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2021 Executive Branch Review Week

The Next Four Years

May 17 — 20, 2021

Executive Branch Review Week will feature eleven webinar panels over four days of programming discussing the theme "The Next Four Years".

All panels will be live-streamed and available to watch online, as well as recorded for later viewing on our YouTube channel.

Continuing Legal Education (CLE) credits will be available for the four webinars on Wednesday, May 19.

No cost to attend.

CLE is offered only for the webinars on Wednesday, May 19.
CLE registration: $50 for members, $100 for non-members
Up to 6 credits available, depending on state approval.

 
 

This event will be hosted on Airmeet, a virtual event platform that combines the benefits of a webinar with virtual networking, so plan to visit the networking lounge before, between, and after panel discussions/sessions. Airmeet works best on a laptop or desktop computer. Functionality is limited on phones. Chrome is the preferred browser for Airmeet. Please click the "Webinar Register" button above and proceed through the registration process on Airmeet. After you register, you will receive a confirmation email from Airmeet. On the day of the event, return to Airmeet and sign in with the email address you used to register. If you have any difficulties, check out our Airmeet Registrant Instructions visual guide or feel free to contact [email protected].

Monday, May 17

  • Non-Delegation? Or No Divesting? Art. I, Sec. 1 at the Founding and Today
  • Trade and Its Cross-Cutting Equities: New Horizons, New Challenges

Tuesday, May 18

  • Civil Rights in the New Administration
  • Reputational Risk in Banking: Is Operation Chokepoint the Answer?

Wednesday, May 19

  • Regulating Social Media in the New Administration
  • Settlement Payments to Non-Governmental Third Parties
  • Religious Liberty in Transition?
  • State Sovereignty or Fair-Weather Federalism?

Thursday, May 20

  • Climate Change, Environmental Justice, and the Environmental Agenda
  • Is Faithful Execution being Devoured By Factional Execution?
  • Judicial Nominations and Confirmations

Networking Lounge

Airmeet, our new online platform for the Executive Branch Review Conference, offers us the exciting opportunity to network with one another, and with speakers, moderators, and FedSoc staff. Before, between and after panel discussions, feel free to click the Lounge button at the top of your screen and join a table of fellow conference attendees. As sessions conclude, we'll also send a "Lounge Alert" with a link you can click to make it easy to join the Lounge. We'll also send alerts to the Lounge before panel discussions begin, so there is no need to worry about missing any of the panels.Please plan to join us in the "Lounge" for a unique networking opportunity. It's a great way to stay in touch with everyone until we can convene in person once again.  We look forward to seeing you there!


Confirmed participants to date:

  • Hon. Alice M. Batchelder, U.S. Court of Appeals, Sixth Circuit
  • Mr. Greg Baer, President and Chief Executive Officer, Bank Policy Institute
  • Prof. Nicholas Bagley, Professor of Law, University of Michigan Law School
  • Hon. Elizabeth L. Branch, U.S. Court of Appeals, Eleventh Circuit
  • Hon. Brian P. Brooks, Former Acting Comptroller of the Currency, Office of the Comptroller of the Currency
  • Ms. Nadira Clarke, Partner and Section Chair for Environmental Safety & Incident Response, Baker Botts LLP
  • Mr. Art Coleman, Managing Partner and Co-Founder, EducationCounsel
  • Mr. Eric Dreiband, Partner, Jones Day
  • Hon. W. Neil Eggleston, Partner, Kirkland & Ellis; Former White House Counsel
  • Mr. Tony Francois, Senior Attorney, Pacific Legal Foundation
  • Prof. Thomas D. Grant, Faculty of Law, University of Cambridge 
  • Hon. C. Boyden Gray, Founding Partner, Boyden Gray & Associates
  • Prof. Philip Hamburger, Maurice & Hilda Friedman Professor of Law, Columbia Law School
  • Hon. Gail L. Heriot, Professor of Law, University of San Diego School of Law
  • Mrs. Allyson N. Ho, Partner, Gibson Dunn
  • Hon. Sandra Ikuta, United States Court of Appeals, Ninth Circuit
  • Hon. Edith H. Jones, U.S. Court of Appeals, Fifth Circuit
  • Prof. F. Scott Kieff, Fred C. Stevenson Research Professor, George Washington University Law School 
  • Hon. Joan Larsen, U.S. Court of Appeals, Sixth Circuit
  • Mr. Matt Leopold, Partner, Hunton Andrews Kurth
  • Mr. Gregory M. Lipper, Partner, Clinton & Peed
  • Prof. Daniel Mach, Director, ACLU Program on Freedom of Religion and Belief; George Washington University Law School
  • Hon. Kenneth L. Marcus, Founder and Chairman, Louis D. Brandeis Center for Human Rights Under Law
  • Ms. Joan Marsh, Executive Vice President of Federal Regulatory Relations, AT&T
  • Prof. Jennifer Mascott, Assistant Professor of Law, Antonin Scalia Law School
  • Dr. Joshua Meltzer, Senior Fellow, The Brookings Institution 
  • Hon. Steven Menashi, United States Court of Appeals, Second Circuit
  • Mr. Hashim M. Mooppan, Former Deputy Assistant Attorney General, Civil Division, U.S. Department of Justice
  • Hon. John B. Nalbandian, United States Court of Appeals, Sixth Circuit
  • Hon. Andrew S. Oldham, U.S. Court of Appeals, Fifth Circuit
  • Mr. Jesse Panuccio, Partner, Boies Schiller Flexner LLP
  • Prof. Christina Parajon Skinner, Assistant Professor of Legal Studies & Business Ethics, The Wharton School, University of Pennsylvania
  • Prof. Nicholas Parrillo, William K. Townsend Professor of Law, Yale Law School
  • Prof. Eloise Pasachoff, Professor of Law; Anne Fleming Research Professor; Associate Dean for Careers, Georgetown Law
  • Prof. Chris Peterson, John J. Flynn Endowed Professor of Law, University of Utah, S.J. Quinney College of Law
  • Hon. Noah Phillips, Commissioner, Federal Trade Commission
  • Hon. Neomi Rao, United States Court of Appeals, D.C. Circuit
  • Prof. Ed Rubin, University Professor of Law and Political Science, Vanderbilt Law School
  • Mr. Justin A. Savage, Partner, Sidley Austin LLP
  • Hon. Virginia Seitz, Partner, Sidley, Former Assistant Attorney General, Office of Legal Counsel, U.S. Department of Justice
  • Ms. Carrie Severino, Chief Counsel and Policy Director, Judicial Crisis Network
  • Hon. Roger Severino, Senior Fellow, Ethics & Public Policy Center
  • Prof. Carolyn Shapiro, Professor of Law, Chicago-Kent College of Law; former Solicitor General, Illinois
  • Prof. Theodore M. Shaw, Julius L. Chambers Distinguished Professor of Law and Director of the Center for Civil Rights, University of North Carolina School of Law
  • Hon. Nathan Simington, Commissioner, Federal Communications Commission
  • Mr. K. Dane Snowden, President & CEO, Internet Association
  • Prof. Ilya Somin, Professor of Law, Antonin Scalia Law School
  • Mr. Judd Stone, Solicitor General, Texas
  • Ms. Anna St. John, President, Hamilton Lincoln Law Institute 
  • Mr. Steven Tepp, President & CEO, Sentinel Worldwide
  • Ms. Farnaz F. Thompson, Partner, McGuireWoods LLP, Former Deputy General Counsel for Postsecondary Education, U.S. Department of Education
  • Ms. Hana Veselka Vizcarra, Staff Attorney, Environmental & Energy Law Program, Harvard Law School

No cost to attend.

CLE is offered only for the webinars on Wednesday, May 19.
CLE registration: $50 for members, $100 for non-members
Up to 6 credits available, depending on state approval.

 
 

This event will be hosted on Airmeet, a virtual event platform that combines the benefits of a webinar with virtual networking, so plan to visit the networking lounge before, between, and after panel discussions/sessions. Airmeet works best on a laptop or desktop computer. Functionality is limited on phones. Chrome is the preferred browser for Airmeet. Please click the "Webinar Register" button above and proceed through the registration process on Airmeet. After you register, you will receive a confirmation email from Airmeet. On the day of the event, return to Airmeet and sign in with the email address you used to register. If you have any difficulties, check out our Airmeet Registrant Instructions visual guide or feel free to contact [email protected].

 

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10:30 a.m. - 11:00 a.m.
Networking Lounge Open
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Airmeet, our new online platform for the Executive Branch Review Conference, offers us the exciting opportunity to network with one another, and with speakers, moderators, and FedSoc staff. Before, between and after panel discussions, feel free to click the Lounge button at the top of your screen and join a table of fellow conference attendees. As sessions conclude, we'll also send a "Lounge Alert" with a link you can click to make it easy to join the Lounge. We'll also send alerts to the Lounge before panel discussions begin, so there is no need to worry about missing any of the panels.

Please plan to join us in the "Lounge" for a unique networking opportunity. It's a great way to stay in touch with everyone until we can convene in person once again.  We look forward to seeing you there!

11:00 a.m. - 12:30 p.m.
Non-Delegation? Or No Divesting? Art. I, Sec. 1 at the Founding and Today

Administrative Law & Regulation and Federalism & Separation of Powers Practice Groups

Topics: Administrative Law & Regulation • Separation of Powers • Federalism & Separation of Powers • Constitution • Founding Era & History
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Whether as the result of hyper-partisanship or as a residue of the constitutional design for lawmaking, government by executive “diktat” is lately increasing.  Many of these executive actions appear to have dubious—if any—statutory authority, but the courts have been reticent to validate objections along these lines.  The U.S. Supreme Court has indicated a willingness to revisit and possibly to reinvigorate the non-delegation doctrine (with 5 Justices adhering to that view publicly), or at least to put some teeth into its supposedly constraining intelligibility principle.  To do so, the Court first will have to grapple with whether Article I, Section 1 of the Constitution contains a non-delegation principle at all?

Featuring: 

  • Prof. Nicholas Bagley, Professor of Law, University of Michigan Law School
  • Prof. Philip Hamburger, Maurice & Hilda Friedman Professor of Law, Columbia Law School
  • Prof. Jennifer Mascott, Assistant Professor of Law, Antonin Scalia Law School
  • Prof. Nicholas Parrillo, William K. Townsend Professor of Law, Yale Law School
  • Moderator: Hon. Neomi Rao, United States Court of Appeals, D.C. Circuit

Speakers

Event Transcript

Dean Reuter:  Welcome to the ninth annual Executive Branch Review Conference hosted by The Federalist Society's practice groups. I'm Dean Reuter, Vice President, General Counsel, and Director of Practice Groups at The Federalist Society. Thank you so much for being with us, today.

 

      EBR9, as we call, it, will focus on the administrative state and the next four years — what to hope for and what to expect in the next four years. EBR9, as we call it, is live on The Federalist Society's website but also live streaming on YouTube, Facebook, Twitter, LinkedIn, and other outlets, and open to the public. So feel free to spread the word even at this late hour. We're also, for the first time ever, on the Airmeet platform, which will allow us to visit with you and you to visit with one another, friends, and colleagues, all in the Airmeet lounge before, after, and between sessions. It's not too late to register on Airmeet through our website to enjoy the networking opportunities in the lounge, and I hope to see you there.

 

      To get us started, today, we'll begin our first panel on congressional delegation or divestment of congressional power moderated by D.C. Circuit Court of Appeals Judge Neomi Rao. To save time and because all speaker panels are on our website and in the conference app, I've asked our moderators to be brief in their introductions of speakers, so I'll try to set a good example introducing Judge Rao, only that she holds degrees from Yale and University of Chicago Law School, and she's had clerkships with Judge J. Harvie Wilkinson and Justice Clarence Thomas. She also founded the Center for the Study of Administrative Law at the Scalia Law School, and she's headed OIRA, making her a true ad-law expert or, perhaps, a true ad-law nerd.

 

      With that, Judge Rao, the floor is yours.

 

Hon. Neomi Rao:  Thank you, Dean. It's a pleasure to be on the kickoff panel for this annual Executive Branch Review Conference. And today, indeed, the first panel has a number of all-stars to discuss the non-delegation principle and the extent to which it is rooted in the text, structure, and original meaning of the Constitution.

 

      Article I, Section 1, vests the Constitution's limited legislative powers in Congress, and our speakers will consider what this means through delegating rulemaking power to Executive Branch agencies. Against the backdrop of an ever-expanding administrative state, the questions about delegation go to the heart of what it means to live in a constitutional republic. Our panel today will address questions such as to what extent is a principle of non-delegation or no divesting consistent with the original meaning of the Constitution? What evidence should we look to when considering questions regarding the existence and scope of a non-delegation principle? What did the text and structure of the Constitution reveal about whether delegation is permissible, and what are the consequences of originalist debates for the modern administrative state which is built on longstanding and expansive delegations of authority to administrative agencies? And, finally, whether and how should courts enforce a principle of non-delegation? Can courts effectively enforce a non-delegation principle, or is it one that depends on the political branches?

 

      Each of our scholars on our panel have written extensively about these subjects, and their full information can be found on the website. We're going to proceed in the following order:  We start with Professor Nick Bagley and Professor Nick Parrillo, who will provide the case against an originalist non-delegation principle. Then we will hear from Professor Mascott and Professor Hamburger, who will discuss the historical, textual, and structural reasons for supporting a non-delegation or no-divesting principle.

 

      After the introductory remarks, we will open it up to questions from the audience. There are two ways to ask a question:  You can submit a written question through the Q&A tab in the upper, right-hand corner of your screen. You can also ask questions live by pressing the Raise Hand button.

 

      And so, with that, I'm going to turn it over to Professor Bagley to kick things off.

 

Prof. Nicholas Bagley:  Thank you so much, Judge Rao. I am beyond honored to be here, and I am excited to have this conversation about the non-delegation doctrine.

 

      So, as you all know, there are now five justices on the Supreme Court that have signaled their receptiveness to reviving the non-delegation doctrine, and the question is what's the justification, the primary justification on offer for reviving a doctrine that, for most of American history, has been largely defunct? And, for Justice Gorsuch, who's leading the charge to revive the doctrine, the answer comes down to originalism — that the founders believed it would violate the Constitution for Congress to delegate too much power with too little guidance. As my co-author Julian Mortenson and I explain in a recent paper, though, that historical claim is mistaken. In our judgment, there was no such thing as a non-delegation doctrine at the Founding. That sounds like an arresting claim, but bear with me for a moment as I walk you through the basics of the argument and the evidence.

 

      So I want to start with just the very simple point that originalists aim to discern the original public meaning of the Constitution at the moment of ratification. That means it can't be a secret or a hidden meaning. It must have been the meaning that the public would have assigned to its rather spare text. And, right out of the gate, it's pretty noteworthy that the text says nothing about delegating power.

 

      Now, its advocates brushed past that, arguing that the founders would have understood the assignment of all legislative powers to Congress to preclude certain types of broad delegations. But what I want to just push at the beginning is that that's an implication from the text, and it's not a necessary one. Delegating authority is, at least arguably, a way to exercise legislative powers; it doesn't mark an alienation or an abdication of those powers. And that's why originalists have traditionally leaned so hard on history, here. To really carry the argument, they've got to show that the founders would collectively have read that implication into Article I. And not only that, they've also got to demonstrate that the founders agreed, at least in principle, on the line that divided permissible from impermissible delegations, even in the absence of textual guidance as to where to draw that line from Article I. Absent that showing, this non-delegation principle would be entirely vacuous.

 

      So, if the founders did hold such views about the propriety of delegation, it really shouldn't be that hard to show. On the originalist's telling, the non-delegation doctrine was understood at the Founding to be a critically important — indeed an indispensable feature of the separation of powers. And the Founding era is especially rich in primary sources. You've got political tracts, polemical pamphlets, newspaper battles, records of state ratifying conventions, and extensive reports of congressional debates. Those sources collectively contain thousands of pages of sophisticated and extensive constitutional debate on issues ranging from implied powers to presidential removal to the scope of the commerce power. So, if the non-delegation doctrine existed, the historical records should be littered with evidence of a shared commitment — a shared understanding — of something so foundational to the new republic.

 

      But, if you look at the sources, they tell a very different story. Prior to ratification, sweeping delegations of legislative power were a ubiquitous feature of Anglo-American law. Parliament delegated legislative power to ministers, colonies, corporations, to the king; colonial legislatures delegated legislative powers to governors and to other state officials; the states delegated legislative power to the Continental Congress; the Continental Congress delegated legislative power to territorial administrators. This practice of freely delegating legislative power flowed naturally from contemporary political theory which held that all government power had been originally delegated from the people and saw nothing intrinsically objectionable about further delegations of that same authority.

 

      Now, some originalists say the Constitution marked a clean break with all of this practice. But, if that were so, it's pretty telling they didn't lock that view into the text of the Constitution itself. Nowhere have originalists assembled historical evidence that the founders, as a group, read the vesting clause to mark such an abrupt departure from what came before. And that evidentiary gap can't be overcome by invoking the founders' oft-repeated concerns about the consolidation of governmental power in a single branch, right? It does not follow from that impulse that they collectively believed that a particular legal doctrine was a necessary implication of the constitutional design.

 

      In any event, early practice under the U.S. Constitution certainly suggests no shared commitment to anything like the non-delegation principle. The First Congress passed dozens of laws delegating wide discretion to the president, to cabinet secretaries, to federal judges, to territorial governors, to tax officials. Many of these laws offered little or no guidance, including laws about issuing, as may be necessary and best suited to the circumstances of the district, any and all civil and criminal laws for the Northwest Territory; the first patent law that gave to cabinet secretaries the ability to deem the invention of new inventions sufficiently useful important; and Congress also forbade trade with Indian tribes without a license, and it required all licensees to be governed by such rules and regulations as the president shall prescribe. So non-delegation doctrines are raised to none of these laws — not once — nor to any of the others during the First Congress delegating wide authority to the president or his subordinates.

 

      Now, our critics dismiss these laws for various reasons. This law was about foreign affairs of the territories; that law wasn't quite important enough; this other law didn't involve private rights. But here's the key thing to notice about all of those objections:  Not one of those reasons draws on an explanation that anyone actually offered up at the time as for the constitutionality of the delegation in question — none. These are post-hoc rationalizations offered to fit the evidence to the theory; they're not historically grounded distinctions.

 

      Now, over the course of the 1790s, a few Republicans, including James Madison and Albert Gallatin, did occasionally voice something sounding like the non-delegation doctrine, in particular in the 1792 debate over the post roads and the 1798 debate over the authority to raise a provisional army. But their arguments were derided by their peers — with good reason — as having been manufactured to serve a political agenda. And, in every case, Congress rejected their objections supposedly in a reflection that any views about the non-delegation doctrine were certainly not widely shared.

 

      And so close attention to early practice betrays no commitment to the principle that some category of laws were beyond the constitutional pale. And, even if it did, it would suggest that laws citing post roads and laws about raising armies would run afoul of the non-delegation principle. But delegations like those would not run afoul of any of the versions of the non-delegation doctrine that are being pushed today. And this is the originalists' best evidence from the Founding era. For those suspicious of centralized agency authority and strong federal government, it is comforting to believe that the founders believed in the non-delegation doctrine. But it is just not what the historical record shows.

 

      Thank you so much.

 

Hon. Neomi Rao:  Next, we'll hear from Professor Parrillo.

 

Prof. Nicholas Parrillo:  Thank you very much, Judge. And thank you to The Federalist Society for the opportunity to be here.

 

      So the debate on delegation and original meaning may seem like a binary one between those who deny any original limit on delegation and those who say there was a limit. But, actually, it's possible for people who think there was originally a limit to come to vastly different views about what the limit was, and I'll talk about some of those different views and give some responses to each of them.

 

      Some believers in an original limit think the limit was categorical. According to Justice Thomas's separate opinion in the Amtrak case in 2015, delegations of rulemaking power to administrators were categorically unconstitutional if they coercively governed the conduct of private persons. On this view, such binding rules were only constitutional if they turned simply on fact findings or rested on the president's Article II powers, such as over foreign and military affairs. So we might call this the categorical critique of today's loose non-delegation doctrine.

 

      But other critics of delegation don't think originalist sources support a categorical limit. They think the sources indicated a more amorphous kind of limit. In this view, it isn't that Congress could never empower administrators to make rules; rather, it's that, whenever Congress authorized rulemaking or any other agency action, it was not to give administrators too much discretion. As John Marshall wrote in Wayman v. Southard in 1825, Congress could not let administrators decide important subjects, but it could let administrators fill out the details.

 

      But, if you start from that premise, where does it lead you? You could argue it's the basis for critiquing today's loose doctrine, albeit on a non-categorical basis. That is, Congress has delegated a lot of things that seem important, so the judiciary should strike down those delegations. But one might object that this non-categorical critique generally encourages courts to strike down statutes without giving them any really predictable method as to which statutes to strike down. "Important" is just too vague. Given this objection, it might be better for courts to be reticent in striking down delegations except, perhaps, in the most outrageous instances once or twice a century, which is pretty much how the non-delegation doctrine has operated up till now. From this perspective, the non-delegation doctrine today, officially established but hardly ever enforced, is a reasonable judicial reaction to an underspecified original meaning. This is consistent with the view of Justice Scalia, who justified the non-delegation doctrine's looseness by saying that the limit, being a matter of degree and not of principle, was not readily enforceable by the courts.

 

      Now, in my own research, I have not focused on whether there was a limit; I assume there was. But, instead, I focus on what practical content the original limit had if any can be identified. I've examined several types of originalist sources, and I'll say a word particularly about early congressional statutes.

 

      As Nick and Julian have emphasized, these acts contain many delegations of rulemaking powers to administrators. The non-categorical critics have responded to these statutes by saying that the things specified in the statutes were important, while the things delegated in the statutes were details. The analysis is inevitably post-hoc. And, while the critics have posited some mid-level factors to make the analysis more determinate — for example, that decisions regarding agency jurisdiction are more likely to be important — I'm concerned that the overall categories of "important" and "detail" remain so elastic that the theory risks being non-falsifiable. Meanwhile, the categorical critics have responded to these statutes by saying that the statutes fall into areas that are exceptions to the limit on delegations, such as government benefits or foreign and military affairs.

 

      Now, I should first note that these ostensible exceptions actually cover the vast majority of early federal statutes. Only a small minority of early federal statutes were binding and domestic. But, while those statutes were few, they did contain at least one broad delegation of rulemaking authority, and that delegation was part of the direct tax of 1798, on which I've done a recent study. Congress apportioned this tax among the states with a set dollar quota for each state. The quota was filled within the state primarily by the state's landowners who each had to pay tax according to what their land was, quote, "worth in money." The legislation gave no further definition of value nor any method for deciding value. Because federal assessors in one region of a state might do valuation differently than their counterparts elsewhere in the state, Congress established for each state a federal board of tax commissioners. Each federal board had the power to divide its state into districts however it chose and to uniformly revise the taxable values of all land in any district up or down by any percentage, quote, "as shall appear to be just and equitable," unquote, with no further definition or methods or criteria in the statute. And the federal boards exercised this power aggressively. For example, the federal board covering Maryland raised the value of all houses in Baltimore upward by a hundred percent.

 

      These mass revisions were rulemakings under the Supreme Court's case law. Indeed, they exactly matched the fact pattern of one leading case defining rulemaking. The revisions were not subject to any judicial review, and they were not the subject of any clear constitutional objections in the extensively recorded discourse about the tax. The categorical critics might argue that each board, in deciding what was just and equitable, was making the kind of factual determination that is allowable under the categorical theory as distinct from a determination of policy. But, if these critics claim that just and equitable mass revisions were matters of fact devoid of policy, that renders their exception for facts very broad, effectively blessing many — perhaps all — modern rulemakings.

 

      Contemporaries in the 1790s recognized that land valuation was highly uncertain and contested. There was no consensus about methods, data were thin, and so forth. If you look at the states' real estate taxes at this time, the relative taxable value of land across different regions of a state was always decided through the political process by the state legislature itself and was notoriously politicized. That said, blessing mass-distributive decisions like these as factual determinations would actually fit with a line of Supreme Court cases going back to before the intelligible principle test in which the Court upheld rulemakings as turning on questions of fact even when they were obviously subjective questions of policy. So, if that's the case, then perhaps the categorical critique is not as categorical as it might first seem.

 

      Thanks.

 

Hon. Neomi Rao:  Next, we'll hear from Professor Mascott.

 

Prof. Jennifer Mascott:  Good morning. Thanks to The Federalist Society for hosting this important panel discussion.

 

      Stepping back a bit for the larger picture, not necessarily based just on the work of the scholars here, I have to say I found it perplexing, over the past several years, that individuals and scholars who have at times claimed various concerns about the way in which executive power is exercised could at the same time support the claim that the Constitution lacks any meaningful delegation constraint and sometimes be passionate about that view. Broad delegations, or at least the interpretation that statutes grant broad, almost-unchecked delegations, have led to the exercise of vast power in a presidency across multiple administrations to support rapidly, wildly changing policies:  power on the one hand, for example, to defer the removal of broad classes of individuals under immigration laws; power on the other to build a border wall and declare broad emergencies.

 

      Of course, all agree the president and, under his leadership, administrative agencies need to be able to exercise authority to keep the country safe and to vigorously carry out policies put in place by elected representatives. But the reality is that, if indeed there really is no meaningful delegation constraint in the Constitution, that view combined with incredibly broad modern views of preemption and an historic broad view of executive power and national security in foreign affairs, really indeed would just about add up to the view that a president's powers are total, at least even in the domestic context.

 

      But what is one to do? If the Constitution really does lack a delegation constraint, interpreters cannot just read one into the Constitution. And perhaps folks who contend there's no delegation constraint are actually comfortable with broad delegations because, in the modern age, the delegations are in the end more diffuse, giving power across administrative agencies who often now operate independently from the president rather than giving broad power to the president who sits at the top of the Executive Branch. But then the problem there is that individuals exercising broad policymaking power are not accountable to the electorate.

 

      It is true that proponents of the view that the Constitution lacks delegation constraints don't necessarily think that Congress should — or has — uniformly delegated broad power to the executive. Nick Bagley just wrote a Washington Post column contending that the public health and quarantine laws have a narrower meaning than the way in which the Executive Branch has interpreted them. And Congress, of course, could always choose to delegate less power to the executive. But I have my doubts that congressional choice alone is the answer to delegation concerns and the constant drift of more and more power away from elected representatives to non-elected agency leaders.

 

      Just one small but currently poignant example:  Before I left recent service in the Executive Branch, I was asked to interpret a statute addressing newly enacted home confinement authority for federal prisoners during the pandemic to stop the spread of COVID in federal jails. And, unfortunately or not, depending on one's policy perspective, that CARES Act emergency pandemic authority is limited just to the duration of the pandemic, meaning that, at the end of the pandemic, those prisoners who have been sent home, some of them would have to return to jail.

 

      Understandably, there are a number of members of Congress and interest groups who have concerns about that policy outcome. This is a case where Congress could fairly easily, with a one-sentence technical correction, fix the perceived problem and make sure that folks once at home can stay at home. But, instead, members of Congress have chosen to lobby executive officials and ask that bureau of prison officials instead have the discretion to reinterpret the statute and expand home confinement authority.

 

      This seems like a fairly simple, straightforward issue for Congress to address by policy. But, instead, these days, all eyes are on the executive. The question for us today on the panel is:  Is this set of affairs okay? Does the Constitution really permit policymaking of any breadth on the private stage to be handed over to the executive or to agency officials?

 

      Nick and Nick have provided great contributions to the literature in their work looking at the early congressional statutes. Their work is well written and very insightful, and I encourage everybody to read it. But in the end, the pro-delegation literature just does not support the conclusion that the Constitution clearly lacked meaningful delegation constraints. Many of the early delegations were much narrower or more nuanced than has been indicated in some of the work.

 

      Professor Bagley's article suggests there's a very high burden to establish a delegation constraint in the Constitution — that, surely, if the Constitution contained a non-delegation principle, discussion of it would have been more ubiquitous. Is this correct? If a constraint is understood at the time or inherent in the structure of a document, would there necessarily have been broad discussion of it? Bagley and his coauthor Mortenson contend there were thousands of pages of constitutionally oriented debate around the time of the First Congress. But, really, at least once the Constitution was ratified, that debate in the First Congress was about how to raise revenue and pay off debts and get the government up and running. Much of the debate was not about grand constitutional issues, and the clearest or most uncontested principles, of course, would not have been discussed much at all.

 

      Also, which way does the burden cut when interpreting the Constitution, which created a new system of separated powers and created a new federal government that lacked any power without an affirmative grant of authority in the Constitution? If the Constitution authorized all grants of delegation from Congress to the executive, then perhaps it would have said so. Bagley and Mortenson cite in their article many discussions in other contexts of the permissibility of delegated power. But there is no such general discussion of Congress having authority to delegate policymaking power to the executive however it sees fit. Instead, Article I, Section 7, imposes very fine-tuned procedural bicameral and presentment requirements, restrictions on the form of action that just are not present in Article II for the executive. Those restrictions mean something, and it's up to us to figure out what it is.

 

      Professor Ilan Wurman has written a wonderful piece, just published in the Yale Law Journal, showing also that there was in fact a fair amount of deliberation over delegation constraints. James Madison at one point proposed a constitutional amendment specifying branches cannot delegate away their power, and the response was that such an amendment was unnecessary because the principle was inherent in the Constitution. And, as Professor Bagley noted, there was some discussion of delegation in the post roads debate, and there was a small amount of discretion given in the end. But the original proposal, one of them to give the president the power to establish roads as he saw fit, was indeed taken off the table, and there was discussion from many folks at the time that at least there should be some consideration of whether there was a constraint on the breadth of power that could be delegated.

 

      More strikingly, the delegation scholarship just is not correct in the conclusions that are drawn from customs laws at the time and laws involving debt repayment. Last year, I published a piece on early customs laws in the George Washington Law Review. Those laws were enacted with significant deliberation, detail, and care — in some cases even before Congress bothered to create any executive department at all. It was critical to the members to ensure that various regional interests were accommodated and balanced in customs duties because of the impact those duties would have on the local economies throughout the new nation. And this ability to represent varied regional and state interests could not have been accommodated if one entity in the executive had been singlehandedly determining customs rates.

 

      Even Alexander Hamilton, once he became treasury secretary — not one known to shy away from power — repeatedly sought congressional guidance from carrying out the customs laws, asking Congress for their interpretation of the relevant laws and requesting permission even for relatively small decisions such as a change in the location of a port for the unloading of goods during a weather emergency.

 

      Finally, pro-delegation scholarship suggests that somehow the non-delegation position might be illegitimate if there are too many exceptions where the executive can indeed exercise discretion. But this is counterintuitive. The non-delegation position tries to be careful and modest and can either be articulate, as has been mentioned, by saying that Congress must decide important subjects or that Congress must make the decisions itself to impose binding obligations of private actors. The argument on the other side that we must claim more and try to suggest there can be no executive discretion at any time in any context or the delegation position is invalid is, of course, incorrect.

 

      And, in a number of instances early on where discretion was given, it was in the exercise of clearly executive activity like decisions about how to administer debt repayment or enforce clearly detailed revenue laws. Even in more purely legislative cases like Nick Parrillo's discussion of the 1798 real estate tax that he beautifully unfolds in his article, congressional determinations, in the end, were detailed picking the overall amount of tax to be paid, making it a temporary tax, and specifying details about how it was to be calculated.

 

      Thank you very much for your time, and I look forward to further discussion in Q&A.

 

Hon. Neomi Rao:  Thank you, Jen. We'll next hear from Professor Hamburger.

 

Prof. Philip Hamburger:  I'm going to begin not by commenting on delegation, but by removing my tie, as I'm in a rather hot office. Now that I can relax, I'm free to talk. So thanks to the two Nicks for their remarks. And I must say I especially appreciate Jennifer's thoughts, which I think are absolutely on point.

 

      I want to begin by discussing some of the underlying scholarship. I know that's difficult to do in a talk because scholarship necessarily is very detailed and involves footnotes. But I think it's necessary to do that. And then we'll try to get some more general comments at this time.

 

      So let's begin with the Mortenson-Bagley vision of uninhibited delegation. Forgive me; it sounds like delegation gone wild. I think the problems are historical and conceptual. Now, for the history, if you want the details, I invite you to look at my essay, "Delegating or Divesting?" in the Northwestern Law Review, and you can judge for yourself.

 

      I'd like to just talk about the Article's historical method because I think it's very relevant here. The historical method may seem tedious, but it actually matters. Mortenson-Bagley selectively quote passages from John Locke and Thomas Rutherforth, leaving out other passages that make clear these theorists actually objected to delegation generally. And I've asked, "Why would they do that?"

 

      They assert that executive power is merely a law-executing power even though some of the very quotes they rely on take a much broader view of executive power. Why then would they say that? Although Parliament had absolute power, they use quotations about parliamentary power to make claims about delegation by Congress. Why would one do that? Although Congress, under the Articles of Confederation generally had no legislative power, they used quotations about that Congress to argue for delegation by the Constitution's Congress. How does that make sense?

 

      They claim that separation of powers did not bar delegation as if the Constitution's allocation of powers were the initial distribution of cards in a card game, leaving the players free to redistribute them. How could one say that? They claim that unlimited delegation has precedence in early federal examples of delegated lawmaking but offer no example — not a single one — of delegated national domestic rulemaking that was binding on the public. Not one example. Why would one omit this unless it didn't exist? And they say there was no non-delegation doctrine at the Founding, but don't even mention Madison's proposal at the Constitutional Convention that the executive shall have authority, and I quote, "to execute powers not legislative nor judiciary in their nature." They were delegated by the national legislature. A proposal rejected only because its objectives had already been accomplished. The Constitution delegated or vested power, so it's not necessary for the legislature to do so. Why would one omit this?

 

      Now, I do not know what to say about historical scholarship that omits so much that counts against its theory, but I think you can judge for yourself. And I'm sorry to have to say that, but I just find it puzzling.

 

      Now, second, let's look at a conceptual difficulty, and I think this is even more important. Their article attacks the non-delegation doctrine, but the very notion of a non-delegation doctrine, I think, is a distraction. Eighteenth-century political theorists generally talk about delegation; politicians talk about it; even the Tenth Amendment talks about powers not delegated. But the Constitution distributes its powers more specifically in terms of vesting — a particular type of delegation.

 

      The Constitution's vesting power goes further than the political theory in barring transfers of power. Congress cannot divest itself of powers that are vested in it by the Constitution, and Congress cannot vest its powers where the Constitution did not vest them. So the Constitution's vesting language sharpens the delegation question. The attack on the non-delegation doctrine, therefore, seems strangely misdirected. Rather than confront the Constitution's vesting of powers, it takes aim at the 1935 judicial doctrine of non-delegation. The Constitution departed from what was then conventional language about delegation and thereby invites us to speak not merely in generic terms about delegation but specifically about vesting and divesting. That's the Constitution's language; that's my view, for whatever that's worth; that was the position of the New Civil Liberties Alliance in Gundy; and Justice Gorsuch also hinted at this.

 

      So I think the debate is no longer the same as in the 1930s. The attack on the non-delegation doctrine made sense 85 years ago, but, for purposes of the current debate, it actually looks rather dated. It looks like an assault on the dead. So I would encourage the authors to engage for the living. We have an evolving — dare I say a living — constitutional debate, and the authors should consider participating in that debate rather than taking potshots at a phantasm from the 1930s.

 

      Now I'd like to say also a few words, if I may, about the Parrillo thesis. Nick Parrillo has written a very serious and careful historical article on the 1798 tax statute, and he alluded to that in discussing delegation as a possible example of the sort of delegation that might justify current delegation. And I just want to note that there are some problems with this — not historically but perhaps constitutionally.

 

      For one thing, the First Congress and the Fifth Congress took very different approaches. It's nice to learn so much about the Fifth Congress, but the First Congress took the opposite approach to taxation. As explained long ago by Leonard White, the First Congress carefully set up a revenue system, and I quote, "which, for some years, avoided the necessity for discretionary valuation of property." In other words, how can we rely on the Fifth Congress to show the Constitution's meaning when the First Congress took a different approach? I don't know. The Article says that the Constitution's earliest lawmakers relied on administrative rulemaking. Well, not quite. The fifth-earliest lawmakers did that. So, use that as you will. It doesn't seem to me quite the determinative evidence one would seek.

 

      Second, and even more importantly, the rulemaking that Nick Parrillo alludes to was made by commissioners who essentially took appeals from valuations and made rules for valuations by assessors. But their rules are only binding on themselves and their assessors — that is, only on federal officials. They reveal nothing about rules that bind the public. I don't want to belabor this point, but it seems to me that it fits in the general observation that both Jennifer and I have made, and I think others, too, that proponents of delegation gone wild have yet to give an early federal example of delegation that's national and domestic and binding.

 

      Now, if I have a minute left, I just want to say one other thing of a more general, less-focused sort. Why vesting? Why worry about non-delegation? Well, it's a crucial expression of consensual government. It preserves the people's constitutional choices; it preserves their power to elect their lawmakers; it preserves the value of voting rights. If you care about retail deprivation's voting rights, how can you not care about the wholesale removal of legislative power out of the hands of elected lawmakers? And, of course, the whole point of this, as Woodrow Wilson explained in the early administrative state, was to take lawmaking out of the hands of the unwashed masses. In contrast, divesting or delegation defeats these basic needs. It defeats the people's constitutional choices. It defeats their elective choices. It makes a mockery of voting rights.

 

      I'll just conclude by saying I think the divesting position is absurd. After carefully specifying the election of lawmakers, are we to believe the Constitution lets the lawmaking power go to anyone? The president? My Great-Aunt Gertrude — charming, but still not really competent for these purposes? The King of England? Perhaps George III? Perhaps Prince Charles, when he becomes king? Lord North? Perhaps Lady Gaga? You want some originalism? I think this is highly original.

 

      Thank you.

 

Hon. Neomi Rao:  Great. Thank you so much to our panelists. I'll just note that you're welcome to submit written questions through the Q&A function or to raise your hand through the Raise-Hand function.

 

      But, I think, given Professor Hamburger's comments, I should give Professor Parrillo and Professor Bagley an opportunity to respond to some of those comments.

 

Prof. Nicholas Bagley:  Let me start and clarify something about the position that Julian and I take in our paper. One of the criticisms that we hear is that we've taken the non-delegation-gone-wild idea that, you know, every single founder at the moment of ratification were all firmly convinced that all legislative powers could freely be delegated.

 

      In fact, our position is the founders are unlikely as a group to have had well-developed views on the matter one way or the other. Early on, at least, the founders still believed they could rise above the spirit of faction, and they had no reason to assume that Congress would be unwilling or unable to protect its prerogatives. They were really worried about legislative views, not legislative abdication. So our claim in the paper is really a negative one that, in 1789, the founders did not share a collective belief in a principle that would prohibit Congress from passing an identifiable category of laws delegating discretionary authority. So could you conjure a delegation that might have caused them to stand up as a group and say that goes too far? It's possible, right? Sufficiently strong policy objections to a sufficiently awful proposal can sometimes find a legal vessel through which to express themselves, but an inchoate impulse is not, without more, a doctrine.

 

      The other point that I just want to, I think flag, both in response to Professor Mascott's comments and in response to Professor Hamburger's comments is this notion that everyone, at the time, must have taken it for granted. And I want to push back on that by pointing out just how much they would have had to take for granted. Professor Hamburger says that there were no examples of national domestic binding laws passed in the early republic. I think that's wrong as a matter of fact. But even if it were true, is the claim that everyone took it for granted that this highly detailed category of prohibitions was just accepted by anyone and everyone even though it was never actually spoken?

 

      That's really the key point, here. The key historiographic move that we see in the literature from originalists is to try to say, well, there are a bunch of laws we don't see on the books; can we discern the shape of the non-delegation doctrine from the laws we don't see? It's like Plato's prisoners in a cave, kind of staring at the cave and hoping to discern through a negative picture what's there. And the answer is you don't need to strain like that in order to try to understand what was going on at the time. These questions were live; they were debated; there was no shared understanding as to the principle, much less as to the contours of that principle.

 

Prof. Nicholas Parrillo:  Thank you for the opportunity to respond. I did want to respond to a couple of Philip Hamburger's points regarding my study of the 1798 direct tax.

 

      So Philip suggests that the rules that were promulgated by the federal boards of tax commissioners were in the nature of binding federal officials rather than directly binding private persons. And this resonates with a lot of arguments in Philip's book in which he argues that several of the documents that have been invoked as early kinds of administrative rules are actually more in the nature of what administrative lawyers today would call guidance documents. In other words, they are documents that are handed down by the head of a department that direct lower-level officials as to what to do. The lower-level officials and their individual adjudications may affect private rights, but there's a kind of break in the circuit, as it were.

 

      This is an important and interesting point. However, I do not think that what I found in my study regarding the powers of the federal boards of tax commissioners is vulnerable to that critique. It is true that the federal boards of tax commissioners could give instructions — and actually sometimes they were called regulations — to lower-level officials as to how they were to do a valuation in the first place — for example, how they were to handle abnormalities in the money supply. And I would agree that those fit into Philip's category of documents that are more like guidance than what we today would call binding rules.

 

      However — and I go through this in the study — the federal boards of tax commissioners also had the power, after the lower-level officials had done their valuations, to raise or lower, en masse, the tax valuations themselves in any district, uniformly, up or down, by any percentage that was just and equitable. And the result of that increase or decrease by the board in all the valuations in any district that the board drew within the state was absolutely determinative of the tax liability of private individuals. It occurred after the internal administrative appeals by the taxpayers had been done. You know, all of the post-administrative-appeal valuations went to the commissioners, and then they said, okay, all houses in Baltimore, we increase the tax values by a hundred percent. And then, of course, that has an enormous effect on the actual tax liability, and there's no further administrative review; there's no judicial review. So I think that actually is an example that stands outside of the line of reasoning regarding guidance-like rules that Philip propounds in his book as to other administrative activity at the time.

 

      And then also Philip asks a very important question about what is the constitutional import of the work of the Fifth Congress as opposed to the First Congress? And I think it is true, as a matter of constitutional interpretation, that the farther in time you get from 1788 or 1789, the weaker the evidence becomes as probative of original meaning. However, there could be a liquidation theory along the lines of what Will Baude has recently written about. But then, furthermore, I would emphasize that the political circumstances of 1798 were the first time that there had been enough of a fiscal crisis that it was a perceived necessity for Congress to tax real estate as opposed to just taxing imports which are politically much easier to tax and which Congress had been happy to rely upon almost a hundred percent through most of the 1790s.

 

      So it's not as if there was taxation of real estate in 1789 and it was done in a less-administratively delegatory fashion. It was simply the first time they ever had occasion to do this kind of thing that they believed was something that was best done through very broad delegations even affecting private rights. And so, I think, to say, well the Fifth Congress is irrelevant here — the Fifth Congress is not relevant here because it's so late, that's kind of like asking whether somebody has an umbrella and saying they don't have one Monday to Thursday when it's sunny, and then say, okay, they must not have an umbrella. Then it rains on Friday, they pull out an umbrella. You've got to wait till it rains before you make that kind of determination about what a legal actor's capacities are.

 

Hon. Neomi Rao:  Okay. Jen, Philip, would you like to respond to some of that? And then we'll turn to some questions.

 

Prof. Jennifer Mascott:  Yeah, since we're going generally in speaker order, I'll step in.

 

      So, starting with Nick Bagley, I mean, I'm not sure that quite precisely what we're saying is just everything was taken for granted or that's the sum total of what we're saying. I think what, at least, my view and understanding is that there didn't necessarily need to be broad debate or discussion over a principle that would be inherent in the structure of the Constitution itself and then talk about some evidence from Ilan Wurman and then some evidence from my piece on the customs laws that actually show that there was sort of discussion or awareness at least to a greater degree than one might get a sense of in just reading the recent Mortenson-Bagley article.

 

      And I guess the other point is a lot of the evidence in the Article is coming from the Continental Congress and other systems of government, obviously, that didn't have the same separation of powers in place as we have under the Constitution. So, if we look at what's happening, which I think makes sense to weigh early practice, the customs laws, which again I don't think any of the pieces — the Ilan Wurman piece, the Mortenson-Bagley piece — any of them actually do contend with some of the points made in the GW article on the customs laws. In fact, the Mortenson-Bagley piece just simply says, well, there was broad discretion because you could go on -- you could send people on ships and figure out if goods had been fraudulently valued or were improperly there.

 

      Without looking first at the great amount of detail that went into just the hugely detailed imposition of customs duties and actually debate in the documentary history of the first federal Congress that talked about, indeed, how the members really actually were quite desperate to raise revenue at the time because they had so much debt to pay off, and there were actually quite challenging political determinations to be made because different parts of the country would have been impacted vastly differently based on which goods were taxed which ways because of the different economies in the different parts of the country. Some folks were experts in shipbuilding; some folks were agrarian; and so there were lots of challenging decisions to be made, and they certainly did not want to hand all of those over to the executive. And again, indeed, if one is to also look at the American State Papers and some of the records about what actually happened in the interaction between Secretary Hamilton and Congress, one would see a lot of great concern that members from all over the country be together formulating the policy.

 

      About Nick Parrillo's piece, I certainly agree that I think the 1798 example is evidence of regulation. I mean, the Fifth Congress is a little bit away, obviously, from the First Congress. Nick raises the point they didn't need direct revenue. I mean, they did need a lot of revenue in the customs laws; there were the tax on whisky distilleries. So I'm not sure that was a totally new problem, but it was addressed in a new way.

 

      For me, one of the things that I found to be constraining, though, in that example — which I agree, Nick has a very careful piece; it's very in-depth, and a lot is made of some stray phrases. I think it's used once or twice in a statute that extends over 20 pages of reference to "just and equitable valuations." But I think the point is to understand that that's within the context of Congress deciding the overall tax is going to be $2 million. The tax is going to disappear once that's raised. The tax has to be proportionate based on population among the states. And then there were a lot of instructions given, like a precise amount that the tax is going to be based on the number of slaves that you have; the different percentage that's going to be imposed based on the value of your house; there has to be a list of windows and other features of the house. And then the just and equitable term is used in relation to the idea that everybody understood the just and equitable concept was going to be keyed to valuation.

 

      So I actually -- I completely agree that I do think that seems to be a clear example of some kind of early regulation. I think the question is just how broad was it? What exactly was being decided? Is it true to suggest that it was actually an instance where Congress was handing over the policymaking decisions about how to bind people? And I don't the answer is "yes" if the overall burden of $2 million was determined by Congress. Certainly, I think some regulation, some executive discretion must be okay. And, if anything, I think folks who were on the side with the concern about a non-delegation principle should take comfort that, if you look at the true current divesting or delegation position, that does not indeed stand for the proposition that there's nothing the executive can do. There is quite a bit in administering the law and carrying out policy decisions made by Congress. But I just -- I think the concern is that that doesn't necessarily add up to all of the modern 20th-century delegations that have been occurring in recent years.

 

      Thanks.

 

Hon. Neomi Rao:  Professor, would you like to jump in?

 

Prof. Philip Hamburger:  Yes. Thank you so much. So I guess we do have to dig back into the history, though I was hoping to talk about vesting and divesting for just the Constitution's language.

 

      First, I really appreciate Nick Bagley's response in clarifying the degree to which he relies on essentially a consensus view. The article says that the standard for originalists is that there has to be a consensus. And that's rather a high standard. I don't think there's ever a consensus in any society, even in one person's mind. We all have multiple thoughts. How could there be a consensus? And, here, he adds that early Americans did not share a collective belief — these are all quotations — you can't say everyone took it for granted; you can't say the idea was accepted by everybody and that there was no shared understanding by everybody. That's an unrealistic standard, and that's actually what not originalism is about. I might add that my arguments on this have not been particularly originalist. That's okay; we can talk about that later. But it seems to me, if we're going to focus on originalism, what you really have to look at is the legal meaning or intent of an enactment. And that's very different from finding some sort of bizarrely high standard of consensus.

 

      Now, I also appreciate Nick's comments. I do think, however, that the argument about his Fifth Congress is not that it was late, so much after the Constitution; rather, the point is that the First Congress quite deliberately tried to avoid these sort of issues. And that's not my opinion alone; that's Leonard White writing some 80 years ago.

 

      But even more fundamentally, is what Nick found in the tax laws actually an example of national domestic regulation, delegated lawmaking? And, here, I'll disagree, for once, with Jennifer. Normally, I would agree with everything she says in her wisdom, but here I'll have a minor disagreement. I do not think this is really an example of early regulation. Nick Parrillo just conceded that the rules were not binding on the public, and that's right. I'll get to the statute and read it to you if you want, and we'll agree on that. What he says instead then, the fallback position, is well, actually, the commissioners sitting as a board can, en masse, alter assessments, and that's right. And that's crucial because their decisions were factual determinations which have long — for two centuries — been understood as judicial in nature.

 

      These are early examples of what you might call administrative adjudication by force of circumstances by the Fifth Congress rather than the First. But they're not examples of delegated lawmaking, and this was widely understood at the time. I'm not going to cite you verse and chapter from early English or later American precedence on this, but this, as well as the just and equitable principle, all related to a judicial style of fact determinations, and so this has nothing to do with lawmaking of a delegated sort.

 

      Thank you.

 

Hon. Neomi Rao:  Okay. I'm going to turn now to some -- Nick, do you want to say -- just briefly, do you want to respond?

 

Prof. Nicholas Parrillo:  Just a very brief response. I guess I don't share Philip's view that the mass revisions of tax valuations were judicial in nature, and I think the strongest evidence I have for that is that if you look at how state property taxes were structured up to 1798, it was universally the case that the state legislatures, within the state tax statutes, did exactly the equivalent of what the federal boards were called upon to do. That is, they determined the mandatory average tax value of land in each county or town of the state or equivalently the total tax liability of each county or town in the state. And I think there's a tension between saying that something was fundamentally judicial in nature and the historical fact that it had, in fact, always been done by the legislature and not by an administrative adjudicator or a court in every state that had property taxes by value up to 1798.

 

Prof. Philip Hamburger:  Can I just point out that the New England legislatures that are good examples of this also served as the highest judicial courts, usually, that the federal government did not adopt the New England model and gave this to commissioners. And the just and equitable language comes out of a long line of decisions that recognize the judicial nature of factual determinations as sort of an exception from the courts. So I can go to this scholarship later, but I appreciate the back and forth, and I love this sort of historical inquiry. So thank you.

 

Hon. Neomi Rao:  Okay. I'm going to turn to a few audience questions, now. Under the Raise Hands, I want to recognize Chad Squirtieri. If you have a question, please go ahead.

 

Chad Squirtieri:  Great. So great panel, by the way, and fantastic scholarship, absolutely.

 

      My question for any of our speakers is both regarding the current non-delegation doctrine and your view of it, how much work is the term "legislative" and "legislative power" doing? For example, in Article I, Section 8, a lot of power, or some of the power, is vested in Congress— and McConnell's latest book on this is helpful—are not very legislative, for example, declaring war. And yet, a lot of the non-delegation doctrine seems to be trying to distinguish between legislative and executive power. So I would just be interested and want to know what your view is on whether that is perhaps a mistake of the doctrine. And, just using Professor Hamburger's theory, for example, if Congress is vested with a power, does it really matter what, you know -- if a political scientist might think of as a legislative or executive or judicial power or not? If they're vested with it, does it change?

 

      Thanks.

 

Hon. Neomi Rao:  Thank you.

 

Prof. Philip Hamburger:  All right. Well, let's just start with the Federalist Papers where Hamilton distinguishes between legislative will, the judgment of the judiciary, the force of the executive. And this has long -- these ideas reach back to the Middle Ages — not that most of these folks have read the medieval sources — but these are longstanding distinctions amongst these different types of power. So maybe it does matter.

 

      Now, the Constitution actually is very careful in the separation of powers. It does not declare a general separation of powers; that didn't work in state constitutions. So, already, some of the early state constitutions, such as New Hampshire -- the committees forming the constitutions say we're not going to declare these principles of separation of powers as we believe in it, but our separation of powers are going to be a little different. We're going to tinker at the edges. So we're actually going to carry out the separation of powers that seem to be vesting, say, in legislative power, mostly in the legislature but then tinkering a bit at the edges. So it's sort of a default rule separation of powers whereby — and they've discussed this at great length in different states — whereby legislative power is mostly, by default, in legislature, but you can trim little bits out and save judicial power, you know, for impeachments and so forth. So there's a lot of tinkering at the edges, but the concepts remain pretty constant.

 

Hon. Neomi Rao:  Does anyone else want to respond?

 

Prof. Nicholas Bagley:  I'll jump in, briefly.

 

      So I think our paper grows out of scholarship that my coauthor has really done about the meaning of executive power in the Constitution. And what Julian's research shows is that the term "executive power" was really an empty vessel for Congress to fill, that executive power had a very thin meaning. Of course, it referred to the force of the executive to carry out legislative instructions, but really it's the legislature that carries out the will of Congress. There's nothing sort of inherent in that bucket of executive power.

 

      Once you see that, you start thinking that these categories of legislative power and executive power may not have had the sharp determinate meaning that current originalists would like to assign to them, that, really, the legislative power meant, in addition to the discrete items that are listed in the Constitution, the ability to chart the will of the state, and the executive was the entity charged with carrying out that will, following it through and forward.

 

      With that vision in mind, I think it becomes a little bit easier to understand how a command from Congress -- or a delegation from Congress of authority to the executive wouldn't be taken to count as some kind of violation of the separation of powers but would simply be an exercise of the legislature's decision about how to sort of produce the will of the state. In this particular instance, we'd like the will of the state to be that the executive carries forward our instructions. And these instructions in this instance are going to be broad, and in other instances, our instructions are going to be quite detailed. Jen Mascott's work shows exactly how the customs statutes are so detailed and refined. But that only shows that Congress really cared about specifying when it came to taxing and spending — which it still does today, not because it's afraid of any non-delegation doctrine but because it's politically important for members of Congress to be keyed into questions of taxing and spending.

 

Hon. Neomi Rao:  Thank you. Okay. I'm going to read out a question. And I'll just remind the audience:  Feel free to raise your hand to ask a question in person or to write up a question in the Q&A.

 

      So Conner Herbert, who is a student at the University of Cincinnati, asks "Why choose evidence outside of the intense debate that took place from 1790 to 1840 over the proposal of the Hamiltonian national bank? Personally, I'm a bit confused about the evidentiary choices, here."

 

      Any thoughts about that?

 

Prof. Nicholas Bagley:  So the delegation to the bank is obviously broad in many respects, but it doesn't appear — at least to my eyes — to run afoul of many of the versions of the non-delegation doctrine that are on offer today in the sense that it is authorizing Congress to -- I mean -- sorry -- executive branch officials to make decisions about the money supply enough to regulate private individuals directly. I don't think the founders carved the world that way. I think the fact that we've got such a broad delegation on the books and, again, no hint that there was any concern about that kind of delegation is telling. Nonetheless, it was not something we emphasized in part because we didn't think it was as responsive to the concerns of those who are pleading for the revival of the non-delegation doctrine.

 

Prof. Jennifer Mascott:  Yeah, and I think the choice of folks to look at early practice again is because, you know, as the Bagley-Mortenson article looks at, their discussion -- they actually look at a lot of discussion from the Continental Congress. And, of course, if the discussion is just about the proper balance of power, of who is doing what, that would not have been as informative, nor would British practice, necessarily, on this particular question because the Constitution here was doing something different.

 

      I think Philip Hamburger's work goes further back and looks more generally at the meaning of legislative. And, I think, if one were to look at sources on the meaning of legislative or executive power, those could be more helpful. So folks, I think, are looking at sources leading up to the ratification, but the early practice I think just can be confirming or questioning evidence to sort of show how people understood the power that they were exercising — certainly not definitive.

 

      And I do think, because the constraint that we're talking about today is structural in nature, it requires a little bit more than just looking for one example here or there or a specific statement one way or the other about precisely what the principle would have been, but just understanding more broadly what the nature of legislative power was — executive power. And I do think that there was evidence that executive power had certain meaning because some of the national security and foreign affairs powers were not necessarily specified in Article II. And, indeed, the first version of the Constitution that was proposed during the drafting debates actually didn't really specify executive duties much at all but relied on the concept of an executive power inherent in the Articles of Confederation. So it definitely had some content.

 

      It's possible, in the way Nick Bagley is describing, the legislature was about the will of the state. That, in and of itself, actually, I think, has a fair amount of information. And so one would question if there's no delegation constraint at all, does that simply mean that the Mortenson-Bagley view is that Congress could say, okay, we're going to actually, then, even leave the determination of the will of the states in total to the executive? And I think if the answer there is "no," then there's got to be some inherent principle, and I think we've all noted that there's not necessarily one precise statement at one point in time at the Founding as to what exactly that delegation constraint is. But I think Philip's and my work shows and suggests that the understanding at the time put us at a vastly different place than where we might be in the modern 21st century.

 

Hon. Neomi Rao:  Jen, if I could just follow up. It may be a question for you, Jen, and also for Philip. I mean, it may be possible that the executive power is less determinate or less specified as a matter of its use in the Constitution, but the legislative power actually had a more specific or concrete meaning. I'm not sure if you agree with that.

 

Prof. Jennifer Mascott:  Well, I mean, certainly, what was more specific in the Constitution is that there were limits. I mean, "the legislative power herein granted." So there were enumerated powers which I think, again, was the reflection that legislative power itself was quite vast and probably much more vast, certainly more vast than the executive power. And so it wasn't just going to be given wholesale over to one branch to be exercised in a particular way. It was only going to be given for certain functions and the rest left up to the states.

 

      I don't know if Philip has more to add on that.

 

Prof. Philip Hamburger:  Thank you. First, as to executive power, I think there was some disagreement. Some people sometimes said it was what's left over after the more well-defined legislative and judicial power, as Neomi suggests. But there's a long tradition — which many bought into, such as Hamilton — that executive power was this action, strength, or force of the nation. Domestically, that was law enforcement and foreign affairs; externally, it was something else. For details of that, I invite you to look at my Northwestern piece.

 

      Can I just throw in something else, here, though? We've been -- I want to have a conversation around it a little bit. The whole point of my vesting argument for the Constitution is to get us away out of delegation and into a vesting conversation because that's what the Constitution talks about. But, in the same spirit, why are we just talking about originalism? For the non-originalists, here, I can't imagine that originalism really makes much difference except to poke a stick at those of us who have some faint attachment to that.

 

      Let's talk about the living Constitution. I'd like to hear why it is that we should interpret the Constitution, when nothing in the foundational documents suggest we should do this, to deny the people their constitutional choices, to deny them the power to elect our lawmakers, and to undermine voting rights so that most legislative power is taken out of the hands of elected lawmakers. Why is that such a good idea?

 

      And why is it that we should embrace a delegation doctrine that allows Congress simply to throw legislative power, again, to Lady Gaga or to anyone else as they see fit? I can't imagine you have such a high view of legislative judgment as to think that that's a good idea. So let's take a holistic view of this, not just an originalist view. There is originalism, I think, a strong argument and the text if you prefer that. But there's a lot more to it, and let's talk about that.

 

Prof. Nicholas Bagley:  Yeah, I can start by responding to that. I'd be curious what the others had to think. Look, our paper took on the --

 

Hon. Neomi Rao:  You have to pick either Aunt Gertrude or Lady Gaga, Nick.

 

Prof. Nicholas Bagley:  You know, I actually also have a Great Aunt Gertrude, and I love her dearly. But I don't think she should wield the full run of the legislative power of the United States, either.

 

      But I think it's important to notice the way that all of the objections that Professor Hamburger had to a broad non-delegation doctrine — that it subverts the will of the people by vesting in executive branch officials the authority to wield the power of the state — well, that can be just turned around very easily to say that, if you believe in the non-delegation doctrine, the courts are disrespecting the choices of our elected officials to allocate decision-making authority to cope with significant problems in the manner that they see fit, right?

 

      Here, what we're talking about is a doctrine -- that is a doctrine that is counter-majoritarian, not majoritarian. It enlists the courts to strike down or narrow acts of Congress in service of what is a controversial political agenda. Now, do I think that it's possible that there are good ‑‑ do I think that there are good reasons for a non-delegation doctrine? Sure. I think both Professor Mascott and Professor Hamburger advanced some very good reasons. They don't move me, but they may move you; and that's fine. But I think it's important, when somebody says the reason we're doing this is because the founders all believed something, that we can evaluate that claim and decide whether or not it is, in fact, accurate. I don't view it as accurate, but if you want to adopt a non-delegation doctrine as a matter of the living Constitution or a principle that we need to read into the Constitution in order to save some vision of democratic accountability, sure. But defend it in those terms.

 

Hon. Neomi Rao:  Can I just ask you one quick follow-up question to that, which is what is your -- I mean, is your view, then, that the text and structure of the Constitution is either indeterminate about the delegation or divesting principle?

 

Prof. Nicholas Bagley:  Yeah, and I want to be clear about that. Our argument speaks to -- look, there's been endless ink spilled over whether or not the vesting of legislative power in Article I actually stripped Congress of the authority to delegate broad discretion to the executive branch. Some people say it's a divestiture; some people say it's a delegation; some people say simply the exercise of legislative power. I'm inclined to that view. But I don't think the Constitution itself definitively resolves that question.

 

      What I know it doesn't say is you can't, you know -- that a law passed by both houses of Congress and signed by Congress is unconstitutional if it delegates too much authority or authority of the wrong kind. And so if you believe that it is a necessary structural feature of the Constitution as written — and Gary Lawson has something like this view — our article is not for you. But I don't think that originalists have rested their case on that because I think it's a very fragile case, and I think the history is what clinches it. And without that historical underpinning, I think the case collapses as an originalist matter.

 

      But Nick Parrillo wants to say something. He's been flagging us down.

 

Prof. Nicholas Parrillo:  Sorry. Thank you.

 

      I also wanted to speak to Philip's question about potential living arguments for the non-delegation doctrine. And I think that actually brings us back to a point with which Jen Mascott opened her initial presentation, which was to say there is a lot of anxiety about and skepticism of presidential power among liberals and progressives. For example, the travel ban, the border wall, and these kinds of issues. And, I mean, Jen posited the question of why isn't there a broader political coalition for a robust non-delegation doctrine? And I think this is actually central to the question of what would be the living arguments or the living attractions of a non-delegation doctrine in today's political environment?

 

      But I think this also points us to some pretty concrete aspects of the doctrine in an originalist debate because, of course, different versions of the non-delegation doctrine, many of them inflected by originalist analysis that are on order, would have very different payoffs, to use a crass word, for different possible members of a political coalition. So, for example, there's one version of the non-delegation doctrine that would apply weakly or not at all to the national security state, weakly or not at all to the federal reserve, but apply very robustly to domestic regulation of private rights, presumably including business regulation and taxation. That is a doctrine with a very different set of political attractions than one that would apply uniformly to those things and also to the national security state and that kind of thing.

 

      And this, I think, goes to how important it is that there are these different formulations of the non-delegation doctrine that would or wouldn't cover national security, that would or wouldn't cover immigration, for that matter, if you consider immigration to be an aspect of external relations as that is formulated in the separate opinions recently of Justice Thomas and Justice Gorsuch. So, on this question -- I mean, to invoke Keith Whittington of Princeton and the idea that judicial power and judicial legitimacy ultimately rest on some kind of underlying political coalition, I think any set of questions about what the living arguments or the living attractions of a non-delegation doctrine are has to consider what the scope of that doctrine is and whether it encompasses delegations that are concerning both to political conservatives and to progressives.

 

Hon. Neomi Rao:  Philip, did you want to --

 

Prof. Philip Hamburger:  Yes, I just want to agree with Nick Parrillo on this, that it's not a matter of whether one likes it or not, as Nick Bagley was putting it, but as to the structural considerations. And the reality is unrepresentative legislative power that runs against the words of the Constitution and vesting runs against early precedent which is no example of early national domestic binding delegated legislative power. When you run against all of that to create unrepresentative legislative power, it leads to political instability, it leads deep alienation from our political institutions, and it leads to all the anxieties that we've seen in the past few administrations. Now we can get those anxieties in other ways, but this is a guarantee of it, and I think it's exceedingly dangerous. So I think we should all just pause and ask what we really wish for.

 

Hon. Neomi Rao:  Okay. I'm going to go to another question from our audience.

 

      This is from A.J. Jeffries who is a law clerk on the Sixth Circuit. So this person asks:  "Advocates of the non-delegation doctrine focus on the vesting thesis, and Professor Mascott's customs article notes that it could be inherent in the constitutional structure. Has anyone argued that it is a requirement of due process of law? I'm thinking of Professors McConnell and Chapman's point that due process requires each branch of government to operate in a respective manner before depriving someone of life, liberty, or property."

 

      An interesting question.

 

Prof. Jennifer Mascott:  Well, I mean, sure. I think it could be conceived, in due process terms, if one takes the McConnell or the Lawson view that -- or maybe the historic view that due process is really about making sure that laws are crafted in accordance with constitutional process. But that does, in the end -- so it gives us another reason, I think, adding on to what Philip's already saying and what Nick Parrillo was hinting at about what the stakes are in figuring out who properly makes policy decisions of what breadth. But it does, I think, in the end also just get us back to the initial question of what is the legislative power that's vested exclusively in Congress at the beginning of the Article? And how much of that has to be exclusively exercised by Congress in what level of depth, rather than sort of giving us an extra tool to know how to answer that question of the division of labor.

 

      But it is an -- it's another important reason, I think, again, to understand the stakes and how important the question is. Because, as folks are saying, right, the issue of delegation and who is exercising what power can lead to folks being upset about the breadth of executive power in different areas based on which administration's in charge. And it's not just, I think, people opposing or having concerns based on which executive is in charge, but it also leads to instability in the sense that the more power can sort of willy-nilly or rapidly be exercised or changed by administrative officials or by one person or a small group of people in the Executive Branch, the faster and more wildly the policies change from term to term. And, when Congress acts legislatively, it does tend to promote more stability and more awareness and more understanding. And, also — and this is why folks resist it — it's tougher, it's more challenging, and it's harder to evoke change, which I think is why, in the other example that I talked about at the beginning, Congress is trying to lobby the executive to get bureau of prison officials to execute the policy preference that Congress itself has rather than enacting a one-sentence statutory change on an important issue.

 

Prof. Philip Hamburger:  I think it's a nice idea that was suggested about due process; it's an interesting argument. I think, with Jennifer, it all comes back to the Constitution. And, here, I would simply invite all of us, just a little more commonly, to use the Constitution's language. Why are we talking about non-delegation? Just because of some case in 1935? If we're serious about that, and especially if you want to dispute originalism, let's use the Constitution's language. Let's talk about vesting and divesting. And I think the conversation changes, then.

 

      And just one other thought, if I may, as to Jennifer's thought; I want to echo her thought on this. And, to put it into perhaps controversial terms, think about election fraud. When so much power is in the executive, the motivations for election fraud and anxieties — sometimes false anxieties — about it are very, very high. When there isn't so much power in the executive, election fraud and anxieties about it tend to be localized, right? And if you didn't think this was important before January 6th, maybe you'll think it's important now. We have to tamp down some of the breadth of power if only to spare ourselves a lot of the commotion that comes with that.

 

Prof. Nicholas Bagley:  If I can just pipe in.

 

      So, two thoughts. I'm not as sanguine as Professor Hamburger about the non-delegation doctrine's quiescence being the root of our concerns around January 6th, nor do I think its revival would do much to actually mitigate the concerns. To the extent we've seen the non-delegation doctrine wielded in lower courts so far, it's been wielded in highly politicized cases with split courts, including here, in my home state of Michigan, striking down the governor's emergency authorities on a four-to-three partisan vote. I think it's more likely to inflame partisan tensions than to reverse them. But, be that as it may, we're speculating at this point.

 

      I do want to address this because Professor Hamburger has begged us to — and I'm happy to address his desire to reframe the debate in vesting terms — I just fear he's trying to squeeze more meaning from that word than the text will allow. So, when Congress passes a law delegating authority to the president, it is by no means obvious that it is divesting its legislative power. And to the contrary, Congress, with its vested powers fully intact, remains on the scene to modify or to end the delegation. And Professor Hamburger says in his Northwestern Law Review paper that, look, that's not really true because Congress can't reliably recall a delegation because of the presidential veto, and, therefore, it's not really a delegated power, it's a full divestiture. I just want to note that these are Professor Hamburger's suppositions and definitions of vesting and delegation; they're not the founders'. He doesn't make an effort to link his claim with an historical record. And, in the 1790s, members of Congress referred to delegations of authority as "delegations." And, to the extent that those delegations are fine but vesting is not, maybe the originalist concerns dissipate.

 

      The key point here, though, is that the existence of the presidential veto does not preclude Congress from resuming its authority. Congress can always do so. It can either elicit the president's signature, or it can get two-thirds of the vote by two-thirds majority. And maybe it's too hard because of the presidential veto for Congress to withdraw delegations. And, if so, I think that's a good — not one that convinces me — but a good policy argument for amending the Constitution, for adopting sunsets in laws that delegate power, or for embracing the organic development of something like the non-delegation doctrine over time. I just want to say it's not an originalist argument.

 

Prof. Philip Hamburger:  I don't want to take up too much time, here, but I didn't talk about full divestiture versus partial divestiture. And the Constitution, having vested powers in Congress, doesn't place them elsewhere. And, Congress, when it places them elsewhere, is placing them where the Constitution does not. So there's both a divestiture problem and a vesting in places where the Constitution doesn't place them. It may be that you're right; I'll take this as an open supposition because the debate is still to unfold. But it makes no difference to talk about vesting. Let's just take you at your word for that. Well, good. Then, let's switch to the vesting language and see where it takes us. I think it actually sharpens the question, which is why I think it's in the Constitution. The Constitution uses different language than was common at the time. People continued to talk about delegation. The Tenth Amendment uses that language. That's not incorrect, it's just more generic -- a little bit more open. When you get to difficult questions, I think it helps to actually focus on the language of the Constitution, that's all.

 

      Thank you.

 

Hon. Neomi Rao:  I'm wondering if any of you, in your research on the original meaning, had a sense of whether, at the time of the Founding, people used the word "delegation" to also include sub-delegations of authority because oftentimes sub-delegations are sort of assumed. And I'm wondering if that also speaks to the difference between using the term "delegation" or "vesting and divesting."

 

Prof. Philip Hamburger:  I'll throw in my two cents here, which is that people used language variously, then and now. Sometimes they specified sub-delegations; sometimes they talked about delegation. It's very hard to talk about sub-vesting, and I think that's exactly on point, here. That's perhaps why the Constitution so carefully uses the word "vesting." And I'll just throw in, along the same lines, if we're going to talk about this as to the legislative group, we also have to talk about it as to the judiciary and the executive. I don't think Neomi can delegate or divest her court of its power. Clerks can assist, but judgment has to be exercised by Neomi, herself.

 

      Thanks.

 

Hon. Neomi Rao:  Okay. We'll go to -- we're getting to the end of our session, so I'll go to another question from the audience.

 

      Daniel Ortner, attorney at Pacific Legal Foundation, asks:  "States have often applied a more robust non-delegation doctrine than the federal government. How does the history of non-delegation in the states impact our understanding of the historical meaning of the non-delegation doctrine?"

 

Prof. Nicholas Bagley:  I'll just say that the state non-delegation doctrine appears later in the historical record, in the 19th century, not around the time of the Founding. So, to the extent that it sheds light on the question, I think it sheds light -- I think it suggests that, over time, a principle that maybe there was something constitutionally dubious about broad delegations started to crop up and become more mainstream. They were still pretty rare; state legislatures did not routinely strike down statutes. And remember here, too, that the U.S. Supreme Court didn't strike any through the 19th century, at all. So does it shed light on the original meaning? I think it sheds maybe a little bit of light in the sense that we didn't see this as a practice at the time of ratification, but not a whole lot.

 

Prof. Philip Hamburger:  May I throw in just -- sorry.

 

Prof. Jennifer Mascott:  Oh. No, you go.

 

Prof. Philip Hamburger:  No. Go ahead.

 

Prof. Jennifer Mascott:  Well, I was just going to say, I mean, that trajectory, though, of it being more robust in the states and earlier than the federal government would match and map onto the fact that the states were exercising regular police power. And so I think one thing we haven't talked about today but is more of a threshold question — and one that is dear to the heart of my former boss, Justice Thomas — what are the limits within the Commerce Clause? And there was a more restrained view with domestic policy and what Congress was going to be doing early on.

 

      And so -- and I found this actually striking when I read the Mortenson-Bagley article because sometimes there's comments about how, well, the debate is centered on whether this power is proper or this more threshold question, and they're not debating delegation. And I think it's because, if the examination is whether this is something the federal government can do in the first place or there's more of a restrained view, of course, you then don't get to the second question about how broad the domestic constraint can be or broadly the executive [inaudible 01:30:51] thing and fill in the details of the constraint because the power is just moving a lot less rapidly and efficiently to begin with.

 

      And so, of course, it would be more frequent in the states. And the fact that it existed there and that the states themselves had at least a sophisticated enough understanding of there being some limits on legislation for there to be judicial victories on that front does seem, to me, telling that the doctrine existed at least a little bit more than some would give credit to it.

 

Prof. Philip Hamburger:  Can I just come in on just a little point that inadvertently arose when Nick Bagley referred to holding statutes unconstitutional? And it's also in the Whittington article, one sees an assumption that that's the measure, that that's the way this is litigated. So I just wanted to throw out an interesting litigation point here that we're very aware of at the NCLA. It's probably a mistake to think of this as a question of statutory unconstitutionality because that requires a court to reach a big decision all at once. It's much better to litigate against the actions taken under such statutes. So, if an agency exercises delegated, divested power, one can litigate against the constitutionality of that, and it's a much more modest question.

 

      So thanks for reminding me of that.

 

Hon. Neomi Rao:  Nick Parrillo?

 

Prof. Nicholas Parrillo:  I wanted to ask a follow-up on what Philip just said -- really for anyone on the panel -- which is -- I don't think I've seen anyone address this, but does the enactment of the Administrative Procedures Act in 1946 and the imposition of the arbitrary or capricious standard on agency action generally mitigate non-delegation concerns for scholars and jurists who are worried about the weakness of a limitation on delegation or on divesting? I mean, if all agency action under that provision of the APA -- if all agency action is now required to be reasoned in a way that wasn't necessarily required before, does that provide a kind of general constraint on agency action that could mitigate some of these problems, whether they be originalist -- whether they be defined in an original sense or more of a living sense.

 

Prof. Jennifer Mascott:  Well, I think I can see why, in a certain sense, it would, but I don't think precisely necessarily with the actors in place that the Constitution intended. For one, because it seems to me clear that, under that scenario, when you talking about the judicial review provision and arbitrary and capricious, it certainly moves power more toward the courts if one has a broad, robust view of what arbitrary and capricious means and thinks that review standard has a lot of teeth, which is the point that Nick Bagley was making earlier. Also, Gary Lawson's research suggests, actually, that the arbitrary and capricious standard was not necessarily supposed to be nearly as robust or strong as it is today, and I tend to agree with that view that, once actually Congress does constitutionally and successfully and actually delegate power to the executive within a constitutional area of discretion, that the executive should be able to exercise it without sort of the unelected judiciary coming in and kind of arbitrarily making that tougher and tougher and thinking of creative reasons about why it wasn't reasoned.

 

      And so I think the pressure does go back to, initially, did Congress delegate or put in place enough of a meaningful policy standard or decision that the statute was constitutional or was properly framed in the first place? And, if there is some measure of examination from a departmentalist view, it's not just the -- the delegation doctrine or the divesting doctrine or limited divesting doctrine doesn't necessarily have to be enforced by the courts; it can be something that Congress or the executive are mindful of when legislating or when interpreting the laws and being willing to bind one's own power in having a modest or accurate interpretation of the law. And, if it's done properly and that division is proper, then the arbitrary and capricious standard, I think, could again properly -- rightly be done in a more narrow constrained way giving the executive the ability to really govern and administer laws the way that it's always been supposed to be able to do.

 

Hon. Neomi Rao:  Okay. We are now at the end of our time, so I'd like to thank our panelists for all their really interesting remarks. We'll give them a virtual clap.

 

      And the next event for the conference will be a panel on Trade and its Crosscutting Equities:  New Horizons, New Challenges, and that panel will begin at one o'clock this afternoon.

 

      So thanks, again, to our panelists and to The Federalist Society, and we'll see you in the lounge. Thanks.

 

1:00 p.m. - 2:30 p.m.
Trade and Its Cross-Cutting Equities: New Horizons, New Challenges

Intellectual Property and International & National Security Law Practice Groups

Topics: Foreign Policy • Intellectual Property • International Law & Trade • International & National Security Law
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The Trump Administration re-focused U.S. trade policy on the interests of several sectors of the U.S. market, including traditional manufacturing. How the Biden Administration directs U.S. trade policy remains to be seen.

Rising to the challenge of IP theft—both by commercial firms and strategic actors—the previous Administration took a hard look at trade with China and other competitors. Keeping pace with emerging technologies, it re-aligned U.S. policies on export control and investment review. Meanwhile, the U.S.-Mexico-Canada Agreement (USMCA) re-configured the United States’ two most important trade relationships. Being a treaty in force, USMCA is likely to stay the touchstone for those relationships. Other areas of trade policy, however, the President may more readily shift in new directions. A range of national security-related policies in particular fall within Executive Branch discretion, and because of the granularity of so many critical trade-related rules, the interplay of White House preferences and Interagency equities inevitably will influence policy outcomes as well.

The ideal for any market is the frictionless flow of goods, services, capital, and ideas. Seldom, if ever, however, does any given market live up to the ideal. Trade, because it takes place across different national markets and regulatory régimes, entails distinctive challenges. This Conference Panel, Trade and Its Cross-Cutting Equities: new horizons, new challenges, will explore several key challenges that lie ahead as the Executive Branch seeks to steer its trade-related departments and agencies to make best use of its particular tools of the trade.

Featuring:

  • Prof. Thomas D. Grant, Faculty of Law, University of Cambridge 
  • Hon. F. Scott Kieff, Fred C. Stevenson Research Professor, George Washington University Law School 
  • Dr. Joshua Meltzer, Senior Fellow, The Brookings Institution 
  • Moderator: Mr. Steven Tepp, President & CEO, Sentinel Worldwide
 

Speakers

Event Transcript

Steven Tepp:  Hello and welcome to the second panel of The Federalist Society’s Ninth Annual Executive Branch Review Conference. My name is Steven Tepp, and I will be moderating this panel on the subject of “Trade and Its Cross-Cutting Equities: New Horizons, New Challenges.”

 

Before we begin, a few housekeeping items. The audience may type questions at any time in the Q&A tab in the upper right corner of your screen. There’s also a chat tab for attendees to chat with each other, but please do not use the chat to ask questions. We’ll also be allowing attendees to ask questions live later in the program by pressing the “raise hand” button. Of course, you’ll need a working microphone and the technical ability to unmute yourself to use this option. As I open the panel, let me note that my comments here today do not necessarily reflect the views of any client or employer.

 

Trade was a primary foreign policy tool of the Trump administration, with Ambassador Lighthizer winning bipartisan praise despite his aggressive actions, perhaps most notably the imposition of tariffs against an array of products from China. In contrast, President Biden reportedly views trade through the lens of foreign policy. He halted trade agreement talks and staffed most of the top ranks of the U.S. Trade Representative’s office with long-time congressional staffers, including the ambassador herself. However well regarded they may be, it raises questions about their leadership experience and clout within the administration.

 

But if anyone thought this administration was going to be sleepy on the trade front, that impression was shattered earlier this month when Ambassador Tai announced the U.S. was prepared to accept some form of a waiver of intellectual property obligations under the TRIPS agreement of the WTO, the World Trade Organization. For those not familiar with the issue, this proposal is from India and South Africa not merely to take advantage of existing flexibilities in WTO rules but rather to suspend whole categories of IP obligations entirely, a property rights kill switch if you will for patents, copyrights, and other IP at least as originally proposed.

 

While the stated motivation is to hasten production of a COVID vaccine, there is agreement across the spectrum that voluntary licenses have already been in place and that IP rights are simply not an obstacle to vaccine production, which makes the move look more political than substantive. Further, this unprecedented move contradicts U.S. policy dating back to at least the Reagan administration that promoting the protection of American intellectual property abroad is in our national interest. On top of that, the administration faces questions on digital era issues, such as a variety of criticisms of the major internet platforms, including the immunities of Section 230 of the Communications Decency Act and Section 512 of the Digital Millennium Copyright Act, DMCA -- as well as challenges on cybersecurity as everyone who’s car is running low on gas can tell you and, oh, yeah, China. Lots for our panel to talk about.

 

So let me begin with the introductions. The Honorable F. Scott Kieff is a former commissioner of the U.S. International Trade Commission and advisor to the Bush, Obama, and Trump administrations on national security and economics. He’s the Stevenson Research Professor at George Washington Law School and a member of the European Academy of Sciences and Arts.

 

Dr. Thomas Grant is a fellow of the Lauterpacht Center for International Law at the University of Cambridge and is a practicing lawyer focused on international trade, investment, and national security. He served from 2019 to 2021 as Senior Advisor for Strategic Planning in the State Department’s Bureau of International Security and Nonproliferation. He’s a former U.S. designee to the permanent court of arbitration.

 

Unfortunately, our third panelist had a last minute personal matter arise that prevents his participation, but we will carry on. And I will do my best to play devil’s advocate and make sure that we have a variety of perspectives discussed in the course of the panel. And, of course, our accomplished panelists’ full bios are available online. So with that, let me turn to our first presentation from Scott Kieff. Scott?

 

Hon. F. Scott Kieff:  Thank you very much, Steve. What a pleasure to join you in this discussion, and I will also try to emphasize multiple perspectives, recognizing that we’re down one panelists, so that we get a range of views included. As we think about the set of topics— intellectual property, national security, trade, antitrust, or competition—boy, these topics are interacting so much these days. And they were years ago and administrations ago, but it seems as though the curve is ever upwards on the degree and that nature of the interactions.

 

So you flagged the IP waiver relating to COVID vaccines. It’s an interesting topic. It’s an area where some people worry, gosh, is this a very anti-IP move. Certainly, today’s Wall Street Journal suggests that there are those in the Senate who think that these IP rules never should have existed in the first place.

 

I think one wonders, though, rather the right way to think about what’s happening right now is to envision it as an overture towards some true or correct destination instead of an overture towards, as you put it, politics and political economy. So let me be explicit about the metaphor or the idea to have in mind.

 

If you are running a business like Sotheby’s or Christie’san auction house—the last thing you want is one bidder coming to your auctions, and the last thing you want to run out of is stuff to put up for auction. In the language of Washington, inside the beltway speak, there’s a dichotomy people often flag between having an issue and solving an issue.

 

The concept of driving to a correct answer presumes that there’s an issue needing a solution. The concept of having an auction is, I think, quite cozy with -- compatible with the concept of having an issue, calling issues into question. And I think what we see right now across the Executive Branch is a desire to call big questions into issue and, even within the White House itself, an enhanced desire to call big questions into issue. And it doesn’t seem to be limited to just the Executive Branch and maybe even just the one political party in the Executive Branch.

 

So we might see a time when every auction house is open for every auction, and that’s a time when you can expect a lot of money to pour down K Street. And of course people who need to raise money for campaigns like that, and all political actors need that like we need oxygen. They need it badly. And it’s interesting because this dynamic is happening now at a pace and in a depth and breadth that suggests that topics that we normally thought of as not really seriously open for conversation may now in fact be entirely open for conversation. They might settle out in a whole range of places.

