Courthouse Steps Preview: Gundy v. United States

 

Operator:  Welcome to The Federalist Society's Practice Group Podcast. The following podcast, hosted by The Federalist Society's Administrative Law and Regulation Practice Group, Criminal Law and Procedure Practice Group, federalism and Separation of Powers Practice Group, the Article I Initiative, and the Regulatory Transparency Project was recorded on Thursday, September 27, 2018, during a live teleforum conference call held exclusively for Federalist Society members.          

 

Micah Wallen:  Welcome to The Federalist Society's teleforum conference call. This afternoon's topic is a Courthouse Steps Preview on Gundy v. United States. My name is Micah Wallen, and I am the Assistant Director of Practice Groups at The Federalist Society.

 

      As always, please note that all expressions of opinion are those of the expert on today's call.

 

      Today, we are fortunate to have with us Sheldon Gilbert, who is the Director of the Center for Judicial Engagement at the Institute for Justice. However, in October he will be starting as the Senior Fellow in Constitutional Studies at the National Constitution Center and will be heading up the Center's new Constitutional Studies Initiative.

 

      After our speaker gives his remarks, we will then go to audience Q&A. Thank you for speaking with us, Sheldon. The floor is yours.

 

Sheldon Gilbert:  Thank you, Micah. I appreciate the introduction. I'm delighted to be here. As I'll explain in more detail in a minute, Gundy v. United States arises under the Sex Offender Registration and Notification Act, which is frequently referred to as SORNA. But this case really isn't about if, when, or how convicted sex offenders should register with law enforcement. Those are all very serious questions, no doubt, and are questions that Congress has good reason to address, but I think this case is about something more fundamental. To borrow from Justice Scalia's dissent in Morrison v. Olson, an important separation of powers case, this case, Gundy, is about, quote, "power." It is about, quote, "the equilibrium the Constitution sought to establish with our tripartite system of government." And this case presents the Supreme Court with an opportunity to begin to restore the legislative power to the correct branch. A decision in this case could have profound implications for the modern administrative state and for the future of our system of checks and balances.

 

      As a quick roadmap, I'm going to briefly discuss the nondelegation doctrine, and specifically the modern practice of delegation in the criminal context. Then I will briefly describe the facts of the case and the question presented. And finally, I will describe the petitioner's and respondent's legal arguments.

 

      So, where to start? I'm sure many of you who are listening are quite familiar with the nondelegation doctrine. That said, as Justice Gorsuch has said, "The text of the Constitution is always a good place to start." So if you open your pocket Constitution or your interactive Constitution app to Article I, Section I, first page of the Constitution, it begins, quote, "All legislative powers herein granted shall be vested in a Congress." So this Vesting Clause is the basis for the nondelegation doctrine, which is a principle that Congress may not outsource its exclusively legislative powers to any other branch or to private parties. Congress's Vesting Clause does not say some, or much, or most legislative powers are vested in Congress; it says all legislative powers are vested in Congress and Congress alone.

 

      In 1823 in one of the earliest nondelegation cases, there's a description that's pretty simple, but, I think, captures our modern system of checks and balances. The Court said the legislature makes the law, the executive executes the law, and the judiciary construes the law. It's a simple description. It's basically what every high school civics class in America teaches its students about our tripartite system of checks and balances.

 

      And once upon a time, it was an accurate description, but unfortunately, it's been about 80 years since the Supreme Court last enforced the nondelegation doctrine in a case called Schechter Poultry in 1935. So Schechter Poultry is probably the case most closely associated with the nondelegation doctrine, and as with this case, Gundy, Schechter Poultry also involved a federal regulation carrying criminal penalties. Schechter Poultry involved a challenge brought by a number of brothers operating a kosher poultry butcher shop to Section III of the National Industrial Recovery Act. This was one of the first signature New Deal era pieces of legislation. And the Recovery Act authorized the President to create, quote, "Codes of fair conduct for trades and industries," and as long as the President determined the regulations are, quote, "in furtherance of the public interest," the President more or less had free reign to regulate trades and industries.

