plaintiffs “are virtually certain to succeed on the merits of their argument that the CDC has exceeded its authority.”[79] Put simply, “[t]he applicants not only have a substantial likelihood of success on the merits—it is difficult to imagine them losing.”[80] In terms deriding the government for even relying on Section 264 of the Public Health Service Act, the majority concluded that “[i]t strains credulity to believe that this statute,” which empowers the CDC “to implement measures like fumigation and pest extermination,” nonetheless “grants the CDC the sweeping authority that it asserts.”[81] The reason is that the first and second sentences of Section 264 must be read together, which makes it clear that “the kinds of measures” that the CDC may employ—”inspection, fumigation, disinfection, sanitation, pest extermination, and destruction of contaminated animals and articles”—”directly relate to preventing the interstate spread of disease by identifying, isolating, and destroying the disease itself.[82] But “[e]ven if the text were ambiguous,” the Court added, “the sheer scope of the CDC’s claimed authority” under the statute “would counsel against the Government’s interpretation.”[83] Citing its 2014 Utility Air Regulatory Group decision,[84] the one on which Justice Kavanaugh had previously relied,[85] the Court noted that “[w]e expect Congress to speak clearly when authorizing an agency to exercise powers of vast economic and political significance.”[86] Aside from granting the CDC “a breathtaking amount of authority,” the Court wrote, “[i]t is hard to see what measures this interpretation would place outside the CDC’s reach.”[87] And that is without considering, the Court added, the “unprecedented” nature of the government’s interpretation of the act, along with the possibility of imposing criminal penalties for its violation. [88]  In conclusion, the text invoked by the government “is a wafer-thin reed on which to rest such sweeping power.”[89] The balance of equities also came out in the plaintiffs’ favor.[90] While “[i]t is indisputable that the public has a strong interest in combating the spread of the COVID–19 Delta variant,” the Court concluded, “our system does not permit agencies to act unlawfully even in pursuit of desirable ends.”[91] It is for “Congress, not the CDC, to decide” in the first instance whether rental payments are to be postponed nationwide.[92]

Joined by Justices Sotomayor and Kagan, Justice Breyer dissented.[93] He found it “far from ‘demonstrably’ clear that the CDC lacks the power to issue its modified moratorium order.”[94] In part, that was because, as Justice Breyer concluded, quarantines, which the CDC may impose, “arguably impose greater restrictions” than the eviction moratorium.[95]  In part that was because “the lower courts have split on this question,” which means that, “[a]t a minimum, there are arguments on both sides.”[96] He also concluded that the equities balanced in favor of leaving the stay in place pending appeal and that “the public interest is not favored by the spread of disease or a court’s second-guessing of the CDC’s judgment.”[97]

* * * * *

The Supreme Court’s Alabama Realtors 2 order did not resolve the merits of the appeal. That order only allowed the district court’s judgment to take effect pending appeal.[98] The government technically could have pursued its appeal, and, in theory, the D.C. Circuit could have decided that, despite the Supreme Court’s order in Alabama Realtors 2, the interpretation of the act that it adopted previously remained the correct one.[99] The government, however, moved voluntarily to dismiss its appeal, and the D.C. Circuit granted the motion.[100] Accordingly, the district court’s judgment in Alabama Realtors is now final. The issue, however, remains a live one, given the lack of a Supreme Court ruling. The next section, therefore, will discuss the merits of the government’s position.

III. The CDC’s Overreach

The Constitution contemplates the existence of federal agencies, like the CDC, because it refers to “Departments” of the federal government.[101] But the Constitution does not itself flesh out that skeleton by creating any such “Departments”; it leaves that job to Congress and the President. Congress must create a “Department” by statute,[102] and the President must fill it by appointing “Officers of the United States,”[103] who ultimately report to him.[104] The result is that, unlike the President, who enjoys certain inherent powers,[105] agencies possess only the authority that Congress has vested in them by law.[106] Here, that law is the Public Health Service Act, specifically Section 264 of Title 42.

Among other things, Section 264 authorizes the CDC to promulgate regulations that the Director deems necessary to prevent the introduction of communicable diseases from foreign nations into this one or across state lines.[107] To do so, the CDC Director may adopt rules governing inspection, fumigation, disinfection, sanitation, and, when necessary to prevent human infection, the destruction of pests, animals, or articles found to be so infected or contaminated as to be sources of “dangerous infection to human beings,” as well as “other measures, as in his judgment may be necessary.”[108]

The government’s argument is simple and straightforward: The Public Health Service Act authorizes CDC Director Walensky[109] to issue whatever rules she deems medically necessary to prevent the interstate transmission of the SARS-CoV-2 virus. The August 3 eviction moratorium is a far more modest step than a nationwide, across-the-board, exceptionless home quarantine order and therefore easily fits under the Director’s Section 264(a) power. The emergence of the highly infectious “Delta variant” of the SARS-CoV-2 virus, along with the recent rise in the number of infected parties, principally unvaccinated individuals, makes it sensible to issue what is effectively a 60-day “shelter in place” order to reduce the number of new Delta-variant caused COVID-19 cases.[110]

The flaw in the government’s argument is the tunnel-vision like approach it takes to one small part of a much larger statute.[111] The government’s approach to statutory interpretation resembles the actions taken by someone who, hoping to understand what a painter has created on a canvas, stands only a few inches in front of it and looks entirely straight ahead without moving his head or eyes. All that person could see is a very small portion of the painting, certainly not a forest, perhaps not even a tree or a branch, maybe only a leaf. Following that approach, someone looking up at the Sistine Chapel ceiling would see only two fingertips in close proximity, not God touching the hand of Man. No one would recommend viewing art that way, at least not if someone wanted to understand the image that the painter sought to convey to the world. Nor would anyone recommend judging the merits of a symphony by any one of its movements or by listening to only the string section, brass, woodwind, or percussion instruments. Finally, the same is true for the written word. Stop reading or watching “The Witness for the Prosecution” before the novelette, play, or movie ends and you will miss a critical part of the story. Whether or not the whole is greater than the sum of its parts, it is critical to consider the whole of a painting, symphony, play, or film to understand its message.

Legal experts would tell you to interpret a statute in the same manner. As Justice Elena Kagan explained two years ago, “statutory interpretation” is “a holistic endeavor which determines meaning by looking not to isolated words, but to text in context, along with purpose and history.”[112] Words should be read, not “in a vacuum,” but “in their context and with a view to their place in the overall statutory scheme.”[113] The reason is that statutes are more than individual nouns, verbs, articles, adjectives, adverbs, and conjunctions. They are directions to the government or to private parties about what one or the other may or may not do. Fixating on a word, phrase, or clause to the exclusion of the remainder of a law is not just an unsophisticated way to learn what a statute means. It also disregards the law-drafting process, which, particularly in long bills, can have several different components that address a common subject, as well as the lawmaking process itself, in which Senators and Representatives vote on the entirety of a bill, not piece-by-piece. Logic dictates that we should follow the same approach to understanding law that we do in the case of art, music, and literature. The Supreme Court must agree because, in its order in Alabama Realtors 2, the majority did just that.[114]

The Public Health Service Act consists of six titles that take up 39 pages in the Statutes at Large.[115] Most of the act’s titles speak to matters unrelated to the moratorium issue, such as the provisions dealing with the CDC’s responsibilities to conduct disease-related research, to collect and publish health-related information, or to assist and fund state agencies with a common disease-control mission. Title III, however, deals with the general powers and responsibilities of the CDC.[116] According to then-Surgeon General Thomas Parran, that title “is in the main a reenactment into law of present widely scattered authority, some of which is very ancient.”[117] Even most of Title III, however, is only indirectly pertinent. Particularly relevant, however, are Parts B through E and G.

Part B is captioned “Federal-State cooperation.” It directs the CDC to assist the states with regard to “the enforcement of quarantine regulations made pursuant to this act,” as well as state quarantine orders.[118] Part C is entitled “Hospitals, Medical Examinations, and Medical Care.”[119] The CDC must “[c]ontrol, manage, and operate” all hospitals and facilities that Congress created for “the care, treatment and hospitalization of patients” covered by the act,[120] such as American merchant seamen and Public Health Service employees.[121] In an emergency, the CDC may also treat parties not covered by the act.[122] The CDC is responsible for “making such physical and mental examinations of aliens” as required by the federal immigration laws[123] and may treat any person held under the “quarantine laws” or by federal immigration authorities.[124] At the request of a foreign vessel seeking to enter the United States, the CDC may provide necessary medical treatment “at hospitals and other stations.”[125] The CDC may provide medical and psychiatric treatment, along with “related technical and scientific services,” to prisoners in federal custody.[126] Plus, the CDC may offer “medical, surgical, and hospital services and supplies” to parties protected by the federal compensation laws, and various other specified federal employees.[127] Parts D and E address the hospitalization and treatment of people in the custody of the immigration service for leprosy, as well as convicts and narcotics addicts.[128]

Now turn to Section 264 of Title 42. Section 264 became law as part of Part G of Title III, which involves “[t]he quarantine activities of the [Public Health] Service,” which was “one of its oldest functions.”[129] Testifying before Congress when Section 264 was being considered, then-Surgeon General Parran described that portion of the bill, “[w]ith minor exceptions,” as being “the same as existing law.”[130] The two new items that he mentioned were the need to account for international “civil air navigation” and “to prevent the wartime introduction into this country of certain diseases not now on the quarantinable disease list.”[131] The Surgeon General did not ask Congress for the power to intrude into landlord-tenant relationships governed by state law.[132]

As noted above, Title III defines the duties and powers of the CDC.[133] To “control communicable diseases,” it empowers the CDC Director to adopt regulations necessary to prevent the transmission of an infectious disease across the nation’s borders or from one state to another. To prevent transmission of a harmful pathogen—that is, “[f]or purposes of carrying out and enforcing” those regulations—the Director may inspect, fumigate, disinfect, sanitize or destroy animals or articles that are “so infected or contaminated” that they are a source of “dangerous infection to human beings,” as well as take “other measures” that he deems necessary.

What “other measures” can a Director deem necessary? One would be to define the steps that the federal, state, and local governments should take to enforce a federal or state quarantine.[134] Regulations could impose reporting requirements on businesses, like airlines and trains, that carry passengers in interstate commerce.[135] Regulations could require travelers from a foreign country with a large number of COVID-19  patients to be quarantined for a certain number of days after entry.[136] And so forth.[137] Those are medical judgments within the competence of an agency responsible for preventing the interstate transmission of disease. They are also similar to the types of judgments that the preceding Parts of Title III direct and empower the CDC to accomplish. The CDC is even authorized in an emergency itself to care for parties infected with or exposed to SARS-CoV-2, which it can do because the CDC has medical facilities and “quarantine stations” for patient treatment.[138]

What Congress did not empower the CDC to do, was to order third parties to accept parties infected with or exposed to a dangerous pathogen. For example, the CDC cannot order a landlord to house such people in unused apartments, let alone in ones already occupied. The CDC cannot order property owners to allow such parties to live in their suburban backyards or rural fields, let alone build dormitories for them. Yet that is the power the CDC claimed to possess under Section 264: the power to draft private parties into the quarantine business by ordering them to admit onto their land or into their homes people potentially or actually suffering from a highly contagious and potentially fatal disease—in other words, potentially everyone—who cannot meet their rental obligations. The term “other measures” does not remotely authorize the CDC to go that far, yet that is exactly what the Biden Administration has asked the courts to endorse. The District of Columbia district court was correct to reject that extravagant claim.

That conclusion should surprise no one. States and localities have long faced the public health problems caused by the introduction of diseased people, fauna, or flora into their jurisdictions, and each state has addressed that concern through the interdiction or quarantine of disease-bearing people, animals, and items.[139] Congress could have resolved this issue for the nation by exercising its power to regulate international or foreign commerce.[140] Instead, Congress primarily left each state to handle the matter through its own quarantine laws.[141] After passing some quarantine-related legislation beginning in 1878,[142] Congress tasked one agency with responsibility to address this subject. The desire was to create a consolidated and codified body of laws, rather than “a patchwork” of disorganized acts of Congress.[143]

In so doing, Congress directed the CDC itself to address this problem, by authorizing the CDC to establish and operate quarantine facilities, or to work with state and local public health authorities for them to care for patients. Nothing in the Public Health Service Act remotely suggests that Congress conscripted private parties into patient care or authorized the CDC to do so, despite the urgency of the need. The archetypical examples of laws with that effect are the ones authorizing a draft of civilians into the armed forces to fight in the nation’s wars.[144] Congress had enacted two such statutes prior to 1944. The Selective Service Act of 1917 expressly empowered the President to draft private parties into the armed forces to fight in World War I,[145] and the Selective Training and Service Act of 1940 explicitly adopted a peacetime conscription.[146] Accordingly, Congress knows how to draft legislation forcing individuals into federal service over their objection. The Public Health Service Act is not such a law. It nowhere empowers the President or the CDC to conscript property owners into the CDC’s service by making them use their property as ersatz battlefield MASH units. To be sure, the size of this pandemic would have overwhelmed the CDC’s existing facilities, forcing Congress to fund the creation of what would be tantamount to new temporary hospitals or “quarantine stations” under the CDC’s control.[147] But the SARS-CoV-2 pandemic was not the first time that the nation had been the victim of a massive potentially fatal viral outbreak. Aside from the yearly influenzas that hit the nation every winter, the Spanish Flu of 1918 told anyone who wanted to know what the size and danger of a new pandemic could be. That the CDC itself never claimed to possess such transformative authority prior to 2020 is powerful evidence that Congress never gave it to the agency.[148]

The government also did not sell Section 264 to Congress on that basis. At a House hearing on a bill that (as amended) became the Public Health Service Act,[149] Alanson Wilcox, Assistant General Counsel for the Federal Security Agency, was one of the government’s principal witnesses. His task was to explain the meaning of each provision in the bill. With regard to the proposed Section 361, Wilcox said that it carried forward a provision in a 1893 law authorizing the Treasury Secretary to promulgate port quarantine regulations if the state or local rules were nonexistent, inadequate, or poorly enforced.[150] Section 361 would modify that law by eliminating the need to show that state or local rules or governments were not up to the task of enforcing a quarantine.[151] “The States as I understand it,” Wilcox testified, “have wholly withdrawn from the field of foreign quarantine regulation,” and “Federal regulation has been confined to matters pertaining to the interstate movement of people or things over which the States have both constitutional and practical difficulties in achieving effective control.”[152] “In eliminating the conditions upon the exercise of Federal regulatory power,” Wilcox concluded, “we believe that we have eliminated nothing of substance.”[153] At a Senate hearing on the bill passed by the House, then-Surgeon General Parran said that the House bill “clarified” the Public Health Service’s “interstate quarantine authority” and “somewhat extended” that authority “in time of war” by virtue of “Presidential order,” a revision that “may be very important” to “protect troops and war workers” given “the possibility that strange diseases may be introduced in the country and become a threat” when those parties return home.[154] “Flexibility in dealing with such contingencies would be very helpful.”[155] Wilcox and Parran did not say anything remotely suggesting that what is now Section 264 empowers the CDC to do anything more than promulgate quarantine enforcement rules.

But there is more. A host of other considerations also demonstrate why the government’s broad interpretation of Section 264 is quite mistaken.

First, because the government offered no limiting principle that would cap the CDC Director’s authority, the government’s interpretation would have allowed the CDC unlimited discretion. In its Alabama Realtors 2 order, the Supreme Court identified a few “other measures” that the CDC would be allowed to demand, such as ordering grocery stores to provide free food home delivery.[156] Others also readily come to mind. After all, the eviction problem arose because out-of-work tenants could not pay their rent because they could not earn their wages. Why not just have the CDC order the tenants’ employers to continue paying their tenant-employees? That would enable tenants to pay their rent, but could impoverish their employers, many of whom likely were small businesses, such as restaurants, not Fortune 50 companies. To remedy that problem, the CDC could also order a diner’s regular customers to send the owner money so that the eatery would not go under. And so forth. It would be worse than silly to interpret the term “other measures” to turn the CDC into America’s version of the Soviet Union’s Gosplan, its central economic planning agency.

Second, the CDC’s sought-after power would not be limited to COVID-19 or even pandemics. Nothing in the text of the statute requires that a pathogen, though “dangerous,” be potentially fatal to a broad swath of the population, and the influenza viruses that strike America every winter (unfortunately) always prove fatal to some people. Under the government’s interpretation, the CDC Director would have the power to issue not only her August 3 order, but also the authority to forestall evictions on a yearly, if not ongoing, basis, because Americans regularly suffer from communicable diseases other than COVID-19 that are dangerous to some people. Private property would remain private only until the government decided that it could be better used by the government and therefore should be taken by forced occupation of infectious parties. Under no circumstances can the terms “necessary” or “other measures” be read to have empowered the CDC to take steps like those without Congress having clearly committed to that course of action.[157]

Third, as recent history proves, the CDC can renew or extend its moratoria repeatedly, or at least it believes it can. The CDC issued its first moratorium in September 2020 and renewed it in January, February, June, and August 2021. There is no guarantee that the agency won’t renew the order again. The text of Section 264 does not limit the number of extensions or new orders the CDC can enter, or the length of any particular one. There is also no guarantee that new variants of the virus will not replace the Delta variant that the CDC cites to justify its August 3 order (there are letters left in the alphabet). Tenants could occupy an owner’s property for a year or more past the year-plus they have already done so. It is unreasonable to read Section 264 as empowering the CDC to tell an owner that he or she must suffer an occupation by tenants unable to pay rent based on the skimpy “necessary” or “other measures” language.

Fourth, if Section 264 truly gave the CDC Director the power to impose whatever order she deemed necessary to prevent the interpersonal transmission of the virus, there is a very serious question whether the statute could survive challenge under the Delegation Doctrine. The Supreme Court recognized that doctrine in two cases decided in the 1930s—Panama Refining Co. v. Ryan[158] and A.L.A. Schechter Poultry Corp. v. United States[159]which held unconstitutional acts of Congress that told the government little more than to “fix” the Depression’s adverse effects on the economy. Since then, the Court has regularly upheld statutes over delegation doctrine challenges.[160] Yet, suggesting that the cavalry might be on the way, in 2019 five justices concluded either that the doctrine is still alive and well or that they are willing to resurrect it.[161] Interpreting the Public Health Service Act to allow the CDC Director a prerogative to decide what “other measures” should be defined at penalty of incarceration might just persuade the Court to roll away the stone.[162]

Fifth, as the Supreme Court noted in Alabama Realtors 2, the Public Health Service Act authorizes criminal prosecution, including fines and incarceration up to one year, for a violation of any CDC regulation.[163] To worsen matters, the act makes the violation of any such regulation a strict liability offense because, unlike the offense of leaving a quarantine area, the act does not require the government to prove that a party acted with any culpable mental state at all—not willfully, or even knowingly.[164] It is unreasonable to believe that Congress intended to empower the government to imprison someone for violating any imaginable regulation that the CDC could devise that he or she was wholly unaware of. Indeed, unless the list in Section 264 of actions that the CDC can take to prevent the spread of disease, such as fumigation, limits the “other measures” term, that provision is subject to challenge under the Void-for-Vagueness Doctrine because it literally gives the CDC Director the power to issue any order she deems “necessary” while affording a “person of ordinary intelligence” no notice of what is prohibited.[165]

Sixth, the CDC’s interpretation of Section 264 legally compels a property owner to suffer the presence of a lessee on his or her property without payment of rent. That is an unconstitutional taking of the landowner’s property. As the Supreme Court made clear earlier this year in Cedar Point Nursery v. Hassid, “government-authorized physical invasions” of someone else’s property “are physical takings requiring just compensation,” regardless of whether they are “permanent or temporary.”[166] That is precisely what the CDC has ordered here. The order forces an owner to accept a government-imposed squatter for as long as a moratorium is in effect. Unlike a rent control statute, which limits only increases in what can be charged for a particular unit as long as the lessee is current on his or her rent,[167] the CDC’s order entitles a tenant to reside in property that he or she no longer has a legitimate right to occupy without paying rent.

It pays no disrespect to the CDC or to Congress to say that the former should make only medical judgments and the latter only economic and social policy ones. The CDC can decide how to treat people infected with a communicable disease, or to handle creatures, bedding, clothes, and the like that have become infested with a pathogen and therefore must be sanitized or disposed of, in the same way that hospitals ordinarily treat patients or manage used hypodermics and gauze pads. Those are quintessentially medical judgments. As the Supreme Court acknowledged in Roman Catholic Diocese of Brooklyn v. Cuomo,[168] physicians and other public health experts possess “special expertise and responsibility” when it comes to making health-care decisions, not legal or policy judgments.[169] Congress can—and should—decide how to balance the competing interests of both sides—unemployed tenants versus their landlords and tenants who do pay their rent, both of whom have legitimate interests the administration has ignored[170]—during a pandemic in the same manner that Congress must decide how to treat the unemployed vis-à-vis employers and the employed during a recession. That is paradigmatically an economic or social judgment, and the democratic process selects members of Congress to represent the interests of their constituents. We increase the likelihood that the CDC and the political process will each make the right or best decision if we restrict each one to its lane and don’t try to force either one to cross over.

When the Public Health Service Act is read in its entirety, what becomes clear is this: Congress sought to empower the CDC to prevent or provide medical treatment for infectious disease problems that could occur because of a contaminated person, animal, insect, or article, and to assist the states in their efforts to do the same. The text of the act speaks to medical treatment decisions, not landlord-tenant problems, macroeconomic policy judgments, or legal issues, and to reliance on government facilities, federal, state, or local, or the voluntary actions of private parties, to quarantine people or disinfect property, not the conscription of private parties into government service. The conclusion that Section 264 empowers the CDC Director to do whatever he deems necessary to prevent the spread of an infectious disease could be reasonable only if the courts were willing to make the CDC Director into a modern-day Nietzschean Übermensch, if not Überlandlord, empowered to do “whatever it takes” to prevent the spread of an infectious disease, regardless of the decisions of private parties not to assist that endeavor.

