18 | Weil, Gotshal & Manges LLP LITIGATION TRENDS 2024 | 19 T O C E M P A N T I I P C A P R O W C C O N T A C T I N T A P P P A T C C L S E C Gregory Silbert Co-Head New York gregory.silbert@weil.com Mark A. Perry Co-Head Washington, D.C. mark.perry@weil.com Zack Tripp Co-Head Washington, D.C. zack.tripp@weil.com The Supreme Court Considers New Challenges To Administrative Agencies In recent years, the Supreme Court has issued a number of significant decisions addressing the structure and authority of administrative agencies under both the Constitution and the Administrative Procedure Act. This trend (aspects of which were addressed in Weil’s 2022 and 2023 Litigation Trends Reports) continued in the 2022-2023 Term – with the Court expanding procedural avenues for challenging agency action and again applying the major questions doctrine to limit agency authority. And it is only set to intensify as the Court considers several significant agency cases in the 2023-2024 Term. First, in Axon Enterprise, Inc. v. Federal Trade Commission, 598 U.S. 175 (2023), the Court authorized a direct route to raise constitutional challenges against administrative agencies in federal court. In two consolidated cases – one challenging the structure of the Federal Trade Commission and the other that of the Securities and Exchange A P P Appeals and Strategic Counseling Commission – the federal government argued that parties must raise constitutional arguments in a proceeding before the agency and wait, often months or years, to appeal the agency’s final decision in court. The Supreme Court, however, held unanimously that parties can bring immediate constitutional challenges in federal court even while an administrative proceeding is pending. Although the Supreme Court did not address the merits of the underlying challenges to the constitutionality of the agencies’ structures, Justice Thomas concurred to express “grave doubts about the constitutional propriety” of agency adjudications. Axon thus opens the door for parties facing administrative action to challenge the constitutionality of administrative agency proceedings at the outset, and provides some indication that the Court may be receptive to such challenges. Second, in Biden v. Nebraska, 600 U.S. 478 (2023), the Court invoked the major questions doctrine to reject the Department of Education’s plan to cancel approximately $430 billion in federal student loan balances. In a 6-3 decision, the Court explained that the major question doctrine requires administrative agencies to point to “clear congressional authorization” before asserting authority over fields with great “economic and political significance.” The Court found the significance of the student loan cancellation was “staggering by any measure,” and the Court found no textual basis in the HEROES Act authorizing cancellation of the student loans. Following the Supreme Court’s opinion in Nebraska, litigants have invoked the major questions doctrine in a variety of challenges to agency action, including recently in challenges to the EPA’s regulation of motor vehicle emissions and to the SEC’s assertion of jurisdiction over certain cryptocurrencies. Looking ahead, the 2023-2024 Supreme Court Term presents a number of significant cases that may further clarify the scope of agency CROSS-PRACTICE FOCUS
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