 

      This was a shockingly broad delegation of power at the time. The new federal agency tasked with enforcing the statute could adopt any regulation that would have the force of law that it deemed in the public interest. That's pretty broad. And this broad delegation sparked a rapid rise in federal regulatory lawmaking. This is the moment of the birth of the modern administrative state. It's the administrative state's Big Bang. So to put that in context, in a single year after the Recovery Act was passed, the federal government produced around 10,000 pages of new law, almost all regulatory, compared to the 2,730 or so pages of federal law created during the preceding 145 years combined. So you have just a huge explosion in the size of the federal government, and the federal law is all coming in the form of federal regulatory law.

 

      So Schechter Poultry involved a challenge to one of those sets of regulations, the Live Poultry Code, as it was called, and it regulated an array of business practices, everything from the maximum hours worked per day in one of these poultry butcher shops, to minimum pay for employees, to record keeping requirements, price controls, prohibiting unfair methods of competition. It has a ban on what's referred to as straight killing, which is this kind of curious term that means letting customers choose which chickens they want to purchase. So this is somewhat ridiculous, but federal law required that a customer sort of blindly put his hand into a chicken coop and had to take the first chicken that came into his hand, irrespective of the quality of chicken. That's the granular level of detail that these regulations are operating at. And if a butcher let a customer choose his or her own chicken, that was a federal crime.

 

      So, by the way, you might have heard a law professor or two call the Schechter case the, quote, "sick chicken case," which is kind of an enduring nickname for the case. And if you want to hear the story of why that nickname should get four Pinocchios by the fact checkers, I encourage you to read the Institute for Justice's amicus brief in the case.

 

      But ultimately in Schechter, a unanimous court ruled that the legislation was unconstitutional because Congress had delegated away too much of its legislative power to the executive branch. But since then, the Court has essentially given up on enforcing the nondelegation doctrine. Since the 1930s, the Court has applied a particularly toothless version of the nondelegation doctrine. Basically, Congress can delegate away any of its legislative powers so long as it gives the executive branch some, quote, "intelligible principle," end quote, to follow in exercising its delegated discretions. So under this standard, the Court has held, for example, Congress can delegate to an agency the power to fix prices at a level that the agency finds fair and equitable. That's the intelligible principle, fair and equitable, to decide what utility charges are, quote, "just and reasonable," or to regulate public broadcasting in a manner that is, quote, "in the public interest."

 

      So these terms, fair, just, and public interest, they're all intelligible terms in the sense that they're "capable of being understood," to quote Webster's Second, but they're also capable of being misunderstood and manipulated, and they grant broad policy making authority that's too great to be called anything other than legislative power. As a result of the Supreme Court's refusal for the last 80 years to enforce the legislative Vesting Clause, many argue that the classic description of our tripartite government that you heard from that 1823 opinion, the Wayman v. Southard opinion, that our modern government bears no resemblance to what the Framers had designed. So today, the executive branch routinely makes the law, enforces the law, and interprets the law, and even adjudicates many of its own cases.

 

      And in the specific area of federal criminal law, executive agencies routinely invoke broad delegations of authority to promulgate regulations that criminalize garden-variety private conduct. So one 1990 study estimated that there are at least 300,000 federal regulatory crimes in the Code of Federal Regulations. That is an order of several magnitudes more than the approximately 4,500 federal crimes in the U.S. Code. So crimes are getting made, the scope of crimes are getting determined and what's a crime is getting determined by the executive branch far more often than the legislative branch. And that's dangerous. Thomas Paine warned that "the avidity to punish leads men to stretch, to misinterpret, and to misapply even the best of laws," end quote.

 

      So to give you a sense for just the type of private conduct the federal regulatory -- the subject of federal regulatory criminal sanctions, I think you could take a look at a very popular Twitter feed called @CrimeADay. This is an account that tweets out one federal crime per day, and by some estimates, it will take at least 800 years to finish doing so. And I'm going to give you some examples that @CrimeADay has highlighted. So for example, under 40 USC §1315, it's a crime to fall asleep at the U.S. Meat Animal Research Center in Nebraska. It's a crime to collect on a private debt if you're visiting the National Arboretum. When you're at the National Institute of Health, whatever you do, don't ride a bicycle without a horn, and don't engage in any hobbies outside of designated areas, or go roller skating, because all of those are crimes.