IV. The Lasting Consequences of the CDC’s Order

Where does that leave us? Twice Congress gave the CDC the necessary authority to carry out a chief executive’s wishes, but the last of those statutes expired months ago. Biden directed the CDC to find a legal justification for a result that even he knew the law does not permit. The CDC faithfully followed orders, once again pinning its hopes on a gauzy phrase in a nearly 80-year-old statute never used before 2020 as an eviction moratorium. A majority of the Supreme Court said that the Public Health Service Act does not remotely authorize such an order. That conclusion was implicit in the Court’s Alabama Realtors 1 order, but the Court’s Alabama Realtors 2 order made the point so clearly that even someone blind could see it. Indeed, given Biden’s decision to ignore the message of the Supreme Court’s Alabama Realtors 1 order, the Court likely went out of its way in Alabama Realtors 2 to say, “And we mean it.”

By rights, the CDC’s August 3 order should have a very short half-life remaining. Given the Supreme Court’s Alabama Realtors 2 order, any judge who rules that the Public Health Service Act empowers the CDC Director to manage landlord-tenant relations on an ongoing basis has willfully distorted the properly limited judicial role of statutory interpretation and has engaged, quite literally, in statutory construction. Even Biden, who directed the CDC to issue its most recent order while simultaneously admitting that it would likely be struck down,[171] has thrown in the towel.[172]

Why did Biden order the CDC to effectively defy the Supreme Court? Perhaps he believed that desperate times call for desperate measures.[173] Maybe he felt a need to appease the Trotskyite wing of his party.[174] Or it’s possible—most likely, in my view—that he made the political judgment that another moratorium would be all benefit and no cost. If the courts did not strike down the August 3 order before Congress returned from its August recess, he would win, because he successfully played keep-away until Congress returned and, presumably, passes another statutory moratorium. By contrast, if the courts struck down the CDC’s order, he could make them take the heat for any evictions. Now that the Supreme Court has done the dirty deed, he can parlay its action into a new justification for expanding the Court’s size, thereby appeasing those elements in his party who see the justices Trump appointed as three of the Four Horsemen of the Apocalypse.[175] For Biden, it was a no-lose political decision.

Power grabs like that one, however, have a way or hurting the overly adventurous in the long run.[176] Like several of his predecessors, Biden believes that the President, not Congress, should be the central federal lawmaking and governing body. From his first day in office, Biden has signaled—shouted might even be more accurate—his disdain for the deregulatory measures that his predecessor took over the prior four years. We are, or at least the government is, building back better—and bigger, or so he believes. His Executive Orders direct agencies to use their regulatory authority to be fruitful and multiply the number, size, and intrusiveness of whatever regulations their personnel can dream of. His nominees see the government as a force, not just for good, but for “great”—at least if “great” means greater federal central control of the economy, society, and individuals. With each agency competing to lead the way, there is no telling how far the federal government’s regulatory actions will boldly go.[177]

To succeed, however, the federal government must do more than turn out regulations throughout Biden’s term in office the same way that Krispy Kreme makes donuts: by the bazillion. The Justice Department must be able to defend those rules by persuading federal judges that Congress empowered agencies to govern private conduct and that the agencies followed the dictates of the Administrative Procedure Act in their lawmaking endeavors.[178] That job just got harder. John Locke defined a “prerogative” as “the Power of doing publick [sic] good without a Rule.”[179] After the Court’s Alabama Realtors 1 order, Biden announced that he can do what he thinks is a “publick good” in defiance of a rule. Article III judges might not be the most important personnel in the U.S. government, but most of them certainly think that they are, and all of them believe that the President must respect their judgments. Telling the federal judiciary “Bafangool!,” even when smiling, isn’t likely to win friends and influence people in black robes. The Biden Administration’s handling of this matter has politely, but accurately, been called a “screw up.”[180]

Consider what the Supreme Court—especially Justice Kavanaugh—will think the next time that the Biden Administration asks the Court to “trust us.” Justice Kavanaugh voted to deny relief to a party whom he said was right on the merits because he thought that the system in place would get money to people in need. That was before he learned that the system in place in New York state allowed each tenant to decide the merits of his or her own application for federal COVID-19 relief, which is tantamount to a new form of rent control in which the amount paid is zero.[181] That was before he learned that the president would channel Admiral David Farragut and order the CDC to issue a new unauthorized moratorium that he confessed the Supreme Court was likely to strike down.[182] So, ask yourself: Just how much will—and should—Justice Kavanaugh and the rest of the Court trust representations by the Biden Administration that it respects the rule of law?[183]

The issue is not whether there is any precedent for Biden’s order to cease evictions. Governments at all levels have taken unprecedented actions in response to the COVID-19 pandemic, shuttering businesses, schools, and churches, imposing mask mandates, and banning evictions for the purpose (at least in part held by some) of saving lives. Nor is the issue whether Biden acted for political gain (although I do have an opinion on that subject). Some of those actions might have curbed some spread of the contagion, others might have been misguided,[184] but some were unlawful. Early on that was understandable. Faced with a rapidly spreading pathogen generating an illness they poorly understood, until recently federal authorities acted without properly examining the legal justifications for their actions.

In August 2021, however, that changed: Fully aware that the Supreme Court had signaled in Alabama Realtors 1 that he could not halt evictions for rental nonpayment without congressional authorization, Biden nonetheless decided to call an audible, issuing a directive that he even he believed would not pass muster. By that point, if not before, political considerations certainly seemed to entirely govern his decision-making—and that is quite troublesome.

English and American history has venerated the rule of law—viz., the principle that no one is above the law, that we are “a government of laws, and not of men,” as Chief Justice John Marshall wrote in Marbury v. Madison.[185] Even though oaths are not much in fashion in this highly secular time, a President must take an oath to uphold the Constitution of the United States[186] and must ensure that the laws are properly carried out.[187] The Supreme Court has also made it clear that the President is not above the laws Congress passes.[188] By telling the Supreme Court that he thinks that he is above the law, Biden has already used up most, if not all, of the nine legal lives that a President has at the start of his first term—and he’s got 38 months to go.

Conclusion

What lessons can we draw from the Alabama Realtors litigation? One is that property owners can now seek to evict nonpaying tenants, a process that likely will take far longer than it has taken the plaintiffs in that case to reach this point in the process. Another one is that the CDC now has a cap on its disease-prevention power that did not previously exist, a cap that might come back to hurt the agency in the long run. A third lesson is that the Supreme Court does not take kindly to parties who try to game the legal system for political purposes or who try to foist on the justices blame for following the law. There might be a fourth lesson, but it will be a while before we know whether it will come to pass: namely, the Biden Administration might have lost its credibility with the Supreme Court.

The administration decided to treat a Supreme Court ruling as only grandfatherly advice: something you must politely listen to, without feeling any obligation to pay it any mind. Biden may prevail on Congress to pass a new statute empowering the CDC to do what the President directed it to do. If so, the Alabama Realtors litigation might just wind up being a side show as far as a moratorium is concerned. Over the long-run, however, Biden needs the Supreme Court to uphold his pro-regulatory game plan and instincts. He is likely to find that the costs of his poor judgment and political gamesmanship will exceed his hoped-for short-term benefits by a country mile. No one likes to be taken for a fool, especially the people who wear black robes and work at One First Street.

 

*  John, Barbara & Victoria Rumpel Senior Legal Research Fellow, The Heritage Foundation; M.P.P. George Washington University, 2010; J.D. Stanford Law School, 1980; B.A. Washington & Lee University, 1977. The views expressed in this Article are the author’s own and should not be construed as representing any official position of The Heritage Foundation. I am grateful to Doug Badger, Marie Fishpaw, Joel Griffith, and John G. Malcolm for helpful comments on an earlier iteration of this Article. I also want to thank Alex Phipps for invaluable research assistance. Any errors are mine.

¨ Apparently, what is quoted above is a bowdlerized version of Farragut’s famous quote. A biography of Farragut says that he shouted “Damn the torpedoes! Four bells! Captain Drayton, go ahead. Jouett, full speed!” The quotation in the text is the popular culture version. See Nat’l Parks Serv., U.S. Dep’t of the Interior, Farragut, Admiral David Glasgow, Gravesite Bronx, New York, https://www.nps.gov/nr/travel/american_latino_heritage/farragut_gravesite.html [https://perma.cc/LGD5-B6V3] (last visited Aug. 8, 2021).

[1] Ch. 373, 58 Stat. 682 (codified as amended at 42 U.S.C. §§ 201–300mm-61 (West 2021)).

[2] See Sean-Michael Pigeon, The Tragedy of the Eviction Moratorium Debate, Nat’l Rev., Aug. 3, 2021, https://www.nationalreview.com/2021/08/the-tragedy-of-the-eviction-moratorium-debacle/ [https://perma.cc/C82A-3FNA] (“The harmful policy was not intended to be a form of rent control, a fact that progressives seem willing to ignore.”); cf. Loretto v. Teleprompter Manhattan Cable TV Corp., 458 U.S. 419, 440 (1982) (“This Court has consistently affirmed that States have broad power to regulate housing conditions in general and the landlord-tenant relationship in particular without paying compensation for all economic injuries that such regulation entails.”).

[3] See, e.g., Edit. Bd., Biden’s Lawless Eviction Ban, Wall St. J., Aug. 4, 2021, https://www.wsj.com/articles/joe-biden-lawless-eviction-ban-centers-for-disease-control-and-prevention-moratorium-11628115210 [https://perma.cc/6LY4-K8A3] [hereafter WSJ Editorial]; James Freeman, Rochelle Walensky and ‘Impending Doom’, Wall St. J., Aug. 4, 2021, https://www.wsj.com/articles/rochelle-walensky-and-impending-doom-11628102849 [https://perma.cc/M7BH-V2NZ]; Brent Kendall, Legal Battle Looms Over New Eviction Moratorium, Wall St. J., Aug. 4, 2021, https://www.wsj.com/articles/legal-battle-looms-over-new-eviction-moratorium-11628104428 [https://perma.cc/W8EN-JBSS]; Howard Kurtz, Biden Flips on Eviction Ban He Called Likely Illegal, But Media Don’t Care, Fox News, Aug. 6, 2021, https://www.foxnews.com/media/biden-flips-on-eviction-ban-he-called-likely-illegal-but-the-media-dont-care [https://perma.cc/SQ3S-GPXL]; Naomi Lim, Liberal Democrats and Pelosi Emerge as ‘Winners’ from Biden’s Eviction Moratorium Bungle, Wash. Examiner, Aug. 5, 2021, https://www.washingtonexaminer.com/politics/liberal-democrats-pelosi-biden-eviction-moratorium [https://perma.cc/KLP9-N274]; Andrew C. McCarthy, DOJ on Biden’s Lawless Eviction Moratorium: What Supreme Court Ruling?, Nat’l Rev., Aug. 10, 2021, https://www.nationalreview.com/2021/08/doj-on-bidens-lawless-eviction-moratorium-what-supreme-court-ruling/ [https://perma.cc/E9ZP-BK5G]; Andrew C. McCarthy, The Eviction-Moratorium Decree: Why It’s Unconstitutional, Nat’l Rev., Aug. 4, 2021, https://www.nationalreview.com/2021/08/the-eviction-moratorium-decree-why-its-unconstitutional/ [https://perma.cc/E9ZP-BK5G]; Dan McLaughlin, Joe Biden Is Daring Brett Kavanaugh to Do His Job, Nat’l Rev., Aug, 5, 2021, https://www.nationalreview.com/2021/08/joe-biden-is-daring-brett-kavanaugh-to-do-his-job/ [https://perma.cc/D4EY-5HK2]; Ilya Somin, The CDC’s New Eviction Moratorium Has Virtually all the Same Flaws as the Old, Volokh Conspiracy, Aug. 3, 2021, https://reason.com/volokh/2021/08/03/the-cdcs-new-eviction-moratorium-has-virtually-all-the-same-flaws-as-the-old/ [https://perma.cc/6YP2-844X]; cf. Josh Blackman, The Statutory Authority for the Nationwide Eviction Moratorium, Volokh Conspiracy, Sept. 1, 2020, https://reason.com/volokh/2020/09/01/the-statutory-authority-for-the-nationwide-eviction-moratorium/ [https://perma.cc/2JSP-JDHN] (analyzing the CDC’s statutory authority for its September 2020 moratorium); Ilya Somin, Trump’s Eviction Moratorium Could Set a Dangerous Precedent, Volokh Conspiracy, Sept. 2, 2020, https://reason.com/volokh/2020/09/02/trumps-eviction-moratorium-could-set-a-dangerous-precedent/ [https://perma.cc/8CTC-E6JV] (same); Adam Winkler, The Supreme Court Might Strike Down Biden’s Eviction Ban. It Shouldn’t, N.Y. Times, Aug. 5, 2021, https://www.nytimes.com/2021/08/05/opinion/supreme-court-biden-eviction.html [https://perma.cc/349H-R9VL]. What is surprising, however, is that the parties do not all line up in the way that we would ordinarily expect. For example, the Washington Post editorial page took the position that Biden’s August 3 order was unlawful. See Editorial Board, The CDC’s Eviction Moratorium Is Almost Certainly Illegal, Wash. Post, Aug. 4, 2021, https://www.washingtonpost.com/opinions/2021/08/04/cdcs-eviction-mortarium-is-almost-certainly-illegal/ [https://perma.cc/32UK-SUBG] (“Americans behind on their rent payments may have cheered when the Centers for Disease Control and Prevention announced Tuesday a new eviction moratorium for most of the nation, this one set to last until October. . . . But the CDC’s action was almost certainly illegal. Under pressure from House Speaker Nancy Pelosi (D-Calif.) and progressive Democrats, President Biden and the CDC may have muted accusations that they failed to stick up for desperate renters. The administration also may succeed in giving many Americans a short reprieve from eviction. But perhaps not as long as advertised — because courts may strike it down before October — and at the expense of the rule of law. . . . If the Trump administration had ignored a direct warning from the Supreme Court, Democrats would rightfully line up to condemn the president. Mr. Biden does not get a pass on the rule of law because his heart is in the right place.”).

[4] See, e.g., John Fritze, Real Estate Groups Ask Federal Court to Block Enforcement of CDC’s New Eviction Moratorium, USA Today, Aug. 4, 2021, https://www.usatoday.com/story/news/politics/2021/08/04/real-estate-groups-sue-block-bidens-new-eviction-moratorium/5493790001/ [https://perma.cc/CL9R-Z7MB]; Dan McLaughlin, Argument Recap: D.C. Judge Holds Hearing Considering Challenge to New CDC Moratorium, Nat’l Rev. Aug. 9, 2021, https://www.nationalreview.com/corner/dc-judge-considering-challenge-to-new-cdc-moratorium/ [https://perma.cc/Q3EA-TVZ3]. There also has been considerable litigation over a host of related issues, such as the validity of the CDC’s regulations governing the disembarkation of cruise line passengers. See, e.g., Florida v. Becerra, No. 8:21-cv-839, 2021 WL 2514138 (M.D. Fla. June 18, 2021) (ruling that Florida was likely to succeed on merits of its claim that the CDC’s cruise ship order exceeded its statutory authority and entering a preliminary injunction against enforcement of the CDC order), supplemented 2021 WL 2882828 (July 7, 2021) (denying a stay pending appeal of the preliminary injunction), granting a stay pending appeal, No. 21-12243-D, 2021 WL 2514138 (11th Cir. July 17, 2021), vacating order staying the injunction pending appeal and denying motion for a stay pending appeal sub nom. Florida v. HHS, No. 21-12243-D, 2021 WL 2514138 (11th Cir. July 23, 2021); see also, e.g., Swain v. Junior, 961 F.3d 1276 (11th Cir. 2020) (prisoner lawsuit challenging conditions of confinement because of COVID-19). Those issues are beyond the scope of this Article.

[5] See Alabama Ass’n of Realtors v. HHS, No. 20-cv-3377, 2021 WL 1779282 (D.D.C. May 5, 2021) (ruling that the CDC lacked authority to issue its eviction moratorium), supplemented, 2021 WL 1946376 (May 14, 2021) (granting a stay pending appeal), on a motion to vacate the district court stay pending appeal, No. 21-5093, 2021 WL 2221646 (D.C. Cir. June 2, 2021) (denying motion), on a motion to vacate the district court stay pending appeal, 141 S. Ct. 2320 (2021) (denying motion), on remand, No. 20-cv-3377, 2021 WL 3577367 (D.D.C. Aug. 13, 2021) (denying renewed motion to vacate stay pending appeal), on emergency motion to vacate the stay pending appeal, No. 21-5093, 2021 WL 3721431 (D.C. Cir. Aug. 20, 2021), vacating stay pending appeal, 141 S. Ct. 2485 (2021), granting government’s motion to dismiss its appeal, No. 21-5093, 2021 WL 4057718 (D.C. Cir. Sept. 3, 2021). Hereafter, I will refer to the lower court rulings as Alabama Realtors, followed by a citation where the decisions can be found. I will refer to the two Supreme Court orders as Alabama Realtors 1 and 2.

[6] Alabama Realtors 1, 141 S. Ct. at 2320–21 (Kavanaugh, J., concurring).

[7] Alabama Realtors 2, 141 S. Ct. 2485 (2021).

[8] Alabama Realtors 1, 141 S. Ct. 2320 (2021), and Alabama Realtors 2, 141 S. Ct. 2485 (2021).

[9] See, e.g., 1918 Pandemic (H1N1 Virus), Cntrs. For Disease Control & Prevention (Mar. 19, 2019), https://www.cdc.gov/flu/pandemic-resources/1918-pandemic-h1n1.html [https://perma.cc/8PVS-2ZK4] (last visited Aug. 8, 2021); John Barry, The Great Influenza: The Epic Story of the Deadliest Plague in History 4–5 (2004); Laura Spinney, Pale Rider: The Spanish Flu of 1918 and How It Changed the World 4 (2017) (all describing the Spanish Flu and the global response to it); Paul J. Larkin, Marie Fishpaw & Lauren McCarthy, Telemedicine and Occupational Licensing, 73 Admin. L. Rev. (forthcoming 2021) (manuscript 2–3) (describing the new pandemic).

[10] See, e.g., Cntrs for Disease Control & Prevention, Scientific Brief: SARS-CoV-2 Transmission (May 7, 2021), https://www.cdc.gov/coronavirus/2019-ncov/science/science-briefs/sars-cov-2-transmission.html [https://perma.cc/A63K-YC6H].

[11] World Health Org., WHO Director-General’s Opening Remarks at the Media Briefing on COVID-19, (Mar. 11, 2020), https://www.who.int/director-general/speeches/detail/who-director-general-s-opening-remarks-at-the-media-briefing-on-covid-19—11-march-2020 [https://perma.cc/KEQ2-REX8]; World Health Org., Naming the Coronavirus Disease (COVID-19) and the Virus that Causes It, https://www.who.int/emergencies/diseases/novel-coronavirus-2019/technical-guidance/naming-the-coronavirus-disease-(covid-2019)-and-the-virus-that-causes-it [https://perma.cc/ETV7-BC5N] (last visited Dec. 24, 2020); The first confirmed case of COVID-19 in the United States came from someone who had traveled to Wuhan. Michelle L. Holshue et al., First Case of 2019 Novel Coronavirus in the United States, 382 New Eng. J. Med. 929, 929–30 (2020), https://www.nejm.org/doi/full/10.1056/NEJMoa2001191 [https://perma.cc/J8MH-E54Z].

[12] See World Health Organ., WHO Coronavirus (COVID-19) Dashboard (Aug. 9, 2021), https://covid19.who.int/ [https://perma.cc/9Q74-HEHK] (last visited Nov. 8, 2021).

[13] The risk of death is greatest for individuals who suffer from certain medical disorders (such as diabetes and heart disease) or who are immunocompromised. See Norwegian Cruise Lines Holdings, Ltd. v. Rivkees, No. 1:21-cv-22492-KMW, slip op. 2–3 (S.D. Fla. Aug. 8, 2021); Cntrs for Disease Control & Prevention, Scientific Brief: COVID Data Tracker: Underlying Medical Conditions, https://covid.cdc.gov/covid-data-tracker/#underlying-med-conditions [https://perma.cc/7HWH-XSBS] (last visited Nov. 8, 2021). The majority of SARS-CoV-2-infected people have been able to recover fully, but various long-term health problems are unknown and might linger. The federal government is collecting data on the effectiveness of the vaccines. See Cntrs for Disease Control & Prevention, Scientific Brief: COVID Data Tracker: COVID-19 Vaccine Effectiveness, https://covid.cdc.gov/covid-data-tracker/#published-sars-cov-2-sequences [https://perma.cc/8GZ7-WQLL] (last visited Nov. 8, 2021).

