Major Questions Doctrine and the Tech and Telecom Sectors After West Virginia v. EPA

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Jack Derwin:  Hello, and welcome to this Federalist Society virtual event. My name is Jack Derwin.  I'm associate director of the practice groups here at The Federalist Society. Today we're pleased to host a panel discussion titled "Major Questions Doctrine and the Tech and Telecom Sectors after West Virginia v. EPA." Joining us is an impressive panel of experts who bring a range of views to the topic at hand. In the interest of time, we'll keep intros very brief, but you can view our speakers' full bios at fedsoc.org.   

 

Our moderator today, Lawrence J.  Spiwak, is President of the Phoenix Center for Advanced Legal and Economic Public Policy Studies, a nonprofit organization that studies public policy issues with a particular emphasis on the law and economics of the digital age. After discussion between our panelists, we'll go to audience Q&A if time allows. Please enter any questions for our speakers into the Q&A box at the bottom of your Zoom window. Finally, I'll note that as always, all expressions of opinion on today's program are those of the guest speakers joining us today. Without further delay, the virtual floor is yours, Larry.

 

Lawrence J. Spiwak:  Thanks, Jack. And thank you everybody, for joining us. We have an outstanding panel on what I hope to be a very interesting and important topic. So let's start with a little background. I don't think that it's any secret that the administrative state constantly tries to push the bounds of their respective statutory mandates when they want to get stuff done. Usually, typically, agencies justify their action by invoking the Chevron doctrine. The statute is ambiguous and therefore courts must give us unlimited and unbridled discretion in interpreting the statute. And over the years, I have seen courts go, "Okay." So it really is an expansion of the administrative state.   

 

But interesting enough, last term, the Supreme Court came out with their landmark decision in West Virginia v.  EPA. And in this decision, the Court reinvigorated or clarified, whatever you want to call it, what's called the major questions doctrine of administrative law. And we're going to get into this, but the really quick summary of the major question doctrine is it basically says, "Now, wait a minute, there's a question of major economic or political significance, and the question is best resolved by Congress and not by aggressive, unelected bureaucrats." Now, while this stands -- sounds very straightforward in concept, I know I have a lot of questions about how the major questions doctrine is supposed to play out in practice and particularly in the tech and telecom sector where the Federal Trade Commission and the Federal Communications Commission have a demonstrated propensity to push the edge of the legal envelope over the years.   

 

So to discuss this in detail, we have really an amazing set of panelists to share their perspectives. And let me just go around the horn and introduce them. We have Ian Gershengorn, who's a partner and chair over at Jenner and Block. He's also the former Acting Solicitor General. Tom Johnson, who's a partner over at Wiley, who's the former General Counsel of the FCC. You have my good friend, Maureen Ohlhausen, who's the former Acting Chair of the Federal Trade Commission, and my former boss and good friend, Christopher J. Wright, was also the former General Counsel of the FCC.      

 

So it's a lot of firepower here on the panel. And let's get started. So given our time constraints, what I'd like to do to organize our discussion is to go, if you will, from what I like to call it, the macro to the micro. So let's start with, I guess, the most obvious introductory question, which is what exactly is the major questions doctrine? And to that, I'm going to turn that over to Ian, if you can give us sort of the Reader's Digest. What is this doctrine that we're hearing so much about?

 

Ian Heath Gershengorn:  Sure, Larry. And thanks to The Federalist Society for having us. This is a great panel. I'm happy to be here with my fellow panelists. Well, as you said, the major questions doctrine is a rule that the Court uses when reviewing an agency assertion of power.  And the main point is the one you made at the start, right?  It flips Chevron on its head.  And what the Court has said is when Congress regulates in an area of great economic significance, the agency has to point to clear authorization for its actions. So ambiguity won't work as it does in Chevron. And in fact, ambiguity is fatal to the claim. So where does this doctrine come from? So it has its roots back in the 2000 case of Brown & Williamson, when the FDA was trying to regulate tobacco as a drug. And the FDA said, "Well, nicotine is a drug and cigarettes are a delivery system, and therefore, we get to regulate tobacco like we do every other drug that comes in a delivery system." And the Court said, "No, that's a bridge too far. Even though it might fit in sort of the plain text of the statute, a major question like that, how cigarettes should be regulated, really should be done by Congress."     

 

And that doctrine has sort of sort of limped along until, as you say, last term, where the Court really, I think, gave it some real muscle. It happened in the West Virginia v. EPA case, where the agency asserted the right under the Clean Air Act, not just to regulate factory outputs, but actually to direct how energy should be created in this country, whether it should be clean energy, wind and solar, or whether it should be coal fired plants. And again, the Court said decisions of that magnitude really need to be made by Congress, not by what the Court calls unelected bureaucrats.     

 

And I guess I want to make sort of -- focus briefly on why that doctrine makes sense or where, at least from the Court's perspective, that doctrine makes sense. The courts really said three things about it.  First, it's a matter of textual interpretation, right? What the Court said is "We don't expect Congress in using the text of the statute to delegate things to an agency that are so important."  Those are the kinds of decisions -- what our energy policies should be, how we treat tobacco.  Those are the kinds of decisions that really Congress should make. Second, the Courts reinforce that with a separation of powers notion, the idea that Congress really is the branch that -- the political branch that should be making these decisions. Congress is answerable to the people, and that's really where we want our policy calls to be made. And then, third, sort of particular importance to justices like Justice Gorsuch, there's a sort of nondelegation flavor that actually Congress couldn't, at core, delegate these kinds of major questions to agencies to resolve on their own. And so the doctrine is rooted in both a textual and a constitutional basis. And the net result is, if you don't have clear authorization for the action, you, as the agency, can't do it. So, Lawrence, you may be on mute still. Larry, I think you're still on mute.