 

      And you don't need to visit federal property to risk an amusement-related criminal offense. So according to the Consumer Product Safety Commission regulations, it's a criminal offense to sell classic toys like lawn darts and toy clackers. And CPSC says it's a crime to sell a toy marble without an explicit warning that the toy marble is a toy marble. And that warning better include an exclamation mark inside an equilateral triangle. That's right, no isosceles or right triangles are allowed because that would be a crime as well.

 

      Federal regulators care a lot about shapes when it comes to the dizzying array of food crimes as well. So, for example, under regulations by the Food and Drug Administration, the unwary pasta seller might face criminal sanctions for selling egg noodles if they're not ribbon shaped or selling soy spaghetti if it's not tube or cord shaped. The FDA also really cares about the shape of your meatloaf. If a meatloaf is labeled old fashioned, it better be rectangular with a rounded top or circular with a flat bottom. If it's not, that’s a federal crime. And wo unto the baker who sells his raisin buns with an inadequate raisin to flour ratio, or the cheesemonger who unevenly distributes spices throughout her spiced cheeses because those are all crimes as well. To borrow from Justice Scalia's dissent in King v. Burwell, one might be inclined to call these regulatory food crimes "pure applesauce," but be careful because canned applesauce with the apple core left in it is a federal crime, too.

 

      But the good news is that the Court's grant in Gundy v. United States might signal a shift toward more serious enforcement of the nondelegation doctrine and to help reign in some of the excesses of the overcriminalization in the federal regulatory context. With that, let's turn to the facts and legal arguments in Gundy. So in 2005, Herman Gundy was convicted of a particularly heinous sex offense in the state of Maryland. I won't describe the details of that. Suffice it to say, Mr. Gundy is not a good man. A year later in 2006, Congress passed the Sex Offender Registration and Notification Act, or SORNA.  SORNA does a bunch of different things, but pertinent to this case, SORNA requires convicted sex offenders to register wherever they work, wherever they reside, and/or wherever they were convicted. And if a sex offender travels in interstate commerce, moves from one state to the next, the offender must register in and notify the new jurisdiction. And importantly, SORNA makes failure to register a federal crime.

 

      So 2005, Mr. Gundy is convicted of a sex offense. 2006, Congress passes SORNA. And then in 2012, while he's in the custody of the Federal Bureau of Prisons, Mr. Gundy is transported from Pennsylvania to New York. Once he's in New York, he fails to register as a sex offender, and he's indicted for violating the registration requirement in 18 USC §2250(a). Well, wait a second, SORNA was adopted in 2006, and Mr. Gundy was convicted of a sex offense in 2005. Why is he in trouble? Well, Mr. Gundy raises a number of legal challenges, and his cert petition raises four potential issues, three of which were statutory in nature. But the Court only granted cert on one issue, and it's an issue actually with no circuit split. And the question presented is, quote, "whether SORNA delegation of authority to the Attorney General to issue regulations under 42 USC §16913(b) violates the nondelegation doctrine."

 

      Well, let's demystify that. In other words, Mr. Gundy says Congress cannot delegate to the Attorney General the authority to decide whether and to what extent SORNA's registration requirements should apply to sex crimes committed before the statute was enacted in 2006. So again, recall that Mr. Gundy was convicted of a sex crime in 2005, a year before SORNA was passed. Let's turn again to the text of SORNA which delegates to the Attorney General the following authority: quote, "The Attorney General shall have the authority to specify the applicability of the requirements of this subchapter to sex offenders convicted before the enactment of this chapter, and to prescribe rules for registration of any such sex offender." So that's it.