 

So in our discussion today, we can start to go through a couple of examples, whether it’s China or the EU, whether it’s intellectual property or national security or even the specifics of so-called trade remedies or dispute resolution. We can plug each of these examples into what I hope is a single theme, that everything’s open -- everything’s open for change. So why don’t I pause there, and I believe Tom Grant is next up at bat to give a brief introduction.

 

Prof. Thomas D. Grant:  Hey. Thank you, Scott, and thank you, Steven. And apologies for the still photo. A little bit of a teasing problem on the video aspect of the link, but I hope the audio is clear enough at least technological, even if intellectual maybe it won’t be that clear. But I’ll do my best to try to say something to bring some of these themes together.

 

We’re talking about trade, cross-cutting equities, and the Executive Branch and national security. So those are a number of different themes, and they intersect in different ways. I thought we’d talk a little bit about that and taking some of the lead from Steven and from Scott. We think about technology as a historic driver for economic development and also a very important element in trade issues. And technology is one of those things -- it’s sort of like motherhood, apple pie, and baseball. Everybody’s in favor of technology.

 

So today, we see the news that the Senate is debating $110 billion appropriation for developing technology -- encouraging technology development over the last several years, spanning both administrations. We see talk about issues of technology and the supply chain and ways to secure the supply chain. We see initiatives that pop up in practically every branch from government on artificial intelligence and machine learning. Who wants to lead the agency that has no AI strategy? Nobody raises his hand.

 

The vaccine patent issue and TRIPS WTO issues are also an industry you can see through the lens of technology. After all, we’re talking about the development of (inaudible 14:47) life sciences equity that would historically -- you know, you’d think of it as a patentable equity. If you look at the renegotiation of NAFTA and the emergence of the USMCA, a very important, maybe sufficiently appreciated dimension of that trade initiative is that automotive manufacturing is a much more high-tech endeavor than it was 30 or 40 years ago. The components if you’re doing content requirements and if you’re looking at content requirements in the automotive industry, it’s not just about putting aluminum and steel on a scale and weighing it. It’s also about placing a valuation on a much large high-tech input in the supply chain for that industry. So on and on it goes. Tech drives so many different equities in trade.

 

One of the things you notice in law practice is that there’s an increasing cross-cutting aspect where these issues intersect in ways that, again, even a short time ago -- a generation, 20, 30 years ago you would have been able to separate, segregate, treat these things as mutably separable. But now, it’s harder to take those equities apart because the currents are now so intermixed. Looking, for example, at some recent major tech players who have been in litigation on patent issues, but then lo and behold, they have trade related international contests that work their way into what it -- again, 30 years ago it would have just been a patent dispute, for example, between Ericsson and Samsung. But then they got into a fascinating skirmish over removing the proceedings to Shanghai.

 

Steven Tepp:  Just to interrupt you for one moment. I wanted to alert you that your audio is fading out, every once in a while, just a little bit for a moment or two. I don’t know if you’re moving around, but just to make you aware of that. Thank you.

 

Prof. Thomas D. Grant:  Steven, I’m sorry about that. I’ll do my best. Yeah. I don’t -- if there’s a fix, I will do it. My apologies.

 

So I wanted to just open with that sort of -- it’s almost a mélange of different cross-cutting issues, but then I wanted to zero in on something at more of a granular level from my own experience in the administration at the Department of State. For several years, we had an ongoing discussion about how to deal with critical and emerging technologies, and indeed just at the level of nomenclature and at the level of definition, there was a great deal of interagency dialogue— and there still is—over how you define an emerging technology. And then answer that you give to that seemingly very basic threshold question of definition is going to relate in some part to the purpose for which you intend to use the definition. In other words, if you’re looking at it from the standpoint, let’s say, of supply chain security, that’s going to be a different lens through which to look at the definition than if you’re looking at it through traditional trade related equities.

 

So at the Department of State there was an effort to put forward something that would constitute a new bureau for cybersecurity and emerging technology. And as Scott was saying, in Washington when opportunity come to negotiate or to bargain or have an auction, if you will, over an issue, that attracts a lot of interest. And there was a great deal of bargaining over how to structure a new functionality to deal with emerging tech.

 

Now, at some level it’s rather boring to be talking about organization charts. How do you rework the organization chart in a U.S. Executive Branch agency? If you want a new tech function, where does it belong? But actually underlying that sort of seemingly inside baseball debate about where to lodge a new function in an existing bureau, there’s a pretty interesting long-term problems of executive organization.

 

If you place a new functionality -- let’s focus on cybersecurity and emerging tech -- if you place it, for example, under the Undersecretary of State who handles international security, that will imply and even require certain types of inputs, certain types of visibility. But if instead you put it under the undersecretary who handles economic development, then that’s going to bring the issue into the bailiwick of a very different set of civil servants and political appointees. There’s a risk, in other words, of siloing -- the silo risk which people talk about so much when thinking about Executive Branch organization.

 

How do you solve the problem of the silo risk -- siloing, placing things in isolated silos? Well, then, the answer some people suggest: we need to have a direct report to the principle. Let the Secretary be the direct report for a new technology bureau. The problem there is simple work overload. A single office or single officer can only do so much at one time.

 

So you’re pressing up against two constraints. The one constraint is if you place things in overly narrow categories, the thing doesn’t get enough information to do its job. On the other hand, in the interest of getting a sort of panopticon view of the issue you make everything under the sun a direct report to the principle. The principle becomes paralyzed. The principle cannot function that way.

 

That seems to me that’s almost a permanent problem of the Executive apparatus. Just at what level do you place lines of responsibility, lines of direct report, and how do you strike the balance between the need for (inaudible 21:21) -- or also actually having an efficient bureaucracy that functions?

 

I don’t think there are easy answers, and I think some of the trade related issues we’re wrestling with now demonstrate why these administrative problems, which are longstanding problems, take on particular salience. Anyway, I’ll leave it at that. I think we’ve got -- it will be nice to kind of launch into conversation kind of using that to maybe instigate remarks. And I’ll hand it back to you, Steven.

 

Steven Tepp:  Great. Thanks very much, Tom. Thanks, Scott. Let me note for everyone’s benefit that Q&A is now officially open. We’ll be taking questions only through this platform, Airmeet. Please use the “raise hand” button located in the bottom middle of your screen if you want to ask your question live. Also, as I mentioned earlier, you can type questions into the Q&A tab in the upper right of the screen, and you can do that at any time.

 

So I’m going to take moderator’s privilege and go ahead and fire a few questions at you based on what I just heard. And I’ll start with Tom. Tom, you were just talking about how to structure different offices and where to place them and what it says about the priority and what it means if they’re under one roof or another, figuratively speaking -- or perhaps literally. But let me ask it this way. For all the moving of chairs that happens in any administration, not just different people in the chairs but some restructuring, how much does it really matter in the sense that what any administration will prioritize will necessarily have the ear of the higher ups who have the political clout to make the final calls on the tough issues?

 

Prof. Thomas D. Grant:  That’s a really good question, Steven. Resources are a constant area of contestation in the Executive Branch and across government. Who gets how much in terms of personnel, which means budgets? That’s one way, perhaps, to trace -- that’s one way to measure the degree of importance that the chief executive places on any given issues. Just how much does the administration budget for it? To what extent is the administration ready -- in this sort of auction house that Scott referred to, to what extent is the administration ready to use political capital in an auction when you need to have legislative action?

 

One thing about org charts in the Executive Branch is that at a low enough level you can change the org chart through the fiat of the agency head or maybe with the President’s help. But then above a certain level of the org chart, you need to go back to Congress to have the statutory architecture itself changed to meet the requirements that you perceive.

 

So that’s a question as well. If the administration only cares enough to reorganize the furniture on the ground floor -- at the lowest levels of the apparatus and not really willing do shuttle diplomacy down Pennsylvania Avenue to talk about statutory refashioning, then maybe they don’t care quite so much. Or maybe they care a lot, but they just don’t see that the time has come to make the case yet to their interlocutors in Congress. So that’s a huge -- it’s something you can look -- I think you can look at different pieces of evidence for signs of greater or lesser concern and dedication to particular issues.

 

Hon. F. Scott Kieff:  May I join a bit of that? I wonder also as we think about this auction house model whether multiple -- you know, it’s very easy to think of multiples as in competition with each other. But there’s an old joke that a one lawyer town is really bad for business for the lawyer, but a two lawyer town, oh, that’s great for business for the lawyers. You know, an Executive Branch with one CFIUS panel calling the question for the interface among IP trade security, tech, and so forth, well, that’s neat. We’ve tried it. We amended it recently with a beefed up version through the FIRMA statute.

 

What if we have several of those? What if there’s USTR? What if there’s state? What if Commerce has its own? What if, what if?

 

Well, that’s a lot of auctions, and that creates a lot of -- if your theory here is you’re trying to get to optimum operation, maybe that’s an interesting debate about how one manages complicated structures. But if your theory is there’s not enough money pouring down K Street right now and it’d be great to make rain, then suddenly the behavior is matching the hypothesis. The behavior is lots of focal points for calling of questions, and the hypothesis is that one wants to call lots of questions because that induces lots of input from those who pour money down K Street. So you might be seeing a lot of this.

 

So let me give a concrete example. I think in the recent case at the International Trade Commission involving two basically Korean battery companies that were fighting over trade secrets relating to batteries for electric vehicles -- and this was a case located in the 337 docket at the ITC, a docket that’s pretty familiar to people who think about commercial litigation. It resembles commercial litigation much more than it resembles regulation or administration.

 

That docket -- that case in that docket made its way as it is permitted to in the statute -- it made its way to the USTR’s office where the President has delegated authority for the possibility of injecting policy preference into that adjudication. 337, the statute itself, says that the Executive Branch is allowed to set aside one of these adjudications. It’s not appellate review. It’s not a disagreement on the facts or on the law. It’s policy review -- a disagreement on policy.

 

This kind of action from the Executive Branch has generally in the past been very rare. It was done once during the Reagan administration and once during the Obama administration and not in any significant way otherwise. But it showed up as a possibility in this recent spring of this year battery case involving these two Korean companies.

 

I think the trade bar watched the case. I think the trade bar breathed a bit of a sigh of relief when the White House ultimately did not intervene to set aside the ITC adjudication. But I think that sigh of relief maybe was not fully informed because what ended up happening in that case was a settlement but a settlement where the Executive Branch of the United States was publicly speaking about the settlement in a way that’s very familiar to those who watch kind of professional clearinghouses of mediation in effect as a very active party mediator, rather than a “behind the scenes” role.

 

Put differently, this looked like the Executive Branch was highly involved in structuring the settlement and not only the Executive Branch of the United States but also of Korea. And these were two very, very large Korean companies interacting with a number of American counterparts, so this is a kind of state industrial interaction that was pretty significant and is much more consistent with a Sotheby’s/Christie’s auction house open for business hypothesis than with the kind of primary guesses about “Are you pro or anti-trade or pro- or anti-domestic industry or pro- or anti-intellectual property?” It’s much more about being pro active engagement as a focal point for gathering large industrial players to come lobby.

 

Steven Tepp:  All right. Thank you. Interesting. So I’m going to ask one more question on the subject of personnel and structure, and then I’d like to after that turn to some of the specific substantive issues that are out there. There’s an old saying that personnel is policy, so what do the Biden administrations moves thus far on personnel as well as restructuringfor example, considering the Office of Science and Technology Policy is a cabinet level office—tell us about what the Biden administration has in store?

 

Hon. F. Scott Kieff:  You’re seeing a lot of talented people inside. Their talents are often in areas that are not -- they’re not primarily about coordination. So the question then becomes how are these -- how are professionals who are professionals at trade law or science research or so forth -- how are they going to master the interagency? And I think that’s a complicated question. The good news is they’re all smart, good people. The question becomes why are they there? Are they there to represent an audience? Are they there to communicate with an audience? Are they there to be a bridge, or are they there to coordinate with each other? Those are very different roles.

 

Prof. Thomas D. Grant:  Yeah. It’s really pretty obvious. If you’re going to have a modern administrative state to the scale and scope that we’ve developed ours to beour Executive Branch has equities in practically every walk of life, every dimension of the economy—you expect that it be largely a highly technocratic organization. That was sort of the promise of the New Deal in 1933 onward. Lots of smart people from outside the government came into the government. And heretofore, there had really been much of a government. Then, with the New Deal agencies and various sort of fresh understandings of the Commerce Clause and the growth of administrative apparatus, you had to bring in a lot of technicians to operate the thing that was built.

 

Now, we certainly expect scientific rigor and technological fluency, but it’s also kind of a mismatch in my mind. This might be a rather idiosyncratic view but forgive me for that. But science is a process of making falsifiable statements, and then the scientific community tests them. And some of these falsifiable statements have been so resilient that we accept them almost as laws. If I drop a ball, it’s going to go down because of something called gravity that attracts the Earth and the ball to one another.

 

So we don’t really consider that something that needs too much testing. But beyond that sort of rare example of a so-called rule of science or scientific truth, it’s not really a discipline that deals in truths, varieties, or sort of commands. Science is not designed to command us to do things. It’s designed instead to test falsifiable statements.

 

Now, government by contrast, administrative apparatus, starting with the military, which is sort of the original kind of governmental entity going back before you had technocratic trade related and technology related agencies -- it’s a command and control structure. It’s about investing authority in certain individuals, and then other individuals do what those authorities say. And that’s all well and good. You need that. Otherwise, you don’t have an army. You don’t have an administrative apparatus of any kind.

 

But there’s a bit of a mismatch between science as an actual discipline the way it really functions and the command and control apparatus. It’s the antithesis of command and control. What do you do? You cannot not have a scientific function in the modern administrative state. You need scientists. It’s one of the characteristics of international security and nonproliferation, which is a piece of the State Department which I’m familiar form recent exposure. Filled with very talented engineers and scientists with PhDs in all sorts of utterly fascinating topics, many of whom had devoted their careers to branches of their specialties where there probably is no really direct commercial private sector application.

 

Trying to stop bad people from getting really dangerous things is sort of a governmental function. It’s a defense and security function. And that’s not only necessary, but it’s a good thing that we have people willing to devote their careers as scientists and engineers to that sort of pursuit. But I’ve always thought there’s a certain uncomfortable, not totally smooth and copacetic fit between any science and technology function and the command and control aspects of a bureaucracy.

 

I asked about the current administration. I think it’s a case of having to watch this space on some of these emerging functionalities. It’s congenial to every administration to be seen to be doing something on science and technology, but then it goes back to our discussion a few minutes ago. What do you look for as evidence that the administration -- any administration is actually serious? And how serious are they about a given initiative? What type of resources? What type of -- who are the choosing to fill the seats?

 

And then after the ribbon cutting ceremony so to speak when it’s all very exciting, fresh, and new, after that going down weeks, months, and years away, how much political capital are they willing to invest to keep the thing going? Sorry, that’s a little bit of a longwinded kind of philosophical take on it, but it seems this combination of having a clear view of what science can do and can’t do and then trying to marry that up with an understanding of how the Executive apparatus actually functions -- that’s a tricky task. But I think that is the task that you have to perform if you’re to make sense of this.

 

Steven Tepp:  Well, and of course the Office of Science and Technology Policy has the word “policy” in its name, and it’s located in the Executive Office of the President. And so anything that’s policy and in an inherently political environment has a multitude of factors that will be weighed.

 

Let me take both your comments just now and use that as a segue to talk about in some more detail this issue of the waiver of intellectual property -- or the proposed waiver of some level of intellectual property ostensibly to promote the production of more COVID vaccine faster. And I’ll segue to it on an administrative front first since that’s what we were just talking about.

 

By all accounts, the interagency process was at best suboptimal. The issue arose prior to Ambassador Tai’s confirmation, and so there were elements within the administration that sought to stake out a position and leadership on internal consideration of the issue. When Ambassador Tai was confirmed and took office, she made efforts to impose a more rigorous bureaucratic structure to it in the context of the usual consideration of a trade issue within the Offices of the USTR structure. But in the end, it appears that a political decision was made by the Chief Executive and his appointee for the trade office was required to carry that out.

 

The degree to which she in her own heart agrees with that or not, we’ll likely never know. But nonetheless, as an appointee of the President, one does what one is told, or one leaves office. So let me ask each of you to jump in on this, both in terms of the process and if you want to start to lead into the next phase of the question which is, Tom, you talked a lot about science -- is there actually reason to think that suspending patents would have any affect whatsoever on the production of vaccines at this time?

 

Hon. F. Scott Kieff:  Yeah. I love talking about innovation and healthcare. And I am very aware that my own contribution to healthcare from an innovation perspective may be merely that I believe I have figured out how to cure just about any case of insomnia by writing lots of books and articles on patent law. And certainly if any of the viewers out there are having trouble going to sleep, I’ve got a solution for you. Just come read the books.

 

But I think on the question of is this stuff about patents, no. I think it’s pretty clear that these vaccines were not significantly induced by anything resembling patents. There was a call to meet with executives in nations’ capitols around the world, and business executives met with national executives. And deals got struck for vaccines to get produced and rolled out. And if there was any doubt lingering that nonetheless patents were somehow hindering development, the business executives have largely devoted -- tied their hands to the mast and said they’re not going to be enforcing patents to stop anybody from producing a vaccine.

 

So on neither side of the coin, the so-called pro or so-called anti side was this particular moment in time related to patents. So you’re right. One question that people then ask is so then why talk about patents, or why talk about IP?

 

And I think that gets back to the auction house model because, boy, can you increase the number of people bidding for political attention if you call that question. Again, Tom talked about science, and every high school physics student remembers well that if you forget to draw in the force of gravity on your force diagram, not only will your physics professor dock you a few points on your lab notebook but that brick that’s going to slide off your desk is still going to fall on your toe and hurt. So you’ve got to remember that force of gravity. It gets you a couple of extra points on the exam, and it saves your toe.

 

There are some other forces like gravity that while open to investigation are pretty well-established as a matter of science. Again, established as a matter of science means they’re still testable. But it does mean we’ve got a lot of data. And there’s some interesting fields of science out there that we sometimes forget about.

 

One of them is political science. Another one is economic science. And of course they intersect with political economics. And boy, it’s hard to think of a business that doesn’t try to maximize profits. It’s also hard to think of politically responsive actors who don’t try to maximize political power or at least political input, sometimes the combination. And sometimes they feed off each other.

 

So opening up the auction house by reminding the world that large industrial players around the world ought to come to Washington to talk about industrial policy is a great way to get more money pouring into K Street. And it’s a great way to get more money pouring into as many different parts of the discussions as possible. On the one hand, people might cry in their soup about that.

 

On the other hand, look, good government should listen to good ideas. And people who used to be world-class scientists and are now government administrators or used to be world-class staffers on Capitol Hill and now are administrators, they now in their expertise as administrators no longer presumably have current expertise in these other activities. So it makes sense for them to want to get input. And of course, we have the First Amendment. People in our society have a First Amendment interest in speaking to their government. So I’m not suggesting that government shouldn’t be open for input, but what I am wondering is the incentives inside the org chart matter.

 

So let me just be specific. It is worth noticing that in a bipartisan way both the Carter administration and the Reagan administration —two presidents from two different political traditions—both of their administrations focused in on a set of ideas about how innovation gets done that focused primarily not merely on the question of creating ideas of inventing ideas, so-called basic science, but instead focused on the downstream stuff, commercializing technology to bring it to market. And both of those presidential administrations from two very different ends of the political spectrum came to the same outcome, which was to think about the idea as a consensus idea of, let’s call it, strong intellectual property rights. And both of those presidential administrations deliberately socialized within their executive branches those idea in order to coordinate out from the government coordinating devices -- a strong IP system, not as tools to reward magical people for doing magical things, but as beacons around which a bunch of different unknown and unnamed people and actors could coordinate with each other.

 

That beacon strong IP approach is one that jurists across the political spectrum have embraced. Judges -- famous judges like Learned Hand, a centrist Democrat; Jerome Frank, a progressive Democrat; Giles Rich, a centrist Republican -- a relatively diverse group of jurists, a relatively diverse group of political actors directly, explicitly coordinating with each other about a more hands-off approach for facilitating commercialization outside of government with a strong IP system.

 

That seems to be the opposite of the approach that is associated with the current set of activities. And then the question becomes are the current activities opposite of that approach because they want to reach the opposite outcome or because they want to put all of this in question -- they want to put it all up for auction? The bad news is you can lose an auction. The good news is you can win an auction.

 

So I would say for those who are interested in those kinds of ideas now may be a good time across the political aisle to coordinate around a perspective and approach a set of ideas that we’ve seen before with both Democrats and Republicans. But it is different than the approach we’re at least being called to consider by the actions you were just highlighting.

 

Prof. Thomas D. Grant:  Might I add a word, Steven?

 

Steven Tepp:  Please, please.

 

Prof. Thomas D. Grant:  I defer to you. As master of ceremonies, you should cut me off if I take it too far down a path that we might just leave aside.

 

Looking at the patent issue, you see there’s a general problem of administrative power in a system that there are administrative tools that are extremely attractive when there is something like a public consensus about the existence of a particular problem. There are types of problems that people find very difficult to coordinate solutions around on their own, but if you’ve got central authority—and we all broadly agree X, Y or Z constitutes a problem—central government apparatus is just extremely good at directing resources in a sometimes pretty blunt way but a very targeted way at the same time. You can sort of bring the sledgehammer down onto a problem if we all agree the thing is a problem.

 

Now, I’m not really qualified to judge myself whether patents is the choke point on vaccine production and distribution. It occurs to me and I guess it occurs to the current federal government of Germany that maybe patent rights are not the choke point, and maybe the choke point is production. Maybe the choke point is logistics and distribution. Put putting that aside -- and let us just for purposes of argument only -- let us say the choke point really is patent rights, and that’s what’s slowing it down. I’m skeptical, but let’s just for purposes of argument say the patent’s the problem. Okay.

 

So you bring a targeted public solution using all the weight of government, bringing it down onto the patent issue. You solve the issue by waiving patent rights. That becomes a little bit habit forming, I think. And I’m just going on the basis of a little bit of administrative law history and the little bit of armchair psychology. But when you do something and it rewards you in some way, you tend to keep doing that thing all else being equal. Max Weber taught us that bureaucracies are all about growing bureaucracies. Once you create one it grows on its own.

 

That ought to be in our set of considerations whenever we deploy an executive apparatus solution because not that the solution might fail today on this issue—though it might—but because even if it works -- maybe especially if it works, it becomes habit forming. And you start doing the same thing to situations where we really do not have such consensus that a solution is needed. And you start to apply the solution to situations where really it would have been better to allow different elements of society to coordinate on their own without the command and control structure telling them what to do.

 

So that’s -- I guess in a nutshell my concerns are, first, the premise might not be right. Maybe we really don’t need to waive patents to get the vaccines out faster. The second point is what happens to the rest of the patent architecture if you take a wrecking ball theoretically in a selective way to one piece but then you see, oh, that’s kind of fun. Let’s keep doing that -- there’s danger there.

 

Hon. F. Scott Kieff:  And related to the science question the old saying, at least I thought, was inextricably linked with this notion of scientific hypothesis is the idea that there is a set of facts that if true would cause us to discard the hypothesis. So if the hypothesis is this intervention is needed, what set of facts, if true, would cause us to conclude this intervention is maybe, dare I say, not needed?

 

And if the answer to that discussion is, “Pshaw, please, you’re really getting in the way of important things by making us build a record to answer that question in writing,” then that sure seems a lot different than the stuff we generally think of as the rule of law and good administration of government. We generally think of rule of law and good administration of government as a system where people say openly to themselves and each other why they’re doing things and why they’re going to not do them and why those things are important in some way other than the identity of the person doing it. Because if person one gets to do it, why doesn’t person two of opposite political valence get to do it, too? And if one is generally interested in thinking about the “it” as a bad, then maybe we don’t want either one doing it.

 

Maybe another way to think about this is in lawyer speak patent law is part of the United States Code. The United States Code has been codified. Over the last hundred years we went through a significant amount of effort in Washington to codify our Code, to organize federal law into topics. Patent law is Title 35. We’ve got 34 up before and a whole bunch after.

 

And if what you really think you ought to do is delete Title 35, that’s easy to do. It can be done. It would be a lot easier for industry to organize itself if it knew yay or nay Title 35 had been deleted. It will be a lot more anxiety provoking but a lot better for the auction houses to keep calling the question whether in effect Title 35 is getting deleted.

 

Steven Tepp:  So let me challenge some of your comments just there a little bit as I promised, playing devil’s advocate. So oftentimes an administration does not get to choose the issue of the day. The issue of the day is thrust upon them. And the coronavirus is of course a perfect, yet terrible example of that.

 

So first the Trump administration and now the Biden administration is dealing with this once in a century global pandemic. India and South Africa forced this issue presumably out of perception of self-interest. The Biden administration is forced to address it. They could have left it hanging in a way that might arguably have kept the -- to use Scott’s analogy, kept the auction opened longer. So that’s one question.

 

Here’s another aspect to it. Because when we’re dealing with international trade which is by definition a subset of international affairs and foreign affairs, one has to consider the ramifications beyond domestic stakeholders and domestic interests. And I note that one of the common critiques from the left of the Trump administration’s trade policy was that it was insufficiently multi-party -- that it was a go it alone approach. We didn’t particularly care about our European allies, and that harmed us. In fact, in some cases we took action that aggravated our European allies.

 

And yet, this administration has just made this announcement about the proposed waiver with no notice by most reports -- by all reports I’ve seen -- no notice to the European allies who were standing shoulder to shoulder with the United States in opposition to this waiver. And now where some predicted that the EU countries would drop their objections the moment the United States did, on the contrary. France, Germany have been quite vocal in continuing to object and now criticizing the United States for what appears to be a non-substantive political approach. What do you say about that?

 

Hon. F. Scott Kieff:  Well, I think those are all interesting points. And one response is to just say the Trump approach seemed to be, let’s call it, more bilateral rather than multilateral. I don’t know whether we’re going to see that the Biden approach is more multi or all multi. I think if you -- I just don’t know. I don’t get the sense that the Biden administration’s approach is to cut off the rest of the world. I think it’s to reframe conversations and remind everyone that everything’s up for discussion or auction -- or discussion or auction or both or just come talk to us.

 

So I think it is an effective short term political strategy for gathering all the iron filings on the proverbial desk of the world to line up with Washington, at least the ones that want to -- the ones that have their own self-interest to. It’ll be interesting to see where things settle out on that from. But I think getting back to the first part of what you were talking about, I do want to be really clear.

 

Wherever one comes down on the debate about whether one ought to have patents or whether one ought to enforce patents in certain ways, there has long been even among the very pro-patent oriented crowd an explicit recognition that in the language of the U.S. system for example the Fifth Amendment of the Constitution does not seem to prevent the government from taking stuff. It seems to require the government to provide just compensation when it takes stuff.

 

And so the notions of sovereign immunity that are extremely old and go far before the United States and beyond the United States, those notions can co-exist with intellectual property regimes and allow for lots of pressure release valve, lots of escape clause, lots of room to maneuver to cope with emergencies that just require a little bit more government forbearance. That government forbearance either can come in the type of decision making where the government says, “Well, if we have to pay for it, maybe we shouldn’t do it,” or the kind of government forbearance that comes in the form of the government making itself amenable to suit. The United States government has graciously made itself amenable to suit in a lot of settings.

 

And going back to the Civil War, one of the traditions that Lincoln very proudly promulgated was an explicitly court designed to in the federal system locate adjudication against the government so that the public could fully and fairly bring actions against the government that would get the kind of compensation that the Fifth Amendment would suggest as appropriate. So that kind of concept of forbearance and collaboration with the citizenry is a different kind of dynamic interaction then come to K Street and pour your money to the auction.

 

Prof. Thomas D. Grant:  That observation by Scott really spurs my historical -- it spurs me to put my historian’s cap back on, especially when you think of Lincoln’s initiatives in the Civil War. But this is Federalist Society Executive Branch week. If you’re thinking about the very origins of the American administrative state, they are trade based very heavily, not exclusively, but very heavily.

 

If you asked where is the federal apparatus circa the year 1850, the customhouse -- customhouse in New York, apart from a couple of other customhouses that was pretty much almost the full ball of wax when it came to executive apparatus. It’s not coincidental that trade is such a central consideration 200 years later -- 180 years later when we’re thinking about Executive Branch action.

 

One of the major differences, no great surprise to say things have changed in the last 180 years of course, but trade in its classic format a century ago was tariffs. Trade was an issue of tariff control. The emergence of several of the major European federal states, especially Germany and Italy, were driving by tariff barrier removal. But it was basically about putting end posts and duties on physical artifacts moving across borders. But today, the degree of economic integration is that much greater, and the technology (inaudible 01:05:22) 120, 130 years ago. So the non-tariff barriers to trade become a vastly more significant part of the picture. So if you’re thinking about action to change patent law one way or the other—strengthening, weakening, going sideways—you’re going to have trade impacts that go well beyond traditional concerns over end posts and duties on physical artifacts.

 

And that goes to not just the patent debate, but if you start looking at things like the Senate discussion today about $110 billion appropriate for a technology driving program, that’s maybe large enough. I’m not a macroeconomist, but it may be large enough in certain targeted sectors to have trade related impacts if you start having something on that scale influencing who wins, who loses, who gets the attention. That’ll just be subject matter for one trade jurisdiction. It may affect other jurisdictions.

 

And the same goes for monetary policy where you’ve got really large increases in liquidity. You lose track of how many trillions, but it’s trillions. And that is not just a monetary issue. That has trade aspects.

 

And Steven, if I could without taking up too much -- the time on one question, but it’s such a fascinating question. You asked, Steven, what about allies, and what about the approach of the current administration and the Trump administration to allies in trade? I think there might be some interesting lessons to be drawn from history there as well. If you look back at the early stages of the second World War, which I think we would agree marked the eve of a time of emergency. Governments don’t choose the issues that they deal with. Sometimes as you said, Steven, the issues are sort of landed on them.

 

And certainly the outbreak of World War II is something none of the democratic countries chose or desired, but they had to deal with it. (Inaudible 01:07:40). He was adamantly opposed to the proposition that was put forward quit seriously by quite a few people of a trade union between Canada and (inaudible 01:08:01). The idea was there’d be the beginnings of a British Empire single trade zone, which actually did not exist. These were separate -- Canada, Australia, New Zealand, the United Kingdom whilst part of the British Empire notionally had their own trade policies. But the thought was, hey, this is highly time given common cause that we all must (inaudible 01:08:22).

 

Steven Tepp:  Tom, your audio’s slipping back out from time to time again.

 

Prof. Thomas D. Grant:  Is that better like that? I’m sorry.

 

Steven Tepp: This is much better, yes. Thank you.

 

Prof. Thomas D. Grant:  So you think of that period of time as one where it would have been high time for allies to act like allies. Shoulder to shoulder, let’s agree on everything. And there was serious momentum in Parliament in Ottawa and Parliament in Westminster to have a trade union -- a transatlantic British-Canadian trade union. But it did not happen. Beaverbrook himself said, “No. We’re not going to do that. The interests are too divergent. Not going to happen.”

 

Now, in the current parlance -- in the current narrative, one would then exclaim, “But allies don’t do that.” Well, I’m sorry. As a matter of fact, allies do in fact protect their trade equities. It’s not necessarily the case that political and military exigency led to everybody being on the exact same page when it comes to trade, tariffs, non-tariff barriers, and so forth. Those can be on very separate tracks, even under the seemingly overwhelming pressure of a crisis such as 1940-41. So just trying to put a little bit of perspective on that and maybe it’s not so surprising when allies do go their separate ways on trade related matters. But I just wanted to put that out of sort of food for thought.

 

Hon. F. Scott Kieff: May I briefly just follow up and just mention it also is interesting to note that around the time of the Civil War the politics of trade were so heated that they were a significant contributor to the entire notion of the choice to go to war with ourselves -- the politics of tariffs between the North and the South. On the one hand, gosh, what a horrendous price to pay. We fought with ourselves. On the other hand, remember part of the reason for the intensity was that we were financing the entire operation of the federal government on tariffs. This is before an income tax.

 

And now, of course, trade is significantly delinked from the day to day fiscal operation of most governments that we’re talking about here because most governments finance their operations with totally different forms of taxes. In Europe, they have the VAT, essentially a consumption tax. And in the United States, we have what is basically an income tax, although it’s kind of a wealth tax and some other things, too.

 

But the point is what it’s not is primarily a tariff. Yes, we have tariffs, and yes, they have tariffs in Asia and in Europe. But we and they finance the operations of the national government with something other than the tariff. So what that allows the central government in each of these locations to do is to play much more the role of auctioneer with their own and foreign industrial interests because they’re not choking off their government’s own ability to pay for day to day operations. And that’s part of what makes the auction house model so attractive these days is you don’t have to worry about civil war so much.

 

Steven Tepp:  So let me pause for one moment to remind everyone in the audience that we are open for questions. You can type your questions in the Q&A, or you can raise your hand if you’d like to ask your question live. I’ve got to say I’ve never been involved in a trade discussion that didn’t have audience questions, but until the audience gets going, I’m perfectly happy to continue making waves.

 

So with that in mind, I’ll go slightly beyond the moderator’s usual role and reflect back on my days when I was in government at the U.S. Copyright Office. A substantial part of that time was spent negotiating free trade agreements on behalf of the United States and in cooperation with U.S. Trade Representative’s office and other Executive Branch agencies. And tying this back to particularly what Tom was talking about but also echoed by Scott -- how a century and a half ago the tariff was the primary tool of income for the government. It was the primary tool of trade for the government.

 

In the context of our modern free trade agreements, we have been quite willing to give away -- I should say reduce tariffs in exchange for compliance with non-tariff trade barriers, including perhaps most prominently intellectual property. And I find that an interesting observation in the context of the TRIPS waiver because having negotiated hard to get what we got in TRIPS itself in then further in a number of bilateral and regional trade agreements, we’re now giving that away, too, at least in this one context.

 

Hon. F. Scott Kieff:  Yes, you’re absolutely right, Steve. You’re right that we have socialized a vocabulary and a style that was very focused on the importance of intellectual property to everyone in the developed world, as well as suggesting that in fact it would be also helpful in the developing world. And now, the narrative -- now, the script has flipped -- that calling this question makes it -- it’s very easy to click along to a smooth jazz rhythm, but screech like nails on a chalkboard when you go immediately to heavy metal or rock and roll or you pick the other form of music.

 

Here in the trade discussions, we, the United States, were generally speaking together with allies who, for nonmilitary reasons at least nominally, were all also singing off the same page of the songbook that IP was generally helpful to everyone. And now, we are singing off of a very different songbook or at least calling the question, is there a songbook about IP and, if so, opening ourselves up to the question of, what page do we want to be on? I don’t know how much conflict that will create.

 

But you are right. It certainly creates some dissonance. There are some other conflicts, though, that are starting to emerge that are pretty high visibility.

 

So one of them is how you even do adjudication. And this started to percolate up in a particular patent case involving two non-U.S. entities, a European entity and a Korean entity—Ericsson and Samsung— the in the context of a patent dispute pending in China and in the United States. But the conflict ended up becoming can courts in country A enjoin parties appearing before courts in countries B, C, D, maybe all the way up through Z? And that conflict where one country tries to shut down another country’s access to courts is starting to heat up quite a bit.

 

That particular case settled as between those two particular commercial parties in a worldwide settlement involving their own business interests. But that left very open the question of how to handle these antisuit injunctions. And similarly, you have just seen last week in the court of justice for the European Union a case pending in which the question is being asked -- how should a sovereign system -- the EU is essentially a collection of sovereigns, but in some respects, it acts like a sovereign. To what extent can it and should it block U.S. security sanctions against countries like Iran from having a commercial impact inside the EU? And so I think you’re going to see these antisuit injunctions and blocking statutes. You’re going to see all of those conflicts. That’s going to heat up very quickly.

 

Prof. Thomas D. Grant:  Yeah. If I could jump in, Steven, on Scott’s observations. I’ll just add to that, or I’ll sort of diverge just a little bit. But there’s sort of an assumption in free trade models that firm to firm competition is extremely good for the market for innovation, for economic growth. And personally I subscribe to that. Competition leads to societal benefit.

 

But in a trade context where the sovereigns are involved -- where it’s an inter-sovereign agreement under treaty—so it actually is international law coming into the picture—it’s not just firm to firm competition, even when you’re dealing with allies with relatively similar operating systems, rule of law, good commercial code, good commercial judges, statutory enactments that are conducive to market competition. Even there, the sovereigns are also coming into play so that what might theoretically be a level playing field for firm-to-firm competition also has these other players involved. Maybe they’re just referees.

 

That would be perhaps the better outcome, but often they’re not just referees. They’re players. And you’ve got relatively mercantilist philosophies in some countries, industrial policy, or whatever title you want to give it. And when developing trade policy -- and Steven, you probably saw this in your Patent Office working with USDR and other Executive agencies. You have to ask yourself what else will the government interlocutor be trying to do in order to influence the playing fields. Are we really dealing with a free market of firm-to-firm competition, for example, between American and—not to pick on any one country—but Chinese firms? Sometimes yes, it is genuine market competition, but sometimes it’s not.

 

And I think in some of these, for example, the Ericsson/Samsung matter that Scott mentioned where ostensibly it’s a pair of dueling suit and antisuit injunction and then, believe it or not, an anti-antisuit injunction. Are the parties and the courts really the only thing involved, or are there, perhaps, executive equities on one side or the other than also influence the playing field? It seems that that well could be a -- and also that EU matter. I mean, it’s an EU kind of sovereign concern over extraterritorial effects of U.S. law. That’s not just a market issue.

 

Steven Tepp:  So we have a question from the audience from Dr. Roger Cline, which fits perfectly into the theme of intellectual property trade and the Executive Branch review week here at The Federalist Society. Given that Congress in the context of the Uruguay Round agreement effectively created property interest and the adherence to minimum standards of IP protection, is it within the President’s power to abrogate these statutorily created property rights without Congress? And Scott, this probably alludes back to your reference to the Fifth Amendment’s Takings Clause as well.

 

Hon. F. Scott Kieff:  Yeah. It’s a wonderful question, and it’s very close to a question I would give or dare I say have given on a final exam in even just a first year property course. Assuming the students have no knowledge of the specifics, can they spot the general questions? And it seems to me the general questions start to include the following.

 

First of all, what is your approach to a takings analysis? Do you think the public use question is a serious pause point or advocacy point along the road to doing a takings analysis? Some would say it is; some would say it isn’t. Some would say it must be. Some would say it must not be.

 

But that wouldn’t end the discussion. The next conversation -- the next stopping off point would be in this language of issue spotting would be fine, what Takings analysis do you even want to go through? Do you want to go through something resembling Penn Central/Penn Coal? Do you want to think about this as total economic wipeout? Do you want to think about this as something analogous to permanent/physical? Or do you really want to pivot and not think about this as a takings problem but something much more analogous to the switch that can happen inside a highly active regulatory or administrative branch?

 

Sometimes the administrative or regulatory system pivots, and sometimes that pivot can create what much more resembles a breach of contract cause of action than a property takings cause of action. So in the parlance of those who are very familiar with U.S. litigation, this would be something like the Winstar cases brought after the savings and loan debacle and the capitalization requirements that allowed banks to -- savings and loans to basically merge. And then a shift in those capitalization requirements, which then triggered a lawsuit, the kind of most famous of which was named after a bank called Winstar.

 

But that one sounded much less like a takings case and much more like a breach of contract case. So yes, there are a lot of arguments here. The problem is how do you, if you’re running an industry inside or outside of the United States or you’re running the general counsel operation either inside a law firm or inside a GC’s office -- how do you think about these things? And I think what at least I’m seeing is these days a lot of businesses and a lot of lawyers are finding that they need strategies that are highly informed by these diverse siloed areas of law and siloed areas of jurisdiction.

 

So you need more that U.S. law. You need more than patent law. You need more than takings law. You need a bundle. You need a bundle of approaches where you can think about particular venues, particular doctrines, and particular national legal and international legal systems before you can, as a business, mount an effective strategy.

 

I think the good news is these strategies can be built and run. I think right now the dominant strategy that I think too many businesses are still focused on is whatever it is, I’m just going to pour more money down K Street. And I think that strategy plays in very well to the auction house strategy. Every auction house will welcome you. Every casino loves a big whale, but I don’t know that competing to be the biggest whale is the right strategy when you’re in that environment. I think the right strategy in that environment is a more technical strategy, one that is informed by these different areas.

 

Steven Tepp:  Tom, do you want to make a quick comment if I can ask? And I want to respond to this briefly as well, and then I had one more question in the five or so minutes that we have left on the panel.

 

Prof. Thomas D. Grant:  Thank you, Steven. Really quick, just thinking about the Uruguay Round, but there’s also the whole universe of investment treaties, bilateral as well as the USMCA which do contain their minimum standard rules and industrial protection rules. And it might just be some interest into looking into the impact on some of those obligations if you’re talking about major changes to patent rights through executive action. I’ll just leave it at that.

 

Steven Tepp:  That’s a really interesting point, Tom. So what I wanted to say on this very briefly is when we -- if the TRIPS council agrees to waive some portion of the TRIPS agreement, that will suspend the obligations of every WTO member to comply with whatever is, quote/unquote, waived. Does that mean that the United States Congress will -- or that the United States Patent Act at that moment is suspended? No.

 

I agree with the pretext of the question that for the U.S. Copyright Act or the U.S. Patent Act to be suspended in some way would absolutely require congressional action, and that would trigger domestically the sort of analysis Scott just discussed in depth. Of course, Tom alludes to the fact that this could also happen around the world. Every member of the WTO would be free under such an agreement to suspend existing rights.

 

The Fifth Amendment does not apply outside the United States, of course. And since it is the Executive Branch that decides whether or not to initiate any sort of dispute process under the auspices of the WTO, one would imagine that agreeing to the waiver would be tantamount to agreeing not to initiate such a dispute. However, as Tom points out, there are other instruments that allow investor state dispute settlement processes where the dispute is brought by the private entity, not the government, and where those exist under perhaps other instruments that require some of the protections that the waiver would proport to abrogate within the TRIPS agreement could provide a basis for litigation.

 

We’ve got just over two minutes left, which is hardly adequate to address the topic I’m going to raise. But you’ve both now alluded to issues of tariffs, non-tariff barriers, intellectual property, currency manipulation. And all of that points us to China. So I’ll invite you to give about one minute each in terms of what should the Biden administration be looking to do on China and any quick closing remarks you have before we end the panel.

 

Hon. F. Scott Kieff:  I’ll just briefly point out that while Chinese courts and agencies are truly first in class in reaching decisions that are founded well in a record using the best lawyer and economic and technical skills and also generally fair as between party A and party B, it is vital for those outside of China to remember that those courts and agencies inside of China are also operating inside a very powerful central government with a very strong military civil fusion that would demand -- in fact require and coerce full compliance with the obligation to draw all information brought into those adjudications into the security state and back out through the belt and road initiatives, through the hands of favored state actors inside China.

 

So put differently, while a lot of people celebrate the incredible professionalism of Chinese courts and agencies right now, I think right now is exactly the wrong time to choose to go litigate there if what you want to do is avoid any of those things that I just mentioned.

 

Prof. Thomas D. Grant:  I think it goes back to that issue that we were talking about whether you’re really looking at a firm-to-firm competition on a level playing field. Is the government a referee, or is the government also a player? And I think what Scott was getting at is, yeah, government in some countries can be a player as well.

 

The thing I would add about China specifically, Steven, in response to your invitation, is that historically looking back the last 40, 50, 60 years -- the beginning of the Cold War through to the present and the new challenges of Iran’s nuclearization, North Korea’s nuclearization, the export of terrorism by certain countries, sanctions have been largely a United States instrument, sometimes joined by allies in Europe, Japan, Australia, and so forth. And sanctions have had largely similar geopolitical targets. Let’s stop terrorism. Let’s stop the proliferation of weapons of mass destruction. Let’s defend democracy, human rights. But sanctions have been, again, largely aimed at similar targets.

 

We now see, though, that China is starting to think about sanctions as a tool in China’s toolkit. Sanctions have an interplay with trade. One of the fraught issues of WTO law is the legality of certain types of economic sanctions. That’s been bandied about by academics but also governments.

 

But that’s been against a backdrop of essentially likeminded countries adopting essentially, broadly aligned sanctions -- devil’s in the details, but at least UK, U.S., EU have some sort of shared philosophical groundwork. But now we do see that one of the world’s biggest financial, economic, commercial trade countries, China, is starting to learn about using sanctions. That seems to me to be an area that could raise quite a few challenges for trade as well as security and geopolitics.

 

Steven Tepp:  Thanks, Tom. I agree that sanctions represent an interesting subset of many of these issues, and you’re certainly reference to Iranian supported terrorism is particularly timely.

 

Thank you to both Scott and Tom, as well as to all of you in the audience and to The Federalist Society for this very interesting panel. I hope you all enjoyed it as much as I did. A reminder that the next conference event will be tomorrow morning at 11:00 a.m. Eastern, “Civil Rights in the New Administration.” So standby now for the alert directing you to the lounge and watch out for Colonel Mustard. I hear he may be wielding a knife. Thank you again.

2:30 p.m. - 3:00 p.m.
Networking Lounge Open
Lounge
Online Event

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Description

Airmeet, our new online platform for the Executive Branch Review Conference, offers us the exciting opportunity to network with one another, and with speakers, moderators, and FedSoc staff. Before, between and after panel discussions, feel free to click the Lounge button at the top of your screen and join a table of fellow conference attendees. As sessions conclude, we'll also send a "Lounge Alert" with a link you can click to make it easy to join the Lounge. We'll also send alerts to the Lounge before panel discussions begin, so there is no need to worry about missing any of the panels.

Please plan to join us in the "Lounge" for a unique networking opportunity. It's a great way to stay in touch with everyone until we can convene in person once again.  We look forward to seeing you there!

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10:30 a.m. - 11:00 a.m.
Networking Lounge Open
Lounge
Online Event

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Description

Airmeet, our new online platform for the Executive Branch Review Conference, offers us the exciting opportunity to network with one another, and with speakers, moderators, and FedSoc staff. Before, between and after panel discussions, feel free to click the Lounge button at the top of your screen and join a table of fellow conference attendees. As sessions conclude, we'll also send a "Lounge Alert" with a link you can click to make it easy to join the Lounge. We'll also send alerts to the Lounge before panel discussions begin, so there is no need to worry about missing any of the panels.

Please plan to join us in the "Lounge" for a unique networking opportunity. It's a great way to stay in touch with everyone until we can convene in person once again.  We look forward to seeing you there!

11:00 a.m. - 12:30 p.m.
Civil Rights in the New Administration

Civil Rights Practice Group

Topics: Civil Rights
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The Biden Administration has signaled, in various respects, that it would take a new course on civil rights. For example, in January, President Biden issued four executive orders regarding executive orders regarding what the new administration describes as systemic racism.  In addition, President Biden issued early executive orders regarding sex-based discrimination, gender identity, and gender orientation. Incoming executive officials have begun taking actions based on these orders. For example, the Education Department has announced a comprehensive review of its Title IX regulations. Similarly, HUD officials have signaled plans to revisit approaches to disparate action that had been abandoned during the prior administration. The new administration’s emphasis on equity also reaches other agencies that have not historically been associated with the issue. The Centers for Disease Control and Prevention, for instance, have launched an initiative to address how “social determinants of health” (education, neighborhood, wealth) impact people of color. In light of such developments, the civil rights panel will review new actions and policies undertaken or announced by federal executive departments. They will examine such questions as the nature, extent, and desirability vel non of these approaches, as well as the underlying legal authority to act.

Featuring:

  • Mr. Art Coleman, Managing Partner and Co-Founder, EducationCounsel
  • Mr. Eric Dreiband, Partner, Jones Day
  • Hon. Gail L. Heriot, Professor of Law, University of San Diego School of Law
  • Prof. Theodore M. Shaw, Julius L. Chambers Distinguished Professor of Law and Director of the Center for Civil Rights, University of North Carolina School of Law
  • Moderator: Hon. Kenneth L. Marcus, Founder and Chairman, Louis D. Brandeis Center for Human Rights Under Law

 

Speakers

Event Transcript

Dean Reuter:  Welcome in to the second day of the Ninth Annual Executive Branch Review Conference, hosted by The Federalist Society’s Practice Groups. I’m Dean Reuter, Vice President, General Counsel, and Director of Practice Groups at The Federalist Society. Thank you all so much for being with us today.

 

      EBR9, as we call it, is live on The Federalist Society’s website, YouTube, Facebook, Twitter, LinkedIn, and other outlets, free and open to anyone, so do help us by spreading the word. We’re also hosting, for the first time ever, on the Airmeet platform, which will allow you to visit with friends and colleagues in the Airmeet lounge before, between, and after panel discussions.

 

I didn’t see as many of you in the lounge yesterday as I’d hoped, so I hope you’ll drop in today. To do go to the lounge, you will need to register on Airmeet, which you can do in a few simple steps through The Federalist Society’s website. In other Federalist Society news, look for a series of weekly Teleforum calls beginning June 11 to help launch our Freedom of Thought Project. Check the website for details.

 

Turning now to the substance of this week, our first panel today will examine civil rights in the new administration and will be moderated by Ken Marcus. Kenneth L. Marcus is the founder and chairman of the Louis D. Brandeis Center for Human Rights Under Law, established in 2011 to combat the resurgence of anti-Semitism in higher education. Most recently, he served as Assistant U.S. Secretary of Education for Civil Rights. Perhaps most importantly, he’s now the Chairman of the Executive Committee of The Federalist Society’s Civil Rights Practice Group. Ken Marcus.

 

Hon. Kenneth L. Marcus:  Thank you, Dean. Hi, everybody. So we’ve been looking forward to this for a while, and I think that this panel, Civil Rights in the Biden administration, is going to be one of the most interesting ways of looking at this issue that we have seen. As Dean mentioned, we have both the panel discussion now, and then, afterwards, a lounge opportunity.

 

Dean mentioned that there weren’t as many people as we’d anticipated yesterday, but let me tell you, for those of you who have previously attended Federalist Society conferences and enjoyed the networking that takes place in the lobby and in the tables, the Airmeet technology has provided really an extraordinary opportunity for people to connect. So I’m going to encourage that at the end as well.

 

But for now, we have, I think, a very timely and early intervention and an opportunity to consider what is happening with the new administration on civil rights with various appointments that have been made or announced, and initial moves, including executive orders. The initial outlines are coming into sight, and it is now possible, I think, to make the first informed, intelligent assessments of what the Biden administration’s program and policy on civil rights is going to look at. And I think that the four people that we’ve assembled for this panel are really the perfect group to discuss this.

 

You have, as part of the online conference materials, the official biographies of our speakers, so I’m going to give you the unofficial now and give you my thoughts because these are four people whom I have always considered, for many years, to be some of the most insightful people on civil rights and really the best for this particular moment.

 

Ted Shaw, you’ll recall from prior Federalist Society events, if you’ve been around for a while. Ted Shaw is not only a distinguished professor of law at the University of North Carolina, he was for many years an advocate with the NAACP Legal Defense Fund. So he is one of the most experienced and forceful civil rights advocates out there, and we’ll be pleased to hear from him first.

 

Second will be Eric Dreiband. Eric Dreiband, another very experienced civil rights practitioner. Nobody knows more than he does about the workings of the civil rights bureaucracy. He had been general counsel of the EEOC during the George W. Bush administration, but most recently, he was the head of the Civil Rights Division at the Department of Justice during the Trump administration.

 

So he’s really perfectly positioned to understand what is happening now with the Biden Justice Department and civil rights, particularly as it applies to the question of what changes are happening or are going to happen with this administration as compared to the last. Since leaving the Trump administration, he’s returned to his partnership at Jones Day with approximately 85 percent of the Trump administration lawyers. Eighty-five or eighty-seven percent, Eric? Somewhere in that ballpark.

 

Eric Dreiband:  Exactly. Yeah. It might be a little lower, Ken, but go ahead.

 

Hon. Kenneth L. Marcus:  Okay. Very good. Very good. Art Coleman, in my opinion is -- I think he might’ve been arguably the leading civil rights policy intellectual of the Clinton administration, I would say. From his perch at the Office for Civil Rights at the Department of Education, he was involved in many of the most important civil rights policy changes of that period. He’s very much stayed in the game of civil rights, especially in the area of higher education, where he has developed a reputation as one of the most astute legal analysts of higher education legal issues, especially as the apply to civil rights.

 

Gail Hariot is a member of the U.S. Commission on Civil Rights and in that respect has been doing oversight of civil rights in the federal government over the various administrations. She’s also a law professor at San Diego and is well known to Federalist Society conference goers. As Dean Reuter indicated, she also headed this practice group during what I think you might call the Golden Age of The Federalist Society Civil Rights Practice Group, which ended only last year when I took over in her place.

 

Hon. Gail L. Heriot:  And I’m so glad that you have, Ken.

 

Hon. Kenneth L. Marcus:  The end of the Golden Age, but the beginning of a new era. So now we have as the first conference since I’ve taken over for Gail, and we have, as I’ve discussed, four great speakers, and I hope some great questions from you. If you, members of the audience, have questions, you will have the opportunity to write them in the Q&A section, or at the end of the presentations, you can raise your hand, as it were, using the function on the right hand of your screen. Raise your hand and we may be able to call on you.

 

There’s also a chat function. That’s not so much questions for the speakers, but that’s a function in case you want to chat with other members of the audience during this talk. So there you have it. An excellent panel about to start, followed by the lounge period. We will start with Professor Ted Shaw.

 

Prof. Theodore M. Shaw:  Well, good morning and thank you, Ken. I’ve been with The Federalist Society on many occasions, and I welcome this occasion to engage in dialogue. Sometimes, we mix it up, and sometimes, it’s a pretty steady conversation, but either way, I welcome the opportunity to be with you all again. I think I have five to eight minutes, and so I’ll try to stick with that. My dear friend and colleague, Art Coleman, will be surprised if I do that, but I’ll do the best that I can.

 

Obviously, with the initiation of the Biden administration, things at Justice have changed and will continue to change, and I want to just talk a little bit about that and talk about not only some of the personnel changes but also some of the substantive issues and what we’re likely to see coming down the pike.

 

So in the first instance, obviously, with a new Attorney General, and, of course, he’s well known to all of us given his history, the Oklahoma City bombing prosecution. But just as importantly, he was a nominee to the United States Supreme Court. Of course, Merrick Garland, no stranger, and under his leadership, the Justice Department has announced a couple of priorities, and they include domestic terrorism. They include the challenges with respect to white supremacists, violence, which included the January 6 insurrection, and that has led to 2,000 charges against individuals who were involved in that incident, as well as 411 defendants.

 

Now, that’s not the job of the Civil Rights Division, but the question of white supremacists, that is an issue that falls within the four corners of the work of the Civil Rights Division. And so that’s a priority that the Attorney General has announced, as well as hate crimes more generally. And we’ve seen a huge increase in hate crimes across the United States, most recently in a very disturbing manner, the only manner that it could be, of course. We’ve seen a focus of hate crimes against Asian Americans, and that as well as white supremacist hate crimes, that appears to be a focal point of the Civil Rights Division of the Justice Department and the Justice Department more generally.

 

We also have seen a focus and will continue to see a focus on police departments. We all know that in recent times, we’ve seen a terrible uptick in deaths of unarmed African Americans—but not exclusively African Americans, primarily African Americans—at the hands of law enforcement. And so the issue now, or the issues, go to policing. That’s not new under this administration. Under more recent administrations, we’ve seen these issues. Ferguson is one of the places where we saw that violence, but also in Minneapolis, and in Louisville, Kentucky, and many other places where police departments have been involved in shootings and the deaths of unarmed African American men and women. So that’s a priority of this administration and more specifically, police department reform.

 

There’s a lot of conversation now about what to do about police departments, and I should’ve started off by saying, of course, that right now there’s not a confirmed assistant attorney general for civil rights. Kristen Clarke, who is a former NAACP Legal Defense Fund Lawyer as well as a former head of the New York State Attorney General’s Civil Rights unit and has been most recently at -- and is at the lawyer’s committee, is a nominee of the department.

 

She, like Vanita Gupta, who now has been confirmed to the Justice Department, she is receiving a lot of opposition. Part of her opposition is right-wing conservatives claiming that she wants to defund the police. She says that’s not what she said and certainly not what she meant, but the nomination has been held up, up until now. My hope is that Kristen Clarke, who is an excellent public servant, will be confirmed soon.

 

Voter suppression issues, they’ve been percolating for quite some time, and in the aftermath, again, of the insurrection, we’re seeing a great deal of action at the state level with respect to proposed legislation that will make it more difficult for individuals to vote, and we could say a whole lot more on that. I think that’s going to be a priority. I know it’s going to be a priority within the Justice Department under the Biden administration.

 

And we’re likely to see a lot more litigation to protect the right to vote, although, given the decision in Shelby County v. Holder in 2013, some of the protections that existed before have been stripped away, so it’s more difficult to protect individuals from being discriminated against in the exercise of their right to vote.

 

And I want to perhaps -- there’s a lot more I could say, but I want to mention that the Justice Department has gotten involved in protecting LGBTQ individuals, in particular, a case in which a trans woman was repeatedly raped in a Georgia men’s prison. I except we’re going to see more of those types of issues percolating up through the Justice Department.

 

And finally, I think many of us have our eyes on the Harvard and the UNC admissions cases and other challenges to admissions, diversity efforts, etc., in which the Justice Department Civil Rights Division will take a different position than the department and the administration under the administration of President Trump.

 

So I’ll stop there. I could say a whole lot more about that, but I want to stay somewhere close to what I promised.

 

Hon. Kenneth L. Marcus:  Eric Dreiband.

 

Eric Dreiband:  Well, thank you, Ken, and --

 

Prof. Theodore M. Shaw:  -- I’m sorry, Eric. I was supposed to do that. Eric Dreiband.

 

Eric Dreiband:  That’s all right. That’s okay. Let me start, first of all, by thanking Ken, and The Federalist Society, and Dean Reuter for inviting me to join this distinguished panel. It’s, for me, a real honor to participate with Professor Shaw, and Professor Heriot, and with Art Coleman, and with Ken, who I’ve known for a long time.

 

I’m going to talk very briefly, basically, three different topics to try to frame our discussion. First, to follow up on Professor Shaw’s remarks about what happened in the Civil Rights Division during my tenure there, secondly, changes by the new administration, and then very briefly, I’ll talk about another civil rights enforcement agency, the Equal Employment Opportunity Commission where, as Ken mentioned, I’d once served as their general counsel. And I want to do that to frame the discussion because I think a lot of what the Civil Rights Division, in particular, is doing will be a continuation of what happened when I served there, and it may surprise some people.

 

So with respect to criminal cases in the Civil Rights Division, we made the prosecution of hate crimes, in particular, and police crimes a priority of the Civil Rights Division, and in fact, set enforcement records in both areas. So with respect to hate crimes, during my tenure at the Civil Rights Division, prosecuted more hate crimes than it’s done in over two decades, just this past year in 2020, despite the fact that we had difficulties with grand juries in the midst of a pandemic.

 

And those cases include several race-motivated cases, including the Tree of Life Synagogue case in Pittsburgh, Pennsylvania, where the defendant is alleged to have killed 11 people and nearly killed 7 others. A national-origin and race-motivated case out of El Paso, Texas, where at a Walmart, where the defendant allegedly murdered 23 innocent people and several dozen others were injured. And, of course, in Charlottesville, Virginia, we successfully prosecuted and convicted a white supremacist there who killed one individual and [injured] several dozen others after the Unite the Right rally occurred in 2017.

 

We also prosecuted—and this may surprise some people—more color of law crimes than ever in the history of the Civil Rights Division during my tenure. These are cases that typically involve law enforcement who engage in excessive use of force, often resulting in death or serious bodily injury to victims of these kinds of crimes.

 

In other areas, sexual harassment, we set records with respect to the Fair Housing Act, sexual harassment in housing. We also prosecuted sexual harassment civil cases involving Title VII of the Civil Rights Act and Title IX of the education amendments involving public schools.

 

And then with respect to racial justice, this was something that I stressed as a priority during my tenure. We prosecuted all kinds of cases under the Fair Housing Act with respect to housing, racial steering, lending under the Fair Housing Act and Equal Credit Opportunity Act, race discrimination voting under the Voting Rights Act under Title VI of the Civil Rights Act, race discrimination in college admissions, among others.

 

With respect to religious liberty, we had something called the Place to Worship Initiative, where we significantly increased the number of investigations and lawsuits brought on behalf of victims of religious discrimination. Our cases involved Buddhists, Christians, Hindus, Jewish people, Muslims, Native Americans, and many others. And, of course, prosecuting anti-Semitic and other kind of religiously motivated hate crimes was a priority of the department and of the Civil Rights Division.

 

Prison reform is something that we did all around the country, including filing suit against the cases pending now against the state of Alabama for guard-on-prisoner and prisoner-on-prisoner excessive force. We prosecuted civilly state prisons for sexual abuse of female prisoners and juvenile justice systems to keep youth safe.

 

We also prosecuted civilly cases that involved immigration discrimination, including our Protecting U.S. Workers initiative. Now, this was something involving employers that abused temporary foreign visa programs by discriminating against U.S. workers.

 

We increased significantly our human trafficking prosecution unit by a fairly substantial number, and that was a three-year plan that remains in place to increase every year the number of prosecutors dedicated to prosecuting sex and labor trafficking cases. And we brought 100s of those cases during my tenure at the division.

 

On disability rights, we successfully settled cases involving the State of West Virginia involving children throughout the state, Amtrak involving accessibility of their train stations throughout the country, the State of North Dakota involving individuals with disabilities. And in Voting Rights Act, our cases included a huge case against Harris County, Texas.

 

We also successfully defended in court protections against coercive abortions for women and their unborn children who are diagnosed with Down syndrome. And we spent much of last year prosecuting cases civilly involving COVID-19 restrictions that infringed upon civil liberties around the country, including First Amendment rights to free speech and the free exercise of religion.

 

With respect to changes that have already occurred, I think a couple of things I want to mention, six of them, real quickly. One, the department rescinded a memo issued by Attorney General Sessions involving long-term consent decrees in state and local government institutions, so the internal approval process at Justice will be different than it was during the previous administration.

The administration rescinded a memo that my immediate successor signed late in January that dealt with the extension of Title VII sexual orientation and transgender protections to other statutes. So it’s unclear what the department will do with that, but there was a memo issued after I left the department extending the reasoning of the Supreme Court in the Bostock case, under Title VII, to other statutes, like the Fair Housing Act.

 

Transgender athletes—I think Art may talk about this later, maybe Gail will—the department has changed positions. The department filed a brief in a pending Ninth Circuit case involving whether or not a state law can mandate athletic participation for people of their biological gender, and the department withdrew that brief.

 

In voting, there’s a case pending at the Supreme Court of the United States called Brnovich v. Democratic National Committee. That case involved out-of-precinct voting and ballot harvesting limits by Arizona State law and whether or not those restrictions violate the Voting Rights Act. And just to be clear, that case is pending. I was fully recused from that case when I was at the Department of Justice. I did not participate in it because my current firm represented one of the parties. In any case, the department indicated in its withdrawal of the brief that it disagrees with the framework of the brief but not the conclusion of the brief.

 

The department, during my tenure, filed a lawsuit against Yale University for its college admissions, alleging that its admissions violated Title VI in the Civil Rights Act with respect to race and national origin discrimination. The department dismissed that case, and then finally, the final change involved the filings about the pandemic-related restrictions. So far, we’ve not seen any, that I’m aware of, anyway, similar types of challenges since the new administration took into effect. There will be other changes, and Professor Shaw, I’m sure, will talk about them as well.

 

At the EEOC, one thing I should mention briefly, is there was actually, during the 2017 to 2021 period, a fairly significant increase in both the number of lawsuits filed and recovery. So the number of lawsuits went up in that four-year period by 27 percent, and recovery increased by 34 percent over the prior four-year term. With respect to policy at that agency, I think it remains to be seen, primarily because of the five commissioners. It is a bipartisan commission. Three of those five commissioners are Republicans, and the earliest that the commission will change will be in July of 2022, when current Commissioner Janet Dhillon’s tenure expires, unless President Biden removes her earlier than that or she resigns.

 

We did have an unusual event happen at the EEOC as well, when the general counsel left the agency after President Biden fired her. There had been some other internal operating procedural changes at the EEOC. I think the most important for anyone who has a case pending there is that the litigation approval now rests entirely with the commissioners. That is a sea change from the last 25 years or so, so that anybody that has a pending lawsuit at the EEOC can go directly to commissioners now as opposed to the authority that the general counsel had.

 

      So I’ll leave it there for now, and look forward to a spirited discussion. So from me, I think, Art, I’ll turn it over to you.

 

Art Coleman:  Thanks, Eric, I appreciate it. And thanks, Ken, for your kind introduction, and to The Federalist Society for inviting me today. It’s a privilege to be here with this panel.

 

I’m going to pivot pretty quickly to Department of Education issues and, in particular, focus on Title IX which prohibits the discrimination based on sex within any institution that’s a recipient of federal funds. For starters, I think it’s very clear -- and by the way, Ken, good timing because there’s been a lot of news about the Office for Civil Rights and the Department of Education in the last week on this front, in particular. What’s very clear is issues of sexual harassment, sexual violence are going to be central and a priority to this administration, as they were, in fact, in the last administration, but with some consequential pivots to come.

 

We saw an executive order by the president in early March telegraphing this intent around emphasis. And just yesterday, as part of the implementation of that executive order, the Department of Education announced it’s going to hold virtual public hearings on issues of policy and enforcement of sexual harassment under Title IX in early June.

 

      I want to talk about the two points of focus that it telegraphed in that context. One, looking at the 2020 amendments to the regulations promulgated by the Trump administration and issues of sexual orientation and gender identity under Title IX.

 

      Before I go a little deep on substance on each of those, I want to make just two big picture points, one kind of a soapbox for me. I hope on this set of issues -- and as Ken kindly noted at the outset, but he said it better than he might have, I’m old. I’ve been around for a while, both within and then watching and being part of conversations on issues of policy on this front. And I hope, to the extent that it’s feasible, we can park politics at the door and focus on real students, and real harms, and real evidence about the consequences of policy shifts in multiple directions so that we actually understand the issues, the harms, and the science, by the way, that undergirds what I think are really important judgements.

 

      The second big picture point I want to make before I dive in a little bit into substance is that last week, the Biden administration announced that Catherine Lhamon would be its nominee for Assistant Secretary for Civil Rights, and that’s a notable action because she was also the Assistant Secretary for Civil Rights in the latter stages of the Obama administration. So one might presume that this is going to be Groundhog Day all over again, and my guess is that Ken can probably respond to that better than I can because he had two separate stints in that position over his tenure.

 

      But the point I want to make is that 2021 is not 2012 for a couple of important reasons. Number one, we are dealing with a very different legal landscape with very consequentially different precedents in the federal courts, that I’ll address a little bit, that I think sets a very different foundation for decision-making.

 

Two, as I’ve alluded, the Trump administration promulgated for the first time in the history of the department Title IX regs that reached the question of sexual harassment and violence, and that’s a positive, in my view. It gives it more power in that zone, but it also is a very different context than the context in which Assistant Secretary Lhamon previously—and assuming she’s confirmed—would again be operating in a context that the foundation for Title IX sexual harassment guidance was actually guidance we promulgated when I was in the department in the mid to late ’90s and into 2001.

 

And the third point I want to make is -- and this is often, I think, missed in the context of these issues that really do address harms to students, physical harms, psychological harms, educational harms. Scientifically, we know more. There is just a bit bigger body of evidence, and I would simply call out if you have not looked at the National Academy of Science’s 2018 report on Sexual Harassment of Women: Climate, Culture, and Consequences. It is a tome of very rich information, principally focused in the post-secondary context. But it’s a very rich foundation to think about these issues, so I’d offer that, for what it’s worth.

 

And so with that background, let me offer two points, one addressing the question of sexual harassment in general, and then one turning to issues of transgender and lesbian and gay students. So we’re dealing now with the context where the Trump administration proposed these regulations. And as I said, I think elevating the issue to the question of regulatory status, was it positive? And as was, at least, conceptually, its focus on issues of due process for the accused, which I think had been both underattended and insufficiently attended in prior administrations. And I think conceptually, at least, that’s good.

 

But in the wake of those regulations, a number of issues have surfaced, and time won’t let me tick through all of them. But I would anticipate, as part of this public comment period and whatever other activity the Biden administration may take on the issue of sexual harassment, we will see attention focused on, one—and I’m just going to lift up three here—the scope of the definition of sexual harassment.

 

The Trump administration narrowed the scope of that definition to conform more in line with Supreme Court precedent and the historical enforcement standard that the department had adopted back in the mid ’90s that then tracked a legal standard that was in place. And I think there’s some interesting questions about how different the two standards really are, in effect, and so that should be a question that everyone is watching.

 

Second, the 2020 regulations shifted materially the required notice sufficient to trigger an obligation by an institution or a school to respond to an incident of sexual harassment in very simplistic terms. The standard is now actual knowledge by a Title IX coordinator or an official with a specific authority, when before it was whether a responsible employee, whether they were in an official position or not—they could’ve been a professor or a teacher—knew or should have known about that harassment. So there’s a big gap there in that, and I would expect that to be an issue.

 

And then third, the issue that I raised that I think is both consequential and complex, and I often find that the headlines on the right and left of this issue at the extremes tend to get it wrong because there’s a lot of nuance, and there’s a lot of context here. But getting to the question of due process for the accused in assuring that there are appropriate protections while ensuring full enforcement of Title IX to protect those who have been victims or alleged victims of harm.

 

And I would just say there, there’s a real question in my mind about the way the regulations may have removed important discretion for institutions and schools to address some of these issues, particularly at the post-secondary level where institutions attempting to do the right thing might want to really invest in community building and restorative practices. And some of the requirements that are mechanical or more detailed and put it more in a very legalistic frame may undercut that effort, and so I think that’s going to be a challenge.

 

      To shift quickly to the issue of LGBTQ+ rights, building on my theme about Groundhog Day all over again and this not being that because of context, what’s very different in 2021 than in 2008 or 2012 is that we now have five or six, by my last count, federal circuit court decisions in what is an unbroken string of cases since, I think, around 2015 or 2016 that have ruled in favor of inclusive prop policies for transgender students, sometimes in support of district policies challenged by opponents, and sometimes against the districts that had restrictive policies deemed discriminatory.

 

And that’s a very different landscape than the Obama administration faced when it first issued Dear Colleague letters, where it was really the front end of the ski, if you will, on that front. That collection of cases is further bolstered by the decision in—Eric mentioned earlier—the Bostock v. Clayton County decision of last term that recognized that discrimination, quote, unquote, “because of sex” under Title VII included protections for LGBTQ individual employees. And the question is now, what’s the implication there for Title IX?

 

I would simply call out, for decades, the courts have considered the “because of sex” standard under Title VII to be the functional equivalent of the “on the basis of sex” standard for Title IX. Some of the later cases on this front, post-Bostock, have actually recognized that point. But you can see a trajectory there, even though the Court was very careful to say, “We’re not reaching those other questions today on a number of fronts,” including some that would implicate fact questions that they could not reach.

 

I will note in the regulatory context, as robust as the Title IX regulations were in the Trump administration, they punted on the question of defining “sex” in the “on the basis of sex” context, did not recognize or incorporate any of those cases that were being decided along the way. So there is a major gap in that regulatory frame, and I would certainly expect the department to address that as it moves forward.

 

So let me stop there and pass the baton to Gail. Hi, Gail.

 

Hon. Gail L. Heriot:  Hi. Thank you so much. I know that many people, including some conservatives, voted for Joe Biden because they judged him to be middle-of-the-road, at least from his campaign rhetoric, and many of our viewers may be among those. But I think it’s important to recognize that middle-of-the-road is not what we have been getting so far, at least on the issues that I’m most familiar with.

 

On those issues of race, sex, and ethnicity, I think the Biden administration is leaning heavily to the left. Biden’s appointments to major civil rights positions make that clear. But it’s the policies, not the personalities that we’re talking about right now. Alas, I only have eight minutes here, so I won’t be able to get to everything, but I hope to be able to point out a few of these.

 

First, on the issue of race preferential university admissions, Biden’s Department of Justice withdrew the Trump administration’s support for Students for Fair Admissions. That’s the group that is suing Harvard for discrimination against Asian Americans. Students for Fair Admissions has a cert petition currently pending in that case against Harvard.

 

I don’t think I know for sure, anyway, whether the Biden administration will affirmatively weigh in on Harvard’s side in that case since those briefs are not yet due. But what we do know for sure is that it has withdrawn support for the Asian American group. Meanwhile, the Biden administration has abandoned a similar lawsuit that had been filed by the Department of Justice during the Trump years alleging discrimination against Asian Americans by Yale University.

 

Now, the abandonment of Asian Americans at Harvard and Yale doesn’t really surprise me. Democratic administrations have long supported race preferences in university admissions, and that pretty much guarantees discrimination against Asian Americans. On the other hand, the Department of Education’s proposal to give funding priority to schools that adopt critical race theory curriculum in history and social science, that did surprise me. That’s a real lurch to the left, and so I suppose that’s my second example.

 

The Biden administration’s proposal explicitly mentions the 1619 Project, and it’s the curriculum that has been developed surrounding it as the kind of curriculum that they would like to give funding priority to. It’s seeking comment on that proposal now, and I hope a lot of people do file comments. I think they might be due tomorrow.

 

What exactly is the 1619 Project curriculum? It is the curriculum that was developed to promote the New York Times 1619 Project. So if you read the New York Times, you know a lot about that. That project purports to date our nation’s founding not from the American Revolution, Declaration of Independence, or the ratifications of Constitution, or the Mayflower Compact, for that matter, but rather from the first year that African slaves were brought to America.

 

The 1619 Project argues that all American institutions are fundamentally infected with slavery and that the American Revolution was fought to prevent the British from abolishing slavery. Hence, everything the country purports to stand for really is just a cover for slavery and for racism. Some of our country’s most distinguished historians -- and I’m not just talking about conservatives here. Sean Wilentz, Gordon Wood, James McPherson, they have condemned the 1619 Project as inaccurate historically and overly focused on race and slavery.

 

Frankly, it’s a bit shocking to me that any administration would threaten to make that kind of curriculum preferred for young minds. If the rumors are true on all of this, the Democratic Party political strategists are already starting to warn office holders that storm clouds are on the horizon. Voters are not nearly as enamored of wokeness as some have thought.

 

A grassroots movement has sprung up nearly overnight to oppose the 1619 Project curriculum and similar critical race theory training in general, not just at the federal level but also at the state and perhaps more importantly at local levels. It has already started affecting school board elections. It already has been persuading state legislatures to take some action, some of which is better thought out than others.

 

The other political storm cloud on the horizon is connected with the overwhelming defeat of California’s Proposition 16. That measure would have repealed the provision of the California Constitution that prohibited, among other things, race-based preferences in state university admissions put there in 1996 by a state popular initiative. And that repeal effort was generously funded by some of America’s largest and wokest corporations, and yet, it went down in multi-million-dollar flames.

 

I co-chaired both the original voter initiative back in 1996 and the “No on 16” campaign this past year, so I suppose that you could say that I have a personal incentive to tell you that Prop. 16 was defeated because my colleagues and I are just political geniuses that knew exactly what to say to persuade California voters about an initiative they might not otherwise have taken much account for. But let me tell you something. We are not political geniuses, and what’s more, we were outspent by about 16 to 1.

 

The one and only reason that we won that initiative was that most Californians, even in deep blue California I’m talking about, agreed with us and always have on that issue. Race preferential admissions are very unpopular in polls, especially if the issue is explained so the people know exactly what you’re talking about rather than using euphemisms.

 

So that’s not new, but what is new is how Asian American voters are utterly energized on this issue, and not just in California now. And they are very much aware of the Biden administration’s abandonment in the Harvard and Yale cases. So those are two issues where the Biden administration is very much to the left, not just of voters in general, but of energized voters.

 

Of course, there’s a lot more that’s coming up on the Biden administration’s agenda on the issue that’s been getting a lot of attention, and I think deservedly so, that is the fate of the Trump administration’s efforts mainly to give due process rights to students accused of Title IX sexual assault. And as many of you know, there was a series of guidances, beginning with the Clinton administration, that essentially required colleges and universities to follow certain procedures. One was to employ proponents of the evidence standard rather than a clear and convincing evidence standard in determining whether or not a student has committed a sexual assault.

 

To me, at every turn, the old guidances were imposing procedures that made it difficult for a young man—and it usually would be men—to defend themselves when accused of sexual assault. Even Justice Ginsburg said that she thought that there were some problems. I, myself, have spoken to several young men who, in my opinion, have been wrongly accused, but who were nevertheless punished for a sexual assault that I do not believe they committed.

 

The Trump administration tried very hard, I think, to do the right thing. Unlike previous administrations, it employed the full notice and comment procedures as required by the Administrative Procedure Act to promulgate actual regulations, laying out, in this case, minimum due process rules for those who are accused. Title IX activists have been calling for the repeal of those regulations ever since.

 

And now the Biden administration has set in motion procedures that could lead to exactly that. We don’t know for sure. Hearings are going to be followed presumably by preliminary proposals. It may take a long time. These procedures do tend to take a long time, but, given that the Trump administration did promulgate these as regulations, the Biden administration has to go through the same procedures now if it wants to repeal or modify them. I’m not optimistic about how that will turn it out, but we’ll see.

 

On school discipline, the Biden administration has now sponsored a web event that points very strongly towards the likelihood that they will at least re-institute the Obama-era policy and quite possibly extend it, I believe, by emphasizing disability, that is disparate impact in disability, rather than emphasizing just race. I consider this to be hugely important, the school discipline issue, in general, and the use of disparate impact, in particular.

 

Students don’t learn in chaotic environments, and efforts to exert federal control over school discipline during the Obama administration, I think, led to exactly that in many parts of the country. I will be glad to elaborate further in the question and answer period on why I think that is contrary to the law under Title VI if anybody wants to ask me about that.

 

On transgender issues, President Biden signed an executive order—I believe it was actually signed exactly on inauguration day, so this was a high priority—directing his administration to look very closely at transgender issues. So far, it has backed away from the Trump administration’s position that Title IX actually forbids assigning anatomical males to girls’ and women’s sports teams. I am told that there is plenty more to come on the transgender issue.

Interestingly, my read of Bostock and that opinion is that it actually makes it harder, not easier, for the Biden administration to go back to the Obama administration’s insistence that transgender individuals be treated according to their gender rather than their anatomical sex for the purposes of bathroom, locker room, and shower assignment. I don’t have enough time in my little eight minutes to explain that, but I’d be glad to talk about it in the question and answer period. So ask me that if you want to.

 

And judging from Ken’s look on his face, I’ve probably used up my eight minutes, so I’m going to now turn it back over to Ken.

 

Hon. Kenneth L. Marcus:  Thank you, Gail, although that was a look of gratitude for the excellent presentation that you’ve just given and that the other three have given as well. For members of the audience, you’ll notice that in the upper right hand corner of the screen, you’ll have an opportunity to raise your hand, as it were, in which case we will be able to call on you to provide a question directly. Alternatively, of course, you could continue to use the Q&A box to provide questions.

 

I’m going to start though, while we’re waiting to see if others raise their hand, by inviting, I would say, in the first instance, either Ted Shaw or Eric Dreiband to address a big picture issue that in different ways, I think, both Art Coleman and Gail Heriot raised, which is, in a big sense, what can we expect from the Biden administration on civil rights?

 

Everyone has given a large number of areas in which we can expect changes, but overall, overall, is this going to be an extension of the Obama administration? After all, as Art pointed out, OCR, the Office of Civil Rights at the Department of Education, will likely be headed by the very same person who headed it during the tail end of the Obama administration.

 

And by the way, at the Civil Rights Division, the person who headed that division towards the end of the Obama administration is now overseeing civil rights as the Associate Attorney General. So should we expect essentially more of the same, or alternatively, should we expect something different perhaps because, as Art pointed out, the context has changed? There have been legal cases, for instance, that in some ways provide more running room, and in other ways might provide more constraints, or alternatively, because as Gail pointed out, there might be political issues.

 

On the one hand, there’s some language from President Biden suggesting perhaps a more unifying or moderate approach. On the other hand, some tea leaves perhaps suggesting a more radical approach. So what should we -- and I know that at least one participant just lost a connection. What should we expect? Is this Obama three, or is it something else? Eric, can I turn to you since I don’t think that you addressed it, and since I don’t think you’ve lost network connection?

 

Eric Dreiband:  Yeah. I have lost it a few times, so I’ll start while we’re waiting for Professor Shaw to rejoin. I think a couple things. One, certainly there have been and will continue to be policy changes that will mirror what we saw in some ways during the Obama years, the sort that Art and Gail described, and that Professor Shaw described, and that I described. There will be changes. Elections have consequences, and there are changes. The landscape is different today, and I think the biggest change that has occurred is in the LGBT area with the Bostock decision by the Supreme Court of the United States last year under Title VII.

 

That decision issued in June of 2020. When it issued, I instructed the Civil Rights Division team to enforce the law consistent with the Bostock case. And that was happening when I left in January, but I think it does raise questions about the extension of that Supreme Court case to other statutes like Title IX, and the Fair Housing Act, and others. And I expect that the current team will take an aggressive approach on those issues.

 

I think likewise on things like Professor Heriot said, with respect to racial preferences, there is a clear difference between what we saw when I was at the Civil Rights Division and what has happened since. And the best example is the one that I mentioned, the Yale case. On the other hand, I think a lot of the work of the Justice Department and of the EEOC will continue apace. Hate crimes prosecutions increased significantly during my tenure, for example. I expect that will continue.

 

Likewise, with human trafficking, sex and labor trafficking, in particular. Those prosecutions will continue. And I think, of course, on issues about police misconduct cases, I think we will see a continuation of what we saw when I was at the department on the criminal side where we, as I mentioned, did set a record on the criminal side.

 

I think on the civil side, what Professor Shaw, I think, was referring to, I think we will see more pattern or practice investigations of police and other law enforcement agencies than we saw during, for example, my tenure. We did have those cases in various places around the country when I was there. We also took a slightly different approach.

 

For example, Minneapolis, I think, is a good example. When I was at the department, we worked with the Mayor of Minneapolis and the Chief of Police of Minneapolis to try to propose collaborative work between the Justice Department and the Minneapolis Police Department. The city council, however, despite the support of both the mayor and the chief of police, rejected our offers. And then we saw more recently Attorney General Garland announce the opening of a civil pattern or practice investigation in Minneapolis. I think on those things, we will see changes.

 

But the bulk of the work, Title VII work, Fair Housing Act work, voting work, hate crime, human labor and sex trafficking, and color of law prosecutions, among others, I think will continue. Same thing with the educational cases involving sexual and racial harassment and things of that nature that we prosecuted during my tenure. And I think those will continue apace, but there will be changes of the sort that Professor Shaw, and others, Art and Gail, mentioned as well.

 

Hon. Kenneth L. Marcus:  So Professor Shaw, I’m not sure exactly when you lost the network connection. My question is, to what extent do you think that this administration would essentially be a continuation of what we saw under the Obama administration in civil rights, or to what extent would it be different either because of different legal context or different political context?

 

Prof. Theodore M. Shaw:  Well, let me first say that I don’t think the -- with all due respect, I don’t think the question is whether it’s going to be resumption of the Obama administration. I’m not sure that that’s -- I don’t think it’s the right frame. There’s been, for decades now, back and forth between various administrations on civil rights policy, sometimes more extreme swings and sometimes less so. But I think the question is going to be where this administration fits with respect to civil rights enforcement that has been underway since the late 1960s.