 

Lawrence J. Spiwak:  Better?

 

Ian Heath Gershengorn:  Better.

 

Lawrence J. Spiwak:  Good thing I'm a musician. I'm always worried about that. Okay. Thank you. So let's sort of move on from there. Justice Gorsuch, I thought, gave a very detailed concurrence of where it is. Let me throw this out to the rest of the panel so we can get the discussion going. What are the factors, though?  I get what you're saying, Ian, but what are the factors that we look to? I mean, it's sort of like, well, it could be this, it could be that. Let's drill down a little bit about that. So, Tom, Chris, and Maureen, do you guys have any thoughts about that?

 

Christopher J. Wright:  Well, let me say, perhaps I'm the skunk at the garden party, but I think this is an anti-textualist doctrine, and that true conservatives should be very suspicious about this. Remember, it only makes a difference when you need to depart from the interpretation of the text that you would otherwise provide under a normal reading of statutory text. That's the only time it makes a difference. In certain cases, when you would say an agency can do X, this doctrine would cause you to say, no, it can't. So I think it's very dangerous. I think there are two versions of it. There's a benign version and a malignant version. And I think Ian was giving a little more -- touting the benign version. If all it means is textualism isn't overly literal, and all it means is, oh, you read statutes in context and with a dose of common sense, and you ask something like, well, would Congress have given the FDA authority over cigarettes in whatever year the relevant statute was enacted? Okay. That's fine. That's sensible. In my mind, that's what normal statutory interpretation ought to be about. But I don't know where a court gets authority if Congress gives broad authority to an agency. Well, unless it's a backdoor -- a backdoor way to reinstate the non-delegation doctrine, about which I think we should be skeptical. But otherwise, why do we need this doctrine? That's where I start from.

 

Lawrence J. Spiwak:  Isn't that Kagan's basically dissent? She said that the major question is doctrine is -- here's her quote, "Text free card for the Court to exercise its anti-administrative state bias?

 

Christopher J. Wright:  Yeah. Absolutely. I thought her dissent was great. Sort of when the Court doesn't like the text of a statute, a magical doctrine appears, and you have a get out of text free card. I thought that was a great line.

 

Lawrence J. Spiwak:  Yes. But as I was taught in law school, she lost.

 

Christopher J. Wright:  Well, I'm not debating what the law is. Although, again, there is this somewhat benign version, but there's also a version in which the Court just says, "Here's what we like and here's what we don't like. And we're just going to decide when the text says that the EPA can regulate air quality, we're going to decide they can't." I think we're going to learn a lot about this, actually, in the next week in the Biden v.  Nebraska case, where Congress gave the Secretary of Education clear authority to "waive or modify any of the rules in the statute at issue." And that's what the Secretary did. And the Court might decide that none of the plaintiffs have standing, but it might well decide that, no, it's just not going to read the text to mean what it says because it doesn't like it. 

 

Lawrence J. Spiwak:  All right. Tom and Maureen, what do you have to say about this?

 

Hon. Maureen K. Ohlhausen:  Yeah. So pulling it into a particular area of application where I think the Congress has spoken in certain ways, and the agency maybe doesn't like what it said. So I've been following this very closely involving the FTC and its interest in doing unfair methods of competition rulemaking, a power that Congress has never given the FTC. When you go back statutorily -- well, precedentially, there was a case called Petroleum Refiners where the FTC tried to do a combined unfair method of competition and unfair deceptive acts of practice rule. And the D.C. Circuit said essentially, well, we like rulemaking, and we think that the statute doesn't prohibit rulemaking, ergo, it's a good idea the FTC has it. In response, Congress passed a law called the Magnuson-Moss Warranty Act that specifically gave the FTC rulemaking for unfair and deceptive acts or practices. So that's the consumer protection said nothing, specifically said nothing about any unfair method of competition authority. The rule at issue, the actual rule Congress later enacted as a statute called the Controlling Marketing Practices Act and gave the FTC only unfair and deceptive acts or practices rulemaking authority.     

 

And now the FTC has embarked on an enormous rulemaking to prohibit non-compete agreements, claiming that somehow this all -- Congress's silence on this means that it has this authority to affect enormous amounts of the U.S. economy and preempt all contrary state law. Right. I do think that the major questions doctrine -- and recently Tim Wu, who was the President's competition czar kind of let the cat out of the bag and said, the FTC can now do these things that we couldn't get Congress to do. Right. So I think that there is a serious question about using congressional silence to claim a big regulatory power and non-delegation issues, major questions, statutory interpretation are really key in this.     