[14] In March 2020, President Trump formally declared the epidemic a national emergency, which gave states, localities, and territories access to billions of dollars in federal financial assistance for health-care related resources; he created the White House Coronavirus Task Force to head the nation’s response; and he invoked the Defense Production Act of 1950 to increase the manufacturing of ventilators for COVID-19 patients. See, e.g., Declaring A National Emergency Concerning the Novel Coronavirus Disease (COVID-19) Outbreak, Proclamation No. 9994, 85 Fed. Reg. 15,337 (Mar. 18, 2020). Congress authorized billions of dollars for healthcare facilities, medical professionals, patients, insurance providers, research into treatment for and a vaccine against the disease. Larkin, Fishpaw & McCarthy, supra note 9 (manuscript 8–9). Congress passed acts authorizing billions of dollars for acts to fund healthcare facilities, medical professionals, patients, and insurance providers, as well as research to discover a treatment for, or vaccine against, the disease. See, e.g., Coronavirus Preparedness and Response Supplemental Appropriations Act, 2020, Pub. L. No. 116–123, 134 Stat. 152 (2020); Families First Coronavirus Response Act, Pub. L. No. 116–127, 134 Stat. 178 (2020); Coronavirus Aid, Relief, and Economic Security Act, Pub. L. No. 116–136, 134 Stat. 281 (2020); Paycheck Protection Program and Health Care Enhancement Act, Pub. L. No. 116–139, 134 Stat. 620 (2020). Governors declared states of emergency, closed schools, limited the size of public and private gatherings, and restricted unnecessary movement across or within their borders. See, e.g., Governor Charles D. Baker, Order Instituting a Mandatory 14-Day Quarantine Requirement for Travelers Arriving in Massachusetts § 1, July 24, 2020,  https://www.mass.gov/doc/july-24-2020-travel-order-pdf/download [https://perma.cc/WAK6-TNVY]; Press Release, Washington Gov. Jay Inslee, Inslee Issues COVID-19 Emergency Proclamation (Feb. 29, 2020), https://www.governor.wa.gov/news-media/inslee-issues-covid-19-emergency-proclamation [https://perma.cc/MW6D-WHFH]; Cong’l Res. Serv., Scope of CDC Authority Under Section 361 of the Public Health Service Act (PHSA) R46758, at 2 (Apr. 13, 2021) [hereafter CRS PHSA Report] (“Consistent with this framework, states and localities have been at the leading edge of the United States’ pandemic response in many respects. For instance, to varying degrees, states have issued numerous mandates aimed at promoting the relevant public health measures, including temporary stay-at-home orders that require the closure of nonessential businesses, restrictions on public gatherings, requirements to wear face masks under specified circumstances, and quarantine requirements for out-of-state travelers.”) (footnotes omitted); Rebecca L. Haffajeeet al., Thinking Globally, Acting Locally: The U.S. Response to Covid-19, 382 New Eng. J. Med. 22, 22 (2021) (“As of March 27, 2020, all 50 states, dozens of localities, and the federal government had declared emergencies for Covid-19. The resulting executive powers are sweeping; they can range from halting business operations, to restricting freedom of movement, to limiting civil rights and liberties, to commandeering property.”) (footnotes omitted); Larkin, Fishpaw & McCarthy, supra note 9 (manuscript 10–11).

[15] Larkin, Fishpaw & McCarthy, supra note 9 (manuscript 11 & nn.30–32). The long term-goal was to develop a vaccine to prevent parties infected with SARS-CoV-2 from acquiring COVID-19. See id. (manuscript 2–5). Fortunately, there was good news on that front. Before 2020 was out, three pharmaceutical companies developed, and the U.S. Food and Drug Administration approved for use on an emergency basis, three COVID-19 vaccines: Pfizer-BioNTech, Moderna, and Johnson & Johnson’s Janssen. See Norwegian Cruise Lines Holdings, Ltd. v. Rivkees, No. 1:21-cv-22492-KMW, slip op. 4–5 (S.D. Fla. Aug. 8, 2021). By now, more than 80 percent of adults have received at least one round of a vaccine. See Cntrs for Disease Control & Prevention, Scientific Brief: COVID Data Tracker https://covid.cdc.gov/covid-data-tracker/#datatracker-home [https://perma.cc/N3Y7-7QZX] (last visited Nov. 6, 2021). Unfortunately, life does not imitate art. Complicating matters, there has been a mutation of the virus into different variations, with one, known as the Delta Variant, being particularly infectious. Yet, like the cavalry arriving to save the day, the approved vaccines appear to be 80–90 percent effective against the Delta variant. See Rivkees, slip op. 5. As a result, we have not yet seen the final act in this drama.

[16] See Larkin, Fishpaw & McCarthy, supra note 9 (manuscript 2–5).

[17] Pub. L. No. 116–136, 134 Stat. 281 (2020).

[18] Id. Div. A, Tit. IV, § 4024 (codified at 15 U.S.C. § 9058 (West 2021)).

[19] Fighting the Spread of COVID-19 by Providing Assistance to Renters and Homeowners, Exec. Order No. 13,945, 85 Fed. Reg. 49,935, 49,936 (Aug. 8, 2020).

[20] Temporary Halt in Residential Evictions to Prevent the Further Spread of COVID-19, 85 Fed. Reg. 55,292 (Sept. 4, 2020).

[21] Id. at 55,294–95.

[22] See id. at 55,295.

[23] See id. at 55,293, 55,295.

[24] See id. at 55,293 (discussing the qualifications).

[25] See id. at 55,292.

[26] See id. at 55,294. Some states adopted eviction moratoria. Ala. Ass’n of Realtors v. HHS, No. 20-cv-3377, 2021 WL 1779282, at *1 (D.D.C. May 5, 2021) (subsequent history cited supra note 5).

[27] 42 U.S.C. § 264(a) (2018):

The Surgeon General, with the approval of the Secretary, is authorized to make and enforce such regulations as in his judgment are necessary to prevent the introduction, transmission, or spread of communicable diseases from foreign countries into the States or possessions, or from one State or possession into any other State or possession. For purposes of carrying out and enforcing such regulations, the Surgeon General may provide for such inspection, fumigation, disinfection, sanitation, pest extermination, destruction of animals or articles found to be so infected or contaminated as to be sources of dangerous infection to human beings, and other measures, as in his judgment may be necessary.

The Public Health Service Act literally assigns authority to the Surgeon General, but Reorganization Plan Number 3 of 1966 abolished the Office of the Surgeon General and transferred its statutory responsibilities and powers to the Secretary of Health, Education, and Welfare, now the Secretary of Health and Human Services. See 20 U.S.C. § 3508 (2018); Reorganization Plan No. 3 of 1966, §§ 1–3, 31 Fed. Reg. 8855, 8855-01 to -02 (June 25, 1966). The Office of the Surgeon General was reestablished in 1987, but the Secretary of HHS has retained authority under the Public Health Service Act. Tiger Lily, LLC v. U.S. Dep’t of Hous. and Urb. Dev., 992 F.3d 518, 521 n.1 (6th Cir. 2021), aff’d 5 F.4th 666 (6th Cir. 2021). For clarification and ease of explanation, I will refer to the CDC rather than the Surgeon General throughout this Article.

[28] 85 Fed. Reg. at 55,292.

[29] Pub. L. No. 116–260, Tit. V, Subtit. A, § 502, 134 Stat. 1182, 2079 (2020) (“The order issued by the Centers for Disease Control and Prevention under section 361 of the Public Health Service Act (42 U.S.C. 264), entitled ‘Temporary Halt in Residential Evictions To Prevent the Further Spread of COVID–19’ (85 Fed. Reg. 55292) (September 4, 2020) is extended through January 31, 2021, notwithstanding the effective dates specified in such Order.”).

[30] On January 29, the CDC extended the order through March 31, 2021. Temporary Halt in Residential Evictions to Prevent the Further Spread of COVID-19, 86 Fed. Reg. 8020 (Feb. 3, 2021). As that deadline approached, the CDC again extended its order, this time through June 30. Temporary Halt in Residential Evictions to Prevent the Further Spread of COVID-19, 86 Fed. Reg. 16,731 (Mar. 31, 2021). On June 24, 2021, the CDC pushed the order’s expiration date back yet again, until July 31. Temporary Halt in Residential Evictions to Prevent the Further Spread of COVID-19, 86 Fed. Reg. 34,010 (June 28, 2021).

[31] See, e.g., Brown v. Azar, 497 F. Supp. 3d 1270, 1281–85 (N.D. Ga. 2020) (denying a preliminary injunction against the CDC’s moratorium), aff’d Brown v. Sec’y, U.S. Dep’t of Health and Hum. Servs., 4 F.4th 1220 (11th Cir. 2021); Tiger Lily, LLC v. U.S. Dep’t of Hous. and Urb. Dev., 525 F. Supp. 3d 850 (W.D. Tenn. 2021) (granting an injunction), denying a stay pending appeal, 992 F.3d 518 (6th Cir. 2021), aff’d 5 F.4th 666 (6th Cir. 2021); Skyworks, Ltd. v. CDC, 524 F. Supp. 3d 745 (N.D. Ohio 2021) (ruling that the CDC’s order likely exceeds its statutory authority, but declining to enter a preliminary injunction); Chambless Enterprises, LLC v. Redfield, 508 F. Supp. 3d 101, 108–15 (W.D. La. 2020) (ruling that the CDC’s eviction moratorium did not exceed its statutory authority), appeal filed, No. 21-30037 (5th Cir. 2021); see also Terkel v. CDC, No. 6:20-cv-00564, 2021 WL 742877 (E.D. Tex. Feb. 25, 2021) (ruling that Congress lacks authority under the Article I Commerce Clause to authorize the CDC order to impose a nationwide moratorium on evictions).

[32] See Brown, 497 F. Supp. 3d at 1281–85 (denying landlords’ motion for a preliminary injunction and ruling that the government was likely to prevail on the merits); cf. Indep. Turtle Farmers of La. v. United States, 703 F. Supp. 2d 604, 618–20 (W.D. La. 2010) (upholding an FDA rule prohibiting the sale of viable turtle eggs and small-size turtles to curb the spread of salmonellosis in reliance on the “catch-all” provision of 42 U.S.C. § 264).

[33] See Brown v. Sec’y, U.S. Dep’t of Health and Hum. Servs., 4 F.4th 1220 (11th Cir. 2021) (Branch, J., dissenting); Tiger Lily, LLC v. U.S. Dep’t of Hous. and Urb. Dev., 525 F. Supp. 3d 850 (W.D. Tenn. 2021) (granting an injunction), denying stay pending appeal, 992 F.3d 518 (6th Cir. 2021), aff’d 5 F.4th 666 (6th Cir. 2021); Skyworks, 524 F. Supp. 3d 745, 757-59  (N.D. Ohio 2021) (same). Some courts have expressed doubt that the CDC’s order is authorized by Section 264, but only resolved the issue whether the CDC’s order should be enjoined pending a decision on the merits of the case. See, e.g., Brown v. Sec’y, U.S. Dep’t of Health and Hum. Servs., supra (expressing doubt that the CDC has authority to declare an eviction moratorium but refusing to overturn the district court’s denial of relief); Skyworks, 2021 WL 911720, at *9–13. Other courts have reached the merits of the dispute. See, e.g., Tiger Lily, 992 F.3d at 522–24.

[34] Alabama Realtors, No. 20-cv-3377, 2021 WL 1779282, at *2. The plaintiffs raised other claims as well, but they are not relevant to the issue discussed in this Article. See id.

[35] Id. at *4–9.

[36] Id. at *5.

[37] Id. at *5.

[38] Id.; see, e.g., Epic Systems Corp. v. Lewis, 138 S. Ct. 1612, 1625 (2018) (“Where, as here, a more general term follows more specific terms in a list, the general term is usually understood to embrace only objects similar in nature to those objects enumerated by the preceding specific words.”) (citation and internal punctuation omitted).

[39] Id. at *6.

[40] Id.

[41] Id.

[42] Id.

[43] Id.

[44] Id.

[45] See infra text accompanying notes 143–47.

[46] Id. at *7.

[47] Id. at *4–5

[48] Id. at *8.

[49] Id. (internal punctuation omitted).

[50] Alabama Realtors, No. 20-cv-3377, 2021 WL 1779282, at *1–4 (granting a stay pending appeal).

[51] Id. at *2; see id. at *2–4.

[52] Id. at *2; see id. at *2–4.

[53] Alabama Realtors, No. 21-5093, 2021 WL 2221646, at *1–4 (D.C. Cir. June 2, 2021).

[54] Id. at *1–2.

[55] Id. at *2.

[56] Id.

[57] Id. at *3.

[58] Id. at *3–4.

[59] Alabama Realtors, 141 C. Ct. at 2320.

[60] Id. (“The application to vacate stay presented to THE CHIEF JUSTICE and by him referred to the Court is denied.”); see Nken v. Holder, 556 U.S. 418, 433 (2009) (discussing the factors courts must consider when deciding whether to stay a judgment pending appeal).

[61] Alabama Realtors, 141 C. Ct. at 2320.

[62] Id.

[63] Id.

[64] 573 U.S. 302 (2014).

[65] Id. at 324.

[66] Alabama Realtors, 141 S. Ct. at 2321 (Kavanaugh, J., concurring).

[67] Id.

[68] See Alabama Realtors, No. 20-cv-3377, 2021 WL 3577367, at *5 (D.D.C. Aug. 13, 2021) (“It is true that the Supreme Court’s recent decision in this case strongly suggests that the CDC is unlikely to succeed on the merits. Four Supreme Court Justices voted to vacate the stay, an action which would have been improbable if not impossible had the government, as the stay applicant, . . . made a strong showing that it was likely to succeed on the merits. . . . And while Justice Kavanaugh voted to uphold the stay, he squarely concluded the Centers for Disease Control and Prevention exceeded its existing statutory authority by issuing a nationwide eviction moratorium.”) (citations and internal punctuation omitted).

[69] See Andrew Ackerman, Biden Asks Congress to Extend Federal Eviction Moratorium, Wall St. J., July 29, 2021, https://www.wsj.com/articles/biden-asks-congress-to-extend-federal-eviction-moratorium-11627571409 [https://perma.cc/HWY6-NKL8].

[70] See Alabama Realtors, No. 20-cv-3377, 2021 WL 3577367, at *2 (“In the following weeks [after the Supreme Court’s order], the Biden Administration repeatedly stated that it would not further extend the eviction moratorium in light of the Supreme Court’s ruling, which it interpreted to ‘mak[e] clear’ the option ‘is no longer available.’ Pls.’s Reply at 1–2, Dkt. 71 (quoting White House, Statement by White House Press Secretary Jen Psaki on Biden-Harris Administration Eviction Prevention Efforts (July 29, 2021)). And the Administration stressed that the CDC agreed with this interpretation, stating that “the CDC Director and her team have been unable to find legal authority, even for a more targeted eviction moratorium that would focus [just] on counties with higher rates of COVID spread.” Mot. Hr’g Tr. at 20 (quoting White House, Press Briefing by Press Secretary Jen Psaki and White House American Rescue Plan Coordinator and Senior Advisor to the President Gene Sperling (Aug. 2, 2021)).”); Press Briefing by Press Secretary Jen Psaki and White House American Rescue Plan Coordinator and Senior Advisor to the President Gene Sperling, Aug. 2, 2021, https://www.whitehouse.gov/briefing-room/press-briefings/2021/08/02/press-briefing-by-press-secretary-jen-psaki-and-white-house-american-rescue-plan-coordinator-and-senior-advisor-to-the-president-gene-sperling-august-2-2021/ [https://perma.cc/P9LU-GE4T] (“To date, the CDC Director and her team have been unable to find legal authority, even for a more targeted eviction moratorium that would focus just on counties with higher rates of COVID spread. . . . One of the things that is — that he is requesting today is that state and local governments extend or pass eviction moratoriums to cover the next two months. . . . I would say that on this particular issue, the President has not only kicked the tires; he has double, triple, quadruple checked. He has asked the CDC to look at whether you could even do targeted eviction moratorium—that just went to the counties that have higher rates—and they, as well, have been unable to find the legal authority for even new, targeted eviction moratoriums.”); Statement by White House Press Secretary Jen Psaki on Biden-⁠Harris Administration Eviction Prevention Efforts, July 29, 2021, https://www.whitehouse.gov/briefing-room/statements-releases/2021/07/29/statement-by-white-house-press-secretary-jen-psaki-on-biden-harris-administration-eviction-prevention-efforts/ [https://perma.cc/SX6T-YKJM] (“Given the recent spread of the Delta variant, including among those Americans both most likely to face evictions and lacking vaccinations, President Biden would have strongly supported a decision by the CDC to further extend this eviction moratorium to protect renters at this moment of heightened vulnerability. Unfortunately, the Supreme Court has made clear that this option is no longer available. In June, when CDC extended the eviction moratorium until July 31st, the Supreme Court’s ruling stated that ‘clear and specific congressional authorization (via new legislation) would be necessary for the CDC to extend the moratorium past July 31.’”); see also Siobhan Hughes & Alex Leary, As Eviction Moratorium Expires, White House Clashes With Progressives, Wall St. J., Aug. 2, 2021, https://www.wsj.com/articles/progressives-raise-heat-on-nancy-pelosi-over-eviction-moratorium-11627918766 [https://perma.cc/E55J-LMD6] (“The White House, under fire from progressives for the expiration of a moratorium on evictions, said it lacked the legal authority to order an extension while blaming state and local governments for slow distribution of rental aid already approved by Congress. [¶] ‘There is simply no excuse, no place to hide for any state or locality that is failing to accelerate their emergency rental assistance fund,’ Gene Sperling, a senior adviser to President Biden, said in defending the administration’s handling of the issue on Monday. . . . The White House said that on Sunday Mr. Biden asked the CDC to come up with a new, 30-day eviction moratorium focused on areas with high Covid-19 rates, rather than the monthslong options previously proposed. But the White House said the CDC said it hadn’t found the legal authority for that action either, and signaled it was loath to take an action that could lead to the high court striking down its public-health powers.”); Glenn Thrush & Matthew Goldstein, Administration Seeks to Blunt Efforts from End of Eviction Moratorium, N.Y. Times, Aug. 2, 2021, https://www.nytimes.com/2021/08/02/us/politics/administration-seeks-to-blunt-effects-from-end-of-eviction-moratorium.html [https://perma.cc/Q65F-SLKH] (“Over the weekend, Mr. Biden called on Dr. Rochelle Walensky, the C.D.C. director and the official with the authority to extend the freeze, to explore the possibility of limiting an extension to areas hit especially hard by the Delta variant, but was told that was not possible. [¶] Mr. Sperling said in an interview that West Wing officials wanted to extend the moratorium. ‘But what was clear from the legal analysis was that we had already litigated this issue all the way to the Supreme Court,’ he said.”).

[71] See Andrew Ackerman & Siobhan Hughes, House Adjourns Without Extending Covid-19 Eviction Moratorium, Wall St. J., July 30, 2021, https://www.wsj.com/articles/house-adjourns-without-extending-covid-19-eviction-moratorium-11627684248 [https://perma.cc/AB5B-LZWF].

[72] See, e.g., Lauren Egan et al., CDC Announced Targeted Eviction Moratorium After Days of Pressure, NBC News, Aug. 3, 2021, https://www.nbcnews.com/politics/white-house/cdc-expected-announce-new-eviction-moratorium-after-days-pressure-n1275860 [https://perma.cc/QB5R-W7S7]; Editorial Board, The Rental Evictions Fiasco, Wall St. J., Aug. 2, 2021, https://www.wsj.com/articles/rental-evictions-moratorium-covid-19-biden-supreme-court-11627838612 [https://perma.cc/7KVC-H38R] (“Cue the political panic. On Thursday, two days before July 31, the White House issued a statement essentially blaming the Supreme Court for the moratorium’s end and urged Congress to extend it. House Speaker Nancy Pelosi declared a five-alarm fire, but her attempt to rush an extension through the House failed. Too many Democrats balked.”); Michael D. Shear et al., As Democrats Seethed, White House Struggled to Contain Eviction Fallout, N.Y. Times, Aug. 7, 2021, https://www.nytimes.com/2021/08/07/us/politics/biden-congress-eviction-moratorium.html [https://perma.cc/X9HH-ZEN3] (“Progressive Democrats were publicly assailing the administration for allowing an eviction ban to expire that past Saturday and House Speaker Nancy Pelosi, unable to secure the votes to approve an extension, was demanding Mr. Biden find a different solution. . . . Mr. Biden and his aides claimed their hands were legally tied by a recent Supreme Court ruling that strongly suggested — but did not explicitly say — that the nationwide evictions moratorium exceeded the government’s emergency powers under a public health law. But Ms. Pelosi did not accept that explanation. [¶] ‘Get better lawyers,’ Ms. Pelosi replied, according to a person familiar with the conversation.”); Thrush & Goldstein, supra note 66 (“[M]any Democrats, including Speaker Nancy Pelosi, have called on Mr. Biden to reconsider his decision not to act unilaterally, and have expressed anger that the White House gave lawmakers only two days to try to ram through legislation to extend the freeze last week.”).

[73] See Remarks by President Biden on Fighting the COVID-19 Pandemic, Aug. 3, 2021, https://www.whitehouse.gov/briefing-room/speeches-remarks/2021/08/03/remarks-by-president-biden-on-fighting-the-covid-19-pandemic/ [https://perma.cc/H89R-T7Y7] (“THE PRESIDENT:  Any call for a moratorium based on the Supreme Court recent decision is likely to face obstacles.  I’ve indicated to the CDC I’d like them to look at other alternatives than the one that is in pow-—in existence, which the Court has declared they’re not going to allow to continue.  And the CDC will have something to announce to you in the next hour to two hours.”); Notable & Quotable: Biden on Evictions and Passing Constitutional Muster, Wall St. J., Aug. 4, 2021, https://www.wsj.com/articles/constitutional-biden-cdc-eviction-ban-moratorium-covid-11628102695 [https://perma.cc/64GW-SALG] (“Q: We’re learning that your administration is about to announce a new partial eviction moratorium, Covid-related. Can you tell us any more about that? And are you sure it’s going to pass Supreme Court muster? [¶] The president: The answer is twofold. One, I’ve sought out constitutional scholars to determine what is the best possibility that would come from executive action, or the CDC’s judgment, what could they do that was most likely to pass muster, constitutionally. [¶] The bulk of the constitutional scholarship says that it’s not likely to pass constitutional muster. Number one. But there are several key scholars who think that it may and it’s worth the effort. But . . . the court has already ruled on the present eviction moratorium. . . .”);  WSJ Editorial, supra note 5 (“‘The bulk of the constitutional scholarship says that it’s not likely to pass constitutional muster,’ Mr. Biden admitted Tuesday. That was only hours before the Centers for Disease Control and Prevention issued its renewed eviction ban. ‘But at a minimum,’ Mr. Biden said, ‘by the time it gets litigated, it will probably give some additional time while we’re getting that $45 billion out to people who are, in fact, behind in the rent and don’t have the money.’”).