 

      According to the briefing by the United States in various challenges to this statute, this provision gives the Attorney General authority to do nothing about sex offenders who were convicted before SORNA was passed, or the Attorney General could require all 500,000 individuals who were sex offenders before SORNA to register, or the Attorney General could choose some subset of past offenders to register, and the Attorney General could change his mind about any of those decisions at any time. And the statute, importantly, provides no guidance to the Attorney General to whatsoever how to exercise that broad discretion. In other words, the Attorney General, which enforces the SORNA criminal provisions, gets to decide what is and isn't a crime under SORNA by its power to determine the scope of the retroactivity of the law.

 

      Okay, so why is this a violation of the nondelegation doctrine? Well, Mr. Gundy's leading argument echoes a 2015 concurrence by Justice Thomas in a private nondelegation case. This is Department of Transportation v. Association of American Railroads, and in this case, Justice Thomas laid out his originalist argument for the nondelegation doctrine and an originalist test for determining what powers are and are not delegable. I highly recommend you read his concurrence, but specifically, the petitioner, Mr. Gundy, argues that Congress cannot delegate any, quote, "quintessentially legislative power." Again, that sounds a lot like Justice Thomas' proposed originalist test, and Mr. Gundy describes as quintessentially legislative power be power, quote, "to prescribe rules backed by criminal sanctions governing private conduct." Again, that sounds very much like what Justice Thomas argues is the best originalist definition of the quintessentially legislative power that cannot be delegated away from Congress.

 

      But Mr. Gundy's lawyers realized that the Court might not want to revisit the longstanding intelligible principle test and adopt this originalist test for nondelegation, so he raises a much narrower argument that even under the nearly toothless modern intelligible principle test, the SORNA delegation just cannot survive. And Mr. Gundy says that unlike a statute that gives, for example, the FCC guidance to exercise its discretion in, quote, "the public interest," SORNA includes no guidelines whatsoever, not even vague terms like public interest or fairness. We read the text of the delegation. There's nothing in there that cabins the Attorney General's discretion at all.

 

      And finally, Mr. Gundy argues essentially that in tough cases, the tie should go to the criminal defendant. Mr. Gundy more or less argues that the Court should be especially suspicious of broad congressional delegations in the criminal context because the branch of government that enforces criminal laws should not also have the power to define what those criminal laws are.

 

      So how does the United States respond to that? Well, the government's strategy in this case reflects, I think, just how entrenched the notion is that it's impossible for litigants to win a nondelegation challenge. So there's a recent study by Professor Whittington that shows that 0.096 percent of nondelegation challenges from 1940 to the present have prevailed, so as close to zero as you can get without being actually zero. In contrast, even when the administrative state was much smaller, the same study showed that upwards of 12 percent of challenges under the nondelegation doctrine suit had succeeded. Now 12 percent might not sound impressive at first, but it's basically on par with a lot of modern constitutional challenges. So, for example, that's about the same as the modern success rate for the exclusionary rule motions to suppress. So it's actually a fairly hardy figure.

 

      But the point is, at the time Mr. Gundy filed his cert petition, the U.S. government knows it's a virtual certainty that this case is dead on arrival. So the U.S. waives its response to the cert petition. Not particularly surprising that it didn't bother to waste the paper, ink, or manpower to respond because the government was pretty sure they would win and the Court wouldn't take it seriously. And besides, not only was there no circuit split to recommend the petition, but many other similar cert petitions had already failed. But the Court called for a response. They asked the government to respond with a brief in opposition anyway. And in the government's brief in opposition to certiorari, the brief essentially a very long string cite of 80 years of failed nondelegation challenges. Again, the government's litigation strategy is to remind the Court that nobody ever wins nondelegation cases, and that continues in the government's merits brief, where the U.S. more or less sticks with that approach. The brief cites case after case after case where the Supreme Court has upheld broad delegations.

 

      As to Mr. Gundy's argument that SORNA provides no intelligible principle whatsoever, the U.S. argues that SORNA identifies a general policy, to use the Attorney General's term, a general policy direction for the Attorney General to pursue. What is that general policy direction? Well, the United States government argues that the overarching, quote, "context of the statute" is suggestive of a, quote, "general policy" to require sex offenders to register to the, quote, "maximum extent feasible." So emanating from the penumbras of SORNA, even if there's not specific guidelines for how the Attorney General should exercise its delegation, you can kind of stitch together from context that there's a general policy that the Attorney General should be pretty strict about retroactive application of SORNA.