 

It's a doctrine that I think will come to play when the FTC's unfair method of competition rulemaking activities get challenged. Because I think you asked about some of the things that Justice Gorsuch had identified Congress considering and rejecting bills, that happened in this case, the agency seeking to regulate a large portion of the American economy. The FTC said, "Oh, this is going to affect $300 billion a year in the economy." And when the agency seeks to intrude on an area typically the domain of the states, again, that non-compete agreements regulated by state law. And so I do think that it's a doctrine of kind of a clarity that I welcome when there is this impulse to say we can't get things done in Congress, ergo, the independent agencies can just issue rules. And really at the FTC, SG has three commissioners or two. I ran the agency with two commissioners enacting essentially nationwide, enormously impactful legislative programs that [inaudible 16:29].

 

Lawrence J. Spiwak:  Tom, let's get back actually just to the doctrine itself real quick. Do you have any thoughts about just the doctrine and the way the Court has sort of teed this up? Because I'm still trying to get the parameters of what this means. Because as I think about it and again, not that I want to be cynical, but when talk of the doctrine started coming up, just me just going, like, well, let's see, we either can have unelected generalist judges make the call or unelected expert -- allegedly expert bureaucrats make the call. I'm still trying to get my head around the doctrine itself to go, what are we talking about here? So what do you think about it, Tom?

 

Thomas M. Johnson Jr.:  Yeah. I think Ian and Chris both kind of touched on this in different ways. I think there's kind of two different ways to think about it. One, you could think of it as a tool or an inference as to congressional intent, that when you're talking about a significant economic or political policy, that we wouldn't expect Congress to resolve it through the use of opaque language. And that the way that we're going to draw that inference or identify when that inference is appropriate is certainly as it plays out, I think, more of a holistic inquiry than you sometimes have when you're just examining the text of the statute, but you get into some of those criteria that Maureen was talking about.     

 

So, for example, are there cases such as with cap and trade or other things that would have mandated a particular energy mix that the EPA tried to accomplish through the Clean Power Plan? Is there a record of Congress trying to enact that policy into law and failing? Is there an attempt to use a long dormant policy or kind of an old policy, an old congressional statute in a new or novel way?    

 

And I think that the loan modification authority and waiver authority, which traditionally intended for servicemen and women for other sort of limited purposes, maybe the text could bear on some level what the administration is doing. But would we expect that Congress would use that long dormant authority hasn't been used in only kind of limited, targeted circumstances a handful of times to affect a major change and adopt massive loan forgiveness? And another criterion that some of these cases often exhibit is that there's just a mismatch between the agency's substantive mission and its area of expertise and what the agency is in fact doing. As Maureen pointed out, do we expect the FTC to be the labor and employment cops on the beat and to be the experts on what constitutes a reasonable non-compete agreement? Do we expect OSHA to conduct vaccine and public health policy? Do we expect the CDC to conduct housing policy and to be an expert on when there should be evictions and the like?     

 

So these are, I think, the kind of inferences. And I think, Larry, what you're struggling with is that this is not something I think amenable or discernible to some easy test. It doesn't admit of the kind of clarity that Justice Scalia would often like with bright line rules. But I think that these are kind of a series of criteria that get at either this intuition that Congress didn't intend to delegate this sort of question to an agency --

 

Ian Heath Gershengorn:  Larry, if I could -- oh, I'm sorry.

 

Thomas M. Johnson Jr.:  -- or in the alternative that we're sort of policing, a kind of separation of powers or non-delegation norm that we're not going to permit Congress to delegate a question of this importance. We're going to force the politically accountable Legislative Branch to resolve it in the first instance.

 

Lawrence J. Spiwak:  Let me ask a follow up question, and this actually will go to Ian, and you can just make your point. You talk about inferences in the statute. Does that mean that then all of a sudden legislative history becomes more important? Does that mean all the assorted preambles that Congress puts into the acts become more important? Because Lord knows I've seen over all my years that the Telecom Act was supposed to promote competition and deregulation. Good luck with that. That's the question. So Ian, I'm sorry. So go ahead and what you were --

 

Ian Heath Gershengorn:  No. I'm glad it fits exactly what I wanted to say, Larry. One of the aspects of the doctrine that makes it so tricky that all of us have been talking about the various ways you go about this is what then Judge Kavanaugh said on the D.C. Circuit about the doctrine and how do you know a question is a major question is he said, "You know it when you see it." And so you know when the Court is in that land, that's a very tricky area. And I think it is subject to the kind of critiques that Chris was raising, one of which is the one you just raised, right? All of a sudden, things like subsequent legislative history, that wonderful oxymoron, right -- did Congress try to pass statutes addressing this very issue afterwards? Has there been a lot of public comment at the agency? Those are the kinds of things we don't usually think of as relevant to statutory construction, but those are things that the Court has placed a lot of weight on.    

 

 If you were making a critique of the doctrine along the lines that Chris was talking about, when you read the West Virginia v. EPA opinion, as Justice Kagan notes in her dissent, the statutory language doesn't appear until page 28. When you're reading a Justice Scalia opinion, paragraph one is the text. And here was a sort of textual doctrine where you don't even know what the text says until page 28 of the majority's opinion. And I think the other critique that you get is, because it's so open ended, it allows judges a fair bit of discretion to decide what's major and what's not, and that's not necessarily their expertise. And then the counter to some of the things we've been talking about, which is, yes, but it implements separation of powers. Yes, but it forces Congress to make those decisions. And so that doctrine, I think, is subject to very serious critiques. And then I'll just close with the point that you made. Yes, but whatever you think about it, it's here to stay. And I think the Court is quite committed, a majority of the Court is quite committed to a fairly muscular version of this doctrine.