[74] Temporary Halt in Residential Evictions in Communities with Substantial or High Levels of Transmission of COVID-19 to Prevent Further Transmission of COVID-19, 86 Fed. Reg. 43,244 (Aug. 6, 2021); see Alabama Realtors, No. 20-cv-3377, 2021 WL 3577367, at *3 (“finding only ‘minor differences’ between the CDC earlier and August 3 orders: “First, the current moratorium is effective through October 3, 2021, and covers all evictions initiated but not finalized before the order’s promulgation on August 3, 2021. . . . Second, the current moratorium applies only in U.S. counties experiencing substantial and high levels of community transmission levels of SARS-CoV-2 as defined by CDC—a category that presently includes roughly ninety-one percent of U.S. counties . . . . In contrast, the previous moratorium applied in all U.S. counties. Apart from these differences, the moratoria are virtually identical—the remainder of their definitions are the same, their exceptions are the same, their applicability provisions are the same, and the criminal penalties for violating those provisions are the same. And the CDC designed the current moratorium to be continuous with its antecedents, insofar as it exempts persons covered under those antecedents from filing new declarations of eligibility.”) (citations, footnote, and internal punctuation omitted); Doina Chiacu, CDC Extends Federal Eviction Moratorium for 60 Days—Schumer, Reuters, Aug. 4, 2021, https://www.reuters.com/world/us/cdc-extends-federal-eviction-moratorium-60-days-schumer-2021-08-03/ [https://perma.cc/HYZ8-A5Q2] (“The U.S. Centers for Disease Control and Prevention extended a federal moratorium on evictions affecting 90 percent of the country for 60 days, Senate Majority Leader Chuck Schumer said on Tuesday.”); Sean-Michael Pigeon, So . . . What Happens After This New Moratorium Ends?, Nat’l Rev., Aug. 4, 2021, https://www.nationalreview.com/corner/so-what-happens-after-this-new-moratorium-ends/ [https://perma.cc/7D9E-U7BE] (“The CDC is framing its eviction policy as a ‘targeted’ one. The CDC’s ploy is to argue that it is only looking at ‘hotspots’ of COVID-19 and that the order is primarily about public health. Given that 90 percent of renters are covered by the order, though, the order isn’t narrow at all.”). Interestingly, it appears that the Justice Department and Biden disagreed about the legality of the new order. Neither Biden nor White House Press Secretary Jen Psaki said that the Justice Department believed that the CDC had authority for the new moratorium, which one or the other surely would have said if it were true. In addition, when Attorney General Merrick Garland was asked by a reporter “whether the department signed off on the eviction moratorium, Garland did not answer the question.” Alan Z. Rozenshtein, Did the Justice Department Give President Biden Legal Advice on the CDC Eviction Moratorium?, Lawfare, Aug. 9, 2021, https://www.lawfareblog.com/did-justice-department-give-president-biden-legal-advice-cdc-eviction-moratorium [https://perma.cc/7ZWF-QXC5]. That silence is telling. See Chisom v. Roemer, 501 U.S. 380, 396 n.23 (1991) (citing Arthur Conan Doyle, Silver Blaze, in The Complete Sherlock Holmes 335 (1927)).

[75] Alabama Realtors, No. 20-cv-3377, 2021 WL 3577367, at *3.

[76] See id. at *4 (“Rather than address any of these factors on the merits, the government argues that the law-of-the-case doctrine requires the Court to maintain the stay as a matter of law. Defs.’s Br. at 6–8, Dkt. 69. This Court agrees. Because the D.C. Circuit’s judgment affirming the stay binds this Court and the Supreme Court did not overrule that judgment, the Court will deny the plaintiffs’ motion.”).

[77] Alabama Realtors, No. 21-5093, 2021 WL 3721431 (D.C. Cir. Aug. 20, 2021).

[78] Alabama Realtors 2, 141 S. Ct. 2485 (2021).

[79] Id. at 2486.

[80] Id. at 2488.

[81] Id. at 2486.

[82] Id. at 2488.

[83] Id. at 2489.

[84] Util. Air Regul. Grp. v. EPA, 573 U.S. 302 (2014).

[85] See supra text accompanying notes 64–65.

[86] Alabama Realtors 2, 141 S. Ct. at 2489 (internal punctuation omitted).

[87] Id.

[88] Id.

[89] Id.

[90] Id. at 2489 (“The equities do not justify depriving the applicants of the District Court’s judgment in their favor. The moratorium has put the applicants, along with millions of landlords across the country, at risk of irreparable harm by depriving them of rent payments with no guarantee of eventual recovery. Despite the CDC’s determination that landlords should bear a significant financial cost of the pandemic, many landlords have modest means. And preventing them from evicting tenants who breach their leases intrudes on one of the most fundamental elements of property ownership—the right to exclude. . . .  [¶] As harm to the applicants has increased, the Government’s interests have decreased. Since the District Court entered its stay, the Government has had three additional months to distribute rental-assistance funds to help ease the transition away from the moratorium. Whatever interest the Government had in maintaining the moratorium’s original end date to ensure the orderly administration of those programs has since diminished. And Congress was on notice that a further extension would almost surely require new legislation, yet it failed to act in the several weeks leading up to the moratorium’s expiration.”) (citation omitted).

[91] Id. at 2490 (citing Youngstown Sheet & Tube Co. v. Sawyer, 343 U.S. 579, 582, 585 (1952), and stating that “even the Government’s belief that its action ‘was necessary to avert a national catastrophe’ could not overcome a lack of congressional authorization”).

[92] Id.

[93] Id. at 2490 (Breyer, J., dissenting).

[94] Id. (Breyer, J., dissenting).

[95] Id. at 2492 (Breyer, J., dissenting).

[96] Id. (Breyer, J., dissenting).

[97] Id. at 2493 (Breyer, J., dissenting); id. at 2494 (Breyer, J., dissenting) (“Applicants raise contested legal questions about an important federal statute on which the lower courts are split and on which this Court has never actually spoken. These questions call for considered decisionmaking, informed by full briefing and argument. Their answers impact the health of millions. We should not set aside the CDC’s eviction moratorium in this summary proceeding. The criteria for granting the emergency application are not met. I respectfully dissent.”).

[98] See id. at 2488 (“The District Court concluded that its stay is no longer justified under the governing four-factor test. . . . . We agree.”), 2490 (“If a federally imposed eviction moratorium is to continue, Congress must specifically authorize it. The application to vacate stay presented to THE CHIEF JUSTICE and by him referred to the Court is granted.”).

[99] Of course, that would take grande cojones, but we have seen comebacks like that happen before. See Super Bowl LI (NFL Feb. 5, 2017) (down 28-3 with 8:31 left in the third quarter, Tom Brady brought the Patriots back to win 34-28 in overtime, thereby establishing himself as the GOAT). For a discussion of the effect of a Supreme Court order entered in its so-called “Shadow Docket” dealing with interim relief pending entry of a final judgment, see CASA de Md., Inc. v. Trump, 971 F.3d 220, 229-30 (4th Cir. 2020); Trevor N. McFadden & Vetan Kapoor, The Precedential Effect of the Supreme Court’s Emergency Stays, 44 Harv. J.L. & Pub. Pol’y 827 (2021).

[100] Alabama Realtors, No. 21-5093, 2021 WL 4057718 (D.C. Cir. Sept. 3, 3021) (order granting government’s unopposed motion to dismiss its appeal).

[101] U.S. Const. art. II, § 2, cl. 2.

[102] The Article I Necessary and Proper Clause empowers Congress to create whatever agencies are necessary to implement federal law. See U.S. Const. art. I, § 8, cl. 18.

[103] Article II creates the office of “President of the United States of America.” U.S. Const. art. II, § 1, cl. 1. It also grants the President the ability—sometimes with the assent of the Senate, sometimes without it—to appoint and commission “Officers of the United States” to staff the “Departments” Congress has established. Id. art. II, § 2, cls. 2 & 3.

[104] See, e.g., Seila Law LLC v. CFPB, 140 S. Ct. 2183, 2198–99 (2020).

[105] For example, Article II empowers the President to grant clemency, U.S. Const. art. II, § 2, cl. 1, and he or she can do so without any need for congressional authorization. See, e.g., Schick v. Reed, 419 U.S. 256, 266 (1974) (“[T]he power flows from the Constitution alone, not from any legislative enactments, and that it cannot be modified, abridged, or diminished by the Congress.”).

[106] See, e.g., Bowen v. Georgetown Univ. Hosp., 488 U.S. 204, 208 (1988) (“It is axiomatic that an administrative agency’s power to promulgate legislative regulations is limited to the authority delegated by Congress.”); La. Pub. Serv. Comm’n v. FCC, 476 U.S. 355, 374 (1986) (“[A]n agency literally has no power to act . . . unless and until Congress confers power upon it.”).

[107] 42 U.S.C. 264(a) (quoted supra note 27).

[108] Id.

[109] The Secretary has delegated all Section 264 powers to the CDC. 42 C.F.R. § 70.2 (2020).

[110] See Brown v. Azar, 497 F. Supp. 3d 1270, 1281 (N.D. Ga. 2020).

[111] The D.C. Circuit made the same mistake. In the court’s view, the clause allowing the Director to inspect, fumigate, disinfect, sanitize or destroy infected, dangerous animals or articles was a sufficient “intelligible principle” to defeat any argument that Congress acted improperly when it had turned the Director loose to prevent transmission in any way that she saw fit. See Alabama Realtors, No. 21-5093, 2021 WL 2221646, at *2 (D.C. Cir. June 2, 2021). But that conclusion makes little sense unless that sentence modifies the catch-all provision in the immediately preceding sentence. If it does, however, it must have that effect by giving content to the type of “other measures” that the Director may take. Otherwise, the list is superfluous. Accordingly, the D.C. Circuit cannot have it both ways. If the list gives content to the “other measures” catchall term, it does so only by limiting the “other measures” the CDC Director can take. And if the list performs that function, an eviction moratorium is not an authorized response to a virus, because it shares no “family resemblance” (the term that Wittgenstein used to describe the ejusdem generis rule of statutory interpretation, see Ludwig Wittgenstein, Philosophical Investigations (G.E.M. trans 3d ed. 1973) (1953)) to the inspection, fumigation, chemical cleaning, sanitization, or destruction of animals or articles.

[112] Gundy v. United States, 139 S. Ct. 2116, 2126 (2019) (citation and internal punctuation omitted).

[113] Id. (citation and internal punctuation omitted); see also, e.g.Util. Air Regul. Grp. v. EPA, 573 U.S. 302, 321 (2014) (“[R]easonable statutory interpretation must account for both the specific context in which . . . language is used and the broader context of the statute as a whole.”) (internal punctuation omitted).

[114] See Alabama Realtors 2, 141 S. Ct. 2485, 2488 (2021) (“Reading both sentences together, rather than the first in isolation, it is a stretch to maintain that § 361(a) gives the CDC the authority to impose this eviction moratorium.”).

[115] See Ch. 373 58 Stat. 682, 682–720 (codified as amended at 42 U.S.C. Ch. 6A (2018)). Title I contains the act’s title and definitions.  Title II deals with administration. It creates the Public Health Service, to be headed by the U.S. Surgeon General, a presidential appointee. Sections 1–2, 58 Stat. 682, 682–83. Title II goes on to identify other supporting personnel, their selection process, pay and benefits, promotions, uniform allowances, and retirement. It also creates the National Cancer Council. Sections 201–17, 58 Stat. 682, 683–91. Title IV deals with the National Cancer Institute. Sections 401–06, 58 Stat. 682, 707–08. Title V is a list of miscellaneous items, such as gifts, the care of patients at St. Elizabeth’s hospital, the settlement of claims, and the transportation of the remains of commissioned officers. Title VI contains temporary and emergency provisions.

[116] Part A deals with research and investigations. It directs the CDC Director to conduct, coordinate, assist in, and fund “investigations, experiments, demonstrations, and studies relating to the causes, diagnosis, treatment, control, and prevention of physical and mental diseases and impairments of man,” as well as publish the result of that research. Section 301, 58 Stat. 682, 692 (codified as amended at 42 U.S.C. §§ 241, 242, 242k). Part B deals with federal-state cooperation. Sections 301–15, 58 Stat. 682, 691–95. It directs the CDC Director to provide to and accept from “State and local authorities” whatever “assistance in the enforcement of quarantine regulations” issued under the authority of the Public Health Service Act state or local governments can provide. Section 311, 58 Stat. 682, 693. Part F empowers the CDC Director to regulate the importation and interstate movement of “biological products”—viz., “any virus, therapeutic serum, toxin, antitoxin, or analogous product,’ or arsphenamine or its derivatives (or any other trivalent organic arsenic com- pound), applicable to the prevention, treatment, or cure of diseases or injuries of man.” Section 351(a), 58 Stat. 682, 702; see id. Sections 351–52, 58 Stat. 692, 702–03.

[117] Public Health Service Code—Hearing Before  Subcomm. Of the Comm. on Interstate & Foreign Commerce on H.R. 3379—A Bill to Codify the Laws Relating to the Public Health Service, and for Other Purposes, 78th Cong., 2d Sess. 43 (1944) [hereafter 1944 House PSHA Hearing] (Statement of Surgeon Gen’l Thomas Parran).

[118] Section 311, 58 Stat. 682, 693.

[119] 58 Stat. 682, 695; see Sections 321–27, 58 Stat. 682, 695–98.

[120] Section 321(a)-(c), 58 Stat. 682, 695–96; see 1944 House PSHA Hearing, supra note 87, at 43–44 (Surgeon Gen’l Parran).

[121] Sections 322, 58 Stat. 682, 695–96; see 1944 House PSHA Hearing, supra note 87, at 43–45 (Surgeon Gen’l Parran) (describing coverage under prior law).

[122] Section 322(d), 58 Stat. 682, 696.

[123] Section 325, 58 Stat. 682, 697.

[124] Section 322(c), 58 Stat. 682, 696.

[125] Section 322(b), 58 Stat. 682, 696.

[126] Section 323, 58 Stat. 682, 697.

[127] Section 324 & 326, 58 Stat. 682, 697–98.

[128] Sections 331–32 & 341–45, 58 Stat. 682, 698–702.

[129] 1944 House PSHA Hearing, supra note 87, at 45 (Surgeon Gen’l Parran). The Public Health Service is the offspring of a system of marine hospitals that Congress established in 1798. CRS PHSA Report, supra note 13, at 6.

[130] Id.

[131] 1944 House PSHA Hearing, supra note 87, at 45–46.

[132] See also 1944 House PSHA Hearing, supra note 87, at 66 (Letter from Paul V. McNutt, Adm’r, Fed’l Security Agency, to Rep. Clarence F. Lea, Chair, House Comm. on Interstate and Foreign Commerce (Mar. 1, 1944)).

[133] Sections 301–69, 58 Stat. 682, 691–706.

[134] See CRS PHSA Report, supra note 13, at 4.

[135] See id. at 13; see also 42 C.F.R. §§ 70.4, 70.5, 70.10 & 70.11 (West 2021).

[136] See CRS PHSA Report, supra note 13, at 13; see also 85 Fed. Reg. 7874, 7874 (2020); Cntrs. For Disease Control & Prevention, Travelers from China Arriving in the United States (Feb. 7, 2020), https://web.archive.org/web/20200220004302/https://www.cdc.gov/coronavirus/2019-ncov/travelers/from-china.html [https://perma.cc/T268-J6A9].

[137] Another measure would be a set of guidelines for deciding whether, when, and how to examine potentially infected people, animals, or articles at an international border, by whatever medical devices are best suited to detect a pathogen, when they have come from a region known to have had a recent widespread dangerous infectious disease, such as happened in 2014–2016 during the Ebola outbreak in Africa. See Cntrs. for Disease Control & Prevention, Ebola (Ebola Virus Disease): History of Ebola Virus Disease (May 27, 2021), https://www.cdc.gov/vhf/ebola/history/summar ies.html [https://perma.cc/7UJV-F39Z].

[138] See Public Health Service Act, Section 364, 58 Stat. 682, 704–705.

[139] See, e.g., Smith v. Turner, 48 U.S. 283, 400 (1849) (“Quarantine or health laws have been passed by the States, and regulations of police for their protection and welfare.”); CRS PHSA Report, supra note 13, at 7–8 (“The use of quarantine to prevent the spread of communicable diseases has a long history in Europe and the United States.”) (footnotes omitted).

[140] See U.S. Const. art. I, § 8, cl. 3 (“[The Congress shall have Power] To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes.”).

[141] The general rule, developed over more than a century of Supreme Court case law, was the following: Even though “quarantines necessarily affect interstate commerce,” absent “any action taken by Congress on the subject-matter, it is well settled that a state, in the exercise of its police power, may establish quarantines against” infected people, animals, or plants, “the coming in of which may expose” inhabitants, livestock, trees, plants, or crops “to disease, injury, or destruction.” Oregon-Washington R. & Nav. Co. v. Washington, 270 U.S. 87, 93 (1926) (per Taft, C.J.); see also, e.g., Compagnie Francaise de Navigation a Vapeur v. Bd. of Health of La., 186 U.S. 380, 387 (1902); Gibbons v. Ogden, 22 U.S. (9 Wheat.) 1, 203 (1824).

[142] Congress passed federal quarantine legislation beginning in 1878 but did not enact a consolidated public health service code until 1944. See 1944 House PSHA Hearing supra note 87, at 35 (Statement of Surgeon Gen’l Parran); CRS PHSA Report, supra note 13, at 8–9.

[143] 1944 House PSHA Hearing, supra note 87, at 28 (Subcomm. Chair Alfred Bulwinkle); see id. (Surgeon Gen’l Parran) (“a patchwork with successive overlapping layers”).

[144] See Arver v. United States, 245 U.S. 366 (1918) (Selective Draft Law Cases) (upholding the constitutionality of the World War I draft).

[145] Selective Service Act of 1917, ch. 15, § 2, 40 Stat. 76 (Repealed 1935).

[146] Selective Training and Service Act of 1940, ch. 720, § 2, 54 Stat. 885, 885 (1940). It required men between 21 and 36 to register with local draft boards, be available for military training, and, if war broke out, to remain in military service for as long as the President deemed necessary for the national defense. See id. §§ 2 & § 3, 54 Stat. at 885–86.

[147] Public Health Service Act, § 364, 58 Stat. 682, 704.

[148] See Alabama Realtors 2, 141 S. Ct. 2485, 2489 (2021) (“‘Our precedents require Congress to enact exceedingly clear language if it wishes to significantly alter the balance between federal and state power and the power of the Government over private property.’”) (quoting United States Forest Service v. Cowpasture River Preservation Assn., 140 S. Ct. 1837, 1850 (2020)).

[149] The original bill was H.R. 3379, 78th Cong. (1944). The bill’s managers revised it after the House hearing, and the House unanimously passed the replacement bill, H.R. 4624, 78th Cong. (1944). See Hearing Before a Subcomm. on Education and Labor on H.R. 4624: An Act to Consolidate and Revise the Laws Relating to the Public Health Service, and for Other Purposes, 78th Cong., 2d Sess. 2 (1944) [hereafter Senate PHSA Report] (testimony of Rep. Bulwinkle). The House sponsor said that the differences between H.R. 3379 and H.R. 4624 were “very little,” “minor,” and designed “to clear up ambiguities.” Id. (testimony of Rep. Bulwinkle); id. at 3 (Senator Lister Hill) (“We are not doing anything new here, we are not passing new law. What we are doing is codifying existing law. But in some instances we are reconciling what appears to be some little conflict here or there, we are reconciling the statutes to bring them together.”); id. (Testimony of Surgeon General Thomas Parran: “As Congressman Bulwinkle has explained, this bill is in the main a codification of existing law. [¶] The public-health law has represented a hodgepodge of overlapping and conflicting provisions, ambiguous references, and obsolete provisions.”).

[150] 1944 House PSHA Hearing, supra note 87, at 139; see Act of Feb. 15, 1893, ch. 114, § 3, 27 Stat. 449, 450–51 (“[A]ll such [quarantine] rules and regulations made by the Secretary of the Treasury shall operate . . . at such ports or places within the United States as have no quarantine regulations . . . and at such ports and places . . . where quarantine regulations exist . . . which, in the opinion of the Secretary of the Treasury, are not are not sufficient to prevent the introduction of such diseases into the United States, or into one State or Territory or the District of Columbia from another State or Territory or the District of Columbia . . . .”).

[151] 1944 House PSHA Hearing, supra note 87, at 139.

[152] Id.

[153] Id.

[154] Senate PHSA Report, supra note 120, at 6 (Testimony of Surgeon General Parran).

[155] Id.

[156] Alabama Realtors 2, 141 S. Ct. 2485, 2489 (2021) (“Indeed, the Government’s read of § 361(a) would give the CDC a breathtaking amount of authority. It is hard to see what measures this interpretation would place outside the CDC’s reach, and the Government has identified no limit in § 361(a) beyond the requirement that the CDC deem a measure ‘necessary.’ . . . Could the CDC, for example, mandate free grocery delivery to the homes of the sick or vulnerable? Require manufacturers to provide free computers to enable people to work from home? Order telecommunications companies to provide free high-speed Internet service to facilitate remote work?”). Free medicine would be nice too.

[157] Of course, if Congress had committed (or hereafter will commit) to that course of action, any statute would be subject to constitutional challenge under the doctrines discussed in the text.

[158] 293 U.S. 388 (1935). Panama Refining held unconstitutional a provision of the National Industrial Recovery Act (NIRA) empowering the President to prohibit distribution of “hot oil”—viz., oil produced in excess of a production quota. Id. at 418, 433.

[159] 295 U.S. 495 (1935). Schechter Poultry involved Title I, Section 3 of NIRA, a provision that delegated to trade or industrial groups the authority to define “unfair methods of competition” that would become law only when the President approved it. § 3(a)–(b), 48 Stat. 195, 196; Schechter Poultry, 295 U.S. at 521. “This was no small operation.” Richard A. Epstein, The Classic Liberal Constitution 270 (2014). “In the eighteen months between August 1933 and February 1935, the frenzied activities of the Roosevelt administration generated some 546 codes, 185 supplemental codes, 685 amendments, and over 11,000 administrative orders.” Id.

[160] To be candid, the Court has done more than just uphold every statute over a delegation doctrine challenge. See Paul J. Larkin, Jr., The Private Delegation Doctrine, 73 Fla. L. Rev. 32, 38 (2021) (“Since 1935, the Court has upheld every judgment that Congress has told an agency to make, even such policy-laden ones as the tradeoff between public health and private profit or the presumptive amount of time that a convicted offender should spend imprisoned. In so doing, the Court has deemed every formulation that Congress has whipped up to be ‘intelligible,’ even ones as vacuous as ‘the public interest’ or ‘excessive profits.’ As long as Congress has written its statutory text in English with some remotely decipherable standard, the Court has upheld delegation of even large-scale lawmaking or policy making authority.”) (footnotes omitted).