 

Yes, this administration is going to be more similar to the Obama administration, and for that matter, to the Clinton administration, and more similar to other administrations where the Democrats have held the White House than the policies and practices under Republican administrations. I’m not going to attempt to go jot by jot with respect to the wreckage that, with all due respect, Eric Dreiband claims have been said.

 

I will refer you to the Leadership Conference for Civil and Human Rights and suggest that there’s a year-by-year accounting of civil rights policies and practices during the Trump administration. And this is going to be a very different administration with respect to those issues.

 

For me, one of the big issues, you can talk about the Yale case and the Harvard case and refer to them as cases involving issues of preferences and abandonment of Asian American students. That’s a much more complex position. Not all Asian American students, even at Harvard, support the lawsuit brought by the challenges to Harvard’s diversity programs.

 

And I think we’re going to continue to see big differences with respect to this administration and supporting programs and efforts that open up opportunities for African Americans and other people of color. That’s what’s being abandoned, or was abandoned, by the Trump administration. And I know, Gail, with all due respect, we continue to have and will continue to have big differences about those issues. So look at the leadership conference record.

 

I also want to point out with respect to voting rights, there was a Texas case in which the issue of whether changes in political processes should be precleared, and the Trump Justice Department said that they didn’t have to be precleared. And career lawyers at the Justice Department refused to sign on to that brief. And so I’m raising that to say there are real differences. It’s not enough to say that the Trump administration enforced the Voting Rights Act. There are real differences between that administration and the administrations under Obama and would’ve been in previous years, including some of the Republican administrations with respect to the Voting Rights Act.

 

I, Gail, would love to engage with you some time about the 1619 Project, although I don’t think that’s the stuff of the Justice Department, which is where I focus. I will simply say that Americans, from the time I was a child and way before that, were taught about American history going back to Plymouth Rock, and they weren’t taught about black folks, and Jamestown, and 1619.

 

It’s quite interesting, and that’s the kindest I can put it, to see the kinds of opposition to teaching that full history and suggesting that we shouldn't keep doing when we taught about American history going back to Plymouth Rock. But that’s another conversation that I would love to have with you at some other time.

 

      So I’ll just mention very quickly, HUD, under the Trump administration, gutted the affirmatively furthering fair housing standards. There were attempts to gut disparate impact regs. That I expect to change under this administration and return to what I would consider to be the longstanding purposes of the Fair Housing Act and its regulations.

 

      I’ll stop there quite arbitrarily. I could say a whole lot more.

 

Hon. Kenneth L. Marcus:  Very good. Eric, did you want to reply to the portion that referred to the work of the Civil Rights Division during your tenure?

 

Eric Dreiband:  Yeah. So, yes, I do. Professor Shaw, who I should add, I’ve admired for many, many years, even though I don’t think we’ve actually met until recently. I want to talk about the issue about whether or not we abandoned race discrimination. And I can only speak to my tenure at the Justice Department, which was from 2018 to 2021. And I want to give you a few examples.

 

So when I arrived at the department, I stressed to every section of the Civil Rights Division the importance of prosecuting civilly and criminally race discrimination cases. And I just want to give a few examples of cases we brought under my tenure.

 

For example, in California, we sued local government agencies for trying to drive out African American and Latino renters from the town. In Georgia, we sued an Atlanta-based management company for illegally steering African American housing applicants to racially segregated housing. In Indiana, which is my home state, we prosecuted a man for allegedly threatening an African American neighbor by burning a cross, displaying a swastika, and racial slur.

 

We brought many, many other cases. In Maine, we convicted two men who committed a series of racially motivated attacks against African American men. In Maryland, we successfully sued a car dealer that discriminated against African Americans by offering different terms of credit than offered to white borrowers, and we sued a police department under disparate impact theory for race discrimination in employment against African American victims of race discrimination.

 

And we brought many cases in North Carolina of hate crime prosecution where the defendant—and we convicted a guy—but a defendant who threatened to shoot an African American family because of the family members’ race. In Ohio, we successfully settled allegations by African American students of race discrimination by a school district.

 

In South Dakota, we successfully sued state and local agencies that discriminated against Native American job applicants and deprived Native American voters voting rights protections. In Virginia, as I mentioned earlier, we convicted a white supremacist who killed an individual and injured several others. And so these are just a few of the cases that we brought.

 

And so while I do agree that the current administration, on some issues, will take a different approach than we took when I was at the Justice Department, I do not agree, respectfully, that we abandoned race discrimination prosecutions, either civilly or criminally. We brought many, many of those cases, including, as I said, against law enforcement officers both in prisons and jails, and police officers that patrol the streets. We brought many, many of those criminal prosecutions successfully and, in fact, set a record there.

 

So I’ll leave it at that, but I did want to respond just to that one. But I do agree with Professor Shaw, there are differences, obviously, that the new administration is taking and will continue to take. 

 

Prof. Theodore M. Shaw:  Ken, if I can just say, first, let me thank you for your kind words, Eric. When I talked about and I used the term abandoning the effort to fight discrimination against African Americans, I think I said it, and I intended to say it, particularly in the context of the higher education cases opening up opportunities to black and brown students in higher education. That’s what I think is an abandonment of opening opportunities for black and brown folk in the name of so-called reverse discrimination.

 

And with respect to suits that under your administration or the Trump administration that brought racial discrimination against African Americans and anyone else to the extent that those suits were filed and pursued, then I would commend that. But I’m still compelled to point out the irony, and I’m not saying, Eric, this was you, but the head of the Trump administration, President Trump himself, the irony of his role in the Charlottesville violence.

 

And so, yes, you can talk about what the Justice Department may have done in the aftermath of that. But in the first instance, the president, the head of that administration, was on the wrong side of that issue when he talked about good people on both sides, etc. And in my view, he promulgated a great deal of racism right on up through the election and the January 6 insurrection. I’m not asking you to respond to all that because I’m not really attacking you for that. But I’m saying that the head of that administration, President Trump himself, does bear responsibility for that.

 

Hon. Kenneth L. Marcus:  So I’m sure we could --

 

Eric Dreiband:  -- Well, Professor Shaw, I can only speak to what I did, so…

 

Prof. Theodore M. Shaw:  I get that. I understand that.

 

Eric Dreiband:  Yeah. No, I understand. Let me just say, my nomination was pending when Charlottesville happened in 2017. I pledged, after Charlottesville, while my nomination was pending, that if confirmed, I would do everything I could to bring white supremacists to justice, including in Charlottesville.

 

Having said that, I also said I have not prejudged that case or any other case. We did, as I say, convict the individual who killed an individual and injured dozens of others during the Unite the Right rally. And working with the FBI and the U.S. Attorney’s Office in Charlottesville, we prosecuted many other people for criminal misconduct related to that as well, successfully.

 

So I’m not going to get into anything about President Trump. I’m just going to talk about what I did and worked both with the FBI and the career professionals in the Civil Rights Division to bring white supremacist violence to justice, those who committed such violence to justice. And we did that, in my view, successfully. And the Civil Rights Division, and the U.S. Attorney Office, and FBI, I’m confident are continuing that work even currently and will continue that into the Biden administration.

 

Hon. Kenneth L. Marcus:  And returning to the Biden administration, one of our audience members invites further discussion of Kristen Clarke, the attorney who has been nominated to head the Civil Rights Division at the Justice Department, the position that Eric Dreiband previously held. Professor Shaw had made some remarks favorable towards Kristen Clarke. The questioner invites any other comments that people have on this pending nominee.

 

Hon. Gail L. Heriot:  Nobody wants to comment on personalities, I think, including me.

 

Hon. Kenneth L. Marcus:  Okay. Fair enough. Again, for members of the audience who choose to raise their hands, you’ll have the opportunity to ask questions directly.

 

      The 1619 Project, Professor Shaw mentioned that it’s not related to the Justice Department, but as Gail Heriot mentioned, there is a request for comments that is open. It’s from the Department of Education, and it refers to procedures involving grants that are outstanding. Given that this is a very timely—two of our speakers have addressed the 1619 Project—I’ll invite if there’s any other further discussion about the approach of this administration towards the 1619 Project in general, or in particular with respect to this grant program for which there is an open request for comments due. I think it may be tomorrow.

 

Hon. Gail L. Heriot:  Yeah, I think it is tomorrow. I want to say that I don’t think that Ted and I are quite joining here in the sense that he’s saying quite correctly that the history of African Americans, the history of slavery, is important to American history and needs to be taught, but that’s not what the 1619 Project curriculum is all about. It’s all about, instead, conceptualizing all of American history in terms of slavery and relating every aspect of history is simply somehow connected to keeping slavery going.

 

The argument that the American Revolution was inspired not by a love of freedom, not by a belief that taxation without representation is wrong, but rather as an effort to bolster slavery, a fear that the British government would have abolished slavery. And again, some of the most distinguished historians in the country -- and again, they’re not conservatives. Nobody would say that Sean Wilentz is a conservative. He’s the guy that posed the question, “Is George W. Bush the worst president in history?” And he seemed to think there was a case for that.

 

James McPherson has been very much upfront on the notion of not honoring confederate memorials. I don’t believe he sees himself as right of center. And they have agreed that this is simply bad history. This was not the case. This is not an appropriate way because it’s not a truthful way to look at a much more complicated world. You can’t really boil everything down to support for slavery.

 

That is not the only thing that ever happened in American history, and yet, that’s what the 1619 Project says. It’s saying that American history really begins at that moment that slaves are first introduced into the colonies. And Ted, I don’t know whether they taught about that in your school, but in elementary school, they did indeed teach me that 1619 was the date that the first slaves arrived in Virginia, and it’s not a happy moment in history. It needs to be taught, but it’s not the center of all American history. And for the Biden administration to be considering prioritizing that kind of curriculum for students, I think that speaks of a very strong lurch to the left.

 

I don’t believe that we’re talking about a continuation of the Obama administration. It is a different world now. And that different world includes a lot of elites quite wedded to the notion of wokeness. I don’t think the average American is wedded to that notion, and I don’t think it’s a good direction to go into, but it does seem to be what the Department of Education has in mind, at least with that particular program. And so I think it’s extremely telling.

 

I hope that many people comment on this, and I hope that the Biden administration is persuaded not to go in that direction. But I don’t want to suggest that’s the only area in which the Biden administration has gone further to the left, I think, than the Obama administration. For one thing, I think, on the school discipline issue, there’s a lot of interest in the notion of disparate impact based on disability status. The point is being made by advocates, left of center advocates, that disabled students are disciplined in school more often than non-disabled students.

 

And I think the average American hears that, and they think, “What? They’re suspending children in wheelchairs?” But no, that’s not what it’s about. What it’s about is the fact that some disabilities are diagnosed on the basis of misbehavior. And so when we say that disabled students are disproportionately being disciplined, what we’re saying is that for that kind of disabled student, those whose disability is essentially, yes, they misbehave more often than the average student, of course, the numbers are going to be higher. And they’re doesn’t seem to be an understanding of that in some of the people that have been discussing this issue, quite shockingly, I think. And that again, I think, is a rather strong lurch to the left.

 

Then you get programs like the Small Business Administration is right now administering a program that I think is called something like the Restaurant Relief Fund, and they have explicitly given priority to restaurant owners who are female or who are members of racial minorities. If one can classify oneself as socially disadvantaged, one also can get priority, but socially disadvantaged is defined in terms of race, ethnicity, or culture, and hence, we’re back to the white male who owns a restaurant has to get at the back of the line. And the law is now riddled with this sort of thing, particularly COVID relief, and I think it’s a serious problem.

 

Prof. Theodore M. Shaw:  So Gail, very quickly, I don’t think Nikole Hannah-Jones said -- although, I think she probably may have tweaked some of the things that she said. But I don’t think she claimed that all of American history is only about slavery and that legacy and history.

 

Hon. Gail L. Heriot:  You might want to look at her original version of this. It was very, very strong in that direction. It takes a lot to get these historians to say, “Look, this is just wrong,” but they were able to do it with this.

 

Prof. Theodore M. Shaw:  Yeah. Well, that doesn’t necessarily mean that the historians -- and I’ve read McPherson, and I admire his work. I like his work. But I also believe that slavery has been central to the American story, and if you don’t agree with that, we can have that conversation.

 

Look, I love this country, but I love it critically. I’ve said this many times. I love it more often, sometimes, in spite of what it has been, not always because of what it has been. But the story that has been told or aided in the 1619 Project is an important and central story to America. And it’s very interesting to see the kinds of reactions that people have, how virulent the reaction has been to that telling and that story.

 

So as I said, I’d be happy to take you on on this some more. I don’t think that slavery has been the entire American story, but for goodness sake, it was the issue over which our country was almost stillborn with respect to the Constitutional Convention. It is the issue over which we fought a civil war, and it’s the issue over which we continue to struggle with respect to its legacy even today. And if people don’t think that and believe it, that’s their right. I disagree.

 

Hon. Gail L. Heriot:  Yeah. But the thing is I think that we may actually agree a lot more than you realize. It depends on what you mean by central. If by central you mean it’s the only thing, then, no, I disagree with you. If you mean it’s an important thing, then, of course, I agree with you.

 

But what I’m saying is you’d be surprised. If you look at that 1619 curriculum, it’s not a question of this is an important thing in our history. I think everybody agrees on that. I think everybody wants to know the history of slavery to be taught. They want to talk about these things, not just in history class but in civics class. It’s important.

 

But there are limits, and the 1619 Project has gone past those limits. And I think that’s why you get the most important historians in the country saying, “This is simply inaccurate history to teach the American Revolution as being primarily a question of trying to defend slavery against the belief that the British might terminate that slavery.” That’s just not accurate history, but that doesn’t mean that we don’t agree on the importance of slavery.

 

And, I think, I suspect we actually do because I think, weirdly enough, you and I agree on a lot of things. That’s why I want to get you out to the University of San Diego for a summer so that we can spend more time talking about these things. I brought you up to our associate team recently, and she was kind of excited about it. So we don’t have any money right now, and that’s why you haven’t already been invited.

 

Prof. Theodore M. Shaw:  Well, Gail, that’s all right. I’m not traveling yet anyway.

 

Hon. Gail L. Heriot:  Soon. Soon.

 

Prof. Theodore M. Shaw:  But I’ll see you there some time. And as I said, we can take this on some more.

 

Hon. Gail L. Heriot:  You bet.

 

Hon. Kenneth L. Marcus:  Another audience member invited further discussion of hate crimes prosecution. The question was aimed at Eric Dreiband in the first instance, and specifically, the question was why was he spending so much focus fighting hate crimes during the Trump administration when those crimes are already illegal under state law? So an invitation to discuss the importance of prosecuting hate crimes.

 

Eric Dreiband:  Okay. So both Attorney General Sessions and Attorney General Barr made prosecution of hate crimes a priority. There are multiple federal hate crime laws, and there is a federal interest in prosecuting hate crimes and the work those laws reflect. There is also a policy at the Justice Department known as the Petite Policy that involves various evaluations when there are also state law charges to be brought, and we often did, and the Justice Department continues to this day, to defer to state criminal prosecutions of particular hate crimes.

 

So there is a judgement call when that happens that the department has engaged in for many years prior to my arrival, when I was at the department, and that continues, where there are times when the department will stand down and defer to state criminal prosecutions of hate crimes, and that’s true of other crimes too. It’s true of color of law crimes as well, involving police officers and so forth.

 

What we saw, though, was that there were cases, many cases during my tenure at the department, where in consultation with Attorney General Barr and others, as well as the career prosecutors in U.S. Attorney Offices and at the Civil Rights Division, where we concluded for various reasons unique to each particular case that there was a federal interest involved in prosecuting a particular crime.

 

So, for example, when an individual drove 10 hours down to El Paso, Texas, to murder dozens of people and, in fact, killed 23 people and nearly killed several dozen others at a Walmart because that defendant, as alleged by the government, was upset about people crossing the border from Mexico into Texas, we felt that in addition to state law charges that federal law charges where appropriate under the department’s Petite Policy. We evaluated each case on its own merit based on the standards that govern each case.

 

Hon. Kenneth L. Marcus:  Thank you. We have just a few minutes left and no hands up. Do any panelists have any further remarks they would like to make?

 

Eric Dreiband:  Ken, let me, if I could, respond to one point that I don’t think I’ve directly addressed to Professor Shaw about the alleged abandonment of opportunities for students in higher education. So first of all, we did bring Title IV, desegregation, race discrimination cases all across the country involving race where the victims were African American students, number one.

 

Number two, I think with respect to, I think, as Professor Shaw cited, the Harvard case where we were amicus in support of the plaintiffs, I think it’s important to understand that any use of race under currently existing law must be narrowly tailored. And what we found in the Harvard case was that the class of plaintiffs, Asian Americans, were experiencing race and national origin discriminations. This was not an attack against African American students or anything of that nature in that case. It was rather, based on the evidence we had in front of us, concluded that Asian Americans were being victimized in their case.

 

Prof. Theodore M. Shaw:  Well, Eric, again, the Justice Department under the Trump administration supported the plaintiffs who brought the suit against Harvard. Harvard, as you know, was held up in the Bakke case in 1978 as an example of diversity pursued in a way that was not only defensible but that was constitutional. And then, of course, in 2003, in the Grutter case, once again the Supreme Court referred back to Bakke, and mentioned the Harvard diversity plan, and took no issue with it.

 

Look, Ed Blum, who, as you know, is responsible for bringing the Harvard case, the case against the University of Texas, and, for that matter, who was responsible for bringing the suit that invalidated the operating mechanism for the Voting Rights Act Section IV, and therefore undercut Section V review, and we can see what that’s led to now. Ed Blum is opposed to any conscious efforts which end up opening opportunities or supporting opportunities for African Americans [inaudible 01:31:07].

 

So when the Trump administration came down on that side, in my view, it’s coming down on the side of those who are trying to close the doors of opportunity to conscious efforts to admit and enroll African American, and Latino, and other students of color. I get it. You disagree, but that’s my view, and we disagree about that. Ed Blum is no friend of opportunity for black folks.

 

Hon. Gail L. Heriot:  Can I add something here, as long as we’re talking about the Bakke case and how Justice Powell’s opinion endorsed the Harvard method of admissions. That’s because you didn’t know the history of it. The Harvard admissions policy grew out of their efforts to exclude Jewish students in the 1920s by saying that we want geographical diversity. What they wanted was not so many students from New York because too many of them were Jewish. That’s clearly from the record.

 

Prof. Theodore M. Shaw:  Gail, with all due respect, that history was there. You’re right that that history existed, and there’s been, even at the time of the Bakke case, some of the Jewish groups and organizations came down against Harvard’s diversity efforts. That’s no secret. Now, not all of the Jewish groups and organizations came down opposed to efforts to open opportunities for black and brown students.

 

But my point is that you’re right; Harvard discriminated against Jewish students at one time. That does not mean that efforts to open up opportunities for black and brown students who historically have been excluded from Harvard and many other institutions is in any way discriminatory and intended to be discriminatory against white students. For goodness sake, we’re talking about low single-digit percent of black students at Harvard and all of these other institutions. Given our history in this country, we can’t stand that. That’s discrimination against white folks?

 

Hon. Kenneth L. Marcus:  That will be the last word as we are now out of time. In a better world, Edward Blum would have an opportunity to respond. He’s not with us today, but I do appreciate the panelists who have joined us.

 

In a moment, there will be an opportunity to join the lounge where we have virtual tables. I’m pleased to say that all of the speakers will be joining the lounge for at least a period of time following this event.

 

I’ve also been asked to mention that the next conference event, after the lounge, will be a discussion of “Reputational Risk in Banking: Is Operation Chokepoint the Answer?” That program will begin at 1:00 p.m. Eastern Time, but standby now for the alert directing you to the lounge. Thank you, all.

1:00 p.m. - 2:30 p.m.
Reputational Risk in Banking: Is Operation Chokepoint the Answer?

Financial Services & E-Commerce and Corporations, Securities & Antitrust Practice Groups

Topics: Corporations, Securities & Antitrust • Financial Services • Financial Services & E-Commerce
Webinar
Online Event

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Description

Beginning with Operation Chokepoint, financial regulators, often boosted by community activists, have introduced social issues into regulation, sometimes under the label “reputational risk,” to discourage banks from serving legal businesses.   Emboldened by successes in denying service to industries they disfavor, such as payday lenders, gun shops, and oil companies, groups now pressure banks to deny service to individuals. This panel will discuss the impact of these efforts on public access to financial services, and whether additional market participants, new technologies such as cryptocurrency, or policy measures similar to the OCC’s fair access rule, are called for.

Featuring:

  • Mr. Greg Baer, President and Chief Executive Officer, Bank Policy Institute
  • Hon. Brian P. Brooks, Former Acting Comptroller of the Currency, Office of the Comptroller of the Currency
  • Prof. Christina Parajon Skinner, Assistant Professor of Legal Studies & Business Ethics, The Wharton School, University of Pennsylvania
  • Prof. Chris Peterson, John J. Flynn Endowed Professor of Law, University of Utah, S.J. Quinney College of Law
  • Moderator: Hon. Sandra Ikuta, United States Court of Appeals, Ninth Circuit

Speakers

Event Transcript

Hon. Sandra Ikuta:  Good Morning, everyone. And welcome to our panel Reputational Risk in Banking: Is Operation Chokepoint the Answer? I'm Sandra Ikuta, a judge on the Ninth Circuit Court of Appeals.

 

Before I introduce the panel, I'd like to begin with some housekeeping items. If you're in the audience you may send text-based questions through the Q&A tab in the upper right corner of your screen. There's also a chat tab for attendees to chat with each other. Don't use chat to ask questions, however. We'll also be allowing attendees to ask live questions later in the program by pressing the raise hand button. You'll need a working microphone to use this option.

 

Okay, now, to our panelists. I'd like to start just by saying I read the district court's decision in a case challenging Operation Chokepoint with great interest. The district court held that it was plausible, though just barely, that the FDIC had deprived the payday lenders of liberty interest. I think it was this decision that led the government to settle the case and promise that regulatory threats, undue pressure, coercion, and intimidation have no place in the FDIC. So I'm very interested in hearing the behind-the-scenes version of this story with our panelists.

 

Since you have the panelist's bios in your material, I'll be very brief. Greg Baer is the President and Chief Executive Officer at the Bank Policy Institute. Previously, he served as Executive Vice President and General Counsel of the Clearing House Payments Company, which is the largest private-sector payments operator in the United States.

 

Next is Chris Peterson. He's a Professor of Law at University of Utah, S.J. Quinney College of Law. From 2012 to 2016, he served as a special advisor at the United States Consumer Financial Production Bureau during the Obama Administration.

 

Next, we have Christina Skinner. She's Associate Professor of Legal Studies and Business Ethics at the University of Pennsylvania's Wharton School. She was previously legal counsel for the Bank of England.

 

And finally, we have Brian Brooks, the CEO of Binance United States. He was previously the acting Comptroller of the Currency during the Trump Administration. We'll start with opening remarks from each of the panelists and then give each panelist a chance to respond to the other panelist's remarks. So let's start with Mr. Baer.

 

Greg Baer:  Thanks very much. Very good to be here with you. I should emphasize I'm currently on vacation. I say that only because I want to make clear that the deplorable piece of artwork over my right shoulder is not one I have purchased or leased [Laughter].

 

With that important caveat, I was going to start off just with a little bit of history on reputational risk. It's sort of a little definitional work. And then maybe lay the groundwork for some of the other panelists. What's really interesting to me — and I've been following this for some time — is that reputational risk really didn't play a role in examination until the 1990s.

 

I would very much commend to use some work in a recent law review article by Professor Julie Andersen Hill at the University of Alabama, who actually did extraordinary research on this. So I'll quote from her, which I thought was interesting. She said, "In 1996, the OCC rewrote portions of its examination manuals covering credit card lending, mortgage banking, and allowance for loan and loss reserves to include detailed discussions of reputational risk. The other federal regulators also began integrating it into their frameworks. Today, the Federal Reserve's bank examination manual uses reputation or reputational 190 times. The FDIC's manual uses it 50 times. The OCC's large bank examination manual uses reputation 45 times. Even specialized examination manuals, like those for IT and any money laundering, are replete with references to reputation. Impressive, considering that reputation risk was hardly mentioned 25 years ago."

 

Now, coming forward from the 1990s, over the past 10 years really, the biggest change has been how the agencies enforce their views of reputational risk. Interestingly — again, a credit to Professor Hill — when they first adopted the risk-based assessments, they assured banks that no major changes would be required. Indeed, the OCC even clarified that its examiners would only monitor, not "actively supervise" reputational risk. Clearly, that has changed. You sometimes see enforcement orders that reference reputational risk, but much more importantly is that through the secret examination process, where everything is considered confidential supervisory information, examiners routinely will cite reputational risk as a reason for an MRA or matter requiring attention.

 

Don't want to get too into the weeds there, but basically, an MRA is a mandate issued through the examination process of something the bank has to fix. It's done outside the public view, and it's really a quasi-enforcement action because a failure to remediate it can affect the bank's ability to grow, its management rating, and can also — speaking from personal experience, although not my personal experience — get the person who's responsible for it fired at the bank. So now, clearly, it is no longer a monitor. This has been, at least since 2010, an active part of supervision.

 

So an interesting question, why the change in the 1990s and 2010? Here I don't have Professor Hill's rigor, but I do have some theories. First, in the '90s, capital regulation became much more quantifiable and objective -- so less, I think, of an examiner focus. In 2010, consumer examination, interpretive, and enforcement authority was transferred from the banking agencies to the CFPB. So that was no longer, at least by law, part of their mandate. Also importantly, post-2010, in the wake of the financial crisis, banks really lost the power and will to push back too much on examiner mandates. And so really, reputational risk was a way, I think, for the examination teams to remain relevant, to retain authority over consumer, and also to not have to worry about it being reviewed. Again, because this is all going on behind the scenes where we can't see it.

 

So if to paraphrase love means never having to say you're sorry, reputational risk means never having to explain your rationale. So what exactly is reputational risk? Regulators define it quite broadly, including remarkably listing themselves among the stakeholders whose view of your reputation is relevant. So it's sort of a bootstrapping l'état, c'est moi kind of view of reputational risk. But really it is an exception to the general rule that the focus of examination regulations should be on violations of law or on unsafe or unsound practices that pose a material financial risk, also known as safety and soundness.

 

And I think as you'll be hearing more from the other panelists, once you remove those two guard rails of legality and materiality, there really isn't a lot to constrain the use of reputational risk as a mandate. And, of course, again, others will cover this more than I -- it's fairly easy for a view of reputational risk to become a rather politicized view, which is one reason I've actually been so critical of it because ultimately there isn't a lot of difference between saying this activity may be legal and it's not causing a material financial risk but it causes a reputational risk in saying I just don't like this. So I think that's been the core concern.

 

As an aside I'd note — and here I actually did some research — one of the foundational views of this is well, it may not be a present material financial risk or violation of law but still is somehow a safety and soundness problem. There I thought it was kind of interesting to look at the Wells Fargo example, as I think it's clear that Wells Fargo, starting in September 2016 and for the next couple of years, suffered a fairly major reputational damage as a result of some conduct -- won't get into the conduct. But if ever there was a reputational risk event, clearly that was it.

 

So we went and looked at Wells Fargo's credit default spreads, which is sort of the best market view of its chance of insolvency and failure. And it turns out that during that entire period there was no material impact on it whatsoever. In fact, throughout that entire period, they were trading at near historical lows. So even what I think anyone would acknowledge as perhaps the worst reputational risk event in modern history — in banking, at least — had no safety and soundness impact. So I think that really is a challenge to the notion.

 

But let's assume counterfactually that this is relevant. The next question is, can bank examiners manage it for banks? Again, I think that's a very difficult position to maintain. I think oil and gas -- again, which will come up -- I think is a great example. Are you in the present political climate of great conflict? Are you at greater risk for banking oil and gas companies, or not banking oil and gas companies, if all you're worrying about is your reputation? In fact, does that depend on the outcome of the midterm elections and the 2024 presidential? And should the banking agencies be hiring political consultants to determine that and make their assessments based on that? I kind of doubt that.

 

Don't want to be too long. So recent developments -- I think there's some good news, bad news -- this topic actually came up without a lot of notice in the context of a recent agency rule making about what should constitute a material MRA or matter requiring attention. So the main focus was whether guidance — a violation of guidance alone — should be the basis for an MRA, and they said it should not, commendably. But in response to our comment, actually, saying, well, it also should not be based on reputational risk alone when there's no violation of law and no safety and soundness issue. It turns out, actually, the FDIC came out and said yes, that is correct. We will no longer base MRAs -- we will no longer issue an MRA on reputational risk when there's no violation of law or unsafe or unsound practice. The Fed has yet to finalize its rule and is pondering that.

 

Interestingly, OCC came out on the other side and refused to say that, which I think is a little incongruous with its Fair Access proposal, which, of course, is about — and Brian can explain it better — it's about the notion that banks shouldn't really be allowed to consider reputational risk in deciding whom they bank. So now it appears that, at least for the time being, that there is some risk that banks will be told, or at least national banks be told, well, no, there are reputational risks to banking oil and gas or other types of companies and that edict will come not from the bank or its investors or its shareholders or Congress or others, but rather from its regulatory agency. So with that, I've probably overstayed my welcome. I look forward to the chat afterward. But now, let me turn it over to Chris Peterson.

 

Prof. Chris Peterson:  Well, thank you, Greg. I appreciate it. And thanks to all the staff at The Federalist Society for setting up this online conference. It's nice to get together and visit with folks. And, frankly, I'll also say that it's an honor to be invited. This is the first -- I think this is the first panel I've done for a Federalist Society event, and it's also the first time I've been on a panel that's been moderated by a sitting United States Court of Appeals judge. So I'd like to thank Her Honor for joining us today too.

 

Well, I'll try to give a little bit of context. First, maybe four points. One, I did work at the Obama Administration. The heading of our panel today is Operation Chokepoint, and I suppose it's fair to say that I was in some of the meetings -- the interagency meetings that talked about the formation of this so-called operation. I worked at the Consumer Financial Protection Bureau. Operation Chokepoint was really a Department of Justice Consumer Protection branch show. There was also some related stuff that was going on at the Comptroller of the Currency and the FDIC.

 

But essentially, my understanding of what that was was really not about favoritism of one particular agency — or one particular industry I should say — or another. It was really about trying to ensure that banks weren't facilitating violating state laws, and in particular, doing so in ways that were fraudulent. The original subpoenas for Operation Chokepoint were issued under FIRREA, the bank fraud statute that facilitates prosecution -- civil cases against companies or individuals that commit bank fraud. And in particular, prominent in that was what was going on in the online high-cost lending industry at the time -- sometimes called pay day loans, but also installment loans or open-end lines of credit that have typical average interest rates in that marketplace of over 600 percent APR, and are often marketed to very low-income consumers. These loans are very dangerous loans.

 

Now, I know that there is disagreement out there in the academic circles and amongst economists, and I suspect amongst very Federalist Society members, about whether or not usury laws are a good idea. But there is a super-majority support for usury laws amongst both Republicans and Democrats all across the country. And in many states across the country, online payday loans at the time were 100 percent illegal. They were being -- they were circumventing state usury laws by partnering with Indian tribes that had sovereign immunity and could not be brought to court by State Attorney's General or by individual private plaintiffs, and that was further buttressed by arbitration clauses that were preventing class-action lawyers, or even individuals, from getting a day in court.

 

And many of the arbitration forums were really illusory. They were so-called tribal councils that did not actually engage in any -- there was really no arbitral forum. It was a way to deflect attention and litigation over illegal practices. But these were big businesses that were doing billions of dollars of illegal transactions and the money was flowing through major banks. So the premise of it was to try to attack some of these illegal online practices that were creating real harm for consumers across the country violating state laws, and also violating federal law because the federal racketeering statute makes collecting an unlawful debt, which is defined as two-times -- in an unenforceable debt that's two-times a federal or state usury limit -- the interest rate.

 

So these were illegal loans. It wasn't about favoritism. And, of course, several of the leading CEOs in this business were eventually prosecuted by the Justice Department and are currently in prison. And it's also fair to say that the largest bank that was processing payments for the largest company ended up paying -- which was U.S. Bank -- don't mean to call them out by name, but that's just it's the historical fact. They paid a $613 million fine for money laundering for these illegal online loans.

 

Now, of course, that being said, it's not -- I agree that it's not okay to try to use reputational risk or favoritism for one industry over the other but often times there are underlying disputes in our society about what is legal and what's not legal. And because of the lack of clarity and the difficulty of getting legislation through Congress in a timely matter, it's the simple reality of the banking business right now — and the payments business — is that those online -- those payment systems become proxy battles for deciding what's legal and what's not legal. And it's particularly likely to happen where there are marketplaces — industries — that are unpopular or where there are lots of state and local laws being passed all across the country that could affect whether or not transactions in that industry are legal. And what that, in turn, does is increase the monitoring costs that banks face when they're deciding to make -- to process ACH payments or credit card payments or debit card payments.

 

So I guess my next point then is that I think that it is entirely appropriate for ACH originators, credit card -- receivable originators, debit card originators, to pay risk-adjusted prices to banks in difficult to monitor markets. So if your product or service is very similar to something that's illegal, and the underwriter that's deciding whether or not to process that payment for the bank can't tell whether or not your engaging in something that's illegal or not without really digging in and doing some legal research, it's appropriate for that bank to charge you a higher risk-adjusted premium. And that's just simple market economics that's functioning in the way that we should all anticipate it should.

 

And then I suppose last point then I'll stop -- I think that in -- ironically, banks are doing -- in doing that, banks are doing something very important about preserving the mixed federalist society that we have in our country where state governments and their elected representatives have the right and should be able to take a stand on commerce that they think is inappropriate and pass laws that regulate that commerce. And, in turn, by discriminating between which banks -- or sorry, which merchants are engaged in legal versus illegal activity and deciding whether or not to offer payment processing and other banking services to those merchants, banks are in fact reinforcing the rule of law and preserving our democratic institutions. So I think that with that there's a lot of positive things that are happening here.

 

But, of course, I certainly agree with Greg that it's not appropriate for any bank examiner to use their own personal opinions or preferences. It's about following the law and doing the work that is necessary to protect banks from the risk of having broken those laws and having to pay penalties or incurring liability on behalf of their shareholders. All right, well, I'm going to stop there. And I think next is Christina. Professor Skinner, passing it off to you.

 

Prof. Christina Parajon Skinner:  All right. Well, thanks very much Chris for that handoff. And also my thanks to The Federalist Society for having me on this panel today. So I'm going to shift gears a little bit and talk about central banks, which is the area of my own academic research. And I want to suggest to you in doing so that there are few other legal hooks, if you will, aside from the traditional sort of reputational risk that we've been discussing so far that could be available to the Fed — the U.S. Central Bank — to deter banks from lending to certain disfavored industries.

 

Now, I want to be perfectly clear, I don't believe that that's where we are right now. With their balance sheets, you see that these banks are exposed somewhere in the range of 2% to 6% when you look at their wholesale loans focusing on things like automotive, oil and gas, and even adding in transportation -- broader categories. So the point is that even if all of these loans had to be written off the bank's balance sheet, the equity cushion of these institutions would cover those losses two, three times over. But, nevertheless, we still see this real desire for the Fed to make a connection between financial stability and climate change because doing so opens the door to a range of different policy interventions.

 

So a second example to flag for you is, again, going to the safety and soundness issue. The Fed's ability to make a safety and soundness determination in its supervisory capacity is another thing to consider. So there is this language in the Bank Holding Company Act that gives the Fed very broad authority to decide with a lot of latitude what presents that kind of safety and soundness issue for a bank. And so under that authority you -- like other regulators, the Fed can do things like examine banks underwriting practices and keep tabs on asset quality. It's known to be a flexible standard, as others have said, and the Fed has previously been criticized for being opaque in the way that it uses supervisory discretion to lean or to nudge on banks to do or not do certain things.

 

And this can raise concerns in the context of climate change with this sort of pressure -- this ability to exert pressure on banks to divest from certain lending activities. Now, I have faith that the Fed leadership right now will be, and will continue to be, judicious in the use of its supervisory power where climate is concerned. So the current Vice Chair for Supervision, Randy Quarles, he's been very vocal about pressing for greater transparency in supervision. Kevin Stiroh who, until recently, was heading supervision at the New York Fed and now he's leading a lot of the board's work on climate, is very much of the view that the Fed should remain faithful to statutory convention and constraints when it comes to climate supervision.

 

I think the real point here is that there's a lot of discretion that's hardwired into the statutory language. So what the Fed ultimately does down the road can vary with leadership changes. So, in other words, there is this opening to political pressure that can have some impact where supervision is concerned. And, of course, this isn't unique to climate, but like I said, it's very much a live issue right now.

 

We're here to review the Executive Branch, so I want to discuss how the current Administration's decision to put climate very high on the agenda fits into what the Fed is doing in this space. Nominally, and via some statutory bulwarks, the Fed is independent from the political branches and especially from the Executive Branch. So left to its own independent devices, I do think we see the Fed working very hard to be responsive on the one hand to increasing calls to consider how climate change can impact its various mandates while remaining apolitical and technocratic.

 

But I certainly see a beachhead for the Executive Branch to influence the Fed in this space, especially where these climate decisions are concerned via the Financial Stability Oversight Council, the FSOC. So the FSOC is this post-crisis counts innovation created by the Dodd-Frank Act. It's a council of regulators. It's not a regulator itself, but it has the power to designate non-bank financial institutions as systemically important, thereby porting them over into the Fed's jurisdiction. And it also has the power to make a non-binding recommendation to its member agencies.

 

So if you look at the first principle meeting that the FSOC had at the end of March, the entire focus was on climate. Secretary Yellen elicited, provided opportunity, for comment from the members on how their respected agencies were handling climate change. There was a special presentation allocated for the Fed. Now, to me, this is unmistakably soft pressure on the Fed to put its foot on the gas where climate change is concerned. So for those that favor a whole of government approach to tackling the climate, the Fed seems to be dragging its feet.

 

Now, objectively, I think, that the Fed is going slowly because, as I've just been discussing, it's not at all clear that it has the legal authority to do much more about climate change other than engage in research and supervise bank's balance sheet for known exposures to climate change -- so this microprudential space -- mortgages in flood-prone areas, loans to coal plants, other major fossil fuel producers. But to go even further, for the FSOC to issue a non-binding recommendation to the Fed to consider financial stability issues more, I think we should hope for the sake of the Fed's independence and preserving this line between monetary and fiscal that we don't get there.

 

So to wrap up, I want to give you the big picture, why do we care? Certainly, with Chokepoint and the OCCs Fair Access Rule, the emphasis was very much on fairness, clarity, due process. So I want to flag a few other rule of law concerns at stake if the Fed were to wade more deeply into these waters. First, there's an age-old slippery slope problem. Truly, once you put the Fed in the business of deterring banks from lending to this sector, or another that the Executive has determined to be against economic or national interests, what's next?

 

Second, there's a broader question of how large a role you want a central bank to play in society. There has to be some line drawn about what is a job for the Fed and what is not. There are a lot of significant economic issues that affect our society -- trade, immigration, tech disruption -- just to name a few. The question is, do we want this central bank leviathan?

 

And then finally, it's a bit anti-democratic to put the Fed in the business of making judgments about what's in or out of a green perimeter. And I doubt very much the Fed wants this job either. Fed leaders exercise unelected power, and we really should want the democratically responsive institutions out in front here making decisions about how to allocate credit in this very fine-grained kind of way. So the Fed is designed to remain sector-neutral, to remain faithful to these fundamental principles of republican — small R — kinds of government. And so I think it's important to preserve the Fed's ability to exercise that neutrality. So with that, I will conclude and hand it over to Brian Brooks.

 

Hon. Brian P. Brooks:  Okay. Well, thank you very much, everybody. I really appreciate the chance to be here. I have to say this is the first Federalist Society panel I've ever been on where I'm going to be the most conservative voice, but I appreciate the opportunity to exercise that privilege [Laughter].

 

I want to sort of cover four -- or I'll cover the topic in four basic ways. First of all, I want to talk about several dimensions of reputational risk in terms of what I, as a former bank regulator, think it should mean and can plausibly mean versus what it's kind of morphed into meaning. So I'll talk about that. I want to talk about Chokepoint in particular because I think the specifics of both Operation Chokepoint, and then later the set of bank practices that led to the Fair Access Rule, need to be unpacked much, much more specifically in order for people on this webinar to really understand what's going on. Because if it were just about climate change, or even mostly about climate change, I think it would be a very different discussion. I then want to put all of this in the frame of who in a market democracy should be making cost-benefit decisions about things. I think for -- in a bunch of ways we moved in sort of a univariate direction, and I'm going to suggest that's not a sustainable approach to decision making. Then finally, I'll tell you a little bit about the story of fair access and what it was really supposed to be about, and how at the OCC we tried to balance considerations of privately-owned banking on the one hand with sort of anti-trust and market power considerations on the other, and try and point a way forward as to how we might actually have these discussions in a way that works for a pluralistic society, many of whom don't agree with each other.

 

Let me start, first of all, with the concept of reputation risk and run through a few features that I think should be discussed in some detail. The first issue is reputation risk can have both a subjective and an objective meaning. Objective is sort of easy to define, and a lot of banks will have risk measurements about when they've triggered a high severity reputational risk event. But there's a risk whenever you talk about reputational risk that you will morph into pure personal opinion about what's good for the world or what choices you might want to make. So examples of this would be it's obviously a reputational risk if, for example, you have a CEO who is using drugs, or who is having extramarital affairs, or who is speculating in the financial markets and occurring enormous losses and that's going to get written up in the newspaper and cause customers to flee or potentially raise questions actually about the stability of the institution.

 

You could quantify that, and many institutions do. They'll define very specifically what counts as a reputational risk, and then they will ask themselves is it a one-time story in a local newspaper or a sustained story in a series in the New York Times, and they'll have different severity levels on their internal severity scale for that, which marries up to a risk tolerance that one could measure, a board could govern, you could define versus saying well, a bank that banks fossil fuel companies is reputationally risky.

 

Well, that's in the eye of the beholder. Every single person on this webinar used fossil fuels today -- every single one of us. So is it reputationally risky or not? That's sort of a subjective and opinion question. And so in defining how an examiner and a regulator should look at this, one first has to make the decision of how much subjectivity and discretion are you willing to indulge. And as Greg said, that's one of the reasons when I was running the OCC that we put out a rule about guidance versus regulations, and we made very clear that the subjective opinions of individual examiners, let alone the non-APA approved guidance of an agency, won't be cause for sanctions or enforcement actions, at least on our watch.

 

So that was intended to address, in part, the subjective versus objective part. There is, then, the question of outcome determinativeness versus viewpoint-neutral approaches to reputational risks. Again, I'll take ESG, and specifically climate change concerns, as an example. I was often asked when I was the acting Controller to take action to look at what was referred to as transition risk. And I would say to the people who were calling me about this -- I would say, "What, exactly, is transition risk?" And they would say, "Well, it's the risk that banks will not adapt quickly enough, or that their customers won't adapt quickly enough, to the coming abolition of fossil fuels." To which I would say, "Well, what if there is no abolition?" I mean, you're presuming a political conclusion. You want there to be an abolition of fossil fuels, and you believe by forcing banks to acknowledge that as a risk, we will cut off funding, and then we'll have a transition, which is what creates the risk in the first place.

 

There is, of course, an alternative viewpoint, which was to let the price mechanism and markets decide what the appropriate mix of fossil fuels is, and that then sort of addresses the presumption, but not the fact, that there's a transition risk. So if your outcome that you've already predetermined is that we're going to abandon fossil fuels as part of our overall energy mix, that would dictate one approach to reputational risk. But if you didn't presuppose that, and if you assumed that we still lived in a market democracy and people, through their elected representatives and markets, would make that judgment. The risk calculus would be very different, but resolving, which it is, is an open question.

 

Then finally, I would say there is the question of minority rights in a constitutional democracy, which is to say what rights should people whose preferences are in the minority, but not the trivia minority, have to obtain goods and services that they want. So an example might be if you're from a small rural place like I am where hunting is a weekend pastime, your view about whether banks should process payments for shotguns and ammunition might be very different from if you live in Los Angeles or New York where culturally you're probably opposed to the idea of widespread firearm ownership. But in Pueblo, Colorado, every house has a gun, and people buy them with their credit cards every day. So there is the viewpoint that I think many of us who are on these kinds of panels sometimes miss, which is we import our cultural preferences because we live in certain bubbles, we interact in certain communities, but we live in a really big country where many, many people don't have the preferences that we have, and actually don't agree with some of our most foundational assumptions.

 

So the question is, what role does financial regulation play in shaping those assumptions versus enabling people to kind of do the things that they want -- which leads me to the second point I want to talk about, and that is, let's get much more specific about Chokepoint. So we've heard from previous dissents on this panel the concept that Chokepoint was really about sort of enforcing laws or giving voice to -- I think one of the comments was preserving our democratic institutions while reinforcing the rule of law.

 

So let me just walk through for you some of the things that were affirmatively listed by the FDIC during its formal Operation Chokepoint process. These were things that were designated as categories that were high risk, and thus, should be avoided by FDIC-insured institutions. And then we can unpack and see whether, in fact, these things are rule of law issues or not. So one category of business that the FDIC deemed high reputationally risky and unbankable was dating sites -- dating sites like Match.com and Bumble and Tinder. Now, last year 35 million Americans were on dating sites. The total market cap of dating sites in the United States was in excess of $60 billion, and they were not illegal in any state. And yet the FDIC said in 2014 that those sites were inherently risky as a category and were subject to, at a minimum, enhanced due diligence and very likely debanking under the thing that was called Operation Chokepoint.

 

A second category of companies that was deemed to be inherently risky was pawn shops. Pawn shops are licensed by the state governments of every state where they exist. They're licensed money transmitters with MTL licenses in almost every state. They're not only not illegal, they're licensed by state governments. And yet again, the FDIC listed them on the list of inherently risky businesses that shouldn't be subject to IDI banking along with such other reputationally risky businesses as fireworks dealers. Again, I could be from a different part of the country than some other people, but buying fireworks for the 4th of July was a very common practice in my neighborhood. Ammunition sales -- again, I mentioned the hunting culture that exists in much of the middle part of the country.

 

One of my favorites was the category of "racist materials." The FDIC website didn't describe exactly what that meant, but as I think we've seen in the last year or two, there's a wide variety of opinions of what constitutes racist materials with all of its First Amendment dimensions. Tobacco sales was deemed to be inherently reputationally risky, telemarketing, and a series of other things -- none of which is illegal under the laws of any state.

 

So that was Chokepoint 1.0. And the point here is to say that it was A, not focused on climate change, B, highly subjective, and I would argue politically elitist, to say that some of these things shouldn't be used. Many of us don't go to pawn shops, but millions of our countrymen do, and why it should be that we should make choices for that is at least something that our democratic institutions, as opposed to our administrative institutions, ought to be talking about in my judgment.

 

Which brings me to the third topic that I wanted to just put on the table, having to do with not only who makes these decisions in this country but how do we make the decisions. So the problem with having administrative agencies make decisions is every administrative agency in the United States — perhaps there's an exception I can't think of — but everyone I can think of is focused on a particular mission. So at the OCC, our mission was the safety and soundness of the banking system. And at the OCC, we didn't know a darn thing about health policy. We have absolutely zero expertise in environmental science or climate change. What we know a lot about is credit and bank operations. That's what we know about.

 

By contrast, we have the CDC, which knows a lot about public health, but absolutely nothing about financial services. So it's a weird world, for example, when you have the CDC prohibiting foreclosures. It would be as though you had the OCC prohibiting mask mandates or prohibiting social distancing. Neither agency knows a darn thing about the others and is not well situated to make cost-benefit analyses. What they're well situated to do is to explain the risks of a given policy within their vertical.

 

The entities in the United States, in my belief, that make cost-benefit analyses are really two. They are the elected branches of government where we elect leaders to say we will accept this much risk for that much benefit on the given thing. For example, we will raise the speed limit from 55 to 75 knowing that it will cost lives because the efficiency gains on net are better for society than the relatively marginal costs of life. But you could make a different decision, and NTSA probably would make a different decision, but our democratic institutions don't do that. You see it with COVID where we save a certain number of lives in certain categories at the expense of other things. If the democratic organs of government made that choice it might be different, and it's the same thing in the world of economic policy.

 

Who can say how much climate change is worth how much loss of quality of life in this generation? That's not a decision for the FDIC to make, I would argue. It's a decision for either the Congress to make because we elect them to make those balancing judgments or for markets to make through the price mechanism where people can decide what they really want. But I would argue that the bank regulators are ill-suited to do that kind of a thing.

 

Which then brings me to the last point, which is, what was the Fair Access Rule? How does it relate to reputational risk? And why did we do it in the first place? So the why is where I'll start just very, very quickly and here. I will tell you that while the things that we saw banks starting to debank were different from the things that we saw in Chokepoint in the earlier part of the decade, they were still widespread and mostly had nothing to do with climate change. Whereas, in original Chokepoint, we saw dating sites being boycotted, pawn shops, fireworks sales, and tobacco, among other things. In the second version, when I was running the OCC, we saw banks, including some of the biggest banks, essentially wholesale deplatforming all of the following kinds of companies. And when I say deplatforming I don't mean refusing to make loans to them because there was credit risk. I mean literally cancel the checking accounts and taking them out of the financial system.

 

So I'm talking about things -- and again, you may find these sketchy. I find these sketchy. Private prisons, which are companies engaged by almost a majority of U.S. states to provide correctional services as government contractors, wholesale debanked by several of the largest banks. Gun manufacturers, including for hunting rifles and things that are sort of excepted American past times -- again, wholesale debanked. Weirdly, on the other side of the political aisle, we saw a mass movement to try and get banks to debank family planning agencies like Planned Parenthood because, again, they were politically unpopular among a certain segment of the society. And then, yes, also including oil and gas companies for various reasons.

 

Now, to be super clear, I'm a lifelong member of the Sierra Club. I grew up in Colorado. I am an outdoors person. I actually have a significant degree of concern over climate change, but I have an even greater degree of concern over how we make these judgments as a society. Because what I do know is that there are not environmental scientists on staff, nor was anyone at the OCC or the Fed elected to make environmental judgments for the United States. We elect democratic representatives to make those kinds of judgments. And when the Congress decides not to enact gun control, or when it decides not to enact national CAFE standards of a certain kind, the idea that we need unelected regulators to "fill the void" ought to trouble us when the people we elected to make those decisions have decided that that's the wrong decision for us. That becomes, sort of, the government of the Solomon Guardians or the Platonic Guardians, rather than a government of the people or of free people acting through markets.

 

So the point of the Fair Access Rule was simply to say this, it was to say, "Listen, banks are privately owned and in the main, they can make decisions as they want to make them." But there are two legal constraints on those decision makings that do exist in statute. One of them is the existing anti-trust laws which apply to banks as much as they apply to any other commercial company. And so we framed the Fair Access Rule in terms of a constraint only on banks that can be demonstrated to have pricing power in a particular market segment. So generally speaking, banks can do whatever they want, but if you have actual pricing power in a segment and are refusing to bank a legal business, you have heightened risk obligations to demonstrate why in those circumstances. So it was a very limited rule based on that.

 

The second animated concept behind it was the fact that in Dodd-Frank, which has been discussed a lot on this call, there was a little known provision added to the OCC's organic statute, and that was that in addition to the OCC's historic mission of ensuring safety and soundness of financial services, it also created a new obligation on the OCC to ensure the "fair access" to financial services. And the question is what did that mean? Now, the term fair access does exist in various places in anti-trust law, but it also implies the notion that in the same way that you can't discriminate on account of race or other immutable characteristics, you shouldn't be able to discriminate because you, the bank CEO, just find a given segment icky or not consistent with your own personal political preferences. And so the fact that you don't like hunting rifles or that you don't want your daughter to have an abortion — if you're on the other side and you're boycotting Planned Parenthood — doesn't mean you can use your federal charter to try and choke off finance to something that the markets want and that our democratically elected representatives have chosen not to outlaw.

 

So that was the concept of Fair Access. I signed the final rule. At the very last minute it did not get published in the Federal Register, and so it never took effect. As a result of which 30-some senators have introduced legislation to enact it by statute, so we'll see where that debate goes. Look, I think the bottom line is this is all a question of who decides in a society and do they decide subjectively or objectively. I've now filibustered long enough, but having lived this I thought I would just provide some perspective from the guy who actually signed the rules. So I really welcome the conversation. I think it's a great topic and I hope that this is not the last time we talk about it.

 

Hon. Sandra Ikuta:  All right. We've now heard one round from our panelists, and I feel enlightened or maybe alarmed [Laughter] to hear about the -- there's a political pressure on the banking industry. But I'd like to give our panelists a chance to respond to the points that were made and so I will do another round and ask Mr. Baer to start us off.

 

Greg Baer:  Sure. Actually, I think I had four or five things. First, I'm really glad Professor Skinner raised climate, which wouldn't immediately jump to mind as a reputational risk. But there is a really interesting question about what is a financial stability risk. A questioner could view that as very broad. And to the extent that there is the existential climate change going on, that's a risk to everything so, of course, it's financial risk. But what I think you'll be watching — and what she eluded to — was actually more at this point in the UK and Europe. I think that she's correct in saying that the Fed, I think, is a little more cautious here, is the notion of a climate stress test on banks.

 

That's a very complicated subject. We've written a fair amount about it if you want to look. Follow us at bank policy. But a lot of it comes down to this question -- suppose you have a 90-day revolving loan to Exxon Mobile and the Bank of England, or someone, is going to conduct a 30-year stress test. Well, what do you assume about that loan? Now, I would tell you as a bank micro-prudential risk that there's no risk to that loan. Because if Exxon refuses to change its business model and climate goes as it's projected to and Exxon eventually is ruined, well, you'll just stop rolling that loan over at some point. The concern about the stress test is that they will actually assume, first, that Exxon never changes its business. Second, that that loan is rolled over every month for the next 30 years. And third, that you take no actions to hedge it. You could hedge it by buying CDS on Exxon or you could hedge it by actually lending to some green companies that will profit as Exxon fails.

 

So that's sort of a fundamentally intractable problem with climate stress testing. Fortunately, I think some regulators are beginning to realize that. Interestingly, the Banque de France just actually did a stress test, which I think everyone assumed would come up with a huge number -- perhaps for other reasons. But in fact, they found that bank losses would be quite moderate even under some rather draconian — even counterfactual — assumptions. But this is a roaring debate now. Again, separate from the notion of what should we be doing about climate change more generally. But really, is this really a bank safety and soundness risk?

 

A couple points on Brian. First, just on rep risk — and this is kind of an aside — and he's certainly not the transgressor here, but if you think about it, any company in America is kind of at risk if their CEO is dating his employees — or her, although it's usually his — or taking a lot of drugs. It's only in banking that you would need to come up with policies and procedures to quantify the risk of your CEO dating too many people or taking drugs. And that's sort of a lot of what the reputational risk exercise has become is a compliance policies and procedures matter. But that's not terribly important.

 

On Chokepoint, I think Brian gives great examples of activities that were choked but completely legal. But I think the broader question — and to some extent, this gets to Chris's remarks — is to the extent that you believe that a given industry is doing something illegal, should the first action be to investigate that industry and challenge the legality and indict the people who are doing the illegality? Or should it be to go to their bank and tell them to stop lending? Because ultimately — and I think this is what Brian's driving at — if it's illegal, well then prosecute people who are doing illegal things or prosecute the bank for aiding and abetting, but you wouldn't actually say as a sectoral matter all banks should stop lending to that company or that industry.

 

And then on Fair Access and just sort of a larger topic, I think Brian noted the first version of Choke which was pawn shops, dating sights, etc., and then the second, which was private prisons, gun manufacturers, etc. There's a crucial difference there. In the first Chokepoint, that was the government telling all banks don't do this. And so that's a systematic government-mandated denial of credit. You can debate how broad it was or where it was, but that's one thing. It's a very different thing, it seems to me, if an individual bank decides — because its shareholders want it to or because it believes it will help it more in the market — not to bank a given firm or given sector. First of all, I think that's a legitimate concern. But second of all, and perhaps more importantly, if one bank decides not to bank a given company or sector, there are thousands of other banks who might. It's only when that reputational mandate comes from the government that it is truly systematic and disabling.

 

On the Fair Access — Brian and I debate this all the time — but I would just note what I think is one problem with this notion, which is you can say we don't want the bank or the CEO -- I don't like this business. But if you think about how banks work in the United States, most banks don't bank most businesses. It actually requires a lot of special knowledge and investment in resources to do an aircraft leasing business or to bank dentists. There are actually banks that specialize in banking law firms. So there are lots of banks that say, "You know what? I don't want to bank aircraft leasing. I don't want to bank dentists. I don't want to bank lawyers. I don't want to do commercial lending in certain areas."

 

And, of course, they have to be able to say that. And I don't -- obviously, that's not what the OCC was driving at, but how do you say, okay, well, you are allowed to say for non-financial reasons you're not going to do a dental practice or an aircraft leasing practice, but you do have to do a gun manufacturing business. And, of course, the answer is well, no, we just pick gun manufacturers because that's politically charged but now -- I mean, at that point the game is over. Right? Because now it's the agency deciding what's a politically important business that needs that, and then that is not, sort of, a neutral application of banking. That's back to a Chokepoint-like thing where certain industries are picked for reputational protection. So I don't see any way out of that box canyon, which is why I was a little down on that proposal -- something Brian knows. But in any event, that's my five cents.

 

Hon. Sandra Ikuta:  Let me turn to Professor Peterson.

 

Prof. Chris Peterson:  Well, thank you, Judge. Great comments and fun to visit about and chat about all this stuff. First off, I think maybe I'll take my time to respond to Brian's -- begin by responding to Brian's list of the different types of businesses that had some sort of risks associated with them. First, -- and you left one off, it was the online payday lending industry, which was engaged in illegal loans -- the one that I focused on. But for each of these businesses that you list, they're legitimate businesses. And I'm not disagreeing about that, but for each of those businesses, I think that there was something that's not about our preferences, but there were complicated underlying legal issues that did not render the banks unbankable but meant that there probably needed to be a little more due diligence and investigation into whether or not some of the participants in that industry were engaging in some form of illegal activity.

 

So dating sites, completely legitimate -- an important part of our online commerce, but they also can facilitate romance scams, which the FTC has said has led to about a third of a billion dollars in terribly tragic losses for victims of online fraud. So at what point is a dating site facilitating online fraud and what steps do they need to take and does the bank need to take to ensure that they're not facilitating online scammers?

 

Pawn shops, of course, are a legitimate financial institution, and they're regulated by state governments. But they also have had a systemic problem for thousands of years for fencing stolen goods, and there are local rules that deal with that. Some pawn shops are compliant, and some are not, and providing banking services to pawn shops might require some additional due diligence and investigation. I don't think that anybody -- at least I'm not suggesting that pawn shops shouldn't have access to the banking service system.

 

For fireworks dealers, -- look, I like fireworks too, but fireworks -- and it's a complicated patchwork of state and local laws. Fireworks can also lead to wildfires and pollution. And the laws in Wyoming, Colorado, and my home state of Utah, are not all the same, and different cities are not all the same. And some fireworks businesses may be actively circumventing those state laws, and it may be the case that the bank needs to take more time to investigate whether or not some fireworks sales businesses are in compliance with state and local laws before they engage in banking services.

 

Then, ammunition sales -- of course, we all know that there's a huge controversy about firearms. There's also some constitutional protections, but those constitutional protections are unclear, and different states -- Colorado and -- where you live and your home state -- and of course Chicago have very different laws, and whether or not a merchant is compliant with those laws is a difficult question and may require some additional due diligence.

 

The racist stuff I don't know so much about what's going on with that. It's a tough issue. I'm not sure where we're at on that. On the tobacco sales, a lot of -- some tobacco merchants online are attempting to circumvent state and local sales taxes, which is not lawful. And then also, telemarketing -- of course we need telemarking. Nobody is suggesting they should be unbanked, but some telemarketing operations are at risk for being boiler rooms to pump up stock prices or engage in fraud and scams. So banks that provide payment services, banking services, checking account services to businesses that are -- where it's difficult to know whether or not they're legitimate, and whether or not they're licensed properly or not, may need a little bit more attention and due diligence.

 

Then, I guess, responding to Greg's excellent point that we should focus on prosecuting the individual as opposed to using banks as a bank shot to try to enforce the law. Look, I agree that that's the first choice. Yes, we should prosecute scammers that are engaging in romance scams or pawn shops that are deliberately engaging in fencing stolen goods. But the problem is that it's not that easy, is it? Tracking down the online scammer who's operating from Mumbai or Ukraine, or the boiler room that does a call center that starts up and immediately shuts down as soon as they get a certain amount of money that runs through it. It's not that easy. And it's especially not that easy when banks wink and nod and knowingly facilitate the large businesses that are very profitable that in turn create profits that are used to frustrate the law enforcement prosecutions of those same scammers that were breaking the law in the first instance. So I think that that's the first choice, but we also need our financial institutions to take responsibility for engaging in reasonable due diligence to screen out illegal activity from our online and digital market places.

 

Then, I guess, last point is that I think that to say that the position of anybody out there -- and look, there may be some people -- but I think we need to be very careful not to engage in a straw man fallacy here where we say that the position of these unelected government bureaucrats is to render some entire industries unbankable or that those practices shouldn't be used. Nobody that I'm aware of, in any conversation I've ever had in my entire 20 years, has ever said that we should not allow people to buy a shotgun. It's not my position. It's never been anybody's position.

 

Instead, what I think the position is much more nuanced is that we should expect our financial institutions who when extraordinary profits and have -- many of our money center banks have revenue that dwarfs the gross national product of many of the world's nation states that we should expect them to engage in some reasonable due diligence in screening to prevent illegal practices from creeping into the banking industry. And we should be careful to distinguish what things are illegal and what things are not illegal. On that point, I agree with everybody on the panel.

 

Hon. Sandra Ikuta:  All right. Professor Skinner, do you have some comments?

 

Prof. Christina Parajon Skinner:  I do -- I do. I have two main comments, I think. I'll be relatively brief. The first comment, I guess, is for you, Brian. I agree with everything you said in your excellent presentation and particularly the remarks that you made in regard to the democratically responsive institutions being out in front making these subjective value-laden decisions. When I make that point, often in my own research, I'm met sometimes with the skepticism that's a fairytale. We can't expect the Congress to make these decisions. We're in this period of gridlock and so, therefore, we need to lean on these agencies that have broadly worded mandates that they can press wider, we can give -- let them exercise their discretion, let them develop the expertise, bring on that climate scientist to the Fed or what have you.

 

      I find this sort of ends justify the means difficult to respond to and wrestle with and I wonder — soliciting your advice, really — how you address those remarks other than saying we have a system in place that's designed to slow down when the nation is politically divided, and so it's not a democratically appropriate response to say well, let's short circuit that and use the agencies and use this sort of "technopopulism", which a colleague of mine has cleverly coined the term of. So that's one question for you, Brian.

 

      And then I guess my second question, comment, remark is for Greg in response to some of the things that I've seen written by you in terms of operational risk, and how on the one hand operation risk is a growing and real threat, we're in a world of cyber risk now, on the other hand — I think as you've pointed out — it seems a slippery slope to allide operational risk with reputational risk, and how do we keep the lines relatively clear there? So I may be upsetting the course of things by putting questions back into the panel, so Judge I'll let you decide how you want to handle my provocative questions there.

 

Hon. Sandra Ikuta:  Thank you. Well, we'll let Mr. Brooks respond to your question and make any remarks he liked, and then we'll turn it over to Mr. Baer to respond to your specific question.

 

Hon. Brian P. Brooks:  Well, this is so great. I mean, boy, I wish we could have done this six months ago when some of these things were live. This would have been a great dialogue at the time. Let me start, if I can, Christina, by answering your question — because I think this is a super profound question — is, what do you do about the gridlock problem? I have spent a lot of the last five years in Silicon Valley where the line about anything that goes wrong in a product is it's a feature, not a bug. But I'm going to argue, actually, that sometimes gridlock is a feature and not a bug.

 

      And what I mean by that is there are times when what the failure to regulate something means, whatever it is, is a decision that not regulating is better than regulating. And I think Americans often misunderstand that because we have a view nowadays that every single thing on planet Earth needs to be subject to some kind of a regulatory regime. This is why we have state licensing of florists and hairdressers and an increasing number of activities that we used to just do in a free country now can't be done without some sort of sanction of the state. Classic example in financial services was in the beginning of the Trump Administration — when the Administration decided to take a different perspective on consumer financial enforcement at the CFPB — is a number of states, starting with California, decided that — and this was the common phrase that was used — they decided to beef up their state regulatory agencies to "fill the void" left by the Trump Administration.

 

      But of course, that wasn't a void at all. It was a conscious policy choice. The belief being that the cost of a relatively low level of kind of inherent fraud and loss in the financial markets was more than swamped by the reduction in economic activity and job creation created when banks, in particular, stayed way, way, way back from whatever the legal line of demarcation was. So not a void, but a conscious policy judgment. Very similar to tax policy where there are some states that have elected not to charge tax, and it's not because they forgot to, it's because they decided that it's a good thing to leave more zone for private economic activity.

 

      And so in this world when we say gee, Congress can't be trusted to impose gun control so we need banks to impose gun control. Well, what if it was the decision of the people's democratically elected representatives not to control guns? Again, I'm not saying that's a good thing. Remember the old line about -- that Oliver Wendell Holmes said about democracy, which is, "If the American people want to go to hell in a handbasket, it's my job to help them get there." That was once the view of a democracy, but it seems like today there's a real skepticism where elites believe that they know the right answer and they're willing to let Congress have the first crack at it. But if the people's representatives don't agree with them, and thus, don't impose those restrictions -- well, we got to have the restrictions and we'll take anybody who wants to impose it even if that is banks versus somebody else. So again, I think the main point here is sometimes the decision not to do something is a decision. It's not a failure to make a decision. It is, in fact, the decision.

 

      Let me turn for a second to something that Chris said about some of these categories I was talking about -- about dating sites, pawn shops, etc. And Chris, I think if I understood your comment it was look, no one is saying you can't bank those companies, it's just that they have higher risks, and thus, you have to make sure that you're managing those risks specifically. So I wish that were true. I think it would be a different conversation if it were true. But candidly, it really isn't, and I can give you two pieces of evidence for that. The first is that I actually ran one of the country's 50 largest banks during Operation Chokepoint. In that time, in 2012 and '13, we [inaudible 1:05:54] policies, which is sort of where all this sat, and we got an MRA from our examiner in charge because we didn't have a policy that blanketly refused to bank pawn shops among other kinds of companies that were on that list.

 

      And we were only able to resolve the MRA by prohibiting all transactions with those kinds of companies. There was no discussion of a risk management framework. We had to prohibit them in order to resolve the MRAs, so I've actually sort of personally observed the way that Chokepoint was implemented inside of a large bank.

 

      But the other evidence of it is — and you probably know this from your time during the Obama Administration — is in 2014 the OCC looked at two different categories of activity that were being entirely squelched by Chokepoint, and the most famous of these -- I mean there were two, really. There was money services businesses and then there was foreign correspondent banking, which had been identified as part of the effects that many of the most significant banks had adopted policies based on the FDIC guidance that simply said we don't bank those sectors. It's not that we'll engage in risk management and enhanced due diligence, we simply will not bank foreign correspondent banking activities or money services businesses.

 

      And the OCC, in the mid-Obama Administration, came out with guidance that said you can't refuse to bank those as a category. So, Chris, they were saying what you're saying today, which is what you must do instead is determine which, among the companies in that sector, have effective risk management. And then you can bank those, while refusing on an individualized basis, to bank those that are not effectively managing those admittedly heightened risks. But that distinction is all the distinction in the world because the industries response to Chokepoint wasn't to make nuanced decisions, as you say, it was to boycott them entirely. And that's sort of what led to the OCCs regulatory response in 2014 -- [inaudible 01:07:41] 2014.

 

      And, I guess, last thing I'll do is I'll address Greg's comment, which I think is a really good one, which I agree with. And that is it's a different thing entirely for the government to prohibit a bank from doing something than it is for privately owned banks to decide on their own that they don't want to be in a given line of business. And I think that's definitely true. What I think got badly misunderstood, because of just the political tone of the last 12 months, is that nothing about the OCCs Fair Access Rule challenges that assumption.

 

      So we had two or three key points in Fair Access that were designed to kind of acknowledge Greg's point. The first is if, in fact, there are lots of other banks banking a given sector -- so if it's really true that your bank doesn't want to do factoring or whatever, but other banks are doing it, that's totally fine -- totally fine. That's why we built it around an anti-trust concept where the rule only imposed obligations on banks that had market power. Because the definition of market power is if you exit the market either the product will not be available or you were such a big part of the market the prices will rise. And we do that kind of anti-trust analysis in every other industry in America, so why wouldn't that apply in the banking business is the first point?

 

      The second thing is we only imposed the requirement on banks of a certain size as a proxy for market power, so the rule only would have applied to $100 billion asset banks and above. And the last point was, to make very clear, that we're only talking about services that the bank offers. So if you're not in the secured lending business, or the asset based lending business, naturally you're not going to lend to an oil and gas company because you don't do that business. And if you don't do it for anybody, you certainly don't have to do it for them. But what we were trying to get at — and I think this is intuitive, but gosh, tell me if I'm wrong about this — if you offer business checking accounts, which many banks do, you can't offer a business checking account to a wind farm but deny the business checking account to the oil company. Neither of those presents credit risk or any other kind of financial risk to you. That's just a fee for service business. Why are you not granting the checking account to the oil company? That's a question no one ever really adequately answered.

 

Greg Baer:  Okay. I'll go. I'll come back to some of that. But on op risk -- and thanks for the question. My colleagues would think you -- I might have planted that question because I was just doing an op risk grant yesterday. So for those who don't know, operational risk is sort of distinguishable from credit risk or market risk, and it's basically -- complicated, but basically, the risk that something's going to break. This has clearly -- over the last five years -- this sort of next great frontier for bank examination under the rubrics of vendor management, third party vendor management recently, fourth party vendor management, and basically, you have to make sure that everything's always going to work, and that means sort of indirectly supervising your cloud provider or your law firm cybersecurity, etc.

 

      Of course, we got a good reality check in the pandemic, and it turns out that banks around the country were able to go completely off-premises through virtual work, really, without any operational problem at all. Which is astounding and would seem to argue that, in fact, they don't need a lot of regulation of their operational risk, but we have yet to see on that. Of course, what it's really now about in terms of operational risk is cyber risk. And there, I think, there's currently very good discussions about this and the question is if you're worried about bank cyber risk, is the answer to send in some examiners who did credit risk and AML last week, and now they're going to come in and check to make sure you have a lot of policies and procedures when, in fact, you already employ say five, ten thousand people doing nothing but cybersecurity who came all from the NSA or the Air Force or whatever? Or is the better way to reduce that operational risk to actually have information sharing between the intelligence community and banks, or at least systemically important banks?

 

      I think there's actually a fairly good discussion going on on that, but there's certainly ways that could go awry. But, of course, then there's the separate conversation is about operational risk capital, which is, I think, a very difficult discussion to understand. Banks now are required under the advanced approaches — too complex — to hold vast amounts of operationalist capital under the Basel Accord -- that at least the largest banks will be required to hold vastly more operational risk capital. When in fact, when you look at it they really don't lose a lot of money on operational risk. I mean, even big cyber events, it's a -- even if it's a denial of service -- that's not a material financial loss in most cases.

 

      And in fact, the way they calculate operational risk capital -- originally there was something called the AMA, or advanced management approach, which completely failed. Currently, the new approach at Basel, which presumably the U.S. would adopt in some form — although I would argue against it — is the SMA, which basically says your op risk is a function of your net income. So no relation to your operations, just if you make this much money then you have this much operational risk, which is sort of intellectually bankrupt. But what it's really always been more about previously was just your litigation losses. So your cyber risk is basically how much you paid in mortgage settlements as a result of the last financial crisis -- even if you got out a mortgage, by the way.

 

      So it is an area, I think, of very little intellectual rigor where the numbers are just kind of made up on the capital side. But I do think on the -- in the real world of what's your actual operational risk, banks have demonstrated extraordinary resilience, and I think also the government's actually doing a pretty good job of that.

 

      Just two other quick notes on -- and perhaps to mediate between Chris and Brian, I would note there's a big difference between reputational risk management and AML KYC, which I spend a lot of time on. In fact, you could actually argue if you're forced to debank people you can't actually file suspicious activity reports. So there's no reason -- I would think if it's a legal business, the bank should be able to bank it. But then if there are all these bad things that Chris is talking about going on, well, the bank is under an obligation to note that and file suspicious activity report and identify for law enforcement that that is in fact occurring.

 

      And if they fail to do that, as USB did -- I don't believe they were actually engaged in money laundering, and in fact, I think they were cited for failure to adopt a sufficiently rigorous program to notice that there was bad activity going on, which is the norm for these things. But again, if you can't bank them, well, then you can't really be spying on them for the government, which is cynically sort of what AML KYC is really about -- not that there's anything wrong with that. So perhaps that is a middle ground.

 

      And then to Brian — I mean, again, we've done this before — but I think my quibble with Fair Access is that there was -- I mean, as you note it was about market power, but there was a presumption that every large bank had market power in all these markets, and I think a lot of these are very competitive markets. So I had a little quibble with that. So much for me.

 

Hon. Sandra Ikuta:  All right. Well, I think we can turn now to questions and answers, and we will be taking questions only through Airmeet. There's no way to ask questions of the speakers on other platforms. Use the raise hand button located in the middle of your screen — bottom middle of your screen — if you want to ask a question live, or an Airmeet participant can enter text questions in the Q&A tab in the upper right-hand section of their screen.

 

      We already have some questions, and this first question, I think, I'll start with Professor Skinner. It says, "Putting aside government intervention, how do we address the secondary problem of bank CEOs exercising their own political preferences in deciding which companies to bank? For example, City Bank and Bank of America regarding firearms manufacturers and retailers. This has become more of a societal problem as banking has become more concentrated with a handful of banks running syndicated lending." Can you start with that, Professor Skinner?

 

Prof. Christina Parajon Skinner:  Yes, absolutely. So you put your finger on a really important issue and it's sort of the other side of the coin here. I'll start by saying I don't think I have the answer of how to address it, but I'll give some context and set up the question. Maybe some of the other panelists want to provide some suggestions. I think big picture we've been discussing all these various regulatory pressures that could be, or have been, leveled against banks, but it's certainly worth us considering also this endogenous pressure that's coming from within the banking sector itself. And I think what's interesting is that over the past couple of years you've really seen these academic debates spill over into the boardroom in terms of so-called corporate purpose.

 

      I'll use the example of climate I guess because it's a big live issue right now, but it applies equally to other sectors that have or may become politically or popularly unpopular. There's a bandwagon effect. So all of the banks made these commitments to go to net zero as of April of this year, I think, and it seems like it was really kicked off by asset managers and then it made the rounds through banks. It seems like the banks really seem to think that this is something they need to do to compete or retain customers, and talent even, on this new sort of climate-focused dimension. I think one of the major reasons why customers and clients, and even the institutional shareholders, are pressing for these various commitments from the banks is because of this rhetoric around corporate purpose.

 

      And this debate was really set up years ago to challenge the shareholder privacy model, this notion that was first sort of famously espoused by Milton Friedman, that companies should maximize profits for their shareholders and should use that as the principal rationale for just sort of guiding which projects to undertake. Now, Friedman is often misquoted, I think, as endorsing this idea that companies should do anything possible to pursue profit, but he never said that. He was always clear that companies needed to play within the letter of the law. But in its place, there was this growing push to supplant the shareholder privacy model with conversations about a stakeholder model. And in its strongest form that companies should pursue things other than profits, that they should pursue the interests of other stakeholders -- so their customers, their employees, the environment.

 

      Or in a lighter version of it that companies should certainly consider the interests of stakeholders when they're deciding which projects to undertake. I always thought it was a bit of a false paradigm because, in my opinion, successful companies always take a long-term view and do necessarily take and view stakeholder interests when they're deciding how to pursue profit-maximizing activities. But, of course, one key stakeholder that has really emerged in all of this is the environment and the implications that has on bank's business models. So I think that's the broader debate, which is I think what is motivating a lot of corporate America, including the banks to voluntarily take on these initiatives without any additional pressure from the regulators. But I'm very interested to hear what the other panelists think about this.

 

Hon. Sandra Ikuta:  Would anyone else like to jump in on this issue?

 

Greg Baer:  I thought that was a terrific summary of where we are.

 

Hon. Sandra Ikuta:  Well, let me -- speaking as a judge, I'm interested in the legal framework here. One of the things that I've heard is that the government here -- is that the government doesn't have legal authority to pressure private industry to further the government's policy goals -- or the legal authority, at least, is questionable. But then my question would be, does doing so violate any law? Is there a legal action that could succeed here? And maybe I'll aim my question at Mr. Baer since he was involved -- you were involved in a legal action against Operation Chokepoint.

 

Greg Baer:  Well, it's funny -- a lot of things in banking these days -- I think banks have the legal ability to push back but not necessarily the will or practical ability. I mean, if you think about the authority that the regulatory agency has over a bank, there is the authority to enforce violations of law. And then the major statute is 12 U.S.C. § 1818, which forbids a bank from engaging in unsafe or unsound practices or being in an unsafe or unsound condition. There is actually a fair amount of jurisprudence. There's a slight Circuit split, but not huge Circuit split, in terms of what that means -- I think the D.C. Circuit rule being the most popular. And also since banks could always challenge in the D.C. Circuit, as you might know, probably the one that's most determinative.

 

      And that really finds that in order for an agency to prohibit a practice under 1818, there has to be -- the words are a little unclear, but basically a risk of material financial loss to the institution. I would say a lot of the focus on activities through the exam process does not really meet that standard. Certainly, given some of the examples we've heard today, those would not in any way represent that kind of loss. So we could argue that a lot of the mandates are not qualifying, either under a classic violation of law or an unsafe or unsound practice.

 

      And then the next question, which is really -- I mean, I think what occupies a lot of our thoughts in terms of how banking works, and what makes it so complicated, is well, that assumes that you're actually willing to contest an 1818 action, which means that the agency actually files a complaint against the bank and says you have violated 1818. That never happens. I mean, you can check your records. The list of contested bank examinations is basically zero for generations. And that's really because the -- and this gets back to why reputational risk is such a useful tool to examiners — and the agency more broadly — is that banks don't really have the ability to fight with the regulators in court because that's seen as a reputational risk. It's seen that you can't get along with your regulators. Your shareholders don't like it. Trust me, from personal experience, your board does not like it.

 

      And so there is always -- and again, all of this is going on behind the scenes under the cloak of examination secrecy, so you are much better advised to do what you are told thereafter, after some haggling. So you never really get to litigate these issues in any meaningful way. There's an internal supervisory process where you can do examination appeals, but you're actually applying to the agency that gave you the examination rating. So, again, Professor Hill, who I really admire, did a whole analysis of bank examination appeals and shows that you always lose. So the courtrooms are empty when it comes to banks being able to challenge mandates like that.

 

      So that's why you see things like this actually going on when you drill down, as I like to, and say what's really the legal authority for it. It becomes less and less relevant over time it appears. It's funny, I'm an adjunct at Georgetown Law School and I always feel kind of silly because I teach a chapter or a class on bank administrative procedures and you have to at the end just say everything I've just told you is irrelevant because you don't have contested actions, you don't really do this. And I think a whole other topic, potentially for The Federalist Society, over time you have — and this gets to what Brian and I think we're agreeing about — you've seen a drift away from doing notice-and-comment rulemaking to issuing guidance, which they -- or it pains to say is not binding like an informal rulemaking under the APA. But in practice, the examiners treat it as binding. And perhaps to their discredit, bank compliance departments certainly treat it as binding.

 

      So you sort of have this vast library -- and I at one point, when I was at one bank, had to do a list of the -- I think it was several hundred rules that are things that our board had to be doing — or a committee of our board had to be doing — and that involved cataloging every piece of guidance, every issue. Now, of course, I could have told them this is not technically binding, but that was not an answer. It's guidance issued by an agency, so we have to certify to our board that they are doing this or we're in big trouble. I think it's very frustrating for rule of law folks, and perhaps actually for Circuit judges, that you don't see a lot of these cases because there's just no ability to get them into a court under your article of the Constitution.

 

Hon. Sandra Ikuta:  Anyone have a comment on that? Does anyone think there is a possible legal action here? We know that the district court thought that there was at least a possible due process argument, and so I'm curious if anyone shares that view.

 

Prof. Chris Peterson:  Well, I'll chime in, Judge. I guess the -- first off, I think that my comment has to be read in the context of lots of different overlapping agency jurisdictions and legal theories. Unlike Brian, who works at the Comptroller of the Currency, I worked at the CFPB. I'm a little more familiar with the unfair, deceptive, and abusive practices framework of the Dodd-Frank Act.

 

      But just for a moment, imagine that you have a company that's making illegal loans under state law, and the state law renders those loans non-existent -- they're void. It's not lawful for that particular type of business to collect the loan. And now, further, let's assume that the bank has been processing payments, collecting those loans on behalf -- the payments from the borrowers. And if that happens on a one-off thing, well, the bank can't really be expected to know. But on the other hand, suppose that the bank is doing that to the tune of billions and billions of dollars, and they're widespread exposés and the bank acting as a service provider to that lender knows and is winking and making extraordinary profits facilitating an illegal online business. In my view, there is a strong argument that the bank is engaged in a deceptive, unfair, or abusive practice as a service provider for the original lender.

 

      So I do -- and of course, that's not -- I'm not sure that was responsive to the safety and soundness reputational risk or if it's in a context of an examination, but these things can come up lots of different ways and I'd want to drill down to the particular transaction for each -- particulars for each transaction and which agency's bringing it, which -- whether or not it's a private citizen that's bringing it. But once a bank starts processing payments for loans that -- for any type of service that's illegal under some state or local law, there's a real chance that the bank is going to start to get closer and closer to potential liability in my view.

 

Hon. Sandra Ikuta:  Any comments? Well, I have one final question for Professor Skinner. Putting this in a historical context, is it novel -- this approach that the Fed is taking pressuring industry behind the scenes, or is this something we've seen before?

 

Prof. Christina Parajon Skinner:  Yeah, so this will bring me back into some totally different work that I'm doing. I want to be clear, I don't think that the Fed is pressuring banks at all right now. I think that there is a live conversation about whether that's a possible direction the Fed could go in that is starting to look like a bit of a parallel to the things that we were talking about in connection with some of the agencies, which is why I raised it. But yet at the same time, there are past periods in history where the Fed — and I would guess the other agencies too — have had to confront this question about whether they should use the policy tools at their disposal to try and either steer the economy in certain directions or certainly steer credit in certain directions.

 

      And I think in response to your question about how to situate this in historical context, I think perhaps the most analogous period, at least for the Fed, would be in the 1920s, ironically, 100 years ago where there was increasing concern about the imminent stock market bubble. When you look at that history — which is fascinating by the way — you see that the Fed board -- of course, much -- nearly out of the gate at that point -- trying to engage in something called direct action where there was a little bit of an attempt to try and lean on the reserve banks to try and lean on banks to not lend for speculative purposes.

 

      And it may not surprise you to learn that the policy was short-lived because it just generally made legislatures and people uncomfortable that this could be applied in a nondiscriminatory way. And I guess the upshot of that is old wine in new bottles. It's not a new problem, and it's good to continue the conversation because often I see when we look back at history these issues, as in all areas, do tend to repeat themselves, and I think they probably are here as well.

 

Hon. Sandra Ikuta:  Well, thank you for that. That's a good note to end our panel.