 

      And besides, the United States argues, the statute suggests Congress determined that broad discretion was necessary because of the, quote, "logistical and practical difficulties of administering the registration program." So this is the fallback position of those who oppose the enforcement of the nondelegation doctrine, which is essentially, "Well, the modern administrative state is really complex, and we really need to leave all of these logistical decisions to the executive branch to figure out, and so we don't need to provide much guidance, if any guidance at all, to the executive branch." That's essentially the thrust of the United States merits brief. So that's more or less where the case stands right now, and I'll turn it back to you.

 

Micah Wallen:  Thank you, Sheldon, for those opening remarks. I wanted to ask you a quick question before we turn it over to the audience. What do you think that the audience should be looking for when the oral arguments happen? What types of questions from which Justices, and how do you think that's going to go, or should go?

 

Sheldon Gilbert:  That's a great question. You know, there's at least three things that I'm going to be watching for in oral argument, and I'll talk about them in a second, but first, I'm really interested to hear what Justice Gorsuch says in argument and I'll explain why in a second. I’m also going to pay really close attention to Justice Ginsburg. I think she is a gettable vote despite kind of the knee jerk impression that the liberals might not be open to reinvigorating the nondelegation doctrine. I think there are good reasons to think that Justice Ginsburg is persuadable here. And finally, there are a couple amicus briefs that proposed interesting tests that I'm going to be looking for to see if any of them find a champion on the bench.

 

      Thinking about Justice Gorsuch for a second, I mean, look, over the years, as I've mentioned, a number of cert petitions have raised this exact same issue before Gundy and they were all denied. And when Gundy reaches the Court, there's no circuit split, and yet, it's granted. So what's the difference between those other cert petitions and this cert petition? I think the difference is Justice Gorsuch joining the Court. In 2015 when he was on the Tenth Circuit, he dissented from rehearing denial in a nondelegation challenge to SORNA, identical nondelegation challenge to SORNA, in a case called U.S. v. Nichols.

 

      And he wrote, quote, "if the separation of powers means anything, it must mean that the prosecutor isn't allowed to define the crimes he gets to enforce, yet that's precisely the arrangement SORNA proports to allow in this case and a great many more like it." So he's very interested in this issue. And in this opinion, he articulates a test that he thinks could be adopted, at least in the criminal context, to determine whether a delegation in the criminal context is permissible or not. And I want to watch oral arguments and see if he brings up the test that he'd proposed in that Nichols case. So I'm going to be watching for that.

 

      I mentioned that I'll also be paying close attention to Justice Ginsburg. Like I said, I think some people might assume that the liberal wing of the Court will not be open to reinvigorating the nondelegation doctrine precisely because it could potentially be used to limit the excesses of the administrative state. But in 2012, Justice Ginsburg joined a dissent authored by Justice Scalia where Justice Scalia said that it's not entirely clear that the broad delegation in SORNA is constitutional. And in Scalia fashion, he actually said that the statute, quote, "seems to me sailing close to the wind with regard to nondelegation." So she joined that dissent. So I think that she can fairly be predicted to have concerns about this delegation and might be open to finding this delegation impermissible, even under the current nondelegation standard, or under some other standard that's specific to criminal law.

 

      And the last thing I'm going to be looking for is to see if there's any Justice who picks up on what I think is a really interesting brief by the Pacific Legal Foundation. They wrote an amicus brief arguing that the Court should basically import the void for vagueness doctrine as the new nondelegation test to determine if a delegation is permissible or not. I think that's a really interesting idea. I can imagine a Justice or two who think that there's something wrong with the delegation here in the SORNA statute, but they are struggling with what an administrable test would be to hold that the delegation is impermissible, and I can imagine one or two justices finding PLF's idea of bootstrapping the familiar Due Process Clause onto the nondelegation doctrine.