[161] Id. at 40 (“In separate opinions involving the same statute—Gundy v. United States and Paul v. United States—five Justices signaled that they are interested in and willing to reconsider the Court’s Delegation Doctrine caselaw. The upshot is it is unknown whether the Delegation Doctrine should receive long overdue last rites or additional CPR.”) (footnotes omitted).

[162] Matthew 28:2 (“And, behold, there was a great earthquake: for the angel of the Lord descended from heaven, and came and rolled back the stone from the door, and sat upon it.”) (King James).

[163] Public Health Service Act, § 368, 58 Stat. 682, 706.

[164] Id. 368(a) (“Any person who violates any regulation prescribed under sections 361, 362, or 363, or any provision of section 366 or any regulation prescribed thereunder, or who enters or departs from the limits of any quarantine station, ground, or anchorage in disregard of quarantine rules and regulations or without permission of the quarantine officer in charge, shall be punished by a fine of not more than $1,000 or by imprisonment for not more than one year, or both.”).

[165] United States v. Harriss, 347 U.S. 612, 617 (1954) (footnote omitted); see also, e.g., Lanzetta v. New Jersey, 306 U.S. 451, 453 (1939) (“No one may be required at peril of life, liberty or property to speculate as to the meaning of penal statutes. All are entitled to be informed as to what the State commands or forbids.”). See generally Paul J. Larkin, Jr., The Folly of Requiring Complete Knowledge of the Criminal Law, 12 Liberty U. L. Rev. 335, 340–43 (2018).

[166] 141 S. Ct. 2063, 22073–74 (2021).

[167] See Yee v. City of Escondido, 503 U.S. 519 (1992); Pennell v. San Jose, 485 U.S. 1 (1988); Block v. Hirsh, 256 U.S. 135 (1921).

[168] 141 S. Ct. 63 (2020).

[169] Id. at 68; see also id. at 79 (Sotomayor, J., dissenting) (“Justices of this Court play a deadly game in second guessing the expert judgment of health officials about the environments in which a contagious virus, now infecting a million Americans each week, spreads most easily.”).

[170] See, e.g., Howard Husock, Stop Extending the Eviction Moratorium, City J., June 24, 2021, https://www.city-journal.org/dont-extend-the-eviction-moratorium [https://perma.cc/CS57-BVDK] (“The push to make evictions more difficult, or even to ban them outright, is a misguided effort that threatens the income of rental-property owners of modest means and puts at risk the safety and building maintenance of tenants who do pay their rent. [¶] The push to make evictions more difficult, or even to ban them outright, is a misguided effort that threatens the income of rental-property owners of modest means and puts at risk the safety and building maintenance of tenants who do pay their rent. . . . In many cases, eviction filings are part of a de facto arbitration process in which property owners, many of whom rely on rental income to meet mortgage payments and perform crucial maintenance, use the courts to work out a compromise on back rent. [¶] Extending the eviction moratorium past June 30 would likely have a disproportionate impact on mom-and-pop rental property owners. As Apartment Owners Association CEO Robert Pinnegar notes, the gap between rent and rental income has reached $10 billion and is growing by about $5 billion every month. ‘Those are real dollars to real property owners who count on that money to survive and to fund their retirements,’ he says.”); Jillian Jay Melchior, The Vulnerable Pay the Price for Covid Eviction Moratoriums, Wall St. J., Aug. 13, 2021, https://www.wsj.com/articles/eviction-moratoriums-rentals-small-landlords-covid-19-coronavirus-pandemic-supreme-court-new-york-denver-connecticut-11628875832 [https://perma.cc/KHP3-5YE2] (“The U.S. Supreme Court’s Thursday injunction against New York state’s eviction moratorium [Chrysafis v. Marks, 141 S. Ct. 2482 (2021)] didn’t come too soon for Rosanna Morey. She is dying of blood cancer, and her worst enemy lives downstairs. Ms. Morey, 48, lives with her teenage son in Seaford, N.Y., in a high ranch house she bought in 2013, about five years after she was diagnosed with a rare, incurable and unpredictable cancer. Ms. Morey undergoes chemotherapy, and last year her sister offered to move into the ground-floor apartment to help care for her. In June 2020, Ms. Morey told her tenant, Lorrie Santucci, that she wouldn’t renew the lease. Ms. Santucci, who has lived there for about three years, refused to leave. According to Ms. Morey, Ms. Santucci hasn’t paid rent since November.”).

[171] See supra note 72.

[172] See White House, Statement by Press Secretary Jen Psaki on Eviction Moratorium, Aug. 26, 2021 (expressing “disappoint[ment]” that “the Supreme Court has blocked the most recent CDC eviction moratorium”), https://www.whitehouse.gov/briefing-room/statements-releases/2021/08/26/statement-by-press-secretary-jen-psaki-on-eviction-moratorium-3/ [https://perma.cc/7YKC-W9UF].

[173] The phrase is a variation of the statement attributed to the Greek physician Hippocrates, who wrote in his Aphorisms, “For extreme diseases, extreme methods of cure, as to restriction, are most suitable.” Definitions, https://www.definitions.net/definition/desperate+times+call+for+desperate+measures [https://perma.cc/5KRS-WLBQ] (last visited Aug. 10, 2021).

[174] See, e.g., Andrew C. McCarthy, White House Signals that Biden Will Bow to Left’s Demand that He Reinstate Eviction Moratorium, Nat’l Rev., Aug. 3, 2021, https://www.nationalreview.com/corner/white-house-signals-that-biden-will-bow-to-lefts-demand-that-he-reinstate-eviction-moratorium/ [https://perma.cc/KB5D-KQMD]; Jeff Stein et al., Biden Administration Moves to Block Evictions in Most of U.S. Following Liberal Backlash, Wash. Post, Aug. 3, 2021, https://www.washingtonpost.com/us-policy/2021/08/03/white-house-evictions-democrats/ [https://perma.cc/E7L7-V8EM].

[175] See Revelations 6:1–8.

[176] The result might also hurt the CDC’s future efforts to issue disease-prevention orders. Before the Alabama Realtors 2 decision, the Supreme Court had never discussed the substance of the CDC’s order-issuing authority. Now, the Court has publicly rebuked the government for offering what the Court clearly though was a flimsy justification for what was a purely political decision. From an agency’s perspective every time that a court clips an agency’s wings, the agency has an adverse precedent that it must fight through when it later acts in the same field. If Biden’s improvident decision to direct the CDC to “carry on” discourages the CDC from later taking justified steps to protect the public health, everyone will be worse off. Playing politics might have serious public health costs.

[177] https://www.youtube.com/watch?v=hdjL8WXjlGI [https://perma.cc/RGN4-TEEB].

[178] 5 U.S.C. § 501 et seq. (2018).

[179] John Locke, Two Treatises of Civil Government, § 166, at 425 (Peter Laslett ed., 1960) (1689).

[180] Jack Goldsmith, The Anatomy of a Screw Up: The Biden Eviction Moratorium Saga, Lawfare, Aug. 9, 2021, https://www.lawfareblog.com/anatomy-screw-biden-eviction-moratorium-saga [https://perma.cc/DS4W-N6BF].

[181] See Chrysafis v. Marks, 141 S. Ct. 2482, 2482 (2021) (“If a tenant self-certifies financial hardship, Part A of CEEFPA generally precludes a landlord from contesting that certification and denies the landlord a hearing. This scheme violates the Court’s longstanding teaching that ordinarily ‘no man can be a judge in his own case’ consistent with the Due Process Clause. In re Murchison, 349 U. S. 133, 136 (1955); see United States v. James Daniel Good Real Property, 510 U. S. 43, 53 (1993) (due process generally requires a hearing.)”). Not to be outdone by the rubes in Albany, New York City demanded that, to receive federal tenant relief funds, landlords agree to waive their right to evict a nonpaying tenant for a full year after the federal program expires. See Policy Pulse: The Eviction Moratorium, Heritage Found., Aug. 11, 2021. Now that’s world class hutzpah! Here’s a tip: If you think that something is rotten, don’t look in Denmark. Try the Empire State.

[182] If Justice Kavanaugh believed that Congress would not leave town until it had passed a new statutory moratorium, he obviously never worked on Capitol Hill. God might be dead to many people, but nothing is more sacred to members of Congress than their August recess.

[183] For suggestions in that regard, see BST Holdings, L.L.C v. OSHA, No. 21-60845, 2021 WL 5279381 (5th Cir. Nov. 12, 2021) (relying on Alabama Realtors 2 to stay a vaccination-or-weekly-testing mandate imposed by the Occupational Safety and Health Administration); Editorial Board, Brett Kavanaugh’s Eviction Lesson, Wall St. J., Aug. 4, 2021, https://www.wsj.com/articles/brett-kavanaugh-eviction-lesson-centers-for-disease-control-and-prevention-joe-biden-11628110002 [https://perma.cc/N4NH-N368]; Editorial Board, The Supreme Court’s Eviction Docket, Wall St. J., Aug. 13, 2021, https://www.wsj.com/articles/the-supreme-court-eviction-docket-new-york-dc-circuit-court-dabney-friedrich-joe-biden-brett-kavanaugh-11628891594 [https://perma.cc/EUK7-UP8Q].

[184] See Doug Badger & Robert Moffit, COVID-19 and Federalism—Public Officials’ Accountability and Comparative Performance, Backgrounder, Heritage Found., No. 3638 (July 26, 2021), https://www.heritage.org/sites/default/files/2021-07/BG3638.pdf [https://perma.cc/7D6Y-L57V].

[185] 5 U.S. (1 Cranch) 137, 163 (1803); see also, e.g., A.J. Carlyle, Political Liberty: A History of the Conception in the Middle Ages and Modern Times 53 (1941) (“the supreme authority in political society was not that of the ruler, but that of the law.”); John Phillip Reid, The Rule of Law: The Jurisprudence of Liberty in the Seventeenth and Eighteenth Centuries (2004) (discussing the importance of the rule of law to the development of English law and political theory).

[186] U.S. Const. art. II, § 1, cl. 8 (“Before he enter on the Execution of his Office, he shall take the following Oath or Affirmation:—”I do solemnly swear (or affirm) that I will faithfully execute the Office of President of the United States, and will to the best of my Ability, preserve, protect and defend the Constitution of the United States.”).

[187] U.S. Const. art. II, § 3.

[188] See United States v. Nixon, 418 U.S. 683 (1974) (so ruling).

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Roe and Casey Were Grievously Wrong and should be Overruled – Cooper et al.

Posted by on Nov 22, 2021 in Per Curiam

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Roe and Casey Were Grievously Wrong and should be Overruled[1]

Charles J. Cooper

Richard W. Garnett

Peter A. Patterson

Brian W. Barnes

John D. Ohlendorf

 

The Supreme Court of the United States has done much over the course of American history to protect and secure our constitutional system of government, but it has been far from infallible. This Article is about two of its worst mistakes.

The history of how the Nation and the Court have together come to recognize past constitutional errors is an uneven one. It took the Civil War and the Thirteenth and Fourteenth Amendments to correct the Court’s grievous errors in Dred Scott v. Sandford.[2] In many other instances, however, the Court has recognized and corrected its own errors. Indeed, it was the Court’s willingness to heed the call to turn from grievous error that led to “the single most important and greatest decision in the Court’s history, Brown v. Board of Education, which repudiated the separate but equal doctrine of Plessy v. Ferguson.”[3] It has the opportunity and the duty to do so again.

In 1973, the Court decided Roe v. Wade, holding that the Constitution confers an expansive right to unrestricted abortion, “obliterat[ing] the abortion laws of all fifty States”[4] with a single stroke. As a matter of the Constitution’s text and history, it is no secret that Roe is not just wrong but grievously so. Roe was roundly criticized as wrong the day it was decided, and it has been robustly opposed both within and outside the Court ever since. No sitting Justice has defended the merits of its actual reasoning.

By the narrowest of margins, the Court in Planned Parenthood v. Casey refused to overrule Roe—not because it thought Roe was correct, but because it thought Roe must endure as a matter of stare decisis. But 30 years later it has become clear that Casey, too, was egregiously wrong, for each one of the stare decisis factors cited by Casey itself supports Roe’s repudiation. While many Americans may hope and expect that the political victory Roe declared for their side of the abortion debate will remain unquestioned, this expectancy plainly does not constitute the type of detrimental reliance to which the Court has given weight in the stare decisis calculus. Judicial developments and scientific progress have undermined Roe as a matter of fact and law. And Roe’s doctrinal standards, as reframed by Casey, have proven unworkable.

The deeper sentiment behind Casey’s decision—a vision of the Court “call[ing] the contending sides of [the] national controversy” over abortion “to end their national division,”[5]—has proved equally unsound. By reaffirming Roe, the Casey majority imagined that it could bind up the national division over abortion. But it was the decision in Roe itself that “stimulated the mobilization of a right–to–life movement,”[6] and the abortion controversy has endured and intensified since Casey. By reaffirming Roe, the Casey majority hoped that it could forestall a “loss in confidence in the Judiciary.”[7] In fact, 30 more years of Roe’s misrule have proved that the greatest enduring threat to the Court’s legitimacy is Roe itself. By reaffirming Roe, the Casey majority hoped to preserve “the Nation’s commitment to the rule of law.”[8] But rather than safeguarding our constitutional order, Roe and Casey have distorted it. By every measure—including the lines marked out by Casey itself—no judicial error stands in greater need of correction than the one made in Roe.

It is now 48 years “after [the Court]’s holding that the Constitution protects a woman’s right to terminate her pregnancy,”[9] and the legitimacy of that holding “is still questioned,”[10] more intensely than ever. Another 48 years of standing by Roe’s error will not yield any different or better result. The time has come to overrule Roe v. Wade.

I.          Roe’s Creation of a Constitutional Right to Abortion Was Egregiously Wrong.

As the Court has long recognized, stare decisis is “not an inexorable command,”[11] and “is at its weakest when [the Court] interpret[s] the Constitution.”[12] When “strong grounds” exist for overturning an erroneous constitutional precedent, the Court will do so.[13]

The stare decisis inquiry looks first to “the quality of [the precedent’s] reasoning,”[14] including whether it is “not just wrong, but grievously or egregiously wrong.”[15] We begin, accordingly, by briefly surveying some of Roe’s most serious, and by now almost universally acknowledged, flaws.

A. Roe conceded up front that “[t]he Constitution does not explicitly mention any right of privacy,”[16] and it was remarkably coy about what provision of the Constitution, exactly, gives rise to the right. Ultimately, the most it hazarded was the observation that “we feel it is” “founded in the Fourteenth Amendment’s concept of personal liberty and restrictions upon state action”[17]—by which it evidently meant the Due Process Clause. But whatever rights this clause protects, the right to an abortion is plainly not among them.

The reason for this is simple: The text of the Fourteenth Amendment does not even hint at such a right, and the generation that adopted the Fourteenth Amendment overwhelmingly banned the practice of elective abortion. By the time the Fourteenth Amendment was ratified in 1868, 30 of the 37 states in the Union had superseded the common law prohibition on abortion by adopting criminal statutes banning elective abortions—and 27 of those 30 statutes applied even before quickening, “the first recognizable movement of the fetus in utero.”[18] That includes 25 of the 30 states that had voted to ratify the Fourteenth Amendment by the end of 1868.[19] It is inconceivable that the same generation of Americans who enacted and enforced outright bans on abortion in overwhelming numbers nonetheless understood the text of the landmark constitutional amendment they adopted to guarantee a right to that very procedure.

B. Roe also gestured towards the view that the right it discovered was protected by the Ninth Amendment.[20] But whether or not the Ninth Amendment confers, and authorizes judicial enforcement of, any substantive unenumerated rights, a right to an abortion was clearly not one of them.

Like the generation that ratified the Fourteenth Amendment, the Founders understood abortion to be unlawful. Blackstone explained that the killing of an unborn child “in [the mother’s] womb” was “a very heinous misdemeanor.”[21] To be sure, Blackstone described this rule as applying once “a woman is quick with child.”[22] But “at all times, the common law disapproved of abortion as malum in se and sought to protect the child in the womb from the moment his living biological existence could be proved.”[23]

C. In addition to being plainly and egregiously wrong, Roe’s reasoning is generally acknowledged to be unprincipled.

Roe’s resort to privacy rights that “have materialized like holograms from the ‘emanations and penumbras’”[24] formed by the Bill of Rights, has been widely decried as “judicial legislation completely cut loose from any pretense of textual justification.”[25] John Hart Ely famously derided Roe as “bad because it is bad constitutional law, or rather because it is not constitutional law and gives almost no sense of an obligation to try to be.”[26] Many other scholars have concurred.[27]

Indeed, Roe has given rise to a cottage industry among pro–choice legal academics: penning faux opinions in Roe that attempt to provide more plausible justifications for the Court’s decree. So popular has this sub–genre become that there is an entire book dedicated to the subject.[28]

The judicial impression of Roe’s reasoning has not been more favorable. Justices have repeatedly pointed out Roe’s fatal analytical flaws.[29] And no Justice on the Court, save Roe’s author, has written in defense of Roe’s actual reasoning.

II.        Casey’s Reaffirmation of Roe’s Supposed “Central Holding” Was Egregiously Wrong.

Like Roe, the decision in Casey is demonstrably and grievously wrong. As with Roe, a full discussion of Casey’s errors could fill many pages, so we confine our discussion to a few of the most significant ones.

A. Casey went wrong from the beginning by failing to acknowledge the gravity of Roe’s errors. The stare decisis inquiry depends in part on whether “the prior decision is not just wrong, but grievously or egregiously wrong,”[30] and as just described, Roe surely qualifies. But while the Casey plurality candidly acknowledged “the reservations [some] of us may have in reaffirming the central holding of Roe,”[31] it never faced up to the seriousness of Roe’s widely acknowledged flaws.

Nor does anything Casey say meaningfully fill Roe’s gaping analytical holes. Like Roe, Casey simply does not grapple with the undisputed fact that 30 out of 37 States criminalized abortion when the Fourteenth Amendment was adopted—27 of them from the beginning of pregnancy onward.

B. The new doctrinal framework Casey erects in place of Roe’s trimester–based schema is also seriously flawed. Perhaps most fundamentally, while Casey appears to draw the critical line at “viability,” from Roe to today, “[e]xactly why [viability] is the magic moment” has been a mystery.[32] After all, if a State’s interest in protecting prenatal life is “compelling after viability,” then it “is equally compelling before viability.”[33] Casey’s naked conclusion that “viability marks the earliest point at which the State’s interest in fetal life is constitutionally adequate”[34] is asserted as though it is self–evident, but it simply does not follow from the premises. Just as Laurence Tribe observed of Roe’s similar nondefense of the viability line, “[o]ne reads the Court’s explanation several times before becoming convinced that nothing has inadvertently been omitted.”[35]

C. Rather than meaningfully defend Roe on the merits, Casey principally rests its reaffirmation of Roe on the prudential stare decisis factors. But none of these other factors justified retaining Roe; and Casey’s misapplication of those factors was far from a “garden–variety error.”[36]

With respect to three of the traditional stare decisis factors—whether the precedent is “unworkable,” and whether subsequent legal or factual developments have undermined its foundations—Casey’s discussion is remarkably cursory.[37] And with respect to the remaining factor—reliance interests—Casey acknowledged that traditional considerations of reliance had little force in this context because “reproductive planning could take virtually immediate account of any sudden restoration of state authority to ban abortions.”[38]

Instead, Casey created an altogether novel category of “reliance,” grounded in the “economic and social developments” that have occurred since Roe.[39] “[P]eople have organized intimate relationships and made choices that define their views of themselves and their places in society”[40] based on Roe. What this means is known for sure only by its authors, but whatever it means the Court has consistently insisted on a showing of more concrete forms of reliance when addressing stare decisis outside the abortion context.[41] And with good reason. If “economic and social developments”[42] that have taken place after a prior decision sufficed then the element of reliance would always be satisfied and the concept would be emptied of meaning. No doubt “economic and social developments” premised on the continued lawfulness of race–based segregation took place in the 58 years between Plessy v. Ferguson and Brown v. Board of Education; and no doubt many white southerners “made choices that define[d] their views of themselves and their places in society”[43] based on the institution. But that did not give the Brown Court any pause before restoring the Fourteenth Amendment’s promise of equal protection.

Roe, according to Casey, has also facilitated “[t]he ability of women to participate equally in the economic and social life of the Nation.”[44] But Casey offered no meaningful evidence that it was abortion rather than other factors—such as women’s “determination to obtain higher education and compete with men in the job market”[45]—that is responsible for their welcome advancement in the last 50 years. To the contrary, evidence indicates that women’s social advancement began several decades before Roe and is not correlated with abortion rates.[46] And rather than abortion becoming ever more entrenched in American life, Americans in fact have fewer abortions per capita today than before Roe was decided.[47]

Indeed, some pro–choice scholars have argued that Roe has to some extent hindered women’s equality, by “legitimat[ing] . . . the lack of public support given parents in fulfilling their caregiving obligations,” with especially dire consequences for the “woman who is poor and chooses to parent.”[48] Moreover, Casey says nothing about the harm to women’s equality inflicted by the free availability of sex–selective abortions—a phenomenon that is pervasive and widely acknowledged in other countries[49] and also appears to be common in some communities in the United States.[50] The Court need not assess or quantify this harm, but it must be noted that Roe’s constitutional right to abortion on demand plainly has done nothing to secure the equal social and political participation of millions of unborn human females, some unknown portion of which were aborted because of their sex.

* * *

Roe and Casey are thus wrong—demonstrably and egregiously wrong –- and were wrong from day one. That arguably should suffice to justify their repudiation.