 

      I'd like to thank our panelists for a truly excellent and illuminating presentation. And I'd also like to thank the audience for your participation. A reminder that the next conference event is a discussion of regulating social media in the new administration, and that will begin at 11:00 a.m. Eastern Time tomorrow. But standby now for the alert directing you to the lounge.

 

 

     

 

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Airmeet, our new online platform for the Executive Branch Review Conference, offers us the exciting opportunity to network with one another, and with speakers, moderators, and FedSoc staff. Before, between and after panel discussions, feel free to click the Lounge button at the top of your screen and join a table of fellow conference attendees. As sessions conclude, we'll also send a "Lounge Alert" with a link you can click to make it easy to join the Lounge. We'll also send alerts to the Lounge before panel discussions begin, so there is no need to worry about missing any of the panels.

Please plan to join us in the "Lounge" for a unique networking opportunity. It's a great way to stay in touch with everyone until we can convene in person once again.  We look forward to seeing you there!

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10:30 a.m. - 11:00 a.m.
Networking Lounge Open
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Airmeet, our new online platform for the Executive Branch Review Conference, offers us the exciting opportunity to network with one another, and with speakers, moderators, and FedSoc staff. Before, between and after panel discussions, feel free to click the Lounge button at the top of your screen and join a table of fellow conference attendees. As sessions conclude, we'll also send a "Lounge Alert" with a link you can click to make it easy to join the Lounge. We'll also send alerts to the Lounge before panel discussions begin, so there is no need to worry about missing any of the panels.

Please plan to join us in the "Lounge" for a unique networking opportunity. It's a great way to stay in touch with everyone until we can convene in person once again.  We look forward to seeing you there!

11:00 a.m. - 12:30 p.m.
Regulating Social Media in the New Administration

Telecommunications & Electronic Media and Corporations, Securities & Antitrust Practice Groups

Topics: Corporations, Securities & Antitrust • Culture • First Amendment • Politics • Telecommunications & Electronic Media • Free Speech & Election Law
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Simmering controversies over the social media platforms we use every day have recently come to a boil, with certain platforms suspending or permanently disabling accounts, others directly or indirectly targeting disinformation, and others removing certain applications from their app stores.  While many statutes, including the Communications Decency Act (and its Section 230), have played a role in the tremendous growth and innovation of modern technology and online platforms we use every day, we are now at a crossroads.  The new Administration must confront important questions, such as the role federal law will play in protecting future innovation, growth, and competition in today’s fast-changing online era.  Furthermore, the appetite to reform Section 230 is shared across the executive and legislative branches: the President, Department of Commerce, Congress, and the FCC have all criticized the existing statute.   Ultimately whether reform happens as an executive branch exercise—or through a more traditional legislative process—is yet to be seen.  This panel will address these issues and more.

Featuring:

  • Ms. Joan Marsh, Executive Vice President and Chief Regulatory Officer, AT&T 
  • Hon. Noah Phillips, Commissioner, Federal Trade Commission
  • Hon. Nathan Simington, Commissioner, Federal Communications Commission
  • Mr. K. Dane Snowden, President & CEO, Internet Association
  • Moderator: Hon. Elizabeth L. Branch, U.S. Court of Appeals, Eleventh Circuit

Speakers

Event Transcript

Dean Reuter:  Welcome into the main stage day of the Ninth Annual Executive Branch Review Conference, hosted by The Federalist Society's practice groups. I'm Dean Reuter, Vice President, General Counsel, and Director of Practice Groups at The Federalist Society.

 

      Thank you all for being with us today. EBR9, as we call it, is for the first time ever on Airmeet platform, which will allow you to visit with friends and colleagues, speakers, and FedSoc staff in the Airmeet Lounge before, between, and after panel discussions. If you're not in Airmeet now, you'll need to register, which you can do in a few simple steps through The Federalist Society website in order to take advantage of the networking opportunities.

 

      In an important and related Federalist Society news, look for a series of weekly Teleforum calls beginning June 11 helping to launch our Freedom of Thought Project. Check The Federalist Society website for details.

 

      And today, our first panel just happens to be an in-depth discussion of the regulation of social media. Our Moderator is Judge Lisa Branch. She's been on the Eleventh Circuit Court of Appeals since 2018. She served in private practice twice. She's also served as an Associate General Counsel in the Department of Homeland Security and counselor to the head of OIRA. But perhaps her most impressive credential might well be that she's a long-standing member of the Board of Advisors of The Federalist Society's Atlanta Lawyers Chapter. Judge Branch, the floor is yours.

 

Hon. Elizabeth L. Branch:  Thank you, Dean, for that kind introduction. And thank you to The Federalist Society for inviting all of us to speak today on such an interesting topic as part of this three-day program, the Ninth Annual Executive Branch Review Conference. I truly enjoy participating in Federalist Society events. As Dean noted, I'm a long-standing member of the Board of Advisors for the Atlanta Lawyers Chapter. And I have participated in these events for a good number of years, and I'm truly honored to do so again today. But while the virtual conferences that Federalist Society has hosted have been a great success during the pandemic, I know that I'm not alone in hoping that in-person events will soon return so that we can meet in person.

 

      In any event, I'm happy to kick off today's programming with our panel titled "Regulating Social Media in the New Administration." I think most people who use it have a love-hate relationship with social media, and these platforms generally provide a place for freedom of speech and thought but sometimes greatly restrict them. Some people cheer these restrictions. Others rise in protest.

 

      Section 230 of the Communications Decency Act of 1996, which paved the way for the enormous growth of social media, has been in the news a lot as of late. It provides, quite simply, but enormously, no provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider. And in its wake, a lot has changed since 1996. Ted platforms have grown, harmful content has expanded, content-based censorship has increased.

 

      So what happens next? Is reform on the horizon? If so, how? And through which branch of government? Our panelists today are going to dive into this divisive topic in their remarks. Just a quick roadmap of how this panel is going to go -- as Dean has mentioned, it is a CLE panel, and you're going -- if you're seeking credits, you need to follow those instructions.

 

      So as for the format I'm going to follow, I will introduce the speakers and then -- all at once -- and then I'll turn it over to them in order for their opening remarks. At that point, when they have concluded, I will invite them to make either a short rebuttal or pose a question to another panelist. I will then ask a few of my own. I will ensure, however, that there is time for audience questions, so please be ready to join in at that time. As Dean said, you need to be on the Airmeet platform, and you can send text-based questions via the Q and A tab, or you can raise your hand. With that framework in mind, I will briefly introduce our esteemed panelists.

 

      Our first speaker is Noah Phillips. Following his nomination by President Trump and unanimous confirmation by the U.S. Senate, he was sworn in as a Commissioner on the Federal Trade Commission on May 2, 2018. Before coming to the FTC, he served as Chief Counsel to U.S. Senator John Cornyn of Texas on the Senate Judiciary Committee. Prior to his Senate service, he worked as a litigator at Cravath, Swaine & Moore in New York City, and then Steptoe & Johnson in Washington, D.C. He received his A.B. from Dartmouth and his J.D. from Stanford. He will explore the topic of content moderation on social media, including First Amendment, antitrust, and consumer protection issues.

 

      Our second speaker will be Dane Snowden. He is the President and CEO of Internet Association, which advocates for public policy focused on a free and open internet. Prior to joining IA, Dane served as Chief Operating Officer of the Internet and Television Association. He also served at CTIA - The Wireless Association as Vice President of External and State Affairs. His government service includes his tenure as Chief of the Federal Communication Commission's Consumer and Governmental Bureau. He's a graduate of The College of William and Mary. He will discuss how Section 230 should be both celebrated and evaluated, and before reforming it, how concerns must first be identified and defined because some solutions may lie outside of Section 230.

 

      Our third speaker is Nathan Simington. He was nominated to serve as a Commissioner of the FCC by President Trump and was confirmed by the U.S. Senate in 2020. Previously, he served as Senior Advisor at the National Telecommunications and Information Administration. Prior to joining the Commission, he was Senior Counsel to Brightstar Corporation, an international mobile device services company. And prior to joining Brightstar, he was an attorney in private practice. He's a graduate of the University of Michigan Law School and also holds degrees from the University of Rochester and Lawrence University. He will discuss how the Section 230 controversy arose because social media has disrupted the consensus speech regime that arose in the mass media era.

 

      And last but not least, our fourth speaker is Joan Marsh. She is AT&T's Executive Vice President and Chief Regulatory Officer, wherein she engages with the Federal Communications Commission and the Federal Trade Commission, as well as with other Executive Branch departments and offices. She has served in a number of capacities at AT&T since 1997, including legal, regulatory, legislative, and executive roles. Prior to joining AT&T, she spent five years as a trial litigator with the Chicago firm of Kirkland & Ellis. She received a J.D. with Honors from UCLA Law and her B.A. from UCLA. Miss Marsh will discuss how any Section 230 reforms need to provide for greater transparency and accountability and may lead to certain internet platforms being treated more like traditional publisher competitors.

 

      Before I turn it over to our speakers, I have one final note. We do have two FTC Commissioners who will be speaking today, and they are speaking in their personal capacities, not on behalf of the FTC. Mr. Phillips --

 

Hon. Noah Phillips:  There we go. Thank you, Judge, for that really kind introduction. It's really an honor to be introduced by you and to appear with you, and Commissioner Simington, and Dane, and Joan. And it's great to be back with The Federalist Society. Since law school, in my life, The Federalist Society has been such a great place to talk about ideas. And today, of course, we're talking about some of the really interesting issues that all of us like to say we as a society are facing.

 

      I want to do a little bit of table setting before I get to at least the antitrust side. I might save consumer protection for later. What I want to introduce is the concept that as a law enforcer, which is what we do at the Federal Trade Commission, my job is to enforce the laws. That is a tautology, of course, but it means something. What it means is that my job is to intervene where companies are violating the law. If companies are engaging in legal conduct that I may not like or that others may not like, other public officials, let's say, that doesn't give me the right to go in and use the law to effectuate change that I want to seek.

 

      A lot of us will remember — I certainly remember from my time on the Senate Judiciary Committee — Operation Chokepoint, which was an example of when believing themselves serving the common good, government used tools to get companies to stop engaging in legal conduct. That includes sale of guns. And when you allow government to do that, focus on who the defendants are, not whether there are violations of the law — to focus on conduct that is legal that they don't like, not on whether there are violations of the law — I think it presents a problem for the rule of law. You see this sometimes at the state AG level.

 

      I'm reminded of the time that New York sued Exxon Mobile for climate change. They said it was a violation of the securities laws. And by the time the trial was all and lost, people weren't paying attention to the headline. But it was the headlines that did a lot of work. So I think that approach of identifying the defendant or legal conduct you don't like and then trying to find a violation, that puts the cart before the horse. And it's no more appropriate in the work that I do — antitrust and consumer protection — than it is in securities regulation, or communications regulation, or energy regulation, you name it. Congress, of course, is a little bit different than law enforcers. Congress can identify a problem that includes legal conduct and seek to remediate it. And that's some of what, I imagine, we'll talk about today.

 

      But I want to talk a little bit through content moderation. So first, social media is hardly the first time that society, and many members of society, have found upsetting the rollout and the rapid expansion of a new communications media. This goes back as far, at least, as the printing press, probably longer than that. And we can all think of ways, like in Rwanda, where the radio played a bad role. Or if you think about some of what Goebbels did under the Nazis with television.

 

      Social media is proving very, very disruptive to a lot of how society works, and that creates issues that not only the United States is struggling with, but also other countries. And part of the issue here is that social media can scale very quickly, and when you're at scale and you're trying to do content moderation, it's really difficult, and mistakes are made. So what I think we've all seen are inconsistent decisions, a lot of, frankly, wrong decisions, in my view, and a lot of flip tops. There's not a lot of consistency, and rules do not seem to be fair -- or fairly applied.

 

      The other thing that's going on is that people have really different tastes for speech moderation. As the Judge laid out, a lot of us are really concerned about what we see as censorship. Others are really concerned about inadequate censorship, and that creates a problem too. I don't know the numbers, but I also suspect that there are a lot of moderations that don't get as much attention that many of us really actually do agree with: removing pornography and this kind of thing. That certainly makes my social media experiences better.

 

      I want to come to antitrust because antitrust is often used as an alternative for regulation, fixing market problems, and letting the market work. But also, of late, we've heard a lot of the notion of using antitrust to solve some of the problems that we'd see. And in particular, one thing that we hear from the right and the left is that when they see something they don't like, they respond with one of the most famous, although not often used, remedies in antitrust law: break them up. It's not always clear to me that that's the right solution.

 

      So antitrust is a tool that addresses problems in competition. It's really ill-suited to address content moderation. The goal, as I said, is to make markets function effectively. And again, we think of it as an alternative to regulation. Now, some argue that moderation, or bad moderation, maybe too much moderation, is part of quality competition and that if we had more competition, we would see better moderation decisions. And what I want to argue today -- I've also heard the argument that absent monopoly power, people couldn't get away with what they're doing. There may be some truth to that. But what I want to argue today is that that doesn't really make a lot of sense in the context of antitrust law.

 

      So the first reason is that people disagree as to what better moderation is. I have heard people say we would see less censorship if there were competition in social media. And I have people say we would see more moderation if there were more competition in social media. And trying to figure out which one is true is tremendously difficult, and I don't think we know the answer.

 

      Here's another thing, we need to think about what it is upon which the companies are competing. So the classic problem in antitrust is one of price-fixing, where the companies agree, and they're no longer competing on price. Do we see the companies competing on content moderation? There is some of that. I think Gab and Parler are two platforms that offer less moderation, and that's part of their brand. But it's not always clear to me that that's where the competition is occurring, so that solving the competition problem would result in, again, whether you want more or less moderation, whatever that answer is.

 

      The other thing is, some of the firms that are making some decisions that I don't like are not very clearly monopolies. So while it is a big company and a lot of people don't like it, it's pretty hard to identify, at least in my view, how Twitter is a monopoly. We've seen a bunch of government cases filed against Google. None of them have referred to YouTube as a monopoly. I'm not saying whether it is or not. I'm just saying that's not what they're being sued for. And there are a lot of suits against Google right now. When we identify a monopoly, one of the things we think about is how a particular market looked. What are they selling? How are consumers using it? This sort of thing. Getting into the details makes these questions a little bit harder.

 

      So stepping back, where I want to end here -- and we can talk about consumer protection later, but there are a lot of attempts right now to pour into the vessel of antitrust a lot of different things that people want. They want to see better environmental behavior by firms. They want to see anti-racism. They want to see more income inequality. Whatever it is that people want to see. And they're saying, if we just had more antitrust, whatever that means, we would see more of the thing I like. And I submit that whether you are a proponent of more moderation, taking more speech down, or less moderation, getting rid of some of these — again, in my view — bad decisions about what content to take down, it's not clear to me why antitrust is the solution to the problem.

 

      And opening antitrust up to solve every problem that everybody sees makes a mess of the law. I also think it creates uncertainty for business and could have a chilling effect on good economic activity, which in this context is speech moderation policies, which again, in the main are probably not so bad. Again, think about porn, not the edge cases. To me, there's an analog to the conversation in corporate law today about stakeholder capitalism. A lot of people want to take companies and make them not work for shareholders but for really a lot of different groups. And in particular, to listen to one particular Senator from Massachusetts, the groups that the government designates as important. I submit that that would be a mess for corporate governance and really just end up empowering the government to do favors for its friends. That's not something I want to see in corporate law, and it's not something I want to see in antitrust. I think I'm probably overdoing my time, so I'm going to leave it to the others. And thanks again for having me.

 

Hon. Elizabeth L. Branch:  Thank you. Mr. Snowden --

 

K. Dane Snowden:  Thank you, Judge Branch. Having participated in past Federalist Society events, it's a pleasure to be back, and this time in a new role representing the internet industry. This year marks the 25th anniversary of Section 230. It is a time to celebrate, evaluate, and if updates are necessary, the internet industry is prepared to sit and thoughtfully discuss the way forward. The first step is identifying and defining concerns because some solutions may line outside of Section 230. It is my hope that policymakers will begin to examine the issue more broadly with the focus on the user experience.

 

      In the past 25 years, this tiny law fundamentally had a huge impact on the growth of the internet. We've seen an amazing array of new businesses and services launched, ranging from selling and buying products to renting or buying homes and cars. We've seen our social and dating life evolve. We've witnessed information democratized and users interacting with each other around the world. The internet has become a reflection of our daily lives, not a curated version of our lives, the real and real-time raw us. Section 230 has allowed everyone to have a voice. We now live in an era where we can see the pulse of the country in real-time, where users can provide reviews and feedback on everything from movies to restaurants to products to politicians. We have witnessed the internet — everything from social media sites to ridesharing apps — transform how we live, how we work, play, and connect.

 

      Here's what we know. Today, more than 90% of Americans use the internet. Section 230 unleashed American ingenuity and innovation that American's find useful in their daily lives. It is those nearly 300 million Americans that should be at the center of any discussion about the future of 230. The most compelling argument for Section 230 is one that is very often ignored, the consequences for individual internet users if Section 230 is repealed or significantly modified. There is a mistaken assumption that Section 230 acts as a blanket liability protection for big tech. This is simply not the case. When my association examined more than 500 Section 230 decisions, we found that the provision has often been used to protect the legal rights of newspapers, universities, libraries, employers, and bloggers. Those are the entities that would be hardest hit by changes to Section 230.

 

      The intermediary liability protections Section 230 provides are foundational for free speech on the internet, and without it, there is a very real risk that all companies will be forced to over moderate, even going so far as to limit user's ability to post content. So when you look at Section 230, remember that there is a wide swath of our economy impacted by any change made to this law. Unintended consequences of change for change-sake jeopardize the very things Americans have found so useful: the ability to connect, to connect a grandparent to grandkids, students to schools, buyers to sellers, restaurants to diners. However, the value users are finding on the internet doesn't stop the connectivity.

 

      One of Section 230s most valuable contributions is empowering the ability to interact. It's hard to recall the last time we shopped, dined, chose entertainment, or planned travel without checking online ratings or reviews to guide our decisions. It's hard to imagine a day when you couldn't share milestones like the first day of school by posting pictures for family and friends, add comments on your neighborhood blog, or leave messages on the fansite of your favorite athlete. The positive advantages of user-generated content should not be forgotten in this debate.

 

      Section 230s intent is a safe and open internet, and we share that goal. Safe for users to post in real-time what's on their minds. Everything from what they ate for dinner, how they feel about the newest TV show, to what books are good summer reads. It is the open and interactive nature of the internet that has democratized information and diversified voices. Moderation facilitates safety, and openness facilitates innovation. We should all want an internet that allows for users and companies to be free of frivolous lawsuits.

 

      Section 230 acts as a routing mechanism and attaches liability to the responsible party. As the Whitehouse, Congress, and administrative agencies review Section 230, it is my hope we can clearly identify the problem we are trying to solve because the unintended consequences are real and long-lasting. We can get this right if we begin to lower the rhetoric and raise the conversation with the focus on the user. 90% of Americans are using internet services and products because of the connection, community, and convenience it brings to their lives. Section 230 and a free and open internet is the reason why.

 

      Section 230 was born out of the moderator's dilemma: moderate everything or nothing at all. Section 230 worked because it provided the shield and the sword to allow the open internet we have today. As we mark the 25th anniversary of Section 230, let's celebrate the best of the law and begin a healthy dialogue on a way to move forward that continues a safe and positive user experience. Thank you, and I will pass it along to Commissioner Simington.

 

Hon. Elizabeth L. Branch:  And Commissioner Simington, one quick note. I did make an error when I was providing the disclaimer that you were speaking on your personal capacity. You are not speaking on behalf of the FCC. To the extent that I had lumped you in with the FTC earlier, I apologize.

 

Hon. Nathan Simington:  Well, thank you very much, Judge, and greatly appreciate the introduction. I would like to note that I am not speaking on behalf of the FTC either [Laughter]. But it's an honor to appear today with today's distinguished panel and to have this opportunity to speak to The Federalist Society.

 

      In 1937, Mae West participated in a half-hour segment on The Chase and Sanborn Hour, a popular NBC radio variety show. In it, she participated in a couple of sketches, one in which she played Eve in the Garden of Eden and the other in which she had a quick dialogue about a date with a ventriloquist doll. In both sketches, West played a character with a pension for racy double entendre. Radio audiences at the time were scandalized, or at least some of them were, though naturally, standards have changed. And to the modern ear, even the most risqué elements of a kind of Rockwellian cast straight forward bloom humor free from irony and in which the sole of scandal is any reference to a spicy behavior whatsoever.

 

      What everyone may think of the act today, it would certainly fall beneath the notice of contemporary network standards divisions and presumably the FCC. But the '30s were a different time, and a great scandal ensued after the sketches were aired. No less than the Legion of Decency, a religious organization dedicated to combatting sexual delinquency and moral perversion in culture and media, and the Women's National Radio Committee, which sought to uphold Christian values in media and oppose the moral depravity of Hollywood, took note.

 

      The Legion and the Committee complained to the FCC about the sketch, and the FCC took action censoring NBC for the broadcast -- or rather censuring. While it is worth noting that cultural commentators of the era did not speak with a single voice as to the broadcast, and some clearly found it to be harmless fun, a perusal of the editorials written at the time reveal that there was a sense on both sides that everyone knew and understood the rules of the game. That is, one may have decried the wanton world depravity in the sketch, or one may have personally thought it harmless and amusing. But everyone agreed that it was the sort of broadcast that would make people stand up and take notice because it bent or broke norms of speech on broadcast media.

 

      So from this, I'm deriving the term the consensus era of mass media. That is, an era in which the norms of speech in broadcast media were known to and agreed to by most, and in which violations of norms would yield predictable regulatory responses regardless of your personal feelings about where those norms were and what they should be. In the consensus era, most audio-visual media was distributed by means directly regulated by the FCC. Broadcasters worked in concert with the Commission, which in turn worked to reflect the prevailing attitudes of the culture.

 

      The purpose of decency regulation was to enforce cultural norms in media. And for a period of some decades, that is what it did, and this was no small role for the Commission. The view at the time was that the broadcast spectrum constituted an involuntary ingress into the hearth and home of the American family. Parents could not, in principle, fully protect their children from exposure to media carried on public airwaves. And so it was left to the FCC to stand as a proxy for parents where parents could not stand for themselves. This highlights two important attributes of what I'm calling the consensus era. Normative consensus between regulators, broadcasters, and culture content producers largely regulated means of media transmission. Those are two distinct issues, so we'll tease them apart.

 

      But first, I'd like to address what I'm now calling the post-Pacifica or retrenchment era in which we lost one aspect of the proceeding era, that of normative consensus. In 1978, as many of you know, WBAI in New York, owned and operated by the Pacifica Foundation, aired the now familiar George Carlin filthy words routine in which Carlin recited the so-called seven words you can never say on television. And this turned out to be true for radio as well. The FCC censured the Pacifica Foundation for airing an indecent broadcast, and the Supreme Court upheld the decision finding that the broadcast was indeed indecent, although not obscene. And while one might imagine this fresh validation might have harkened to a new era of hardnosed moral policing at the Commission, the opposite happened, at least when one takes a sufficiently long view.

 

      Relying on the justification of the consensus era that the broadcast medium by its intrusive nature exposes children to content, the Pacifica decision sought to expand the ambit of FCC regulation over the decency of content by smudging the ink of the prior, arguably more cut and dry, Miller test. The Pacifica standard tied to offensiveness specified prohibited depictions of anatomy and focused on a risk of exposure to children. So unlike Miller, there was no appeal to prurient interests and no possible redemption of serious value in the broadcasted expression so long as children may be listening to the broadcast.

 

      However, if the Pacifica decision was intended to inaugurate a new era of vigorous FCC policing of obscenity, arguably it failed to deliver. Yes, the Commission did restate its commitment to the Pacifica standard in 1987. And yes, there is a period during the 1990s and early 2000s that are often cited as periods of reclamation of obscenity policing on the part of the Commission. But if you look closely at these periods, you'll find that the action largely centered around a single incident, The Howard Stern Show -- sorry, a single broadcast, The Howard Stern Show, and a single incident, the so-called wardrobe malfunction at the 2004 Super Bowl. The cultural reactions to Howard Stern's show and Janet Jackson's wardrobe malfunction revealed not a culture unified in outrage but an outspoken cadre of moralists seeking to stanch the bleeding of what they themselves viewed as old fashioned norms of speech in broadcast.

 

      So if there were a culture to say nothing of legal consensus regarding what constituted obscenity at some point, that consensus was on the ropes 20 years ago and surely has evaporated by 2021. The first of the attributes normative agreement of this consensus can perhaps be said to be gone. And as for the other now, the regulated means of transmission, well, let's turn to the Super Bowl again. The 2020 Super Bowl taught us another important lesson on this score. The proportion of those who streamed the event rather than watching on broadcaster cable increased 23% over the 2019 number. This, despite overall viewership of the 2020 Super Bowl declining 13% from its 2015 high. It's true that more people watched the Super Bowl on cable or broadcaster than on the internet, but directionally the trend is unmistakable.

 

      Even more notable, I think, is the ascendency of online media platforms where it would seem, at least to me, that the majority of news and political and cultural commentary is delivered today. And I'm not sure that entertainment's far behind or perhaps we're there already. So the second attribute of the consensus era, speech delivered in a regulated means of transmission, is also gone or at least quickly on its way out. We might call this the digital media era, an era of relatively weak normative consensus and of transmission via unregulated media. And as such, a big contrast with the consensus era on all fronts.

 

      While I'm not a sociologist, I do at least know why the Commission considers its hands tied regarding regulation of digital media. And if we look back to the 1956 AT&T consent decree, and the following computers one, two, and three determinations, their progenies provide that AT&T could offer computer-based digital services, so-called enhanced services, under unregulated subsidiaries, provided that it limits its activities to those of the common carrier. This is a world apart from the presumption of state interests in broadcast regulation. And really, it's worlds colliding.

 

      I'm not confident, in short, that there is anything at present that the Commission can or should do about speech on digital platforms, given the current state of the law, regs, and precedent. Some would say, well, what about Section 230? I think the Commission can interpret Section 230. But even if it were advisable to front-run an emerging bipartisan cultural and congressional consensus that Section 230 reform is needed, Section 230 cannot touch, and indeed has nothing to do with, the cultural preconditions of the consensus era. As courts have noted, we struggle to regulate speech that violates community standards when we can't say what those standards are. So even if Congress delivers bipartisan Section 230 reform that relates to the liability to which digital platforms are exposed, it's a potential liability for their behavior. That's not touching agreed-upon rules of speech, which we've got no power to reach.

 

      So in sum, there's no consensus for speech regulation in the digital media era. There's no obvious path forward from a regulatory point of view. It's not clear which federal agency, if any, is responsible for administering such an effort, even if we could agree on what it should be. There's no obvious path forward from a cultural point of view either. Our cultural norms have never been more polarized, so where norms of speech can be described at all, there is another sizable cultural contingent arguing the opposite. The future for speech in America, where it happens, how it happens, and who's involved is at best uncertain. I don't know what will happen. And it's no clear to me how best to proceed. And with that, I look forward to a cheery discussion.

 

Hon. Elizabeth L. Branch:  Thank you. Miss Marsh --

 

Joan Marsh:  Thank you, Judge Branch. And thank you to The Federalist Society for inviting me to this conversation. As Judge Branch noted when she kicked off this discussion, Section 230 has been much in the spotlight. And there is support from both sides of the aisle for reform. The challenge is there appears to be little agreement on what Congress should do and why. My comments today will focus more broadly on the competitive disparities and consumer harms created by the broad interpretation of Section 230 immunity by some courts.

 

      I'll start with the point that I think we all agree on, America's text platforms are no longer the emerging internet startups they were when Section 230 was adopted 25 years ago. Indeed, companies protected by 230 include some of the largest and most valuable companies in the world whose services reach our lives on a daily basis, as Dane discussed. Yes, they offer great products and services that have made our lives better in many ways, but they have also amassed unprecedented control over our markets, our economy, our political and social discourse, and they are gatekeepers of the platforms that they control.

 

      When Section 230 was enacted, the purpose made a lot of sense, to protect emerging internet service providers from liability for content distributed over their platforms, which back then acted a lot more like community bulletin boards for user-generated content. At that time, there were no social media networks in the modern sense. Mark Zuckerberg was still in high school. No e-commerce companies were competing in any material way with brick and mortar businesses. No digital marketplaces were serving as essential distribution platforms for rivals. And while there were some basic search engines, they did not use the type of complex algorithms to determine how and when content was presented to users that we see today.

 

      Congress enacted Section 230 to insulate "internet interactive computer services" from liability risks for third-party content that they might face as a publisher or a speaker. Risks that Congress feared would not just weaken their incentives to maintain free and open discourse but also their incentives to block obscene, lewd, and harassing comments. What Congress did not foresee was how that immunity provision would be construed by the courts over the years or how powerful the internet platforms would eventually become. The reality is that these platforms are no longer simple bulletin boards. Or rather, they are intimately involved in curating the content on their platforms through the use of algorithms that choose which content users will see, often steering users to content deemed relevant to their likes, while at the same time monetizing that content through advertising that relies on an extensive data collections.

 

      This type of content curation should no longer be afforded immunity protections via a completely different set of rules than those imposed on traditional third-party content providers, such as book publishers and newspapers. We, therefore, agree it's time to rethink Section 230 and that it's time for legislatures and policymakers to consider reasonable and pragmatic reforms that are designed to make the big tech platforms more accountable to the American public for their conduct and to ensure competition across all markets. Let me be clear, we support reform, not repeal of Section 230. Its original intent was to ensure that truly neutral interactive computer services are not held liable for third-party content that traverses their platform. We agree that this should remain a fundamental and a foundational policy principle of the law.

 

      Now, there are -- as we've discussed here today -- many proposals to reform Section 230. Some seek to chip away at the munity for certain types of activities, such as Senator Warner's safe tech bill. These reforms seek to ensure that victims of stalking or harassment, for example, have an opportunity to raise those claims without Section 230 serving as a categorical bar to their efforts to seek legal redress for harms that they've suffered. Separately, Justice Thomas has argued that Section 230 has been too broadly interpreted, suggesting dominant social media platforms should be treated more like common carriers or places of public accommodation.

 

      Other ideas are more holistic, attempting to create a duty of care as part of Section 230 so tech companies have an obligation, or at least an incentive, to provide effective guardrails. These holistic proposals also try to better define when an entity becomes so involved in the content on its platform by monetizing it, curating it, or amplifying it, for example, that it should have the responsibility to police it. Will we lean more toward the latter approach? The holistic approaches? We welcome all ideas as this dialogue develops.

 

      But at a minimum, we believe any reform must include more accountability and transparency. For example, large online platforms that curate, amplify, and monetize third-party content should be treated the same as more traditional publisher competitors. In fact, there is some case law going in that direction now. The DOJ has argued that a tech company could, for example, enjoy Section 230 immunity where they simply support user-generated content in a neutral fashion, but at the same time, lose that immunity when they are involved in the curation or targeted dissemination of that content.

 

      Alternatively, tech platforms could be required to earn the immunities granted under Section 230 by meeting a duty of care standard achieved through transparency, including requirements that enable users to understand how content is generated on the platform, how the platform uses data, and what tools are available to consumers and competitors to protect themselves. This construct is one the ISPs know well. It is similar to the requirements imposed upon IFBs to be transparent about our network management practices.

 

      One final note, in reforming the Section, we believe that federal policymakers should adopt a single set of nationally consistent rules. While several state legislatures are considering proposals that would attempt to refine Section 230 immunity, these efforts should ultimately coalesce around a single federal standard. We have long argued that networks do not stop at state borders.

 

      In short, we believe it's time for federal policymakers to consider whether and under what circumstances the nation's largest online platforms should continue to enjoy broad legal immunities not available to competitors. Again, I want to thank everyone for the opportunity to sit with this esteemed panel. I look forward to the discussion. And Judge Branch, I'll turn it back to you.

 

Hon. Elizabeth L. Branch:  Thank you, Miss Marsh. Before I turn to my questions, I want to give the panelists, as I indicated, an opportunity to either give a short rebuttal to anything that your fellow panelists have said, or you may also feel free to ask one of your panelists a question if you so choose. And --

 

K. Dane Snowden:  Judge Branch --

 

Hon. Elizabeth L. Branch:  Thank you, Mr. Snowden.

 

K. Dane Snowden:  Sure. I feel like I have to respond to some of the comments that — I will call her my friend, Joan — has just raised. And I find it a little -- the irony of AT&T suggesting that we are gatekeepers is not lost on me, or I'm sure anybody.

 

      When you look at 230, there are a lot of questions here, and everyone keeps talking about bipartisan support. There is not bipartisan agreement on what the problem is or how to solve it. And I think as we look at this -- when you look at what AT&T is suggesting, that answers some of the questions that I think Commissioner Phillips talked about, is there competition? Their arguments are all about they're worried about us competing with them. So there is competition. It's just concerning that we're being accused of being gatekeepers when -- by a company like AT&T.

 

Joan Marsh:  And, Judge Branch, may I respond?

 

Hon. Elizabeth L. Branch:  Yes, please.

 

Joan Marsh:  So I think Dane is getting to the question, of what I think is the interesting question, of whether there are similarities between this argument and the net neutrality debate, which we have been engaged inside the beltway for, I don't know, a decade -- longer, 15 years. Yes, there are similarities, but there are also differences. Certainly, the net neutrality debate arose up at a time where ISPs were defined as gatekeepers, including by many of the companies that Dane now represents. The tech platforms undoubtedly now serve as gatekeepers of their platforms, and they control access to the content on their platforms very often, as well as access to their customers.

 

      Now, that's why exactly I'm calling for the type of transparency requirements that have been imposed upon ISPs. They should be required to share their business practices much as we have been required to share our business practices, including, for example, how they rank search results, how they interoperate with others, and how their algorithms prefer some content or services over the other. But there is very different -- there's a very important difference between our platforms and the big tech company platforms. We do not curate or amplify content over our networks. We allow for distribution of a content. In that regard, there's big differences here, and I think why it's so important and timely that we're having this debate.

 

K. Dane Snowden:  And I think it's also a reason why --

 

Hon. Noah Phillips:  Judge --

 

K. Duane Snowden:  -- they're calling for a complete repeal of Section 230, as well, because you know AT&T and other ISPs are protected by the law. So I'll leave it there.

 

Hon. Noah Phillips:  If I --

 

Hon. Elizabeth L. Branch:  Commissioner Phillips -- 

 

Hon. Noah Phillips:  Thank you. If I may, for just a moment -- so I want to come back to Commissioner Simington's remarks. And let me just begin by saying thank you, Commissioner Simington. I thought that was one of the most deep and erudite discussions that I have heard in years of listening to this debate. I've been reminded of the Cole Porter line in the song "Anything Goes" where he asks, "If Mae West you like?" But to bring together Carlin, and Jackson, and Mae West in that way -- first, was just excellent to listen to. Second, I think really edifying.

 

      And one of the points that I will take from it, and Commissioner Simington can disagree if he so chooses, this point about the fact that we don't have a normative consensus today on what speech is and is not acceptable cannot be made enough. This is really important. And it goes directly to one of the questions that we're all debating, which is whether and how to regulate speech.

 

      If you don't have the object of your regulation in mind, the project of regulation becomes difficult, incoherent, and very likely, especially in today's divided America, to result in different answers depending on who is in charge, which will result in a tremendous lack of clarity for business, and I submit, a lot of unhappy consumers. One party's in control. They want to see one of speech. Another party's in control. They want to see another. And not that the parties even agree internally on these questions. And I think his point that we don't have the goal yet in mind of how to regulate the speech really is important.

 

      I'll just briefly add to sort of speak to Joan and Dane's debate earlier. One of the interesting points that I think people need to recognize is that Section 230 — and I'm not an expert on 230, it's not our statute, it limits our jurisdiction a little — it's a liability shield. And so the underlying regulatory principles that would apply, if it were reduced or removed, are tort principles. And I think it is fair to have the conversation about how those tort principles, as applied, depending on the solution -- how they would impact moderation decisions. Because I think the question we always have to ask with regulation is, what is the problem that we're solving? And how does the solution support the problem? I'll leave it at that.

 

Hon. Nathan Simington:  If I may, I would like to respond just a moment to Commissioner Phillips.

 

Hon. Elizabeth L. Branch:  Yes, please.

 

Hon. Nathan Simington:  Thank you very much, Judge. Well, first of all, thank you very much for your kind words, Commissioner Phillips. It's always nice to be able to use some cultural references in the midst of the dry legal analysis.

 

      So you make a very important point, what is the problem that we're trying to solve for? What is the impact on consumer welfare? What is the scope of the power, if any, that's been granted? And just -- since 230 is very much a subject of discussion today -- well, I suppose one way or the other, it did wind up being our statute, so we've got to deal with what that means. The question of regulation under 230 is, I think -- it hasn't reached a final settlement, but I certainly know where I come out on it, and I think there's an emerging consensus that there is the ability to interpret the statute for regulatory purposes at the FCC.

 

      As against that, there's a question of whether it's wise to do so. And I just want to emphasize to the degree that there are calls in Congress to changes to the statute, that is, I think, a good time for the FCC to step back and say, let Congress do their work on this front. If and when Congress decides to put down the issue, it might make sense for us to revisit it. But now with the NTIA petition gone — as of, I believe, a day or two ago — and with Congress clearly having shown an intent to take up the issue, I think both the Executive Branch and the Legislative Branch have spoken clearly on the role of the FCC at this point in time.

 

Hon. Elizabeth L. Branch:  Thank you. Let me just pose a couple of questions. I'm going to be mindful of the time. I do want to make sure that there's plenty of time for audience Q and A. And so I would alert the audience, now is the time to either start raising your hands. Or I see that we do have some questions stacking up, and I will turn to those shortly. I have one question for Commissioner Phillips. Because President Biden recently revoked President Trump's executive order on social media censorship, what do you expect is going to be the result of that action?

 

Hon. Noah Phillips:  I think the result is neither agency is going to proceed along the lines that they may have otherwise. Commissioner Simington just spoke to and can speak to greater depth in terms of where the position from NTIA was before the FCC. In terms of the FTC, what the executive order contemplated was that the White House would send a group of complaints about censorship and social media to us, and we would look at it, presumably through a consumer protection lens.

 

      To my knowledge, the complaints never came. So it actually never reached the point of ripeness in terms of how we're evaluating those complaints. I have some real questions about how, even if you had such complaints in hand, how an antitrust lens or a consumer protection lens would apply. It raises First Amendment issues, but it also does not fit at all neatly within how those legal principles operate. So I don't know where -- the EO is now revoked. That's that. What kind of regulatory scheme the Biden Administration pursues or tries to pursue, I don't think we know yet.

 

      I also don't think we know where they ultimately are on 230. Candidate Biden, Vice President -- former Vice President Biden, wanted to repeal it. I don't know that that's where the Administration is. And I agree with Commissioner Simington that now that this is a big debate in Congress, they're the best body, having adopted 230, to figure out in what direction we ought to go.

 

Hon. Elizabeth L. Branch:  Thank you. Mr. Snowden, we've obviously talked a lot about whether there's a legislative appetite for reform of Section 230. Any time Congress looks like it may intervene, industries start taking steps themselves to try and, perhaps, stave off that legislative action. What areas of content moderation can be improved by the industry to address what I think is certainly the most pressing problem, at least perceived by the general public and most tech platform users, is that how do you get inappropriate content down without removing -- without turning into censorship -- a viewpoint-based censorship and the wrongful removal of such content?

 

K. Dane Snowden:  Right. Well, first, and I think as Commissioner Phillips just said, the idea of removing 230 altogether, that would only lead to the companies being responsible for everything people say online. And that could only lead to more platforms enforcing no standards to avoid the risk. So the best way to do this is a combination of preserving 230, prioritizing transparency — and I think Joan was pointing that out, and I agree we can be more transparent on why we do things, and we're working on that — and improve content moderation, generally.

 

      Content moderation is done, some by machines, some by humans, and a lot of it's nuance, so it's not just one way of doing it. And when you look at the volume of content that comes across some of these social platforms -- a company like Trip Advisor, every 60 seconds they get 250 reviews, YouTube gets 400 hours of video, Twitter gets 350 tweets. So when you start looking at the volume, there is -- it is not an easy task to do content moderation but an important one.

 

      And it's also -- I think as you look, new Congress -- new Administration or Congress, as they look at 230, one of the things that should be done is it should be done very carefully, and the first rule -- first goal should be to do no harm. We need to make sure we have the right solution for the defined problem. And because 230 has become shorthand for every single internet issue that's out there, and it's not necessarily that that's not the case. I would encourage policymakers on all levels to not just talk to tech but talk to all the industries that are involved in this. As I mentioned, ISPs are involved in this, large apps, small apps, blogs, all kinds of people who would rely on 230. So it's this -- keep that in mind as we're going through this process.

 

Hon. Elizabeth L. Branch:  Thank you. Alright. I am going to open this up to some of our audience questions. And I am trying to load up -- I can see the questions, and I'm having trouble reading -- alright, let's start with Dr. Christopher Wolfe. Alright. I can't get to the entire question here. I don't know if Facebook -- sorry, if Federalist Society is able to assist me with that. Let me just shift to one that I can see.

 

      Dr. Christopher Wolfe, he notes, "Recently, I saw Facebook advertising that, 'We need updated internet regulations, specifically Section 230.' Have the regulators taken note of this?"

 

Hon. Nathan Simington:  Well, if I could respond first, perhaps, Judge. I guess it's my statute, so it behooves me to say something. Of course, Facebook has, from my perspective, found itself in a position where it has to be its own self-regulator. Facebook, of course, has a vast, primarily third-party contracted moderation staff that's engaged in addressing the torrent of material that Mr. Snowden has noted. And the difficulty, from Facebook's perspective, of course, is that it has to use its own best judgment. But no matter what it does, this is going to annoy and irritate and, perhaps, even lead to lawsuits from people all over the political spectrum.

 

      So in a certain sense, for a company that's taken on this kind of burden as a normal part of its operations, being regulated would be a safe haven. No one is going to complain if you're fully within the regulatory and legal safe harbors, or perhaps they will, but their cases will get quickly dismissed. So I can certainly understand Facebook's perspective on this. Whether that would amount to a cult unilateral backing by the FCC is, I think, not supported by what Facebook's own language says. They support thoughtful updates to internet laws, including Section 230.

 

      Clearly, anything that we do on the regulatory end would really be in cooperation with and conjunction with whatever Congress's larger intentions are in that front. So while I've certainly taken note of this as a regulator, I'm not sure that there's a direct call to action as of this point.

 

Hon. Noah Phillips:  So I'd echo that. I think it's something of which we are aware. In terms of how it applies to us, I don't think it changes the landscape where we are. As I said before, Section 230 does have a bearing on what I do. There's a proposal in Congress -- one of the proposals from Senators Thune and Schatz — the PACT Act — includes a provision that would remove the bar that it imposes upon federal civil jurisdiction. You can bring a criminal case, but you can't bring a civil case, which is different from a private bar. But at the end of the day, the devil is in the details. And the question isn't whether they are for something or against, or whether -- and not to pick on Joan, but whether AT&T is for something or against. The question is, what does Congress pass, and then we're into the discussion of how we work with what they have passed.

 

K. Dane Snowden:  And I would add that the tech industry, generally, is leaning into this issue of trying to figure out and define what the problems are so that we can try to solve them. Judge Branch, your earlier comment of, we try to do things as issues pop up, that is very true. We recognize that on the issue of transparency, we need to do better at that. We need to be clearer in terms of why we do what we do, and that's a part of this conversation that we want to have. And right now the focus is on Congress. There are several bills -- 230 related bills that are out there, and we'll continue to work with members of Congress on their interests.

 

Hon. Elizabeth L. Branch:  Perfect. Alright. Hold on. I am -- here we go. I'm having trouble reading these questions. So I'm asking for assistance. Hold on. Let's see. Here we go.

 

      From Carol Mathus (sp), "Some scholars have suggested regulating social media companies with large audiences, say, over 100 million users per month, as common carriers or public utilities. What are the panelist's thoughts on this?" And anybody who wants to jump in.

 

K. Dane Snowden:  Well, I would say that we're not common carriers, and right now, there are over 32 different social media platforms with over 100 million users. Most people think just one or two, but there are 32 that are out there, so there is a lot of -- one, competition -- people can go any way they want. So we aren't common carriers. We should be looked at -- viewed as common carriers. We're private companies, and we operate within our rights to moderate content.

 

Hon. Elizabeth L. Branch:  Anybody else have a response?

 

Hon. Nathan Simington:  Well --

 

Hon. Noah Phillips:  So I'm --

 

Hon. Nathan Simington:  I happen to defer to Commissioner Phillips.

 

Hon. Noah Phillips:  I kind of lost the question on my screen. I apologize. I guess what I would say is this. One, is a discussion about does common carriage properly apply? And there's a whole long discussion about competition, but also issues like scarcity. The internet is not a place of scarcity. It's a place of plenty. That's a part of the problem. I'm not yet sold on the common carriage sort of intellectual architecture that you would need to impose a common carriage regime. But my bigger issue is I do think people need to spend a little more time thinking about what common carriage for speech and broadcast looks like.

 

      Common carriage means you take all comers. And while there are a lot of cases that I can think of where I think the companies make the wrong call, took down speech they shouldn't have, I suspect there are tens of thousands of cases where I think they made the right call. And I'm not sure I want to live in a world where people who are saying some really bad stuff have a right -- like, a legal right to get that stuff broadcast.

 

      I do think, though, we can end up right where Commissioner Simington started -- and I'm still reeling from how great his remarks were, which is we don't have the consensus yet. We have a consensus on the common carriage obligations of the telecom company. But we don't have a consensus yet on what speech should get broadcast and what speech should not. And I think we need to spend a lot more time talking about that issue before we get to a common carriage obligation for speech. That's not just the speech you like. By definition, it's the speech you don't.

 

Hon. Elizabeth L. Branch:  Thank you.

 

K. Dane Snowden:  You know --

 

Hon. Elizabeth L. Branch:  And before I let another panelist respond, let me take the opportunity to read the CLE code for the session.

 

Hon. Elizabeth L. Branch:  But I also do want to let any other panelists who want to weigh in on the common carrier question before I turn to the next question.

 

K. Dane Snowden:  I just wanted to add a little bit to what Commissioner Phillips just said because he sprung an idea in my head. And that -- Section 230 allows us to moderate awful but lawful content. And we should be able to do that. Having common carrier rules would, in fact, say, for trolls -- for someone who's trolling the Parkland students or the Sandy Hook parents that we would have to go ahead and allow that content to be available. We don't think that's right. And so it might be lawful that they are doing that, but it's awful content that we don't think should be on our sites. There are sites that you can have that, and they can do that. We have chosen, for the ones I represent, not to do that.

 

Hon. Elizabeth L. Branch:  Thank you. And I have a raised hand, and it's one of our Federalist Society folks. Dean Reuter, do you have a question?

 

Dean Reuter:  Hi. I'm able to read a question that I don't think you could get to, Judge, if you'd like me to read it. I have another question from Christopher Wolfe. He asks, "Recently, I saw Facebook advertising that we need updated internet regulations, specifically Section 230. Have the regulators taken note of this? We support thoughtful updates of the internet laws, including Section 230 to make content moderation systems more transparent and to ensure that the tech companies are held accountable for combating child exploitation, opioid abuse, and other types of illegal activity." That's the question.

 

Hon. Elizabeth L. Branch:  Do any of our panelists want to jump in?

 

K. Dane Snowden:  The last part of his question, those are all issues that we're working on right now. Opioid abuse, hate speech, all of that is being discussed within our companies and with Congress to figure out what's the best solution going -- and a best path moving forward.

 

Hon. Elizabeth L. Branch:  Anyone else?

 

Hon. Nathan Simington:  Just to chime in a little bit. I think that's -- there's obviously precedent in the Congress for providing carve outs from 230 already with respect to particularly egregious acts. I think there's obviously continued interest in looking at this at a congressional level. And I think Facebook's language is thoughtful. Well, quite literally, they say thoughtful, so thoughtful updates to internet laws. And again, this just stiffens my resolution to see how Congress comes out on this.

 

Hon. Elizabeth L. Branch:  Anyone else have any thoughts?

 

Hon. Noah Phillips:  Yeah, I'd echo what Commissioner Simington said. I've heard three different problems identified in the course of this conversation, and I might have missed some. One is an issue about transparency. Are people saying what they are doing, leveling with consumers, and stuff? Another one is an issue of harm. And Commissioner Simington is right. When Congress passes [inaudible 1:07:24], we're looking at particular harms and looking to allow liability to reduce those harms.

 

      Another one is where we started today, which is apparent bias in takedown and other moderation mechanisms. Harms, transparency, and apparent bias are three different kinds of problems, and they may invite different kinds of solutions. And I do think sometimes our conversation about 230 is a little too much like we see a problem, whatever it is, and then we talk about 230. The question is identifying the problem and then aligning the solution best [inaudible 1:08:04].

 

Joan Marsh:  And I'll add, Judge Branch, that we haven't taken a position on some of these broader reforms that are being discussed in the questions. Like, should the internet companies be treated as common carriers? But that's why we've started our analysis and our recommendation at that foundational requirement of transparency. Let's -- we do believe that it needs to be reformed to include more transparency about their practices, about how they make decisions. And just getting that type of transparency may further inform the debate, as Commissioner Phillips just said, to determine what other specific reforms might be necessary.

 

K. Dane Snowden:  And while we agree more transparency is good and necessary, we have to also find a balance between how much we publically explain how we do what we do. And that is because the trollers, the spammers, the organized crime, all those folks are looking at this as well, so they're trying to gain the system. But there can be a balance that can be found.

 

Hon. Elizabeth L. Branch:  Thank you. We have a question from Christopher Kane. He is an antitrust reporter for Acuris. This is directed to Commissioner Phillips, but I would ask any of the panelists to jump in as well. "Commissioner Phillips, you said it's unclear how to approach 230 under the FTCs antitrust or consumer protection mandates. But in your view, is there any legitimate argument that the issue could or should be addressed with the antitrust laws?"

 

Hon. Noah Phillips:  Okay. Thanks, Christopher, for the question. I guess what I would say is, what I meant in terms of 230 is it can present a bar to the government from bringing a case if the government is proceeding in a civil fashion. And that, as I mentioned, in terms of the PACT Act, the Thune and Schatz bill, that is one of the things that Congress is trying to decide. Should the government, other than in a criminal capacity, be able to do whatever it's doing, whether it's antitrust or consumer protection, what have you?

 

      In terms of the antitrust case, I'll just say -- sort of reiterate what I said before. It's not clear to me -- a few things are not clear to me. The first is, I do think this gets us into thorny First Amendment issues. Moderating content on your platform is protected activity itself. People can make choices about this. And how that interplays with law enforcement is a whole big decision. But even if you get over that, the question is, is there a thing that is eliminating competition in this regard? It's easy to see when competition on price is being eliminated,  where you have competition on moderation being eliminated, much more difficult.

 

      One person's benefit is another person's harm. That makes the question very difficult, if not impossible, to answer without the government making terrifically subjective judgments. I see consumer harm because of this. Also, I sort of mentioned Twitter earlier. It's not clear to me that the problems people see are always manifestations of market or monopoly power. It's not clear to me the companies are getting away with it —if they're getting away with something — because they are monopolies. And ultimately, monopoly power is the target for antitrust enforcement. So again, the question is figuring out what the problem is, and using the solution antitrust for a variety of reasons is a profoundly imperfect solution.

 

Hon. Elizabeth L. Branch:  Thank you. We have a question from Dean Reuter again. This is a great one. "Beyond the exercise of monopoly power by a single big tech company, do any of the panelists have any concerns about collusive activity when more than one big tech company deplatforms certain groups while server providers disable parlor?" I'll let anybody jump in.

 

Hon. Noah Phillips:  I do the antitrust enforcement, so I feel like I should speak to that. Collusive activity is often concerning. And we have standards that we put out about when it's in, when it's out. I don't want to speak to the specifics of any case. But conscious parallelism, which is companies are doing similar things at the same time for the same reasons but not as a result of coordinated activity, is usually legal. And we also have to consider, what is the thing that is going on? So I think that is popular topics that some people talk -- I think when you dive into the details, it can be a little bit more difficult.

 

Hon. Elizabeth L. Branch:  Anybody else?

 

Hon. Nathan Simington:  Judge, I'd be happy to speak a little bit to this topic as well. I'm going to take this question a little bit back to front. Server providers disabling a particular application or a suite of applications offered by a company has raised -- on, I think, independent of left-right political alignment, has raised questions about the degree to which upstream infrastructure should be a future subject of regulation. Of course, upstream infrastructure was all bundled into the operations of the Bell System, so our title to legacy structure contemplates -- doesn't contemplate a server intermediary, for example, between Bell's switch banks and local loops.

 

      But now I think it's clear that a relatively small number of relatively large companies that would constitute major ISPs, if we were to look at them as direct to consumer, are now sitting upstream of the consumer-facing ISPs at certain points in the delivery of information. So it's not clear to me what the rationale is legally for subjecting upstream server companies to regulation under present law.

 

      On the other hand, it's also not clear to me what the regulating -- what the rationale is for excluding them. And certainly, the logic of the 2015 open internet order would seem to extend to anyone who's a potential gatekeeper. And as we've seen, on a -- for all practical purposes, the server providers have served as a gatekeeper demonstratively very recently. So to me, that's a very interesting aspect of this question that I think we have an obligation to address going forward unless we're going to simply agree to act by inaction and leaving this major emergent category in the economy and in the flow of communication unaddressed.

 

Hon. Elizabeth L. Branch:  Thank you. Anybody else have any comments on that question? Alright. We've got Dr. Christopher Wolfe, Assistant Professor of Political Science, asks, "Is it helpful for social media companies to talk in terms of 'community standards'? It seems different than the way that the Court has discussed community standards in First Amendment cases." Anybody want to jump in? Anyone? Any panelist?

 

Hon. Noah Phillips:  I suppose clarity from companies is helpful. One of the issues that I feel like we're facing, although I can't cite chapter and verse about it, is that standards will be articulated and then they will be, apparently, not applied so clearly. And I think that raises, rightfully, a lot of wrinkles. But I think clarity in terms of how these processes are working is in the main a helpful thing. I think it's a matter of interest to the public and to the consumers.

 

K. Dane Snowden:  And we've had some of our CEOs, actually, on the Hill testify to that point. And so, more transparency is good.

 

Hon. Elizabeth L. Branch:  Alright. We've got James Haney, who's a software engineer, talking about, "The Section 230 debate is arising in the web 2.0 era with its giant platforms. People used to get banned from blogs and forums all the time, often with no clear moderation rules without any anti 230 backlash. Is today's backlash a side effect of the platform bigness?"

 

Hon. Nathan Simington:  Since this is 230, Judge, if you don't mind, I'd like to take this one up just initially. That's -- again, that's a fantastic point. As far as I'm aware, we haven't seen a lot of litigation over Jack Slack being banned from New York City baseball fans dot org or whatever the equivalent would be. And of course, the comment sections of blogs have to be very actively moderated, in part to keep out trolls and spam and then also in part to get rid of anyone whose opinions contradict those of the blogger in any way [Laughter]. No. But all joking aside, when we talk about platform bigness, I think that comes in two respects.

 

      Obviously, major online companies have demonstrably become a much larger part of the economy than they ever were. And now, central economic actors, as Mr. Snowden has pointed out, there's no distinction between internet life and real-life any longer. Our real lives are on the internet. So when we talk about platform bigness, then we also have to talk about what other things these platforms have replaced.

 

      So, for example, if platforms have replaced broadcasters and there's a sense that — this is to tie into some of my earlier points — if there's a sense that broadcast standards were warranted, but platform standards are not, legally that can be justified with recourse to the non-viability of the spectrum scarcity and involuntary penetration of the home arguments that have been used as a justification for heightened -- or should I say lowered First Amendment protections in broadcasting. But the analogy is difficult and painful and can be challenged either way.

 

      Similar comments apply to 230 coming into the news like this. Being banned from a platform is no longer simply a matter of no longer being able to provide your opinions to the other seven people who care about your favorite baseball team and post about it on a particular obscure corner of the internet. It can mean being kicked out of the stream of commerce, having your books ceased to be available. It can be losing a revenue stream upon which you've come to depend. It can mean losing connections to friends and family. It can carry a little bit of a mark of Cain effect where the fact that you are now inconvenient for whatever reason to a company's business plan has rendered you subject to something like a public moral sanction.

 

      So it's -- this, I think, also ties into the question of community standards, which I'm seeing in the chat. And I think it would make a lot of sense to tie these issues together. To what extent are these synthetic communities in the sense that the law is meant to reach and what effects should we expect people to accept -- what sanctions should we expect people to accept for contravention of community standards as defined by the private interests of large successful private corporations.

 

Hon. Elizabeth L. Branch:  Does any other panelist want to jump in on the whether it's a -- this anti 230 backlash is a side effect of platform bigness?

 

K. Dane Snowden:  I would just add that it's not -- when you look at 230, it doesn't just impact large companies. It also impacts small companies as well. So when we think about changes to 230, we can't just think, oh, we're going to impact these big companies because you're literally -- in some cases, you could actually starve and have a chilling effect of the ability for smaller companies to either get into the business or stay in the business. So that's -- it's important to keep that in mind.

 

Hon. Elizabeth L. Branch:  Anyone else?

 

Hon. Noah Phillips:  I think I'd just say, "Yes." It seems pretty clear -- sorry, Joan -- it seems pretty clear to me that the ubiquitous platforms are the objects of a lot of the attention. Their mistakes, or their successes that others view as mistakes, depending on what side you take on a particular issue, are very or more obvious. And as Commissioner Simington was saying, their impact is greater.

 

      That said, talk to any -- not any, but many 13-year-olds that you know, and they will talk to you about what the mods are doing on discord. The mods being the moderators. Discord, Reddit -- there are distributed architectures for moderation. There is outsourcing like Commissioner Simington was talking about on Facebook. Lots of different models trying to tackle this very different problem. But I think it's difficult to argue that the ubiquity and the size, and thus, the power, of some of the biggest platforms are absolutely animating some of this discussion.

 

Hon. Elizabeth L. Branch:  Miss Marsh, I feel certain you have something to say.

 

Joan Marsh:  [Laughter] Yeah, I was going to basically say what Commissioner Phillips just covered. I think it's the pervasiveness of these platforms in our daily life. So it's not just that we are sharing where we went on vacation or pictures of our kids, but these platforms are really shaping our social discourse, our political discourse. There's certainly research that suggests the content on these platforms are shaping elections and the outcomes of elections. These platforms are where a lot of Americans go to get their news, and they accept the content they receive on these platforms that there's news.

 

      So I just think that this information that's so pervasive in our life and -- I think as Commissioner Phillips just indicated -- particularly for our children and our young adults. They are likely to be very oriented toward the content on these platforms. I think that's what's raising the scrutiny and the call for some additional inquiry into this section, quite frankly, and the broader question of how antitrust laws do or do not apply to these companies.

 

Hon. Elizabeth L. Branch:  And looping back, we've been talking about community standards. And certainly, anybody who is a consumer of social media platforms has heard about community standards. Jeffrey Wood, who is the Principal of Wood Law Office, asks, "Isn't it deceptive to describe these as 'community standards'? Did these 'communities' draft, vote on, or adopt these standards, or were they imposed by the platform owners?" Would anybody like to speak to the use of that terminology? Anybody jump in?

 

K. Dane Snowden:  I'll speak to the -- not to the use of the terminology, but it's important to remember that these are private companies who are creating a standard of what they want to use for their product. And that -- we shouldn't want the government to dictate how a private company runs their business. So the standard -- we debate about what should be moderated, what shouldn't be moderated. Things that really have gotten to the attention of the American mindshare is -- when you've seen violence being portrayed or promoted, or hate speech, or trolling -- we're going to have -- we can't allow that to happen.

 

      And we have to have the option, the 230 protection, to allow us to remove some of that content. Commissioner Phillips mentioned pornography. That's another example of the things that have to be moderated out so that we can have a safe environment for people to use these platforms who want to use these platforms. You can still have the vigorous debates that go on from left and right and middle. Our platforms are usually accused of creating the discord that goes on, but this is user-generated content that's being put up there, be it the news or a political view.

 

      So when you look at this, particularly when you look at the community standard, it's what a private company has decided this how we want our product to be used. Certainly, AT&T makes that decision every day, how they want their products to be used. And they have a right to do that, and we don't disagree with that. We should have that same right.

 

Hon. Noah Phillips:  So the one thing I'd say here, it's not clear to me that the question was about consumer protection law. But in consumer protection law, we have a standard for what constitutes deception. Whether what you're doing is likely to mislead consumers, acting reasonably under the circumstances, and is material to their decision making. So the question is, if you say something is a community standard, is it likely to mislead people because people assume that community means generated by the group of people participating?

 

      I'm not sure that's right. I'm not sure that people assume that community standards don't describe the standards at private platform. And as I said before, a lot of the standards that operate at any given place may be either some combination of things, or they may be different depending on the place. They could be set private platform. They could be set by the group of people that are moderating or the person that's moderating a particular discussion. So there are a lot of different things that go on and which -- what consumers hear when they hear community, I think at the very least, probably ought to include these commonly adopted protections.

 

Hon. Elizabeth L. Branch:  And following up on the community standards question, Peter Jensen (sp), who is a sole practitioner, asks, "Well, what if the platform's community standards are inherently biased? Does it create a due process issue for regulators to condone such bias?"

 

Hon. Nathan Simington:  Judge, if I could take that one up.

 

Hon. Elizabeth L. Branch:  Sure.

 

Hon. Nathan Simington:  I would say that platforms are currently unregulated. So as far as creating a due process issue for regulators, that would be a question for whatever regulatory environment were to emerge. And just to plug my own ideas a little more, people assume that media is going to be regulated because it always was. For those of us who grew up in broadcast media era, we were in a highly regulated media environment, at least as audio-visual media. And now, we're not. So it's a very uncomfortable state of affairs.  

 

Hon. Elizabeth L. Branch:  Does any other panelist want to respond?

 

Hon. Noah Phillips:  The only thing I'd add is that [inaudible 1:27:33]. Even if it were true, it's highly subjective. So one person's bias is not the bias as the parent to the other person. When you get into -- leaving aside the sort of First Amendment questions and the political debate questions and all of that, when you get into government regulators saying, yes, establish [inaudible 1:27:54] do not, I think they have to make, almost by definition, very politically laden decisions about some kind of [inaudible 1:28:04]. And I think that gets you into a lot of the problems we were talking about both in terms of the normative goals and in terms of the rule of law at the beginning of the panel.

 

K. Dane Snowden:  I would just add, also, that the goal is for more speech, not less. And so, for social media companies, their goal is to have a diverse ecosystem and a variety of viewpoints. That keeps people coming back. So you want to have many viewpoints on our sites, not fewer.

 

Hon. Elizabeth L. Branch:  Alright. Well, I think we are reaching the end of this panel. And just to wrap things up here, I want to thank you again to The Federalist Society for organizing such a lively debate topic. I also want to thank all of the panelists for their participation today and their thoughtful remarks. I would like to ask all the audience -- the people in the audience to join us for the next panel, which will start at 1:00, and it's entitled "Settlement Payments to Non-Governmental Third-Parties."

 

      But first, I want to let the attendees know that they should go to the lounge where they can network with other participants and ask questions of some of our panelists. What you'll do is you'll click on the alert to move to the lounge, and then you'll be able to join a table. And you'll need to turn your camera and your mic back on when you sit down at a table. With that, we conclude this panel.

 

Hon. Noah Phillips:  Thank you, Judge. And thank you --

 

K. Dane Snowden:  Thank you, Judge.

 

1:00 p.m. - 2:30 p.m.
Settlement Payments to Non-Governmental Third Parties

Litigation Practice Group

Topics: Litigation
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President Biden, on his first day in office, signed Executive Order 13990, which ordered all agency heads, not just those overseeing health or environmental issues, to “immediately review all existing regulations, orders, guidance documents, policies, and any other similar agency actions promulgated, issued, or adopted” during the entire Trump Administration, giving agency heads significant leeway to suspend, revise, or rescind a large swath of Trump-era administrative actions.

A related document issued the same day entitled “Fact Sheet: List of Agency Actions for Review; Actions Address the COVID-19 Pandemic, Provide Economic Relief, Tackle Climate Change, and Advance Racial Equity” includes the U.S. Department of Justice’s “Prohibition on Settlement Payments to Non-Governmental Third Parties,” 85 Fed. Reg. 81409 (Dec. 16, 2020), for review and suspension and/or rescission. The original regulation prohibits the government from including “provisions in settlement agreements directing or providing for a payment or loan to a non-governmental person or entity that is not a party to the dispute, except in defined circumstances.” Prior to this policy, DOJ sometimes gave significant discounts in monetary penalties to defendants who agreed in exchange to give money to third parties unrelated to the litigation.

Many interest groups and industry representatives welcomed the promised return of third-party payments on the grounds that they incentivize settlement and can be used to achieve desired policy outcomes. But the move also drew sharp criticism. As these critics have noted, third-party settlement payments (1) often use federal enforcement power to pressure defendants to give money to an administration’s political allies, (2) likely offend Congress’s power of the purse (as well as the Miscellaneous Receipts Act and the Anti-Deficiency Act) because they effectively divert penalty monies from the U.S. Treasury to projects and entities which Congress never selected, approved, or legislated, and (3) can be combined with the controversial practice of “sue and settle,” where the government declines to defend against a special-interest group’s lawsuit and settles on terms favorable to the plaintiffs, allowing interest groups to collect large amounts of attorneys fees and, in some cases, enabling "regulation by litigation" by using settlement terms to achieve policy goals without the transparency and accountability of rule-making under the Administrative Procedure Act.

Featuring:

  • Ms. Anna St. John, President, Hamilton Lincoln Law Institute
  • Mr. Jesse Panuccio, Partner, Boies Schiller Flexner LLP
  • Mr. Justin A. Savage, Partner, Sidley Austin LLP
  • Moderator: Hon. Alice M. Batchelder, U.S. Court of Appeals, Sixth Circuit

Speakers

Event Transcript

Hon. Alice M. Batchelder:  Well, good afternoon everyone. It's a pleasure to be here, and I'm hopeful that we have a good audience out there. I would have to say that this is a lot more complicated than it used to be when you could just be in a room with a lot of people, and I’m new to this. I'm not exactly a Luddite, but I could be mistaken for one so hopefully I will be able to accomplish what I need to do electronically here.

 

      We're supposed to begin this panel with some housekeeping items. I would admit that I went to law school in the vain hope that I wouldn't have to do housekeeping, so I'm just going to call these the preliminary things. 

 

      Turning now to some questioning, if you're in the audience, you can send text-based questions through the Q&A tab in the upper right corner of your screen. There's also a chat tab for attendees to chat with each other, but don't use chat, please, to be posing any questions. And there will be, later on, a live question period, and you can participate in that by pressing the "Raise Hand" button. You do, however, need a working microphone in order to use that option.

 

      So with those preliminaries, we can get started. President Biden, on his first day in office signed Executive Order 13990 which ordered all agency heads, not just those overseeing health or environmental issues, to immediately review all existing regulations, orders, guidance documents, policies, and any other similar agency actions promulgated, issued, or adopted during the entire Trump administration, giving agency heads significant leeway to suspend, revise, or rescind a large swath of Trump-era administrative actions.

 

      Included in those matters to be reviewed and potentially axed is the U.S. Department of Justice's Prohibition on Settlement Payments to Non-Governmental Third Parties. The original regulation prohibits the government from including provisions in settlement agreements directing or providing for a payment or a loan to a non-governmental person or entity that is not a party to the dispute except in defined circumstances.

 

      Prior to the adoption of this policy, the DOJ sometimes gave significant discounts in monetary penalties to defendants who agreed in exchange for the penalty to give money to third parties unrelated to the litigation. So as you can imagine, many interest groups and industry representatives would very much welcome the return of third-party payments, claiming that they, among other things, that they incentivize settlements of enforcement actions and can be used to achieve desired policy outcomes.

 

      Critics of these payments strongly disagree noting that these payments often use federal enforcement power to pressure defendants to give money to an administration's political allies, probably -- excuse me. The critics point out that these are payments are probably both constitutionally and statutorily wrong because they're contrary to Congress's power of the purse, not to mention the Miscellaneous Receipts Act and the Anti-Deficiency Act and can be combined with the controversial practice of sue and settle where the government declines to defend against a special interest group's lawsuit and settles on terms favorable to the plaintiffs, allowing interest groups to collect large amounts of attorney's fees and facilitating regulation by litigation by using settlement terms to achieve policy goals without the transparency and accountability or rulemaking under the Administrative Procedures Act.

 

      So among things, which I expect our panelists today may address, will probably be what the point of penalties is, either criminal or civil, and how this point is furthered or not by payments in lieu of penalties, what is the authority for payments in lieu of penalties, and -- well, there certainly are both statutory and constitutional concerns with these payments in lieu of penalties, are there policy considerations?

 

      So with that, I would like to introduce our very fine panel here. And let me point out that I'm going to do this in the order that I was given, just in case anybody wonders how I chose to go -- whom I chose to go first.

 

      Our first panelist is Jesse Panuccio. He is with the firm of Boies Schiller and Flexner. He has offices both in Washington and Fort Lauderdale. He is the former third ranking official at the U.S. Department of Justice. By the way, I'm doing this in an abbreviated fashion because all of our panelists have bios that we could spend the entire time going through. Before joining the firm, Jesse was the acting associate attorney general at the United States Department of Justice. And in that role, he oversaw the civil and criminal work of the anti-trust civil rights, environment and natural resources and tax divisions.

 

And he also has served as chair of the DOJ's regulatory reform task force and vice chair of the DOJ's task force on market integrity and consumer fraud. He served for three years as the Secretary of Florida's Labor Economic Development and Land Use Agency, the Florida Department of Economic Opportunity. And before that, he served as Governor, now Senator, Rick Scott's General Counsel, and I understand that he has some very specific experience with these third-party payments in lieu of penalties.

 

      Our second panelist is Justin Savage. You may be disappointed to learn that this is not the Justin Savage who is a gospel singer or the Justin Savage who is a wrestler. He is, instead, an attorney with Sidley Austin. I see that he's laughing about this. That's good. He's a global co-leader of the firm's environmental practice and serves on the firm-wide marketing and practice development committee. He also serves on the firm's COVID-19 task force. His focus is on high stakes environmental litigation and strategic counseling, including government enforcement actions, internal investigations, and rulemaking challenges.

 

He is recognized for his litigation and trial prowess in major environmental cases and his understanding of regulators' viewpoints. That's an understanding that some of us on the bench would probably enjoy getting more acquainted with. He won the law 360 MVP award in 2018 for several notable victories including using litigation to leverage a solution to a multi-billion-dollar regulatory problem for a heavily regulated industry. Like the other panelists, his accomplishments are really too many to detail, but he has extensive experience in various things having to do with the environment and internal investigations, audits, diligence reviews, and compliance engagements over a whole variety of types of things. And I'm not going to try to even go any farther with that, Justin, because it'll take us the rest of the day.

 

      And our third panelist is Anna St. John who is an Attorney with the Hamilton Lincoln Law Institute. She began working with the Center for Class Action Fairness, which has since moved to—excuse me—the Hamilton Lincoln Law Institute. She has argued appeals before the Seventh and Ninth Circuits and has presented argument to nearly a dozen federal and state trial courts. Her work has led to the return of over $100 million in settlement funds to class members.

 

She also serves as a Deputy General Counsel for the Washington Ballet. And previously, she was an attorney with Covington and Burling and clerked for the Honorable Rhesa Barksdale on the Fifth Circuit Court of Appeals. She's a graduate of the Columbia Law School, where she was named a James Kent scholar. And she is a member of the state bars of New York, Louisiana, and the District of Columbia. And she resides in New Orleans where I bet it's even warmer and muggier than it is right now in D.C.

 

      So having now introduced them, I will turn first to Mr. Panuccio for his presentation.

 

Mr. Jesse Panuccio:  Well, thank you, Judge Batchelder, and thank you for the kind introduction. Thanks to my co-panelists and thanks to The Federalist Society for hosting, once again, this important conference examining the Executive Branch and reviewing its work.

 

      As this is a Federalist Society panel, I think it's probably appropriate for me to begin with James Madison. I wore the tie. I've got the Madison head tie on. So let me start with that. Famously lamenting in Federalist 51 that men are not angels and thus need the government, Madison explained as follows. "In framing a government which is to be administered by men over men, the great difficulty lies in this: you must first enable the government to control the governed; and in the next place oblige it to control itself."

 

      When I served, as you heard, at the Department of Justice from 2017 through 2019, we took seriously Madison's admonition. And many of the policies we put in place were geared toward obliging the government, and especially the DOJ, to control itself. Examples included the new policy on dismissing meritless False Claims Act cases, the prohibition on the use of sub-regulatory guidance documents, and the policy implementing requirements and procedural safeguards for consent decrees with state and local governments. And relevant to our discussion here today, we implemented a ban on including third party payments in DOJ settlements.

 

      Now, to begin unpacking why we implemented that policy, let me start by reading a quote from a dissent by former D.C. Circuit Judge Janice Rogers Brown. "Perhaps one day, I will possess my colleague's schadenfreude toward the Executive Branch, raiding hundreds of millions of taxpayer dollars out of the Treasury, putting them into a slush fund disguised as a settlement, and then doling the money out to whatever the constituency the Executive wants bankrolled. But that day is not today."

 

      Now, what had gotten Judge Brown so exercised? The dissent came in a long running saga of a case called Keepseagle, a lawsuit filed in 1999 by a class of Native American farmers who alleged that the Agriculture Department had discriminated against them under various government loan programs.

 

      In 2010, DOJ agreed to settle the case for $680 million, providing for payments to each class member with precise amounts to be determined through a claims process. The money, of course, was to come from the Treasury through an appropriation known as the judgment fund. That's the fund that DOJ draws upon when it settles litigation.

 

      Now, the parties predicted there would be at least 10,000 claims and agreed that any remaining funds would be paid to third-party organizations that served Native American farmers. Now, if you think about this, it sounds laudable and sensible, right? After all, who can object to funding non-profits that seek to serve the community? And given that the result of the claims process was a bit uncertain, who could object to this tidy way of cleaning up some loose ends?

 

      Well, Congress could object, that's who. Article I Section 9 Clause 7 of the Constitution, known as the Appropriations Clause, states as follows. "No money -- no money shall be drawn from the Treasury but in consequence of appropriations made by law." Now, Congress has appropriated funds to settle cases. As mentioned, the judgement fund, 31USC1304, provides "that necessary amounts are appropriated to pay final judgments, awards, and compromise settlements."

 

      But query whether Congress thought that by providing this general authority to provide settlements of claims against the United States for which sovereign immunity had been waived, it was authorizing the Executive Branch to negotiate settlements that also provide funding to organizations that have no valid claim against the United States. If so, what is the limiting principle? Vast sums can be allocated by the Executive Branch without any congressional consideration whatsoever.

 

      And indeed, vast sums have been spent without any congressional consideration whatsoever. The Keepseagle case provides one stark example. Recall the parties had anticipated 10,000 claims. In the end, there were only about 5,200 claims filed, and only 3,600 were deemed valid and payable. Even after paying the lawyers $61 million, that left a lot of money on the table. Indeed, it left more money in the settlement fund than had been paid to the parties with actual claims.

 

      The parties renegotiated and agreed that the remaining amount, a whopping $380 million, would still be paid through a so-called cy-pres distribution to third party organizations with no claim against the government. Judge Brown summed up the situation thusly. "The Executive Branch may wish to favor certain interests on the taxpayer's dime. If the government wishes to achieve certain purposes by expending taxpayer money to people with no monetary claims against the United States, a legislative appropriation is required. No such appropriation exists here because the money was appropriated to pay claims, and those claims have been compensated. The more than $380 million that remains here should be returned to the American people."

 

      Now, Keepseagle was far from the only example of settlements being used to end run the appropriations process. That particular case involved DOJ taking money directly from the judgment fund and paying into parties that had no claims against the United States. But what happens when DOJ settles a case with a party that has violated the law, and thus owes the United States damages and penalties?

 

      Well, according to something called the Miscellaneous Receipts Act, "An official or agent of the government receiving money for the government from any source shall deposit the money in the Treasury without deduction for any charge or claim." And according to another statute, the Anti-Deficiency Act, "An officer or employee of the United States government may not make or authorize an expenditure or obligation exceeding an amount available in an appropriation or involve the government in a contract or obligation for the payment of money before an appropriation is made."

 

      In other words, when a liable party pays the United States, the money is to be deposited in the Treasury, and Congress, consistent with the appropriations clause, gets to decide how to expend those funds through the normal lawmaking process with its democratic accountability and procedural protections. Yet for years, DOJ included terms and settlements that require defendants to pay money to third parties who were not victims and who had no plausible claim for compensation from the defendants.

 

      For example, in the settlements with big banks for their fraudulent conduct in securitizing and selling residential mortgage back securities prior to the 2008 financial crisis, DOJ included terms requiring the banks to pay third-party organizations. For example, in the $15.65 billion settlement with Bank of America entered into in 2012, DOJ required the bank to provide 7 billion, billion with a B, in consumer relief, "consumer relief."

 

      But DOJ did not require all of that relief to be paid directly to victims of the bank's conduct. Instead, according to provisions buried in something called annex 2 menu items d through g of the settlement agreement, the bank could receive two dollars of credit for every one dollar it donated to non-profit organizations, community development and financial institutions, legal aid organizations run by statewide bar associations, and housing counseling agencies.

 

What was the result? Hundreds of organizations were funded, many of which are groups that have ideological missions or advanced policy positions on highly contentious issues. For example, a group called New Jersey Citizen Action received a healthy payment. It defines itself on its website as "a grassroots organization that fights for social, racial, and economic justice by taking positions on everything from healthcare to boating laws to climate and clean energy to banking and housing."

 

The National Council of La Raza received millions, a group that identifies itself on its website as advocating for policy positions on issues such as criminal justice, the economy, education, healthcare, immigration, and voting. In short, the Obama administration used third party payments to funnel billions of dollars to hundreds of organizations, all of which just happen to align perfectly with the administration's political views.

 

Now, lest you think I'm being one-sided, and though this abuse was most pronounced during the Obama administration, it was not limited to that administration. During the Bush administration, the then US Attorney for New Jersey signed a deferred prosecution agreement that required Bristol Meyers Squib to endow a professorship at the Seaton Hall School of Law, which just happened to be the then US Attorney's alma mater.

 

Now, perhaps all these are worthy causes and groups. Perhaps their policy positions are unassailable. Perhaps they make society better through their work. But ask yourself whether these sizable payments compelled by the threat government enforcement action are really consistent with the Appropriations Clause and our democratic system. And further, ask yourself whether the funneling of such monies is consistent with the plain text of the Miscellaneous Receipts Act and the Anti-Deficiency Act.

 

Well, the leadership that came into DOJ in 2017 thought not, and we took very seriously our responsibility to the public fisc and too, as Madison said, oblige the DOJ to control itself. To that end in June 2017, just a few months after he was confirmed, Attorney General Sessions prohibited payments to third party organizations that were not directly involved in the litigation or harmed by the defendant's conduct.

 

That policy was then memorialized in the justice manual and in additional policy memoranda such as those from the AAG from the environmental division who provided a lengthy analysis explaining why EPA's Supplemental Environmental Projects, or SEPs, almost certainly violated the law and had to cease.

 

As noted, such third-party payments raise serious legal, policy, and ethical concerns. If a payment is imposed as a penalty for misconduct, then it should be paid to the Treasury. Funds intended to make victims whole should be paid to the victims. And even if one assumes that third-party payments are lawful, quite an assumption, they create the appearance of political favoritism and cronyism, as the former New Jersey US attorney found out when he ran for president and this issue was brought up and as Congress found out when it investigated the banking settlements. Congress even uncovered an email stating that a funded organization said it was "willing to build a statue of the Associate Attorney General who was overseeing the settlement. And then we could bow down to this statute each day after we get our $200,000." This, my friends, is not what we want American citizens saying about our unelected, unaccountable prosecutors who wield tremendous, tremendous power.

 

Thus, we determined that the Department of Justice should not use its settlement authority to subsidize favorite causes or political allies. Under the Sessions memo, DOJ got out of that unseemly business. It was a significant blow in favor of, again, as Madison put it, obliging the Executive Branch to control itself. But alas, as you've heard from Judge Batchelder, the new administration has decided it would prefer to be an appropriator rather than have to deal with the American people's representatives in Congress. And so pursuant to an executive order from President Biden, it appears the slush funds are coming back. It will be important to monitor closely how DOJ uses these funds and to be vigilant in calling out political cronyism and illegality.

 

And now for a rebuttal, let me turn it over to Mr. Savage. Thank you.

 

Mr. Justin A. Savage:  Thanks, Jesse. And thanks, Judge, for the kind introduction. And I do apologize that I am neither a gospel singer or a professional wrestler, although it would be pretty cool if I could be both. And let me just say that I, like Jesse, was at the Justice Department, perhaps a bit longer, about a decade, and in a career position where I had the honor to work for the environment division but also in some cross functional organizations like the National Advocacy Center down in South Carolina, which has delicious shrimp grits, although not as good as where Anna St. John's is.

 

      So listening to Jesse's speech, I was both quite concerned and I thought my day job is not this interesting. I think both the legal reality and the on the ground facts are, for the most part, third-party settlements are appropriate and can work with the right oversight and safeguards. And I thought it was telling that he talked about judicial decisions which means there is a level of review by Article III judges, such as the one -- the distinguished one we have on this panel, and other folks. But I really do think that Jesse is someone who served across multiple administrations and actually worked on these settlements, including some ones that went through under the Sessions policy.

 

      But this is really taking a meat ax to something that might need a scalpel. Or another way of looking at it is it's a solution in search of a problem based on some lofty principles. On Madison, that sounds great. I love Madison, but it really ignores a wealth of law out there and how this works in the real world outside of these political talking points.

 

      So let's talk a little bit about the law. Jesse mentioned Article I of the Constitution, which vests Congress with appropriations authority. He mentioned the Miscellaneous Receipts Act, and he mentioned the Anti-Deficiency Act and a lone dissent. Let me tell you about some things that were left out and I think will inform the audience about the legality of this.

 

      The Office of Legal Counsel looked at this in a softwood lumber settlement in 2006, and that's quite, as everyone knows, that's the government lawyer, the pretentious government lawyer. And they said that the issues identified, Article I, the Miscellaneous Receipts Act, and the Anti-Deficiency Act, are not implicated if there's a third-party settlement that one, is reached before there is an admission of liability or a judgment and two, the government doesn't control the disbursement of the funds.

 

      That opinion is also consistent with GAO opinions that have been reached, and GAO is the Government Accounting Office. It's the police, so to speak, of Congress's fiscal authority, and it's concluded multiple times, looking at settlements with the FTC and other organizations, that as long as those two criteria are met, they're lawful.

 

      So to me, as a practicing lawyer who does this day to day, that's informative that these organizations both within the Executive and the Congressional Branch have said okay, let's look at this, and this seems lawful provided there are these safeguards in check that I've mentioned.

 

      Now, that's not a lot. There's not just one dissent out there by Judge Brown, who I think it's the Judge Brown who's retired, who's a distinguished jurist, rashly been, by my count, at least four cases that have looked at this. And I should say, my background is in the environmental context. I was a trial lawyer and then a senior counsel in my division. I think my experience is generally applicable to these other fields of law in terms of third-party payments. Both is this legal, and then are there appropriate safeguards that can be put in place, both within the Executive Branch and then ultimately the Judicial Branch and through public and congressional oversight? I think the answer is yes, there can be.