 

Lawrence J. Spiwak:  All right. Thank you. All right. So let's now go then to my next question, which is, again, now that we got the doctrine, but how is this doctrine supposed to work in practice? We're very fortunate. We've got a former Acting FCC chair, two former FCC General Counsel. So let's assume for the moment we're all back in government. And West Virginia comes out and you want to write an order. And so you're all sitting there in your offices figuring out how to do it. And just if we're going to play along, I'm the poor schnook staffer down below who's got to write the damn order. All right. So how do we do this? We're going to write an NPRM, notice of proposed rulemaking. Does every notice of proposed rulemaking now that comes out of an agency have to have a section in it going "This is why we think this is not or is not a major question." Do you then -- or do you ignore it and see if party is raising try to slough it under the rug? Or are we at a point now given the Court decision and Lord knows I've written plenty of these, and we all have, is it just at the end of every order, you tack on the major question section like you tack on the regulatory flexibility analysis and the paperwork reduction analysis? What are we going to start to see -- supposedly supposed to see from agencies in dealing with this? Because now I can see everybody just running and go, "That's a major question." How is this going to work in practice if you got to write a notice in an order?  So I'll start with Maureen, because you were actually head of an agency. And then I'll go to the two general counsels who will give advice on how they would counsel you.

 

Hon. Maureen K. Ohlhausen:  Sure. So from the FTC vantage point, I think on the consumer protection side, it's pretty easy, right? You point to the Magnuson-Moss Warranty Act that gave the FTC clear rulemaking authority with certain requirements, and now the rule itself, the content of the rule, you would have to examine more broadly. I think it's a challenge when you have this very vague, unfair methods of competition, how you get rulemaking out of that, right?  How you say that -- where do you hang the language regardless of the subject matter of the rule? I think there's kind of two -- it's a two-part question, rulemaking at all, I mean, versus case-by-case enforcement and the actual content of the rule. And so, like, what the current FTC leadership is saying, "Well, there's this little statutory term about the FTC can make some rules to sort of effectuate the act." And so they're looking for that to say, "Okay. Well, that like the D.C. Circuit in Petroleum Refiners case would be enough. But I think -- so to my mind, it raises two questions, at least in the FTC context, rulemaking and then the subject of the rulemaking. The unfair method of competition, I think actually raises both issues for the ability to make competition rules and then secondly for non-competes in particular. That is very much a labor issue. Is that something that was ever put in the FTC? So those are the kinds of issues that I think an agency in rulemaking -- at least, the FTC is going to have to grapple with.

 

Lawrence J. Spiwak:  Tom and Chris, how would you counsel the chairs of the agency if you were there?

 

Christopher J. Wright:  Well, look, it could have the good benefit that the agencies like the FCC sometimes, but not always do is that they look very carefully at what authority Congress has given them and write a section that actually isn't just boilerplate explaining how what they're doing implements a statute. Somewhat, I don't know, humorously or not, but I think another effect on general counsels of the agency in particular is right now I know you know that I've sometimes laugh about the press releases that go out from the FCC that say even the most diddly decision is groundbreaking and earth shattering and it's going to do all kinds of wonderful things. It's going to help the economy. It's going to create jobs. It's going to do all sorts of things, whether they had the boilerplate for that. But now I think you got to tell the chairman or the chair rather, "Hey, let's keep this down. We need to talk about how we're making some incremental changes that will modestly affect something," which will probably be more accurate in many of those cases.

 

Lawrence J. Spiwak:  Tom, what do you think?

 

Thomas M. Johnson Jr.:  Yeah. I think, as Chris alluded to, you always want to be conscious of and advising the agency that they ought to be grounding their actions in legal authority and explaining the legal authority for their actions. But I do think this is going to put a heightened burden on the agency to explain the legal basis of its actions, and it's going to depend -- how much of that you'll need to do will depend on the rulemaking. So, I mean, for the FCC -- you hinted at this, Larry, you made reference to the opinion, Ian -- if the FCC, back at full strength in the near future, decides to reinstate Title Two classification, so called net neutrality rules for broadband, I think it's going to have a high burden to grapple with then Judge Kavanaugh's decision at the D.C. Circuit saying, that's a major question which decision is cited, I believe, in the OSHA case, the CDC Eviction case, and at some length in West Virginia v. EPA. So Justice Kavanaugh certainly hasn't forgotten about that opinion. It stands a reason that there could be a majority to find that Title Two classification of broadband is impermissible, and that Congress didn't speak clearly enough.     

 

And you made reference, Larry, to the Congressional findings in Section 230 that interactive computer services were supposed to be lightly regulated. I think that could also play into a future Title Two litigation. So if I'm the GC dealing with that order, I think there's going to be a heavy burden to have a very robust legal authority section. And then, even for the mine run of orders, what I'd be looking for from outside parties -- and I think sometimes federal agencies need to make use of their regulated parties and of outside counsel to assist with supplying legal analysis that can support their proposals. The Commission -- I know we're going to get into this -- but the FCC, for example, if it seeks to regulate not only broadband but other emerging technologies, social media, et cetera, it's going to need to ground whatever it's doing in some concrete source of authority within the act. That's going to be the burden not just for the FCC, but across the federal government.