In his concurring opinion in Gamble v. United States, Justice Thomas articulated an approach to stare decisis under which, “if the Court encounters a decision that is demonstrably erroneous . . . the Court should correct the error, regardless of whether other factors support overruling the precedent.”[51] That view, Justice Thomas urged, “follows directly from the Constitution’s supremacy over other sources of law—including our own precedents,”[52] and it is also consistent with “the nature of the ‘judicial Power’ vested in the federal courts,”[53] which “is not the power to ‘alter’ the law; it is the duty to correctly ‘expound’ it.”[54]

There is much to be said for this view. All acknowledge that application of the traditional stare decisis factors is far from “mechanical,”[55] and their subjective nature creates the risk, often realized, that judges may apply the doctrine to protect those decisions they favor on policy grounds but offer no refuge to those precedents they dislike. Moreover, given “the Constitution’s supremacy over . . . [the Court’s] own precedents,”[56] it is paradoxical that the Court should demand a “special justification”[57] before correcting a demonstrably wrong decision, rather than a “special justification” for continuing to adhere to a decision it has concluded is in error.

Ultimately, however, the debate over the correct approach to stare decisis is beside the point, for the special justifications for overruling Roe and Casey are overwhelming.

III.      The Other Stare Decisis Factors Support Overruling Roe and Casey.

The other stare decisis factors the Court has considered also demonstrate that Roe and Casey should be overruled. Indeed, by every measure, it is difficult to imagine a constitutional precedent less worthy of adherence than Roe and Casey.

A. Begin with the role of stare decisis in protecting against upsetting “detrimentalreliance”[58]—the frustration of transactions or conduct premised upon precedent in a way that leaves those involved “worse off than . . . [they] would have been had . . . the mistaken earlier ruling . . . never occurred.”[59] Because this type of reliance generally occurs where overruling would inflict a “broad upheaval of private economic rights,”[60] reliance interests “are at their acme in cases involving property and contract rights.”[61]

There is nothing like this here. Of course, many Americans hope and expect that Roe will not be overruled, but the law does not protect this type of “mere expectancy,”[62] or else every precedent would create reliance interests. And while the abortion industry could see its profits suffer in some States if Roe is overruled, the fact that abortion providers “may view [the continued rule of Roe and Casey] as an entitlement does not establish the sort of reliance interest that could outweigh the countervailing interest”[63] in correcting grave error.

Moreover, any assertion of reliance “ignores the checkered history” of the Court’s abortion–rights jurisprudence.[64] While Casey purported to reaffirm Roe’s “central holding,”[65] it simultaneously interred the great bulk of Roe’s doctrinal framework[66] and overruled several post–Roe abortion decisions.[67] Nor did the twists and turns in abortion rights jurisprudence end with Casey.[68] This vacillation diminishes any legitimate expectation that Roe and Casey will apply in perpetuity.

The repeated calls by justices of the Court to overrule Roe likewise undermine any reliance.[69] The Nation has “been on notice for years regarding the Court’s misgivings about” Roe.[70]

B. Next, “related principles of law” have “developed” in the last three decades in a way that has rendered Roe and Casey increasingly isolated.[71] In the past several decades, the Court has frequently approached novel or monumental questions of constitutional law with an approach that hews closely to the Constitution’s text, history, and tradition. Perhaps the best exemplar of this approach is District of Columbia v. Heller.[72] The first decision from the Court to seriously examine the Second Amendment, Heller was firmly rooted in the original meaning and historical understanding of that provision’s text. The Court has increasingly taken a similar approach to cases involving the Constitution’s structural protections.[73]

In the past several years the Court has also frequently worked to narrow or replace subjective and manipulable balancing tests with more rule–like doctrines grounded in text, history, and tradition.[74] As Justice Alito noted last Term, the Court’s more recent opinions “respect the primacy of the Constitution’s text,”[75] as well as the Nation’s history and traditions. The judicial lawmaking style epitomized by Roe is increasingly out of place in modern constitutional case law.

Roe and Casey are in tension with the Court’s larger jurisprudence in another way as well, as they have caused distortions in other doctrinal areas. The line of First Amendment cases beginning with Hill v. Colorado has sanctioned limits on abortion–related speech “in stark contradiction of the constitutional principles . . . appl[ied] in all other contexts.”[76] The majority in Whole Woman’s Health reached the merits of the constitutional challenge only by “disregard[ing] basic rules” of res judicata “that apply in all other cases.”[77] And the plurality in June Medical granted abortion providers third–party standing to challenge, on behalf of their patients, regulations designed to protect those patients’ health and safety, contrary to the rule that “third–party standing is not appropriate where there is a potential conflict of interest.”[78] The fact that Roe and Casey have repeatedly led to such incoherent “jurisprudential consequences,”[79] is an additional reason to overrule them.

C. Apart from these legal developments, “facts have so changed, or come to be seen so differently”[80] since Roe and Casey were decided as to have significantly sapped those decisions of whatever residual force they might be thought to have.

Roe recognized that whether “life begins at conception and is present throughout pregnancy” was of pivotal importance, but it asserted that “at this point in the development of man’s knowledge” medical science had been “unable to arrive at any consensus” on the issue.[81] Roe thus proceeded on the assumption that life “as we recognize it” “does not begin until live birth.”[82] This “unsupported empirical assumption” has been significantly undermined by subsequent developments.[83]

It is now clear that an unborn fetus is not merely “potential life,” but is a “a living organism while within the womb, whether or not it is viable outside the womb.”[84] As a recent, exhaustive review of the scientific literature concludes, “[t]he scientific evidence clearly indicates that a one–cell human organism, the zygote, forms immediately at fusion of sperm and egg. From a scientific perspective, this single cell is inarguably a complete and living organism; i.e. a member of the human species at the earliest stage of natural development.”[85]

Further, in 1973—and, to some extent, even in 1992—it was widely assumed that an unborn human being had no ability to sense and experience pain.[86] Today, by contrast, there is a growing scientific consensus that the unborn can feel pain as early as 12 weeks gestation.[87] These scientific advances further undermine Roe’s underpinnings.

D. Finally, consider the “practical workability” of the precedent in question.[88] The overarching standard established by Casey—whether a restriction “imposes [an] undue burden on a woman’s abortion right”[89]—is so subjective that it has proven incapable of guiding constitutional analysis. That can surprise no one: the adjective “undue” simply means “[e]xcessive or unwarranted.”[90] The phrase effectively takes the conclusion of the constitutional inquiry and costumes it as the constitutional standard. The “undue burden” test—which was “plucked from nowhere”[91]—is thus an “ultimately standardless”[92] standard, that turns entirely on “a judge’s subjective determinations” and seems designed for the purpose of “engender[ing] a variety of conflicting views.”[93]

The last three decades have borne out Chief Justice Rehnquist’s concerns. The authors of the joint opinion disagreed even among themselves on the correct application of Casey in Stenberg and again in Gonzales. And consider merely a handful of examples from the lower courts: they have split over whether parental notification requirements that lack a judicial bypass procedure constitute an undue burden.[94] They have differed over the constitutionality of laws that bar doctors from performing abortions for certain reasons, such as the unborn child’s diagnoses with Down syndrome.[95] And they have divided over the constitutionality of requirements that physicians make certain disclosures before administering an abortion.[96] These conflicts bespeak the fundamentally ad hoc and standardless judicial inquiry that the undue burden standard forces courts to undertake.

Perhaps most critically, the lower courts—and even the Court—have struggled without success to determine what the “undue burden” test even means. As laid bare by the dueling opinions in Whole Woman’s Health, this confusion stems from Casey itself. The plurality in Casey equated the “undue burden” inquiry with asking whether the challenged law places “a substantial obstacle in the path of a woman seeking an abortion,”[97] without any inquiry into the law’s benefits.[98] The majority in Whole Woman’s Health, however, read Casey differently, as requiring “that courts consider the burdens a law imposes on abortion access together with the benefits those laws confer.”[99]

When the Court reconsidered the matter in June Medical, it brought more darkness than light. The plurality insisted, again, that the “undue burden” inquiry required a balancing of burdens against benefits,[100] but the Chief Justice’s concurrence expressly disclaimed any such “weighing of costs and benefits.”[101] And because the four dissenters took the Chief Justice’s view, “five Members of the Court” rejected a cost–benefit reading of Casey,[102] such that “no five Justices [could] agree on the proper interpretation of [the Court’s] precedents.”[103]

Predictably, the divisions within the Court over the proper reading of the “undue burden” test have led to a parallel division in the lower courts.[104] All told, 30 years after Casey the Court’s “abortion jurisprudence remains in a state of utter entropy.”[105]

Casey’s viability line has also proven indeterminate and incoherent. For starters, and as Casey itself acknowledged, viability is a contingent and arbitrary line that depends on “advances in neonatal care.”[106] While Casey pegged the date “at 23 to 24 weeks,”[107] viability “is inherently tied to the state of medical technology that exists whenever particular litigation ensues,”[108] and as a result “will only increase” with further “[m]edical and scientific advances,” rendering the standard “even less workable in the future.”[109] Even today, viability varies from case to case; it may generally occur around 24 weeks gestation, but the most premature “viable” newborn so far—born at just 21 weeks and two days—recently celebrated his first birthday.[110] And determining precisely when gestation began in any given case is a matter of guesswork.

Moreover, while Casey assured States that upon viability their interest in prenatal life could “be the object of state protection that now overrides the rights of the woman,”[111] some cases have interpreted Casey’s exception barring post–viability restrictions where “the life or health of the mother is . . . at stake,”[112] so expansively as to largely vitiate the Court’s assurances. [113]

The short of it is this: 30 years of judicial experimentation with Casey’s undue–burden framework have confirmed Chief Justice Rehnquist’s prediction that it would “present[ ] nothing more workable than the trimester framework which it discard[ed].”[114] As a consequence, “[the] Court’s abortion jurisprudence has failed to deliver the principled and intelligible development of the law that stare decisis purports to secure.”[115]

IV.      Three Decades of Upheaval and Controversy over Abortion Rights Have Conclusively Shown that Casey’s Call for a Halt to the National Abortion Debate Is a Complete Failure.

A candid assessment of the very same “prudential and pragmatic considerations” cited by Casey,[116] thus shows that those cases should be repudiated. But while Casey briefly rehearsed the stare decisis factors just discussed,[117] the dominant considerations that appear to have animated the Casey plurality are instead set forth in the concluding section of the joint opinion’s discussion of stare decisis: the special precedential force of the rare case, like Roe, that “calls the contending sides of a national controversy to end their national division” and the institutional concern that owning up to Roe’s errors would come “at the cost of both profound and unnecessary damage to the Court’s legitimacy, and to the Nation’s commitment to the rule of law.”[118] But these same considerations today affix the final seal on the warrant for overruling Roe.

A. Roe’s call did not so much resolve the national debate over abortion as supercharge it. As Justice Scalia observed in his dissent in Casey, “Roe fanned into life an issue that has inflamed our national politics … ever since.”[119] The ensuing three decades have amply vindicated Justice Scalia’s prediction that Casey’s failure to overturn Roe would perpetuate the firestorm.[120] The abortion issue remains as contentious and divisive as ever. Indeed, between 1995 and 2021, the share of Americans who describe themselves as pro–life jumped from 33 to 47 percent.[121] A total of 28 States, moreover, have “sought a federal constitutional amendment—either proposed by a constitutional convention or by Congress—that would prohibit abortion or restore the states’ authority to do so.”[122]

That enduring controversy refutes any suggestion that Roe should be entitled to some sort of “super–precedential”[123] force. This “super–precedent” idea has no basis in law. The Court has not hesitated to overrule even landmark decisions that had previously been reaffirmed without the slightest hint that it had to overcome some sort of “super” precedential weight. Plessy v. Ferguson, for example, was reaffirmed in Chiles v. Chesapeake & O. Ry. Co.,[124] McCabe v. Atchison, Topeka & Santa Fe Ry. Co.,[125] and Gong v. Rice,[126] before Brown finally (and correctly) buried it.

Moreover, even scholars who believe as a descriptive matter that some precedents are practically “immune from judicial overruling” concede that “a decision as fiercely and enduringly contested as Roe v. Wade has acquired no immunity from serious judicial reconsideration.”[127]

Casey lamented that “19 years after our holding” in Roe, “that definition of liberty is still questioned.”[128] It is no less questioned after another 29 years. Even in 1992, a student of history could have doubted the ability—or legitimate authority—of the Court “to resolve the sort of intensely divisive controversy reflected in Roe.”[129] Today there can be no doubt that the effort has failed.

B. Roe’s attempt, and then Casey’s, to resolve the national division over abortion has failed for any number of reasons, but surely one of them is the widespread belief that the decisions are fundamentally illegitimate exercises of judicial power. It is thus ironic that Casey found adherence to Roe’s “imperative” to preserve both “the Court’s legitimacy” and “the Nation’s commitment to the rule of law.”[130] In so doing, Casey elevated Roe above the Constitution itself as the rule of law.

It is for this reason that a great many Americans have refused to accept the legitimacy of Roe and Casey. As the Casey plurality wrote, again ironically, “the Court’s legitimacy depends on making legally principled decisions” whose “principled character is sufficiently plausible to be accepted by the Nation.”[131] The plurality penned these words to justify its refusal “to overrule [Roe] under fire,”[132] but it is the Court’s creation of a constitutional abortion right that has failed Casey’s “principled justification” test and, for that reason, will never receive widespread acceptance by the Nation.

C. The enduring debate over Roe’s legitimacy leads us, finally, to a far–reaching consequence of the decision that cannot be ignored: the way in which Roe has not only intensified America’s political divisions over abortion but perverted the very institutions and mechanisms that are meant to resolve them.

The story of much of the dysfunction in American politics over the last 50 years can be told through the prism of Roe. The difficulty is not only that Americans are intractably divided over the abortion issue, but that the views of each side are extraordinarily intense. Public opinion polls have consistently showed that around half of Americans view the issue as either extremely or very important.[133] Because of the Court’s decision in Roe, however, the only place where the political energy over this issue can realistically be channeled is the debate over Supreme Court appointments. Thus in 2016, for example, 26% of Americans who voted for Donald Trump—and 18% of voters for Hillary Clinton—listed appointments to the Court as the most important factor in their vote.[134]

Focusing all of the political activism over the abortion issue on judicial selection has resulted, inevitably, in the poisoning of the process. For much of the 20th century prior to Roe, nominees to the Court were confirmed largely without controversy.[135] As the battle over Roe began to emerge as a central issue in the appointments process, however, these dynamics changed dramatically: Every Supreme Court nominee since Justice Stevens in 1975 has been explicitly asked about his or her views on Roe v. Wade,[136] and the judicial confirmation process has become increasingly divisive. There can be no doubt that Roe has significantly contributed to the deterioration of the process.

* * *

Nearly half a century into its effort “to end [the] national division”[137] over abortion, it is time for the Court to admit that the effort has failed.

 

 

[1] This Article is adapted from the Brief of Amicus Curiae Ethics and Public Policy Center in Support of Petitioners and Reversal filed in Dobbs v. Jackson Women’s Health Organization, No. 19-1392, available at: https://www.supremecourt.gov/DocketPDF/19/19-1392/185234/20210729114228086_19-1392%20Amicus%20Brief%20of%20Ethics%20and%20Public%20Policy%20Center.pdf.

[2] 60 U.S. (19 How.) 393 (1857)

[3] Ramos v. Louisiana, 140 S. Ct. 1390, 1414 (2020) (internal citations omitted) (Kavanaugh, J., concurring) (first referencing Brown v. Board of Education, 347 U.S. 483 (1896); and then referencing Plessy v. Ferguson, 163 U.S. 537 (1896)).

[4] John T. Noonan, Jr., The Hatch Amendment and the New Federalism, 6 Harv. J.L. & Pub. Pol’y 93 (1982); see also Laurence H. Tribe, Foreword: Toward A Model of Roles in the Due Process of Life and Law, 87 Harv. L. Rev. 1, 2 (1973) (explaining that after Roe “no abortion law in the United States remained valid”); Nathan S. Chapman & Michael W. McConnell, Due Process as Separation of Powers, 121 Yale L.J. 1672, 1797 (2012) (“Roe … effectively invalidated the then-operative laws of all fifty states.”).

[5] Planned Parenthood v. Casey, 505 U.S. 833, 867 (1992)

[6] Ruth Bader Ginsburg, Some Thoughts on Autonomy and Equality in Relation to Roe v. Wade, 63 N.C. L. Rev. 375, 381 (1985).

[7] Casey, 505 U.S. at 867.

[8] Id. at 869.

[9] Id. at 844.

[10] Id. (emphasis added)

[11] Pearson v. Callahan, 555 U.S. 223, 233 (2009).

[12] Agostini v. Felton, 521 U.S. 203, 235 (1997).

[13] See Ramos v. Louisiana, 140 S. Ct. 1390, 1411 (2020) (Kavanaugh, J., concurring) (“[I]n just the last few Terms, every current member of this Court has voted to overrule multiple constitutional precedents.”).

[14] Janus v. AFSCME, 585 U.S. __, 138 S. Ct. 2448, 2479 (2018).

[15] Ramos, 140 S. Ct. at 1414 (Kavanaugh, J., concurring).

[16] Roe v. Wade, 410 U.S. 113, 152 (1973).

[17] Id. at 153.

[18] Id. at 132; see James S. Witherspoon, Reexamining Roe: Nineteenth-Century Abortion Statutes and the Fourteenth Amendment, 17 St. Mary’s L.J. 29, 33-34 & nn. 15, 18 (1985) (collecting sources).

[19] Id. at 33.

[20] Id. at 153.

[21] 1 William Blackstone, Commentaries 125-26 (1765).

[22] Id. at 125.

[23] Robert M. Byrn, An American Tragedy: The Supreme Court on Abortion, 41 Fordham L. Rev. 807, 816 (1973).

[24] Laurence Tribe, American Constitutional Law 893 (1978).

[25] Michael Stokes Paulsen, The Worst Constitutional Decision of All Time, 78 Notre Dame L. Rev. 995, 1014 (2003).

[26] John Hart Ely, The Wages of Crying Wolf: A Comment on Roe v. Wade, 82 Yale L.J. 920, 947 (1973).

[27] See, e.g., Akhil Reed Amar, Foreword: The Document and the Doctrine, 114 Harv. L. Rev. 26, 110 (2000) (“In the year 2000, it is hardly a state secret that Roe’s exposition was not particularly persuasive, even to many who applauded its result.”); Philip Bobbitt, Constitutional Fate 157 (1982) (arguing that “the universal disillusionment with Roe v. Wade can be traced to the unpersuasive opinion in that case” (footnote omitted)); Archibald Cox, The Role of the Supreme Court in American Government 113-14 (1976) (Roe “read[s] like a set of hospital rules and regulations” that “[n]either historian, layman, nor lawyer will be persuaded … are part of … the Constitution”).

[28] Jack Balkin, ed., What Roe v. Wade Should Have Said:  The Nation’s Top Legal Experts Rewrite America’s Most Controversial Decision (2005).

[29] See infra, Part III.A.

[30] Ramos v. Louisiana, 140 S. Ct. 1390, 1414 (2020) (Kavanaugh, J., concurring).

[31] Planned Parenthood v. Casey, 505 U.S. 833, 853 (1992)

[32] Ely, supra, at 924.

[33] Webster v. Reproductive Health Servs., 492 U.S. 490, 519 (1989) (plurality opinion).

[34] Casey, 505 U.S. at 860.

[35] Laurence H. Tribe, Foreword: Toward A Model of Roles in the Due Process of Life and Law, 87 Harv. L. Rev. 1, 4 (1973).

[36] Ramos v. Louisiana, 140 S. Ct. 1390, 1414 (2020) (Kavanaugh, J., concurring).

[37] Casey, 505 U.S. at 855-60.

[38] Id. at 856.

[39] Id.

[40] Id.

[41] See, e.g., Ramos, 140 S. Ct. at 1409; Arizona v. Gant, 556 U.S. 332, 349 (2009); Payne v. Tennessee, 501 U.S. 808, 828 (1991).

[42] Casey, 505 U.S. at 856.

[43] Id.

[44] Id.

[45] Id. at 957 (Rehnquist, C.J., dissenting in part)

[46] See Brief of 240 Women Scholars and Professionals, and Prolife Feminist Organizations in Support of Petitioners, Dobbs v. Jackson Women’s Health Org., 141 S.Ct. 2619 (2021) (No. 19-1392).

[47] Compare Centers for Disease Control, Abortion Surveillance—United States, 1992 at Table 2, [https://perma.cc/D5RL-ECWX] (13 abortions per 1,000 women in 1972), with Centers for Disease Control, Abortion Surveillance—United States, 2018 at Table 1, [https://perma.cc/BA22-34JH] (11.3 abortions per 1,000 women in 2018).

[48] Robin West, From Choice to Reproductive Justice: De-Constitutionalizing Abortion Rights, 118 Yale L.J. 1394, 1411 (2009).

[49] See Fengqing Chao et al., Systematic assessment of the sex ratio at birth for all countries and estimation of national imbalances and regional reference levels, 116 Proc. Nat’l Acad. Scis. 9303 (2019).

[50] See Douglas Almond & Lena Edlund, Son-biased sex ratios in the 2000 United States Census, 105 Proc. Nat’l Acad. Scis. 5681 (2008).

[51] Gamble v. United States, 139 S. Ct. 1960, 1984 (2019) (Thomas, J., concurring).

[52] Id.

[53] Id. at 1982.

[54] Id. at 1982 (quoting James Madison, Letter from J. Madison to N. Trist (Dec. 1831, in 9 The Writings of James Madison 477 (G. Hunt ed., 1910)); see also Amy Coney Barrett, Stare Decisis and Due Process, 74 U. Colo. L. Rev. 1011 (2003) (explaining the due process concerns raised by stare decisis in some cases).

[55] Lawrence v. Texas, 539 U.S. 558, 577 (2003) (quoting Helvering v. Hallock, 309 U.S. 106, 119 (1940)).

[56] Gamble, 139 S. Ct. at 1984 (Thomas, J., concurring).

[57] Allen v. Cooper, 140 S. Ct. 994, 1003 (2020) (quoting Halliburton Co. v. Erica P. John Fund, Inc., 573 U.S. 258, 266 (2014)).

[58] Lawrence, 539 U.S. at 577 (emphasis added).