 

      Let me just tell you a little bit about the cases. There's one published opinion in the Third Circuit. It's called Public Interest Group v. Powell Duffryn. There's another one in the Ninth Circuit called Sierra Club v. [Electronic] Controls Design. If you're interested and you're a law nerd like I used to be before I started practicing 25 years ago, happy to send you the sites. And in both those cases, what was interesting, there were so-called citizen suits under environmental laws. And that's when literally, citizen groups stand in the shoes of the Executive Branch to enforce. And in those cases, there were objections just like the ones Jesse mentioned in appropriations clause, the Miscellaneous Receipts Act, because those settlements in those cases required third party payments.

 

      And in both of those decisions, unanimous decisions by six city and appellate court judges, they found that the payments were lawful because they were made before an admission of liability or a judgment and the government didn't control the payment structure once they went out. There's also two district court opinions on both coasts, one from the Western District of New York and one from the Western District of Washington. I won't bother you with the sites. If you'd like to see them, I'll certainly send them to you.

 

      So to me, this is more of a policy issue and more of a political issue that there's this concern that everything's a slush fund. And I work on enforcement matters on a day-to-day basis. I've been on the other side at the Justice Department doing environmental enforcement for 10 years, so this is something that it's part of my day job and I wish it was that interesting that people were having these lofty policy debates to steer money this way or that or it was all that political. But the sad reality is it's not. There are both institutional controls inside the government, and then as Jesse's alluded to, you can review this in court.

 

      So let me go through just a little bit of the judicial oversight because I think that's so vital, right? We have different branches of government. And then a judicial side, the third-party settlements typically arise in the context of a judicial consent decree, and there's a standard of review when an Article III judge reviews a consent decree. It has to be fair, reasonable, in the public interest, and further the objectives of statute.

 

      And furthermore, they're often opportunities for the public to file comments on that. If someone feels very worked up, they can try to intervene and oppose a consent decree. And in that context, it provides some oversight if there is a third-party settlement. So I mentioned the four cases that are out there. That's where those decisions came from. It's a consent decree. And then also, I think the decision that Jesse mentioned, obviously Judge Brown felt strongly and had a dissent, which again indicates there is judicial review.

 

      I think the other thing to keep in mind, at least in the environmental context at the environment division before the last administration, and there did continue to be some third-party payments under AG Sessions, but let me just give you some real practical examples quickly of some of the safeguards that at least the environment division follows that I think are generally applicable and could be something to be considered for other settlements.

 

      First of all, the defendant who's settling, if they want to have a third-party payment, there has to be some work, some specified work tied to the payment. It's not just a payment for the good of the order to toastmasters international and do what you will. There has to be something. So in the environmental context can be removing led paint. I did one of those in a city in judges district where they cleaned up led paint. It could be putting in a park. It could be something that's -- work that's tied to the alleged violation.

 

      There has to be accountability, meaning there's reporting. The defendant has to report to the government, and in some cases a judge, what's the work being done? How's the money being spent? And as part of that, there has to be "eligible costs," meaning you can't just buy somebody a pickup truck or a Cadillac who works at a public interest organization, receives a payment. There actually has to be some eligibility criteria for how the money is spent.

 

      And I think the final safeguard that you have there, you know, Jesse mentioned the Slush Fund Act or the hearings in the Bank of America act, that was through congressional oversight. There was an act introduced in Congress in 2016 to ban third-party payments to stop slush fund act. It failed, but there's a lengthy report everyone should read. And that just emphasizes there's, again, some measure of accountability.

 

      So my bottom line is, from a legal perspective, all three branches have weighed in and said listen, there's broad enforcement discretion in the Executive Branch to do this. There's some limitations on that, okay? And then to reach the practical perspective, some of the guidance I shared with you from the environment division I think really provides some good working guidelines for both judges and parties to consider. And look, there are benefits to doing these kinds of settlements. They directly benefit communities that maybe impacted by an alleged violation or other issues as opposed to an amorphous deposit into the Treasury.

 

      So I understand that high-minded folks, you begin with Madison and then this parade of horribles. And I'll just say this has been reviewed several times by all three branches of government, and there are working guidelines that both internally, at least on the environmental side, it could be applied more generally, and in these judicial decisions provide a level of oversight where I think it's appropriate to have these third-party payments provided there's limits in oversight as I've just recommended.

 

      So thank you, and I'm going to turn the microphone now over to Anna St. John. Anna?

 

Anna St. John:  Thank you, Justin. And thank you to The Federalist Society for the opportunity to discuss a topic that's now more timely than ever.  So I'd like to address some further problems with these settlements even with the safeguards that their supporters have suggested.

 

      Now, no one is claiming that all or even most of DOJ's settlements had or will have these third-party settlement payments, but we know that a number of them did and we know that one of the Biden administration's very first actions was to issue an executive order directing DOJ to review the rule against third-party settlement payments. And that's a problem.

 

      Some people have argued, as Justin did today, that these settlements are usually in the form of consent decrees. And those consent decrees require court approval, and therefore, they have a degree of oversight by another branch of government. That doesn't solve the problem. When these consent decrees are presented to the court for approval, there's rarely anyone on the other side arguing that the court should withhold approval.

 

      Instead, you have the Department of Justice bringing its full authority to the table saying the settlement should be approved. And the defendant, too, is asking the court to approve the settlement. Well, courts are structured to decide issues in an adversarial context, where they're presented with the best arguments on either side of an issue. Judges also rely on precedent and because it's very rare for anyone to fight these things, there's no real precedent for them to look for when a settlement should be rejected.

 

      Now, there was one case where Judge Rakoff of the Southern District of New York actually rejected a proposed consent decree between City Group and the SEC. He found that the proposed consent decree did not meet the necessary standard and did not provide the court with enough evidence to approve it. Well, as you can expect, both the SEC and City Group appealed. And in that ex parte posture, the Second Circuit vacated Judge Rakoff's judgment.

 

The Second Circuit ended up creating this watered down rule that district courts have to give significant deference to a government's proposed consent decree. A court essentially only has to review for procedural fairness and basic legality. So, really, as long as there isn't bribery in the settlement process or human trafficking required by the terms, this holding allows the government to get what it wants in a consent decree.

 

      Now, this was an SEC settlement, but there's no reason to think the same standard doesn't apply to DOJ settlements. It also doesn't help the process that people can conceivably file notices with the court voicing objection to the consent decrees. So for example, when DOJ and Volkswagen entered into a consent decree following the clean diesel scandal several years ago, the settlement directed $2 billion to zero emissions vehicles charging stations infrastructure and promotion of zero emissions vehicles.

 

      And this was a rare event because usually there's no notice or media coverage of the settlements, but DOJ received thousands of pages of objections and other comments which it shared with the district court. And we were among those who submitted comments, and we addressed the separation of powers issues among other legal problems.

 

      But unlike an agency under the Administrative Procedure Act, a court has no obligation to consider any comments at all. If anything, it's more likely to review DOJ's rationalization of the comments. And in fact, in that case, the district court barely covered the substantive objections raised in the consent decree in its opinion approving the settlement. It issued a short opinion. it wasn't even the length of DOJ's response to the comments, and it made no mention of the separation of powers issue.

 

      And this was a really outrageous settlement. President Obama had asked Congress to fund a zero emissions vehicles program on more than one occasion, and Congress had repeatedly refused to do so. So here, you have money from the settlement with Volkswagen that could or should go to Treasury, and if it went there, it would never fund a zero emissions vehicle program because Congress wouldn't allow it. And yet, because of the settlement, DOJ is now making spending decisions on behalf of the government, completely bypassing Congress.

 

      The Volkswagen settlement is not a lone example. Jesse mentioned the mortgage settlements. In 2014, DOJ entered into a settlement with Bank of America that raises similar constitutional and policy concerns. So under the deal there, if Bank of America funded a critical need family housing development, it got a credit of nearly four dollars for every dollar it lost on the resulting loans.

 

      This program was completely unrelated to the theory of the suit which was that investors were defrauded by the way the bank was selling mortgage-backed securities. But that's not even the worst of it. HUD, a different part of the Obama administration, thought the program was a bad idea. HUD, which has the housing policy experts, thought that that sort of mortgage relief made things worse because a lot of people were in houses they couldn't afford. And this was a sort of government giveaway that prolonged the pain where the recipients of the program had a high probability of still defaulting on their loans later.

 

      So it was a big waste of money, and it's not clear why DOJ imposed housing policy that a different part of the administration opposed. But the important point is that you had a DOJ attorney who is not an expert in housing policy undermining the housing policy of experts on the issue within the same administration. Well, the problem is no judge is going to look at that. It doesn’t have the information before it. It's all buried in the paperwork. Nobody's even told HUD about it, and nobody's telling the court about it.

 

      So even if you think DOJ has the authority to enter into these settlements, its hard to imagine that anyone thinks it's a good idea to have DOJ making policy that contradicts what the policy experts in the same administration believe is the correct approach on the issue.

 

      So I'll end with a point that not all is lost with respect to these settlements. It's my experience that when you have a party before the court with standing and that party challenges improper settlements, the courts will recognize the problem. Hamilton Lincoln Law Institute, my organization, challenged an FCC settlement on behalf of consumers harmed by unlawful merger conditions that the FCC imposed on Charter and Time Warner Cable in a settlement with respect to their merger.

 

      The merger conditions there had nothing to do with the transaction and were outside the FCC's normal regulatory authority. And these conditions resulted in increased prices to subscribers and also reduced the quality of service they received. Well, when we challenged this, the D.C. Circuit found that the consumers did have third-party standing to challenge certain of these conditions and struck them down noting that they were troubling.

 

      And the court pointed out that even FCC acknowledged that certain conditions were not a transaction specific benefit. They were just add-ons that the agency decided to impose. So we're 1-0 challenging improper administrative settlements when we have clients that have standing to do so. And while we'd like to see these abusive settlements disappear entirely, that seems unlikely, especially with the executive order that the Biden administration put out.

 

      So we're looking to increase our win count to 2-0, 3-0, as high as we need to go because we're not afraid to take these on, and we're looking for the right opportunity to make that happen. So I'll stop there and turn it back to the panel. Thank you.

 

Hon. Alice M. Batchelder:  Well, thank you all three of you for a very enlightening, I think, overview of either the process or the problem, whichever way you might want to be looking at it. And so before we turn to the audience Q&A, I thought maybe we might have a little bit of additional discussion here. And I mentioned in my opening that one of the things that might come up, but I don't think, at least explicitly, has come up, is a question that I have which is in either the civil or the criminal type of statutes that these enforcement actions are being brought under, what is the point of the penalties in those statutes, and how is the reason for or the point of those penalties being either furthered or not by these third-party payment settlements? And I would turn, I guess, first to you, Mr. Panuccio.

 

Mr. Jesse Panuccio:  Well, thanks for that excellent question and to my fellow panelists, both, for enlightening commentary on this. My view is prosecutors wield incredible power in this country. Their job is to enforce the criminal law and the civil penalties. And the point of penalties in our criminal justice system and our civil justice system is punishment and restitution.

 

      So if we're looking at restitution, the money needs to go to the parties deserving of restitution, victims. If we're looking at punishment, that means it's the sovereign, it's the state, wielding its coercive authority to collect money from otherwise free citizens and entities and take that money and do something with it. And the question is, I think the legal and policy question is, who decides? Who gets to decide what happens to that money? Same as when the government uses its coercive power to tax citizens. Who gets to decide what's done with those funds? And the answer is right there. It's in the plain text of the Constitution. Congress decides, and the reason Congress decides is Congress is the only representative of the people.

 

      As well-meaning as they might be, and I've worked with many of them, I was one of them, Department of Justice officials aren’t elected by anybody and they're not accountable to anybody. And so if we want to further the purpose of punishment and then the United States getting that money, it should be appropriated by the one body that is elected to appropriate funds, and that’s Congress.

 

Hon. Alice M. Batchelder:  Mr. Savage, following up with that, so if the point of the penalty is that the government is entitled to have either the money, the monetary penalty, as punishment or as restitution, why does it make sense to have the party being punished or against whom the restitution order is being levied, deciding where the money goes and how it's going to be spent? How is that punishment or restitution?

 

Justin A. Savage:  That's a great question, Your Honor. And I appreciate --

 

Hon. Alice M. Batchelder:  Oh, I hope you do think my questions are good.

 

Justin A. Savage:  Oh, it's good. It's good. I like it. I like this. So here's what I'm -- here's my point of view, for what it's worth. From a punishment perspective, you could take the money, put it into projects. You could take the money, put it in the Treasury. You could take the money and put it in a garbage can and burn it. It's irrelevant from a changing behavior perspective, right? The point of a penalty or other fine is to promote general deterrence in the regulated community or business community or whatever your target community is. And then specific deterrence as to the particular company or individual, right? And so whether they make that payment to X or Y or Z, it's irrelevant. And I think there's a robust body of literature on that.

 

I think on the point of well, it should go to the victim and restitution, absolutely. But this is all at such a high, philosophical level, let's make it into ground truth. Let's talk about a particular case. If I've got a case where there's an allegation of led paint not being completely remediated appropriately and people are exposed to it or at risk, does it really make sense to that community to say you know what, ya'll been harmed, we're going to give you some money. Go out and fix the led paint in the homes. No, it doesn't. And that's why the environment division typically requires, and sometime agencies do too, say let's have a third-party payment so we can have an expert in there to remediate led paint in homes because this was an alleged led paint violation and so there's a nexus.

 

      And so I think both from a deterrence perspective and a restitution perspective, this can make sense. I think what doesn't make sense is to say let's throw the baby out with the bath water. We don't think the oversight is enough, blah, blah, blah, and change what's been 40 or 50 years of practice, Your Honor.

 

Hon. Alice M. Batchelder:  Ms. St. John, what do you think?

 

Anna St. John:  Well, I think it's hard to argue that the funds from these settlements are not public funds that belong to the American people. These are claims brought on behalf of the American people. The settlement represents the value of those settled claims, and so they should be coming into the Treasury to the public purse, which Congress then has the appropriate power to distribute as it sees fit.

 

      There's a real lack of oversight if it's prosecutors deciding where to send the money for these settlements. If you think DOJ has the authority to decide how it'll spend the money from a settlement, you get into real conflict of interest problems. You get lobbying from third parties, and I think there's a natural tendency, just as we see in class actions by class action attorneys, that where there are absent victims, there's no one really standing up to the principles to make sure that they are true fiduciary agents for the American people here to make sure that the funds are spent in their interest rather than in the interest of the attorneys who are getting to make these decisions.

 

      The natural human inclination is to follow their self-interests and get the money to political allies as we've seen in some of the abusive settlements that we've talked about today.

 

Justin A. Savage:  May I briefly respond?

 

Hon. Alice M. Batchelder:  Sure, briefly.

 

Justin A. Savage:  As someone who's a career prosecutor in the government, I just think that assumes that people are not acting in good faith and doing their jobs in the government. And then from a corporate perspective, Jesse and I represent companies. They're interested when they do a settlement, again, in good faith, in seeing the work performed by a third party. It's very much painted as you're in a dark room with a gun to your head and you better give to whomever political organization or bad things are going to happen, and I just don't think that scary picture is how it works in the real world with specific cases.

 

Jesse Panuccio:  And, Your Honor, allow me to just add one thing to that because it is a point I -- if I may.

 

Hon. Alice M. Batchelder:  Please.

 

Jesse Panuccio:  Justin raises this point that look, in most cases, this is just well-meaning prosecutors doing their job, and there's really nothing to see here and just let it happen. Now, even if you accept that that is sometimes the case, it is also very often not the case, and Anna and I have both pointed out two tremendously important large-scale settlements that saw the transfer of billions of dollars of money from these parties that had broken the law to hundreds of private parties. And we, to this day -- and I know this because I was there and tried to figure it out.

 

To this day, we still don't know what happened to the billions of dollars in the banking settlements that went from the banks to these private organizations because there was no system setup for accountability. We don't know if that money was spent on improper political projects. There was nothing setup to say if you're getting this money, here's how you have to spend it, here's who you're reporting back to, and most importantly, here's how the public can trace every dollar that's spent. We don't even know who at DOJ made the decision about which groups would be included. Congress tried to investigate and was stonewalled. So that was a multi-billion-dollar third party settlement. Ten years later, we still don’t know what happened to it.

 

Hon. Alice M. Batchelder:  Sort of casting aside any debate on the prevalence of good faith of the actors here, because I suspect there's room for disagreement, one of the things that I was kind of intrigued by was Mr. Savage's point, and I know it's been widely made, that as long as we haven't proceeded to judgment, sort of, the defendant hasn't admitted liability, you really can't call the money that would have been coming if we had proceeded to judgment, you really can't call that a penalty. So what's the problem here if everybody agrees on how the defendant ought to anti-up vast sums of money according to a consent decree?

 

And I guess one of the concerns I have about that, Mr. Savage, is it seems to me that maybe is an argument a little bit built upstairs over a vacant lot because certainly, the defendant wouldn't be spending those mega dollars doing whatever it is the consent decree makes it do, but for the enforcement action and the threat of the penalty. How do you answer that?

 

Justin A. Savage:  That is the argument for the other side of these, and the way I would answer it is in litigation, no one knows. There's a risk to a defendant in a case that could cause them to say we think it makes sense to do a settlement and to consider doing a third-party settlement.

 

      In the environmental context at least, and I think it has some policy lessons for exercising enforcement discretion, you can't be forced to do a third-party settlement. And I'll say there, further, Judge, this has been looked at, I think by OLC and others who are comfortable that in that context it is not actually -- there are not actually funds received by the Treasury that would cause the Article I, Miscellaneous Receipts Act, Anti-Deficiency Act concerns that you've raised.

 

Hon. Alice M. Batchelder:  Because under those statutes, the government really hasn't ever had the money, so we don't need to worry about either of those statutes because we can avoid having it actually be government money by doing what has been described, I think, by Mr. Panuccio as an end run around the requirements. Am I interpreting you correctly?

 

Justin A. Savage:  You're interpreting that -- I don’t agree it's an end run, but the OLC has ruled, and I think this is consistent with some case law there, that as long as there's not an admission of liability or judgment and as long as the government doesn’t control whom the money goes through, which I still think means they can ensure there's performance, then those concerns are not implicated. And it's a classic question of where do you draw the line? And we've seen this in other appropriations fights over things such as the wall in the last administration.

 

Hon. Alice M. Batchelder:  One of the criticisms that I have seen and, honestly, this is not an area that I've had a lot of experience in, but one of the criticisms that I've seen is that these third-party payments tend to be very one-sided politically. And that is the criticism, that this has become a very, very political thing to do. And one of the people who was opposed to these, and I'm not sure whether it was Mr. Panuccio or Ms. St. John, treaded lightly on that subject. Does either of you want to go any further into detail?

 

Jesse Panuccio:  I'm happy to or if Anna wants to take that, she can as well.

 

Anna St. John:  Go ahead, and I'll follow up after you.

 

Jesse Panuccio:  So I think if I understand that question, are these often politically one-sided? I think the bigger the case, the more political -- and more funds that are available, the more political it becomes. And that's just human nature. If you are a government regulator and you have a few billion dollars to give out, you're not going to give it out to things and causes and people you disagree with. You're naturally going to be inclined. And that's what Congress does too. The only difference is Congress is elected to do that. They have the democratic legitimacy to make those decisions on behalf of the people, and prosecutors don't.

 

And what prosecutors also have is this tremendous power behind them to say -- to come to this notion that companies -- defendants often want this. Defendants want to do anything to get out from under the tremendous power of DOJ, and so if a DOJ prosecutor comes along and says oh, hey, we'll lower your penalty two for one, as they did in the banking settlements, if you just fund this project over here.

 

Or let's take SEPs, an area that Mr. Savage has much more familiarity with. For years, the EPA said we will give you up to an 80 percent credit on your penalty with the United States if you do these SEPs projects. So the notion that oh, well, the money never touches the hands of a regulator so therefore, it's okay. I mean, it's completely fictional. It's only on paper. The DOJ and the EPA are trading penalty dollars for these projects that they favor, and those projects are projects that they favor.

 

Anna St. John:  I'll add too --

 

Hon. Alice M. Batchelder:  Ms. St. John?

 

Anna St. John:  Yes. Thank you, Your Honor. I'll add too that investigating these settlements, it has come to light that the Department of Justice has directed the money to political allies. There were emails that are detailing The Federalist Society paper on this topic that during negotiations with a settlement with Citibank, there were DOJ lawyers saying like let's make sure this settlement includes language so that money doesn't go to conservative organizations like the Pacific Legal Foundation. And so we know that there is this kind of slush fund-y political thinking that does exist behind some of these more abusive settlements.

 

Justin A. Savage:  May I briefly respond, Your Honor?

 

Hon. Alice M. Batchelder:  You probably should have that opportunity.

 

Justin A. Savage:  Thank you. This notion of widespread slush funds makes me feel like a Chicago politician in the 1970s. Unfortunately, my day job working on enforcement settlements, it's not like that. I mean, I'm hearing well, DOJ's not democratically elected, the President is. And there's a wide band of enforcement discretion and then this notion that well, there's more money so these bureaucrats, they're just going to go hog wild and their Biden supporters are going to give this money to this group or that group. I think most people want something good to happen from a settlement if there's a settlement, and they're going to direct in a way that makes sure something good happens whether it's building a park or led paint or whatever.

 

And so, yeah, I get it. I get why there's concerns because this is a very technical area that I work in every day and it sounds -- makes a good talking point. All these settlements that Jesse and Ms. St. John have mentioned, they're all out there because there's been some level of congressional or judicial review. And so I hear ya'll, but I just don't think that's the way it works in the real world.

     

Hon. Alice M. Batchelder:  Well, that kind of brings up what I think is maybe my last question which is the extent to which the judicial review to which Mr. Savage refers is real. Now, he described that in his opening remarks, and he talked about if the people out there whose tax dollars are involved or who would be the taxpayers benefitting from the money coming into the treasury where if the penalty were enforced, the money would actually go, if you don't like these settlement agreements, you can -- and I think the words he used were you could attempt to intervene. That struck me as being probably pretty realistic in terms of the likelihood. So I'm just wondering whether any of the three of you have anything further you would want to say on the subject of the extent to which there really is judicial review of these settlements and what is the role that the court should be playing?

 

Anna St. John:  I'll start, Your Honor. So I do agree that there is a path to intervene when a party is aware of these consent decrees and these settlements that when they are presented to the court, but a party has to have standing or have some injury to really be a participant in those court actions. And if they're not, I've seen in my experience that if you just submit a comment, the court kind of brushes it aside because it does have two parties in front of it, the defendants and the Department of Justice, pushing for approval of these settlements.

 

      And so I think that one of the stronger ways to challenge abusive settlements with the third-party settlements is through intervention if you can find a party that has been harmed by the third-party settlements and can really make a strong showing in court as to why the settlement shouldn't be approved.

 

Jesse Panuccio:  I'll just add to that, I mean, my view is as a matter of [inaudible 61:22] judicial oversight over these settlements? No. I think judges want to clear their dockets of big cases, and when you have a willing prosecutor and a willing defendant and they come in and say we've settled, your honor, independently, the court does not have much reason or inclination to review all of the terms closely and make sure that every single line complies with law. That's as a matter of incentive.

 

      As a matter of reality, we know that's the case. These settlements, which sometimes include sweeping provisions -- and take consent decrees generally. Justin said these often come in the form of consent decrees, not always. But when they do, it's a topic for another day, but consent decrees include many times structural relief and dozens of provisions that have no basis in federal law and if actually analyzed, could never pass muster and never be announced through an actual final judgment that was litigated. And yet, judges sign off on them every day.

 

      So the reality is we have a -- I mean, this is why I lump this in with things like sub-regulatory guidance. We have a whole system of lawmaking that's going on in this country, of appropriating that's going on, and it all happens below the level of any actual elected officials who are supposed to be doing that stuff. And courts sign off on it all the time every day.

 

Justin A. Savage:  And if I may just briefly respond.

 

Hon. Alice M. Batchelder:  Yes.

 

Justin A. Savage:  Having doing this on a day-to-day basis, interacting with judges, I think they take seriously their oath to look and make sure a settlement is fair, reasonable, in the public interest. People are not just clearing their dockets. I've been involved in cases where people filed comments, both government and the defense side, where the judge raised questions and he had to go in and explain it. And I've been involved in at least one case where someone intervened where they had standing. And I don't know, call me old fashioned. I just have faith in the system, both from a judicial and from a litigant perspective, and I just think we're really searching because of fears for a solution when there's not a significant problem.

 

Hon. Alice M. Batchelder:  So with that, before we turn to the audience to see if we have any questions, I guess I would like to ask each of the three of you if you have any general closing remark you'd like to be able to make. And we'll go in the order that we went before, so we'll start with you, Mr. Panuccio.

 

Jesse Panuccio:  Okay. Well, thanks very much for that opportunity, and I'll just say a few things, probably in response to the discussion generally but a few points that Justin made.

 

      One, in terms of OLC, I love the lawyers at OLC. Let's not forget what their job is. It's to make arguments in favor of Executive Branch action. They often overrule themselves from administration to administration. And, of course, if you go back and read the AAG ENRD memos from the Trump administration on this, there are OLC opinions from the early 1980s as well as comptroller of the currency opinions casting serious doubt on these kinds of settlements. And even putting that all aside, I love an OLC opinion, but I love more the plain text of the Constitution and statutes. And it is very hard to make a plain text argument that these are lawful.

 

      And then again, I would just come back to Justin says oh, the system's working. it's fine. I have faith in the system. The question is what system? Established by whom? Under what laws? The system that I see that was established says no appropriation. No money can be spent absent an appropriation. That's the system. I have faith in that system because it respects my vote as a citizen and makes sure the people that I elect actually have the say rather than prosecutors. Thanks very much.

 

Hon. Alice M. Batchelder:  Thank you. Mr. Savage?

 

Justin A. Savage:  Thanks, Jesse. Thanks, Judge. Thanks, Anna. This has been a fun panel. And I'll just say that, again, I have faith in the system, and we've brought up some settlements. There's some law in there whether you consider the OLC law or not or some of the opinions, they are there. And I think they've consistently found that this practice is lawful.

 

      And then the question is are there measures in place to make sure there's appropriate oversight? I think we can get there, and I appreciate everyone working together. I would just not cite this ENRD AAG memo just because that's also -- the author of that particular memo is also someone who wrote a memo or thought that would be a good idea to sue the State of Georgia, overturn the election. So not necessarily the best precedent there, but I appreciate the thought. Thanks, Jesse. On to you, Anna.

 

Anna St. John:  Thanks. I really appreciate the opportunity to be here today. It's been a fun discussion. I want to close by saying again, this is not a problem with every DOJ settlement, but we know that there are billions of dollars in these settlement payments that have been slushing around and without any oversight by Congress. That money settled public claims. It belongs to the public, and it should be subject to the Appropriations Clause with congressional oversight and authority directing those funds. This is really a problem no matter where you sit on the ideological spectrum because just because it's one party doing it today, it could be the other party tomorrow. So with that, I turn it back over to the Judge.

 

Hon. Alice M. Batchelder:  And with that, I hope I can figure out how we now are supposed to go to the audience to see if we actually have people who would like to be able to pose some questions to this panel. And I think I'm supposed to mention, as I think I already did, that you can do text-based questions through the Q&A tab on the upper right corner of your screen, and you also have the raise the hand button if you have questions that you want to be able to pose vocally. And I'm not seeing anything on my screen.

 

Jesse Panuccio:  We do -- if you click on Q&A, Judge, I believe we do have a few questions there.

 

Hon. Alice M. Batchelder:  Hang on. As I warned everybody, I am something of a Luddite here. Okay. So this is a text question that has come in. And the question is for Mr. Savage. Can't we distinguish between a circular remediation expressly authorized by Congress as a remedy and the sort of industrial policy in the VW settlement where the DOJ is overriding the judgment of Congress?

 

Justin A. Savage:  That's a great question. Circular does have specific provisions for remediation. The judges have also found that they have broad equitable authority to mitigate the harm from an alleged violation. And I think in that particular instance in VW, there was an argument that in fact the funding of the ZEV infrastructure was mitigation.

 

      And beyond that, there's the Executive's broad take power authority, which I'm sure Jesse advocated for when he was at the government. But I think it's a good question and one that's been wrestled with in the OLC opinion in the other cases that I mentioned, which I'd be happy to provide to the questioner. Thanks, Your Honor.

 

Hon. Alice M. Batchelder:  And I think we have one raised hand, so I'll click on that. Oh, we have the raised hand of Dean Reuter.

 

Dean Reuter:  Hi. Hi, Judge. While I'm here, I will ask a question, and it specifically goes to audit and oversight of the third-party settlement funds. I was in the inspector general community a couple of different times, and we took seriously the oversight of federal expenditure of funds. Federal funds come with all sorts of restrictions with regard to hiring, firing, environmental impact, everything you could name top to bottom.

 

      Do these funds transfer to third parties with the same restrictions, with any restrictions? And are there provisions for independent audits of the funds at any point along the way? How do we know they're not using the funds for Christmas parties, for example?

 

Hon. Alice M. Batchelder:  Which one of you wants to tackle that?

 

Justin A. Savage:  I can just offer briefly my experience. In environmental settlements, typically with the environment division, there is reporting on spending on eligible costs, and there's a percentage that has to be met for eligible costs, somewhere between 90 to 95 percent so that some dude at amortization doesn’t spend it on a pickup truck.

 

      And I've also, when I was there, participated in a GAO audit that was precipitated by Congressman John Dingell, not the current Congressman Dingell, of third-party disbursements. I don't know have happened since.

 

Dean Reuter:  Well, then I'm curious, Justin Savage, what's the legal authority? Is that part of a settlement itself? What's the legal authority for the government to oversee funds that I suppose went in one instance from Citibank directly to a third-party or private party?

 

Justin A. Savage:  Yeah. So I'm not commenting on the Citibank, somehow I wasn't involved in that. But from environmental settlements, they're generally is a term that says defendant, you can pick who will perform -- so the led paint example, go mediate led paint. But then there's a requirement that a percentage of the money spent by the organization, it's typically pretty high, 90-95 percent, actually go toward the remediation.

 

      And those reports are sent into the government. I've seen situations where judges have wanted to have periodic briefings on settlements. So there are at least mechanisms in the environmental context, which I think more broadly makes sense as a policy matter just to make sure that money, as you know, when there's money, there can be a risk of fraud or abuse.

 

Jesse Panuccio:  And let me -- I think this is helpful because it helps show the fiction that as long as the money doesn't touch government hands, it's okay from a Miscellaneous Receipts Act, Appropriations Clause, and Anti-Deficiency Act perspective. So what we have here is the government official, the regulator, says it's not us. It's not touching our hands because then I'd be in violation of the Anti-Deficiency Act which could be a real problem to me personally, so you do it over there.

 

      But by the way, make sure you send in reports to me so that I spend my government paid for time monitoring what happens to that money and making sure that it's being used exactly as I want it to be used. I mean, it's sort of just shines a light on the fiction that the government regulator is not directing exactly where this money goes and touching that money in a very real way by spending its -- their own time and funded time on making sure that money goes exactly where they want it.

 

Hon. Alice M. Batchelder:  If I could interject something here, which really does raise the question of what the policy considerations are with regard to either supporting or opposing these third-party payments because one way or another, this is money that initially would have been directed to the Treasury. One way or another it doesn't get to the treasury, but the government is still having something to do with some oversight. And if it isn't, then these consent decrees may very well, you could at least argue, not be in the interest of the public. So we've skirted this and sort of talked in general terms, but does anybody want to address very specifically some of the policy considerations here for either permitting or not permitting these types of payments? Don’t everybody talk at once.

 

Jesse Panuccio:  I want to give Anna a chance to go first on one of these, so I was kind of waiting.

 

Anna St. John:  Well, I think that's exactly right. There's either oversight because these are public funds or there can't be oversight because it's not government money. And so that really does put into sharp focus the policy problem. And I don't think anyone supports just sending off money to third parties with no oversight. Maybe they do spend it on a Christmas party, and we wouldn't know unless there's some kind of oversight. But, again, if it's not public funds, where does the authority for the oversight come from?

 

Justin A. Savage:  Yeah. So let me briefly address that. I think we're conflating are these public funds with is there both judicial and executive branch oversight of performance of a consent decree? And so the way it works in the environmental world is yes, there can be third party payments, but the defendant can choose to do the work himself. If you make widgets, you're not going to choose to do led remediation, you're going to have a third party do it. If the third party does it, there needs to be reporting.

 

      So I don't think just because there's oversight of performance of a consent decree that suddenly money spent to do that makes that the government money, just the same as it wouldn't be if the government said yeah, we want you directly, Widget Acme America, to clean up a sandlot of contamination. That doesn't' mean the money the company spent becomes public money. And, again, I think this is something that's been looked at by the courts repeatedly as I mentioned.

 

Jesse Panuccio:  One thing I'll just note here is if you look at the memos that came out during the Sessions era, for example, whether it's on third party payments or the control of consent decrees with state and local governments, there were very detailed provisions and explanations about legality and sources of law. If you look at the practice of DOJ prior to those memos, there's virtually no explanations. There is nothing you can turn to. There is nothing that Mr. Savage can say oh, here's the DOJ policy on how they monitor and make public how these funds are used and whether they're used appropriately, and here's the report that comes out every year that's up on the website that says here are all the monies for third-party projects and how they have been spent.

 

      It's an ad hoc process that's done project by project with no serious policy behind it and no routine policy, and nothing that anyone can grab ahold of and say oh, now I understand the full scope of what DOJ is doing with billions of dollars every year throughout all these cases. And by the way, it's not just environmental. It's civil rights, it's civil, it's the financial sector. And there is no uniform policy that governs any of that, none of it.

 

Justin A. Savage:  And I do think that's a good point, actually, Jesse. I agree with you. I think there should be more transparency, more oversight. How is this working? But there's a difference between saying there should ought to be more oversight and saying let's just ban it together. A good example, there was a farmland project in New Orleans, where Anna is right now, with the City of New Orleans public water system where they actually cleaned up a beach, Lincoln Beach, so people could use it, etc. So to me, that's sort of throwing the baby out with the bath water to say yeah, the system's ad hoc. It's hard to follow. Yeah, true, and then saying okay, well, let's ban it.

 

Jesse Panuccio:  Let me respond to that one point, should we ban it? And here's the reason why. We live in a society where there's more wants than there are funds to satisfy all those wants. And all of those wants and needs are often for the public good, and one of the hard decisions that representatives elected to Congress have to make every year is what's going to get funded, and what's not going to get funded? And what we've seen is Congress has actually made those decisions in Appropriations Act, stripped provisions out in a negotiation process, and then DOJ comes behind it and funds it anyway through a settlement. That's exactly what happened with the banking.

 

      Or let's take the Volkswagen settlement, for example. There, DOJ started something, maybe we actually could call infrastructure, which is these charging stations throughout the country. The question is maybe the charging stations are great, but Congress has to fund a lot of stuff that's great. And in the years prior to that, they decided charging stations weren't going to make the cut. And then DOJ regulators came in and said eh, you know, we hear you, but we have better ideas. And so we're going do it and then there's no oversight over it.

 

Justin A. Savage:  And I think, again, that's a principle too far. Congress has a lot of things, and just because they touch on a subject like should we fund a wall, certainly the last administration took a view of the Executive's authority that touched on that. So, again, I don't think just the principle that because Congress may have some appropriations on a particular subject, the government can't settle particular enforcement action as too far.

 

Hon. Alice M. Batchelder:  Well, that leads directly to a question which has been posed from the audience which is is Mr. Savage's position that the Constitution, the Appropriations Clause, is not being violated or that it doesn't matter so long as the money is put to good use? Is separation of powers simply irrelevant?

 

Justin A. Savage:  Great question, audience member. And let me say this at the outset. You're talking to a guy who went to McNeese State University in Lake Charles, Louisiana. So my super power is that I recognize my limitations. I am not as smart as the people in OLC and at DOJ, and I'm not as smart as the judges who have looked at this before. And all I'm saying is if there are these limits and conditions, if there's not a judgment of initial liability, the government doesn't direct who gets the money, then I think there is not a constitutional issue. I'm not out here saying yeah, as long as it's building a park or Lincoln Beach in New Orleans, spend what you want. I have a much more limited position based on the precedents that are out there.

 

Hon. Alice M. Batchelder:  So I'm not seeing any additional questions coming from the audience. I guess maybe my final comment before I -- the next thing, I guess, is to put everybody into the lounge if they want to get there. But I guess part of my question would be following that last one, am I correct, Mr. Savage, that your point, your position is pretty directly founded on your belief that the money in these consent decrees, these consent settlements, these third-party payment things, that money just really isn't public money.

 

Justin A. Savage:  Correct. And I'll give you an example. Judge Rebecca Beach Smith actually in Virginia Beach today, in the Eastern District of Virginia, had a case overseen against Smith Field Foods. The government had a judgment. She invited questions to the government that said can we disburse this to anyone else? And the government said no, there's a judgment. But short of that, if there's not an admission of liability or judgement and the government's not directing who the money goes for, then, yes, I think that's what the law is today as we know it, and we know the law sometimes can evolve, but that's my understanding.

 

Hon. Alice M. Batchelder:  Okay. I was incorrect if I can bring up this question. I'm not having fun trying to pick up some of these questions. Okay, here's one. Justin, what is the source of legal authority for the restrictions, limits, oversight that you propose as making third party payments palatable? And if they're not legally required, then how can self-imposed restrictions make the practice lawful?

 

Justin A. Savage:  I love this question because I asked the same thing when I started working for the government, and as a defense lawyer, I've looked at it before. It goes back in the midst of times to the 1970s. I guess, it's not too old. I was born in the 80s, where there were some GAO opinions and earlier OLC opinions saying there's some constitutional issues with just handing this stuff out willy nilly. So the government, both the Justice Department, EPA, CFTC, in light of those opinions, have imposed these limits. And as someone who's had to go to a senior political official, like Mr. Jesse, and say this makes sense to do this, people take that seriously. So that's really the authority. I'm happy to share the history. It's actually fascinating because it shows at least the system got a little out of control and people pushed back based on their understanding.

 

Hon. Alice M. Batchelder:  And we have another one here. Following the lines of argument here, cannot one make an argument that non-compensatory damages, punitive, exemplary, etc., should all be put into the public fisc? Let me not turn to Mr. Savage on this one, let's turn to Ms. St. John.

 

Anna St. John:  Well, I think that there is an argument for that, but there's also an argument for direct compensatory relief. And so if the relief is in fact going to victims whether it's equitable in nature or compensatory, that makes a lot more sense. The problem comes when the relief of any sort is going to those who are not actually harmed by the underlying conduct and those who are not by statute given any right to recovery from the underlying claims.

 

Hon. Alice M. Batchelder:  And Mr. Panuccio, did you want to add anything there?

 

Jesse Panuccio:  Well, I'll just add, it's a good question and I think I understand where it's headed. The issue, though, is if you look at the Anti-Deficiency Act, for example, it says you can't do something with this money if it's not -- there's not already an appropriation. A lot of these statutes have a prevision for restitution, that is actually something that the DOJ or the other enforcement agencies are authorized to go out and get which is victim restitution.

 

      But if you don't have such a provision, then yeah, that's a serious issue to be wrestled with. If all the United States is authorized by Congress to do is seek retribution, seek penalty, then those monies, those penalties are public fisc monies and should go into the public fisc.

 

Hon. Alice M. Batchelder:  So we have, I think this might be the last text question. I keep being told if I would just scroll up or down, I would find something different, but I think this is the last one. Would the panelists -- and I cringe a little bit in doing this, but I will. Would the panelists be interested in comparing and contrasting the legalities of these settlement payments with the funding arrangement used during the Iran-Contra affair in the late 1980s? The panelists aren't old enough to remember that affair, but I'll turn it over to them anyway.

 

Jesse Panuccio:  Sounds like a question for Justin.

 

Hon. Alice M. Batchelder:  Justin is being very quiet.

 

Justin A. Savage:  I'm not sure I understand the question. It seems more like a statement buried in a question. And I guess in this question, who's Fawn Hall? Who's Oliver North? Listen, whoever asked that, reach out to me, we can talk. But no, it's not Iran-Contra. I was born in 1972, so I don't remember all that perfectly, but what I recall was there was some sale of weapons to Iran to fund the Contras in Nicaragua, and that's not what's going on. All of these cases that you've heard about from Anna and from Jesse and they don’t like them, they're in the light of day. We know about them, and judges ruled on them. But I do appreciate the historical reference. It brings back some memories from middle school.

 

Hon. Alice M. Batchelder:  And actually, I think that you did address that question, which is all the questioner asked, would you be interested in doing that? And you did.

 

Jesse Panuccio:  Judge, I'll clear one thing about that, but I think it goes back to something earlier. I think Justin and I and probably Anna have one point of agreement we've heard here today which is actually we don’t know what happens to all these funds. For maybe some of the run of the mill projects, the smaller SEPS that Justin is talking about, we do. But for the really big settlements, one of my points -- I mean, again, look at the banking settlements, the biggest of all time. We don’t know what happened to those monies. We don’t have sufficient oversight, and the public still doesn't truly know who made the decisions and how the monies were spent. That's just fact.

 

Hon. Alice M. Batchelder:  I see that we have one more raised hand which appears to be Dean Reuter.

 

Dean Reuter:  Yes, it's me again, Judge. I thought we might want to not end early, but I have two questions really. One, do we really know about the whole universe of these settlements? Are they all done through Department of Justice, or does SEC do some of these? And as a company, don’t companies painfully try to, always, at pain, try to avoid indictments. Could some of these be happening before indictment outside a court even? And that's my one question.

 

      And my second question is we haven't talked too much about the two for one provision where company might be required to pay a billion dollars or 800 million dollars, 100 million of which goes to one of these groups, so they're out of pocket 900 million instead of a billion. That seems to me to be an interesting wrinkle that hasn't been discussed a lot. But there's something, I can't really put it into words, there's something particularly illicit about that, that the defendant gets off 100 million dollars cheaper, but I'd be happy for responses on either of those.

 

Hon. Alice M. Batchelder:  Who would like to --

 

Jesse Panuccio:  Well, I'll offer --

 

Hon. Alice M. Batchelder:  Mr. Panuccio.

 

Jesse Panuccio:  I'm sorry, Your Honor. Let me offer one opening thought on that which is yeah, the two for one provision in the banking settlements or more particularly the up to 80 percent trade off that was EPA policy for SEPs for supplemental -- I'm sorry. Justin, can you hear? Can you hear me, Judge?

 

Justin A. Savage:  I can hear you, Jesse.

 

Jesse Panuccio:  Okay. I just want to make sure. So we were just talking about the two for one policy and the 80 percent -- up to 80 percent trade off policy that EPA has for SEPs. I mean, the implication of that is the government is saying if you fund these projects so that the money never touches us, we will give you a direct reduction in the penalty that we would otherwise force you to pay and that would otherwise come into the Treasury.

 

      It seems to me that that is absolutely an end around the appropriations process. It's actually giving value to the defendant and taking value away from the Treasury so that these defendants use this money in ways that these regulators want used outside of the appropriations process. I think it's a serious flaw in the argument that there's no problem because it's not touching the government's hands, the money.

 

Anna St. John:  Right. And I'll say that I think that it really brings home how there's an argument that the defendants want to settle and they're only going to pay money to causes that they can support. But when you're being offered double credit to give money to particular organizations or causes, of course you're going to accept it because it's also a tax donation. And so you're really getting a reduced fine as a company, as a defendant, and getting rid of the liability of this lawsuit. And so it's hard not to see some kind of compulsory aspect to these elements when they do have these credits.

 

      I also want to say that we know that there are abusive settlements outside the DOJ context. I mentioned an FCC settlement that we settled -- that we challenged successfully where the FCC imposed conditions that were outside of its authority. And so while it wasn't a direct monetary payment, it was an abuse where they were forcing parties subject to their authority to do things they didn't have regulatory authority to do. And so you see multiple types of abuses in settlements by administrative agencies that don't necessarily just involve direct transfer of monies.

 

Justin A. Savage:  May I briefly respond or --

 

Hon. Alice M. Batchelder:  Sure.

 

Justin A. Savage:  Okay. I think if you read the report that The Federalist Society put together, I applaud it. It acknowledges that further research is needed to undercover the details of politically motivated third-party disbursements because it cites sources like The National Review Forbes, which I enjoy, but are not original source documents. And so I think this concern animating that it's illicit, it's done purely to create value for someone. So, I mean, Jesse, you're a defense lawyer. Of course, you're going to create value for your clients. The point is why do clients like them? Why does the business community like them?

 

      I've got to say, this is a rare panel. I think the business community would have watched it and say why are they doing this? I think the business community likes this not just because there might be a credit but because it can actually benefit their community and that they don't like it because oh, their arms getting's twisted or they have a bat upside their head in a darkened room to give to [inaudible 91:16] or whoever. That's not how it works. They're doing it because they see some benefit, at least in an environmental context, some good work is done.

 

Hon. Alice M. Batchelder:  So this is just a I'm curious because I don't know question to follow up the very last one that we've been discussing and because we've got, like, a minute and a half left. So one of the big criticisms of this whole thing is that the beneficiary of these third-party payment requirements has been pretty generally one side of the political spectrum rather than the other. So my question is who, of the three of you, can anybody give me some examples that would demonstrate that that's not correct?

 

Justin A. Savage:  I'll give you some. So I've done settlements in Texas and Louisiana. I was raised in New Orleans and spend a lot of time in Texas. It's not a super blue area, right, but there have been settlements that benefitted communities in those states. And so, yeah, we mentioned a few organizations here or there, but I think for the most part -- and I applaud The Federalist Society for having this dialogue. If you were to dig in and do research, you'd see more of a range of communities and a range of organizations.

 

Hon. Alice M. Batchelder:  In the remaining minute and a half, I think, no, less than that, few seconds, does anybody have anything further on that topic that you would like to contribute?

 

Jesse Panuccio:  I'll just say thanks for a great panel and for really active and great moderating. And thanks to Anna and Justin for a good debate and Justin especially. You're a good sport. You got ganged up on two to one here and defended your position very well. So thanks to you both and thanks to you, Judge, and to The Federalist Society.

 

Hon. Alice M. Batchelder:  Well, I want to thank everybody for this. And I want to thank you for making it easy for me. I've never done one of these electronically, and I cringed at the idea. But I have survived, so I thank you all. And now, I guess the next thing is for everybody if they want to go into the lounge, and I don't remember exactly how to do that, but I assume that all the rest of you do. And with that, I think we are bringing this to a close.

 

 

3:00 p.m. - 4:30 p.m.
Religious Liberty in Transition?

Religious Liberties Practice Group

Topics: Religious Liberty • Religious Liberties
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Presidential administrations have traditionally acknowledged the important role of religious liberty and pursued executive action concerning this constitutional right. The Trump Administration used a range of executive branch tools to pursue a broad program to protect religious freedoms of individual believers as well as houses of worship and other faith-based organizations, both domestically and around the world. The Biden Administration has acknowledged the important role of faith-based organizations with its mid-February launch of a White House Office of Faith-Based and Neighborhood Partnership. Our panel will explore the approaches to religious liberty and executive action that the current and previous administrations have taken, highlighting commonalities while noting differences. 

Featuring:

  • Mrs. Allyson N. Ho, Partner, Gibson Dunn
  • Mr. Gregory M. Lipper, Partner, Clinton & Peed
  • Prof. Daniel Mach, Director, ACLU Program on Freedom of Religion and Belief; George Washington University Law School
  • Hon. Roger Severino, Senior Fellow, Ethics & Public Policy Center
  • Moderator: Hon. Edith H. Jones, U.S. Court of Appeals, Fifth Circuit

Speakers

Event Transcript

Hon. Edith Jones:  Good afternoon, everyone. My name is Edith Jones. Dean Reuter said many of you would know who I am. I will just say that on June 1st of this year, I will celebrate by 36th anniversary as a judge on the Court of Appeals of the Fifth Circuit. Every minute has been a joy so far. But this is my debut on TV, so to speak, so I hope you will bear with me as I moderate this very distinguished panel.

 

      Of note first, Federalist Society reminds me we have some very important housekeeping items. If you are in the audience here, you may send us questions through a Q&A tab on your screen in the upper right-hand corner. There’s also a chat tab for attendees to chat with each other. Please do not use the chat tab to ask questions. Finally, we will have a live Q&A session later on in the program. If you press the raise hand button when we get to the Q&A session, I will begin to address the questions that have been asked in written form.

 

      With that, I will introduce our panel, the topic of which is the religious liberty in the executive branch in this coming administration. As we know, presidential administrations have acknowledged the important role of religious institutions and pursued executive actions to enforce religious liberty. The Trump administration was perhaps one of the most active in protecting certain religious liberty rights in our modern day history, but the Biden administration has also acknowledged the important role of faith-based partnerships and launched a White House Office of Faith-Based and Neighborhood Partnership in February. This panel will explore the approaches to religious liberty and executive action that the current and previous administrations have taken, highlighting commonalities and differences.

 

      Our first speaker will be Mr. Roger Severino, a Senior Fellow at the Ethics & Public Policy Center where he directs its HHS Accountability Project. Before that, he was the longest serving director of the Office for Civil Rights in the Department of HHS. He led a team of 250 staff enforcing the nation’s civil rights, conscience and religious freedom, and health information privacy laws. Before that, he was the director of the DeVos Center for Religion and Civil Society at the Heritage Foundation. He was with the Becket Fund for Religious Liberty and is a former DOJ trial attorney.

 

      Our next speaker will be Daniel Mach. He is an adjunct professor at Georgetown University Law School focusing on constitutional law and religious liberty, but his full time job is that of director of the ACLU Program on Freedom of Religion and Belief. He leads a wide variety of religious liberty litigation, advocacy, and public education efforts nationwide and writes, teaches, and speaks on religious freedom issues. Before working at the ACLU, he was a partner at Jenner & Block, specializing in First Amendment law.

 

      Our third speaker is Greg Lipper, a partner at Clinton & Peed who litigates both trials and appeals. He has extensive experience in a very wide variety of litigation and appellate work for a diverse set of clients, including financial institutions, media and technology companies, small businesses, nonprofits, and individuals. Previously, he spent over five years as the senior litigation counsel at Americans United for Separation of Church and State. He represented plaintiffs in a class action challenge to Alabama’s ban on same-sex marriage and represented the plaintiffs in a major Supreme Court case addressing the constitutionality of prayer in government meetings. He previously practiced white-collar criminal defense, commercial litigation, and media law at Covington & Burling.

 

      Our final speaker is Ms. Allyson Ho, a partner in the Dallas office of Gibson, Dunn & Crutcher where she leads the firm’s Appellate and Constitutional Law group practice in Texas. Ms. Ho is recognized as one of the nation’s most respected appellate litigators. She is the highest-ranked Texas appellate litigator for several years running and one of the top appellate lawyers in America. She has argued and won more business cases before the U.S. Supreme Court than any Texas lawyer, but she is also engaged in a significant amount of religious liberty litigation.

 

      With that, we will begin our presentations with Mr. Severino. Take it away.

 

Roger Severino:  Thank you, Your Honor. And thank you, Dean Reuter and The Federalist Society, for inviting me to this important panel, “Religious Liberty in Transition?” I could speak with some authority on this question because I was actually on the transition team for President Donald Trump, and I was right in the middle of things for four years during President Trump’s, I think, watershed work on religious freedom. I think he was the most pro-religious freedom president we have ever had.

 

      And part of that began with policy through personnel. The people that he appointed were vetted for their religious liberty bona fides. They had to have evidence that they were actually in the trenches and actually stood up for the principles. And once they were put in, they actually delivered. We delivered from our transition plans, until those four years, almost all the initiatives that we had thought of and reached for were accomplished. And I’m going to list several of them in my time now.

 

      And we’re in another moment of transition. I fear that many of the religious liberty achievements we put in place over the last four years, and even some that preceded that were actually much more bipartisan historically, are at risk of being torn down and dismantled.

 

      Today is a beautiful day in Washington, D.C. It was a day like this in March of 2017 when President Trump hosted an event in the Rose Garden announcing his first religious liberty executive order. He had a religious liberty executive order every single year. And at that beautiful day in the Rose Garden, he actually invited the Little Sisters of the Poor to come up to stage, and he said, “The federal government is finally going to get off your back.”

 

      For those of you who probably know, but those who might not, the Little Sisters of the Poor were being required by HHS under Obamacare to provide contraceptive coverage to fellow nuns. This, of course, was a violation of the Religious Freedom Restoration Act. The Supreme Court has supported them in this view. The federal government finally backed off and issued regulations providing for exemptions for religious and moral convictions on this issue. This was one example of where the federal government took one position, switched with a change in administration that had dramatic effects on religious liberty.

 

      The Supreme Court has done fairly well in recent years. There’s been a string of victories for religious liberty plaintiffs. We don’t have that same sort of consistency at the federal level, and  we cannot simply rely on the Supreme Court as the final savior for all these disputes. The federal government has its own role to play in enforcing the First Amendment of the Constitution and federal statutes.

 

      I’ll give you a prime example of this. NIFLA v. Becerra dealt with the State of California trying to force religious groups to actually refer for abortion in the pregnancy resource centers.  Precisely what they’re trying to prevent is abortion. They were required to refer for that. This was a violation of the First Amendment in NIFLA v. Becerra. That’s what the Supreme Court held. But my office at HHS also found that California violated the Weldon Amendment, a statute that prohibits federal funds from going to states that discriminated against entities that won’t refer, pay for, or cover abortion.

 

      So we’ve seen this issue, rights of conscience, come up time and again where they were not enforced by previous administrations, and we launched a conscience and religious freedom division to cure that oversight. Religious freedom should be treated like every other civil right. We have civil rights offices in every federal agency, just about, and they enforce sex, race, national origin discrimination, but you don’t see that same focus on religious freedom. So I launched an office with career professionals that is dedicated to enforcing these laws, issued a conscience regulation protection.

 

      And now the question is, will Biden and his administration continue that tradition to say that it is not up for debate anymore whether or not religious liberty is going to be given equal respect under the law? It was NIFLA v. Becerra, and Becerra is now head of HHS. He’ll have found to be in violation of the Weldon Amendment. It cost the state $200 million in Medicaid funds, and now he’s in charge of the Medicaid fund. So I’m actually not encouraged by the developments, but we’ve established so many victories that I think it’ll be hard to reverse all of them.

 

      The American people have reached a broad consensus, especially on the questions of life and abortion, that whatever everyone thinks about the legality of the practice, you don’t force other people to engage in it or pay for it. We’re seeing the same sort of issue on sexual orientation and gender identity. Now that you have same-sex marriage expanding, are we going to force people to adopt the view that same-sex marriage is equivalent to man-woman marriage, even if it’s against their religious beliefs?

 

      We’re going to see these conflicts rise again and again. We took a stand very firmly during the Trump administration in favor of religious liberty. I hope that the Biden administration will follow suit. The initial signs, however, are not encouraging, and I hope to explain more of that in the Q&A.

     

      Now, I have the pleasure to hand it off to Dan Mach.

 

Prof. Daniel Mach:  I wanted to thank you, Roger, for handing it over, and The Federalist Society for hosting. When we’re assessing how well any administration handles religious liberty, I think it’s important to have a clear sense of what we mean when we’re talking about religious freedom. All too often these days, the notion of religious liberty gets highly politicized and narrowly defined to fuel the flames of the culture wars.

 

      But religious liberty does not belong only to a select few. It shouldn’t be a proxy for whether one believes in LGBTQ equality or a particular view about reproductive freedom. Of course, there are many people in this country with deep, sincere religious convictions in opposition to, say, same-sex marriage or abortion, but not all of the faithful lean in those directions. Many feel with equally sincere religious fervor that there’s a religious obligation to treat all people equally, regardless of sexual orientation or gender identity, or that government has no business interfering with a woman’s right to choose.

 

      Needless to say, obviously, religion is far from monolithic. There’s no one universally accepted Christian or Jewish or Muslim or Buddhist approach to profound theological questions. And many people, indeed, a growing number in the U.S., don’t self-identify as religious at all.

 

      And when talking about religious freedom, we shouldn’t lose sight of one of its core components, the separation of religion and government. As our founders knew well, religion thrives best when the government stays out of it and doesn’t play favorites or tip the scales to encourage or promote particular religious viewpoints over others. Both religion clauses in the First Amendment, Free Exercise Clause and the Establishment Clause, advance the cause of religious liberty and work hand in hand to safeguard our first freedom.

 

      So against this backdrop, how has the executive branch been doing? I think Greg will be discussing some of the regulations and enforcement mechanisms that Roger just mentioned, so I’d like to focus on another contrast between the previous administration and the current one. And I say the current one -- obviously, we’re only a few months in, so who knows what will happen?

 

      The thing I want to focus on here is the Trump administration’s appalling treatment and vilification of an entire faith. This was among the most disgraceful displays of anti-religious bigotry by a modern U.S. administration. And I know this story is well known, but I just want to run through a bit of the lowlights. In the weeks and months leading up to the 2016 election, Trump expressly attacked and ridiculed Islam and Muslims. He said Islam hates us, he said we’re having problems with Muslims coming into the country, and then he called for a total and complete shutdown of Muslims entering into the United States.

 

      And then one week into his presidency, he made good on that promise with an executive order that targeted Muslim majority countries with severe immigration restrictions. He freely admitted that countries were just used as a stand-in for religion in his ban, and he bragged on national Christian Broadcasting Network that the order was designed to favor Christian immigrants over Muslim immigrants. And sure enough, almost all of the hundreds of millions of people affected by the initial version of the ban were Muslim.

 

      Other iterations of the Muslim ban followed the same basic game plan, and Trump continued to disparage Muslims and their faith, including—just a few examples—he promoted a fake story involving general purging and a supposed massacre of Muslims with bullets dipped in pig’s blood. He retweeted blatantly anti-Muslim videos, and then his administration expressly connected those tweets to this ban.

 

      Now, as most of us know, the Supreme Court eventually let the president get away with it, but only because of the massive deference that it gave him in this context, which was the intersection of immigration and national security, and not because there was any reasonable or innocent spin to what he had said. In fact, neither of the government lawyers in the case defending this executive order nor the majority of the Court that voted to uphold this executive order even tried to argue against the mountain of evidence of religious animus or to suggest that Trump hadn’t displayed any hostility toward Muslims. And it was just plain as day. It was there, just as when then President Trump later retweeted a doctored picture of Nancy Pelosi and Chuck Schumer in a hijab and a turban.

 

      Now, Trump certainly wasn’t the only one in his administration displaying such rampant religious animus. From senior advisors who claim that the West is at war with Islam to high-ranking officials calling Islam the most oppressive, violent religion, declaring that Islam is a vicious cancer that must be excised, and that fear of Muslims is rational, or calling Islam a barbaric cult, anti-Muslim bigotry was far too common in the Trump administration.

 

      And just take a moment. Can you imagine if any administration, any other president, had said a fraction of those things about some other faith, would there even be a question about a supposed commitment to religious liberty? Fortunately, on his first day in office, President Biden rescinded Trump’s Muslim ban, taking a first step toward undoing the significant damage done to our international reputation and our basic values.

 

      Now, as all of this makes clear, the narrative of the Trump administration as a consistent champion of religious liberty for all just doesn’t hold up. But it’s hardly the only example. Early in the Trump presidency, then Attorney General Sessions issued a memo telling DOJ attorneys to accommodate religious exercise to the greatest extent possible under law. Yet, it aggressively prosecuted members of a faith-based humanitarian organization for leaving food and water in the southern Arizona desert so migrants wouldn’t die. And this is even in the face of express RFRA defenses, Religious Freedom Restoration Act defenses, by these criminal defendants.

 

      The Trump administration also rushed to resume federal executions for the first time in 17 years, during a deadly pandemic, executing 13 individuals in the span of 6 months. Now, not only is that practice, as we know, vehemently opposed by many faith traditions, but the administration also resisted RFRA claims by clergy seeking a delay in light of COVID concerns because they simply wanted to be present at the executions for spiritual support and comfort. Again, the Biden administration has signaled its intention to cease the practice of federal executions, though we’ll see what happens on that front.

 

      And one quick final contrast between the two administrations, at least thus far. The Trump administration showed a clear disregard and, I think, even contempt for the separation of church and state. This is both in court cases supporting giant government displays of particular religious symbols and supporting compelled taxpayer funding of religion, encouraging public schools to teach biblical doctrine, and even some officials railing against atheists and others who just simply don’t share a particular Christian viewpoint and accusing them of being immoral and plotting the organized destruction of religion.

 

      So to sum up, it’s too early to tell, but the initial signs from the Biden administration, I think they indicate that the new executive branch will take a more inclusive approach to religious liberty. That’s probably a good segue for Greg, so I’ll turn it over to him now.

 

Gregory Lipper:  Thank you, Dan. And I think it’s striking to listen to what Roger had to say and what Dan had to say and to hear all the examples of anti-Muslim bigotry in action. Dan didn’t mention, but there is plenty of antisemitism at various positions in the administration, and Trump’s campaign was endorsed by Nazi parties and the Klan.

 

      And to digest all of that and say that Trump was the most pro-religious liberty president we’ve ever had, and without even addressing any of those other things, I think it does reflect an unexamined assumption in Roger’s remarks that religious liberty, I think, in his view, and not just to single him out, and the views of most of the relevant appointees in the Trump administration, that religious liberty meant religious liberty for certain conservative Christians at the expense of anyone else and at the expense of most other faiths as well.

 

      And we, in theory, live in a constitutional democracy, not a Christian theocracy. And so that approach, which was pursued quite aggressively—and there I very much agree with Roger that the Trump administration moved with great speed and efficiency and success—leaves a lot of work to do to fix things. And I think the Biden administration is starting to do that, but I don't know that he will undo all of what happened during the Trump administration.

 

      To take a bit of a step back, I think one of the reasons why the Trump administration was able to get most if not quite all of what it wanted accomplished was that there was a lot of play in the joints here because you were dealing with old statutes that were somewhat broad and somewhat flexible. And so a lot of the relevant protections and laws were regulatory or executive orders.

 

      And if you squint at my bookshelf, you can see I’m a bit of an obsessive of biographer Robert Caro. And in a book he wrote, his slim volume that he wrote in 2019—he was talking about Lyndon Johnson, but I think it applies—he has a quote, “The books of law, that’s what Johnson felt mattered. An executive order, as we’re all learning now, to our sorrow, is just a piece of paper and can be repealed by another piece of paper.”

 

      And you could make a similar point about regulations. You can’t repeal it quite as quickly or easily, but certainly much more easily than you can repeal legislation. And because a lot of the relevant inflection points were regulatory and within the realm of the agencies, that gave the Trump administration and his appointees a lot of latitude to move aggressively, and aggressively they did.

 

      Another thing I do agree with what Roger said was looking at the personnel because I think it was very clear from the start that from the appointments that the Trump administration made to key positions, and key positions as to the scope and intersection of religious liberty and other rights, what direction this administration is going to be headed. There were no mushy moderates in the Trump administration in the relevant positions.

 

      Roger, I think, probably most people know his background, but he was very much a critic of treating, for instance, sexual orientation or gender identity as a protected class. I think I can say that as an understatement.

 

      Matthew Bowman, who was initially Deputy General Counsel at the Department of Health and Human Services and then went to HHS’s Office of Civil Rights, had been a litigator with the Alliance Defending Freedom, had been very active in challenging the contraceptive coverage regulations, the director of the Trump administration’s Center for Faith-Based and Community Partnerships, with Shannon Royce from the Family Research Counsel and then the Southern Baptist Ethics and Religious Liberty Commission. Charmaine Yoest, former head of Americans United for Life, was the HHS top spokesman. Outside of HHS, Betsy DeVos was the DeVos Center at the Heritage Foundation that Roger was the head of, Betsy DeVos at Department of Education, White House domestic policy advisors.

 

      And one final point about the Department of Justice. I think we know about Sessions and Barr, but Trump’s Attorney General was Noel Francisco. One of the last cases he had argued when he was in private practice before taking that position was in support of a challenge not just on contraceptive coverage regulations from the Affordable Care Act but even to the accommodation that was created for nonprofit organizations.

 

      So this was a group of people in key positions in a position to move aggressively who very much had a view of religious liberty that put conservative Christian religious objections first and foremost. And then the resulting policies reflected that.

 

      I could probably go on for an hour about these things, but the music stands ready to play us off, I believe, so I will just cover a couple of highlights. In February 2017, the Trump administration withdrew the Obama administration’s guidance that would have allowed transgender secondary school students to use bathrooms that corresponded to their gender identity.

 

      There was a religious liberty guidance that Roger mentioned. The Department of Health and Human Services repealed nondiscrimination provisions in the Affordable Care Act that had protected from discrimination not only transgender people but also protected people from discrimination on the basis of having obtained or sought services related to pregnancy, childbirth, or abortion.

 

      Department of Labor guidance that would have allowed basically any federal contractors to discriminate for religious reasons on the basis of sex, sexual orientation, gender identity, or even religion, just hiring -- being able to say, “I’m not hiring you because you’re Jewish or Muslim.” And federal contractors employ a lot of people, potentially up to a fourth of the workforce. So we’re talking everything from Meals on Wheels to foster care agencies to recipients of Head Start grants.

 

      Not only the repeal, or at least the reinforcement and broadening of the exemptions to the contraceptive coverage regulations, not only extending them to religious objectors but to people with moral objections, and for the first time dropping any pretense of making efforts to provide alternative arrangements for women who lost contraceptive coverage as a result.

 

      And then, finally, we saw this in the positions in the courts. There was often sort of a little criminology when the Trump DOJ would file an appellate or Supreme Court brief in a hotly contested case because you look at the brief and see how many non-political appointees are there? Is the EEOC on the brief in an employment case? And you saw briefs that were filed in ways that not only reflected policy choices but policy choices that seemed to undermine the scope and application of bedrock federal statutes, for instance, in cases involving Title VII or in other discrimination cases that implicated federal public accommodation laws.

 

      And so, yes, I think the Trump administration moved aggressively. They hit -- I would say the Supreme Court’s decision in Bostock which held that Title VII sex discrimination prohibition extends to sexual orientation and gender identity I think is a bit of a roadblock for their efforts, especially if it is extended to other statutes like Title IX. But on the whole, this was fast moving. Their arms didn’t need to be twisted as the Obama -- I think people on my side of things felt like we were often having to twist the arms of the Obama administration to make changes that ended up happening more slowly and less fully than we thought. And I think that people who share Roger’s view did not have that problem with the Trump administration.

 

      In terms of what’s going to happen on the Biden administration, I think the prognosis is encouraging but mixed. I think we do not have the -- we are not getting the Democratic equivalent of the Trump administration’s approach to these issues. Xavier Becerra is a, I think, encouraging choice at HHS. We’ll, perhaps during the discussion, get into a bit more of the details as to what his case has involved. I’m not sure I quite agree with how Roger characterized him, but I think he has certainly been a major supporter of reproductive rights, in contrast to the aggressively anti-transgender policy initiatives coming out of the Trump administration.

 

      It was notable that Rachel Levine, who was appointed and confirmed as an assistant secretary at HHS, becoming the first openly transgender person to hold a Senate confirmed office, and I think that isn’t a policy that -- that doesn’t directly change policy, but I think it’s important, given the vulnerability of especially transgender youth and the force that they were met from the past administration.

 

      Department of Justice, it’s a little unclear. Merrick Garland is more of a prosecutor’s prosecutor. But Vanita Gupta has a civil rights background, and --

 

Hon. Edith Jones:  -- Mr. Lipper, I’m sorry. I’ve given you at least a minute and a half extra. Thank you, though.

 

Gregory Lipper:  Yes, thank you. If I can just say one more sentence, and I think we’ve had several of the regulatory changes made by the Trump administration have been repealed or withdrawn, but several others have not. And I think that is a mixed record right now, and I’m looking forward to discussing what remains and what has been taken off the books.

 

      And with that, I will hand it over to Allyson.

 

Allyson Ho:  Thank you, Greg. If I could take a moment of personal privilege, I want to thank The Federalist Society for hosting this important conference and for the opportunity to participate in it. I’ve been active in The Federalist Society since I was a 1L in law school. It’s been one of the most rewarding parts of my career as a lawyer, and its work of fostering debate on the most significant legal issues of our day has really never been more important. So thank you again for the opportunity to participate in today’s conference.

 

      I’m on this panel to talk about something else very near and dear to my heart, and that’s religious liberty. I’d like to make three points today, two briefly and one more expansively. First, I’d like to underscore what should be, I hope, an obvious point, and that’s that religious liberty isn’t a benefit that the executive branch can dispense or withhold on its whim. It’s a foundational right often described as our first freedom. And Dan, I was heartened to hear you refer to it as that.

 

      That’s the default rule in our constitutional republic. “Congress shall make no law,” the First Amendment says, “respecting an establishment of religion or prohibiting the free exercise of the same.” So the question for us today is really what role will or should the executive branch play in enforcing or vindicating that fundamental right?

     

      Second, if the mantra in real estate is location, location, location, the mantra in executive branch enforcement is priority, priority, priority. As a practical matter, especially given the immense scope and reach of the federal government today, if something isn’t a priority for the executive branch, it’s highly unlikely to happen, even if it’s something that the administration deems a good or worthy thing. And that’s especially true when it comes to religious liberty, which touches virtually every department or component in the executive branch, as Roger was touching on. But is it the primary responsibility of any?

 

      Third, from the practical perspective of a litigator in this area, it’s difficult to overstate the immense difference it makes in matters large and small when religious liberty is an executive branch priority. We tend to focus, rightly so, on the things that grab headlines, the regulations, the departmental working groups, the executive orders, the departmental working groups, and putting a premium and priority on religious liberty abroad.

 

      Without diminishing the importance of any of those things, I’d like to focus very briefly on one of the smaller and perhaps underappreciated but still very impactful way an executive branch focused on making religious liberty a priority can make a difference in the courts. And that way is the Department of Justice’s filing of statements of interest in cases at all levels of the judiciary, including in cases that implicate religious liberty.

 

      For example, in May of 2020, the department filed a statement of interest in a Colorado federal court supporting the First Amendment religious freedom claims of a church and its pastor. The statement emerged from a directive given by Attorney General Barr that the department should review state and local policies to ensure that civil liberties, including religious liberty, are protected during the COVID-19 pandemic.

 

      “We appreciate the challenging position that the state and the governor face in trying to balance public safety with personal and religious freedoms,” wrote the U.S. Attorney for the District of Colorado. “But when government restrictions cross the line into unconstitutional violations of religious liberty,” he went on, “it is my duty and that of the Department of Justice to engage and protect those interests.”

 

      In its statement of interest, the department explained that because Colorado appeared to be treating similarly situated non-religious activity, such as in-person dining in restaurants, better than religious activity, including in houses of worship, Colorado’s actions may constitute a violation of the church’s constitutional right to the free exercise of religion.

 

      The department filed statements in similar cases across the country from Washington State to New York seeking to protect religious liberty during the pandemic. Those statements of interest didn’t always or even usually make headlines, but I’m sure that the parties seeking to vindicate their religious liberty rights in those cases were very grateful for the assist from the department, if only to underscore the larger point that religious liberty isn’t a luxury that we enjoy during good times, but a right worthy of protection and vindication even or especially during times of crisis.

 

      I look forward to the discussion with my fellow panelists and questions from the audience. Thank you.

 

Hon. Edith Jones:  Okay. It’s customary at times like this for us to go briefly through the roster of speakers and see if any of you have comments on what the other speakers have said. I think we agreed to go about two to three minutes each, and we’ll start with Roger.

 

Roger Severino:  Well, where to begin? My name was invoked, so I’ll answer about some of these very specific things. But some of the flavor of the arguments from Dan and Greg amount to “Orange Man Bad.” And we’ve seen this time and again that it all comes down to what Trump may or may not have tweeted.

 

      The Supreme Court on the travel ban case, as Dan noted, ruled in favor of the Trump administration, ultimately. And if you see what the actual policies that were implemented by the Trump administration, they were always about religious freedom for everybody. There’s not a single action that you could point to in any regulation we did that said, “This is for Christians only,” or even conservative Christians, as has been bandied about.

 

      There were religious freedom orders from the president every single year which were neutral because religious liberty is a right for everybody. There was one specific religious liberty order, and that was an antisemitism religious liberty order, which kind of seems to upset the narrative that Dan and Greg are trying to portray. It doesn’t fit that story so neatly, does it? However, that does show that were the need is greatest, that’s where the administration focused its attention.

 

      On the issues of conscience, those are federal statutes that had not been enforced for years, passed on a bipartisan basis by presidents of both parties. We were finally actually enforcing those statutes. That is the main difference between the Trump administration, Obama, and what seems to be the Biden administration.

 

      In terms of what we’re doing and why, look at the actual policies. I’ll go back to this. Look at the actual policies. We did the outreach to all the groups to get all their input. We followed the rules of rulemaking. Contrast that to the Biden administration, which announced just last week that they were going to impose a sexual orientation and gender identity policy without going through rulemaking, no public comments.

 

      We went through about 200,000 comments, read every single one, responded to all of them, and actually addressed the religious liberty concerns. Are hospitals going to be required to perform sex reassignment surgeries on minors if it’s against their religious beliefs? We answered that very, very clearly.

 

      The Biden administration is saying, “Well, we’re not going to go through the rulemaking process. We’re going to respect RFRA,” whatever that means. At the same time, President Biden wants to sign the Equality Act that would actually erase RFRA from civil rights protections. So we know where they’re going on this. Their view of religious liberty is one that is something that is purely private, that it should be done on Saturday or Sunday or Friday, not during the workweek, and that’s what the Trump administration pushed back against. Religious liberty for all religions.

 

Hon. Edith Jones:  Dan?

 

Prof. Daniel Mach:  Thanks. I guess we’re keeping the same order. Yeah, just a few points in response to that. Well, first of all, I agree with Allyson that religious liberty is not a benefit that can be dispensed or eliminated by the executive branch. I do think it is a crucial, fundamental right. And I think where we disagree may be on the extent and limits of that right and how much it can be invoked in ways that may intrude on the rights of others. But I totally agree that it is a crucial right and one that’s not left to the whims of the executive branch.

 

      I also -- well, to Roger’s point, it’s interesting that all of a sudden, words don’t matter. Some policies were announced in tweets. It’s not that tweets are irrelevant. And it’s not just tweets. Its’s  statements to rile folks up to lead them toward oftentimes harmful action, and those things have consequences. And when you attack an entire faith -- again, I return to the point, can you imagine if another president attacked one single faith in a way that Trump and the Trump administration did for Muslims, what sort of uproar we would see. It’s an easy question to answer.

 

      And as for the executive actions, the actual regulations and rules, I’ll just point out that many of those were challenged, not only on their substance but also as a violation of the APA, so on procedural grounds, because proper procedures in so many situations were not followed.

 

      I’ll turn it over to Greg.

 

Gregory Lipper:  So I think -- I don't know that this should bear repeating, but I really think it needs to bear repeating again that religious liberty is not just religious liberty for people who object to marriage equality or LGBT rights or abortion. And to say, well, obviously, we all have to agree that that religious liberty comes first, yes, religious liberty is a bedrock constitutional right, but it’s not self-executing. And we live in a pluralistic country with people with a lot of different religious beliefs and a lot of different other interests, and everyone has the right to live their lives. And so to say, well, obviously, he put religious liberty first, you can say that only if you define religious liberty very narrowly.

 

      And it was interesting that when we got to the Muslim ban, Roger was like, “Oh, don’t worry about the tweets, and look at the third iteration really closely.” When it comes to the contraceptive coverage regulations -- and the Little Sisters of the Poor had an exemption because they were a church plan, and in any event, had to fill out a form that would enable a third party to provide the coverage, that nuanced approach goes away, and it’s “Obama administration is forcing the nuns to hand out birth control.” When it’s Trump, says he want to ban an entire religion from entering the country, then it’s like, “Oh, don’t worry about the orange guy.”

 

      So I think we can’t have it both ways. If we’re going to use hyperbole to describe LGBT rights protections or reproductive rights protections, then we can’t get all exonerative when it comes to things like the Muslim ban.

 

      The final thing is I want to talk about antisemitism for a moment also because one of the first things that happened in the Trump administration, and this was January or early February of 2017, which was that the State Department issued a Holocaust memorial statement that didn’t mention Jews. And it turned out that the White House had blocked the State Department from issuing a statement that had mentioned Jews. And again, and regulations that allow federal contractors to discriminate on the basis of religions. It can affect Jews, and it can affect Muslims. It can affect Catholics or other Christians.

 

      So I guess I’ll end where I started, that it does little work to say that Trump stood for religious liberty. It’s in the First Amendment. It trumps everything. Really, the question is what is religious liberty? Who is protected, and who is not? And if, as Roger says, you look at the policies, all of the policies, it was a low watermark for -- the Trump administration was a low watermark for religious liberty. And the Biden administration is starting to correct it but still has a long way to go.

 

Allyson Ho:  I feel like we’ve -- I’m going to pull out my appellate litigator reply card and focus less on what we have heard and what I don’t think we have heard from Dan and Greg. We've heard a lot of criticism about how the previous administration treated, prioritized, or handled religious liberty, but I don't know that we’ve heard as much about what they would like to see other than maybe the answer is just doing the opposite of everything that the Trump administration did.

 

      But I’d actually be very interested in Dan and Greg’s views on -- if they don’t like anything—and it sounds like they didn’t—the Trump administration did, although I don’t want to put words in their mouths. Maybe there are things that they would highlight that they agreed with. What would you like to see happen other than just dismantling everything that came before? You’ve both expressed a commitment to and an appreciation of religious liberty. What’s your view of what positive steps could we envision for religious liberty, our first freedom, under a Biden administration?

 

Gregory Lipper:  I’d be happy to address that if Judge Jones authorizes it.

 

Hon. Edith Jones:  Well, yeah, if you’ll -- yes. Try to be pithy.

 

Gregory Lipper:  I will do my best. I think a couple of things. I think one is some of these are simply fixing what happened before, and then I think some of it is moving in new directions. I think the first thing is reiterating the pluralistic belief in everyone’s religious freedom to believe what they want or not believe what they want, and so things like eliminating explicit or tacit restrictions on immigration based on people’s faith. You can say it’s just opposition to what came before, but it was a major overhang, and so getting rid of things like that, I think, is important.

 

      Extending the civil rights laws as consistent with Supreme Court precedent in Bostock so that sex discrimination is properly understood to include discrimination on the basis of sex and sexual orientation and gender identity, I think, is another important factor.

 

      And again, and I think Dan -- I don’t want to speak for Dan, but I think he’ll say the same thing. I think both Dan and I very much support religious accommodations and religious exemptions in  a wide range of areas, but I think the overriding principle and I think the unavoidable principle in a pluralistic democracy is that exemptions that cause real harm to others are much harder to justify.

 

      And I think resetting and restoring religious accommodation regimes so that if someone needs -- I just finished representing, for instance, a prisoner who needed fast replacement meals for his religious fasts in prison. That is a pain for the government, yes, maybe costs them a little extra money, but ultimately doesn’t really harm anyone else and allows the prisoner to practice his faith.

 

      And I know Americans United, and I know ACLU works on a lot of cases like that, getting back to the nuts and bolts of religious liberty rather than the regime in which religious liberty is focused and in which the priorities are on religious liberty as a basis to deny other people their own rights, I think, is essential. And I think it’s also critical for the long-term popular support for religious liberty. One of the reasons that RFRA support is diminishing is because it --

 

Hon. Edith Jones:  -- Okay, Mr. Lipper. Okay, you’re going -- yes. You’re very expansive.

 

Gregory Lipper:  [Laughter] That’s why they pay me.

 

Hon. Edith Jones:  And this is -- I don’t really object to that, but I want to give everybody a fair chance.

 

      But I do -- since Allyson and Roger haven’t mentioned this, I feel constrained to point out that what you keep calling the Muslim ban was a ban on immigration from only a few Muslim countries in the world heavily identified with terrorists, and that many Muslim countries representing at least, if I recall correctly, three-quarters of the entire several billion population of Muslims in the world were not banned from immigrating.

 

      I also think that anyone daring to call this administration anti-Semite has to respond to the recent activity of many in the Democrat party who are supporting Palestinians throwing thousands of rockets into the population of Israel.

 

      And a former law clerk of mine in particular would take issue with this theory about the Trump administration and antisemitism. Her name is Sigal Mandelker. She was the head of antiterrorism finance in the Treasury Department. She gave a commemorative speech on National Holocaust Memorial Day about her parents’ close escape from the ovens when they were but infants.

 

      And of course, this president is the first one in American history to be the father-in-law of Orthodox Jews. This idea doesn’t bear further analysis.

 

      Now, I do think that the questions about gender identity and so on can be pursued among the panel. I think those are very relevant.

 

      I will move to one question that we’ve been asked. This is a fellow -- oops, if I didn’t lose it. I need to scroll down there. He said he fought with Iraqi troops in that war, and he was just wondering what Mr. Mach and Mr. Lipper would think about importing notions of polygamy or applying Sharia law domestically in the United States as a matter of religious liberty. If one of you would -- does one of you have an answer to that?

 

Gregory Lipper:  I’m not sure Sharia law is on the table, much less that any individual would be able to, as a matter of religious liberty. I do think the question implicates the importance of separating church and state and the importance of not allowing any one religious group to have their particular beliefs trump all other rights of people of other religions and people of no religion.

 

      If you’re concerned with quote, unquote, “Sharia law,” which I know we had these Sharia law bans a few years ago that were all struck down and were not responding to anything actual, but if you say -- if your concern is allowing a single religion’s doctrine to control the actual civil law, then you should support robust separation of church and state, and you should support religious freedom that recognizes pluralism and doesn’t favor one particular group’s belief.

 

      So I guess that’s what I would say. I don’t support Sharia law, nor do I support any faith’s law trumping the secular constitutional order that we have.

 

Roger Severino:  Judge, may I respond to that?

 

Hon. Edith Jones:  Sure.

 

Roger Severino:  The broader point I think Greg and Dan are making is one that treats religion a bit like second-hand smoke. You can do it in private, but if it has any negative impact on anybody else, then it has to give way because that would be an imposition of somebody’s religious beliefs, and that cannot possibly be allowed in a pluralistic society. That’s a very cramped and narrow view, and it squelches the grand diversity of human expression, which includes the religious impulse. You are free to believe and not believe. You are free to express and live it.

 

      So how does this actually play out in practice? We’ve had all sorts of cases we’ve been talking about where the Trump administration actually won. So the position that Dan and Greg have been portraying lost at the Supreme Court. It has not been an imposition of religion.

 

      And on the question of imposition of third-party costs, we don’t look at it in that frame for other civil rights. Look at the Americans with Disabilities Act. It required companies to retrofit housing, public accommodations, billions of dollars. That’s a real imposition to build ramps and cutouts and Braille. Everywhere in this country, everybody had to shoulder a burden. But religion, you cannot? It’s somehow verboten because it’s a disfavored civil right, perhaps? No. It’s the first civil right that’s enshrined in our Constitution. We have to get away from this third-party burden conception because that is really something about civil rights that is consistent with all of them.

 

Prof. Daniel Mach:  Judge, can I respond briefly?

 

Hon. Edith Jones:  Certainly.

 

Prof. Daniel Mach:  Thanks. So lest my position be crafted out of whole cloth by someone else, let me just be clear. For over a century at the ACLU, we have been defending the right to religious practice and expression, whether it’s exercised quietly and privately or loudly and publicly. And there are so many examples. In public schools, we’ve opposed bans on Catholic rosaries, argued for students’ right to sing religious songs in after school talent shows. We’ve represented synagogues, churches, and mosques, Christian street preachers, and the list is quite long. And so that’s just a misconception.