 

Ian Heath Gershengorn:  If I could just jump in too, Larry, I think one thing you would say also as a general counsel, certainly from DOJ's perspective, is you have to say to the Chair, is this really worth it? You have a limited amount of resources, you have a limited number of initiatives you can pursue, and you think about something like net neutrality, and I would hope the general counsel would say to the chair, "Is this the path you want to go down?" Your legacy is going to be a bitter fight that's very expensive, that takes a lot of resources, and then it's going down whether in the D.C. Circuit or the Supreme Court. And I think there will be and certainly if I were in a position like that from DOJ, I would be saying to my colleagues, "Is this where you want to spend your capital to sort of fight a losing fight? Or do you want to do a series of other more discrete tasks that may leave a better legacy than just a tremendous amount of resources for what is ultimately a Supreme Court loss?"

 

Christopher J. Wright:  So I have to chime in and remind everyone that Justice Scalia, joined by Justices Souter and Ginsburg, wrote an opinion in the Supreme Court's net neutrality case, correctly concluding that broadband is obviously a telecommunication service. The statute refers to it repeatedly as an advanced telecommunication service. And no justice thought that it was obviously an information service. Justice Thomas and the others thought, giving a very Chevron broad reading to the statute, that it was at least arguable that it was an information service. So if you read the text, I think you'd come out where Scalia came out.

 

Lawrence J. Spiwak:  We'll get to net neutrality in a moment because -- let's save the icing for the cake, shall we?  Well, here's an interesting question I was actually thinking about this morning.  I call it the City of Arlington question. I bring that up because I think, Chris, actually you were involved in the early stages of that case. City of Arlington was the argument that this was a Chevron case. And you still see people on the hill talking about this. And I'm just going to throw this out for an academic exercise where the argument essentially was no. Before an agency gives -- the statute is ambiguous, first you got to go to a court. Then the court will then interpret whether the statute is ambiguous. Then it goes back. And that went up to the Supreme Court and Scalia said, "No, basically, government will grind to a halt." Are we going to see something like that for the major questions doctrine? Who knows? I guess for if City of Arlington governing, the answer would be no. But again, knowing Chris had so much fun with that case in the early days --

 

Christopher J. Wright:  For the record, that was referred to as a Chevron step zero case. And there was what I thought a very powerful argument that you don't defer to agencies interpretation of the scope of their power, as opposed to interpreting what a statute actually says. And Justice Scalia scolded us and said, "No, it's really the same question," but I actually think Justice Scalia might have been too favorable to the administrative state there. And something like Chevron step zero would seem more sensible there, because you're always suspicious of people who are interpreting the scope of their own power, right? There's a heavy weight there that isn't necessarily there when the FCC is resolving dispute -- dispute between cable operators and broadcasters or something like that, where they have more reason to think they can be perfectly neutral.

 

Lawrence J. Spiwak:  Anybody else have any thoughts on that before I move to --

 

Hon. Maureen K. Ohlhausen:  I would say I agree.

 

Lawrence J. Spiwak:  There we go. Let's go back to something that Maureen touched on, because I think this is an interesting question. Most people, I think, when they sort of consider the major questions doctrine, it's just sort of, the agency looks at something with Chevron and then they say, "Well, whatever the scope of it is." I mean, you could look at, you know, Mag-Moss is a good, good example, Maureen, where, yes, they do have rulemaking authority, but what they try to do is so broad in scope. But I think it is an interesting question that we should spend a few more moments on. And the question of is, do you have rulemaking authority in the first instance? And you touched on the FTC's UMC rulemaking, you've written on it, but the FCC has also done that.       

 

I know Tom was on the inevitable position when President Trump got NTIA to ask the FCC to decide, do we have rulemaking authority to interpret Section 230? I don't think that you guys ever publicly released that legal analysis. And the election changed, and I think GPI probably breathed a sigh of relief. But the FCC did say that they had rulemaking authority to implement Section 230, which is -- my reading of it is just an affirmative defense. So how does that come up? I'll start with you, Maureen, to just sort of, again, sort of expand on the six A, but I'd also like to hear the FCC approach, because you just start having these expansive questions that keep coming up about -- I think to use Chris's line, it's, I'm going to judge my own authority to do something. And then you have what I would consider like the Tim Wu argument. I mean, if you look at net neutrality, he actually determines the public interest in catch all phrases. So you have this growth. So, Maureen, I'll start with you. Then I'll go to Tom and then go around the horn here.

 

Hon. Maureen K. Ohlhausen:  So your question is, how does an agency determine if it has rulemaking authority?

 

Lawrence J. Spiwak:  Yeah, I mean, again, the doctrine, when I think of the major questions doctrine, it's like it's a constraint on Chevron in terms of no -- because most agencies are like, I've got deference; I can do whatever I want. I mean, net neutrality -- I was having this argument with one of your former colleagues, a former FTC chairman, and he's like, oh, this is an ad law question. And like I said, I've seen the D.C. Circuit take Chevron deference, and -- you've got to be kidding me. You never know because the Court's a black box when it comes to deference.  So arguably, this doctrine constrains what the agency wants to do in the interpretation of the statute. But sometimes and that was you, I think, what you had gone to was, step one is, do I have the authority to issue rules in the first instance? So we're not even talking about the policy that they want to implement, but just the agency's power itself. And again, I think UMC rulemaking, authority -- the FTC has their argument -- six A, I can do whatever I want. Okay.  Chair Khan has been very upfront. That's her authority. She's written plenty of papers. You wrote a paper with Rick Rill saying no. So let's dive into that a little bit, because I think that's a really important thing, if you will. It's a major questions step one question. So I'll let you take it away there.