[59] Vikram David Amar, Justice Kagan’s Unusual and Dubious Approach to “Reliance” Interests Relating to Stare Decisis, Verdict (Jun. 1, 2021), https://verdict.justia.com/2021/06/01/justice-kagans-unusual-and-dubious-approach-to-reliance-interests-relating-to-stare-decisis [https://perma.cc/ECQ7-BXYS]; see also Vieth v. Jubelirer, 541 U.S. 267, 306 (2004) (plurality opinion) (stare decisis weakened where “it is hard to imagine how any action taken in reliance upon . . . [the precedent] could conceivably be frustrated”).

[60] Ramos v. Louisiana, 140 S. Ct. 1390, 1409 (2020) (Sotomayor, J., concurring in part).

[61] Payne v. Tennessee, 501 U.S. 808, 828 (1991).

[62] Amar, supra note 60.

[63] Arizona v. Gant, 556 U.S. 332, 349 (2009).

[64] Id. at 350.

[65] Planned Parenthood v. Casey, 505 U.S. 833, 860 (1992).

[66] Id. at 860, 869-78.

[67] Id. at 881-83.

[68] Compare Stenberg v. Carhart, 530 U.S. 914, 930 (2000) (invalidating partial-birth abortion ban), with Gonzales v. Carhart, 550 U.S. 124, 151-67 (2007) (upholding similar law); and compare Whole Woman’s Health v. Hellerstedt, 136 S. Ct. 2292, 2309-10 (2016) (appearing to revise Casey’s test to require a balancing of burdens and benefits), with June Med. Servs., L.L.C. v. Russo, 140 S. Ct. 2103, 2138 (2020) (opinion of Roberts, C.J.) (rejecting such balancing).

[69] See Thornburgh v. Am. Coll. of Obstetricians & Gynecologists, 476 U.S. 747, 785 (1986) (White, J., dissenting); Casey, 505 U.S. at 944 (Rehnquist, C.J., dissenting); id. at 979 (Scalia, J., dissenting); Stenberg, 530 U.S. at 980 (Thomas, J., dissenting).

[70] Janus v. AFSCME, 138 S. Ct. 2448, 2484 (2018).

[71] Casey, 505 U.S. at 855.

[72] 554 U.S. 570 (2008).

[73] See, e.g., Seila Law LLC v. CFPB, 140 S. Ct. 2183, 2192 (2020); Edmond v. United States, 520 U.S. 651, 658-65 (1997).

[74] See, e.g., Am. Legion v. Am. Humanist Ass’n, 239 S. Ct. 2067, 2097 (2019) (Thomas, J., concurring); accord id. at 2081-85 (plurality opinion); United States v. Jones, 565 U.S. 400, 404-11 (2012); Crawford v. Washington, 541 U.S. 36, 42-56 (2004); Apprendi v. New Jersey, 530 U.S. 466, 476-90 (2000).

[75] Fulton v. City of Philadelphia, Pa., 141 S. Ct. 1868, 1894 (2021) (Alito, J., concurring).

[76] Hill v. Colorado, 530 U.S. 703, 742 (2004) (Scalia, J., dissenting).

[77] Whole Woman’s Health v. Hellerstedt, 136 S. Ct. 2292, 2330 (2016) (Alito, J., dissenting).

[78] June Med. Servs. v. Russo, 140 S. Ct. 2103, 2167 (2020) (Alito, J., dissenting).

[79] Ramos v. Louisiana, 40 S. Ct. 1390, 1415 (2020) (Kavanaugh, J. concurring).

[80] Planned Parenthood v. Casey, 505 U.S. 833, 855 (1992).

[81] Roe v. Wade, 410 U.S. 113, 159 (1973).

[82] Id. at 160-61.

[83] See Janus v. AFSCME, 138 S. Ct. 2448, 2483 (2018).

[84] Gonzales v. Carhart, 550 U.S. 124, 146-47 (2007).

[85] Maureen L. Condic, When Does Human Life Begin? The Scientific Evidence and Terminology Revisited, 8 U. St. Thomas J.L. & Pub. Pol’y 44, 70 (2013); see also Hana R. Marsden et al., Model systems for membrane fusion, 40 Chem. Soc’y Rev. 1572, 1572 (2011) (“The fusion of sperm and egg membranes initiates the life of a sexually reproducing organism.”); Enrica Bianchi et al., Juno is the egg Izumo receptor and is essential for mammalian fertilization, 24 Nature 483, 483 (2014) (“Fertilization occurs when sperm and egg recognize each other and fuse to form a new, genetically distinct organism.”).

[86] Stuart W.G. Derbyshire & John C. Bockmann, Reconsidering fetal pain, 46 J. Med. Ethics 3, 3 (2020).

[87] Id. at 6; see also American College of Pediatricians, Fetal Pain: What is the Scientific Evidence? at 1, 7 (2021), https://acpeds.org/assets/Fetal-Pain-Position-Statement-(2).pdf [https://perma.cc/R8EE-RG6R] (concluding that “a large body of scientific evidence demonstrates that painful or noxious stimulation adversely affects immature human beings, both before and after birth,” “as early as 12 weeks gestation (and possibly earlier)”).

[88] Planned Parenthood v. Casey, 505 U.S. 833, 854 (1992).

[89] Id. at 880.

[90] Undue, Black’s Law Dictionary (8th ed., 2004).

[91] Casey, 505 U.S. at 965 (Rehnquist, C.J., dissenting in part).

[92] Id. at 987 (Scalia, J., dissenting in part).

[93] Id. at 965 (Rehnquist, C.J., dissenting in part).

[94] Compare Planned Parenthood v. Camblos, 155 F.3d 352, 367 (4th Cir. 1998) (en banc), with Planned Parenthood v. Adams, 937 F.3d 973, 985-90 (7th Cir. 2019), aff’d on reconsideration sub nom. Planned Parenthood v. Box, 991 F.3d 740 (7th Cir. 2021), and Planned Parenthood v. Miller, 63 F.3d 1452, 1460 (8th Cir. 1995).

[95] Compare Preterm-Cleveland v. McLoud, 994 F.3d 512, 520-35 (6th Cir. 2021), with Little Rock Family Planning Servs. v. Rutledge, 984 F.3d 682, 688-90 (8th Cir. 2021).

[96] Compare EMW Women’s Surgical Ctr. v. Beshear, 920 F.3d 421, 430-32 (6th Cir. 2019), and Planned Parenthood v. Rounds, 686 F.3d 889, 893-906 (8th Cir. 2012), with Stuart v. Camnitz, 774 F.3d 238, 244-55 (4th Cir. 2014).

[97] Planned Parenthood v. Casey, 505 U.S. 833, 877 (1992).

[98] See Whole Woman’s Health v. Hellerstedt, 136 S. Ct. 2292, 2324 (2016) (Thomas, J., dissenting).

[99] Id. at 2309 (majority opinion).

[100] June Medical Servs., L.L.C. v. Russo, 140 S. Ct. 2103, 2120 (2020).

[101] Id. at 2136 (Roberts, C.J., concurring).

[102] Id. at 2182 (Kavanaugh, J., dissenting),

[103] Id. at 2152 (Thomas, J., dissenting).

[104] Compare Preterm-Cleveland v. McCloud, 994 F.3d 512, 524 (6th Cir. 2021) (en banc) (applying the Chief Justice’s concurrence); and Hopkins v. Jegley, 968 F.3d 912, 915 (8th Cir. 2020) (same), with Reproductive Health Servs. v. Strange, No. 17-13561, 2021 WL 2678574, at *12 (11th Cir. June 30, 2021) (applying plurality opinion); see also Planned Parenthood of Ind. & Ky. v. Box, 991 F.3d 740, 741-42 (7th Cir. 2021) (finding the Chief Justice’s concurrence “controlling” but not those parts identified as that opinion’s “dicta,” including “its stated reasons for disagreeing with portions of the plurality opinion”).

[105] June Medical, 140 S. Ct. at 2152 (Thomas, J., dissenting).

[106] Planned Parenthood v. Casey, 505 U.S. 833, 860 (1992).

[107] Id.

[108] City of Akron v. Akron Ctr. for Reproductive Health, Inc., 462 U.S. 416, 458 (1983) (O’Connor, J., dissenting).

[109] MKB Mgmt. Corp. v. Stenehjem, 795 F.3d 768, 774-75 (8th Cir. 2015).

[110] Sydney Page, A newborn weighed less than a pound and was given a zero percent chance of survival. He just had his first birthday, Wash. Post, (June 23, 2021, 6:00 AM), https://wapo.st/2SJ1AvH.

[111] Casey, 505 U.S. at 870.

[112] Id. at 872.

[113] See, e.g., Women’s Med. Pro. Corp. v. Voinovich, 130 F.3d 187, 209 (6th Cir. 1997) (interpreting the Court’s precedents as requiring an exception for “severe mental or emotional harm”).

[114] Casey, 505 U.S. at 966 (Rehnquist, C.J., dissenting in part).

[115] June Medical Servs., L.L.C. v. Russo, 140 S. Ct. 2103, 2152 (2020) (Thomas, J., dissenting) (quotation marks omitted).

[116] Casey, 505 U.S. at 854.

[117] Id. at 846, 855-61.

[118] Id. at 867-69.

[119] 505 U.S. at 995 (Scalia, J., dissenting).

[120] See id.

[121] Abortion, Gallup, https://news.gallup.com/poll/1576/abortion.aspx [https://perma.cc/Z5TL-E5BZ].

[122] Paul B. Linton, Overruling Roe v. Wade: Lessons from the Death Penalty, 48 Pepp. L. Rev. 261, 275 (2021).

[123] Richmond Med. Ctr. v. Gilmore, 219 F.3d 376, 376 (4th Cir. 2000) (Luttig, J., concurring).

[124] Chiles v. Chesapeake & O. Ry. Co., 218 U.S. 71, 77 (1910).

[125] McCabe v. Atchison, Topeka & Santa Fe Ry. Co., 235 U.S. 151, 160 (1914).

[126] Gong v. Rice, 275 U.S. 78, 86 (1927).

[127] Richard H. Fallon, Jr., Constitutional Precedent Viewed Through the Lens of Hartian Positivist Jurisprudence, 86 N.C. L. Rev. 1107, 1116 (2008); see also Amy Coney Barrett, Precedent & Jurisprudential Disagreement, 91 Tex. L. Rev. 1711, 1735 n.141 (2013) (collecting citations).

[128] Planned Parenthood v. Casey, 505 U.S. 833, 844 (1992).

[129] Id. at 866; cf. Dred Scott v. Sandford, 19 How. (60 U.S.) 393 (1857).

[130] Casey, 505 U.S. at 869.

[131] Id. at 865-66.

[132] Id. at 867.

[133] Karlyn Bowman & Heather Sims, Abortion As An Election Issue 1-2, American Enterprise Institute (Jan. 2016), https://www.aei.org/wp-content/uploads/2016/01/Abortion-as-Election-Issue.pdf (compiling survey data).

[134] Philip Bump, A quarter of Republicans voted for Trump to get Supreme Court picks — and it paid off, Wash. Post (June 26, 2018), https://wapo.st/3qB6Wpa [https://perma.cc/WQ9X-529B].

[135] See Supreme Court Nominations (1789-Present), U.S. Senate, https://www.senate.gov/legislative/nominations/SupremeCourtNominations1789present.htm [https://perma.cc/EY3M-FCM3].

[136] See Paul M. Collins & Lori A. Ringhand, Supreme court confirmation Hearings and Constitutional Change, 122 fig.4.6 (2013); S. Hrg. 115-208 at 76 (2017); S. Hrg. 115-545, pt. 1 at 75 (2018); Barrett Confirmation Hearing, Day 2 Part 1 at 35:30, C-SPAN, Oct. 13, 2020, https://www.c-span.org/video/?476316-1/barrett-confirmation-hearing-day-2-part-1 [https://perma.cc/AKL5-YVB2].

[137] Planned Parenthood v. Casey, 505 U.S. 833, 867 (1992).

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Why Justice Blackmun’s Appeal to Roman Law to Justify Roe v. Wade is Wrong – Grzegorz Blicharz

Posted by on Nov 22, 2021 in Per Curiam

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Why Justice Blackmun’s Appeal to Roman Law to Justify Roe v. Wade is Wrong

Grzegorz Blicharz

 

 

Struggling to root a constitutional right to abortion in some legal tradition, Roe v. Wade, 410 U.S. 113 (1973) made two deeply misleading claims. First, Justice Blackmun vaguely pointed to “[a]ncient attitudes,” ones “not capable of precise determination,” to claim that, in other places and times, “the Roman Era” endorsed abortion “without scruple.” Id. at 130. Second, the Court continued, “Greek and Roman law afforded little protection to the unborn.” Id. 

On both counts, the Court was wrong. Roe’s unsophisticated grasp of “ancient [Roman] attitudes” toward the unborn generally and abortion specifically ignores both the effect of Christianity on the Roman Empire and the ways in which even the pre-Christian Roman Empire and Roman Republic protected the unborn. A proper historical analysis would account for both, and produces the opposite conclusion than the breezy one reached after two sentences in Roe. As the Supreme Court is poised to reconsider Roe, this article provides a brief summary of the key aspects of Roman law that show Roe’s error.

The Pagan Roman Empire vs. the Christian Roman Empire

When Justice Blackmun claims that “Ancient religion did not bar abortion[,]” he cannot be referring to the Christianity which gradually reshaped Roman Empire. Id. Unlike the pagan religions that influenced Rome, Christians already in the 2nd c. AD were considered exceptional since they believed that those “who use drugs to bring on abortion commit murder”[1]  and they “did not expose [their children] once they are born.”[2] From a Christian perspective, abandoning (exposing) newly born children was equivalent to killing a child, just like abortion. By contrast, some pagan religions may have justified abortion on the basis of convenience and self-interest, or even preferred abandoning children instead of abortion. Yet at no point does Roe explain why “Assyrian, Canaanite, or the utilitarian Greek and Roman worldviews” should supplant the “Western, unmistakably Judeo-Christian, and Enlightenment premises” that actually produced the American legal tradition.[3]

The Christian Roman Empire did not completely apply the laws of the Christian Church, and relied heavily on pre-Christian Roman law. It combined much of this with the tenets of Christianity. Pre-Christian Roman law lacked coherent conceptual categorization of unborn child due to a Stoic idea expressed by Papinian, a pagan jurist of 2nd c. AD and 3rd c., that an unborn child is only a spes animantis[4], the hope of a living being (Justinian’s Digest – D. 11,8,2), and that “it cannot be correctly called as a man (homo non recte dicitur )” (D. 35,2,9,1). But pre-Christian Roman law still created a set of protections for unborn childrens’ interests in private law, and had limitations on abortion in public law. At the turn of 2nd c. AD and 3rd c. AD pagan emperors Septimus Severus and Caracalla introduced the first public penal sanction against abortion: the woman who did abort her child was condemned to exile, and the reason for it was the ancient right of a husband to have a progeny.[5] Although various methods of abortion were already well known in the early Roman Empire,[6] abortion was not accepted in society and Romans generally tried to limit abortion for many different reasons – including the risk for women and to protect the patrimonial interest of citizens and the state.[7] In the sphere of private law, pre-Christian Roman jurists shaped legal solutions in favor of the unborn children even though they did not use a clear anthropological category.[8] They fashioned the concept of nasciturus [child to be born]. The patrimonial interests of a conceived child were of the utmost importance, and doubts were resolved in favor of the unborn (D. 37,9,1,1). Ulpian – a pagan Roman jurist of 2nd c. AD and 3rd c. AD – explains that according to the Law of the Twelve Tables (5th c. BC) – “one in the womb (qui in utero fuit)” can inherit on the same footing as one already born: “one brother and one unborn brother, or one nephew and one who is not yet born” (D. 38,16,3).

Roe’s cursory reasoning about the Roman Empire before it became Christian overlooks Roman law’s surprisingly positive appreciation of life from the moment of conception, and the importance it placed on protecting pregnant women. Nonetheless, even taking the pre-Christian Roman law on its own terms, it did authorize considerable protection to the unborn, and did not authorize unlimited abortion like Roe did. Three aspects of Roman law demonstrate Roe’s error: 1) the legal importance of the moment of conception for a child’s legal status, 2) the unborn child’s inheritance rights and protections for its safe birth, 3) the unborn child’s treatment as an ontologically individual being, even though this proposition was dubious from a Stoic perspective.

Moment of Conception and the Child Legal Status

Even focusing the analysis of “[a]ncient attitudes” in Rome toward protection of the unborn in the pre-Christian Roman Empire, we see a consistent recognition, summed up by Julian, a pagan Roman jurist of the 2nd c. AD,  that “[f]or almost all purposes of civil law, children in utero are considered as existent beings” (Qui in utero sunt…in rerum natura esse)” (D. 1,5,26).[9]

A complete person in Roman law was defined by three statuses: freedom, citizenship, and a position in the Roman family. Marriage was about having children under paternal power. Accordingly, if a child was born in marriage, the recognition of the child’s family status began at the moment of conception. The virtue of this solution was to afford children a status that benefitted them. For example, Gaius – a Roman legal scholar of 2nd c. AD – reports that if a Roman citizen was sentenced to exile from Rome during her pregnancy but conceived a child while still married, the child born in exile would have the status of a Roman citizen (Institutes of Gaius – G. 1,90). Similarly, if a Roman citizen lost her freedom during her pregnancy and became a slave, the child she gave birth to would also be born as a full citizen, as long as conceived in marriage (G. 1,91). Marcian, a Roman jurist of the 3rd c. AD, further points out that pregnant slaves who were free at any time—whether at conception, at birth, or at any time during pregnancy—always bore free children. And this is supported by the principle that through the “moment of freedom,” the born child will receive at least one of the critical statuses, because of the principle that freedom should be favored supported by the principle to favor freedom – favor libertatis (D. 1,5,5,3). Similar reasoning was applied to a child receiving the status of a decurion, i.e., a member of a city council. As Ulpian reports on the son of a decurion: “if his father loses his rank after his conception, one must generously admit that he is to be regarded as the son of a decurion (…) and again, if the father was a decurion during the period between conception and birth, the child is given the status of a decurion” (D. 50,2,2,2–3).

The Concept of Nasciturus – Not to Neglect Those Yet Unborn

In addition to acknowledging the child’s existence at conception, Roman law also granted any child conceived in marriage the right to succeed and to inherit parental property. Julian, in speaking of the fact that children in utero are considered as existent beings, explains that statutory inheritances revert to them. He comments: “Even hereditates legitimae (statutory inheritances) revert to them; and if enemies take a pregnant woman prisoner, the child to be born has the right of postliminium (a recovery of rights)” (D. 1,5,26).

As Ulpian points out, children conceived were brought into possession of the inheritance by the praetor who, “given the prospect of their birth, (…) has not neglected those yet unborn” (D. 37,9,1,1). Even if there were doubts whether the child, if born, would be in the first class of statutory heirs (sui heredes), the praetor should put the unborn child into possession. Ulpian argues that maintenance cannot be refused to “him that is in a position to be the owner of the property in some event.” (D. 37,9,1,1).

The idea that unborn should be provided with the maintenance coming from his father’s estate is based on the Stoic perspective that a “child (…) is born if not for the advantage of the parent alone, whose child he is said to be, yet also for that of the state” (D. 37,9,1,15). However as Paul, a pagan Roman jurist of the 2nd and 3rd c. AD, explains “The one who is in the womb is deemed to be entirely a human being whenever the question concerns advantages accruing to him when born, even though his existence is never assumed in favor of anyone else before birth.” (D. 1,5,7). It is neither the interest of the father or the mother, nor the welfare of society, but the benefit of the child himself that constitutes the reason and basis for considering it as a complete child during fetal life.

Children already conceived, but who were born after the death of their fathers were considered, while in utero, as already born (G. 2,147), and Romans either instituted them in their wills as heirs, like in the landmark case of Causa Curiana, from 93 BC, or disinherited them. Even when disinherited, however, when there were any doubts regarding the father’s will, Roman law preferred to maintain the unborn child (D. 37,9,1,4). Similarly, in intestate succession, the existence of an unborn child served to withhold or entirely block the acceptance of the estate by more distant heirs. As Ulpian explains, “the heir next after a posthumus son cannot accept the inheritance while the widow is pregnant or is thought to be so” (D. 29,2,30,1). And what “if she was pregnant when the heir thought that she was not pregnant, he accepted, and then she had an abortion? Undoubtedly, his action was ineffective” says Ulpian (D. 29,2,30,4), for, indeed, the unborn child existed at that moment.

A curator for the child conceived (curator ventris) was usually appointed to exercise a child’s possession of estate during child’s fetal life, without waiting for the child to be born so as to protect its interests and secure its safe birth – to “furnish food, drink, clothing, and lodging to the woman” (D. 37,9,1,19), and “to take care of an unborn child” (D. 50,4,14).

A Child Is Neither the Fruit of a Woman, Nor Part of the Woman

Some have invoked one Roman text, authored by Ulpian, to support the thesis that an unborn child is considered a part of a woman’s body—partus (D. 25,4,1,1). However, as Professor Waldstein has wisely observed, this is an inaccurate interpretation of the text.[10] In the case described in the text, the woman denied being pregnant. The ex-husband was convinced that she was pregnant and wanted to protect the child’s interests, and obviously his own interest. Under the law it was the mother who could ask for the appointment of curator ventris, not the ex-husband. The emperors Marcus Aurelius and Lucius Verus, however, subjected the examination of this matter to the praetor and ordered him to carefully check whether the woman was pregnant to ensure the child’s interest, neither plainly rejecting nor merely following the ex-husband’s request. They took the case out of the private sphere, as Waldstein points out, affirming the importance of determining whether a child exists in the womb, and acted to protect fetal life.

Analogically, in 142 BC, a jurist named Brutus decided in favor of a slave child – the object of property – having its individuality. “The question was raised in times gone by whether the offspring of a female slave belonged to the usufructuary.” (D. 7,1,68). Brutus argued that “one human being cannot be treated as being among the fruits of another” so the rules of usufruct do not apply to it. The decision remained highly controversial, because it preserved future offspring of slaves for the owner. Regardless of that, already in the 2nd c. BC the argument that a human being is not classified legally as fruit of the mother persuasively expressed even a slave child’s distinct position.