 

      And just one small thing on what Roger just said. It sounded like he said the Supreme Court ruled in his favor; therefore, that must be the correct result. If that were true, then surely he should be embracing Roe v. Wade, which he is not. So it can’t be the case that just because any given Supreme Court says so that that means that is the absolute objective right answer. We all disagree with some amount of judicial decisions out there.

 

Roger Severino:  I agree.

 

Hon. Edith Jones:  Okay, let me pose another question. And the last -- in the aftermath, this may not -- I wish the people asking questions would try to model on the -- lest the panelists be shocked or surprised, model it on the topic here, which is this administration’s approach to religious liberty and the previous administration. Some of the questions are a little bit more general in nature. But there’s an interesting one about whether anyone thinks that in the wake of the Espinoza v. Montana case last year, the Blaine Amendments nationwide are going to be modified. Does anyone have an opinion about that?

 

Allyson Ho:  I’ll take that one, Judge Jones. I certainly hope so. I think that the history of Blaine Amendments, of anti-Catholic bigotry in this country is certainly of the more shameful chapters in our nation’s history, and I think it shows through a cautionary tale the tremendous importance of religious liberties. I certainly hope that the message that the Supreme Court sent last term against these remaining vestiges of really offensive anti-Catholic bigotry will be seen for what they are and demolished.

 

Hon. Edith Jones:  Does anyone have an opinion as to how this administration would react if a case actually started being litigated again? Mr. Mach or Mr. Lipper?

 

Prof. Daniel Mach:  Meaning a case on this particular issue?

 

Hon. Edith Jones:  Well, something -- yeah, right.

 

Prof. Daniel Mach:  On the funding question?

 

Hon. Edith Jones:  Right.

 

Prof. Daniel Mach:  Yeah. So obviously, we could debate so many of these individual points. We could take an hour and a half for any of them. I disagree with Ms. Ho’s historical analysis. There’s certainly some history of disgraceful anti-Catholic bigotry in this country, but it is not the case that all of these no way provisions, which are in place in over three-quarters of the states, derive from that history, and the majority of the Court has never said that they do.

 

      Right now, where we are after that Espinoza decision, there is still room for states to say we are not going to fund religious activity. The opinion seemed pretty clear that the states can’t—and I assume this applies since the federal constitution applies to the federal government as well—can’t say we are not funding an entity simply because of their religious identity. That seems to have been answered by these cases. But what is still open is the ability of governments from the federal on down to say we are not going to fund religious activity. And in fact, I’d argue that the Establishment Clause still prohibits the funding of such activity.

 

Hon. Edith Jones:  Well, and from that would you suspect that this administration would file an amicus brief if such a -- when such a case comes up in favor of the state, or would it depend on a state-by-state basis and whether the provision in question historically had an anti-Catholic animus?

 

Prof. Daniel Mach:  I think it would depend on the situation. I would hope that the current administration, just like I would hope the previous administration would, with less optimism back then, but I would hope the current administration would still embrace the idea that the First Amendment’s Establishment Clause allows states, and indeed requires states, not to fund religious activity with direct funding. Whether they’re going to do it, that’s up for grabs. I don't know if they’re going to act more cautiously, given the current landscape.

 

Gregory Lipper:  Yeah, and if I could add just one point to that. In the Obama administration, early in the Obama administration, there was a case -- it was an Establishment Clause challenge to a voucher-like tuition tax cut program in Arizona. And the Obama administration actually filed in defense of that program, I think sort of disappointing a lot of people, myself included, who thought that it raised serious Establishment Clause concerns. And so I think on questions like that, the jury is still out. And I, for one -- I’m always less optimistic about how these things are going to turn out, but I think it’s less clear how questions like that are going to play out under this administration.

 

Roger Severino:  And if I may add, Ramos v. Louisiana, which came out in 2020, dealt with whether or not Louisiana and Oregon had non-unanimous juries which were tainted by a racist history. They wanted to be able to veto, say, an African American who was on a jury. And several justices said that tainted history is relevant today because the effects of discrimination are ongoing, even if so much time has passed or it has been readopted. If they didn’t explicitly reject the bias of the past, it is suspect. Same with the Blaine Amendments. If the states do not explicitly reject the undisputed anti-Catholic bigotry of the 1850s, ’60s, ’70s, and ’80s, then they are suspect under the Constitution.

 

Gregory Lipper:  And I think Roger reinforces why the Supreme Court decision in the Muslim ban case was so disappointing because you had a very, albeit short, very intensive history of clear anti-Muslim animus and statements that seemed very clearly to be animating the policy and its various iterations. And in that situation, it seemed to not be taken into account.

 

      And so I do think whatever approach one chooses, I think it really is necessary both in fact and for appearance’s sake to treat history, be it racist history, anti-Muslim history, anti-Catholic history, treat it consistently and not treat a history of discrimination against one group as more important than a history of discrimination against another religious group, for instance.

 

Hon. Edith Jones:  Okay. We have some good questions here. One of them is what you think is the future of the Lemon test. And again, I’d say, given that at one point, I think seven members of the then Supreme Court had criticized the Lemon test, what would this administration do if and when a case presents itself on the Establishment Clause invoking the Lemon test? Who wants to start off? Dan? You don’t have to.

 

Prof. Daniel Mach:  No, I’m happy to. It’s been under fire for a while, but it’s still holding on by its fingertips. So it’s unclear where the Court is going to go. Obviously, as you mentioned, Your Honor, there have been a number of signals from current justices suggesting that they really don’t like it. But I don't know.

 

      One of the big problems with replacing it is what replaces it? And each time something is proposed, I think the Court has struggled with great difficulty to unify, or at least five of them, to unify around what’s the new test? And a lot of things have been proposed, a historical test, coercion, endorsements floating around, or has. So I think that’s one of the big open questions. If Lemon goes, what do we have after it?

 

Hon. Edith Jones:  Anyone else? Okay. The next question is what’s going to be the status of the contraception mandate, and put more bluntly, is this administration going to sue the Little Sisters again?

 

Roger Severino:  Well, they can’t, specifically Little Sisters, because there is an actual injunction. However, the Little Sisters are at risk because the new mandate might contradict with the old one, depending on what courts say. So it’s very, very tricky what all the contours are going to be. I will say this, that the Biden administration has not given any good signs that they want to protect groups like the Little Sisters of the Poor.

 

      On the question of abortion, it’s been about coercion. It’s being led by Xavier Becerra, who could not identify a single abortion restriction he would support during his confirmation hearing, even partial-birth abortion. He couldn’t even acknowledge that partial-birth abortion is actually still illegal in his most recent hearing, and he is the head of HHS now. So I would imagine that he would move aggressively any way he can against the Little Sisters because he, in fact, filed a brief in a case where they intervened in the Ninth Circuit. I would presume that would continue, especially on the regulatory side.

 

      Are they going to get rid of the contraceptive mandate exception and exclusion? I hope not. If they try to do it, it’s really just to score political points to make sure that people who have to toe the new line, which is ideologically driven, that if you do not buckle, then you will face consequences. Women can receive contraceptives easily. They have the Title X program. Why are you going to force nuns to participate in that? It doesn’t make sense, but it seems like the Biden administration is going in that direction.

 

Gregory Lipper:  I have to say, the notion that the Little Sisters of the Poor, first of all, were ever sued—they weren’t, they brought their own challenge—and second, that they ever faced any risk of enforcement of any contraceptive regulation is a -- it’s actually one of the more glorious fictions of the entire Affordable Care Act history, and there have been many.

 

      The Little Sisters have been protected by the Church Plan Exemption during the entire time. And so I know it’s a very -- I know they make for a very sympathetic group. I know it’s a nice talking point. But it is hard to take seriously this “they’re forcing the Little Sisters to provide contraception” when A) they have a fully exempt plan, and B) even if they didn’t, all they would have to do is sign a piece of paper that would enable a third party to provide it.

 

      More generally, all that said, I think we don’t know yet. I think my general rule of thumb is that the contraceptive coverage litigation is going to go on past my retirement and past my death because it never seems to end. And so I think that -- take the over on how long it’s going to go on. The Biden administration has not said what it is going to do yet, and I think we just don’t know what they’re going to do. And there’s a lot of different layers and a lot of different groups involved.

 

      I think more broadly, though, the contraceptive coverage regulations, which is one aspect of the broader point, Roger said, “Are we treating religion like second-hand smoke?” And no, we’re not. But I think we have to recognize that people -- there’s a lot of different realms. There’s the private realm, there’s the public realm, there’s the commercial realm, there’s the going to the doctor realm, and that people absolutely need to be able to practice their faith. At the same time, people need to be able to get medical care, get employment benefits.

 

Hon. Edith Jones:  Well, Mr. Mach, why can’t a baker refuse to bake a wedding cake for a same-sex couple when there’s another baker down the street to whom he refers the patrons?

 

Prof. Daniel Mach:  The reason why we shouldn’t allow that is the same reason why we shouldn’t allow someone to turn away someone because of their race or their faith simply because -- you can’t eat at my lunch counter, but go down the street and you can eat at that lunch counter.

 

Hon. Edith Jones:  Well, let me ask you further, then, Dan, what do you do when one item of freedom, which you say is transgender, let us say, conflicts with another item of freedom, which is women’s rights, girls’ rights. And so how do you resolve the conflict that is being waged all over the country right now about transgender participation in girls’ sports because don’t the girls have a right to compete with people who are biologically equipped with the same musculature?

 

Prof. Daniel Mach:  So that is obviously a separate question, and my answer on that is trans girls are girls and should be allowed to compete with other girls.

 

Hon. Edith Jones:  Well, except that you know that -- do you know any so-called trans girls that have been failures in sports competition?

 

Prof. Daniel Mach:  I’m sorry, I didn’t catch the question.

 

Hon. Edith Jones:  Oh, never mind. I’m a moderator. I lose my place.

 

Roger Severino:  I could respond to that on the religious liberty side of the question. So the question of what is male or female is incredibly important for science, for medicine, for sports, etc. And the religious liberty implication is can somebody disagree on that question and not be cut out from polite society? There’s a risk that with the latest transgender mandate from HHS with respect to medicine, they’re going to say that you cannot respect people who think that sex is male and female and biologically determined, that you have to say a person’s sex is whatever they say it is, and if you don’t go along, regardless of your religious beliefs, then you’re going to be cut off from federal funding. I think that’s the religious aspect.

 

      You have the Religious Freedom Restoration Act. Does the Biden administration think there’s a compelling interest in sexual orientation/gender identity policies that would override the religious interest to say, for example, avoiding the use of pronouns altogether, or must they say this person identifies as a man and you must say they are a man, regardless of your beliefs about creation or theology? That’s the way it’s got to be, or you lose federal funds. That’s the religious liberty in question, and I think the Biden administration with Dr. Rachel Levine and others are going to say you have to go along with the new ideology.

 

Gregory Lipper:  I think, ultimately, though, if I may rephrase Roger’s question, do transgender people, including transgender children, have a right to exist?

 

Roger Severino:  Yes, they do.

 

Gregory Lipper:  Well, but do they have the right to exist and be treated as human?

 

Roger Severino:  Yes, they do.

 

Gregory Lipper:  I call Roger Mr. Roger Severino, and I think he would presumably -- and I wouldn’t undertake to call him Ms. Roger Severino, even if I genuinely believed as a matter of ideology, religion, or otherwise that he was actually a woman. It’s common courtesy. And when you’re having First Amendment challenges or religious challenges by teachers who refuse to call their students by their preferred pronouns, that’s getting into dehumanizing.

 

      When you’re saying that we need to inspect the genitalia of people on sports teams, even though there are all sorts of body types, there are women who are taller, there are women who are shorter, there are women who are more muscular, there are women who are less muscular. When you’re talking about discrimination that people have a right to receive medical care or education without discrimination on the basis of their gender identity -- and by the way, as sex has been interpreted definitively in a 6-3 decision of the U.S. Supreme Court written by a Trump appointee.

 

      So I think that people are absolutely free do debate how they think gender should be defined, whether it’s biological, whether it’s psychological, whether it’s anything else. But I think that the question really -- and polite society is not really -- what private entities do or don’t do is not the government’s business, but ultimately the new transgender people have a right to be --

 

Hon. Edith Jones:  -- Thank you, Mr. Lipper. We’re getting a little repetitive.

 

      Another question that was asked is that the Trump -- I’m sorry, several previous administrations, including the Clinton administration, published guidance on religion in the public schools—and I can remember the Clinton one, actually, I had to read it—about what could be taught about religion in the public schools. The Obama administration did not do such a guidance. I believe the Trump administration did. Is this administration going to provide any guidance? Any predictions other than the 1619 Project?

 

      Okay. I’ll move to the next one. Someone asked --

 

Gregory Lipper:  -- Actually, the one thing I’ll say is I think there’s --

 

Hon. Edith Jones:  -- Mr. Lipper, 30 seconds. Yes or no?

 

Gregory Lipper:  I’ll try to time myself. I think there are often times -- the guidance often evolves from administration to administration, and so I imagine -- I don't know for a fact, but I imagine the Biden administration may modify some of the existing guidance. I don’t think it’s going to be a whole new thing, but I imagine there may be some changes on the margins from the previous administration.

 

Hon. Edith Jones:  Okay, great.

 

Prof. Daniel Mach:  Yeah, if I may, just one small thing to add, Your Honor. What was interesting, I think about the Trump guidance on public schools is that there was a lot of discussion in anticipation of it, and there was some degree of hype when it came out, but in the end, it actually wasn’t that different. So I suspect that if there are tweaks, it won’t be significantly different than the ones we’ve seen previously.

 

Hon. Edith Jones:  All right. There’s another question. What position do you think this administration would take on Employment Division v. Smith?

 

Roger Severino:  I’ll take that. If it is challenged in the sense that plaintiffs want it to be pared back, to go back to the original Sherbert v. Verner test, then I would imagine the administration might oppose that because they oppose RFRA. If they’re in support of the Equality Act and some other bills in Congress which have signaled that would gut RFRA, then they would not want Employment Division v. Smith pulled back at all.

 

      I think RFRA has served as an incredible check so far on the federal government. The Supreme Court in case after case has ruled against the federal government in many different contexts, and that is one of the last stands. So I would imagine they would do anything to push away from vigorous RFRA enforcement and to not constitutionalize RFRA if they could avoid it. And I think that’s my prediction.

 

Gregory Lipper:  I don't know that it’s fair to say the Biden administration opposes RFRA. I think they believe certain applications of RFRA are incorrect. I’m pretty sure Biden voted for RFRA.

 

      I don't know where they’re going to come out on the Smith question. I think Smith has been pared back quite significantly by the courts anyway, and so it may be ultimately sort of an academic question. But my reading of the Biden administration, as was my reading of the Obama administration, is that they do support religious accommodations in a wide range of contexts, but they draw the line when those accommodations do significant harm to third parties or discriminates significantly against third parties.

 

Hon. Edith Jones:  Okay, thank you. There’s another Trump regulation someone asked about, that the administration promulgated a rule that said—I’m assuming, obviously, in connection with federal funding—that student groups on campus -- religious student groups would be allowed to choose leaders of their own faith. Does anyone foresee this administration trying to back down on that regulation? Well, good. Maybe not. Maybe that means they won’t.

 

      Let’s see, someone has asked a question here. Are there any reflections on Biden COVID regulations and funding and possible collisions with religious liberty? Is there anything going on in regard to that anymore, now that -- I guess the money is still going out, even though maybe the need is much smaller than it was recently.

 

Roger Severino:  There was a question as to whether PPP, the funding for people who were hurt economically, if religious organizations would be allowed to receive funding. And  my view is there would be an Establishment Clause and Free Exercise Clause violation, more Free Exercise, actually, if they federal government were to say religious organizations cannot receive PPP funds when everybody else can get PPP funds. That’s an important issue. I’m not sure how the Biden administration’s going to address it.

 

      There’s an additional issue that we saw with whether or not houses of worship would be allowed to reopen on an equal basis. We had some guidance that I actually had to fight to prevent the CDC from going too far in regulating the actual practice of worship, and the Supreme Court has actually vindicated that position in a series of cases that you have to have equal treatment when you’re exerting a public safety rationale. You can’t single out religious belief and exercise as somehow more dangerous than comparable secular behavior.

 

Prof. Daniel Mach:  I think the key in those cases and in future cases, and this applies not only to the COVID area but, I guess, to free exercise more broadly, is what is comparable? And there’s a real disagreement about what activities are comparable from a public health perspective. And you saw those in the differing opinions -- this is in some of these shadow docket decisions that the Supreme Court has issued with the majority saying, “Anything is comparable,” essentially, and with the dissent saying, “No, you’re comparing apples and watermelons.”

 

      So I think the real -- the key question there is going to be what do we count as comparable, as legally comparable? And by comparable, I think the question should be what advances the state’s asserted interests, whatever they may be, in a similar way?

 

Gregory Lipper:  And, by the way, that’s why I sort of -- circling back to an earlier question, I think that’s why Employment Division v. Smith is not long for this world, even if it’s never formally overruled, that as more and more -- the Supreme Court is more and more saying if you have any exemption for anyone, no matter how non-comparable, it’s no longer a neutral law of general applicability, and so we’re out of the Smith test. And so I think what Dan alluded to, I think Smith is going to become a dead letter just because the definition of what’s comparable and what’s not comparable is being adjusted in a way what almost everything is now getting strict -- most things will get strict scrutiny.

 

Roger Severino:  And I think you’re right with the direction, and I think there’s good reason for that, which was illustrated precisely by the COVID pandemic. Singing in the church is no different than singing a Broadway musical. It’s no different than being close together in a movie theater or a casino, but you saw that casinos where you’re allowed to be around craps tables and serving mammon, but you couldn’t serve God in a house of worship. And you cannot privilege some activities over others compared to religion, and that’s the issue.

 

      And the problem is, as society is getting more and more secular, you’re going to see a lot of decision makers say, “Religion just isn’t that important. What’s the big deal? Just don’t go to church. Don’t go to synagogue. What’s the big deal?” That’s the problem. Because they don’t have that same solicitude for religion, they’re going to start to pick and choose what is a higher value, and that’s actually discrimination.

 

Gregory Lipper:  Where are these singing casinos? I want to go to one of these.

 

Roger Severino:  Celine Dion has a great show in Vegas.

 

Hon. Edith Jones:  So here’s a question that probably should go to Roger or Allyson. How should the law balance the harm of making believers act against their beliefs with the emotional harm because such beliefs fundamentally conflict with the self-identity of others?

 

Roger Severino:  Okay, so the question of what if somebody’s belief is offensive to somebody else? That’s something that’s going to be inevitable in a pluralistic society. So we have to have space for everybody. You could have controversial beliefs, and in fact, the First Amendment and RFRA and the other laws are precisely designed to protect the most unpopular beliefs. If your beliefs are popular, you don’t really need as much protection. So that’s the answer to that. Everybody has an equal shot, and if there is offense, hopefully we could be civilized in how we treat each other.

 

      However, as Greg was saying earlier, that it’s about enforcement of civility -- I’m paraphrasing, Greg, forgive me. But our civil rights laws are not about civility and enforcement of civility. It’s a very blunt instrument. There has to be room for people to express and live out their faiths, and we see this in other civil rights laws as well. I mentioned in the ADA, it’s part and parcel in a pluralistic society that we make room for each other.

 

      And one final point. It’s not, especially in the sexual orientation/gender identity, it’s not about saying you can’t treat in healthcare a person of a particular identity because a person of religious belief will say no. That’s offensive to people of religious belief. They don’t do that. They don’t say, “I’m not going to fix your broken bone because of your identity.” It’s about particular procedures, whether its sex reassignment in minors or abortion, the issue of forcing nurses to perform abortions, that’s where the fight is, not these hypotheticals. These are the real ones, real cases, that, in fact, Becerra was on the other side of when I was at HHS, and he’s now the one in power.

 

Allyson Ho:  Just to underscore something that Roger said, I think we’ve all expressed -- I think if there’s one thing that all of us would agree on, it’s that the Supreme Court’s establishment and free exercise jurisprudence leaves a lot to be desired. I think if there’s one thing that’s certain in the Supreme Court’s jurisprudence in this area, it’s that mere offense cannot be the basis of depriving someone of the exercise of their religious liberty rights.

 

Hon. Edith Jones:  Does Mr. Mach -- Dan or Greg, does either of you have an opinion about Canada having defined misgendering as a hate crime? It’s a question from the audience. I think it’s sort of interesting.

 

Gregory Lipper:  No, I guess, because that law would not survive the American First Amendment. I tend to not -- I think the First Amendment prohibits that sort of thing, criminalizing. And I think it’s generally a good idea that racial slurs, as awful as they are, are not criminalized. So yeah, I don’t think it’s really relevant to American law.

 

Roger Severino:  What about a $250,000 fine like New York has in employment?

 

Gregory Lipper:  Well, I think -- and this was the -- it goes back to a ban on race discrimination is not really worth much if the employer can hire an African American but subjects them to racial slurs all day. So I think when you’re talking about employment, you’re a different thing.

 

      Someone is free to go on the street corner and yell and scream about how Greg Lipper supports Sharia law, but if they deny me a marriage license because my parents are interfaith, that’s a whole different story. And I think that’s really -- it’s sort of trying to reconcile people’s different beliefs in different contexts in a way that allows everyone to express their views but also allows a diverse country to participate in society, receive services, receive the necessary care, and recognize everyone’s religious diversity.

 

Hon. Edith Jones:  So I see you’re a fundamental supporter of federalism and subsidiarity, Greg. Is that right?

 

Gregory Lipper:  It depends.

 

Hon. Edith Jones:  [Laughter]  Okay, well, I think I’m under orders that we conclude the panel at 3:30, so we’re within a minute of that. And I want to thank all of our panelists for extraordinarily interesting presentations and the good will of all of you in the face of some very challenging and highly debated issues. Thanks very much to our host, Airmeet, which provided the webinar technology here. I now thank the audience for having tuned in and asked your provocative questions.

 

      A reminder is the next conference event, a discussion of “State Sovereignty or Fair-Weather Federalism?” will begin at 5:00 p.m. Eastern, 4:00 p.m. Central, 30 minutes from now.

 

5:00 p.m. - 6:30 p.m.
State Sovereignty or Fair-Weather Federalism?

Federalism & Separation of Powers Practice Group

Topics: Federalism • State Governments • Federalism & Separation of Powers
Webinar
Online Event

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The last few administrations have seen an increasing willingness by states to challenge the executive branch, pushing back on both regulations and executive actions. This has coincided with the increase and growth of state solicitor general offices, as well as a willingness by courts to entertain lawsuits and issue injunctions, including nationwide ones. Is this just another example of our polarized times—with red states suing blue administrations and vice versa—or is there something to this reassertion of state sovereignty? Are the states becoming the primary check on executive overreach?

Featuring:

  • Prof. Ed Rubin, University Professor of Law and Political Science, Vanderbilt Law School
  • Prof. Carolyn Shapiro, Professor of Law, Chicago-Kent College of Law; former Solicitor General, Illinois
  • Mr. Ilya Shapiro, Vice President and Director, Robert A. Levy Center for Constitutional Studies, Cato Institute
  • Prof. Ilya Somin, Professor of Law, Antonin Scalia Law School
  • Moderator: Hon. John B. Nalbandian, United States Court of Appeals, Sixth Circuit

Speakers

Event Transcript

Hon. John B. Nalbandian:  Okay, great. Hello, everybody, and welcome to our last panel of the day. I'm John Nalbandian. I'm a Judge on the Sixth Circuit Court of Appeals, and I want to welcome everybody. Our panel today is sponsored by the Federalism and Separation of Powers Practice Group and is entitled, "State Sovereignty or Fair-Weather Federalism?"

 

      As always, we have a distinguished panel ready to have an engaging discussion on this topic. I apologize in advance, by the way, for the state of my office but you all get to see how the sausage is made.

 

      With regard to questions, and as always in Federalist Society panels, we welcome questions, if you're in the audience, you may send the text-based questions through the Q&A tab that's in the upper right-hand corner of your screen. And we also have a chat tab for attendees to chat with each other there on the separate tab, but please don't use the chat tab for questions. We also are going to be allowing attendees to ask live questions by pressing the raise hand button. You'll need a working microphone, of course, to use this option. But that's also in the upper right-hand corner.

 

      So with all that said, let me introduce our topic. As all of us know, we've seen an increased willingness by states over the last few administrations to challenge actions by the Executive Branch on, for example, immigration. These challenges have been to both regulations and executive actions. This rise has also coincided with the growth of our state solicitor general offices, which are elite litigation shops within state government who've spearheaded many of these challenges.

 

      In addition, the rise of nationwide injunctions, a topic that's been separately discussed in other Federalist Society events, has given those offices enormous power when they pursue these lawsuits. But one of the questions that we're going to look at today I think is whether these suits are simply another example of our polarized political times with red states suing blue administrations and vice versa, or is there something deeper to this reassertion of state sovereignty? In other words, are these suits just an example of law being politics by another means?

 

      Another question is whether these state suits are adding something different to the mix of checks on the Executive Branch that traditional public interest and private litigation don't do, especially given the special justiciability concerns that sometimes arise in this context. And finally, I suppose we have an overarching question of whether the states are now becoming the primary check on executive overreach.

 

      As always, we have a very distinguished panel to explore these and other questions, including both components of the so-called hashtag Ilya confusion.  All of our speakers have written extensively in this area and are prepared both to discuss these issues, other issues that they've got, and answer your questions. And as a reminder, and we'll go over this later, we've got a networking opportunity after the panel in our networking lounge, and I hope that you'll join us after the program.

 

      We're going to begin with opening remarks followed by an opportunity for response remarks, discussion, and then audience questions. So let me get to our panel. Their full bios are on The Federalist Society website. I'm not going to repeat them but very briefly, first up with opening remarks will be Ilya Shapiro who occupies the overlap of the Ilya and Shapiro parts of our panel Venn diagram. And that's -- I'm done with the Ilya jokes, so don't worry. And by the way, I'm sitting in a room, nobody's laughing at my jokes, so I don't even know what I'm doing. So he's Vice President of the Cato Institute, Director of the Robert A. Levy Center for Constitutional Studies, and Publisher of the Cato Supreme Court Review.

 

      Second will be Professor Edward Rubin, who is University Professor of Law and Political Science at Vanderbilt University. Third, we have Professor Ilya Somin, who is Professor of Law at George Mason University, and I will note, clerked for my old boss and mentor, Judge Jerry Smith on the Fifth Circuit. And finally, we have Professor Carolyn Shapiro, who is Professor of Law and Associate Dean for Academic Administration and Strategic Initiatives at Chicago-Kent College of Law.

 

      So with that, I will turn it over to Ilya Shapiro to kick us off.

 

Hon. John B. Nalbandian:  Great. Thanks very much, Judge, and thanks to The Federalist Society for inviting me to speak on what I consider to be the most important panel of the whole Executive Branch Review Conference. I'm actually on the Federalism and Separation of Powers Practice Group Executive Committee and help put the panel together, but this isn't a Dick Cheney situation.

 

Texas Solicitor General Judd Stone was supposed to be here but had to drop out at the last minute, so hopefully, rather than the Cheney parallel, my pinch hitting for Judd is more of a Lou Gehrig situation. We'll see, but I do feel like the luckiest man in the Zoom world today in part because I get to be on this august stage despite neither being a member of the law school faculty nor having any experience in a state SG's office. I'm just a simple constitutional lawyer.

 

      Anyway, the reason I say that this is the most important panel is because it highlights a growing trend that is an important shift in our constitutional governance, that states are resisting executive excess more than Congress. The last few administrations have seen an increasing willingness by states to challenge the Executive Branch, pushing back on regulations, executive actions, guidance documents, and everything else.

 

      This has coincided, as Judge Nalbandian mentioned, with the increase in growth of state solicitor general offices as well as a willingness by courts to entertain such lawsuits, whether ultimately resulting in nationwide injunctions or otherwise. This is another example of our polarized times with red states suing blue administrations and vice versa, but there's also, I think, something different in terms of a reassertion of state sovereignty. That is states are becoming a very important check on executive overreach, both because Congress is unwilling or unable to do its job to play that check and because private parties and other sorts of actions have been stymied for a host of technical procedural reasons.

 

      So states are rediscovering their sovereignty both in increased lawsuits and in how they press their claims. That is not just defensively in terms of asserting sovereign immunity but offensively, questioning the power of the president, administrative agencies, sometimes even the entire federal government. This push back on the growth of federal power is a very healthy development, a very healthy dynamic, I think, in my view.

 

And in theory, it shouldn't have ideological valence because the federal government could be pushing progressive policy or it could be pushing conservative policy, or it could simply be pursuing technocratic policies that states might feel aren't well-tailored to their particular realities. And so if we've awakened a slumbering beast in our structural protections for liberty and our federalism and our separation of powers, I think that is all to the good to have more parties being vigilant towards government and specifically executive excess.

 

      And concomitant with that is the growth of SG offices, which -- not just the growth of the offices themselves but their appellate and strategic specializations. So it's not just hiring more deputy and assistant SGs to handle more, I don't know, state death penalty cases or other sorts of internal dynamics. I mean, part of the reason why we're even talking about this, why this is a real phenomenon, is it took off about a decade ago, not just that Obamacare was signed in March 2010 or the Obama administration's breathtaking expansion of pen and phone governance, although that's an important part of the story, but before then, there just weren't that many states with well-developed solicitor general offices or more specifically, those that thought broadly and strategically about national policy and federalism and these kind of deeper issues.

 

      And we've seen this dynamic manifest in assorted issues, whether immigration, going back to Arizona's SB1070. Remember that, already? It seems like a lifetime ago, but where does state criminal law end and federal immigration law begin? Sanctuary cities. The federal government is trying to force states to participate in immigration enforcement, and where do you draw the line on that?

 

      Conversely, there are sanctuary states or other jurisdictions, California, for example, has in some regards interfered with federal enforcement of its own law, one could argue. So again, there are these kinds of tensions between federal and state power, and I think that is all to the good as long as courts are taking these challenges seriously, which I think they are.

 

      Marijuana, you know, right. Schrodinger's weed, that's both legal and illegal in many parts of the country. And we're all learning about anti-commandeering and the idea that the feds can enforce their own law, but there are very few federal law enforcement or DA agents in the context of marijuana. So how do you handle that tension? It's very interesting, both intellectually and practically on the ground, that's not necessarily shifted with respect to marijuana with different parties in power.

 

      Gun restrictions. Gambling, right? There was a recent Supreme Court case about commandeering about the feds cannot force -- Congress cannot force state legislatures not to decriminalize or to keep criminalized sports gambling, the Murphy v. NCAA case. And now we've seen an explosion in sports gambling since then.

 

      Obamacare, of course. Not just the initial challenge to the actual law, to the legislation, although that was a significant ignition of state litigation but challenges to knock on regulations, guidance, enforcement that continue to this day. And most recently, in the COVID relief bill, there's a provision about not using the relief funds to lower taxes, and that's been enjoined by a couple of courts now because you can't tie states' hands in that way.

 

      And that goes to the theory of the matter. What exactly are these challenges about? I mentioned anti-commandeering, going back to the New York v. United States, the United States v. Prince case, and most recently, Murphy v. NCAA. So federal government, including the Executive, can't force states to do its bidding.

 

      Clear statement rules, the Pennhurst case. The idea that federal government can't impose surprise new conditions. Congress can pass a new law requiring states to cooperate on immigration or anything else if they take the related funds, but there has to be a clear explicit statement about that, and non-coercion with South Dakota v. Dole and NFIB v. Sebelius, it's the perfect Obamacare case, that you can't change existing programs with new funds, with new strings tied to those funds. So very interesting dynamic all the way up in Supreme Court level in these federalism tensions.

 

      But much of the reason why the Supreme Court is at the heart of our national debates is because over the decades, federalism has been lost. But perhaps, federalism is coming back now. And then states have been rediscovering their own sovereignty. Initially, courts were not enforcing the separation of powers or limits on executive power, so states stepped into the gap to challenge governance by pen and phone and tweet. But maybe courts are now becoming more engaged.

 

      And fundamentally, as I write in my recent book, "Supreme Disorder," the reason we have such heated political battles is that the federal government is simply making too many decisions at a national level from such a large, diverse, and pluralistic country. There's no more reason that there needs to be a one-size fits all healthcare system, for example, and that zoning laws be uniform in every city.

 

So let federal legislators make the hard calls about truly national issues like defense or actually interstate actual commerce, but let states and localities make most of the decisions that affect our daily lives. Let Texas be Texas and California be California. That's the only way we're going to diffuse tensions in Washington, whether in the halls of Congress or in the marble palace at the highest court in the land.

 

So I welcome all friends of federalism, whether they be fair weather or constant, issue by issue, or across the board. Professor Somin will no doubt elaborate and expand on my remarks, my position, this scenario where there's very little daylight between our views, so do be aware of that hashtag Ilya confusion.

 

Professor Shapiro and I, meanwhile, likely disagree on the scope of federal power in many areas so I guess there's less chance of hashtag Shapiro confusion. But before we hear from them, I'll turn this over to Professor Rubin. Thanks very much.

 

Prof. Edward Rubin:  Okay. Thank you. Thank you very much.

 

      So let me start by saying something about what federalism is and understanding what it is that we're talking about. And I think what's important here is to distinguish between federalism and decentralization. And this is something I've written about with my colleague Malcolm Feeley in a number of places.

 

      Decentralization is the policy adopted by an institution, a unitary institution, that allocates some decision-making authority to either functional or geographic subdivisions of that institution. It is a managerial decision that shifts operational authority between dissenter and subsidiary units.

 

      Now, you cannot use the term decentralization to distinguish between governments in the world because every government -- every country larger than the Vatican or maybe Monaco is decentralized to some extent. Every country whether it's a federal country like Canada or a unitary country like Japan has to make those decisions about where managerial authority will rest.

 

      And most of the supposed values of federalism are in fact values that are instantiated by decentralization and not federalism. So the idea that the government should be closer to the people or be more responsive to people, the idea that people will be able to communicate with the government more readily because it's local to them, the notion that there will be variation from one area of the country to another, that Ilya was just talking about. All of those things are products of decentralization.

 

And it's the decision of the assenter as to how much -- where authority is going to be exercised. And I would note that this is not just a political issue. It's a management issue generally. It's an issue that affects any large, dispersed corporation as well.

 

      Federalism is a political mechanism that grants autonomy rights to almost all these geographic units within the country. And an autonomy right is a legal right to oppose certain actions being taken by the center. So the components of a corporation never have such rights. They cannot go to court against the parent company. And in many countries, provinces or cities can't do so either, but federalism allows them to do that.

 

      So the question, looking at it from the perspective of the central government, which is of course the government in control according to our Westphalian system, why would a central government grant autonomy to subsidiary units when of course those units might take actions that the central government would regard as ill-advised or perhaps oppressive or immoral as well? And the answer is it's a political compromise. It's something that nations do in order to either constitute themselves, the way Switzerland did, or to hold themselves together in the face of conflicts of political identity. The way, for example, is taking place now in modern Spain.

 

      Now, turning to the United States. United States began as a federal nation because of its inheritance from British imperial policy. There was no central administration of the 13 colonies in North America. Each colony was not only separately charted but separately operated and communicated separately with the Secretary of State for the north or the Board of Trade back in Britain. And so when the country was first established during the constitutional convention, the issue was what was going to be the way that this was embodied in the constitution.

 

      Now, Madison's original instinct was to get rid of the states and developing unitary regime. But that turned out to be impractical because people had associated themselves with the states in terms of political identity, not with a national government because there was none or central administration. And in addition, all the machinery of government was in the states.

 

      Now, over the course of our history, we've achieved something wonderful. We've taken these disparate units and created a real national identity of ourselves as Americans and a basically unified regime. We had one very serious disruption of that, and that was the debate over slavery. That did not follow state lines. That was a regional debate and in fact the various sides in that debate crossed state lines leaving not only to West Virginia but to strong northern sentiments in East Tennessee and Northern Alabama and strong southern sentiments in southern Indiana and other parts of the country as well as the border states.

 

      But having gone over that, we have forged a unified political identity. And that's an enormous political resource and something that's extremely valuable. Federalism is a hold over, a vestigial artifact, and I would argue it does us very little good and a lot of harm. And one way that it does us harm is what Ilya already mentioned, namely the polarities switches back and forth depending on who's in charge of the central government.

 

      So when you have a central government in control of progressives and they're imposing things like civil rights legislation on the states, conservatives become great proponents of states rights and progressives are fans of national government. When you have something like the second Bush administration or the Trump administration, then all of a sudden, conservatives become great fans of national government, and progressives discover the glories and value of states' rights.

 

      And I think this indicates the fact that it's not a real position. What it is is a kind of rhetorical tool that can be deployed by different sides. And the problem with that, the conceptual problem, is it confuses the issue. We're not talking about the issue that we really care about anymore. We're talking about it in terms that are outmoded, states' rights and autonomy and all this other stuff, that really is of very little value to a nation that's developed a uniform political identity.

 

      But I think there's a bigger problem which is that it really impedes our ability to govern ourselves. And I think the current state -- well, more than a state, the current trend that Ilya already mentioned toward having states become increasingly aggressive in these litigative stances against the central government are indicative of that.

 

      Now, there are cases that are really federalism cases. Regardless of what you think about federalism, they at least raise the issue, no matter which side of it you think the decision should be reached on. So for example, New York. New York, one state, really didn't want to be forced by the national government to store nuclear waste within its borders. Maybe that's right, maybe that's wrong. Well, Gregory v. Ashcroft, not a constitutional case but a seminal one, states didn't want -- some states didn’t want the federal government to impose anti-discrimination laws against its judges.

 

      Okay. But we've seen more and more a trend to litigating national issues that really have very little to do with the rights or statutes of states. We've seen challenges, for example, to the climate change policy of the Bush administration. We've seen debates about same sex marriage which clearly affects the whole country depending on your concept of rights or not. And recently, now, as soon as the Biden administration came into power, there were dozens, maybe more, of cases filed all of a sudden, very often on national issues.

     

      So for example, the effort to prevent the Biden administration from cancelling the XL Pipeline or even the Ohio suit about not providing tax compensation or tax cuts, which affects really the whole country and involves national policy. And the problem here is that the people elected a national government that ran and debated on national issues. And they either want something done or they don't want something done. But to then use this outmoded mechanism of federalism to give -- really, very often, it's not even populations in the state but just officials in the state, the opportunity to use their personal views to contest those and shift decisions away from the elected officials who are supposed to make those decisions and to courts that will necessarily be issuing activist decisions, that is to say anti-elected official decisions, whenever they act definitively seems to me to be a very poor way to manage a complex national regime like the one we have.

 

      Oh, and now I guess turn the floor over to Ilya Somin.

 

Prof. Ilya Somin:  Thank you so much, and thanks to The Federalist Society for organizing this event. I apologize also for the light that's shining into my eyes in this room. I'm not sure there's much I can do about that, but I hope you can at least hear me even if you can't see me well. And at the very least, this may reduce the Ilya confusion because I will be the Ilya that has a light shining into their face whereas the other Ilya has better lighting, at least for now.

 

If you'd like to know more about how to avoid the problem of Ilya confusion, I've actually placed a weight to a piece that I wrote about this a couple years ago because the problem was so bad that it got to the point where people were confusing my wife with Ilya Shapiro's wife even though they don't actually look alike. So hopefully we can avoid making that problem worse during this particular panel.

 

Mr. Ilya Shapiro:  Of course, the apogee was when Ilya Somin sent himself a note to self and it came to my email. But anyway.

 

Prof. Ilya Somin:  That was the fault of the Firefox email program, not mine. But yes, that did happen. So in any event, I'm going to start off by talking briefly about why constitutional federalism matters and why we should seek to preserve it and strengthen it. Then I'll talk about some major federalism controversies that arose in the Trump administration and also some in the Biden administration. And I'll conclude with a few words on prospects for the future of constitutional federalism.

 

      So there are a number of big advantages that we can derive from having a system under which federal power is limited, preferably tight-limited and more is left for the states and local governments. One, the most obvious advantage, is preserving diversity. I think you've all seen that we have a deeply divided nation along many different kinds of lines, left versus right, different racial and ethnic groups, different kinds of economic hindrance and so forth, and on a very wide range of issues, education, healthcare, environmental policy, quite a few others. It's simply impossible to have a unitary national policy made in Washington that will satisfy all of the different diverse interests. Whereas decentralizing more power to state and local governments, that will allow more diversity to flourish and leave more people satisfied with the polices they live under than would be the case otherwise.

 

      Secondly, and something that's been a major focus of my own scholarship including, in the interest of shameless self-promotion, my recent book, "Free to Move," is the issue of voting with your feet. When you have a division of authority between different levels of government with different states and localities having autonomy, that enables people to vote with their feet for the policies they prefer. And this actually has two major advantages over traditional ballot box voting at the center for the federal government.

 

      One is that when you vote at the ballot box, the chances that your vote will make a decisive difference to the policies that you live under is extremely small. In a presidential election, it's about one in 60 million. On the other hand, when you choose where you want to live and vote with your feet, the chance your decision will make a real difference is much, much higher than that. And so it gives you much more in the way of meaningful political choice.

 

      Secondly, precisely because when we vote with our feet, the decision is likely actually to matter, we also have much better incentives to make a well-informed decision. In my previous book, "Democracy and Political Ignorance," I talked about how much of the time, most voters barely understand any of the issues they're voting on. They often don't even know very basic things like what are the three branches of the federal government. Only about a third of Americans can name them. On the other hand, when people vote with their feet, both social science evidence and just common sense suggest people are much more careful and seek out more information.

 

      And when we have federalism and powers more decentralized, there are more opportunities for people to vote with their feet than if there's a single one size fits all policy that's made in Washington and imposed on everyone. The combination of foot voting and diversity can also reduce political conflict. Less will be at stake every time a new president or new Congress are elected, and therefore, there is less reason for people to fear the victory of the other side and hopefully less of the kind of anger and hostility that we saw recently, most noticeably with the assault on the Capitol but obviously in other incidents as well.

 

      So I recognize, as Professor Rubin has argued in his excellent book and in some of his other work, that in principle, you could get all of these advantages through decentralization and not federalism. In practice in the real world, however, I think this will rarely be possible because while a benevolent despot, should we ever have one, might create some kind of desirable decentralization and commit to it, in the real world, if you have a central government with few or no constitutional limitations or with little or no enforcement of those limits, it will have tremendous incentives to violate any kind of autonomy that is left to sub-national units of government. And I think we've all seen that under both democratic and republican administrations. Therefore, we need judicial review as a check, and it's useful to have state and local governments with the resources and ability to litigate these sorts of cases.

 

Often their motivation will indeed be political and their fair-weather featherless, that's absolutely true. However, that's perfectly fine, I think. The same thing can be said about lots of litigants in all kinds of constitutional cases. For example, many of the Supreme Court's most important free speech decisions, some of the greatest victories for freedom of speech were one not by principal advocates of freedom of speech but by people like communists or Nazis who had no real commitment to freedom of speech, but nonetheless, while they were pursuing their narrow self-interests, all the rest of us also benefitted from those free speech victories.

 

      So to go into some more specific detail on recent controversies, I'll start with the Trump administration. There was a whole bunch of federalism controversies during his four-year presidency as well as obviously many other controversies to put it mildly as well. The most significant federalism controversies were probably those about sanctuary cities, where the Trump administration essentially in many cases made up their own new conditions that they wanted to impose on various lands to state and local governments to force them to assist the federal government pursuing Trump's immigration enforcement priorities.

 

      And for the most part, a variety of lower courts ruled against the Trump administration on these issues and said they can't just make up their own dispending conditions. Some of these cases also involved commandeering efforts to simply coerce directly state and local governments into helping the federal government in this area.

 

      Another big federalism controversy of the Trump administration was that which resulted in the Supreme Court decision in Murphy v. NCAA, which Ilya Shapiro mentioned, which struck down a federal law that in fact prevented state governments from legalizing sports gambling within their state. It interestingly pitted a blue state against the Trump administration, and the Trump administration in this case was on the side not only of the NCAA but also of the NFL, with which Trump was in essentially at the time, engaged in a cultural war over players kneeling during the playing of the national anthem.

 

      I think this one turned out to be the most important federalism Supreme Court case of the Trump era because it has tremendous implications for other areas of law including sanctuary cities, and in fact, it led to the invalidation of a number of Trump administration measures trying to attack sanctuary cities.

 

      I think a lot of the sanctuary city controversy and other controversy of the Trump era did involve situations where there was fair weather federalism on both sides, but I think there was some systematic change in attitude as well in that I think many, not all, but many people on the left have come to recognize that it may not be true anymore that the federal government is the friend of unpopular and oppressed ethnic and racial minorities, whereas the state governments are necessarily their enemies.

     

      The sanctuary city situation is a dramatic illustration of how that isn't always true, though it's not the only sanctuary illustration. And at the same time on the right with the rise of a more nationalist right, that may lead them to be less sympathetic to the states than some previous conservatives were before.

 

      Turning now to the Biden administration, there actually have so far been fewer federalism controversies than I have expected, though that may very well change, but there are some important ones. One is the National Eviction Moratorium imposed by the Centers for Disease Control. This was a policy that was first started in the Trump administration, but Biden reinstated it and he has run into a lot of trouble. There have been seven court decisions on the issue, and five of them have gone against the administration on the theory that they overreached in various ways. I think this case has significant implications that go beyond the specifics of the Coronavirus pandemic or eviction moratorium specifically. And I'm happy to talk about that in the questions.

 

      Similarly, there's also the already mentioned litigation by Ohio and also now other states challenging the anti-tax cut provision of the stimulus bill passed in, I think, February which says that states to take money from the stimulus bill, they're not allowed to enact new tax cuts until at least 2025. And here, too, I think the issues are actually similar in some ways to those raised in the sanctuary cities cases because here, there wasn't much, if any, in the way of clarity of what exactly it means to cut taxes and what kinds of taxes are covered. And so the Biden administration in effect had to invent its own version of these conditions to make them clear and it so far -- the one court decision we have so far has gone against the administration on this, though it's very early in this litigation and we don't know where it'll go.

 

      I should mention also that recently, the State of Montana has in effect declared itself a gun sanctuary. They had said that they will not use state resources to enforce certain types of federal gun laws. This is very similar to the stance that more liberal states took on federal immigration laws during the Trump administration and before, though it as a different political valence.

 

      I'm one of the very few people who supports both the liberal immigration sanctuaries and this conservative gun sanctuary and for lots and lots of sanctuaries all around. But even if you don't like the states' stances on these particular issues, I think it's a valuable check on federal government power.

 

      Finally, prospects for the future. I think obviously this kind of conflict over federalism will continue, and I hope the courts will continue to be active in enforcing them at some federal power. I think state and local governments will continue playing an active role in litigating this, not all the lawsuits they file will have merit. I don't agree with necessarily some of the lawsuits filed in the Trump era. I don't agree with some of those filed in this era too, but I do at least sympathize with many that seek to limit federal power whereas I take a more negative view of some state and local lawsuits where the goal is actually to try to get the federal government to do more as with the current litigation by Texas against the Trump -- I'm sorry, against the Biden administration's 100-day moratorium and certain types of deportations.

 

      So I think this litigation, although it has its access as to the good, on the other hand, there are some negative trends as well. The big one I think is the growing dependence of many states and also some localities on federal funding of various sorts, which is problematic both by giving the federal government more leverage against the states and by reducing their incentive to compete for people who vote with their feet. A big part of that incentive is this need to seek out more funding from taxpayers.

 

      A second problem is that there's certain factors, particularly exclusionary zoning in many parts of the country which have reduced the ability of people to vote with their feet, particularly of the relatively less affluent people. There is a zoning reform movement under way in a number of states and also the Biden administration has given it some support. I hope to see that grow over time. There are some other barriers to mobility as well such as state by state occupational licensing that I hope can be reduced, and here too, there is an active reform movement.

 

      So overall, I think there's great value to the American system of federalism, but there's also a lot that can be done to make that value still greater. You can call it building it back better or you can call it making federalism great again, the title of an article there published a couple of years ago about the sanctuary city litigation, but whatever you want to call it, I hope to see more of it.

 

      Thank you so much, and I now turn things over to Professor Carolyn Shapiro.

 

I think you're muted. We still can't hear you.

 

Hon. John B. Nalbandian:  No.

 

Prof. Ilya Somin:  I'm sorry. I still can't hear you. Is there anyone here online with The Federalist Society that can perhaps help Professor Shapiro? I still can't hear you.

 

Mr. Ilya Shapiro:  Well, Judge, maybe we should move on and then go back to Carolyn when they resolve the technical stuff.

 

Hon. John B. Nalbandian:  Yeah. Carolyn, you're not muted so I can see the green, so maybe there's a volume issue or something. Let's go -- why don't we ask Ilya Shapiro if, Ilya, do you have any kind of response or remarks, Ilya Shapiro, to what maybe Professor Rubin or --

 

Mr. Ilya Shapiro:  Right. I mean, I -- the decentralization versus federalism point, I think, is an important one because there are many countries that do decentralized policy in various ways without having a federalist regime, that is, with dual sovereigns and things like that. And so to the extent that policy has been nationalized over the decades. I'm not sure --

 

Theoretically, there's a lot of differences between decentralization and federalism, but in terms of boots on the ground and peoples' experiences with getting locally responsive policies rather than the big maw in Washington that just does what it does, to the average person, whatever policy you care about probably doesn't matter as much. But that could be an issue of block grants versus formal legal rules and things like that, but that is an interesting theoretical point to tease out.

 

Hon. John B. Nalbandian:  Let me ask Professor Rubin, I'm curious. You talked about a lot of the suits -- a lot of these suits really are about national policy and national issues. Are there -- I guess, I don't know how to phrase it, but are there legitimate suits that states would bring against the federal government that wouldn't -- is there anything that wouldn't implicate a national issue that a state would bring? Is New York v. U.S. an example of that?

 

Prof. Edward Rubin:  Yeah, no. That's a very good question. It depends on your general attitude toward federalism. As I indicated, I think it's vestigial, and so I don't think that is a particularly important way by which we instantiate rights or control the national government. I think there are other ways to do it. I think individuals, corporations, all sorts of public interest organizations have an ability to get into court. I would like to see standing rules relaxed so that they had a greater ability to get into court.

 

      But I think those mechanisms actually deal with the issue that is being raised. It's the claim of an individual, it's the claim of corporation, it's the claim of a public interest group that's really at stake and not the claim of a state.

 

      Now, if you believe in federalism, then there are definitely real federalism issues, that is to say New York. I gave the other example of Gregory v. Ashcroft. Those involve the rights of the state. So if you think that states should have rights, then those would be valid suits. But that still raises the question of why we are having state solicitor generals, state attorney generals litigate national issues that really don't differ from one place to another.

 

      And let me just add one thing to Professor Somin. I think the issue of voting with your feet and the ability to choose different sort of configurations of public services is very important. but most of that is dealt with interstate. It's very easy to move from one suburb to another within a metropolitan area --

 

Prof. Carolyn Shapiro:  Is this working?

 

Prof. Edward Rubin:  -- keep a city job. You don't have to -- you might not even have to switch your kid's school, things like that. But that has nothing to do with federalism. That kind of adversity exists in the states, and most states allow for it even though typically, a city has no rights whatsoever against the -- some constitution is granted, but certainly at the federal level, cities and other sub-jurisdictions are regarded as creatures of the same. Yet, there is that diversity. I think that's an example of where it's decentralization and not federalism that's doing the real work in providing the kind of local diversity that allows people to make those choices.

 

Hon. John B. Nalbandian:  I think we'll get back to that because I think there's some interesting points that are embedded there, but Professor Shapiro, are you -- Professor Carolyn Shapiro, are you with us?

 

Prof. Carolyn Shapiro:  I think I'm here. Can you hear me?

 

Hon. John B. Nalbandian:  Great. Perfect. Yes.

 

Prof. Carolyn Shapiro:  Great. I'm not really sure why it didn't work the first time but thank you for your patience and thank you to the FedSoc tech people who walked me through fixing that.

 

      I do want to say before I start, sine Judd Stone isn't here, I think I'm the only person on the panel who has served as a state solicitor general. And that's actually not the focus of my remarks but I'm happy to talk about that during the Q&A. My remarks are actually looking at this question of state sovereignty and federalism from the other side. The debate we've been listening to has mostly been about when and how we should keep states or local governments independent and why and what the mechanisms for doing that might be.

 

      But I think it's also important to think about the flip, which is when -- are there times when it might be necessary for important structural reasons, not policy reasons, but structural reasons to limit state sovereignty? And what might those be? Why might we want to, for example, protect states from each other or protect the federal government or the nation itself or some amount of national identity from some kind of dissolution from the states?

 

      The Constitution, of course, contains a number of express limitations on state sovereignty along those lines. Article I Section 10, for example, prevents states from entering into treaties, issuing their own currency, imposing tariffs and duties or without congressional approval, keeping troops in peace time or entering into interstate compacts. And I think it's fairly easy to see why those limitations might be important to prevent states from undermining the national government, for example, in its relations with other countries or the terms of a group of states banding together in some way from that group of states itself.

 

      And some of those provisions can also be understood as protecting the states from each other. No tariffs and duties for example helps protect states from trade wars against each other. But there are other provisions of the Constitution that actually speak expressly to this concern about protecting states from each other, notably in Article IV. For example, in Article IV, we have the Extradition Clause. We have the Fugitive Slave Clause, which I'll return to, and we have a promise to protect states from invasion, which was absolutely understood to include the invasion of one state by another.

 

      So from the beginning, the Constitution has recognized that there had to be some limitations on state sovereignties. And one of the ways that I haven't addressed yet has to do with the Framers' concern about the danger of incompatible forms of government. Federalism scholars today, of course, sometimes talk about spillover effects, the way that a policy decision in one state might have effects on another state. Environmental laws are the easiest way of thinking about that. Lax environmental laws in one state may affect the levels of pollution in another. Those are policy spillover effects.

 

      But the Framers' concern about spillover effects actually extended to the problem of what would happen if there were different forms -- incompatible forms of government such that those spillover effects would prevent the country from functioning as a single country. For example, what would happen if a state decided it wanted to be governed by some kind of monarch?

 

      Now, that might sound really far-fetched, but actually, after Shay's Rebellion, proposals like that were taken seriously. There were some people who wanted to see some form of monarchy or viscounty to be put in place in the country as a whole or in particular, states. And the Framers thought that monarchy was inherently and really inevitably expansionist and tyrannical.

 

      And just -- here's a quote of a number from James Iredell at North Carolina Ratifying Convention. He said, "If a monarchy was established in one state, it would endeavor to subvert the freedoms of the others and would probably by degree succeed in it which of course could then undermine the country as a whole."

 

      So these concerns I provide the background explanation for another provision of Article IV which is the Guarantee Clause. The United States shall guarantee to every state in this union a republican form of government. Another way of thinking about that is that state sovereignty is limited to the extent that a state might want a non-republican form of government. This, of course, raises the big question of what is a republican form of government? And there's an awful lot one can say about what republicanism meant at the time of the founding. And I'm happy to talk about it in a lot more detail during the Q&A, but for now, I'll just say a couple of things.

 

      One thing is it meant no monarchy, at least on this side of the Atlantic. In England, there was a vision of republican monarchy. But on this side of the Atlantic, no monarchy, absolutely. And there wasn't a detailed consensus about what had to happen in addition to that but there was some agreement on some level of representative democracy and some amount of separation of powers.

 

      There was -- and I want to emphasize the third point that on which there was wide agreement which was also -- I've already -- I'm sort of re-emphasizing, right, that the Framers did agree -- or that there was wide agreement that there were some forms of government that would simply be incompatible. And so for that reason, state sovereignty could not mean that states could structure their governments in any way that they chose.

 

      And history, I think, proved the Framers right on that broad point. Though they, or many of them, likely wouldn't have said so, it turns out that having slave states and free states meant essentially having incompatible forms of government in one country and that those incompatible forms of government led to encroachments on each other's sovereignty. There were obviously some spillover effects that don’t implicate sovereignty.

 

      Professor Rubin and his co-author Malcolm Feely have talked about the ways that abolitionists in the 19th Century came to believe that they could not tolerate the moral horror of slavery as part of their own country even if they themselves lived in free states and that they cared about that moral horror in the United States in a way that was different from how they might feel about slavery in other parts of the world.

 

      But there were also spillover effects that spoke to states' abilities to govern their own -- what happened in their own border. For example, the Fugitive Slave Act and the Fugitive Slave Clause meant that free states could not exercise their sovereignty to protect their own citizens, including those born free within their borders from abduction from within the free state itself under a claim of right by slaveholders. That's Pennsylvania v. Prigg.

 

      Dred Scott, of course, precluded states from recognizing African Americans as citizens, even if they wanted to. Because of those -- this development, this understandings and developments, by the time of reconstruction after the civil War, Congress relied on the Guarantee Clause to impose significant requirements on -- related in particular to voting rights and elections, even before the ratification of the 14th and the 15h Amendments.

 

      And I'm not going to go into any more detail about the history of that period other than to recommend, if you're interested in a recent article in Vanderbilt Law Review by David Louk, L-O-U-K.

 

      Of course, since then, we've seen a dramatic expansion in the Constitution itself of voting rights and in other forms as well, including but not limited to 14th, 15th, 17th, 19th, 23rd, 24th, and 26th Amendments. We've also seen, and this speaks in part to Professor Rubin's points, significant embrace of a national identity that is fundamentally democratic in the sense of representative democracy and self-government.

 

      If you think about, for example, presidents including Woodrow Wilson, Theodore Roosevelt, Franklin Roosevelt, George W. Bush, all rallied the country around the call of democracy, talk about the country as a beacon unto the world because we are a democracy, talk about our obligations to the world and our example to the world as a democracy.

 

      Now, these contemporary or relatively contemporary commitments to democracy and self-government are broader and more specific than the Framers understanding of republicanism, in part, due to how the Constitution has -- the text itself has been amended but they are consistent with it. And if we focus on the insight of the dangers of incompatible forms of government, then I think we have to think today about what forms of government might be incompatible with each other and with this commitment to representative democracy.

 

      Now, I would say we are in a moment of danger on this point. And those dangers obviously -- those dangers predate the 2020 election, although they've only gotten worse. And the example I'll lean on is extreme partisan gerrymandering of state legislatures. I'm sure the background is familiar to many of you but to just use one example, my neighbor to the north, Wisconsin, in 2018, democrats won 53 percent of the vote for the state house and ended up with 36 percent of the seats. That was by design. That was the way the districts had been drawn after the 2010 elections, and the Wisconsin State Legislature will remain under heavy republican control through the next round of redistricting even if and when democrats obtain a higher percentage of the vote.

 

      Now, this implicates spillovers of the sort I was talking about a few minutes ago in a couple of different ways. One way is that the legislature is in states or the legislature itself draws congressional districts. We can see a spillover -- these anti-small d-democratic spillovers find their way into the national government. We saw that with North Carolina attempting in a more or less 50/50 state to throw out districts that led to 10 out of 13 of them being safely republican.

 

      And of course, it's not just limited to legislation, though those impacts might not just affect federal legislation. They can also affect the outcome of something like a contested presidential election. But there are other spillovers as well. For example, this kind of anti-democratic, small d democratic, conduct can become part of a game partisan tit for tat.

 

      We saw that in the Maryland gerrymandering case where the democratic governor of Maryland defended his decision as a political matter to gerrymander to create a new democratic congressional district by saying well, that's what the republicans do so that's what we're going to do. And that tit for tat, as numerous scholars have pointed out, can send us into something of an anti-democratic spiral.

 

      We can see ways that through the types of litigation that all the different panelists have spoken about that we could have these kinds of spillover affects because one attorney general can bring a lawsuit, seek a national injunction that affects everybody. Using Wisconsin as an example again, in the 2018 election, the people of Wisconsin elected a democratic governor and a democratic attorney general.

 

One of the biggest issues in the election was whether or not Wisconsin would continue to challenge -- participate in the challenges to the ACA, the Affordable Care Act. The democratic candidate said we will withdraw from that lawsuit after the election, but during the lame duck period, the republican controlled legislature passed a law withdrawing the power from the attorney general and the governor to make that decision so directly implicating not only the -- undermining the will of the people of Wisconsin but also has implications for the rest of the country.

 

      You don't even have to go all of that far to see all of these spillover effects. They can actually undermine many of the benefits of federalism that everybody has spoken about, that Heather Gerken calls the everyday practice of pluralism that can arise from more ordinary policy spillovers, right? If I -- citizens of one state are much less likely to tolerate policy spillovers, like environmental regulation, if they believe those policies were developed through on democratic or anti-democratic processes.

 

      So lots more I can say, I'll save it for the Q&A if people have questions. But the point is that state sovereignty has to have constitutional limits and one of those constitutional limits is the subversion or destruction of meaningfully representative democracy. Now, that statement leaves lots of statements unanswered, probably most notably is who decides? Who decides what those limits are and hot to enforce them?

 

And so with the assumption that it will provoke some interesting discussion, I'll end with at least a partial answer to that questions which is Congress. I think Congress under the Guarantee Clause has significant power to do things like, for example, limit extreme partisan gerrymandering, not just for congressional districting which it probably has under the Election's Clause but also for state legislatures. That's the power and the promise of the Guarantee Clause. So thank you.

 

Hon. John B. Nalbandian:  Great. Thank you, Professor Shapiro. I think we will -- I want to get to Q&A but I do want to let -- and if anybody has questions, please type them in the Q&A tab or raise your hand. But let me ask Professor Somin, we didn't get a chance to get any response or remarks from him, if he's got anything that he wants to add before we get into Q&A.

 

      You're muted.

 

Prof. Ilya Somin:  I apologize. I'm one of those people who often forgets when they're muted or not. Just two very short points. I agree with Professor Rubin when he said that often, what we really want is the ability to vote with your feet between localities and not between states because it's swifter and easier and cheaper. I go further than that and actually argue that we should have more ability to vote with our feet in the private sector as well.

 

      However, even the ability to vote with your feet between localities can be undermined if there's a unitary federal policy on the matter. Sometimes, it can be undermined if there's a unitary state policy, and those states that do not have constitutional protections for localities in their state constitutions, they indeed have had significant problems with state governments overriding localities.

 

      As Professor Rubin perhaps knows, there's a growing scholarly literature on this issue by scholars on both the right and the left. Wren Reynolds(sp) on the right, and Rick Schrager(sp) on the left. I would add also that foot voting between states is by no means unknown. More than 40 percent of Americans have made at least one interstate move, and there's a lot of examples of people voting with their feet between states. So that's a significant phenomenon in its own right.

 

      I would secondly like to make one brief comment regarding Professor Shapiro's presentation which is, I think, there's a key distinction that's important to make and that is there are some things that maybe we wouldn't want any level of government to be able to do such as violate certain kinds of individual rights. And there, we want limitations on state power and federal power simultaneously, and that may include certain kinds of measures that might undermine democracy as well as other kinds of constitutional rights.

 

      I would add also that certain specific limitations on state power are there, to my mind, at least in part to facilitate foot voting within a federal system, like limitations on states' powers to keep people from leaving or keep people from entering. Certain provisions of the original Constitution, which were incompatible with that or undermine that, unfortunately have been eliminated or reduced. The Fugitive Slave Clause is the most notorious example. It's the most obvious example of an awful thing that we had in a constitution that not only tied people to a particular state but of course tied people to their particular master, so to speak as well.

 

      So much more can be said on all these issues, and I very much look forward to questions. Thank you.

 

Hon. John B. Nalbandian:  Thank you, Professor Somin. Let me get to a question.

 

      Okay. So we have a question about the gerrymandering and I guess let me paraphrase but I know that Professor Somin talked a little bit about voting with your feet. And one of the things that we've seen, I suppose, is a lot of our cities are now very democratic, and I suppose that's an example, a little bit, of voting with your feet within a state, clustering in large metropolitan areas.

 

      I take it, Professor Shapiro, that's not gerrymandering. If one party wants to pack itself into a certain area, there's nothing that can be done about that in terms of correcting that as a political gerrymandering question, is there?

 

Prof. Carolyn Shapiro:  So there's a big distinction between the natural what some people call the big sort, right, where the cities tend to be blue and the other parts of the country tend to be red. And that does have a natural effect of advantaging republican districting -- republicans in districting used in traditional redistricting measures. And I'm not suggesting that there's anything intrinsically nefarious about that.

 

      I might -- but what we see in other states including, for example, in Wisconsin and North Carolina, in some states, is an effort to draw the most extreme possible map to protect one party or the other. And if you look at -- and now that we have mapping software and highly sophisticated uses of data, there's -- it is possible to produce thousands of maps with thousands of different types of consequences.

 

      Justice Kagan suggests in her dissent in Rucho, for example, that one way to determine whether or not there's undue or extreme or unconstitutional partisan gerrymandering is to look at the -- to compare where in this range of maps in terms of advantaging or disadvantaging one party that the selected map comes out. And in particular in a situation where you can, as she suggests again in Rucho, look to the neutral determinants of redistricting that the state itself has identified as important.

 

      You plug those in and you look at the range of maps. You can -- that doesn't necessarily mean that the effects of the big sort will be resolved and lead to some less and eliminate that republican advantage in districting. It doesn't mean that necessarily at all. But it does eliminate the more purposeful efforts to make it -- to shut out, as what turns out in some cases to be a majority of the people.

 

Hon. John B. Nalbandian:  What -- I'm curious how you would respond --

 

Mr. Ilya Shapiro:  Can I add something?

 

Hon. John B. Nalbandian:  Oh, yeah. Yeah. Yes, sure.

 

Mr. Ilya Shapiro:  I think -- I agree with the Supreme Court decisions that define political gerrymandering to be non-justiciable, but something that's really in the way of a more sensible districting process is interpretations of the Voting Rights Act to require majority/minority districts. And in fact, the original -- when software started being developed, there were these unholy alliances between, especially in the south, between the Republican Party and Black Democrats to guarantee, rather than more competitive districts across the board, to guarantee safe Republican seats and safe Black Democrat seats.

 

      And I think interpretations of the Voting Rights Act to prevent districting that would change that sort of dynamic plays a role in all of this. But there could be more flexibility in terms of multi-member districts. Other types of creative solutions, but again, I think a lot of this hinges on the way that the Voting Rights Act in districting has been interpreted.

 

Hon. John B. Nalbandian:  Let me ask a question. Let me switch gears a little bit back to the litigation issue. And I'm wondering, any of you and maybe the Ilyas because they've talked a little bit about the litigation question, but we have seen some cases where some states are suing other states or questioning other states' policies. And I'm wondering if that's -- for example, the travel ban that some states have put in about traveling to other states, and I think Texas was challenging California's self-imposed, I guess. Is that of the same kind of thing here, or is that state versus state thing just a completely different issue?

 

Prof. Ilya Somin:  I don't know if the other Ilya wants to go first. If not, I can briefly comment. There are lawsuits between states, and I think most of the time, they don't necessarily raise issues about the scope of federal power like what we're talking about. Like lawsuits between states and the federal government, I think some of them may have merit, others do not, but I think the courts for the most part have done a pretty good job of separating out the state versus state lawsuits that do have merit from the ones that don't.

 

      They rejected the Texas lawsuit challenging the election, which I think had little if any merit. They rejected earlier, a couple years ago, the Nebraska lawsuit against Colorado trying to prevent Colorado from legalizing marijuana under their state law. Right now, I think there is a more meritorious state versus state lawsuit before the Supreme Court: New Hampshire v. Massachusetts, which is challenging Massachusetts's attempt to impose taxes on people in New Hampshire who work remotely for Massachusetts firms.

 

My hope is that the Supreme Court will take that case and strike that Massachusetts policy down because that really is a case of one case intruding on the affairs of another and also preventing people from voting with their feet. I say that even though I lived in Massachusetts for many years. I have nothing against the State of Massachusetts. I'm a big Boston sports fan, but I think they're wrong in this instance.

 

So I think as Professor Shapiro said, there are cases where the Constitution rightly prevents states from infringing on each other or in some cases, prevents people from freely moving from one state to another in a way that escapes the jurisdiction of the prior state. And there's good reason to have constitutional constraints on that because ultimately, I think the goal of the system of federalism is not to have the maximum possible autonomy for state governments or to make state governments happy, it's to create a system of multipole competitive jurisdictions which protects peoples' welfare and gives them options and also protects liberty as well.

 

      And in some cases, that will mean giving states more autonomy. In other cases, it will mean imposing some constraints on states to protect individual rights or to protect other states against their fellow states.

 

Hon. John B. Nalbandian:  Let me ask Professor Rubin, going on that point, if we were to have the decentralization model, and maybe we do, would that work without those constraints, the legal constraints that Professor Somin and Professor Carolyn Shapiro talked about? How would that -- I mean, it seems to me in a decentralized corporate sub or something, if the parent doesn't like what you're doing, they just fire the board or the CEO. Without that restraint on the parent, are we going to lose the distinctions that still might matter?

 

Prof. Edward Rubin:  Well, I think that image of an oppressive regime that is displacing the people elected by local democracy is a kind of parade of horribles type situation that doesn't actually occur. I mean, look, if you look at countries around the world. If you take, for example, either the freedom houses or economic intelligence list of the most democratic countries in the world, most of them are unitary regimes including some large countries like Japan and France. And in fact, right now, at least, both of those regimes place the United States with its federalism or quasi-federalism in a subordinate position as a flawed democracy or as well below the top tier in terms of political freedom and democratic practices.

 

      So I don't think that having a unitary regime has very much to do with either the overall democratic nature of the regime or the robustness of local democracy and the ability of people to elect representatives who reflect their interest at the city or provincial level at all. I think it's much as more as an impediment to certain national policies. And I think it allows a lot of the abuses that Professor Carolyn Shapiro was referring to as well as other voter suppression. That really effects peoples' rights that should be universally guaranteed.

 

Hon. John B. Nalbandian:  Let me go back to -- we have another question, and it's about -- well, it's about Professor Carolyn Shapiro's apparently very provocative remarks about gerrymandering. So let's go back to your last point, and the question is could Congress -- the point about whether Congress could itself impose limits on extreme political gerrymandering. And the question is whether any of you all believe that the Supreme Court, current or any past Court I suppose, would have supported that view. Is there any evidence that that would be something that the court would uphold?

 

Hon. John B. Nalbandian:  Well, I'll start by saying that the Court has made a point of not deciding Guarantee Clause cases. It has held that the Guarantee Clause is a political question, and so when individuals have tried to assert rights pursuant to the guarantee clause, the court has said that's for the political branches to decide what to do about.

 

      So my proposal is that the political branches do that. Given that the Supreme Court has declined to explain what the Guarantee Clause means by holding it nonjusticiable, it seems to me that should entitle Congress to a certain amount of deference. I don't think it's a blank check, and I don't think that it would be a nonjusticiable question whether or not what Congress did pursuant to Guarantee cCause powers is constitutional.

 

      But I think that Congress should be entitled to significant deference as to how to define a republican form of government and whether or not measures it's putting in place would be -- are necessary or reasonable or necessary and proper, because the Necessary and Proper Clause here applies, to enforce the guarantee.

 

Mr. Ilya Shapiro:  So I have something on this. I actually agree with Professor Shapiro that the Court should enforce the Guarantee Clause in lots of cases but probably not the cases where she would want it to. As she was raising a lot of examples beyond the redistricting, I thought about HR1 and a lot of the voting regulations there as well as the campaign finance ones.

 

      The campaign finance ones raise First Amendment issues, but a lot of the electoral regulations I think do tread on state prerogatives in ways that can't be justified either under the Guarantee Clause, the Elections Clause, or anything else. So I find it highly dubious that this court would uphold those more controversial parts of HR1 and similar projects.

 

Prof. Ilya Somin:  If I could comment also. Though, perhaps then Professor Shapiro would have a right to respond to the two Ilyas if she so wishes, that I too agree with the other Ilya that the Guarantee Clause should be justiciable. It's very unlikely the Supreme Court will go with that just because there are two Ilyas who think so but for what it's worth, I think that too.

 

      At the same time, at least under the original meaning of the Guarantee Clause, I think it probably sets out only fairly minimum standards of what counts as a republican government including you can't have a king or a hereditary aristocracy and a few other things like that. I'm skeptical, at least, again, at least as an original matter, that it does very much to control various kinds of voter registrations or even various kinds of restrictions on voting.

 

      However, if you imagine a world where either the Guarantee Clause is not justiciable or it's only justiciable in rare instances and for the most part Congress can do what it wants, would not Professor Shapiro and others who favor congressional intervention here worry what will happen next time the republicans control Congress. A republican Congress could say well, you know what, we believe that to really guarantee a republican government, we need to prevent even the slightest bit of voter fraud so there should be a very rigorous national system of voter ID and a ban on or severe restriction at least on absentee voting and various other measures of the sort that republican states are enacting now. And you can imagine more severe measures.

 

There's a lot of republican theory in certain political got in 18th and 19th centuries but even today which says that only certain classes of people can be trusted to truly participate in a truly republican government. They have to be knowledgeable enough or have a big enough stake in the community or other criteria like that. So you could imagine a right wing Congress acting on that sort of idea.

 

      Obviously, many people will say no, that's wrong. That isn't really promoting republicanism, but if the idea is that Congress would have broad discretion in these areas or could do whatever it wanted so long as it didn't violate some other provision of the Constitution like engage in racial discrimination or something, then it seems like a republican Congress under this approach would be able to do at a national level the kinds of things that democrats are angry about republican state legislatures doing at a state level. And of course doing it at a national level would have much more impact. They would be doing it everywhere and not just in one or a few states.

 

Prof. Carolyn Shapiro:  Well, there's lots to respond to here. So I'll just make a couple of points. First, in response to Ilya Somin's last point, yeah. It doesn't mean that I would necessarily like the legislation that Congress would come up with, but it does mean that the nature of the debate, the nature of what it would mean for national cohesion and for national identity would be quite different than it is from a state-to-state basis.

 

      I agree with you also that the original meaning of republicanism was pretty thin, that it really was much more a philosophy about how to promote virtue for the purposes of the public good and to protect against corruption than it was a particular vision of how to structure government, which is in part why in England, they thought you could have a monarch and still be a republic, which the Framers certainly didn't think.

 

      But I think it's only fair and only appropriate to read the Guarantee Clause in light of the last 250 years and the host of constitutional amendments that I mentioned that have dramatically expanded both expressly and implicitly our commitment to representative self-government.

 

      I have not taken a position on whether or not the Guarantee Clause should be justiciable from the perspective of an individual, right? It's pretty clear today that if I or say a resident of Wisconsin were to sue claiming a Guarantee Clause violation over the way the districts are drawn in Wisconsin, that would be thrown out of court. That's a political question, that's not justiciable. That was true before Rucho. It's certainly true after Rucho. And my -- I think Rucho was wrongly decided but not for reasons related to the Guarantee Clause.

 

I do think that there is a different kind of standard overview that's appropriate when Congress is exercising its authority provided under the Constitution, and it would have to provide some amount, I think, of legislative record, as it's been asked to do in other contexts but not to the same degree as, say, to exercise its power under the 14th Amendment where Congress -- or the court, excuse me, has increasingly required an extremely detailed and specific record that it reviews essentially the way one might review a court trial record or an administrative record.

 

Hon. John B. Nalbandian:  Any other responses?

 

Mr. Ilya Shapiro:  Could I ask Carolyn, Professor Shapiro, a question to get us back to the beginning, the original subject matter of the panel in terms of her being the only person with SG experience here, I think. And  I said that I found it healthy that blue states, red states, everyone sues the Executive, sues the federal government, and then courts can police the proper bounds of federalism and so forth. Do you agree with that statement? I mean, I think your entire tenure as SG was under Obama, but would you, you know, do you find it healthy that there's now more state action and state lawsuits and just make sure the courts get it right but it's useful to our system to have that kind of activity?

 

Prof. Carolyn Shapiro:  I would say I have mixed feelings about it. I don't have -- I tend to agree with Professor Rubin that federalism is a very useful means to a number of very important ends but that I am much more skeptical of it as a philosophical commitment that -- and I'm very skeptical, but that's what motivates any of the attorneys general of any state when they bring these lawsuits.

 

      Part of the reason I have mixed feelings about it is because sometimes those efforts really have significant spillover effects on other states. So for example, when Texas sued to enjoin DAPA, right, not DACA but the program for undocumented parents of legal immigrants, it requested a nationwide injunction, which it got, despite the fact that a host of blue states said we don’t want an injunction. We think the equities -- Texas is claiming a series of harms to itself, but we think this is good for us as states.

 

      And so whether or not ultimately it's a constitutional law or executive order or whatever, right? The immediate consequences of a national injunction is going to hurt us as states. So is it healthy to have one district court in Texas then issuing a nationwide injunction that is contested not just on the, right -- obviously the constitutional questions are contested but the merit -- the equities are also contested?

 

      Well, I guess I would say I think it's complicated. And I would agree with Professor Somin that it's largely, these are politically motivated lawsuits and that that's not intrinsically bad, but it is descriptive.

 

Hon. John B. Nalbandian:  Let me ask, maybe as a final question or maybe not, but Ilya Shapiro, I guess, is a constitutional litigator and someone who's participated in these kinds of suits. Is the nationwide inunction, is it necessary to get the result or to make this strategy work? Do we have to have the nationwide injunction?

 

Mr. Ilya Shapiro:  I mean, I think that's a separate issue, really, and a prudential one rather than a principled one in the sense that sometimes nationwide injunctions are appropriate and sometimes they're not. And when they are appropriate, and I imagine that's for cases where you need uniformity, you can't have, for example, a different rule for people entering the country at JFK airport than for those entering the country at LAX. But when they are appropriate, appellate courts need to act quickly to decide those and anyway, there's a lot of prudential considerations there.

 

      So in the sanctuary cities cases, even though on the merits, I'm with Professor Somin almost entirely that the cities shouldn't be forced to cooperate with federal officials, I also think it's not appropriate for nationwide injunctions in that circumstance. But, again, that's a whole different discussion. But I think federalism can work, and federalism through state litigation can work without nationwide injunctions and to the dynamic that Professor Shapiro pointed out, without the fewer nationwide injunctions, the fewer spillover effects that other states might be complaining about.

 

Hon. John B. Nalbandian:  I guess the question -- I guess what I was wondering is, I mean, to the extent Professor Rubin is saying that these are national issues, and it really is something that the people as a whole have decided or Congress has decided, whatever, does the nationwide injunction prove that point? You're looking for nationwide relief which makes it look like a nationwide issue. Just QED, I guess that's my -- I'm curious about that.

 

Mr. Ilya Shapiro:  I mean, I want the Supreme Court to take more cases, so I guess. I mean, like I said, I think it's a prudential point where appellate courts should be weighing quickly. And to the extent there's a split, the Supreme Court needs to weigh in quickly as well. But on nationwide injunctions in and of themselves, I'm neither a never okay nor always okay.

 

Hon. John B. Nalbandian:  Great. I think with that, we've come up against our time. I was given a strict timeframe to finish up by 6:30.

 

      Well, first of all, this air meet platform that we're trying out here, it's giving us an opportunity to meetup with our panelists hopefully and with other people that have been observing this panel and others in the lounge. And I hope you'll join us in the lounge to network with other participants or maybe ask some questions. To join the lounge, there'll be an alert in the top right-hand corner of your screen. Click on that alert to move to the lounge and then click on one of the boxes that appears to join a table. You'll need to turn on your camera and your mic and when you sit down at the table. So hopefully, we can do that and hopefully you can join us for a few minutes at least.

 

      And I do want to say that this is the last panel of the day, obviously, because we're going to go over to the lounge but the event -- the Executive Review Week, of course, continues tomorrow. The first panel is called, "Climate Change Environmental Justice and the Environmental Agenda," and it's going to begin at 11 in the morning. So with that, I want to thank our panelists for a very interesting and provocative discussion. And at this point, let's standby for that alert and hopefully you can join us in the lounge. Thank you everyone.

 

Prof. Carolyn Shapiro:  Thank you, Judge.

6:30 p.m. - 7:00 p.m.
Networking Lounge Open
Lounge
Online Event

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Description

Airmeet, our new online platform for the Executive Branch Review Conference, offers us the exciting opportunity to network with one another, and with speakers, moderators, and FedSoc staff. Before, between and after panel discussions, feel free to click the Lounge button at the top of your screen and join a table of fellow conference attendees. As sessions conclude, we'll also send a "Lounge Alert" with a link you can click to make it easy to join the Lounge. We'll also send alerts to the Lounge before panel discussions begin, so there is no need to worry about missing any of the panels.

Please plan to join us in the "Lounge" for a unique networking opportunity. It's a great way to stay in touch with everyone until we can convene in person once again.  We look forward to seeing you there!

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10:30 a.m. - 11:00 a.m.
Networking Lounge Open
Lounge
Online Event

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Description

Airmeet, our new online platform for the Executive Branch Review Conference, offers us the exciting opportunity to network with one another, and with speakers, moderators, and FedSoc staff. Before, between and after panel discussions, feel free to click the Lounge button at the top of your screen and join a table of fellow conference attendees. As sessions conclude, we'll also send a "Lounge Alert" with a link you can click to make it easy to join the Lounge. We'll also send alerts to the Lounge before panel discussions begin, so there is no need to worry about missing any of the panels.

Please plan to join us in the "Lounge" for a unique networking opportunity. It's a great way to stay in touch with everyone until we can convene in person once again.  We look forward to seeing you there!

11:00 a.m. - 12:30 p.m.
Climate Change, Environmental Justice, and the Environmental Agenda

Environmental Law & Property Rights Practice Group

Topics: Environmental & Energy Law • Environmental Law & Property Rights
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The Biden Administration has made it clear that its environmental agenda will be a top priority.  Central to this agenda is addressing climate change and environmental justice.  On his first day in office, President Biden issued a notice that the U.S. was rejoining the Paris Agreement.  On January 27, he issued an executive order that would seek to establish a “whole-of-government” approach to climate change and commit to net carbon emissions by 2050.  The same executive order also committed to making environmental justice part of the mission of every agency.  What is the Biden Administration’s environmental agenda, and what should we expect moving forward? What should its agenda be, especially when it comes to climate change and environmental justice?  Join us as we hear leading experts provide differing views on these important questions.

Featuring:

  • Ms. Nadira Clarke, Partner and Section Chair for Environmental Safety & Incident Response, Baker Botts LLP
  • Mr. Tony Francois, Senior Attorney, Pacific Legal Foundation
  • Mr. Matt Leopold, Partner, Hunton Andrews Kurth
  • Ms. Hana Veselka Vizcarra, Staff Attorney, Environmental & Energy Law Program, Harvard Law School
  • Moderator: Hon. Joan Larsen, U.S. Court of Appeals, Sixth Circuit

Speakers

Event Transcript

Dean Reuter:  Welcome to the final day of the Ninth Annual Executive Branch Review Conference hosted by The Federalist Society’s practice groups. I’m Dean Reuter, Vice President, General Counsel, and Director of Practice Groups at The Federalist Society. Thank you all so much for being with us today, and welcome to the Airmeet platform, which will allow you to visit with friends and colleagues, speakers, and Federalist Society staff members in the Airmeet lounge all day today before, between, and after panel discussions. If you’re not logged on to Airmeet now, you can still join using a few simple steps through The Federalist Society’s website in order to take advantage of these networking opportunities.

 

      Our first panel this morning is on climate change and environmental justice. I’m very sorry and saddened to report that one of our panelists, Mr. John Cruden, suffered a family tragedy earlier this week and is not able to be with us today, though our thoughts and prayers are with him and his family at this time. We have been able to find a replacement for him, and we will carry on.