 

Hon. Maureen K. Ohlhausen:  Sure. Yes. So Jim Rill and I actually wrote --

 

Lawrence J. Spiwak:  Oh, Jim Rill. I'm sorry.

 

Hon. Maureen K. Ohlhausen:  -- wrote a word of paper on that.

 

Lawrence J. Spiwak:  All you antitrust lions are all --

 

Hon. Maureen K. Ohlhausen:  I know, right? And then I wrote a follow up --

 

Lawrence J. Spiwak:  -- Doug Ginsburg and all of you people just --

 

Hon. Maureen K. Ohlhausen:  Yeah. And then I wrote a follow-up one post the major questions after case, so -- the EPA case. I think you really need to look at kind of the core authority that's been given. And so in the FTC Act, it's case by case enforcement. And then what happens if you violate a rule? Congress has to say, "Well, what's the penalty?" Right? And in the FTC Act, the core authority is in a section of the act that only talks about case-by-case enforcement, cease and desist order, and has nothing to say about a penalty if a rule is violated. And so what the agency is hanging its hat on is, in addition to its enforcement authority, the FTC has this other -- this is supposed to be a body of expert's -- authority to get reports from industry to do six G studies where it can get information through compulsory process. And it had a little provision in there that said and to basically promulgate rules to carry this out.

 

And the interpretation had been, I think, that was for that authority. It wasn't rules with a force of law. And the FTC for 100 years never made a UNC rule. And it had often disclaimed that it had this. And so the idea that -- now, look, one court, the D.C. Circuit did say, oh, yeah, that little snippet counts, and you can basically do what you want with it. But since then, we've had, for example, the AMG case where the FTC had claimed that because Congress under Section 13 B gave it the ability to get a preliminary injunction, that meant it can get any type of equitable. Preliminary injunctions equitable, therefore it includes all equitable relief. And that's how it was getting money redressed. And it had several court opinions upholding that, not Supreme Court opinion, but when the Supreme Court looked at that, it unanimously said no. And it didn't just look at the language "preliminary injunction," it looked at how the whole FTC Act fits and the way the FTC Act worked and the way the authority -- what sections it was in and where it came from.       

 

So when you take that type of analysis and you look at the FTC's current claim that this little snippet in this kind of sub part of the FTC Act that covers a bunch of things that's not enforcement, and the statute still doesn't give the FTC any -- there's no provision of what is a penalty for violating the -- I think that's the kind of thing where looking at Chevron step zero, it's just not in there. And if you do look at the subsequent actions by Congress to specify rulemaking and to enact the particular rule solely as an unfair deceptive after practice rule, even though the FTC asks for authority, there's just not -- I don't think you can take two null sets together and say that somehow means the FTC has this authority, because Congress never said it didn't.

 

Lawrence J. Spiwak:  Tom, just real quick on the 230 stuff, and then I want to take our last segment and talk about application of the doctrine to where we are now. But just like I said, I was surprised -- we never saw the analysis.  But again, would that be a major questions doctrine without giving any private information away or privileged information away?

 

Thomas M. Johnson Jr.:  Yeah. No. I mean, we did release a legal analysis, Larry.

 

Lawrence J. Spiwak:   Oh, did you? Okay.

 

Thomas M. Johnson Jr.:  Yeah. We released a blog post detailing why we thought that we had the authority not to prescribe what we would think of as legislative prescriptive rules, but to interpret the scope of ambiguous terms within the Section 230 immunity shield. And the rationale there was the one articulated by Chris or the case he alluded to, City of Arlington. That was a case where the commission had determined what constitutes a reasonable time for purposes of local zoning authority. And that wasn't something that was a rule that everyone needed to comply with, and there were enforcement penalties behind it. It was essentially a direction to courts as to how to interpret an ambiguous provision of the act in particular cases that arose when zoning authorities exceeded what the commission said was a reasonable time. 

 

So what the blog post said was, under existing law, City of Arlington and the similar case, Iowa Utilities Board, Justice Scalia had ruled that the Court was not going to get into the business of distinguishing what is a jurisdictional provision, what's a non-jurisdictional provision.  We're going to permit agencies to interpret those ambiguous terms. I think what's going to be interesting is, is there still an appetite on today's Supreme Court for continuing to enforce or extend those City of Arlington type cases? I think the Loper Bright case, which raises not necessarily the jurisdictional question, but just the broader question of the scope of Chevron deference implicates those issues. And certainly, since we had those cases, we have now all of these major questions cases, and those canons, to my knowledge, weren't invoked in those earlier sets of cases. And I think Maureen's right. That canon sort of gets to this anterior question, did Congress intend to delegate in the first instance, sort of that Chevron Step Zero type question.      

 

I think once you get past that, you put that aside, we're dealing with what I've heard some people jokingly call it's a minor case, now. It's the minor questions doctrine. Then you get into the question of what's the scope of the delegation which might be what Loper Bright is about. Because I don't know that anyone's saying Loper Bright as much as being from New Jersey, I really support the New Jersey fishing industry in that case. I don't know that anyone's claiming that's a major question.  So it's an ordinary Chevron case.