Abortion, Exposing Children, and the Role of Adoption

Did the pre– and non–Christian Romans protect life during pregnancy because of the sanctity of life? No. To understand the Roman perspective, however, it is crucial to take some distance and look at the unborn child as a future member of the community, an expectant (nasciturus), and as the future owner of the estate. The Romans were conscious that their lives did not end with themselves but continued through generations. Protecting life from the moment of conception was natural and obvious to them, and giving birth to and raising children was a common law of nature (D. 1,1,3). They discussed the status of the unborn child, however, primarily in the private law context.

The ancient Roman law did not penalize abortion performed by woman with the consent of her hus-band. That idea was an obvious consequence of the right of killing which the head of family (pater familias) had over persons under his power in the patriarchal Roman family. Possibly due to convenience, Ancient Romans developed yet another inhumane practice based on this right – they preferred abandoning the newborn instead of abortion. But pre-Christian law did attempt to protect exposed children. The power of the head of the family to decide about the life and the death was gradually limited under imperial legislation in pre-Christian Empire. Quite interestingly the pagan jurist Paul equates exposing children with murdering them (D. 25,3,4). A new perspective was brought by Christianity. Constantine allowed for the legal status of foundlings to be changed, which allowed ancient Romans to adopt such abandoned children. Constantine, in addition, offered financial help to parents to prevent them from killing or exposing their children due to poverty. Subsequently, Emperor Justinian, in 529, decided that abandoned children could not be raised as slaves, regardless of their previous status.[11]

Therefore, the idea of adoption, invented by pre-Christian Romans, which served many different goals, started to be used to protect exposed children. Adoption places a foreign child within a family and treats it as if it were born from the new parents. It was a way to introduce people into different social spheres. The Romans believed that even where one did not have children, one could adopt them, and that one’s children can become heirs to others – since “adoption imitates nature” (Institutes of Justinian – I. 1,11,4). As Professor Witte argues, adoption, which was used in the past to remove the cultural stigma of illegitimate children, today may be “one of the best hopes and remedies to the new illegitimates who are condemned” in utero.[12] Indeed, it is yet another topic to which Roman legal experience can contribute.

Conclusion

In ancient Rome abortion was considered a breach of the public trust. Does this mean that the Romans did not perform abortions at all? No. Rome’s allowance for abortion is one of the distinguishing marks between the pre-Christian and Christian Roman Empires. Pre-Christian Rome, as should surprise no one, operated in an entirely different cultural context, yet it still was able to inform the Western legal tradition that influenced America’s legal structure. Pre-Christian Rome’s understanding of human life and worth are simply incomparable to Christian Rome and the American experience. But, as the foregoing demonstrates, even pre-Christian Rome’s distinct understanding of the human person did authorize considerable protections for the unborn child, always afforded the benefit of the doubt to the unborn, and did not authorize the unlimited abortion regime like the one sanctioned by Roe. Pre-Christian Roman law recognition of “one in the womb” as a legally-recognized human life contradicts Blackmun’s opinion about Rome’s unfettered allowance of abortion and the lack of protection for unborn children. Perhaps today, we are at a point where we can learn from pre-Christian Rome to respect life from the moment of conception, just as it could have learned from us to appreciate life after birth.

 

 

[1] Athenagoras, A Plea for the Christians: Volume II, 147 (Benjamin P. Pratten trans., 1885) (177).

[2] Epistle to Diognetus, in The Apostolic Fathers: Volume II, 141 (Bart D. Ehrman eds. & trans., 2003) (130).

[3] Emma Finney, Shifting Towards A European Roe v. Wade: Should Judicial Activism Create an International Right to Abortion with A., B. and C. v. Ireland, 72 U. Pitt. L. Rev. 389, 416-17 (2010).  

[4] E. Nardo, Procurato aborto nel mondo greco romano, 30 (1971).

[5] E. Cantarella, Women and Patriarchy in Roman Law, in The Oxford Handbook of Roman Law and Society,

421-422 (P.J. du Plessis, C. Ando, & K.Tuori eds., 2016).

[6] J.M. Riddle, Contraception and Abortion from the Ancient World to the Renaissance, 84 (1992).

[7] W.J. Watts, Ovid, The Law and Roman Society on Abortion, 16 Acta Classica 89, 89-101 (1973).

[8] F. Longchamps de Bérier, Law of Succession: Roman Legal Framework and Comparative Law Perspective, 83 (2011).

[9] English versions of Roman legal sources follow Alan Watson’s translation of Justinian’s Digest; Samuel P. Scott’s translations of the Institutes of Gaius, and the Institutes of Justinian.

[10] W. Waldstein, Quelleninterpretation und statusdes nasciturus’  in Status familiae: Festschrift für Andreas Wacke zum 65 Geburtstag, 513-529 (2001).

[11] Y. Monnickendam, The Exposed Child: Transplanting Roman Law into Late Antique Jewish and Christian Legal Discourse, 59 American Journal of Legal History 1, 23, 10 (2019).

[12] J. Witte Jr., Gods Joust, Gods Justice: Law and Religion in the Western Tradition, 421 (2006).

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Interview with Lael Weinberger

Posted by on Nov 16, 2021 in Per Curiam

Watch Harvard Journal of Law & Public Policy Editor-in-Chief Eli Nachmany’s interview with Lael Weinberger, the Olin-Searle-Smith Fellow in Law at Harvard Law School, here:

Lael’s paper, Keep Distance Education for Law Schools: Online Education, the Pandemic, and Access to Justice, can be accessed here: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3894382

Lael Weinberger is the Olin-Searle-Smith Fellow in Law at Harvard Law School. He was the Raoul Berger-Mark DeWolfe Howe Legal History Fellow at Harvard from 2019-20. Lael earned a JD with high honors from the University of Chicago Law School and clerked for Judge Frank Easterbrook on the Seventh Circuit Court of Appeals and for Chief Justice Daniel Eismann on the Idaho Supreme Court. Lael also earned a PhD in history at the University of Chicago. His research interests include constitutional law, international law, civil procedure, law and religion, American legal history, and the legal profession. Lael’s academic articles and reviews have been published in the University of Chicago Law Review, Constitutional Commentary, and the International Journal of Constitutional Law, among others. His reviews and essays have appeared in publications including Newsweek, National Review, Claremont Review, First Things, Christianity Today, Los Angeles Review of Books, and the New Rambler Review. Lael is on Twitter @LaelWeinberger.

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Administrative Law Theory and Fundamentals: An Integrated Approach – Ilan Wurman

Posted by on Nov 9, 2021 in Per Curiam

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Administrative Law Theory and Fundamentals: An Integrated Approach

Foundation Press 2021

By Ilan Wurman*

 

 

New casebooks can be hard to justify. Many legal doctrines and their canonical cases are well established. But few fields are more in need of fresh thinking than administrative law. My new casebook, Administrative Law Theory and Fundamentals: An Integrated Approach, newly out with Foundation Press, seeks to provide such thinking. To my knowledge, it is the only administrative law casebook with the words “theory” and “fundamentals” in its title. And the reason might be that there is at present no coherent theory regarding the nature of administrative power. And the debates surrounding administrative power, on the part of both proponents and opponents of administrative government, have stalled.

The new casebook proposes a theory of administrative power that better explains constitutional text and structure, as well as historical and modern practice, than competing accounts. It argues that there are “exclusive” powers that only Congress, the President, and the courts can respectively exercise, but also “nonexclusive” powers that can be exercised by more than one branch. This theory of “nonexclusive powers” allows students and scholars of administrative law to make more sense of—or better critiques of—administrative concepts such as delegation, quasi-powers, judicial deference, agency adjudications, the chameleon-like quality of government power, and of the separation of powers more broadly. This five-page introduction seeks to situate this theory within the existing administrative law scholarship.

 

In many respects, administrative law scholars today continue to have the same debates that occurred in the 1930s.[1]  Opponents of administrative government today, as they did then, point to the Constitution’s tripartite scheme of separate powers and claim that administrative government violates this separation of powers.[2] They argue that administrative agencies unlawfully combine legislative, executive, and judicial power by promulgating binding regulations governing individual conduct, enforcing those same regulations, and adjudicating disputes involving their regulations in their own tribunals.[3]  In the words of Philip Hamburger, who speaks for many critics, administrative law is therefore “unlawful.”[4]  To borrow the phrase of a recent and prominent law review article, these critics believe that our Constitution is an “anti-administrative” constitution.[5]

Proponents of administrative government, on the other hand, maintain that nothing at all is wrong with contemporary administrative law. They normally take one of three positions. The first quite plainly accepts the unconstitutionality of the administrative state as a matter of the Constitution’s original meaning. The advocates of this view argue that the Constitution’s separation of powers has come to be replaced with a different separation of powers: by the “surrogate safeguards” of the Administrative Procedure Act, which requires agencies to separate out rulemaking, enforcement, and adjudicatory functions.[6]  Gillian Metzger takes this argument further and claims that an administrative state, and many modern administrative law doctrines, are in fact constitutionally compelled in a world of broad delegations from Congress to agencies.[7]

The second position maintains that administrative law is not unconstitutional even as matter of the Constitution’s original meaning. For example, Jerry Mashaw argues in his book Creating the Administrative Constitution that Congress has enacted open-ended statutes with broad delegations of power to the Executive since the beginning of the Republic.[8] Thus, he argues, modern administrative government is neither novel nor unconstitutional, even when agencies promulgate rules and regulations pursuant to broad and open-ended statutory provisions. A variant of this argument by Cass Sunstein and Lawrence Lessig maintains that the Constitution distinguishes “administrative power” from executive power, and permits Congress to structure this administrative power much the way it does today, including by insulating administrative agencies from presidential direction and control.[9]

A third view, most relevant to the new casebook, maintains that it is simply too difficult even to classify most exercises of government power as “legislative,” “executive,” or “judicial.”[10] Scholars argue, for example, that when agencies promulgate rules, the agency is “implementing” the broader laws enacted by Congress—and implementing the law is tantamount to executive power.[11] In the view of these scholars, Congress can legislate in as broad and open-ended terms as it likes because in implementing Congress’s statutes, administrative agencies will always be executing the law.

My new casebook, Administrative Law Theory and Fundamentals: An Integrated Approach, newly out with Foundation Press,[12] seeks to move past these standard debates to a rethinking of administrative law. It does so by at least partly accepting as a fundamental premise that the administrative state, or at least an administrative state of some kind, is not only inevitable, but fundamentally constitutional. If we accept for present purposes the modern-day scope of federal power, then we must recognize that an administrative state of some kind is going to exist to “execute” all of the numerous laws that Congress enacts and that the President cannot possibly hope to execute alone. This will also include, and always has included, the power to fill in incidental details of legislative programs in addition to enforcing laws against private individuals.

But even more fundamentally, the casebook tries to make sense of the nature of government power and why it can be so hard to classify. When an agency promulgates a rule filling in the details of a legislative statute with binding effect upon individuals, is the agency executing the law, or exercising legislative power? The power at hand seems to partake in both kinds of power. When an agency issues a license under the standard that a license must be within the “public interest,” it is also exercising a power that seems to partake in legislative as well as executive qualities. And when the National Labor Relations Board creates a new rule of conduct in a retrospective adjudication against a private party, it seems to be exercising a power that partakes of all three qualities—legislative, executive, and judicial.

The casebook advances the debate over the nature of administrative power by recognizing that when administrative agencies undertake such activities, they are usually not combining legislative, executive, and judicial power in a way that violates the separation of powers. Rather, they are exercising powers that partake of multiple qualities. That is, when an agency promulgates a rule, it is not necessarily unlawfully combining legislative and executive powers; rather, it is often exercising a single power with both legislative and executive characteristics. It is exercising a single blended power rather than combining several otherwise separate powers.

The central theory driving the new casebook—the “theory” of the book’s title—is that much administrative power does not comprise unlawfully combined power, but rather this blended power, or what the casebook terms nonexclusive power. It terms such powers “nonexclusive” because more than one branch can exercise them. For example, when President Washington issued regulations respecting when the payments to the invalid veterans of the Revolutionary War would be made, and what proofs would be required of eligibility,[13] he was enacting rules that could have been enacted by Congress itself. But Congress did not have to exercise such power. It could delegate such power, too—hence one could call it nonexclusive legislative power. Similarly, Congress can assign public rights cases to the courts, or to the Executive.[14] When agencies adjudicate public rights cases, they aren’t exercising the judicial power of the United States; rather, they are exercising a nonexclusive power that can, but need not be, exercised by the federal courts.

To be sure, not all power is nonexclusive. There are also exclusive powers: exclusive (or “strictly” or “purely”) legislative, executive, and judicial power. Only Congress can exercise exclusively legislative power, whatever that happens to be. When it delegates its exclusively legislative power, it violates the Constitution. But, I argue, much modern rulemaking does not necessarily fall within that category. Similarly, some power is exclusively executive—such as prosecuting a case in court or exercising discretion left by law—and such power must be exercised or controlled by the President, and cannot be done by Congress or the judiciary. And some power—the power to decide cases under existing law affecting the traditional private rights to life, liberty, and property—are exclusively judicial and must be adjudicated in courts under de novo standards of review. To the extent the administrative state exercises exclusive powers inconsistent with the constitutional strictures for each type of power, it acts unconstitutionally. But much of what modern agencies do can be characterized as nonexclusive power.

This theory of nonexclusive and exclusive powers advances the field of administrative law. It explains why the concept of “quasi-legislative” and “quasi-judicial” power[15] is appealing, but ultimately erroneous: because even if some power can be exercised by more than one branch, and thus appears legislative or judicial in form, it still must be exercised by at least one of the three named constitutional actors. It explains the “chameleon-like” quality of government power.[16] It explains why Congress must authorize agencies to promulgate “legislative rules,”[17] which are nonexclusive legislative power, but not interpretative rules or policy statements, which are simply executive power. It explains what Chief Justice Marshall meant when he wrote that Congress cannot delegate power that is “exclusively legislative” in nature, but it can delegate to other departments power that it could have exercised itself, namely, the power to fill in the details pursuant to a more general provision.[18] The theory better explains Chevron deference,[19] once it is acknowledged that in most Chevron cases agencies are not actually interpreting law, but rather making policy—that is, exercising nonexclusive legislative power.[20] And the theory explains why most, but not all, administrative adjudications are constitutional. In summary, administrative law is in need of a serious rethinking and clarification—and my new casebook lays the necessary groundwork. It takes formalism and originalism seriously, but concludes that much, although not all, of the administrative state may be constitutional after all.

 

* Associate Professor of Law, Sandra Day O’Connor College of Law, Arizona State University.

[1] See Gillian E. Metzger, The Supreme Court, 2016 Term—Foreword: 1930s Redux: The Administrative State Under Siege, 131 Harv. L. Rev. 1, 6 (2017) (“Although resistance to strong central government has a long legacy in the United States, the real forebears of today’s anti-administrative movement are not the Framers but rather the conservative opponents of an expanding national bureaucracy in the 1930s. Like today, the 1930s attack on ‘agency government’ took on a strongly constitutional and legal cast, laced with rhetorical condemnation of bureaucratic tyranny and administrative absolutism.”).

[2] For early examples of critics of administrative government on these grounds, see id. at 54-59. The progressive proponents of administrative government conceded that administrative government would violate the Constitution’s separation of powers. See, e.g., Frank J. Goodnow, Politics and Administration 21 (1900) (noting that the “principle of the separation of powers” developed into  “an unworkable and unapplicable rule of law” for modern administrative government); id. at 23 (“Actual political necessity however requires that there shall be harmony between the expression and execution of the state will. Lack of harmony between the law and its execution results in political paralysis.”); James M. Landis, The Administrative Process 1 (1938) (“In terms of political theory, the administrative process springs from the inadequacy of a simple tripartite form of government to deal with modern problems.”); Woodrow Wilson, Congressional Government, in Woodrow Wilson: The Essential Political Writings 141, 167 (Ronald J. Pestritto ed., 2005) (1885) (“As at present constituted, the federal government lacks strength because its powers are divided, lacks promptness because its authorities are multiplied, lacks wieldiness because its processes are roundabout, lack efficiency because its responsibility is indistinct and its action without competent direction.”); id. at 173 (“The Constitution is not honored by blind worship. The more open-eyed we become, as a nation, to its defects, and the propter we grow in applying with the unhesitating courage of conviction all thoroughly-tested or well-considered expedients necessary to make self-government among us a straightforward thing of simple method, single, unstinted power, and clear responsibility, the nearer will we approach to the sound sense and practical genius of the great and honorable statesmen of 1787.”).

[3] See, e.g., Gary Lawson, The Rise and Rise of the Administrative State, 107 Harv. L. Rev. 1231, 1248 (1994) (“The destruction of this principle of separation of powers is perhaps the crowning jewel of the modern administrative revolution. Administrative agencies routinely combine all three governmental functions in the same body, and even in the same people within that body.”); City of Arlington v. FCC, 569 U.S. 290, 312-313 (2013) (Roberts, C.J., dissenting) (“Although modern administrative agencies fit most comfortably within the Executive Branch, as a practical matter they exercise legislative power, by promulgating regulations with the force of law; executive power, by policing compliance with those regulations; and judicial power, by adjudicating enforcement actions and imposing sanctions on those found to have violated their rules. The accumulation of these powers in the same hands is not an occasional or isolated exception to the constitutional plan; it is a central feature of modern American government.”).

[4] Philip Hamburger, Is Administrative Law Unlawful? (2014) (answering “yes” to the question posed by the book’s title).

[5] Metzger, supra note 1.

[6] See, e.g., Metzger, supra note 1, at 81 (“Agencies’ structures reveal further internal divisions and checks on administrative decisionmaking. Internal separation of functions and ALJ independence protections guard against biased decisionmaking by keeping agency prosecutors and adjudicators apart.”); Peter L. Strauss, The Place of Agencies in Government: Separation of Powers and the Fourth Branch, 84 Colum. L. Rev. 573, 622–25 (1984) (arguing that the APA’s separation of functions has come to replace the constitutional separation of powers); The Oxford Handbook of the U.S. Constitution 262 (Tushnet et al. eds., 2015) (“Later scholars have expanded the scope of the response by classifying the Administrative Procedure Act (APA), the fundamental charter of the U.S. administrative state, as a surrogate safeguard. On this view, the APA’s central notice-and-comment provisions create a kind of surrogate legislative process that allows for representation of all affected interests; APA provisions that ensure the independence of agency adjudicators, and that separate functions at lower levels of the agency, constrain politicized adjudication; and the APA’s expansive judicial review provisions enlist courts to monitor the executive on behalf of Congress and the citizenry.”).

[7] Metzger, supra note 1, at 87-93.

[8] Jerry L. Mashaw, Creating the Administrative Constitution: The Lost One Hundred Years of American Administrative Law 25 (2012) (“Government has grown larger, along with the country, but the general relationship of the political to the administrative—the degree to which elected officials make and control national policy and its implementation—has changed much less than we conventionally imagine.”); id. at 90-99, 115, 187 (noting examples of broad delegations from Congress to the administration); id. at 290 (concluding that “[t]he notion that early statutes delegated little discretionary authority to administrators is simply a myth”).

[9] Lawrence Lessig & Cass R. Sunstein, The President and the Administration, 94 Columb. L. Rev. 1, 35 (1994) (arguing for “another conception of the original understanding—one that imagines that the framers conceived of departments differently, and contends that the President would, by the Constitution, have directory power over only some of those departments”).

[10] See, e.g., M. Elizabeth Magill, Beyond Powers and Branches in Separation of Powers Law, 150 U. Pa. L. Rev. 603, 612 (2001) (“[T]here is no well-accepted doctrine or theory that offers a way to identify the differences among the governmental functions in contested cases. . . . The sporadic judicial efforts to identify the differences among the governmental powers are nearly universally thought to be unhelpful.”).

[11] Id.at 618-19 (“For example, consider the granting of licenses. Congress authorizes the Federal Energy Regulatory Commission (FERC) to grant licenses when they are ‘in the public interest’ and sets forth a list of factors that indicate when the license would be in the public interest. In determining which of the various applicants should obtain a license, the FERC would be implementing that law. And, just as clearly, by granting or denying a license, the FERC would govern the rights and obligations of a third party [and thus would be legislating].” (footnote omitted) (quoting 16 U.S.C. § 797(e) (1994)). For a more recent account of this view, see Julian Davis Mortenson & Nicholas Bagley, Delegation at the Founding, 121 Colum. L. Rev. 277, 313-16 (2021).

[12] https://faculty.westacademic.com/Book/Detail?id=337041.

[13] These regulations can also be viewed at An Act Providing for the Payment of the Invalid Pensioners of the United States, LIBR. CONGRESS (Oct. 13, 1789) https://www.loc.gov/resource/rbpe.21201200/?sp=1 [https://perma.cc/R29C-C9SU].

[14] The classic statement comes from the Supreme Court in 1856: Congress cannot “withdraw from judicial cognizance any matter which, from its nature, is the subject of a suit at the common law, or in equity, or admiralty; nor, on the other hand, can it bring under the judicial power a matter which, from its nature, is not a subject for judicial determination,” but “there are matters, involving public rights, which may be presented in such form that the judicial power is capable of acting on them, and which are susceptible of judicial determination, but which congress may or may not bring within the cognizance of the courts of the United States, as it may deem proper.” Murray’s Lessee v. Hoboken Land & Imp. Co., 59 U.S. 272, 284 (1856).

[15] Humphrey’s Ex’r v. United States, 295 U.S. 602, 624, 628-29 (1935).

[16] Bowsher v. Synar, 478 U.S. 714, 750–51 (1986) (Stevens, J., concurring).

[17] Nat’l Petroleum Refiners Ass’n v. FTC, 482 F.2d 672, 674 (D.C. Cir. 1973).

[18] Wayman v. Southard, 23 U.S. (10 Wheat.) 1, 42-43 (1825).

[19] Chevron, USA, Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984).

[20] See Ilan Wurman, The Specification Power, 168 U. Pa. L. Rev. 689 (2020).

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