 

      Our moderator for our first panel this morning is Judge Joan Larsen from the Sixth Circuit Court of Appeals where she’s served since late 2017. Before that, she served as a justice on the Michigan Supreme Court. Before that, she was on the University of Michigan Law School faculty. She clerked for Judge Sentelle and Justice Scalia before a stint in private practice and in the Department of Justice’s Office of Legal Counsel. Notably, I think, she graduated first in her class at Northwestern University Law School. Now, I spent some time myself at Northwestern Law School, but perhaps that was before they had class ranks. I’m not sure.

 

      Judge Larsen, please go right ahead. You need to come off mute, Judge.

 

Hon. Joan Larsen:  Yes, yes. Thank you, Dean, both for the introduction and for the cue to come off mute. You can see that first in class didn’t really help my technology skills, so I thank you. And I thank you for the opportunity to be with you today.

 

      The topic of today’s panel is “Climate Change, Environmental Justice, and the Environmental Agenda.” The new administration has promised an aggressive approach to environmental concerns and has made clear that environmental concerns will be a priority. The president, for example, has vowed to reduce carbon emissions by 52 percent by the year 2030, and the administration has promised a “whole of government” approach to climate change, meaning that every agency will have the environment and environmental justice as part of its brief.

 

      But will the administration be able to meet these goals, and at what cost? What exactly should we expect from the new administration in terms of climate, the environment, and environmental justice? We are lucky to have a panel of distinguished experts to help us think through these issues today. I will introduce them very briefly, but I invite you to check out their full biographies on the website.

     

      Our first speaker today will be Matt Leopold. Mr. Leopold is currently a partner at the law firm of Hunton Andrews Kurth. He comes to us with extensive experience in both state and federal government, having served as the General Counsel of the EPA in the last administration and also as General Counsel of the Florida Department of Environmental Protection.

 

      Next, we’ll hear from Hana Vizcarra. Ms. Vizcarra serves as a staff attorney in the Environmental & Energy Law Program at Harvard Law School where she leads the portfolio on private sector approaches to climate and environmental issues. She is both an experienced litigator and frequent speaker on environmental topics.

 

      Our third speaker will be Tony Francois, who is senior attorney at the Pacific Legal Foundation. Mr. Francois is also a seasoned advocate and frequent speaker on environmental and land use issues. He frequently litigates on behalf of individual landowners in their environmental and property rights disputes with the government.

 

      And finally, we will hear from Nadira Clarke, who graciously stepped in to join the panel on short notice. Ms. Clarke is a partner at Baker Botts and the section chair for the Environmental Safety & Incident Response. In addition, she has a wide range of experience in the U.S. Department of Justice, having served both as a federal prosecutor and as an environmental litigator at ENRD.

 

      A few housekeeping items before we turn to our speakers. If you are in the audience, you may send text-based questions through the Q&A tab in the upper right-hand corner of your screen. There is also a chat tab, but don’t use that to ask questions. Use the chat tab to chat with one another. If you want to ask a question, use the Q&A tab. You may also ask live questions by using the raise hand button. You will need a working microphone in order to use this option.

 

      So with those housekeeping items out of the way, I will turn it over to Matt Leopold to start us off.

 

Matt Leopold:  Thank you, Judge Larsen, for that kind introduction. As you’ve heard, I’m Matt Leopold, and I served most recently as the EPA General Counsel, focusing on regulatory development and a lot of litigation. I also served as an environmental litigator at the Department of Justice earlier in my career and have been around a lot of administrative law challenges, which could be very relevant for our discussion today.

 

      I’m really pleased to be with you here this morning to discuss the Biden administration’s progress on their agenda related to climate change, environmental justice, and their overall environmental agenda. And we’ve just been through the first 100 days, and much of what has been accomplished was expected and predicted, and the president has made good on many of his campaign promises.

 

      According to the American Presidency Project, the president has issued 42 executive orders in his first 100 days, in addition to other administrative actions, memoranda, that were issued as well. And in those 42 orders, he revoked or revised 67 prior executive orders, with many of those revocations, of course, being focused on the EOs that were issued by President Trump.

 

      There’s been some litigation surrounding those executive orders so far, and based on what’s been reported, there have been 21 cases that so far have been filed referring to executive orders in this administration. And compare that to 50 over the first 100 days for President Trump, 10 for President Obama, and 0 for President Bush, George W. Bush.

     

      So with those general statistics, they demonstrate there’s a clear change of direction in federal policy, and nowhere is that change more clearly demonstrated than in environmental policy. The president kept his campaign promise to reenter the Paris Agreement. He has canceled the Keystone EX Pipeline that was set to bring in additional fossil fuel resources from Canada. There has been a temporary ban issued on new lease sales on federal lands and waters, particularly focused on fossil fuels leasing. And there have been numerous efforts to establish climate environmental justice across federal decision-making.

 

      What I’d like to do is lay out a couple of those, and I won’t be able to get to everything right now, and we’ll dive into them in the panel discussion, but just to give you a sense of some of those actions. Of course, the administration started off like most all administrations these days with a regulatory freeze of any non-final regulations from the prior administration. But what was interesting, they also issued a list of actions across every federal agency that were scheduled for review.

 

      And no surprise, EPA had the most of any regulations targeted for revisiting or repeal, some 42 actions, if I recall correctly. The Department of Interior had a number of regulations as well, and some had begun work already. And then, of course, the Council on Environmental Quality was tasked with revisiting the NEPA streamlining regulation that was recently finalized.

 

      The president issued an executive order on tackling the climate crisis at home and abroad with setting ambitious goals of a net-zero carbon economy by 2050, a carbon-free electricity sector by 2035, and a conservation of 30 percent of all the nation’s land and waters, which has come to be known as the 30 by 30 initiative, and then a doubling of offshore wind electric energy production by 2030.

 

      The president also proposed structural reforms to look at cost-benefit analysis, which is a touchstone of regulatory work across many administrations. There’s been a publication of a new number known as the social cost of carbon, which has been set as an interim value of $51 per ton, which the federal agencies are supposed to incorporate in their analysis in determining costs and benefits of new federal regulations.

 

      And in addition, related to the reentry into the Paris Agreement, the government has issued what’s known as the nationally determined contribution for greenhouse gasses, which is an attempt -- the U.S.’s attempt to do their part in ensuring that global average temperatures do not exceed two degrees Celsius above pre-industrial levels. So that’s where we get the 50 to 52 percent target for a reduction of greenhouse gas below 2005 levels.

 

      As Judge Larsen said, every agency, not just the environmental agencies, have been tasked with this goal. And we are, as a nation, trending toward -- with pretty good reductions. We’ve already achieved 17 percent below 2005 levels, and we’re on track to achieve 26 to 28 percent by 2025. But to achieve 50 percent by 2030 is an ambitious goal, and one of the key elements is to achieve 100 percent carbon-free electricity production by 2035, which is also very ambitious.

 

      We’ll talk a lot today about what’s happening at the Environmental Protection Agency. And I think this administration, like every administration, will wrestle with a key question, which is how to achieve these goals with the existing statutory and regulatory frameworks that are in place, and, of course, how hard to push and how far to push, given the current composition of the courts. But just a few of those issues that EPA will focus on are whether to directly regulate GHGs using authorities under the existing Clean Air Act, or whether they may look to more conventional approaches.

 

      So for example, direct greenhouse gas regulation is certainly permissible and available based on Supreme Court precedent. And the administration will definitely revisit, for example, what’s known as the safe vehicles rule for carbon emissions from light duty cars and trucks. But there’s a question of maybe relying on more conventional approaches like ratcheting down the national ambient air quality standards to achieve reductions in fossil fuel energy or making more costly, and that may be an approach that’s a little bit more conventional and safer in terms of not overreaching the agency’s statutory authority.

 

      So I will end it there for now and look forward to discussing these and other issues with my co-panelists.

 

Hon. Joan Larsen:  I believe we will now hear from you, Hana Vizcarra.

 

Hana Vizcarra:  Yes, thank you. And I appreciate the invitation to be here today to talk about what is a session that could take us all day if we really wanted to sit around and do that. Matt gave some good introduction to what we’re seeing from the Biden administration.

 

      As Judge Larsen mentioned, I’m at the Harvard Law School’s Environmental & Energy Law program, and one of the things we’ve been doing over the last few years is tracking and analyzing federal regulatory developments in the environmental and climate space. So one of the things that I’ll talk a little bit more about sort of what we’ve seen that’s different in this administration from the last and also touch on some of the more specifics that came out of the executive orders on the environmental justice priorities for this administration.

 

      So we saw a real deep effort to focus on deregulation across the board in the last administration, and also some reworking of internal operations at environmental agencies. I think you could say that both the Trump administration and the Biden administration have a pretty ambitious program for environmental regulation, but they’re just pointed in different directions.

 

      And the ambition of the Trump administration’s approach was, I think, apparent in how it used rulemaking to reassess and reinterpret the approaches that the environmental agencies had taken before and their understanding of the Clean Air Act in particular, and in ways that could have limited future efforts to address greenhouse gasses through regulatory action. Some of this work was left a little bit unfinished because it didn’t quite get through the full stages of litigation, and we’ve seen some action at federal courts on a few of those rules like the ACE rule that broke with the administration’s approach.

 

      But these efforts, I point them out just to note that they’re going to continue to be relevant because many of the arguments that were put forth on how to interpret these different provisions of the Clean Air Act, and Matt spoke to a few of those in his opening remarks, will reappear in challenges, I think, to the Biden administration rules.

 

      So what has the Biden administration done? Matt outlined some of their really ambitious climate goals. They’ve really made incorporating climate change considerations into government decision-making across the board a top priority, and they’re considering both the impact of government action on climate change as well as climate change’s impact on public and private actors. And I think this is a little different than what we’ve seen in some prior administrations.

 

      They’re trying to be much less reliant on EPA. While there’s always certainly going to be a bit role for that agency, they’re not fully relying on EPA to do all the work. We’ve seen in their early directives a focus on building the systems to properly or more effectively evaluate and incorporate climate change information into government decision-making processes. And I think you could almost look at this as the federal government starting to do what investors have been asking companies that they invest in to do over the last 10 years.

 

      At the same time, the president has made a point to acknowledge and address inequitable impacts of past governmental actions. This is their focus on environmental justice. And they’re really trying to ensure equity considerations are given attention in their new ambitions and in their efforts to address climate, as well as in their regulation and enforcement efforts and in their funding and permitting decisions. So their goal really is not to exacerbate these inequities but to start to correct them.

 

      One of the early executive orders in the first week of the Biden administration focused specifically on advancing racial equity, and I just want to highlight a few things about their efforts so far. One is this -- you’ll hear the president speak regularly on the “whole of government” approach and everyone in his administration. I think it’s notable.

 

      There are some real indications that this is how they’re approaching things. They’ve asked agencies to create equity plans. They’ve launched what they’re calling the Justice40 Initiative, and that has a goal to direct 40 percent of the benefits of relevant federal investments into disadvantaged communities. We don’t really know what that is going to look like yet. OMB is developing an agency guidance on implementation. But this government-wide approach does differ, I think, from the Obama administration where the EJ efforts were largely limited to the Environmental Protection Agency.

 

      I think another notable feature of their efforts is their personnel. They’re bringing in people who have experience in working on equity issues in the environmental space into new positions. They’ve created new advisory bodies as well. But they’re also bringing them into existing posts where they’re expected to bring their background knowledge in this equity work into the existing functions of the different agencies.

     

      Possibly the most notable difference in their environmental justice approach is that there’s a real focus on correcting a legacy of disinvestment in communities through direct investment, not just on enhancing participation. So improving access to participation mechanisms and emphasizing enforcement are certainly key features of any effort to address these problems, but they really are looking through their Justice40 Initiative and from some of the announcements we’ve already seen out of agencies on their funding parameters and priorities to really direct investment into communities who have been on the -- haven’t been on the receiving end of it in the past.

 

      And they’re also building -- the last thing I’ll mention on the EJ issue is that they’re building better tools to inform these decisions. They’re leading an effort to update the EJ screen tool so that they can incorporate a broader range of information into their decision-making process.

 

      So going back to these early executive orders, Matt talked about the large number of executive orders. I’m going to speak specifically to just a few of them. There were six executive orders that were signed in the first week that I think are particularly relevant to our discussion, and they outline actions that the president wanted executive branch agencies and offices to take on the environment, public health, climate change, and equity.

 

      And many of these came with deadlines. So one of the things that my shop has been doing is trying to tease out the deadlines that were in these orders and track what we’ve seen happen so far in the administration. We have a very complicated spreadsheet available on our website to do that if you’re interested in following along with us.

 

      And some of these were focused on planning for future action, requiring submission of your reports and plans, but they also had specific directions to reevaluate prior regulatory action. In addition to the list of 104 agency action that Matt mentioned that were in a memo that accompanied these EOs, they had some particular rules that were outlined in the text of the EOs that had deadlines for review attached to them. But even the planning pieces are connected to specific goals and actions, and so they’re the first step to more direct action.

 

      In their first week, there were also two presidential memoranda on regulatory review and scientific integrity that are important, and Matt also mentioned the Paris Accord statement. So these have kicked off a flurry of activity. I think it’s notable for the extent to which the administration really seemed to have come in and worked out its priorities before taking office to have these lists of prioritized rules they wanted to look at and kick off this effort from the very beginning. One of these executive orders was signed the first day President Biden was in office.

 

      And it’s also notable for the range of offices and agencies involved. Of course, EPA and DOI are key players in this, but they’re not looking to them to carry the water alone. And the directives, particularly the ones that aren’t focused on reevaluating prior action but are more forward looking, cover all agencies. And there’s a lot of emphasis on DOT and DOE as well, and of course, many offices within the White House purview.

 

      We've already seen a lot of action, and I think it’s notable also that these early efforts seem to outline a detailed agenda beyond reconsideration of the Trump administration’s actions. So the regulatory review is a significant portion of the work, but it’s not what it’s all about. And the reports requested, working groups created, goals established, show that they intend to make a lasting mark on environmental and climate policy as a whole.

 

      And I’ll just finish with making note that the “whole of government” approach is not limited to the agencies that are most directly under the purview of the president. We’re seeing a lot of action at the independent agencies as well. These aren’t directly discussed in the executive orders, but particularly at the SEC with new leadership, we’re seeing new priorities.

 

      Under the last commissioner of the SEC, there was a lot of pushback against the increasing calls to provide additional guidance on incorporating climate change into corporate disclosure and other activities under the commission’s purview. But just in the first couple of months of new leadership at the commission, we’ve seen a tremendous amount of activity. Corpfin, enforcement, and examination divisions have all prioritized climate change in their work and explained how they’re going to do so over the next year or so.

 

      The SEC is expected to update its Section 22 guidance on climate related disclosure, and they’re doing more to look behind corporate disclosures to understand companies materiality determinations. And then, of course, they’re also talking about potential new requirements and disclosure requirements that are specific to climate change. They have a comment period that’s open right now to gather initial information. But there’s a lot the SEC can do and seems prepared to do, based on what they’ve said and the actions so far, even without new regulation.

 

      And it’s not just the SEC. We’re also seeing this in other federal financial regulators. There are new positions, task forces, and commissions at the Federal Reserve, Treasury, CFTC, that are focused on climate related risks. Now, some of this was already happening. The Federal Reserve and CFTC were actively researching and considering the financial system impacts of climate change even before this shift in our political leadership.

 

      But I think it’s important to note that we’re really moving beyond a period in which these discussions largely took place between investors and companies and banks and financial entities to one that’s really centered around regulatory actors.

 

      And so with that, I will wrap up and pass it to Tony.

 

Hon. Joan Larsen:  Great. Thank you, Hana. We will now hear from Tony Francois.

 

Tony Francois:  Thank you, Judge Larsen. And thank you to The Federalist Society for hosting this panel. My name is Tony Francois. I’m a senior attorney with Pacific Legal Foundation where I primarily represent clients against federal agencies in constitutional and other disputes arising under various federal environmental laws.

 

      My remarks this morning address the topic of environmental justice from the perspective of how various federal regulatory regimes impair state and federal common law remedies that are otherwise available to those whose health and homes can be harmed by industrial pollution.

 

      Many federal environmental laws have had the consequence, perhaps unintended, of limiting those legal remedies. The key example I’ll use this morning is CERCLA, or the Comprehensive Environmental Response, Compensation, and Liability Act. CERCLA authorizes the EPA to identify parties potentially responsible for contaminated sites and order that those parties engage in specified remedial actions to clean up those sites. CERCLA reflects a congressional priority on ensuring diligent cleanup of contaminated sites by those most able to fund the work, the so-called deep pocket, whether or not they’re the most immediate cause of the pollution or most recent or current owner of the property that’s polluted.

 

      CERCLA elevates this priority over complete judicial adjudication of which parties are responsible and to what extent. So it’s an example of a regime which advances remedy to the front of the process and leaves determination and apportionment of liability largely to later stages. CERCLA also expresses this priority by barring lawsuits in federal court which challenge EPA’s prescribed method of cleanup for a particular site before that cleanup is completed. And that’s in 42 USC 9613(h), which I’ll refer to as Section 113(h).

 

      So I’m going to talk a little bit about an Eleventh Circuit decision that interprets Section 113(h) in the context of constitutional challenges to EPA cleanup plans. In Broward Gardens Tenants Association v. U.S. EPA, the Eleventh Circuit held in 2002 that the Section 113(h) bar on judicial review of removal and remediation plans applies to discrimination-based constitutional challenges. In this case, a predominantly African American group of residents of a public apartment complex next to a city operated landfill in Fort Lauderdale, Florida, sued EPA and the city to challenge the manner of an EPA ordered and approved cleanup of that landfill.

 

      The problem they had with the cleanup was that, in their view, backed up by their evidence, it did not actually completely clean up the site and left them exposed to the various harmful chemicals. Their complaint in federal court alleged that the public housing project was established as part of an overall plan to racially segregate Fort Lauderdale, that the cleanup plan was inadequate and would leave the plaintiffs exposed to continuing unsafe levels of dioxin and arsenic, and that the execution of the cleanup as ordered would perpetuate de jure segregation. So this was their claim.

 

      The complaint pled causes of action for violations of the 5th, 13th, and 14th Amendment, as well as Title VI of the Civil Rights Act of 1964. The trial court dismissed all of their claims under Section 113(h), which, again, bars challenges to any ongoing cleanup action. On appeal, the tenants argued to the Eleventh Circuit that Section 113(h) does not apply to constitutional claims. The Eleventh Circuit disagreed.

 

      The court first rejected an argument that Section 113(h) should be read as only applying to cases brought by potentially responsible parties, the theory being that the congressional concern for rapid funding of the cleanup and the accomplishment of the cleanup and the bar on judicial challenges that relates to that has the purpose of ensuring that the potentially responsible parties can’t delay cleanup through litigation, not that injured parties not be able to delay litigation in order to get a better cleanup.

 

      The Eleventh Circuit noted, correctly, I would say, that the plain text of the statute does not make this distinction, and that distinction can’t be read into it. Instead, the Eleventh Circuit adopted a plain reading of the term “any” in Section 113(h) and concluded that the unlimited breadth of the prohibition encompasses any legal basis for challenge, constitutional or otherwise. The Eleventh Circuit then examined Supreme Court precedent to determine that there is sufficiently clear congressional intent to bar constitutional claims simply from the term any challenge may not be brought in federal court, or any suit is the word in the statute.

     

      So the Broward Gardens Tenants decision relies on similar holdings from the Sixth Circuit in a case called Barmet Aluminum v. Reilly as well as the Eastern District of Michigan in a case called South MacOmb Disposal Authority v. EPA. The Eleventh Circuit, though, did note contrary decisions from the District of West Virginia in Reeves Brothers v. EPA as well as an unpublished decision in a case called Washington Park Lead Committee v. EPA.

 

      In that case, residents of a predominantly African American public housing project were held to have standing to sue EPA for discrimination and continued segregation following EPA’s decision in a CERCLA action to relocate the residents of privately owned housing from the area immediately surrounding the contaminated site but not the residents of the public housing project. So that’s an unpublished decision from the Eastern District of Virginia in 1998. So Broward Gardens Tenants looks at these disparate chains of authority, goes with those cases that find no jurisdiction to hear constitutional challenges to cleanup orders.

 

      The court rejected an absurd results canon application from the tenants. The tenants’ argument is pretty common sense, really, that the point of CERCLA is to get effective cleanups quickly and well-funded. And it’s kind of an absurd result to say that the people injured by the contaminated site cannot then challenge a cleanup which would leave them in that state of injury. And the court rejected that.

     

      The Eleventh Circuit in Broward Gardens Tenants does acknowledge the tension here between a policy of protecting human health through cleanup of toxic sites and preventing legal challenges to cleanups which threaten harm to human health. But the court concluded that the ability to challenge a cleanup after it was complete and the site closed by EPA and to pursue state court nuisance actions resolved this tension.

 

      So alongside of the Broward Gardens Tenants case, there are a number of other circuits that have held in a more limited setting that potentially responsible parties can bring constitutional due process challenges to, if not an ongoing cleanup, to the overall structure of CERCLA on the due process argument that this advancing of liability in front of -- excuse me, of remedy in front of liability violates the due process rights of the potentially responsible party.

 

      So these two lines of authority sit next to each other somewhat in tension and raise a question whether other circuits would follow Broward Gardens Tenants and hold in the same way that discrimination-based constitutional claims may not be raised against ongoing EPA cleanup operations. It would make a fairly significant difference, I would say, in how those cleanups are administered and how the plans are developed if these kinds of discrimination-based constitutional claims can be brought before the cleanup is complete.

 

      So other circuits have yet to weigh in on that. In that sense, Broward Gardens Tenants is a little bit of an outlier. And of course, Congress has control of the text of its statutes and could take action in this area as well.

 

      And with that, I will hand the mike off to Nadira Clarke, our next panelist.

 

Nadira Clarke:  Thank you so much, and it’s really nice to be here. It’s big shoes to stand in for John Cruden, who’s been a wonderful mentor of mine throughout my career, and we wish him and his family the best.

 

      I thought that maybe for purposes of my presentation today to think a little bit about environmental justice, the administration’s commitment to environmental justice, and really the question that I think is on a lot of my clients’ minds, which is what’s going to be different, will anything be different, will it stick, so to speak. And I think a lot of the comments that we’ve had here today on the panel raise those questions.

 

      There’s clearly an absence of law in this area. There’s real tension on whether or not you can use existing statutes in regulations to further the government’s commitment to environmental justice. And I think there’s also a question about, notwithstanding from the leadership of this administration, at the end of the day, the question is will -- despite the commitment, what will be different, and will anything be different?

 

      And so I thought it might be just interesting to reflect back for a moment on what would ultimately be -- how environmental justice started. When I started at the Department of Justice, actually, it was under President Clinton. Environmental justice was just being introduced at the department, and there was a lot of energy and at least lip service around the concept of environmental justice. Certainly, the executive order was signed during that time.

 

      And you saw within the Department of Justice a real challenge in terms of -- I think career lawyers who are committed to environmental enforcement trying to understand what to do with this concept and a lot of debate going back and forth about what laws could be used to further this concept? Was it the role of the Environment and Natural Resources Division? Was it the role of the Civil Rights division?

 

      And I spent probably more time than I care to remember in meetings where everyone was tied up in knots trying to answer these questions. And I think at the end of the day, while there were some important advancements just in terms of broad commitments and some infrastructure built within the federal government around environmental justice, I think at the end of the day, there weren’t, I think, probably from community activist perspective, there weren’t necessarily tremendous advancements that were made.

 

      And I think in the Obama administration, it’s not tremendously different. I wasn’t at the Department of Justice at that time, but I think you heard commitments. You heard Administrator McCarthy at one point making the connection between climate change and environmental justice and noting the opportunities that that presented. But I think if you were to speak to community activists, I think they would say even under the Obama administration that there was relative little -- that the concerns around disparate impact remained.

 

      And then for companies and regulated industry, the question is will this be different, and what will be different? And I think that one thing to consider is just that you have these broad pronouncements that Hana has mentioned in terms of what the government is committed to, and I’m going to go through some of those as well in a little bit of detail. And so that’s notable because they’re talking about -- the administration is talking about environmental justice in a slightly different way.

 

      But I think what’s important to recognize as well is the social climate in which this is coming up because at the end of the day, given the murkiness of what the legal framework is for environmental justice, it’s going to come down, I think, ultimately, to using existing laws, if the government is inclined to do so, and exercise of discretion.

 

      And I spend most of my career defending criminal actions in environmental and major accidents, and discretion plays a very significant role. And so I think the question will be how does, given what’s happened, and if we just sit back for a moment and think, whether we agree or disagree, about the events that have transpired over the last year, just the reality is that there has been a pandemic, and there has been a significant amount of racial strife and focus on racial equity.

 

      And there’s been a connection made, it seems, by community groups with the idea that there’s this connection between vulnerability to COVID-19 and the collective impact over the years of environmental pollution. And so I think you see within certain sectors of society a real focus on that. And I think you see that within the administration as well.

 

      And so I guess when I say all of that, I think part of the point I would make is that will there be a difference? There may very well be a difference, not just because the government is thinking and talking about environmental justice differently, but also because I think individuals -- there’s a demand, a climate, and a demand by the public. There’s a sense even by companies and regulated industry that there’s a need to at least appear to be sensitive to issues of racial equity. And with that climate, I think you’re going to see some use of discretion under traditional environmental laws in favor of protecting or bringing cases where minority and low income communities are perceived to be disproportionately impacted.

 

      And I think we all know that, or we recognize that maybe there is that out there. But I think having spent a fair amount of time in the Department of Justice, it’s important to recognize that when there’s a climate like that, that really does impact what cases are selected and the vigor with which they are pursued. And I think that will make a real difference.

 

      I  just wanted to touch on just some of the things -- at the risk of repeating some of what Hana said, I wanted to just touch on some of the things that I thought are notable about the Biden administration’s focus on environmental justice. When we talk about the “whole of government,” it’s really this intersectional environmentalism and the concept that environment, justice, climate justice, racial justice, and social justice are tied together, and that they can’t be seen in isolation. And if that’s the concept, then you see that it’s going to impact, as we’ve said, all of government and all agencies.

 

      We’ve noted a few of the developments, but I think certainly watching the White House Environmental Justice Advisory Council and looking at what some of the developments will be there will be important in terms of seeing what happens with environmental justice. I think watching as well the developments within the Council on Environmental Quality and looking at some of the developments there will be important as well.

 

      I also think that it will be important to consider, to my point about enforcement, there’s a real focus, as Hana mentioned, on collection of data. And we’re observing that quite a bit in my own work in negotiating resolutions with the agencies, including EPA. There’s a keen interest in fenceline data and collecting that data, and then slicing it and dicing it in a number of different manners. That’s obviously groundwork, or presumably groundwork for bringing enforcement actions, and I think that will lead to marked changes potentially in the types of enforcement that that has brought.

 

      I wanted to mention just two other things that I think are interesting, and this has already been touched on a bit. One is the SEC enforcement. The SEC launched a new climate and environmental -- ESG task force, and that’s likely to drive new initiatives. The commission’s focus will include environmental disclosures, diversity disclosures at the board and workforce levels, and political spending disclosures.

 

      The SEC also recently completed a review of ESG investing and issued a risk alert based on increasing numbers of ESG products and services that don’t have a standardized definition or industry practice. And I think that emphasis on public statements is especially important, and you will see, I think, the focus on potentially misleading statements and omissions and the focus on climate change that could easily sort of move to environmental justice.

 

      And so why is that important? I think as companies think about the reality -- react to this focus on environmental justice to the extent that there is a tendency to start to build a program, start to characterize actions as being responsive to concerns around environmental justice, I think there’s a recognition that the SEC will be evaluating that and testing that to some degree. And I think that is where you see a unique approach outside of EPA to, I think, Matt’s earlier point, that it’s not just relying on EPA.

 

      And then similarly with the FTC, I think you see with the FTC and the green guides, there’s focus there more from the perspective of consumer protection or deceptive marketing, same kind of concept though, representations. As there’s a focus on environmental justice, there’s a great desire, I think, by companies to see that as an opportunity for promotion of products, services, the overall ethos of the company. But there, too, I think there’ll be some testing of that by the FTC.

 

      So I think in closing, I would just say that discretion is important. We know that. But it’s particularly true in the context of environmental justice. And I think when you consider the climate that we’re in, the imperative that many feel about speaking to the issue of racial disparity or injustice, I think that, indeed, we may see this administration making some advances that we haven’t seen before, notwithstanding the absence of real legal construct to rely on.

 

      Thank you, and I’ll turn it back to Judge Larsen.

 

Hon. Joan Larsen:  Thank you to all of our speakers so far this morning. Your comments have certainly provoked a lot of questions in my mind. And I’m sure that you would like to have a chance to speak to one another and respond, maybe, to a few things that have been said. So I think I will give the speakers an opportunity now to offer any comments in response to what other speakers have said. Since we’re not sitting around a table, I feel like I can’t be quite as organic as I ordinarily would, so I’ll go in order and ask if anyone would like to make any comments in response to others. So I will start with Matt Leopold and see if you have anything you want to chime in on.

 

Matt Leopold:  Thanks, Judge. I wanted to make the point, Nadir’s comments, about discretion in the agencies I think is particularly relevant. And having recently served, it’s very true that the federal agencies have vast scopes of discretion, even within the limits that are put in our federal environmental laws and other laws.

 

      And with respect to environmental justice and the questions of how do they accomplish the policy goals, I think enforcement in particular is the one area which is wholly driven by discretion to some extent. There are many violations, many referrals from states around the country, and the federal government is large, but it doesn’t have unlimited resources. There’s are about 400 attorneys at the Department of Justice Environment and Natural Resources Division, and of those, the majority are enforcement-based, but not all of them.

 

      And so how to utilize that federal resource and where to focus it is a key issue that I’ve been hearing from DOJ. And in watching the types of cases EPA is choosing to prioritize and bring themselves or refer to the Justice Department, I think will be focused around those communities in proximity to pollution, as it should be, and mitigating risks posed by pollution in particular. Air pollution is a big focus.

 

      But as Tony mentioned, site cleanup is also an issue that often plagues low-income and minority communities. And I think you’ll see in that context CERCLA’s mechanisms where Tony is very right that 113(h) is routinely asserted by the government to stop individuals from thwarting an EPA remedial plan. But you may see on the front end the administrative process, EPA reaching out more broadly to impacted communities as they design their cleanup program and remedial measures.

 

      And you’ve seen in some of the policy documents EPA and the White House calling for more engagement and transparency in mechanisms like the remedial investigation and feasibility studies that are done before the government makes a determination on a CERCLA remedy. So those are a couple thoughts in response to the comments.

 

Hon. Joan Larsen:  Great. Hana, do you have anything you want to chime in about?

 

Hana Vizcarra:  Sure. I think one thing that you could hear from listening to us all speak about different pieces of -- sorry. I was going to say that one of the things that I think is apparent from listening to all of us speak about this is that a lot of what we’re seeing from the administration and what may move the needle on some of their priorities really is about process. It’s about incorporation information into the decision-making process, both on their climate initiatives and on their environmental justice focus. You’re seeing both of, as Nadir mentioned, the requests for information and incorporation of information into the agencies’ work and a priority on the EJ issues, but also the structure we’ve seen that’s come out of the executive orders.

 

      And looking ahead a little bit to one of the questions I see in the queue here on the Modernizing Regulatory Review memo, that’s also another process involved. It’s not necessarily directing agencies to ensure that their initiatives don’t have EJ impacts. It’s directing agencies to incorporate the consideration of these impacts into their decision-making process.

 

      And playing back to what Matt said on discretion, much of the law, administrative law and environmental regulatory rulemaking, is very much focused on what you consider. That’s what NEPA’s about, and that’s what EPA is about, or a good portion of it. And I apologize if you’re picking up background noise. There’s some yardwork going on here at my house.

 

Hon. Joan Larsen:  I think we might be getting a little feedback from you, Hana. Not just the yardwork, but -- so maybe we should move just so we can hear better, and maybe that’ll get fixed, and I think move to Tony Francois. And we will come back to you, Hana. I promise to let you have your time.

 

Tony Francois:  Thanks, Judge Larsen. Responding to the comments that both Nadir and Matt made about agency discretion and durability, or I’d say their responsibility to front load, making sure that the injured parties at very least are made whole in the cleanup process. I don't know what the -- I guess what I’ll say is that somehow or other, that needs to be more than just a matter of agency discretion.

 

      And it’s not meant of a criticism of the fact that the agency makes a higher priority of that. That’s not what I mean. But that as the injured parties somehow or other, I think, whether that’s judicial interpretation of 113(h) or amendment of it, or some other change to the status quo, somehow or other, the injured parties need to be able to have, I think, a little bit more time in the driver’s seat to make sure that the impacts to them and their property aren’t left behind for the duration of the cleanup.

 

      I think everybody knows the cleanups take a very long time to do in most cases. I think the last administration, one of its most admirable things was the priority it put on accelerating cleanups and getting them done and getting sites closed. But even with that, people have to live with a problem for a long time.

 

      And so I don’t really know what the answer to that is because the 113(h) disposition of these things is pretty long standing, and there’s a lot of reliance expectation on it. I’m not sure what the wisdom of simply changing that would be by amending the statute, but I do tend to think that there would be value in some more control over the outcomes for the actually injured parties, and that that probably should rest on more than the good actions of the agencies.

 

Hon. Joan Larsen:  Okay. Oh, Hana, are we back to you?

 

Hana Vizcarra:  Well, let’s test this out. Does it sound okay?

 

Hon. Joan Larsen:  Still getting some feedback. I don’t know what’s going on. I think we’ll go to Nadira, and then maybe we can circle back one more time.

 

Nadira Clarke:  Well, I have the benefit of going last, so I have addressed many of the comments. I think I would just say that when we are talking about agency discretion, there’s a real education, I think, that has to take place. I think everybody in government is well-meaning, but I think for a long time there are -- and it’s not intentional, but I think it just happens that we focus on certain areas of concern and interest, and others, without even thinking about it, we dismiss.

 

      And I don't know that this is really responsive to what anyone else has said, but I’d just make the comment that even with discretion, even with this imperative that people may feel right now, I think there’s a -- it will take a certain amount of education and development, even with all of that, for individuals who have been disparately impacted in the past to have their interests heard.

 

      And I think whatever changes might take place, perhaps to Tony’s point, I think we have to recognize that it’s not natural for people -- these interests and these concerns and the impacts that people are experiencing are things that we just haven’t had an opportunity to consider. And I think now is the time that people can focus on it.

 

Hon. Joan Larsen:  Okay. So I understand that the tech people are reaching out to Hana to try and fix whatever problem we have on her end. But I had a few questions. It seems to me that one of the things that we’ve been talking about is less reliance on the EPA and more reliance on other agencies to carry an environmental brief, whether that be environmental justice or also climate change. And of course, those are related, and I imagine other environmental concerns as well.

 

      Many of us have spent time in government, and when you disperse regulatory authority or litigation authority across numerous agencies or even when you put it in different hands within the same agency, it often leads to conflicts. So I guess one question I have is whether dispersing all of this authority over these questions will result in more action or less action. Do any of you have any thoughts on that question?

 

Matt Leopold:  I’ll be happy to kick it off. I think, Judge, you’ve rightly recognized a challenge in wielding federal power. By design, I think it’s been separated by Congress into different agencies.

 

      The most notorious example of that, even that I think President Obama mentioned in one of his State of the Union speeches, is one agency, the Fish and Wildlife Service, regulates endangered species that are terrestrial. Another agency in the Department of Commerce, the National Fishery Service, regulates the same fish when they go out into the ocean. The wisdom of that and why Congress separated that authority into two agencies which often conflict and then puts the Justice Department in interesting situations sometimes in court, I don’t necessarily understand.

 

      But when it comes to harnessing all the agencies and getting them rowing in one direction, that is where the power of the executive order really comes into play. And what I would note is this trend towards more aggressive use of executive actions has really been -- Biden wasn’t the first president to lean into that. I think it’s becoming more of a recognized practice that administrations on day one come in with pre-drafted, ready, prepackaged executive orders to make sure that they are getting their policies out and in the bloodstream of the federal agencies.

 

      And in addition to that, on climate in particular, this administration has appointed not one but two climate czars, Gina McCarthy, the former administrator of the Environmental Protection Agency to focus on domestic issues, and former Secretary of State John Kerry to focus on global climate change issues in the international space.

 

Hana Vizcarra:  All right, I’m here.

 

Hon. Joan Larsen:  Great. Hana, we’re glad to have you back.

 

Hana Vizcarra:  Sorry about that.

 

Hon. Joan Larsen:  Matt, I didn’t mean to cut you off, though. Did you want to conclude there?

 

Matt Leopold:  Yeah, just to point out that I think that this administration on climate change and environmental justice as well is clearly running the policy from the White House, and I think that’s going to eliminate some of the usual conflicts and turf wars among federal agencies.

 

Hon. Joan Larsen:  Great. Hana, I don't know if you heard the question, but the question was, which I think Matt addressed well, was whether dispersing regulatory authority among agencies is likely to lead to more -- to progress or to conflict because agencies with different ideas about how to enforce the same statute or pursue the same regulatory goals may end up in turf wars or battles.

 

      I don't know if you want to comment on that, or whether we want to move to some of the speakers in the queue. But I want to give you a chance since you’ve been offscreen for a little bit.

 

Hana Vizcarra:  Sorry. I apologize for the technical difficulties. I hope you can hear me well now. I think that that actually connects well with that I was attempting to say earlier, which is that part of what will make that successful for them is if they are able to integrate new decision-making processes into their efforts.

 

      So a lot of the focus we’ve seen in some of these early EOs and some of the memos, the regulatory review memo, for example, and others, is how are they getting environmental justice information, climate related information, into the regular decision-making process of many functions of government? And I think that’s less about what does the statute allow and where. It’s more, “We make these decisions within our purview. How does this information relate to what the decisions and the authority we already have, and how should we be considering that in our work?”

 

      And so I think that’s a compliment to what Matt was talking about as far as the coordination from the White House. I did hear a little bit of that. But I think they will be more successful if they’re able to develop the tools to really evaluate these issues. That’s why I think you see a focus on things like the revamp of EJ’s green, and the social cost of carbon, and reevaluating how they’re approaching cost-benefit analysis, and those types of rulemaking and decision-making tools, and getting that throughout the government outside of maybe the particular places where we’re used to talking about them.

 

Hon. Joan Larsen:  We have a question in the queue that is related, and so I think I’ll pose it now for the group, which is assuming, for the sake of argument, the latitude to do environmental justice in non-environmentally related or specifically environmentally related agencies, do we have any concerns about the adequacy of environmental expertise at these agencies among the top leadership at HHS or DOT or the Department of Justice? Are we concerned that expertise may not be present in those agencies, and we may end up with something that’s less than ideal? Any of our speakers want to address that? I’ll just let you jump up.

 

Tony Francois:  I’ll take a run at that. I think that there’s even a bigger question with that. Obviously, agencies that do not primarily enforce environmental statutes can still have people within the secretary’s office or some agency leadership offices that have that expertise. And you can create positions within non-environmental agencies to supply the agency with some environmental expertise just the same way that EPA can, by having positions that are dedicated to things like understanding the financial aspects of cleanups or other, permitting, things like that, can spin up on those things.

 

      I think there’s kind of a bigger question that this is really just one example of, which is, is this the way the government is supposed to work? I think the high school civics version of the federal government, which might state it a little bit pejoratively but is of great interest to pretty much everybody involved in The Federalist Society, is that the constitutional settlement of this question is that Congress makes the rules and decides what the agencies are going to do. And the agencies do that.

 

      And that, even in an era of congressional abdication where so many policy questions are delegated to the executive branch and to the agencies, the fact that statutes drive the workflow, the workload for agencies is an integral part of the process of congressional oversight. What the committees meet on and what they grill agency staff and leadership on is really all designed around what are the statutes and the programs that that agency and that part of the agency is supposed to be implementing.

 

      When you broadly replace that with legislator in chief executive order governance from the White House, one of the things that does is frustrates the typical methodology, as underperforming as it may be at times, of congressional oversight because if the answer to a committee chair from an agency head is, “Why aren’t you doing these things?”, if the answer to that is, “Because the president has me doing something different,” Congress is in a different position than they would be if the answer is, “I just didn’t get around to it. I know that’s what I’m supposed to be doing. I just haven’t done it, or I haven’t done it well.”

 

      And so there’s a lot of things contributing to this. It’s much broader than this topic or even this presidency, obviously. But I think it’s important for all of us to observe this as it happens that there’s a pretty substantial change in paradigm about the way the executive branch operates that we’re observing here.

 

Hon. Joan Larsen:  Okay. I think I might go to a few of the questions that we have in our queue. I think Hana already addressed this question regarding Biden’s memo, Modernizing Regulatory Review, and explained -- so the question was that this memo, Modernizing Regulatory Review, directs agencies to ensure that regulatory initiatives do not have environmental justice impacts, but environmental regulations routinely have such impacts, and how can that be reconciled?

 

      I think Hana already addressed that question, but we have a follow-up—I don't know if it’s a question or a statement—regarding Section 2 of that memo that directs OMB to write recommendations on environmental justice analysis. And so maybe some of the panelists want to comment on that and explain what that might look like. Is anyone familiar with what OMB’s brief is here and how that might affect the conversation? Hana, is that something that you’re familiar with?

 

Hana Vizcarra:  Yeah. I was just going back to take another look at it. So my understanding of that memo is it is more of a process and analysis memo about how to approach -- it goes back to regulatory reform and talks about regulatory analysis. And I think the directive there is to require more direct consideration of environmental justice issues in the analysis. And yes, OMB is part of that as their oversight of regulatory -- the development of rules and how these types of cross-cutting initiatives are applied across agencies in providing some guidance there, just as they are with the environmental Justice40 Initiative and developing some implementing guidelines for agencies.

 

      So I think we’re still waiting to see what these directives are going to result in and what they will mean for the actual process that agencies go through when they develop their rulemakings. But I think we’re going to see new guidance on how to incorporate environmental justice information into their process and what type of information they need to be considering.

 

      We are already seeing some more focus on EJ issues, or just highlighting of the EJ considerations in rulemakings. With the HFC rule, the proposal that came out that was highlighted a little more than you would normally see by brining it to the forefront. A lot of times, the environmental justice considerations are buried down in the rulemaking, but don’t think that’s yet where they’re going. We’re going to see more action with more guidance and recommendations as to more specifically how they expect agencies to consider these issues.

 

Hon. Joan Larsen:  So I have another question in the queue which might be related, although I’m not sure. The question is whether anyone in the panel is familiar with the 2021 IEA Cleanup Energy Transition Report. Does anybody have any comments on that particular energy transition report or want to offer some clarifications on that? If not, it might be just something that’s not in our particular panel’s wheelhouse. There’s been a lot of stuff coming out of this new administration. But maybe Hana has an answer.

 

Hana Vizcarra:  Well, I could just -- I know the IEA has recently put out a new report. I think this is the one that they’re referring to that was focused on more aggressive action, highlighting the need for more aggressive action on decarbonization in order to reach the goals that have been set. But I can’t say that I have a lot of detailed information on it.

 

      The other piece of the question that’s mentioned is the demand for critical minerals. That is a significant issue that anybody focusing on renewables has to consider is what are the other needs for different types of development, whether it’s batteries or anything else that requires more -- or solar panels and the like that have different kinds of supply chain needs. And I think that’s -- if I’m reading it correctly, I think that’s what this question is asking, is related to.

 

      And I think this administration is definitely considering these issues, and you’re seeing a lot of activity in DOE around funding initiatives to address concerns around potential shortage in supplies for other key minerals for different -- as these efforts in renewables development ramp up.

 

Matt Leopold:  I’ll just jump in on one point. I read a little bit about the report, but I think the question gets to the point of even this week, the president visited Ford’s manufacturing plant to talk about a complete transition to electric vehicles from fossil fuel combustion engines.

 

      And I think a test of the mettle of this new policy approach really is where are we going to source those minerals? Are we going to source them -- right now, reports I’ve read said 80 percent of the minerals that are needed to create batteries for electric vehicles are coming from China at the moment. Are we going to have a mining renaissance in this country to help source the EVBs and have the ability to produce those domestically? And how are we going to dispose of those batteries is a huge question for environmental law as well.

 

      But just on the mining point, it’s becoming more and more difficult to permit new mines in this country, and so how are we going to balance natural resource concerns with the EVB renewable transition? And I think no one fully knows or appreciates that yet, and outsourcing those minerals, and whether we’re going to allow that to occur in the United States.

 

Hon. Joan Larsen:  Interesting. As a resident of the Detroit Metro area, that’s a -- what we hear about is the new Ford truck with this giant battery, but it’s interesting to think about how are we going to produce those batteries and where are we going to dispose of them. So anyone else want to comment on that? No?

 

      If not, I have another question which might be directed towards Nadira. I’m not sure. Anyone could comment. But you mentioned discretion in environmental enforcement, and obviously that plays a huge role. I’m wondering whether what you meant by that is discretion in using existing authority, and we might say within the lines, and just directing its more conventional prosecutions or enforcement actions towards particular communities, so using conventional authorities in new places, or are you thinking about discretion in terms of a broader and perhaps more creative reading of conventional authority? So where do you see this discretion going? And I’m not sure if my question is clear, but if you understand it, you can answer it.

 

Nadira Clarke:  I do. Thank you, Judge. I think I initially saw it in terms of discretion in terms of using existing authority. Not to say that we might not get to a place as we evolve, and this administration evolves, where you’re testing new and creative approaches to existing authority. But I think within existing authority, there’s the idea -- when I listen to environmental justice activists or talk about what they’re looking for, it really is just wanting to be considered, the impacts they’re experiencing, the communities that they live in, even just under existing law.

 

      And I know and I think many of us who’ve worked in government know that even the path that it takes for there to be -- if you’re in environmental enforcement or you’re in environmental crimes, the path that it takes to get folders on your desk of potential cases, there’s a lot of discretion involved in who chose what to focus where, and what information was available, and what resonated with you when you saw it, an agent when they saw it, or a regulatory attorney when they saw it. There’s lots of steps along the way before you get to the stage that there’s a recommendation for enforcement that’s brought at the Department of Justice.

 

      And so I’m thinking really just in terms of use of existing laws, but perhaps through some of the guidance that’s issued and some of the directives around thinking about environmental justice as being more intentional about thinking about what was that path? What might not have been considered? How might you change your -- how might those procedures change so that you’re viewing more broadly or considering more broadly communities or impacts that you wouldn’t otherwise have but that are certainly already recognized within the law?

 

Hon. Joan Larsen:  Do you think, in your experience as a prosecutor and as an environmental litigator, what do you think have been the roadblocks to the kind of enforcement that environmental communities might want to see, communities adversely affected by environmental concerns?

 

Nadira Clarke:  I think some of it just comes down to just having -- in order to make an effective environmental claim, I think sometimes you just have to have resources. You have to be able to articulate. You may perceive that you are experiencing adverse effects from the facility that’s across the street from you, or you may believe that those are issues, but you have to have more than that in order to bring a case. And so I think some of it is a lack of resources by these community groups and an inability to get adequate legal representation. And I think some of the money that’s going to be funneled to these groups may shift that.

 

      But I also think it’s -- even when you do that and once it comes through the system within EPA or the other agencies, reaching all the way up to Justice Department, for instance, on the criminal side, I think that a lot of whether you bring a criminal case as a prosecutor has to do with the law, but also how outraged are you? How much does it bother you? How concerned are you about the actions?

 

      And you have a lot of discretion within that. You’re not compelled to bring a case. And whether you choose to either decline that case, on the criminal side, decline that case, or plead that case to something lesser, a lot of that just has to do with your own background and you’re thinking. And you’re not doing it with malice. But perhaps part of being more intentional and asking agencies to think more about this means that you’ll think, perhaps, a little differently about where you might be inclined to decline a case, and perhaps you take a second look. Or when an agent brings you a file, perhaps you ask what didn’t make it into the file. On the criminal side, anyway, that’s maybe an example.

 

Hon. Joan Larsen:  Matt or Tony, do either of you want to comment on what this discretion might look like in the new administration? No?

 

Tony Francois:  I would defer to Matt on that. Not having been in the government, I really would want to hear from those who have been. Matt and I worked on an enforcement matter together when he was at EPA, so it was kind of a one-off.

 

      But my -- well, I guess I started. My experience with enforcement, both civil and criminal, is that there’s always -- there always seems to be something extra beyond—I think this is coherent with Nadira’s observation about it—something beyond simply here’s the elements of the crime, or here’s the elements of civil liability. This person satisfies those elements. We should enforce. There always seems to be something else going on. Prior history with the agency that refers the case I think is a typical thing, or something that the agency appears to have identified as a priority for its field staff to funnel upward to referral to DOJ.

 

      And I do tend to think, observing this from the perspective of representing people who are enforced against, that leadership policy on this does make a difference in the types of cases that are brought and that are not brought, and that Nadira’s discussion about education and policy setting, I think, does actually play a large role, and certainly can, in bringing certain types of cases and leaving others aside.

 

Matt Leopold:  I’ll add an element that we haven’t discussed yet. And for people in the audience who are less familiar with how environmental enforcement cases work, EPA is one of the largest generators, of course, of new cases and matters. And there’s an office called the Office of Enforcement and Compliance Assurance that sets enforcement policy. And there are elements like Nadira talked about where individual attorneys either aggressively pursue cases or not within certain parameters. But there’s also formal policymaking at OECA to formally tell numerous -- on an EPA-wide basis, tell the employees and the environmental prosecutors, if you will, which cases are going to be pursued.

 

      So a memo was recently issued by the acting head of OECA that said you need to identify environmental justice cases for potential development in the administrative enforcement process, but also for potential referral to the U.S. Department of Justice. Most enforcement cases are handled at the administrative level, and the more serious cases with higher penalties and environmental harm are referred to the DOJ.

 

      But that policy has been issued, and it also talks about the tools called next generation enforcement using data collection, potentially drones to gather data using -- I know people think the resources of the federal government are unlimited, but they’re actually not. And so utilizing technology to gather the data that Hana was talking about in order to more effectively make those cases, so putting fenceline monitors next to a facility that might be exceeding permitted limits of air pollution and affecting an EJ community is a prime example that a lot of people are talking about right now.

 

Hon. Joan Larsen:  Interesting. And when you start talking about things like electronic monitoring and drones, of course, then I can imagine that there will be a number of other new legal issues with respect to privacy concerns that will probably land itself here in my desk or one of the other circuits.

 

      I see that we are just about out of time. We have about one more minute in the panel, so if any of the panelists would like to make a final remark, or there’s something that I didn’t call on you to speak about before we end, I would offer this remaining minute to any of you. Okay. And if not, then I think with 30 seconds left, we can probably conclude.

 

      I would like to spend the last few minutes just thanking our panel, thanking The Federalist Society for putting on this informative panel and rounding up these distinguished speakers. I also would like to thank the audience for your participation and for the good questions that you submitted to us.

 

      If you would like to join our next panel, the next conference event is entitled “Is Faithful Execution Being Devoured by Factional Execution?” That will begin at 1:00 Eastern Time, and you can log in for that. Thank you very much to all of our speakers, and I think our business here today is concluded. If I could adjourn court, I would. But I don’t have a gavel, so I’ll just have to use my voice. Thank you.

1:00 p.m. - 2:30 p.m.
Is Faithful Execution being Devoured By Factional Execution?

Administrative Law & Regulation Practice Group

Topics: Administrative Law & Regulation • Litigation • Constitution
Webinar
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Description

Abrupt and complete reversals of position from one Administration to the next, whether by Executive Order or other method, arguably not only tend to undermine respect for the law, but also disrupt the lives and businesses of those subject to the changed rules.  When the Department of Justice, on behalf of a new Administration, reverses a position the previous Administration had taken in ongoing litigation, courts might reasonably question the extent to which, if any, deference to the Executive can be reconciled with the judicial duty to say what the law is.

This panel will explore the legal standards associated with, and the practical ramifications of, the Executive Branch implementing major policy changes without involving the United States Congress, discuss examples of regulatory and litigation actions that have changed from one administration to another in the recent decades, and address whether these changes are consistent with the Constitution’s mandate that U.S. laws represent the consent of the governed.

Featuring:

  • Mr. Hashim M. Mooppan, Former Deputy Assistant Attorney General, Civil Division, U.S. Department of Justice
  • Prof. Eloise Pasachoff, Professor of Law; Anne Fleming Research Professor; Associate Dean for Careers, Georgetown Law
  • Hon. Virginia Seitz, Partner, Sidley, Former Assistant Attorney General, Office of Legal Counsel, U.S. Department of Justice
  • Ms. Farnaz Thompson, Partner, McGuireWoods LLP, Former Deputy General Counsel for Postsecondary Education, U.S. Department of Education
  • Moderator: Hon. Steven Menashi, United States Court of Appeals, Second Circuit

Speakers

Event Transcript

Hon. Steven Menashi:  Okay. I think we’re live now, so hello, everybody. I am Judge Steven Menashi of the Second Circuit, and I will be the moderator for this panel today. Welcome to our 1:00 panel. The name of the panel is “Is Faithful Execution Being Devoured by Factional Execution?” And the panel will consider reversals of position from one administration to the next and whether such reversals are consistent with respect for the rule of law and the expectations of parties who are subject to changed rules.

 

Of course whether a change in position is consistent with respect for the law or is unduly disruptive might depend on how abrupt and complete the change in position is. And it might also depend on how the administration changes position because, of course, there are many ways to effectuate change in position such as executive orders, a change in a litigation position, interpretive guidance, engaging in rulemaking or sponsoring legislation. And it might be that the mode or even how you employ that mode makes a difference as to whether it’s consistent with rule of law values.

 

So to help us puzzle through these questions we have four distinguished panelists with us today. But before I introduce them, I’m going to note a few housekeeping things. So one is if you are in the audience, you can send text-based questions through the Q&A tab in the upper right corner of your screen. And after all of the panelists make their opening remarks, I’ll look to those questions to facilitate discussion among the panelists.

 

And then, we will open up the discussion for the audience to ask questions directly from the virtual floor. And you can do that by pressing the “raise hand” button, and I will see raised hands in my interface and will call on you then. There’s also a chat tab for attendees to chat with each other. But that is only for attendees to discuss amongst each other, so don’t use that function to ask questions because we won’t see it.

 

So with that, I’m going to introduce our panelists in the order in which they will be speaking. So first up we’re going to hear from Professor Eloise Pasachoff, who is a professor of law and the Anne Fleming Research Professor at Georgetown University Law Center where she specializes in the administrative law of federal funding. She’s a public member of the Administrative Conference of the United States and formerly was a clerk to Justice Sotomayor.

 

Next, we’ll hear from Hashim Mooppan, who was recently the Deputy Assistant Attorney General for the Appellate Staff of the Civil Division at the U.S. Department of Justice and also served as counselor to the Solicitor General. Before that government service, he was a partner in Jones Day’s Issues and Appeals practice, and he’s argued several cases in the Supreme Court and in the courts of appeals and is a former clerk for Justice Scalia.

 

Next, we’ll hear from Virginia Seitz. Ms. Seitz is a partner in Sidley Austin’s Supreme Court and Appellate Practice where she represents a wide range of clients in the U.S. Supreme Court and courts of appeals. Before that, she served as Assistant Attorney General for the Office of Legal Counsel at the Department of Justice and is a former clerk for Justice Brennan.

 

And finally, we’ll hear from Farnaz Thompson. Ms. Thompson is a partner at McGuireWoods where she represents employers, institutions of higher education before federal and state courts, as well as before federal agencies. Before joining McGuireWoods, she served as the Deputy General Counsel for Postsecondary Education at the U.S. Department of Education and also as in-house counsel at the University of Virginia. And she is a former clerk to Chief Justice Hassell of the Supreme Court of Virginia. And so with those introductions let’s turn to Professor Pasachoff.

 

Prof. Eloise Pasachoff:  Well, hello, everybody. It’s a pleasure to be here, and I’m looking forward to our conversation. So it’s my job as the first panelist to set the stage of it, and I’m going to do so by pushing back at the premise of the panel description, which I would describe as gentle alarmism about presidential transitions. So I take the underlying thrust of the description to suggest that abrupt and complete reversals in position as administrations change destabilize the rule of law and undermine the premise of consent by the governed.

 

So I’m going to make four quick points in response. My first point is that most of government continues to chug along as administrations change. There are not huge upheavals in everything. So the same conditions on the CORE education grants to K-12 schools, kids in special education apply. Social security checks continue to go out. Disability claims continue to be heard. The FDA continues to approve drugs, etc. So in most ways I just want to underscore that the day to day experience of most individual people and regulated industry will not feel vast changes. So I want to start by just pushing back at the premise that abrupt and complete reversals throughout government characterize most transition periods.

 

So my second point is of course there are hugely major changes as well, but I don’t think that’s undermining respect for the rule of law. I want to suggest that that’s embracing the separation of powers supported by regular elections where different administrations will implement different policy choices that they articulated during the campaign and that they’ll do so within the bounds of delegated statutory authority. And where their actions exceed the scope of this authority, courts can stop them. So that’s consistent with the rule of law.

 

These major changes are in fact why we have elections, and so implementation of these changes directly reflects the consent of the governed, assuming, of course, free and fair elections. When the Department of Justice changes its litigation position in court as an administration changes, it’s often because the underlying issue was an executive action that the new administration no longer wants to defend because it wants to make a different underlying policy choice. So if you think about the typical challenge to an administrative action, it might be challenged on procedural grounds as not complying with the requirements of the Administrative Procedure Act; on statutory grounds as not within the limits of what the statute authorizes; or on arbitrary and capricious grounds where the decision making process and expressed rationale don’t comply with recent decision making.

 

So all of those arguments are beside the point as a matter of what to defend in court if the new administration is going to withdraw the underlying administrative action of the previous administration. A related observation about deference here and the lack of any conflict with the duty of the courts to say what the law is in this context, many of those arguments that I just articulated are not matters on which any deference is provided, so agencies don’t get any deference on whether they complied with the APA or whether they acted arbitrarily or capriciously or even whether their statue is ambiguous. And where Chevron issues are imbedded, the delegation and accountability rationales that underly Chevron are precisely the point. The court still retains the authority to say what the law is within the bounds of which agencies can legally act. So again, that is completely consistent with the rule of law function.

 

My third point is that there are absolutely times in which dramatic flip flops and dramatic overhauls can be troubling from a rule of law perspective. So one example might be using the criminal law, for example, to target presidential enemies or to benefit presidential friends. That would be deeply problematic from a rule of law perspective.

 

It can also be troublesome when an executive order demands immediate and dramatic changes in legal consequences for private parties rather than requesting that agencies take certain actions within a particular time frame because the latter provides more notice and less disruption to private parties. But these are not the mine run of cases, and I don’t want to overplay the dramatic for the kind of ordinary way things operate.

 

My fourth and final point is that I think we actually ought to tone down the rhetoric about transitions as reflecting vast upheaval and disruption and undermining the rule of law. I worry that that kind of rhetoric itself contributes to a public lack of understanding about the machinery of government, and that overtime can erode trust in government and the genius of our American experiment. So I will stop there and will turn things over to Hash Mooppan. Thanks.

 

Hashim M. Mooppan:  Thank you, Professor Pasachoff. Good afternoon, everyone. So picking up from there, I agree with a lot of what Professor Pasachoff said. I think context matters a lot in this in terms of when you -- sometimes after a change in administration it’s going to be appropriate or even necessary to change positions. And sometimes it won’t. And whether it’s appropriate or not turns on a lot of different factors.

 

So I think what I’ll do this morning in my opening remarks is lay out some of the factors that I think are relevant and then assess how the new administration and the last administration compare on some of those factors. So the first major factor I think that’s relevant is what’s the nature of the change? Is it an agency changing its actual policy on the ground, or is it the government just changing its litigating position in court?

 

When the agency is changing its actual policies on the ground, I agree with Professor Pasachoff that elections have consequences, and agencies are going to make changes to policy. And in that context, I think what’s most important is that the agencies comply with the APA. The APA of course requires reasoned decision making, including considering reliance interests that have built up around old policies. And all that’s fairly well known. I think one lesser appreciated fact is ensuring that litigation over the old rules is resolved in a way that ensures that the APA is complied with in changing to the new rule, in particularly ensuring that judgments against the old rule are not left in place in a way that sort of obviates the need to go through notice and comment rulemaking to get rid of the old rule.

 

Turning to just sheer litigation changes, in that context I think the rule of law interests are a little bit more implicated because you’re not talking about policy changes. You’re just talking about what the Executive Branch is telling courts the law is. And in that context I think if anything -- more than anything it's about the credibility of the Department of Justice and its respect for both the courts and the litigants. That said, even in that context, of course, there are going to be times where it’s appropriate to change.

 

A couple of factors that I think are relevant in assessing that are things like how recently was the prior position taken? What level of court was the prior position taken? When is the change in position happening in the course of the litigation, and what’s the nature of the issue? All those sort of factors go into whether the courts and the parties will perceive the Department of Justice changing position as reflecting respect for the litigants and the courts and the adjudicative process.

 

So let me now turn to sort of assessing both the last administration and the current administration on those sort of factors. In the Trump administration, it was fairly well publicized at the time that in the first term or the first six months or so the Trump administration changed positions in the Supreme Court in four major cases. There was the Epic case that involved the FAA and the NLRB. There was the Janus case that involved NC union fees. There was the Husted case which involved voter registration, and there was the Lucia case which involved SEC ALJs.

 

And I think there are two significant factors about those cases. None of them were cases in which the Solicitor General’s office flipped a position that had already been taken in the Supreme Court’s merits brief in that case. Only one of them even flipped a cert stage filing in the same case. And ultimately, of course, the change position was the position that the Supreme Court adopted in all four cases. And I’m not aware of any cases in the Trump administration’s first term where what you had was you had an existing agency policy that was already in the Supreme Court and then the underlying agency action was changed. So that second category of cases just wasn’t implicated in the Trump administration.

 

If you turn to what’s been going on this first few months in the Obama administration it’s similar, but I think there’s some notable differences. So there have been, I believe, at least five changes of litigation position. Three of those flipped the position that the prior administration had taken in a merits brief in the Supreme Court already. So the most well publicized of those was the ACA case but also in Cedar Point, which was a takings case, and Brnovich, which was the Voting Rights Act case, the new administration changed -- they basically filed letters with the Supreme Court saying they didn’t hold to either part or all of prior briefs in just short letters. And then in two other cases, AFP and Terry, the government changed its position after the cert stage, after they’d already taken a position in the cert stage, they flipped in the merits case.

 

The Terry case in particular was fairly remarkable. It’s a criminal case where the government had opposed the criminal defendant at the cert stage. The government didn’t notify the Court or anyone else of their change in position until the day their merits response brief was due. And then, they filed a letter saying that they had flipped positions. And so then the Court had to scramble and appoint an amicus to defend the judgement below. And at the argument, there were some questions from several justices about the government’s change in position.

 

Obviously, in all five of these cases, the Court hasn’t ruled yet, so we can’t assess what the Court thinks of the new positions. But from argument, I’ll just say I’d be pretty surprised if they go five for five in the changes of position. But probably the most remarkable aspect of what the new administration has done is actually in the context of changes to policies that were already in the Court.

 

Some of these were handled in the sort of ordinary way that I think Professor Pasachoff was referring to. You know, the agency changed its underlying policy. And because of that, the Court basically at the government’s urging put the cases in abeyance, and those cases will go away. And that happens in every administration, and it’s not uncommon.

 

But there were two cases where something different happened. In the Title X rule and the Public Charge rule. In both of those cases the new administration hasn’t changed its policy through notice and comment rule making yet. And the cases were already in the Supreme Court granted, and the government basically in the Public Charge cases just dismissed all their cert petitions, dismissed all their appeals. And they did the same thing in the Title X case.

 

And what that had the affect of doing is locking in a district court judgement or a court of appeals judgement that was adverse to the rule without having to go through a notice and comment rulemaking to get rid of the rule, at least as to the parties to the judgement. That’s particularly notable in the Public Charge case because the public charge case one of the judgements was a nationwide vacatur from the district court. And the Supreme Court had already granted a stay.

 

So the Supreme Court had already determined that the Public Charge rule was likely going to be upheld as valid, but the new administration came in and just dismissed all their appeals, which had the effect of letting this single district court judgement wipe out the rule nationwide and obviate the need for APA rulemaking. And that, I believe, is a fairly remarkable change. That’s very unusual to happen for the department, for a substantive rule to be wiped out that way. And that I do think presents pretty significant rule of law issues. Judge VanDyke in the Ninth Circuit actually wrote a fairly interesting dissent on that point. With that, I will transition over to Ms. Seitz.

 

Virginia Seitz:  Thanks, Hash. So I think to answer the question whether faithful execution is being devoured by factual execution you have to first decide whether the take care clause or some other provision of the Constitution contains some kind of general anti-lurching principle that might constrain a new president changing positions about what the law requires. And so although this panel’s question involves lurching in the Executive Branch, you could of course ask the same question about lurching in the Legislative or Judicial Branches. And I don’t think anyone would suggest that the Constitution imposes general limits on Congress changing the law going forward after an election.

 

But Congress’ ability to lurch after an election is several constrained by the challenges our Constitution creates for enacting laws. And the Judicial Branch has anti-lurching constraints imposed by its passive function and the doctrine of stare decisis and the role of the Supreme Court and other factors. But where do we look for analogous anti-lurching constraints on a newly elected president?

 

There are substantive and procedural laws like the APA, limits on his power in the Constitution, and what some call norms. But it’s historically pretty typical for a new Executive Branch to change positions within a range of reasonable interpretations of the law and the Constitution, including on fundamental constitutional issues. And whenever the Supreme Court and Congress have left room for interpretation on legal questions with salience to public issues of the day, the new Executive Branch can take advantage of that room and act on its own view.

 

So I think the last six administrations have changed position on the so-called Mexico City policy within weeks of taking office. And you might even say we have elections precisely to bring about some of these changes in position. So what is the basis for arguing that there’s a principle of Executive Branch stare decisis that constrains the newly elected president?

 

So I think some people have the intuition that the law shouldn’t depend on the party in power, and that feels right. But to me, it just raises the question of what’s imbedded in the concept of law. And if you believe as I do that although the law isn’t indeterminate, that there sometimes are often multiple ways of viewing interpretive issues, then there’s room for reasonable principle disagreement about what the law is.

 

And on that view, if you’re within the room, the real issue with flip flopping isn’t the flip flop but substantive concerns with the new executive position from a policy perspective. And then saying the law shouldn’t change with politics is pretty good rhetoric, but it isn’t really a legal argument. Of course, it’s only human nature to want to make a strong argument to limit change when your favored legal framework has been on top but is threatened, and the law works for that. But if we’re in the reasonable interpretation space, I think that change isn’t really a violation of law.

 

A second concern is that if you agree there’s a range of possible interpretations, once the Executive picks one, there’s an independent benefit in maintaining that interpretation because of the reliance interest we’ve been talking about. That’s a very powerful policy point. And in some contexts, it argues for putting a very large thumb on the scale against changing positions.

 

Except in certain narrow areas, though, reliance interests aren’t really fought to impose constitutional constraints on legislative lurching with the occasional exception from the due process clause. And it’s really hard to see why it would or should be different in the Executive Branch. And in areas where reliance interests are low, as with almost all debated constitutional questions about the internal functioning of the Executive Branch or when change is reasonably expected, then reliance interests simply don’t carry the day.

 

Finally, some might argue that the take care clause, the duty of faithful execution, by itself implies a duty of the Executive Branch not to depart from prior legal positions. This would have to be a theory that the take care clause has some kind of penumbral emanations that impose a sort of substantive stare decisis requirement, which is a view that’s pretty hard to square with our nation’s history or with any precedent about the clause. One could just as easily argue that the take care clause requires the president to be responsive to let penumbral emanations of the people underlying his or her election.

 

And that’s not to say, though, that the Executive Branch doesn’t observe important anti-lurching norms. For decades, the Solicitor General’s office has used such a norm in changing the United States’ position in litigation. And my old office, the Office of Legal Counsel, did act as a kind of voice and repository of precedent for stare decisis in the Executive Branch in many areas.

 

It had a body of precedent it followed. It had extraordinary career lawyers with deep institutional knowledge, and it had a tradition of quietly saying no to the Executive Branch. In my experience, the same was true in general counsel’s offices in many federal agencies.

 

There’s a perception since 9/11 that it’s increasingly difficult for OLC to dampen lurching, but my sense is that it continues fighting that good fight. I agree, though, that the norms constraining lurching are become fragile, and that may explain in part why people are looking for a legal constraint. And of course, partisanship and polarization make lurching worse. And polarization is quite high right now, and I think that directly leads to lurching because the further you see the other side from the middle, the less likely you are to feel the pull of stability.

 

The further you see the other side from the middle the less likely you are to see their constituency’s reliance interest as legitimate. The further you see the other side from the middle the greater its departure from norms, the less likely you are to trust it to respect your stability interests when it resumes power. And the more polarized we are the harder it is for law making to resolve these outstanding issues when lurching occurs because there is no basis for compromise.

 

And that is how both sides feel about the other right now, and I don’t see the take care clause as a basis for solving this quite fundamental problem. I’ll turn it over to Ms. Thompson now.

 

Farnaz Thompson:  Thank you. It’s a pleasure to be with you this afternoon. I think the theme that we can all agree on is elections have consequences, and really federal officials are elected to change policies at some level. How they go about changing those policies can help either strengthen or undercut the rule of law. And I think I have a unique appreciation for the rule of law because I’m an immigrant from Iran, and I was born in Tehran. So I think it’s really important how policies change.

 

So with respect to changes in regulations, three factors that I would look to to determine whether the change actually strengthens or undercuts the rule of law -- and those factors include, first, is the change in policy consistent with current case law, or is the change really an opportunity to circumvent case law? The second factor I’d look at is does the change actually have the force and effective of law? Is the change in policy actually legally enforceable? And the third factor I’d look to is what is the reasoned justification for the change? I might not agree with the policy, but if there’s a reasoned justification, then I think reasonable minds may disagree and that the rule of law continues to be upheld.

 

I had the privilege of working at the University of Virginia, and I worked on their Title IX policies under President Obama’s administration. And I’m very familiar with President Obama’s policies in the 2011 “dear colleague” letter, and I also had the opportunity to work on the Title IX final rule as part of the last administration. And so I really wanted to use Title IX as a concrete example and go through these factors.

 

And I’ll actually state that the Title IX final rule, which was published May of 2020 -- I’ll say that was considered a sea change. And it’s still one of those things that may go back and forth. But in terms of whether the final regulations under Title IX that were promulgated in 2020 are consistent with case law, I would assert that they are because the foundation for those regulations was the Supreme Court case, Davis v. Monroe, that was a seminal case with respect to sexual harassment as a form of sex discrimination under Title IX. And that case really provided the framework for the regulations.

 

One of the more controversial, perhaps, aspects of the regulations is the opportunity for live hearing and a live cross-examination. But again, that too is consistent with current case law both with respect to the Third Circuit and private universities as well as the Sixth Circuit and public universities. Both of those federal appellate courts have held that live cross-examination or some form of cross-examination between the parties is a necessary aspect of a hearing under Title IX.

 

With respect to the second factor— is the change in policy legally enforceable— the 2020 Title IX final rule went through notice and comment rule making. It’s a legislative rule. Prior to those regulations, the last time the Department significantly regulated on Title IX was 1975.

 

So in between 1975 and 2020 at least with respect to sexual harassment, what was guiding institutions of higher education as well as other schools with respect to Title IX was really just a series of guidance documents, which don’t have the force and effect of law. At best, the guidance documents referred to as “dear colleague” letters were interpretive rules, which at most would be afforded Auer deference. But certainly they were not legislative rules.

 

And the last kind of factor that I would consider is what’s the reasoned justification? As Hash mentioned, the Administrative Procedure Act requires there to be a reasoned justification for a policy change. And the reasoned justification for the Title IX final regulations were essentially to provide people who come forward with reports of sexual harassment with the support that they need while also providing due process for both parties.

 

Before the Title IX final regulations, there was no legally enforceable obligation to provide support to people who come forward with reports of sexual harassment, and this rule actually requires that as soon as someone comes forward with such a report that they -- that the institution -- the school offers them supportive measures. And if the school has actual knowledge without someone coming forward, they also have to offer those supportive measures. And those supportive measures are offered irrespective of whether the individual who allegedly experienced the sexual harassment actually files a formal complaint or wants to go through a hearing.

 

And also with respect to due process, I think that people forget that due process benefits both parties. So if someone who comes forward with allegations of sexual harassment has those allegations dismissed, they deserve to know why. And they also deserve to have the opportunity to challenge the justification or the reason for the dismissal, just as much as an accused deserves to know what the allegations against them are and have a meaningful opportunity to respond to those allegations.

 

And just this week, the Department of Education opened up registration for public comments either live or written on the Title IX final rule. And that is in pursuant to an executive order that President Biden issued asking the Secretary of Education to either review, rescind, or suspend the Title IX final rule. I personally don’t think that there are any legal reasons to suspend it nor justifications to suspend it. But certainly, the Department can go through notice and comment rulemaking to revise it or to rescind aspects of it. It has survived challenges in litigation, and there are still three cases pending. So we’ll see what happens.

 

But I’m encouraged that this administration is taking public comment and announced just on April 6th that they intend to issue notice of proposed rulemaking, which leaves me to believe that the process will be a fair one. It remains to be seen whether the changes are consistent with case law and what the reasoned justifications for any changes are. But I’m encouraged that irrespective of our differences with respect to policy, there’s a process that this government continues to follow with respect to issuing regulations. And with that, I will turn it back over to Judge Menashi.

 

Hon. Steven Menashi:  Thanks very much for those opening remarks, everybody. So I’d like to have some discussion among the panelists and maybe get some responses to the other comments. And maybe I could start by asking Eloise to respond to something that Hash said, which is you had said in your opening remarks that when an administration changes position or no longer wants to defend something in litigation, it’s because they want to change the underlying rule.

 

But Hash had drawn a distinction -- obviously, there’s a difference between saying your new rule is better and saying your new rule is legally compelled or that the prior administration’s rule was illegal. And so Hash drew a distinction between cases where you might change the underlying rule and maybe delay the litigation to change it and ones where you accept an adverse judgement that the prior rule was illegal. And so does that distinction make a difference? Maybe you could react to that.

 

Prof. Eloise Pasachoff:  Yeah. It actually does, and I made a note when he was saying that because I think that’s a really important clarifying point, Hash. And I value the fact that you brought it up. If I could also go back to one other thing that Hash said that I also found very interesting was the time -- the posture, I guess, of the positions in the actions in the Trump administration and the Biden administration.

 

And one of the challenges of where the Biden actions fall -- the facts that the rules are in court has to do with the prior administration’s pushing them into the Supreme Court and the timing of all that. So some of that is just, I think, coincidental. I’m a little reluctant to read too much into the posture of where the cases are in between the -- you know, as between the two administrations because I think some of that is outside the administration’s control. But I’m a fan of notice and comment.

 

So I am going to -- and I think, you know -- I’m an administrative law professor. I teach the Administrative Procedure Act. I love the Administrative Procedure Act, and so I’m going to also kind of support what, Farnaz, you were saying about going through notice and comment in order to do it.

 

So I’m going to agree that, Hash, that’s a -- the moment that you talked about, I think it is less sort of destabilizing from a rule of law perspective to go through the proper procedure rather than just to accept an adverse judgement. I’m not totally clear that the current administration isn’t planning on doing that with the public charge rule, so I don’t want to kind of speak too much about the posture of that. But I like very much the granularity of the distinction, even though I’m pushing back a little bit on the happenstance of the differences between the two administrations writ large on what the procedures are.

 

Hon. Steven Menashi:  Okay. Well, maybe I could ask Hash to respond to that. So I guess there are two things there. So one is if the posture of the case depends on the actions of the prior administration, why should that constrain the subsequent administration that’s elected? So maybe you could respond to that and say why that makes a difference. And then on this question about whether the administration plans to change the rule, does that obviate the concern about accepting the adverse judgement?

 

Hashim M. Mooppan:  Sure. So I’ll take those in reverse order because it’s a little bit easier. So my understanding of the public charge rule is immediately upon dismissing all the appeals the new administration published something in the federal register saying the Public Charge rule is gone because the district court judgement vacated it, and all appeals were dismissed. So they are not enforcing the Public Charge rule even though they haven’t gone through notice and comment.

 

I don’t know whether they intend to later go through notice and comment because the pre-Trump version was all based on a 1999 guidance document. So maybe they intend to go through notice and comment rulemaking for whatever version of the Public Charge rule they want to have. But in the interim, right now on the ground, they have reverted to the ’99 guidance rather than the 20 whatever year rule without having gone through notice and comment to effectuate that based solely on the district court judgement that the Supreme Court had already staid. So I do think that is pretty concerning.

 

As for the broader question, look, I don’t think it’s right to say anyone’s hands are ever tied. Of course in any circumstance, wherever you want a procedural posture the Executive Branch always has discretion to make decisions. But I think you have to take the hand you’re dealt with. So if cases are in the Supreme Court and, you know, the case has already been argued, I think the justices and the public and the regulated community are going to be a different position if you try to yank the rug out from under that suit than a case that’s, you know, in district court and people are deciding whether to take an appeal.

 

Now, does that mean that by rushing up to the Supreme Court you may be boxing the subsequent administration? Perhaps. But it also just reflects that each administration has to consider the facts and circumstances before them. So it is true that I don’t think we went in either Public Charge or Title X -- you know, there were square circuit splits in both cases, so I don’t think it was necessarily all that rushed. But even if it was, it seems to me like when you’re making decisions in the Department of Justice, you have to account for where you are at the time you are.

 

 

Hon. Steven Menashi:  Okay. Let me ask this. I think Virginia wants to weigh in, so why don’t you just do that? And I think I also have a question, but I’ll hold it.

 

Hon. Virginia Seitz:  Judge, I just had a different angle based on listening to that conversation, which was I wonder how much people think this kind of problem is caused or created by the difficulty of a transition in modern times -- you know, getting your people in. It feels a little bit more like the rush to get things done because of the limited amount of time you have to effectuate your policies is affecting how -- the lack of orderliness in the process for change. And I wondered if, Hash, you thought that there was some effect of that on the way in which the Biden transition happened.

 

Hashim M. Mooppan:  Yeah. That’s an interesting question. I hadn’t thought about it. It’s hard for me to see why that would be the case. It’s not like the inability to go through -- you know, to promulgate a notice and comment rule -- it’s not like they’re hamstrung by the fact that they don’t have enough political appointees in DHS or HHS to start down the rulemaking process. In fact, I believe they’ve already started down the NPR process for the Title X rule.

 

So I don’t think it’s right that it is out of some view that they are hamstrung in the ability to go the APA route. I think, frankly, it’s out of a combination of not wanting to have the rule in effect right away, not wanting to have to defend it in the court, and not wanting the Supreme Court to uphold the old rule, which they were likely to do in the Public Charge case because they’d already granted a stay. Because having the Supreme Court say that the old rule was lawful and reject a bunch of the policy arguments that’s been made against it is going to some extent effect the new administration would say a notice and comment rulemaking for a new rule. So it seems to me that’s largely what’s driving this, not sort of the staffing problems at the front of the administration.

 

Hon. Steven Menashi:  Well, beyond the staffing problems, I think the question was also about the amount of time you have in one administration. So if the rulemaking process is lengthy and cumbersome and every new rule is subject to a very lengthy litigation process, does that mean that administrations are really looking for shortcuts to get closer to policy changes than maybe they would have if we had a more efficient or timely system? I think maybe that’s what it was --

 

Hashim M. Mooppan:  Fair enough. If that is, I’m very sympathetic to the concern about the ability to promulgate the rule and actually get a policy in place, given sort of the pace of litigation against it. But it doesn’t really seem to me like the solution to that should be the sort of procedural shortcuts, you know, during a transition period. You know, if you’ve got a rule that’s likely valid, acquiescing in the judgement against it just doesn’t seem to me the appropriate way to deal with the problem that if you go through notice and comment rulemaking for your own new rule you’re going to be subjected to litigation.

 

Hon. Steven Menashi:  So Farnaz, I guess as somebody who has done a rulemaking and is familiar with the procedures, maybe you could weigh in on the interactions between the requirements to follow those procedures and what I guess have been described as short cuts. But maybe that’s an unfair characterization -- but the interaction between those two phenomena.

 

Farnaz Thompson:  Well, I would agree first with Hash that I think the better course of action is really to file a stay, go through notice and comment rulemaking or whatever you need to do to change the policy as they’ve been. And then, that changes the posture of the litigation. Whereas with what Hash is describing, now you have a federal district court judgement that would preclude another administration or make it at least more difficult for another administration to change the policy in a manner that’s against that federal district court judgement.

 

But to your point, Judge Menashi, it is a very onerous process to go through notice and comment rulemaking. And I often wondered why President Obama’s administration didn’t do that with Tile IX until I got to the Department of Education and realized just all the hoops that you have to jump through. So first of all, the Office of Management and Budget and OIRA play a key role, and you have to kind of make sure that every agency is on board or at least has an opportunity to comment on your proposal. So that’s just going through the notice of proposed rulemaking -- that stage.

 

And then with respect to all the comments you receive, combing through those comments, making sure that you respond to every unique aspect of the comment. And with respect to the Title IX rule at least, from the notice of proposed rulemaking stage to the actual final rule, there were a lot of changes that were made as a result of comment. But those comments were very -- you know, it’s very difficult to go through those. And then to actually issue the final rule, you go through that same process with the Office of Management and Budget -- their internal guidance documents and within the agencies as to the process.

 

But it’s very onerous. And so by the time you actually issue the final rule and give institutions and schools an opportunity or the regulated entities an opportunity to comply with it, it’s -- you know, you’re looking at two to three years. And you’re almost at the end of the administration. And then you have to go through the litigation, the motions for a preliminary injunction. And it’s a very burdensome process.

 

So I can understand why it’d be easier to issue a “dear colleague” letter or to issue guidance on something. But with guidance, there’s two problems. Well, first of all, it’s not a legislative rule. But then also, I think there’s a fair notice issue because at least with notice and comment rulemaking, you know that there’s a process in place. And there’s usually at least 30 days or 60 days to comply with the rule.

 

But with respect to guidance, I remember being at a university and having a new “dear colleague” letter issued without any notice. And then all of a sudden you wonder, okay, well, when does this interpretation from the Department of Education take effect because it’s just really an interpretive rule? So it really puts the regulated parties in a state of uncertainty, and I don’t think it’s the best course of action.

 

I think with respect to guidance documents, the better course of action is to use those as safe harbors for regulated entities so that they can turn to that guidance document and know that there’s some certainty that if they interpret this regulation or if they proceed in this course of conduct that there’s a safe harbor for them but with the knowledge and the note that that’s not the only possible way of proceeding.

 

Hon. Steven Menashi:  Okay. So I have a question from the audience, which I’m going to -- a written question, which I’m going to read and then maybe direct it. So the question is if an incoming administration is hostile to the legal posture of the previous one, won’t they just sandbag the case? If they are forced to defend it, how could courts trust the new government is giving the best and fairest representation of the policy?

 

And maybe I’ll just ask Hash for initial reaction. I guess maybe the import of that is maybe it’s better if a new administration just doesn’t defend policies it doesn’t agree with. And maybe it’s better to have an amicus defend it. Is that, like, a more open system, or might that be more reliable? You’re on mute. Let me just say you should unmute.

 

Hashim M. Mooppan:  Thanks for reminding me about that. So look, I think it depends. There are going to be some issues where it’s just clear that there are profound both legal and policy differences between the administrations, and it’s just not tenable for a variety of reasons for a new administration to try to defend the legal position or the policy position of an old administration.