 

Christopher J. Wright:  So, Larry, if I can follow on to that, some people trace the doctrine back to the decision 30 years ago in MCI v. ATT, where the question was whether the FCC had exceeded its authority by relieving long distance companies of the tariffing requirement because the market was becoming competitive. And I noticed that in the West Virginia case, Chief Justice Roberts cited the case, but didn't actually seem to claim it was a major questions case. But so here you go. This is a case that involved billions of dollars, and it was certainly major -- there'll be a lot of people from the FCC who would tell you that was pretty major. On the other hand, I think if you go to the general public and say the question that -- telephone companies that are in competitive markets don't need to file their rates anymore. The reaction would be, well, if that's a major question, what is it?

 

Lawrence J. Spiwak:  Well, that's the case, actually. I mean, I love that case, because that was the case where MCI actually went in and said, please tariff me.  And it actually led to section ten, the forbearance of the Telecom Act.

 

Hon. Maureen K. Ohlhausen:  Can I just give an interesting historical footnote to that?

 

Lawrence J. Spiwak:  Oh, we have so many -- this is great. Sure.

 

Hon. Maureen K. Ohlhausen:  Cert was granted on, I think, it was a motion in the D.C. Circuit, and it was decided without oral argument. And I know that because I was the staff attorney who --

 

Lawrence J. Spiwak:  There we go. I knew we had experts -- people with actual experience in this business.

 

Hon. Maureen K. Ohlhausen:  Yes. I don't know if that makes it a major question or a minor question.

 

Lawrence J. Spiwak:  It makes it important to me, Maureen. It makes it important to me. All right. Let's use our remaining time -- and this was excellent in explaining the doctrine -- on sort of hot issues in tech and telecom where the major questions doctrine is likely to come up. I think it is safe to say that we are dealing with very old statutes. FTC Act was passed in 1914.  Communications Act was passed in '34, updated over 25 years ago in the 1996 act. But as Justice Gorsuch wrote in his concurrence, an agency's attempt to deploy an old statute focused on one problem to solve a new and different problem may be a warning sign that an agency is acting without clear congressional authority. And if history is any guide, I doubt we're going to see any updates to any legislation anytime soon, which I always find sort of the interesting point about -- the Court keeps going, "Have Congress do it," and Congress -- well, let's just say nice things about Congress.       

 

So given Justice Gorsuch's statement, where do we think the potential flash points are in the current tech and telecom debate? I think a good place to start because I think it's the thing that helped pay from putting my kid through college and what I hope to ride into retirement on. Let's start with the FCC and net neutrality, which is obviously the biggest thing, but I'm sure there are others. So, Tom, as you wrote that -- and by the way, speaking of having help on the outside, thank you for citing us. We appreciate that. Where do we think this is going to go? I mean, net neutrality is a great example. As you said, it's mentioned repeatedly. And as Ian said, if I'm the chair and trust me, that's not going to happen.  Someone said this is going to take a lot of your resources, but net neutrality is mentioned in the President's executive order. It is religion. Title Two is going to happen. And I think similar to the student loan case, it's like if they lose, oh, well. But this one is going to be run up the flagpole. Let's talk about that for a minute. Tom, I'll start with you and then if anybody else has got some other examples where it might also pop up. But Tom and Ian -- let's start with you, Tom, and then Ian, and then we'll go with Chris.

 

Thomas M. Johnson Jr.:  Yeah. I think as I sort of previewed, I think major questions is going to be front and center in that case. I have clients who want to make every case a major questions case. And sometimes you say that's not the canon you want to be invoking. Sometimes it's a lenity case or it's avoidance case, and you lose credibility by trying to make every question a major questions case. But you'd certainly want to put that front and center for Title Two, given that opinion you have from Judge Kavanaugh.

 

And I think that the basic intuition there -- and there's this great exchange if you're interested in the doctrine and the puts and takes the doctrine -- great exchange between Judge Kavanaugh and Judge Srinivasan at the en banc stage in the D.C. Circuit taking opposite positions on this issue. Judge Srinivasan saying, well, Congress did speak clearly. It said, we are authorizing the commission to make this decision. Should this be a Title One or a Title Two service? And Justice Kavanaugh responding that no, there are textual indications there, just like there were elsewhere in the federal code with respect to cigarettes. There are textual indications there that Congress did not intend to subject broadband to the same utility style framework as the old Ma Bell telephone network. And to some extent, the major questions doctrine does function as this sort of one-way ratchet. It acknowledges the fact that we're a government of limited and enumerated powers, requires Congress to speak clearly if it's exercising one of those powers. And the courts are essentially policing that separation of powers principle.       

 

I wanted to put one other kind of related item on people's radar coming out of the FCC because I think it is going to raise similar issues, which is that the commission is facing a statutory deadline in November to interpret a provision that was inserted towards the end of the process of the Infrastructure Act governing digital discrimination. And it's another very broadly worded provision, just one provision, and kind of a sprawling infrastructure federal benefit statute. And a lot of folks want to interpret that provision asking the commission to conduct a rulemaking to sort of assess the state of digital discrimination, want to interpret that to impose a host of unfunded mandates on internet service providers. Everything from universal service mandates, build out mandates, price caps, all these things that typically you would only get through a Title Two framework, a wish list, a progressive wish list of net neutrality obligations of internet service providers. So we may not have to wait for Title Two in order to get some of this litigated, because I think that you may, depending on what the Commission does, see some of this in the November digital discrimination document.