 

      And if they're thinking, well, I'm not satisfied with the intelligible principle test, I can see how a Justice or two might prefer not to build a new test from scratch, but instead would like to draw on a body of case law that already exists, the void for vagueness doctrine, as a way to find a path forward. I don't know if that will get any play, but I definitely want to see if any of the Justices is a champion of that view. So those are kind of the three things that I'm going to be watching for in oral argument.

 

Micah Wallen:  All right. Well, let's go to audience questions.

 

Caller 1:  Is it possible for the Congress to make a conditional law to stipulate that the law depends on something without violating nondelegation? And also, why did the Congress, with Poultry codes, why did they delegate if that was illegal?

 

Sheldon Gilbert:  Those are very good questions, and I'm going to answer your second question first because I don't know the answer as to why Congress in this particular instance decided not to decide this issue. I don't know why they decided to put this particular, very broad delegation into the statute. I do think that there are at least some on the Hill in the Capital who are regretting that decision, and they're looking at this case and they're worried about how it might turn out, and I understand there are some folks on the Hill who are working on a bill that would either fix the statute after the Court rules, or possibly preempt the decision by the Court by addressing this delegation issue in the first instance.

 

      As to your first question, can Congress under the nondelegation principle delegate conditional authority to the executive branch? Well, certainly that is one argument that many of the proponents of a robust nondelegation doctrine support. They say that in certain circumstances, if the legislature has identified very clearly what conditions would trigger a particular authority to act, that Congress can do that because Congress is making the policy decisions. Congress is deciding how to regulate private conduct. All it's doing is delegating to the executive branch the fact-finding role of determining whether or not the condition that Congress has identified has been met. So under this theory, Congress is not giving away any legislative power in this conditional scenario. It's made a decision, it's just delegating to the executive branch the authority to determine whether or not the factual predicate has been satisfied, whether or not the condition has been triggered.

 

Micah Wallen:  And Sheldon, I also had a follow up question. Based on what to look for at oral arguments, do you expect, based on the importance of Gorsuch and Ginsburg in the oral arguments, do you expect one of them to be writing the opinion for this case, or depending on which way it comes out, do you have any predictions there?

 

Sheldon Gilbert:  That’s a great question. One thing we haven't talked about is the possibility that when this case reaches oral argument and even decision time, that there may only be eight Justices on the Court, and that could complicate things even further, so I'm hesitant to make too many predictions about how this is all going to play out. But like I said, I think that it's reasonable to infer that the big difference between the other cert petitions that failed that raised the same issue and the Gundy cert petition is precisely that Justice Gorsuch joined the Court, an he very much cares about this.

 

      I mentioned the Nichols dissental, his dissent to denial of rehearing, but he also has this opinion in the Tenth Circuit called Baldwin. This isn't a necessarily -- this isn't a SORNA case, but in this opinion, he talks at great lengths about his concerns with broad delegations of authority to Congress to determine the scope of regulatory crimes. So that figure that I gave you that there are at least 300,000 federal regulatory crimes in the Code of federal Regulations, in CFR, that figure comes from then Judge Gorsuch's Tenth Circuit opinion in Baldwin. And he gives lots of examples of strange things that have happened because of these broad delegations of what he refers to as unelected bureaucrats to determine what's criminal and what's not.

 

      So I think it would make sense for Justice Gorsuch, having thought about this a lot, to be given the pen to write the majority opinion, or a Justice Ginsburg who has already kind of signaled her concerns with this through joining Justice Scalia's dissent, so I would not be surprised to see either of those writing an opinion in favor of Mr. Gundy.

 

Micah Wallen:  I'm not seeing any more questions in the queue. Sheldon, did you want to wrap up with any closing remarks?

 

Sheldon Gilbert:  This is a case to watch. I think that people may not be thinking of this as major administrative law case. They may be thinking of it as a sex offender case or a criminal law case, but I think this is a case that could have very profound applications for the future of the administrative state. So I would watch very carefully.

 

Micah Wallen:  All right. On behalf of The Federalist Society, I want to thank our expert for the benefit of his valuable time and expertise today. We welcome listener feedback by email at [email protected]. Thank you all for joining us. We are adjourned.

 

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