Neil Gorsuch Will Help Put Legislative Power Back in The Hands of Congress

February 1, 2017 at 9:31 am Leave a comment

If you believe that regulators have been given more power than is allowed under the Constitution – and as a member of the credit union industry you should – you have reason to be optimistic about President Trump’s Supreme Court  nominee. Neil Gorsuch of the Court of Appeals for the Tenth Circuit is a kindred spirit who will work to refocus the locus of legislative power back to Congress and away from unelected bureaucrats.

First, a quick primer. The most basic job of agencies is to translate federal legislation into operational mandates.  When Congress’ intent is clear, agencies are to do what Congress tells them; but, what happens when a Congressional mandate is unclear?  Under so called Chevron deference, courts are to defer to an agency’s interpretation even if an  agency’s reading differs from what the court believes is the best statutory interpretation.  A second line of cases extends this deference to reinterpretations of  regulations by agencies even when they t effectively overturns court decisions.  (Nat’l Cable & Telecommunications Ass’n v. Brand X Internet Servs., 545 U.S. 967, 125 S. Ct. 2688, 162 L. Ed. 2d 820 (2005). These are judicially created doctrines which the Court could reconsider.

Financial institutions saw the impact of this deference when the Department of Labor decided that mortgage originators were nonexempt employees who must be given overtime pay and the Federal Reserve was given broad discretion to devise the interchange fee cap imposed on the debit card transactions by larger financial institutions.  The CFPB had broad discretion in its reinterpretation of RESPA.

No wonder, then, that Congress is increasingly willing to draft broadly written measures secure in the knowledge that regulators will fill in the blanks and get blamed for the negative consequences of tough decisions.

In an April 2016 decision called Gutierrez-Brizuela v. Lynch, 834 F.3d 1142, 1143 (10th Cir. 2016), Judge Gorsuch wrote a separate concurring decision to underscore his unease with the direction of the regulatory state.

“There’s an elephant in the room with us today.” He argued. Judicial precedents such as Chevron and Brand “permit executive bureaucracies to swallow huge amounts of core judicial and legislative power and concentrate federal power in a way that seems more than a little difficult to square with the Constitution of the framers’ design. Maybe the time has come to face the behemoth.”

He argued that “When the political branches disagree with a judicial interpretation of existing law, the Constitution prescribes the appropriate remedial process. It’s called legislation. Admittedly, the legislative process can be an arduous one. But that’s no bug in the constitutional design: it is the very point of the design. The framers sought to ensure that the people may rely on judicial precedent about the meaning of existing law until and unless that precedent is overruled or the purposefully painful process of bicameralism and presentment can be cleared… “ Gutierrez-Brizuela v. Lynch, 834 F.3d 1142, 1151 (10th Cir. 2016)

When he gets on the Court, and unless there are skeletons in his closet that would make the Kardashians blush, he will get on the Court; he will have ample opportunity to nudge his fellow justices to reconsider the contours of regulatory power. In fact, it’s possible that one of his first major cases will deal with the constitutionality of the CFPB.

Entry filed under: General.

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Authored By:

Henry Meier, Esq., General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association.

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