 

Lawrence J. Spiwak:  I would commend my FedSoc blog on that very topic. That particular statute, 60506 actually has not one, not two, but three statements of policy, and they also use income as a contributing factor, which I'm old.  I remember litigating the 2008 Cable Franchise Reform Order where the commission rejected it. But as we're in an economics free zone, we'll deal with that later. Ian, what do you have to say about that? What do you see on the horizon that's coming up?

 

Ian Heath Gershengorn:  The main one that I had in my sights was also the net neutrality example. It does seem to me the most obvious and in some ways the most salient, and I don't have too much to add to what Tom said. Then Judge Kavanaugh said any argument that it's not a major question would fail the straight face test. And yet it seems like this is going to be something the commission is thinking seriously about. It seems to me like a mistake. Despite Chris's reference earlier, I think it's fair to say that Justice Kavanaugh is a lot closer right now to where the Court is on these questions. And I think an effort to regulate under Title Two and forbearance is exactly the kind of broad policy discretions over major areas of the economy that the Court is going to be deeply, deeply skeptical about. So that's certainly the one that I'm most focused on.

 

Lawrence J. Spiwak:  Chris, what do you think is on the plate here?

 

Christopher J. Wright:  Well, I've said what I have to say about net neutrality. Just read Justice Scalia's opinion and accept it. But we don't know what's on the plate. And I want to read from Justice Kagan's dissenting opinion in West Virginia v. EPA. A key reason why Congress makes broad delegations like Section 111 is so an agency can respond appropriately and commensurably to new and big problems. Congress knows what it doesn't and can't know when it drafts a statute. And Congress therefore gives an expert agency the power to address issues, even significant ones, as and when they arise. And so we don't know what the next one will be.

 

I guess I'd also like to make the point that we're moving backwards here. I know the constitution and exile thing was that we should go back to a pre–New Deal Congress. But here's one of the Supreme Court's first important interpretations of the Communications Act was in NBC v. United States, where it addressed what was called chain broadcasting regulation of broadcast networks. And the majority said, "True enough, the act does not explicitly say that the commission shall have the power to deal with network practices found inimical to the public interest." That would be the end of the case under the major questions doctrine, I think.  But it said that Congress was acting in view of regulation, which is both new and dynamic, and then went on to make exactly the point Justice Kagan made in dissent was that Congress intended the FCC to be able to respond to new and different problems. Interestingly, here's a quote from the dissent in that 1943 case "The subject is one of such scope and importance as to warrant explicit mention." So we're moving back to the pre-New Deal Supreme Court, I think.

 

Lawrence J. Spiwak:  All right. And Maureen, I've saved you for last because the remaining minutes I think the FTC has been far more active than the FCC is. So real quick, lay out where you think the major questions doctrine is going to come out in the plethora of rulemakings that is coming out of the FTC over the last two years.

 

Hon. Maureen K. Ohlhausen:  Well, certainly I've already touched on the unfair methods of competition, so that's really key. But also, under its unfair deceptive action practices Mag-Moss authority, the FTC has started what it's called a commercial surveillance rulemaking involving the collection and use of data primarily for advertising purposes. So if the FTC comes out with a highly restrictive rule so the FTC can have authority over deceptive or unfair practices and Congress has defined unfairness to require a substantial injury that a consumer can't reasonably avoid, and that's not outweighed by countervailing benefits to competition.  One of the things, if this is like basically a prohibition on targeted advertising, I could see that becoming a major questions issue, that is, apart from the rulemaking authority to the actual content of the rule itself.

 

Lawrence J. Spiwak:  All right. Well, we have actually come to the top of the hour, and I want to thank everybody. And as I was thinking about this, I was going to ask you all this question, but I realized, as you guys actually have to practice from the agencies, I don't want you to say anything controversial. That's the beauty of me working at a think tank. I can just throw M&Ms because they don't even let me in the building. But that's okay.

 

This has been an absolutely phenomenal panel. I think this is going to be interesting to see how this plays out over time. There's obviously still a lot of questions about the scope and application of the major questions doctrine. Where do we go from here? I think the consensus is we're not sure because we're not really sure -- I mean, if a regulator wants to push it, they could scramble the omelet. And then even if they lose and sometimes, and I've seen this, sometimes it gets past the appellate level, and for whatever reason, it doesn't go to the Supremes. We've seen a lot of that over the years.  We don't know. I think the best answer about the major questions doctrine is stay tuned. But this has been absolutely fascinating. I appreciate every single one of you. Ian Gershengorn, Chris Wright, Tom Johnson, Maureen Ohlhausen. This has been fantastic. Thank you all so much for participating on this, and we look forward to catching you next time.

 

Jack Derwin:  And thank you as well, Larry, for serving as our fantastic moderator today. Thank you to our audience for tuning into today's virtual event. Check out our website, fedsoc.org, or follow us on all the major social media platforms @FedSoc to stay up to date. With that, we are adjourned. Thank you.