 

In those circumstances, it seems to me what’s important to do is for the new administration to tee up the litigation in a way that it continues with a new defender. So whether -- I don’t necessarily say an amicus. More appropriate in those circumstances would be to have someone who’s interested intervene and take over the defense of the litigation in that circumstance, whether it’s a party who benefits from the rule or things like that.

 

And that is a possible way of proceeding in some of these cases rather than just dismissing appeals without giving anyone any notice that they need to intervene because the government often -- when parties try to intervene into litigation when the government is still defending the rule, the government will often oppose and so, “No, no, we’re adequate representatives for your interest. You don’t have any right to intervene.” And that seems right to me as long as the government’s actually defending.

 

But what seems not tenable is to then turn around and say, “When we’re going to stop defending, we’re just going to dismiss the appeals rather than put people on notice and give people an opportunity to intervene at that point.” But look, I do want to emphasis I do think that’s the minority of cases. I think there’s a large number of cases where, even if the new administration doesn’t necessarily agree with the old administration, either because of institutional reasons or because it’s just not that big a deal, the government can continue to defend that position.

 

Most of the briefs all the way through have been written and signed by career lawyers who are still there. Most of the positions just aren’t at that level of controversy. We’re all lawyers at the end of the day. Right? We’ve all represented clients where we don’t necessarily agree with the position our client has taken.

 

So it’s not that hard for a new administration to continue to defend something, saying, “You know, look, I might not have interpreted the wire fraud statute that way, but, you know, they brought this prosecution. And we’re just going to keep defending it.” You can think of lots of situations like that. It happens.

 

And in most of those cases, I don’t think there’s any reason to doubt the bona fides of the government, and I don’t think the courts would unless the brief seems weird. If the brief seems to be not making arguments they should be making, then their credibility’s going to take a hit. And no one I knew at DOJ would do that.

 

It was always either we’re going to actually defend this thing, or we’re not going to defend it. But trying to sandbag with briefs is just a very bad idea because courts will know that you’re not living up to the normal strength of DOJ briefs, and they’re going to know why. And that’s going to hurt the Department in the long term.

 

Hon. Steven Menashi:  Maybe I can ask Virginia to react to that. So I think what’s behind what Hash was just saying is the idea that there was some recognition that there were interests of the government that transcended administrations. And so if you’re a lawyer for the government, you might defend those interests even if you have different policy perspectives. But I think your comments were suggesting that because of polarization and maybe other factors that sense that there interests of the government that transcend administrations is weakening, or we have less of it. Is that right?

 

Hon. Virginia Seitz:  It’s fair, although I want to immediately say how strongly I agree with what Hash said about the Department of Justice lawyers and their interest and their integrity and their pursuit of a position in litigation that they’re assign to defend without compromise. I mean, my experience was that once the decision had been made to move forward that the case was litigated with complete good faith. And I never saw anything that suggested otherwise to me.

 

I was thinking more in terms of the institutional norm of the SG’s thumb on the scale against changing your position in litigation and thumb on the scale of observing OLC precedent. And I think the desire to do that or the strong institutional commitment to do that can feel more fragile, can feel endangered if you aren’t trusting the bona fides of the people who came before you and the people who will come after you to do the same thing. It was more a fear that that could happen that I was expressing than a view that it has happened.

 

I don’t actually believe that the changes -- the lurching that happens with new administrations does undermine the rule of law because I believe that as long as it’s within the area of reasonable interpretation and it’s done through a process that’s lawful that it’s in fact compliant with the rule of law rather than otherwise and that calling it a threat to the rule of law because things change the way they do is, again -- I’d agree with Professor Pasachoff that that’s just inflaming a conversation that could perhaps be held differently about when is reliance strong and other kind of policy interests that might push back against lurching along with those institutional norms but that it’s not undermining the rule of law.

 

Hon. Steven Menashi:  I want to remind everybody in the audience that if you raise your hand through the “raised hands” function in the online interface, I could call on you and have questions from the audience. I’m going to do that in a moment, but before I do, let me just ask if there’s anyone on the panel who wants to react to anything that anybody else has recently said or if there are further comments. Okay. If not, I have a raised hand from Dean Reuter from The Federalist Society.

 

Dean Reuter:  Hi, this is a great discussion. Thank you all for participating. This question might be more on the litigation side than the regulation side, and there’s two questions, one for each of the four panelists I suppose.

 

But for those of you who are skeptical of the wisdom of kind of an Executive Branch reversal of a litigation or regulatory position or even the power to reverse, could President Trump reverse his own positions or policies, and could President Obama reverse his own or President Biden reverse their own? And if not, why not? And for those of you who endorse a president’s authority to reverse, wouldn’t a reversal by President Obama of an Obama stance or by President Trump of a Trump administration stance -- wouldn’t that be perceived as disruptive or somehow coherent if not undermining the rule of law?

 

Hashim M. Mooppan:  I’ll start. So just to be clear, I guess I’m on the more skeptical side here about some of the changes that have been happening. I don’t at all think -- I agree pretty much entirely with Virginia Seitz that this isn’t a question of authority, that there’s no real enforceable constitutional norm here that we’re talking about.

 

That said, I do think faithful execution -- you know, part of that duty is the duty to exercise the Executive power and the Executive power to litigate in a prudent way. And I think considering these things, it’s not constitutional. It’s not judicially enforceable. But I think it’s more than just any old policy decision.

 

Now, in response to the concrete question, so given that, yeah, I of course think you can change -- an administration within the same administration can change. As to whether they have more power to do it or less, look, I suppose that in so far as the concern with changing is a credibility concern with the courts, a concern that you’re not actually reflecting your view of the law; you’re reflecting a view of just politics -- often that will be a mitigated concern because it’s the same political administration.

 

On the other hand, I can imagine it cutting the other way that, if it’s all still within the same administration, what were you doing? Presumably, you should have known when you took the position earlier. And so it can potentially greater undermine the credibility of the Department that you have it within the same administration. It seems that you’re the gang that can’t shoot straight. Like everything I said about this, I think a lot of it depends on context and how the change is justified and how the change will be perceived by the courts.

 

Prof. Eloise Pasachoff:  I’ll echo and agree that the context just completely matters. I think one context in which you could absolutely justify and find kind of authority -- moral authority, I mean, not legal authority -- moral authority for a change is when you learn more. I mean, one of the reasons why we have administrative government is for expertise.

 

And so if you come in and you’re one and you think something’s going to work a certain way and you make a certain choice and then over the course of time you realize that it’s not working that way -- the science improves. You learn more about the science. You learn more about the implementation of the thing in real life. You learn that car companies can’t actually do the thing. You know, you learn that it might take 25 years. So I don’t know.

 

But relying on learning and then reflecting that learning into law or into policy positions, I guess, I want to call them strikes me as something that could easily be defended on arbitrary and capricious grounds, assuming that it’s framed properly. And probably I think in Chevron step two if it’s within the bounds of permissibility and there’s a reasoned rationale for why you want to get there, I think you could both do it as a matter of law and then tell a good compelling story that would not make you look just like a flip flopper in the public eye.

 

Hon. Steven Menashi:  Does anyone else have reaction to that question, or should we move on? There’s another written comment that says it’s not only the administration’s rules that one administration might defend and the next one not, for example, the switchback from Bush 43 to the Obama administration about defending the Defense of Marriage Act. So what about those kinds of changes in legal position where you’re just not defending legislation? If someone has a reaction to that question.

 

Hon. Virginia Seitz:  I’ll just start by saying that kind of change or that kind of movement is the subject of a very rigorous and thoughtful procedure in the Department before a decision is made not to defend the constitutionality of a law. And that norm of that close examination that involves people at the highest level in the Department I think is an important norm and represents the best of what Hash was talking about.

 

Hashim M. Mooppan:  Yeah. I agree, and I would add that as is fairly well known and also publicized in various letters to Congress, etc., in general the Department of Justice will defend acts of Congress if there’s any reasonable argument to be made. There’s some exception to that, the most notable one being if the law implicates the Executive’s Article II prerogatives. But in general, it’s not really a question of which side do we think is right. It’s is there a reasonable argument that can be made here? Then the Department will generally defend an act of Congress.

 

That being the case, it becomes commensurately less likely that a mere switch in administration is going to lead to a flip on the defense of an act of Congress because the window to say -- it’s pretty narrow to be able to have to come in and say, “You know what? They defended it on X ground, but that ground is not only wrong. It’s so wrong that it’s not reasonable that you could defend it.” It becomes commensurably harder.

 

Hon. Steven Menashi:  Maybe I could turn back to something that you said earlier, Hash, about the government often says that people can’t intervene to defend a law because the government says it’s defending the interest sufficiently. I think the suggestion was that when the government is not willing to defend it or is not as enthusiastic about it maybe -- is the suggestion that courts should be more permissive about intervention under those circumstances? Is that something that they should take into consideration when deciding whether to allow parties to intervene?

 

Hashim M. Mooppan:  Well, so this is the tricky thing about it, right? Because I think that it’s -- at least in terms of intervention as a right, I think the government is pretty much right that when they’re actually continuing to defend the rule, they are an adequate representative for the public. And you probably shouldn’t be able to come in and say that you intervene as a right.

 

But I think that only holds together if the Department handles litigation in situations where they change positions in a way that allows those people to come in on the back end. If they instead do what they’ve done in cases like the Title X case where they just pop in and dismiss everything without giving anyone a chance to intervene, I think it’s going to put pressure on courts on the front end because people are going to start filing intervention motions saying, “Well, we’re worried they may change positions, and look what they did last time. They came in at the dead of night and dismissed stuff.”

 

And I think there are going to be a lot of courts that are going to take that more seriously. So I think it’s important that if the Department is going to change positions in these sort of litigation context, that they do it in a way that facilitates the ability of aggrieved parties to continue to defend the rule. Otherwise, I think they are going to run a risk that courts are going to start allowing more intervention on the front end. As a former government litigator, I don’t think that’s actually a good result because it leads to more parties at a time when you don’t need to have more parties, as opposed to ensuring that when you do need to have parties they can get in.

 

Hon. Steven Menashi:  Maybe I can ask Eloise to react to that. It looks like you actually want to react to that.

 

Prof. Eloise Pasachoff:  Yeah. I was actually going to tie a couple of things together and throw a question back out to my colleagues. To what extent do people think that a court decision that the first administration’s, say, regulatory action was not arbitrary and capricious ties the hands of the subsequent administration? So we’ve had a couple of suggestions that a decision blessing a Trump rule, for example, in the Supreme Court would make it much harder -- say blessing it, but I want to be precise here. Blessing it as not arbitrary or capricious, so allowing it within the scope of what is permissible within arbitrary and capricious land.

 

To what extent do you think that that would significantly tie the hands for the Biden administration, say, to take a strongly different opposition? Because again, the scope of arbitrary and capricious is quite high, so I feel like there’s a little bit of an underlying premise that a positive decision here would play a really strongly limiting decision here. And I’m just wondering if my intuition that that’s what people are suggesting is right. And if so if we could maybe talk a little bit about what drives that sense.

 

Hashim M. Mooppan:  Yes. So look, I think there are two aspects of it. One aspect is it’s not the reasoning; it’s the judgement. So if the first court strikes down the Trump rule as arbitrary and capricious and there’s no appeal, then no one has to do anything. So it’s not that it ties the Biden administration’s hands. It’s that it frees the Biden administration’s hands.

 

But setting that aside, so let’s say then the question is not that we don’t want to avoid the loss; it’s we want to get the win in the appellate court. There I agree with you that if the ruling is merely that it wasn’t arbitrary and capricious, then that will tend to -- it will have some affect because it will take off the table certain types of policy arguments that they could have otherwise used to justify the new rule. But it doesn’t take off the table too much given the breadth of arbitrary and capricious reasoning. This tends to have more of a bite on questions of statutory authority than on arbitrary and capricious. I think that’s probably true.

 

Farnaz Thompson:  I would also agree with that. It’s almost like the Fox v. FCC case. Right? So the FCC can take a radically different position on whether expletives are allowed or not allowed. And I don’t think that just because a court holds that a particular regulation is not arbitrary and capricious prevents another administration from coming out with another policy position.

 

But I think it makes it at least more compelling for that administration to really hone down on what the reasoned justification is because I remember with several regulations -- the borrower defense to repayment regulations that I worked on, the Title IX regulations -- because some aspects of the “dear colleague” letters actually were referred to by courts, we really made a point of going through every kind of aspect of those “dear colleague” letters, even though they weren’t regulations, and providing a reasoned justification for the change. Maybe we didn’t have to, but I think it’s a best practice to.

 

And I think that with respect to other regulations that’s also what’s necessary. But I don’t think it precludes another administration from taking a totally different policy position. But I think it would preclude an administration from trying to, for example, stay a set of regulations or suspend regulations. I know there were some issues there with the borrower defense to repayment regulations that President Obama’s administration had issued and that the next administration was supposed to implement. So I think that’s a distinction.

 

And then when we were discussing litigation, I think there’s another thing I’d love to get your thoughts on is 28 U.S.C. § 530(d) allows for an administration or an agency to determine whether some aspect of a statute should no longer be enforced because it’s unconstitutional or for -- and usually, there’s a review process with the Department of Justice’s Office of Legal Counsel before an agency actually comes out and makes that pronouncement that it’s not going to enforce a certain aspect of a statute. And I’ve always -- and it’s very rarely used, but there’s a rigorous process within the Department of Justice. And I’d love all of your thoughts on how that process has been used in the past and whether it’s been abused.

 

Hon. Steven Menashi:  Does anyone have thoughts about that?

 

Hashim M. Mooppan:  I’ll let Virginia go first if she wants since a lot of that runs through OLC, but I’m happy to speak to it also.

 

Hon. Virginia Seitz:  I don’t have any reason or recollection or belief that it’s an abused process at all. Again, I would think of it as similar to what we previously discussed, which that it tends to be really careful and quite rigorous as opposed to abused. But nothing specific comes to mind on that, Hash, so you go ahead.

 

Hashim M. Mooppan:  Yeah. I didn’t have much to say other than that, too. It functions very similarly to the process for not defending the constitutionality in court. Probably the biggest difference is how much of it is run through OSG rather than OLC. Obviously in court, it’s going to be run through OSG. And when it’s just the agencies out in the world, OLC probably has the lead.

 

But in both circumstances, I think both of those offices will tend to be pretty heavily involved given the stakes and given, as Farnaz referenced, you have to send a letter to Congress under 530(d) when you make that determination. So these aren’t things you can just sort of do in the dead of night and hope no one notices.

 

Hon. Steven Menashi:  The question about whether it runs through OLC first before an agency makes that kind of determination, that’s also a norm, right? There’s no legal requirement that it does, so doesn’t that also go back to this question about the strength of these kinds of norms and how the government is run on these kinds of issues?

 

Hashim M. Mooppan:  Yeah. I think that’s fair. Yeah. I think you’re right, and, Virginia, correct me if I’m wrong. I don’t think there is any reg that requires an agency to get sign off from OLC before taking the position that a rule or statute they administer is not constitutional and they’re just going to cease to enforce it. But yeah, there’s a pretty strong norm about that, at least in part because I think the Department of Justice has pretty significant equities in that sort of determination. And so I don’t think -- in a well functioning Executive Branch, I don’t think you want to have individual cabinet secretaries making determinations like that without coordinating with the Department of Justice. And that’s at least a significant part of why OLC exists is to mediate any potential disputes on that front.

 

Hon Virginia Seitz:  I think that’s right, and I also think agencies see a significant benefit in having OLC weigh in that makes them more likely to ask in this setting for that analysis from OLC. It’s, I think, a valuable commodity if you’re going to take this kind of action and seen as such throughout the Executive.

 

Hashim M. Mooppan:  I was going to say part of the reason why is at least in some circumstances nonenforcement sometimes is traditionally nonreviewable, but other times there will be a review. And so you can end up in a situation where if the agency doesn’t clear -- coordinate with the Department of Justice and they get hit with a lawsuit, you can end up in a bad spot where the Department thinks that the rule actually is valid. So that’s just a very practical reason why it makes sense to coordinate.

 

Hon. Virginia Seitz:  Right. Just one thing I wanted to say in response to an earlier strain of this conversation was more in the way of a question, but I feel like everybody is tiptoeing around now the question of how long is Chevron and other similar kinds of deference going to survive and that that concern kind of permeates any decision about appeals or how you litigate or how strongly you -- or what arguments you might make when reversing position with respect to an agency rule. So it’s kind of a backdrop uneasiness that now is part of the discussion of cases involving review of administrative action.

 

Hashim M. Mooppan:  You know, that’s interesting. In general, I don’t know if I share that reaction. I don’t think it’s wrong to say that at least at the Supreme Court there’s a distinct possibility of real change in the scope of Chevron. Obviously, in lower courts that’s not in the cards, at least if they adhere to what the Supreme Court said about following Supreme Court precedent. So unless you’re worried about teeing up a vehicle, at least in direct appeals I’m not sure it makes a lot of difference.

 

I can think of a handful of cases -- sort of outlier cases where concerns about Chevron might have implicated either what arguments were made or whether to seek further review. But by and large for normal, just sort of run of the mill major agency actions where there’s no real fight that Chevron under existing doctrine applies, maybe on the margins I can see not pushing really aggressive interpretations. But that’s largely because at this point you’re likely to lose those under Chevron because I think there’s a pretty decided trend towards applying step one with some real teeth, whether you call it step one or step two -- saying that there’s a very narrow zone of ambiguity and you’re suppose to take ambiguity or the lack thereof pretty seriously before you jump to step two in the --

 

Hon. Virginia Seitz:  But when we’re in the area that we are in, which involves lurching upon a transition to a new administration, you’re sort of by definition in an area where you’re talking about a high profile case of the sort that might involve thinking at least about the possibility of Supreme Court review. And in that context, I do think it’s -- myself, it’s a little bit of an ant at the picnic right now.

 

Hashim M. Mooppan:  Yeah. You might be right. It’s interesting.

 

Hon. Steven Menashi:  So Hash mentioned a moment ago about why an agency might want to involve the Department of Justice because it would have to defend the agency in any subsequent litigation, and I think Farnaz mentioned earlier that in rulemaking you need to each involved OIRA and other parts of OMB. And so I wonder if anyone has further reflections on whether the fact that lost of different parts of the government with different sorts of equities have to weigh in on a lot of these decisions is helpful in that it promotes -- or like, it’s a counterweight to a kind of lurching? Or maybe the fact that lots of entities are involved in these kinds of decisions might encourage more of that lurching? I don’t know if people have thoughts about that phenomenon.

 

Prof. Eloise Pasachoff:  I’m actually not sure that lurching should be the guidepost to think about the value of weighing in, so if I could -- although, I really like the framework. I think it’s an important one. I don’t know if it’s the only one that should be relevant there.

 

And if we’re thinking about the value of a deliberate Executive Branch where you want to make thoughtful, careful, reasonable decisions that thoroughly assesses equities and competing balances maybe from competing sets of regulated parties and different aspects of the regulated public, I think that in and of itself is a value that mirrors some of the slowness that kind of bogs down Congress. And so certainly it’s a slowness in the Executive Branch. But I think it’s a slowness that helps to further this value of deliberative, rational based decision making in addition to the kinds of expertise I was talking about before. I think that’s a separate value of this.

 

Hashim M. Mooppan:  Yeah. I’m not sure. I’m not sure about the initial question from Judge Menashi. Just thinking about it in terms of my experience and just how it could work, I think the extent of multiple parties could cut either way. On the one hand, often it creates inertia. You have lots of different interests. Some times they cut in different directions. And if you’ve got a lot of people cutting in different directions, sometimes that just leads to okay, well, we’re not going to flip positions when no matter what we do different parts of the government are going to be upset about it.

 

And other times, I think arguably that frees up the Department of Justice. The action agencies all disagree. No one agency has any greater stake than the other, and maybe it frees up the Department to decide “Well, we’re just going to decide what we think is right. And that’s what we’re going to do.” So yeah, it’s not a particularly helpful answer, but I think the dynamics -- it’s hard to generalize. A lot of it will depend on the specifics.

 

Farnaz Thompson:  I’ll say that I actually think it’s a very good process, even though when I was going through it I didn’t quite appreciate it because it was so long. But I think that there are some unintended consequences that you can’t anticipate because, when you’re one agency enforcing a particular statute, you’re not always aware of all the unintended consequences it might have, especially with other agencies that enforce either that same statute or a similar statute. So for example, I think that sometimes with respect to the Title IX rule at least there are certain intersections with other rules, like Title VII also concerns discrimination based on sex but in an employment context.

 

So I think it was invaluable to confer with agencies and the EEOC as well as the Department of Labor on some of the kind of consequences with respect to labor laws and the intersection of those laws. And I think it actually makes for a really good product because you also don’t want to have a situation where one agency is really using a different rubric for the same statute as other agencies. And so to the extent that there could be unity within the Executive Branch, I think that is something that we should aspire to, and even though the process is onerous, it’s worth it.

 

Hon. Steven Menashi:  Okay. So I have another question from the audience for Farnaz specifically about the Title IX regulation. And it says given your experience in universities’ GC office, will colleges that do not continue to enforce the last administration’s Title IX rule run a real risk of civil liability from students or faculty who are harmed by a noncompliant hearing?

 

Farnaz Thompson:  Well, I’d like to distinguish the types of liability. So there’s liability before courts, like a federal litigation under Title IX. And I would state that for the most part you don’t have to follow the Title IX regulations to a tee to avoid liability for Title IX litigation because the Davis standard is deliberate indifference. And although we use that standard as part of our regulations, the way we define deliberate indifference might be somewhat different than the way that a court defines deliberate indifference. So it’s not as though you have to follow our process to a tee to avoid liability.

 

But what I will say is you absolutely should adhere to the regulations because they are currently the rules that have the force and effect of law. And also, I think that there is liability still with the Department of Education’s Office for Civil Rights because that office should still enforce this rule, and there are some actions that people may take against the Department, including litigation if they don’t enforce that rule or if there’s reasonable delay in enforcing that rule. I remember that at least one judge ruled against the Department of Education, and this is in the context of a different set of regulations on borrow defense to repayment. But that the Department’s actual delay in processing borrow defense to repayment applications -- that delay was actual under the Administrative Procedure Act.

 

But my personal opinion is that if you do follow the Title IX regulations because they so closely follow the case law, that you will minimize your liability with respect to any lawsuit under Title IX. So is there case law that states you have to provide a party with other party’s evidence within 10 days after you receive it? No. That’s not in case law. But if you do that, does it make for a more fair process such that due process is satisfied so that both parties have notice and a meaningful opportunity to respond? Absolutely. So the way that we structured the regulations was such that if you follow them, you likely will avoid liability under Title IX or under actions pursuant to 42 U.S.C. § 1883.

 

Hon. Steven Menashi:  Okay. Maybe I can go back to something Virginia said earlier in your opening remarks when you were talking about what would be the source of anti-lurching constraints, and you were evaluating whether the take care clause might impose such restraints. But it seems like this discussion has focused to a large extent on the Administrative Procedure Act.

 

There was concern that certain litigation moves might evade requirements of the -- allow agency or administration to evade requirements of the APA. And I think Farnaz was pointing out that using guidance documents or so on might evade requirements of the APA. So maybe we should understand the APA as setting up a kind of set of norms that constrain the Executive Branch. Whether those kinds of norms are judicially enforceable or not is a separate question which you might want to address. But should that be the focus of this principle that you were talking about that maybe we should look for?

 

Hon. Virginia Seitz:  So I do think it’s a helpful constraint on Executive agencies. Of course, it doesn’t affect the President and his ability to move. So I know we haven’t spent a lot of time talking about executive orders or the Office of the President, but that would be one place where it would be less helpful.

 

I do think a substitute or a congressional enactment of the presumptions of regularity that now are in the Administrative Procedure Act does constrain the Executive Branch to some significant effect. So I think it’s a really good point that it’s a statutory potential substitute that applies to part of the Executive Branch to regularize the procedure and substance of changing its mind. It’s so well accepted that I think I may have undervalued it for that purpose, but I was primarily focused on what might constrain the president in connection with his actions. And I think that is a much harder question to try to find a source of law that might do that outside the take care clause in any statute or in the Constitution.

 

And Hash’s point that it’s probably a political question how far the take care clause can get you as an anti-lurching principle is exactly right. So we don’t know the substance of it. The Executive Branch has developed norms to try to constrain it to the extent that our government values it, which it’s embodied in the Constitution, I think, with respect to the other branches. But it’s very hard to find anything other than those norms in my view that’s an actual legal constraint. And I am not sure that I even see in the take care clause itself a sort of direction about not changing that isn’t counter -- that doesn’t have a counterweight in the other constitutional provisions that suggest that elections have consequences.

 

Hashim M. Mooppan:  So the other problem with the APA in addition to the fact that it doesn’t constrain the president is that it doesn’t constrain the Department of Justice’s litigating positions. Those are not final agency action that’s reviewable, and they would be viewed as committed to agency discretion by law. So I agree that the APA is a pretty significant constraint on the ability of the underlying action agency that changed their rules.

 

They have to go through reasoned decision making. They have to go through notice and comment. They have to consider reliance interest. But if it’s just the government in a brief flipping positions or more importantly in this context not taking appeals or dismissing appeals, the APA is not going to constrain that.

 

Prof. Eloise Pasachoff:  I was just going to connect that point to our previous conversation about the posture in which the administration would accept a lower court adverse judgement or ask for a stay. Do we think that the government’s decision in that kind of litigating posture really implicates a rule of law concern? Or is it a norms-based concern? So relying on the district court injunction, for example and raising these questions about the proper procedure under which the DOJ is going to dismiss or seek to not dismiss before the agency has actually issued an NPRM.

 

What do people think about that? In the critiques that are coming up in this conversation, is it really a rule of law concern? Or is it something just feels a little squishy, but it’s not totally constrained? Because I’m sort of sensing both directions.

 

Hashim M. Mooppan:  Look, again, I don’t think it’s a rule of law concern in the sense that they are acting illegally if they acquiesce in an adverse court judgement. But I think if there’s a rule of law concern in the sense that agencies can’t just suspend rules without going through notice and comment, even though they plan to go through notice and comment. The Trump administration at the beginning of the administration tried doing that in a bunch of circumstances and was largely unsuccessful with courts saying that the suspension of a rule counts as an agency action and therefore has to go through rulemaking.

 

And so I think there was a pretty significant rule of law concern in getting the functional equivalent of a suspension of a rule by acquiescing in the district court judgement, not because you think the district court judgement’s wrong, just because it’s very convenient for you that this district court did something that’s legally erroneous. And it seems to be particularly strong in cases like the Public Charge situation where you know -- like, the Supreme Court has already granted a stay. So the Supreme Court has already signaled that they are likely going to reverse the district court. And to let that be the mechanism through which you wipe out a rule, that does strike me as creating rule of law concerns, though not actually being illegal.

 

Hon. Steven Menashi:  So in that case, even though the DOJ would not be violating the APA as you point out in flipping position, if the effect of a decision has the -- if a decision has the effect that it excuses the agency from doing something under the APA it otherwise would be required to do, maybe that’s a framework for evaluating whether such an action is appropriate. Does that make sense? Anybody?

 

Hashim M. Mooppan:  I think that’s right. Again, a lot of it I think turns partly in what the district court held. So it’s not uncommon for even within the same administration if a district court sets aside a rule on narrow procedural grounds or on a narrow arbitrary and capricious ruling, the sort of thing that the agency can easily cure and that doesn’t handcuff the agency especially going forward. Often even within the same administration the decision will be made, “Look, it’s going to take time to take the appeal. We may not win the appeal. We can fix this faster on the agency level. We’ll just do that.”

 

I don’t think anyone thinks that there’s a rule of law concern with that, and I don’t think there’s any concern with a new administration making the same sort of judgement call if they’re operating in good faith. I think where there’s really -- the rubber really hits the road is when you’ve got a court striking it down as substantively invalid because that judgement takes the agency’s policy discretion off the table. The agency can’t do anything about that and especially if it’s a nationwide judgement or some sort of judgement that goes beyond the particular parties, which is a whole different issue.

 

But when district judges issue those sort of rulings, it’s going to create real problems down the road. So for example, if one of these district judges says that the Title X rule or the Public Charge rule is substantively illegal and you’ve got a final judgement to that effect that’s nationwide, it’s not just that the Biden administration got to avoid having to go through notice and comment to repeal it. It’s that four or eight years from now or who knows how long if another administration tries to come in and reinstate the Trump rule, they’re not going to have to just deal with the legal arguments. They’re going to have to deal with the argument that there’s a final judgement -- that they’re just precluded from doing that. And then there’d have to be litigation about whether you can escape the scope of a final judgement in those circumstances.

 

Hon. Virginia Seitz:  Hash, does your view turn on the Supreme Court’s stay decision? That is if in fact a new administration came in and made the judgement that the district court’s ruling was correct and therefore they weren’t going to appeal, would you still see rule of law concerns in that scenario?

 

Hashim M. Mooppan:  Look, I think that the Supreme Court stay makes it a particularly concerning situation. I don’t think it’s necessary. I think even when -- for me, a large part of it turns on the substantive versus procedure, whether the ground was it was substantively illegal.

 

I’ll put it this way. During our administration, there were a lot of district court judgements that had been issued against Obama era rules. And what we tended to do -- not invariably, but pretty commonly was not acquiesce in district court judgements, even where we might have actually agreed with the district court because we wanted to leave the playing field open for the agency. So what we would do is we’d take the appeal, keep it in abeyance, have the agency go through notice and comment rulemaking and then try to get the district court judgement vacated as moot and things like that to preserve broader Executive Branch discretion over time.

 

And so I’m not saying that’s a universal rule. It could be that the district court judgement was so clearly right that I don’t think there’s really a rule of law concern and there’s acquiescing in it because that’s all that’s ever going to happen. And you’re not really constraining anyone. But it’s cases where there’s a real argument to be made that the old rule is subsequently lawful, and that’s now been taken off the table by a district court judgement. And it’s exacerbated when it’s not just the Executive Branch internally predicting whether this is a valid rule or not. You’ve got the objective initiative of the Supreme Court granting a stay.

 

Hon. Steven Menashi:  So I have another question from the audience which is as to regulations, does the ability of an Executive to change positions benefit either those who generally favor a regime of strong federal regulation as opposed to those who would favor reducing regulation? Does either side enjoy an advantage?

 

Prof. Eloise Pasachoff:  I’ll just start by saying I don’t think so -- that it depends on the party in power and that it’s all context determinate. It so deeply depends on the background context and the rule itself. So I’m reluctant to say as a general matter that the ability to change positions favors one or the other side here.

 

Hashim M. Mooppan:  In general, I think I agree with that with one fairly marginal potential disagreement, which is generally when you’re switching back to a rule that regulates people, third parties are going to be able to sue over it. Sometimes when you’re switching back to a rule that doesn’t regulate people, it might be harder to sue over it.

 

So insofar as you’ve got an Executive Branch that’s switching from a regulation to a nonregulation, that might -- the ability to do that through executive maneuvering, you might have greater latitude to do it because you won’t get sued over it compared to the administration that’s switching from nonregulation to regulation. But I think that’s a fairly marginal caveat to keep in mind because especially these days it’s not that hard to figure out someone who has standing, even when you’re switching to regulation.

 

Hon. Virginia Seitz: Though it does seem to be the case with some regularity lately that an agency will say, “We are not going to regulate in this area because we believe the statute does not give us power to.” And when they decide not to regulate on that basis instead of simply exercising their discretion based on circumstances that they find, it does seem to be susceptible to a legal challenge -- that kind of decision that they lack power as courts tell them they do have power. And I find that a kind of interesting choice by agencies to specifically state that they don’t have power. And courts do seem to want to correct them and say, “Look, you’re not legally barred from doing this. This is a policy choice that you’re making.”

 

Hashim M. Mooppan:  Yeah. So it’s an interesting point. There are two parts of that. I agree with you on the merits that if the court can reach the merits, they’re more likely to reverse an agency that says, “We’re not going to enforce because we don’t have the power,” then “We’re not going to enforce because we choose not to as a policy matter.” But for either of those things, you still have to have someone who has standing to complain about the nonenforcement.

 

Now, sometimes, that will be easy. But sometimes, actually, it might be difficult. I’m trying to think of something off the top of my head. If there were limitations on when you could forgive student debt, and they just said, “We’re not going to --” to the government. So let’s say it’s a government debt and the Executive Branch stops enforcing some of the limits on that. It’s going to be pretty hard to find someone who has standing to complain about that. But I agree with you that on the merits once you get there courts are more willing to adjudicate a pure legal question of whether you have the authority.

 

Whether to do it or not raises interesting strategic questions for an agency. On the one hand saying that you had to do sort of takes some of these reliance interests off the table because if your hands are tied by the law, then the reliance interests are sort of besides the point. But on the other hand, if you say that you had to do it, then if you’re wrong about that as a legal matter, you’ve exposed yourself to getting set aside under the APA for lying on an erroneous legal reason. Whereas if you just said “We’re just choosing not to do it,” you might either be nonreviewable under cases like Heckler v. Chaney. Or at minimum you’re only subject to sort of arbitrary regence review. So there are costs and benefits to which way you go on the things like that.

 

Farnaz Thompson:  And I’d just like to add from a normative perspective I think the ability to change positions actually does favor people who are supportive of a larger regulatory regime because once the footprint of a federal agency has been expanded to include jurisdiction over something through regulations, it is almost impossible -- I mean, it’s possible, as Virginia pointed out, to take the position that the agency no longer has authority for that. But it’s very rare.

 

So I think some of the criticisms we received, for example, on the Title IX final rule is why are there regulations on this at all? And with respect to the proceeding for allegations of sexual harassment shouldn’t really be conducted by a school at all if it’s truly a crime because that belongs with a police department. But there’s no going back. And so I think that once an agency starts down a path and assumes that a statute covers a particular topic and starts regulating on it normatively, the next administration may change. It may try not to increase that footprint. But once that footprint is established, it’s really difficult to get rid of it.

 

Hon. Steven Menashi:  Okay. So we are at the end of our time. Let me ask quickly if anybody has some final comment they’d like to make before I thank everybody and close it out. Well, thank you very much. So I want to note for the audience that the Airmeet platform on which people are in has an opportunity to meet with other attendees in the lounge. So please join us in the lounge to network with other participants or to ask questions of some of the panelists who join the lounge.

 

So with that, I’d like to thank our panelists for an interesting discussion and remind everyone that the next conference event, a discussion of judicial nominations and confirmations, will begin at 3:00 p.m. Eastern. But please stand by for now for the alert directing you to the lounge. Thank you, everybody.

 

 

 

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Judicial Nominations and Confirmations

Professional Responsibility and Litigation Practice Groups

Topics: Federal Courts • Professional Responsibility & Legal Education • Supreme Court • Litigation
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Whenever control of the White House turns over to a different political party, as it did in 2009, 2017 and 2021, the new administration’s personnel and practices pertaining to judicial selection will differ. That is true of the Biden administration, but that administration is also subject to some novel kinds of political pressure. Some are calling for the President to expand the Supreme Court and the lower federal courts. In response, the President has established a commission to explore reforming the courts. At the same time, departing from the approach taken by President Clinton and President Obama, President Biden has said that he will not give the American Bar Association an advance role in vetting judicial nominees. The self-styled progressive group Demand Justice welcomed that announcement calling the ABA “another corporate dominated gatekeeper in the judicial process,” and stating, “it must not be allowed to act as an obstacle to diversifying the bench.” Finally, what will the Senate Judiciary Committee’s practice be with respect to blue slips?

Our panelists will discuss these and other developments regarding judicial selection. Among the questions to be addressed: What criteria will guide the Biden administration in selecting judicial nominees? How will the Senate Judiciary Committee and the full Senate respond to efforts by individual Senators to utilize blue slips? How will Senators who, in the past, called ABA approval “the gold standard,” react if the ABA deems some Biden nominees “not qualified?” How should the executive branch interact with potential judges regarding the taking of senior status?  What can we except from the Biden commission on judicial reform and when can we expect it?

Featuring:

  • Hon. W. Neil Eggleston, Partner, Kirkland & Ellis; Former White House Counsel
  • Hon. C. Boyden Gray, Founding Partner, Boyden Gray & Associates
  • Ms. Carrie Severino, Chief Counsel and Policy Director, Judicial Crisis Network
  • Moderator: Hon. Andrew S. Oldham, U.S. Court of Appeals, Fifth Circuit

Speakers

Event Transcript

Hon. Andrew S. Oldham:  Good afternoon and welcome to the final panel of the Executive Branch Review. We will be discussing judicial nominations and confirmations. I’m Andy Oldham from the United States Court of Appeals for the Fifth Circuit, and it’s my great honor to moderate this panel.

 

Before we get started, a few house keeping items: we sill start, as is the custom, with introductory remarks from our three distinguished panelists. Then, we’ll have plenty of time for discussion between the panelists, including Q&A from y’all in the audience. When it comes to the Q&A, the easiest way to ask a question is by using the raised-hand button. I’ll see your hand, and just like in a live conference, I can call on you.

 

Please note that you will need a working microphone to use this option. Alternatively, you can send text-based questions through the Q&A tab in the upper righthand corner of your screen. There’s also a chat tab for attendees to chat with each other, but please don’t use the chat tab to ask questions. If you do, I might not see your question, and I would hate to miss it. So please either use the raised-hand function or the Q&A function if you would like to participate.

 

Now, I could spend our entire 90-minute panel recounting the illustrious careers of our panel members, but to keep us on task, to keep the panel from blushing, and to keep the rest of us from feeling inadequate, I will be brief. I commend to you, however, their full bios, which are in your program materials.

 

Our first panelist this afternoon is Carrie Campbell Severino. She is the Chief Counsel and Policy Director of the Judicial Crisis Network. She appears frequently on television and other media to discuss today’s topic. She’s also the coauthor, with Mollie Hemingway, of the bestselling book Justice on Trial: The Kavanaugh Confirmation and the Future of the Court. I would also note that Mrs. Severino clerked for my favorite court of appeals judge in the nation, Judge David B. Sentelle of the D.C. Circuit before clerking for Justice Thomas.

 

Our second panelist will be Neil Eggleston. He currently serves as a litigation partner at Kirland & Ellis. Before that, he had an extraordinarily distinguished career in public service, including two stints in the White House Counsel’s Office. He served as President Obama’s White House Counsel from 2014 to 2017 and Associate Counsel to President Clinton from 1993 to 1994. So he’s obviously seen a lot of judicial nominations and confirmations. Neil started his career by clerking for Judge James Hunter III on the Third Circuit and Chief Justice Burger.

 

Last, but certainly not least, we are honored to be joined today by Ambassador C. Boyden Gray. He is the founding partner of Boyden Gray and Associates, a law and strategy firm in Washington D.C. focused on constitutional and regulatory [audio cuts out 00:08:36] experience in the White House. He worked there for 12 years, first as counsel to the vice president, during the Reagan administration, and then as White House Counsel to President George H. W. Bush. He too has seen the frontlines of many, many, many judicial nominations and confirmations. Mr. Gray is a marine and a former law clerk to Chief Justice Warren. With that, I will turn it over to Miss Severino to kick us off.

 

Ms. Carrie Severino:  Thank you so much, Judge Oldham. It’s great to be here, and I really am excited to be part of this conference and experience this new format that we have, so I’m looking forward to this discussion.

 

So today, we’re talking about the judicial nominations under this new executive administration that we’re dealing with here. And I think some of the main – I’ll give a summary of some of the main features that I see coming up here. First of all, one of the key things that any president has in their toolkit, I suppose, is judicial nominations of things they can do. They obviously sign legislation; they have the Bully Pulpit, etc., but they do have judicial nominations to make, and that’s something that President Biden is just at the frontend of getting involved in.

 

Right now, we don’t have an incredibly long list of nominees that he has been able to get involved in. So far, simply because he’s only been there a while, and obviously, with other things on his plate, has not gotten to them as quickly as some administrations have. So up for this moment, he is – at this point in his administration, he’s coming in with about just over 100 vacancies—111. That’s just short of where Donald Trump started in office, where he came into office with 121 vacancies.

 

Currently, there’s 111 for Biden, and that does include a few that have come up since he took office. Fifty of those are on the Court of Appeals, and 96 of those are in the district courts, the Court of Federal Claims, etc. So far, he’s got 18 nominees up for those positions, and we are just at the point where we have started having some of those nominees being voted out of committee. In fact, just a couple of votes out of committee today were the first ones that we have really seen getting through the process.

 

Now, this is a little bit slower than President Trump, who obviously came into office with a Supreme Court vacancy right in front of him and was getting – I think his first appellate nominee went through in March. It’s a little bit behind that process, but still, obviously, it’s very early, so it’s hard to predict what we’ll see in the terms of the pace of judicial nominations.

 

One thing that the Biden administration has done, which I hardly commend, is the continuing refusal to give the ABA a privileged place in the judicial nomination process. This is something that used to be done by many presidents where they would give judicial nominations nominees’ names to the ABA before announcing them publicly, and then have the ABA do its ostensibly nonpartisan analysis of these nominees before they would release these names.

 

Often, if they didn’t get a well-qualified vote, then they wouldn't release the name, but it gave the ABA really an outsized role in the process and a quasi-governmental role in vetting those judges. I think that’s an appropriate – first of all, simply because giving any outside group that role, I think, seems inappropriate if this is the job of the president in his administration to be doing the vetting of judges, not an outside group, but also because a lot of concerns have been raised as to the ABA’s own bias in that process both – and they’ve been documented empirically both bias against conservatives and bias against women and minorities.

 

And some of this may stem from the factors that they look at in terms of the type of experience they’re looking for and the number of years of experience, but also, we’ve observed that in certain cases, where you had people that didn’t meet their objective, numbers of years of experience, they were more likely to give a pass to that or it bypassed those objective standards when they were progressive or liberal judges versus conservative judges, and there’s concerns about that as well.

 

So I’m happy that President Biden has followed President Trump’s lead in giving the ABA a backseat in this process. They’re certainly welcome to do those evaluations, but it’s not something that I think should take first – they should get a first crack before anyone else gets to see those nominations. And I’ll note that this is something that only republican presidents had done up until now, and they got a lot of pushback, so I’m glad to see that now this is a bipartisan agreement, that the ABA shouldn't have that special outsized role.

 

Another area that I think is going to be really important in terms of the courts, with the Biden administration, is the issue of court reforms, particularly, court packing. This is something that’s been important since the campaign, and it’s something that we’ve seen particularly pushed by some of the liberal “dark money” groups that have this is a top priority, it seems. It’s something that they had tried to inject into the nomination process during the democratic primary.

 

And at that point, interestingly, all the nominees across the board seemed to be open to the idea of court packing with the exception of Bernie Sanders and Joe Biden, who said he thought it wasn’t a good idea. And now, probably, a lot of you have seen the clips of him, from the ‘80s, saying not only that it wasn’t a good idea but that it was a bonehead idea, and harkening back to FDR and saying that that was an abuse of power, and that he shouldn't have been trying to pack the court back in 1937.

 

And now, of course, we see a different approach. So this time, last year, we had Biden saying he didn’t think it was a good idea. That shifted after he became the nominee, and I would say it’s a matter of concern that it also shifted as he was receiving over $100 million in assistance in his campaign from some of these same “dark money” groups that are advocating for court packing.

 

But if he shifted to a position where he wasn’t actually willing to disclose what he thought about court packing instead and was almost like one of those “you have to vote for the bill to find out what’s in it. You have to vote for me to find out whether I’m in favor of court packing.” Then, he moved to the position of, “Well, I’m going to appoint to a commission, so I don’t even know whether I’m for court packing. I’ll have a commission that will decide this.”

 

Well, that is what we’ve now seen appointed, and actually, the first meeting of that commission was yesterday. It is a three-dozen member commission. Of those three dozen members, they span the spectrum of – there’s a lot of academics and thinkers, but there’s also people from the advocacy world.

 

But the members of that commission are very heavily weighted in favor of liberal activists, including people like Laurence Tribe, who literally wrote the book on how to bork Bork. His book was what inspired the campaign against Robert Bork. He’s one of the people who helped come up with the idea of filibustering appellate judges on a partisan basis, in the first place, that got us to where we are now when we had the filibustering during the Bush era and then the nuclear option, etc.

 

I think if personnel is policy, the choice of the members of this commission are really telling in terms of the outcome that this administration is hoping to get. And, yes, they included a handful of moderate Republicans to give it a bipartisan veneer, but it’s not a commission where if you look at the members or have any question as to what direction this is going to go.

 

My personal assumption is that the goal of the commission is really to provide cover, political cover, for the president as he changes his own position from again his strong opposition to court packing to what will presumably be support for it; although, I frankly think the commission probably will come up with whatever is politically beneficial result at the time that it comes out with its results, which will be roughly six months from now.

 

Whatever is politically beneficial for the administration to do at that point will probably be approximately what they come up with and then will give him cover to do that, unless, by that point, it turns out that court packing continues to be as unpopular as it is now and, frankly, as unpopular as it was in the FDR era, at which point FDR, who was a president, who was incredibly popular, who had a strong support in Congress.

 

Even then, it was viewed as beyond the pale to pack the court. And he also gave nonpartisan excuses for packing the court. He said, “Oh, the judges are getting older, etc., and they need help on the court.” There hasn’t even been an effort to make those kind of arguments at this point. I think it’s very clear the argument is “Donald Trump had his nominees. We don’t like that, and we think we should add nominees to balance that out.”

 

It's no surprise that this bill that then was proposed to pack the court didn’t wait for any commission, didn’t wait to see “Oh, I wonder what the academics will say about this.” It is simply they put out a bill, and while Donald Trump had three nominees to the court, this surprisingly would just give Biden, right off the bat, four nominees. “So we see your three nominees, Donald Trump, and we give you one more to Joe Biden.” So I think it makes it pretty clear what the political angle is.

 

And I think another theme that is a concern, to me, is seeing the intimidation of judges, and I think that the court packing is one area in which that is happening because people – you’ve heard, some of the advocates of this court packing even explicitly effectively say, “Hey, Justice Breyer, if you don’t want the court to be packed, you should just retire and give us a seat to fill right now.”

 

It’s that kind of move that makes me very concerned that this is being used as a threat to the court to the justices who are on the court that if you don’t rule in ways that make the loudest voices on the left happy, that we will then alter the court in a way that almost all of Americans acknowledge, apart from the extreme groups on the left, would not actually be good for the country.

 

Yes, they’re considering some other court reforms in there as well, some of which would make more sense than others, but many of which would require difficult things like a constitutional amendment. But I think it’s very clear that the real action and the real move here is to try to increase the size of the court and, maybe, as a close second, to add a bunch of seats to lower courts in a pretty overtly partisan attempt to get the kind of nominees that the liberal “dark money” groups want to see on the courts. There’s a lot more to say, but I want to leave time for our other panelists, so I’ll hand it off to Neil Eggleston.

 

Hon. W. Neil Eggleston:  Thank you, Carrie, for those comments. But mostly, I want to thank The Federalist Society for inviting me to be a member of this panel. As the judge said during the introductions, I was the White House Counsel for basically the last three years of the Obama administration as well as in the White House Counsel’s Office.

 

I wasn’t the White House Counsel, but I was in the White House Counsel’s Office during the Clinton administration, and actually, I remember that then Judge Breyer’s office, a little tiny office, was right next to mine in what was then called the old executive office building as he was getting ready for his hearing sand going to the process, and I got to know him during all of that.

 

Look, I agree with Carrie that two things that are going to make this topic, that we’re talking about today, quite intense. I think the fact that President Trump got three nominees is creating some unrest. I think the other thing that’s happened is the Supreme Court just granted cert on an abortion case, which is going to really highlight the country on the membership of the court, and a stare decisis, and all sorts of issues that the justices are now going to have to confront.

 

But I’m not going to speak that much. Maybe, a little bit here at the very end about the recent commission, but let me just touch on some other issues quite quickly because I know mostly the audience wants us to get to the Q&A and bantering phase, which is I think, Carrie—although, you’re closer to all this than I am, so maybe, you’re right, and I’m wrong—but I thought President Biden has now 20 nominees. I think he had two more last week. I think he’s up to 20.

 

What’s most interesting is that he had promised this, and it turns out to be true, is that he’s really focused on diversity and different kinds of diversity. Of the first five nominees, I think all of them were people of color. There have been Native Americans; some are from Puerto Rico recently nominated to the First Circuit; many more women. And in addition, the other kind of diversity, there’s been significant diversity on background. And that is not for the first time, but a real accent on people with different kinds of employment background, including federal public defenders, plaintiffs lawyers, civil rights lawyers.

 

Typically, the people who have populated federal courts have been former U.S. attorneys, and assistant U.S. attorneys, and frankly, people at big law firms, like the one I’m at, and at the one Boyden Gray used to be at, before he started his own firm. I think that President Biden is looking for a very different kinds of people to nominate to the bench.

 

I might point out that I believe this is true that President Trump, in his four years, despite all the nominees that he had, did not nominate a single person of color to the Court of Appeals, and I think that Biden is looking to write the balance of the composition of our federal courts.

 

I think already as I’ve heard from people involved in the process that the Biden nominees are changing who’s applying, that people who are people of color, and people with different kinds of backgrounds, and what’s been traditional are now for the first time thinking, “I have a shot at this, and I’m going to apply,” and I think that we’ll see more and more applications from highly qualified people with different kinds of backgrounds than what we have usually seen.

 

Carrie talked a little bit about a little of the ABA, and actually, I think for very different reasons than Carrie agree that it was time to end the ABA’s role in the process, but as I said, I think probably very different than Carrie. I think they just took too long.

 

And as a President Biden supporter, the vote in the Senate now or make up the Senate now is 50/50 with Vice President Harris casting deciding votes. Who knows what’s going to happen after the midterms? And I just don’t think that the Democrats have time to wait for the months and months that it always took the ABA to make their decision before the nominations took place.

 

I think that what the ABA is doing is what it probably ought to be doing, is continuing to do an evaluation, but they don’t get the names in advance and the nomination held up until they come back, and I think that that’s appropriate. I do think that they have an important role in the process.

 

I think 10 of President Trumps nominees were ranked unqualified. I think they were nearly all confirmed anyway. I think most of the 10 – and I think I’m right on this. I think most of the 10 were district judges who were nominated to be district judges, and then basically never set foot in a courtroom before, and had never been involved in litigation process, and the ABA routinely recommended against them.

 

I think Judge Walker is probably an example. When he was nominated to the district court, I think—if I’m remembering this right—the ABA came out against him, but when he was nominated to the Court of Appeals, I think he was deemed qualified because he was qualified for the Court of Appeals job, but he wasn’t qualified to be a district judge when he had never really been a district court litigator. So I agree actually that it was time to take the ABA out of the process.

 

Let me just say this finally before we open it up, that I don’t really know what to do with this, but I’m increasingly concerned about the confirmation process. Presidents typically lose the Senate – if they still have the Senate in their last two years, they typically lose the Senate in their last two years of an eight-year presidency. It didn’t happen to President Trump because he only had a four-year presidency, but typically, presidents, I think, lose the Senate their last two years of an eight-year term.

 

In President Bush’s last two years, he had 10 circuit court confirmations and 58 district court confirmations. In Obama’s last two years, when I was White House Counsel, Obama had two circuit court confirmations. Bush had 10, and Obama had 18 district court confirmations, and of the 18, 9 of them were from states with two republican senators. And it was palpable how much really there had been a slow down in the confirmation process in the last two years when the Republicans took the Senate.

 

As we all know quite well—and Carrie was heavily involved in this—when Justice Scalia died, the Senate refused even to hold a hearing for Judge Garland, then Chief Judge Garland, because Obama was in the last year of his term, and yet the Senate held a hearing for Judge Barrett with only weeks left before the election and, obviously, with weeks left in the constitutionally provided term.

 

The president gets one term and then has to run again and be reelected to get a second term. I’m really quite worried about this process and whether we’re getting to ourselves in a situation where there will be very few judges confirmed if the president and the Senate are not members of the same political party.

 

Now, let me just touch base for a little bit on this commission. Look, I have a little trouble getting all that interested in all this because unless the filibuster’s abandoned, none of this is getting – whatever the commission comes up with, nothing’s going to get through the Senate anyway. It’s not going to get through on reconciliation. It’s not a financial bill, and still, they’ll be some discussion of it, but I don’t think anything’s really going to happen.

 

I also think that the commission’s mandate, as I looked into it, is quite narrow now that they can write whatever they want. But I think the mandate is not really even to come up with recommendations but to analyze various different issues and things like that.

 

And last, Carrie, I just can’t resist – I made a note when you said this. You talked about intimidation of judges. We just finished four years of the president calling out judges by name and calling them not able to sit on his cases because his parents were from Mexico, even though he was born in my home state of Indiana. He talked about “My judges on the Supreme Court are going to save the election.” I think the record of his lack of respect for judges who countered him was truly remarkable by President Trump.

 

And the notion that a few people with some interest groups are intimidating judges, as opposed to what President Trump did, look, I’m sorry I’m just not really there with you on that. And we’ll probably come back to the Breyer stuff, but let me turn it over now to Boyden Gray.

 

Hon. C. Boyden Gray:  Thank you very much, Neil. I want to make just a couple of simple points—some with reference to what you just said. I share your view about the polarization of the nomination process. I think it’s gotten worse over the years that I’ve been involved, officially and unofficially, and I think that’s a real danger. I don’t even think it was polarized even in the Bork saga, or even Thomas for that matter.

 

Justice Ginsburg told me not long before she died that the mistake Reagan made was nominating Scalia first and Bork second. If she had nominated Bork first, he would’ve gotten some of the first nominee deference and might’ve been confirmed. Scalia could've been confirmed at any time under any circumstances in any country. So it was a wasted vote, in a sense, to have him up there first. And she liked Bork. They got along very well together.

 

When Thomas came along, the Republicans, you talk about losing the Senate in a big way, Bush 41 never had a Democrat out of a Republican Senate, and there never were enough votes to confirm Thomas without Democratic support without bipartisan support. So even then, I think the horror—to us anyway, to me anyway—of the Thomas episode is that it was Kennedy, Metzenbaum, and Simon who are all in the labor and education committee who really understood his threat to what a lot of liberals wanted, which was raced by the numbers, hiring by the numbers, and he was opposed to that.

 

And that was why they went after him, but it wasn’t uniformly bipartisan. And in either case, Bork or Thomas, was the filibuster even threatened, let alone used? They could've stopped Thomas easily if they had insisted on a 60-vote margin, but it was not even discussed, and we never had 60 votes. We had 57, 58, but never 60.

 

The filibuster became something of a football shortly thereafter, in the early 2000s, with Bush 43’s nominees, and I don’t really know who – Carrie, you were saying it was Professor Tribe. I’m not really sure I really know who kicked it off, but I’m told that some Democrats were—even some Democrats, but several Democrats—were suspicious of it and didn’t really support it all that strongly, but it held up.

 

And it wasn’t until a bunch of us saw it threatening the so-called nuclear option that we got a resolution, a temporary resolution, by the gang of 14—a senator from Florida and John McCain leading the way on that, which allowed the Bush nominees, which included Roberts and Kavanaugh to get through and get confirmed. Even Roberts, though, was nominated by Bush 41 in January of 1991, and he never got a hearing the whole year, so even though it was obviously for the D.C. Circuit and not the Supreme Court, it is a telling indication of the way things were, in the last year, when the White House doesn’t control – or the White House is not in the same party as the Senate.

 

The nuclear option worked to get these nominees through later. It hit me hard because I had been nominated to be Ambassador of the EU. And many of you may not know this, but Reid said anybody who ever threatened the nuclear action is never going to be allowed to be confirmed by me, so I had to be recessed.

 

Yet, just several months later, he invoked the nuclear action to break the filibuster primarily for the D.C. Circuit, with Mitch McConnell warning that “What goes around comes around. You may regret this.” And so when he got in the majority position, McConnell did the same thing that Reid did.

 

But nevertheless, filibusters in the context of judicial nominations, not legislative affairs but judicial, had a very short life. The filibuster in terms of legislative issues, that has a much longer history, a much longer tradition, and I think that’s going to be very difficult to break.

 

Of course, personally, I guess, I would say I hope Manchin holds firm, but I think it would be a mistake, and I think that even Justice Ginsburg, and now Justice Breyer, have expressed doubts about court packing. I frankly don’t think it’s going to happen, but there we are.

 

But I did want to make the point that, in a sense, I do think the nomination process has gotten more polarized over the years, so I’ll turn it back, at this point, to Judge Oldham for the audience questions.

 

Hon. Andrew S. Oldham:  Wonderful. Thank you, Ambassador Gray. So we’ll move to Q&A. As a reminder, we’re only taking questions through Airmeet. There’s no way to ask speakers questions through other platforms, so please use the Airmeet functions that are on the righthand side of your screen. Again, the easiest way to do it is the “raise hand” function, which I can just call on you. Otherwise, feel free to type into the Q&A box, into the Q&A feed if you’re more comfortable doing that, and I can just read those questions.

 

So as the audience is preparing to ask questions, let me kick us off by asking the panel, it seems like all three of you had things to say about the difficulties confronting the status quo and the process that we have today, but amongst this panel, we have a wealth of information, and knowledge, and experience of advising presidents and participating in judicial nomination process in other ways. I’m curious, if you could change something to make it better in your view, what would you do? Why don’t we start with Mrs. Severino?

 

Ms. Carrie Severino:  We might be to a point, at this point, where even just having these hearings is so much Kabuki theatre that we need to move on from that. It has gotten to be almost a strange exercise, so that’s just one thing that it gets frustrating to watch sometimes. I don't know. I know how valuable you thought your own confirmation hearing was or how valuable it was to the senators, but it seems like there’s minimal gain through that process nowadays.

 

Hon. Andrew S. Oldham:  Mr. Eggleston. Oh, Neil, you’re on mute. I’m sorry.

 

Hon. W. Neil Eggleston:  I knew I was going to do that. I just didn’t know I’d do it quite so early in the process, so thanks, Judge, and thanks to the people who pointed out I made a mistake in opening remarks. You should never rely on associates to do your research for you. It’s just a mess.

 

So, Carrie, I really hadn’t thought about that as a possible issue. There are some examples though where it’s been effective. And you probably again remember better than I do when Senator Kennedy was questioning one of the nominees who then blew up because he didn’t know any principles, and Kennedy made it clear that he wasn’t going to vote for him. I think mattered.

 

I actually think—and interesting to hear what Boyden might say about this—but unlike Garland, Bork got his hearing, and it didn’t go very well. And so the American people had a chance to hear him and hear his views, and it doesn’t go very well. So I think it continues to have a role. But Judge, I’m not sure what you would do because I think it’s all part of a bigger problem that I don’t really know how to solve.

 

I do think that when – well, let me just give you an example. So obviously, in the last two years, there were states that had two republican senators, and I would work with them to identify – I’d remind them periodically that this process doesn’t start until the president makes a nomination. They can have anybody they want to be their judge, but unless the president nominates them, there’s no real role.

 

And we worked together and identified some really terrific people that then didn’t move forward and didn’t get hearings. And yet I was later told by some of them, as I ran into them in various places, that once President Trump was in office, a number of them were renominated by President Trump and confirmed. And so you think to yourself, “Well, then what was that all about?”

 

And so I just think this is part of a bigger problem in some weird way the fact that there’s no longer a filibuster means that the other party has free reign to not support the nominee because the person can get put on the bench. And in many of these, there are tremendous judicial emergencies where there’s a real need for judges so that the senators really, they have a desire to get the right people and get them in. And most of these are just upstanding people who are trying to do the best job that they can.

 

So I don’t really know. Sorry, Judge, that’s kind of a rambling answer, but I don’t quite know what to do, and it’s part of the overall symbol of partisanship. I think that’s really in some ways an issue.

 

Hon. Andrew S. Oldham:  Ambassador Gray, do you have a magic bullet that would change it in your view?

 

Hon. C. Boyden Gray:  No. I have no magic bullet, but I do think that it will – this polarization will eventually end, and it won’t be necessarily the judges which trigger the end of it, but it’s not going to continue, I think, forever, and so I think hearings are useful.

 

And the board, for example, I can remember that I had no lawyer, and I was going for the vice president at the time, but he refused to do any moot court sort of practice, and that was very apparent when he went through the hearing. So it wasn’t automatic that he was going to get defeated or get rejected.

 

But today, it is party line. It’s pretty close to party line, and so I think it’s a general overall cultural political situation we’re in, and it’s not just judges and the different process that gets compromised; it’s a lot more. I hope it will resolve itself, but I have no bullet.

 

Hon. Andrew S. Oldham:  Let’s go to our first question from the audience. Jeffrey Wood asks whether and to what extent the presidential commission, which at least a couple of the panel members have touched on, is intended to act as a sort of Damocles that is in some ways operating over the Supreme Court of the United States. Does anyone subscribe to that theory?

 

Ms. Carrie Severino:  Well, I think that’s a little bit what I was talking about with the intimidation process that it seems like we have here. Back in—I think it was—2019, the brief that was filed by Senator Whitehouse and several of his Democratic senator colleagues that basically said if the court doesn’t moot this case, we may be forced to move forward on court reform, and I think everyone knew they were talking about court packing specifically.

 

And so it has been used as a threat to the justices. And you know what? Actually, they did end up responding the way that Whitehouse said, and Justice Alito’s amicus, or his dissent in that case, left one to believe that maybe he thought that that could've had some impact on the way the justices voted in that Second Amendment case.

 

And then, low and behold, look, they did exactly what they were asked to, and nonetheless, we’re getting these talks of court reform now. And I agree with Ambassador Gray, I think as long as Joe Manchin holds firm, it isn’t likely to move, but I think it nonetheless functions as that kind of threat to the court.

 

Now, it maybe is a threat that is uniquely worrisome to the Chief Justice, and he’s not the swing vote anymore, so perhaps we have a little less to worry. But I think it’s disturbing to me to see that held out there as a threat in terms of fears that there could be a switch in time to try to avoid this kind of process. I think the best way for them to minimize the danger of these kind of process would be simply to try to ignore it and not feed these mafiosi kind of techniques by giving into them.

 

As the mother of a toddler, I can tell you that when you give into that kind of threats and tantrums, you only get more of that behavior, so I’m hoping that the left isn’t thinking that this is something that is going to be a successful technique.

 

Hon. W. Neil Eggleston:  So Judge, look, I doubt that Justice Thomas, Justice Barrett, Justice Alito, even the Chief Justice care anything about this movement, and they’re pretty much, I think, going to decide the case in the way they think the cases ought to be decided. So I don’t really think of this as much of an intimidation tactic.

 

And Carrie, I did follow a little bit. I know that some of the justices have dissented, but that New York case was so plainly moot. Basically, New York City had abolished whatever regulation it was. New York State had passed a law that said that New York City couldn't pass a new regulation to the case. It was completely moot, and I think Whitehouse was just concerned “are they so anxious to get to a Second Amendment case? Are they going to go ahead and decide it even though it’s plainly moot?”

 

And the other thing, which I think they probably largely figured out, is since there’s an entire industry built around bringing Second Amendment cases to the court, they didn’t need that one. There was always going to be some other one, and now obviously, they’ve taken cert in one and said they’re going to get their opportunity to do it.

 

So, look, I think they’re going to decide the cases they way they want to decide them, and, look, I’m not actually – I’m sort of with Boyden on this. I’m not actually a big fan I have to say of abolishing the filibuster. All presidents who have the House and have less than 60 in the Senate want to abolish the filibuster. Because if they could just abolish the filibuster, they could get more done, and I get that, and they care more about their presidency.

 

But as a Democrat, I would not have been happy if there had been no filibuster and President Trump, in his first two years, had the House, the Senate, and he was obviously the president. And sometimes, the parties forget how quickly everything changes in Washington, so I’m not actually a supporter of that at all, and I know I’m contrary to a number of people on my side of the line in connection with that.

 

But I think this is, as Boyden said, I think this is just an area where the parties just have to work things out. We’ve sort of gotten ourselves into a position where financial-related stuff, they can get through when reconciliation has passed, and the NDAA has passed, the National Defense Authorization Act has passed, and in addition to that, they named post offices, and it’s sort of a sad state of affairs, and obviously, I’d like to see some movement. And I hope Boyden’s right, at some point, we get out of this mess.

 

Hon. C. Boyden Gray:  Well, I would add just one little thought that looking back at history, I think, those books about Lyndon Johnson who point this out that in and about, before and after Kennedy’s assassination, there was a real partisan freeze, and I think a year went by with no legislation or more major legislation being passed at all. People have forgotten about that entirely, but it resolved itself eventually, and so I just think that if history is any guide, this too will pass.

 

Hon. Andrew S. Oldham:  Let’s go to our first raised hand. It’s from Dean Reuter from The Federalist Society.

 

Dean Reuter:  Hi. Thank you, Judge. I’m only interjecting here because I didn’t see any other questions in the queue, and I’m trying to demonstrate to our audience how easy it is to ask a question live, which I encourage.

 

My question is a Goldilocks question because I’ve heard from both sides criticisms of judges appointed—and especially justices—appointed by their political parties, that their judges are insufficiently decisive, that they’re dodging cases, that they’re either not granting cert or they’re deciding on too narrow of grounds. I’ve also heard, at the same time, the court exercises way too much power, is in everybody’s everyday life. So is it too little power, too much power, just right? I’m interested in the opinion of the panelists.

 

Ms. Carrie Severino:  Well, I’ll jump in, and we can keep on going in order. I think part of the problem that there’s too much power that rests with the Supreme Court is that right now, compared to the way that the country was when our Constitution was set up, there’s just disproportionately too much power in the federal government altogether. So that then makes the federal Supreme Court disproportionately significant; whereas, I think at the time of the founding, you would have had a lot more significance for state courts and frankly all sorts of other jobs.

 

You could see that by the fact that historically some Supreme Court justices left to do other things like run governor or something like that. So it wasn’t deciding every issue that came up in the country. They certainly wouldn’t have thought they could've been deciding what the national healthcare policy was, or whether abortion could be criminalized, or things like that that certainly wouldn't have entered the minds of the Founders.

 

And I think also—and that example brings it up as well—there are issues that have been constitutionalized that otherwise wouldn't be decided by the court, so I think there are a lot of issues that, in fact, are not actually addressed in the Constitution, but because of expansive evolving readings of the Constitution, maybe we have brought into that process.

 

As a side note on the importance of state Supreme Courts, I appreciate Neil Eggleston’s comments on the diversity of the Biden nominees, but I’ll point out there are different types of diversity of background that Trump, I think, was excellent on and having state Supreme Court justices was really one of them.

 

I don’t think that historically has been something where you have seen as much, but off the top of my head, I could think of Allison Eid, Britt Grant, Dave Strauss, Barbara Lagoa, Robert Luck, Joan Larsen. There’s a ton of these judges who have that state experience that is, I think, relatively unique in the federal judiciary, not to mention you have different types of backgrounds, like mothers of many, which is a mother of six, I appreciate, like Sarah Pitlyk, or obviously Justice Amy Coney Barrett; people who have worked in civil rights from a conservative perspective; people like Kyle Duncan at Becket Law; people who are ordained religious, which is interesting.

 

We have Stephanos Bibas in the [Third] Circuit who is an Eastern Orthodox deacon; Joseph Bianco is a Catholic deacon; and then a lot of former state SGs, including people like our moderator here who worked as a deputy SG of Texas, but people like Lawrence VanDyke, or Andrew Brasher, or Kevin Newsom. So that diversity and some of that state experience I think is valuable as well.

 

Hon. W. Neil Eggleston:  So Dean, just to come back to your question. Look, I would like the Supreme Court to continue—or not continue. I would like them to recognize they’re one of a very long series of justices, and there are going to be a lot of justices after them, and that we come out of a rule-of-law system where we rely on prior case law that sort of developed the law, or whatever.

 

And I’m sure troubled by this kind of rethinking every issue that comes up as if the justice for the first time has come up with the right answer, and all the justices that came before didn’t come up with the right answer. I really just think that they should decide questions fairly narrowly.

 

As I said in the gun case, there’s always going to be another one, right? there’s always going to be another abortion-related case. There’s going to another restriction. They ought to be deciding these issues fairly narrowly, I think, and incrementally, and I think that that’s – I think the country would be better off, and I think the role of the judiciary – which frankly ought to be fairly limited.

 

There’s another thing that’s happening, and I’m going to raise this, and I’m a little worried the chat is going to light up and tell me I’m wrong again. But I’m going to just do it anyway, which is justices and academics always talk about “Well, the court is limited jurisdiction. It can only really deal with the cases that are brought in front of it, and so it has a limited power to it because it’s limited to the cases in front of it.”

 

But it’s my impression—and this is where the chat function may light up—that the conservative justices are frequently inviting another case that they write a concurrence to say, “I think this is an issue we should look into, and I’m looking for an appropriate case to do it,” and as a result of that, the conservative bar goes out and looks to find a case to bring it to the court.

 

And I think that that’s odd in the context of a court that is supposed to only decide cases that have Article III standing, and it was a method really of limiting its jurisdiction. Anyway, I think I’m right on that, that it’s more of a conservative thing than not, but again, that’s an impression sitting here and maybe not.

 

Hon. C. Boyden Gray:  One comment that I would have is that this question about the court’s power goes back to the very, very beginning, and I think it was Tocqueville who made the famous observation. He said one of the geniuses of the American system is their capacity to turn all difficult political issues into judicial ones, resolvable by tenured judiciary. And so this has been around this question of who can do what and who has the power as old as the Republic.

 

And I think it’s true – and I remember Justice O’Connor having a seminal on this, at some point. I think it’s true that Hamilton and Washington picked the first chief justice because they knew he would stand up to states like New York and Virginia who loved to interfere with interstate commerce and have their own monopoly enterprises. And Chief Justice did that. That’s why he [inaudible 00:55:03] Dormant Commerce Clause. Well, that came out of nowhere.

 

And so I think it’s ebbed and flowed, and ebbed and flowed, and back and forth. And Neil, I think, there are democratic nominee justices who, every now and then, hinted that it would be nice to see a case. But whatever the outside groups do to try to tee up cases, they still have to meet all the standing requirements, and I would say just disability and everything else, whiteness – and I would say that those rules remain pretty strict, even now.

 

Ms. Carrie Severino:  If I can just follow up. I think it may be true that right now the justice and the court most likely do that. I feel like it’s probably Thomas and, maybe, Alito are the ones most likely to do that of the conservatives. I do think historically – I think, for example, in death penalty jurisprudence, you have justices who are inviting “Hey, let’s take the next step on this,” even just with their dissents from denial of cert or something.

 

At this point, maybe, it wouldn't make sense for them to invite new cases if they don’t think they’re going to be on the prevailing side of it. But certainly, historically, the idea that people would go out and look for plaintiffs to address things, that’s something that I think is common to most of the civil rights era cases. This is just a common feature of litigation.

 

And I think if anything, probably, was first developed by some of the groups on the left before. Then, groups on the right started to employ those same techniques, but as Ambassador Gray pointed out, you still have to meet standing requirements. You can just bring any old person. If they don’t really have a case, the court can’t hear it.

 

Hon. Andrew S. Oldham:  Thanks very much. Jorge Perez (sp) has a question that goes back to something that Mrs. Severino had said earlier about the hearings. He asks whether it would make the process better to just not have cameras to do the hearings in private as Congress can in other circumstances? Are the cameras part of the problem or has this ever been explored that anyone’s aware of?

 

Ms. Carrie Severino:  It’s an interesting thought. It would be fewer signs that people put up which I think are particularly distracting from the topic. Following Neil’s comment, one other thought I had too was part of these judicial emergency problem that we have here is blue slips. And that’s another area that could be done away with as far as I’m concerned, and I think that generally where you see the judicial emergency.

 

Certainly, that was the case that a lot of judicial emergencies persisted through the Trump era because people, like the California senators, for example, were blocking his nominees. And I’m sure it probably goes both ways, but if you got rid of the blue slips for district court judges, you might have some of those seats filled more quickly and maybe with people that the administration was happier with. Yeah.

 

Hon. Andrew S. Oldham:  What of that? Do you think that that would be a solution that might help, or do you think it would hurt? Neil, what do you think?

 

Hon. W. Neil Eggleston:  So I think that this is another example of where the Democrats and the Senate have kept the process that the Republicans adopted when they had the Senate under President Trump, which is blue slips are still being honored for district judges; I think U.S. attorneys; I think U.S. marshalls, but not really being honored for court of appeals judges. I think that’s where they’ve ended up.

 

That kind of made sense to me. It seemed kind of weird to me, at the time when I was White House Counsel, that somebody’s being nominated to the Second Circuit. They may be filling a seat that had come out of New York, but they’re not a New York judge anymore. They cover the entire Second Circuit, which is Connecticut, Vermont, and so to treat it as owned by a particular judge seemed a little strange to me.

 

This may be an area where comity – even in this area, there may be enough comity among senators that if they got rid of it – this is a forum – I’m going to use the word patronage, but I don’t mean it in the evil sense, but this is something senators can do for constituents. And so I think part of the reason that neither the Democrats nor the Republicans have taken away the blue slip, as to senators, when it’s a district judge who’s literally in the state that that senator represents. I think this could also be one of these where taking that away is going to end up damaging everybody. And I just don’t know that it’s all that helpful really.

 

Before we lost the Senate, I talked to Senator Grassley, who was chair of the Judiciary Committee, about whether he’d been willing to get rid of the blue slips. And he just felt quite strongly that this was an issue that senators had a level of comity on and that senators should respect each other, and that’s sort of his view.

 

And this was another example of something there’s nothing the White House could do about it, independent of what the Senate was going to do about it. So we can nominate anybody we want, but if the Senate is going to agree they’re not going to go forward unless there’s a blue slip, there’s nothing that the White House can really do about it.

 

Hon. Andrew S. Oldham:  Boyden, I was going to ask you – obviously, if you have any response to that, it would be great. But I’m also curious, I heard all kinds of different information about the state of the blue slip in previous administrations, and I’m curious when you were in the thick of this, in the Reagan years and the Bush years, the H.W. Bush years anyway, were the blue slips honored for all of these judgeships or is this a relatively – are these innovations of more modern time?

 

Hon. C. Boyden Gray:  I don't know. Well, my recollection is there may be faults; they may be frayed, but I think honored blue slips for district court judges but not for appellate. And I don’t remember there being a big stink about that. We didn’t actually, of course, have—in the Bush years, Bush 41—control of the Senate, so that dominated the blue slip process, the fact you don’t control the body means you have to go with who you think you can get confirmed. Confirmability was a major factor, but there wasn’t a blue slip factor. It was the fact that we didn’t control the Senate.

 

Hon. Andrew S. Oldham:  We have a question from Rachel Morrison (sp) and she says, “What do the panels think are the qualifications a judge should have to be nominated and confirmed? Are race and sex important considerations? If so, to what extent should they be considered presumably with other variables? How do you measure their important weights?” Why don’t we just keep going in order? We’ll go one, two, three.

 

Ms. Carrie Severino:  Yeah. I think the real consideration should be the person’s experience, their qualifications, and chief among those is that they have a judicial philosophy that is faithful to the Constitution. I don’t think that people’s race and sex should be a major factor in that. I think that’s, to my mind, contrary to my understanding of what I would like for our country in terms of colorblindness.

 

I’d rather have that not be considered. I’d rather have people’s sex not be ruling them in or out. I would like our country to have the best judges. And I think what we see is that’s going to end up covering a wide and diverse swathe of individuals, but first and foremost is going to be how they approach their job as a judge and are they able to do that and able to do that faithfully the Constitution.

 

Hon. W. Neil Eggleston:  So obviously, in this process, you’re looking for the best people for the job, but in my view – look, on any of these positions, there are probably 50 people in the community who could be an excellent judge, and I think Carrie and I would agree that it should be someone who’s going to follow the Constitution. I think she and I would violently disagree what that means. But I think we both agree that a qualification is that they agree to follow the Constitution—a basic qualification of the job.

 

But I think that – President Trump said, “If I get another Supreme Court nominee, it’s going to be a woman,” I think, and then he nominated Amy Coney Barrett. I don’t remember Carrie coming out and saying, “Oh, President, you can’t do that. It’s got to be a man.” And so I think that having a judiciary that looks a little bit more like the country, it is an important factor, and when I say looks like, I mean gender, race, ethnic background, what we used to call grandiosely, maybe, experiential diversity and have this different kinds of backgrounds.

 

Carrie’s right that President Trump did look to the state courts more than had been traditional. But to think that having a judiciary that looks more like the people that are going to be appear in front of judges, I think that’s a factor that’s worth considering because I think a lot of people can perform these jobs and perform them quite well. And so it’s not like you’re deciding on one single person, and I think these are values that are important, and should be highlighted, and that President Biden is right to focus on them.

 

Hon. C. Boyden Gray:  Well, I just would add simply that since the time I was involved, the strength of the bench, as it were, has greatly expanded, and to include [inaudible 01:06:03] perhaps in gender than perhaps than on other grounds. But there are plenty of good people to pick from all kinds of diverse backgrounds that really weren’t available, say, 30 years ago, and I think it’s a tribute to the law schools. I say The Federalist Society has helped with the diversity on the philosophical grounds, but I think there are a lot more candidates of great ability who are available now, and are anxious to do it, and willing to do it for 30 or 40 years ago.

 

Hon. Andrew S. Oldham:  We got another question in the Q&A feed that harkens back to a topic that, at least, two of you have raised, which is that some of the issues associated with judicial nominations and confirmations may be, in the minds of some, connected to the things that judges do, whether it’s in deciding cases or what cases to decide.

 

And one of our questioners asks, are there any movements afoot to regulate things like basically Title 28 of the United States Code, which regulates judicial jurisdiction; it regulates all sorts of cases and procedures that judges use in deciding these cases. As someone who’s not inside the beltway and doesn’t pay as much attention to this as others do, I’m curious if that’s part of the conversation going on at Washington?

 

Hon. W. Neil Eggleston:  Maybe, Carrie, just to break up the order, I’ll just jump in here so that they don’t hear – so I think one of the things that this commission is supposed to look at is this issue not so much of jurisdiction but of what kinds of cases the Supreme Court should take and reduce, I think, its discretion and have more mandatory appeal cases than it has now. I think that’s one of the things that they’re going to look into.

 

I don’t actually have a view on that. I don’t know really enough about it, so I don’t personally have a view, but I think that’s one of the things that this commission is going to be looking into. And maybe, we could just take a little poll—we do this—which is the – because I think Boyden, Carrie, and I cover three generations of Supreme Court law clerks, so when I was a law clerk, which was to Chief Justice Burger, OT ’79—’79, ’80.

 

Again, I don’t remember exactly, but the court had something like 140, 150 merits opinions during the course of the year. I think maybe they were down to 60 or something last year. I don’t know what they have. Carrie, you’d probably know better than I do. Boyden, I think you may have actually even had more when the merits decisions in the era, and you clerked, and Carrie, I don't know—I lost track when you were—whether you were part of the downward slope, or whether the slope had already gone down, or what.

 

Hon. C. Boyden Gray:  Well, I think there were, in that range, 140, 150. And we had fewer law clerks. I remember that too. And there was no fax machine. This is maybe a frivolous point, but the head of the appropriations committee of the House didn’t like Warren, and so refused to appropriate money for a fax machine.

 

So that led to the so-called flimsies, which were done by the Chief Justice’s law clerks, and they would type up their recommendations for them for the populous petition, and then the secretary would take it over with very thin onion paper and make 10 copies. That’s why they were called flimsy, not because the evidence was flimsy, because the paper was flimsy.

 

But I don’t know how with more than double the case load to then as now, we did all that with maybe half the number of law clerks or two-thirds the number of law clerks. I’m sort of astounded, but maybe, we worked harder. I don't know.

 

Ms. Carrie Severino:  I’m amazed that not only without a fax machine, but my gosh, without Westlaw or Lexus, I – honestly, hats off to all of the justices and clerks who were able to accomplish that. I know Justice Thomas used to talk about when he came on the court, there were 120 cases a term, and he’s like, “We heard cases in the morning, and we heard cases in the afternoon.” And now this term actually was down to 58. So even less than 60. I think we were in the 70s. I clerked in 2007, 2008. But I agree, I think it’s a little nuts.

 

Justice Thomas actually would joke that he thinks maybe if they heard more cases, they’d have less time to be making stuff up on the side, and maybe, it would better if we could just – let’s have fewer random other meanderings of the court if you got to sit there and get focused on doing your work, if you’re going to crank out over 100 cases in a sitting.

 

One of the interesting thing is I remember Chief Justice Roberts, or getting the impression, that when he started, he wind up the number of cases, and obviously, this last year, or so, has been a blip for other reasons, but it is interesting because they have not gone up at all. They have been this steady decline, and it’s frustrating.

 

My personal thought is part of the reason for that might have to do with just the internal factor of the way that cert is granted in the way the cert pool works because as a clerk working on a cert pool where you’re running – and just for everywhere – the way it works is the justices who were in the pool—I think now that’s seven of the nine, or maybe eight—all of those cert petitions—and it’s 5,000, 6,000 petitions a year—are divided amongst all of their clerks, and then they write one memo that goes to all of the justices in that pool, so they’re not just giving advice to their own justice; they have to write a memo for everyone.

 

And I feel like it makes the stakes a lot higher in terms of recommending a grant because you know that 99 percent of these are going to be a no. And so if you’re going to recommend, you should grant the case. That’s a really big standard. So I think it gives this clerks even higher incentive to be looking for reasons to bump it. “Ah, it’s a vehicle problem,” or “It’s a this,” or “It’s a that. Not a big enough split. Let it have time to percolate. Off to denied,” which I always think is a funny thing because some of the off denied things are things that maybe shouldn’t be off denied, but once you – it’s like friend zoning someone. Once they get in the off denied zone, now that’s just a line that would get into a thing, and everyone thinks “Oh, no one’s going to ever grant on this issue.”

 

So maybe, that internal process helps reinforce a getting-to-no approach rather than getting-to-yes on the cert petitions. But at the end of the day, you got to talk four justices into doing it, and I don’t know how to get them to switch from their negative approach to cert because I do think there’s a lot of issues that could stand to be considered by the Supreme Court. I think maybe part of it is this sort of intimidationy kind of feel thing. There’s too much concern about this is going to be a big issue for the court, and every time they – like when they took the Dobbs case, the abortion case, everyone’s like, “Oh, this is going to be big, and the election is going to get the court in the crosshairs.”

 

That kind of rhetoric about every major case you take, hopefully, isn’t affecting them, but to the extent that it is, the justice is like, “Oh, my gosh. I don’t want to wade into this territory” either side you’re on. It’s like, “We don’t want to be here.” Because they’re not on the court because they’re politicians that ran for office. They’re not in court because they like being behind the scenes more, I think. So I feel like that doesn’t help the process.

 

Hon. Andrew S. Oldham:  One of the topics that we haven’t really touched on is the various division of labor that is associated with a judicial nomination confirmation, so obviously, the counsel’s office, then there’s the Justice Department, and the Office of Legal Policy; there’s obviously, the Senate, and senate staffs, the Senate Judiciary Committee, etc.

 

I’m curious, given, I think, as Mr. Eggleston had pointed out, we have three different generations of people who have participated in those processes, law clerks and as staffers of various kinds, how that has changed over time, if it has changed over time, does it change by administration, does it change based on the political breakdown in Washington? Is there some level of constancy as to who does what and how it works, or is it really all just driven by the people that are in those various offices? Any thoughts about the division of labor?

 

Hon. C. Boyden Gray:  Well, I would say this simple thing, that I think more and more of the authority has been transferred, over the years, from the department to the White House Counsel’s Office. Neil may not agree with that, or Carrie, but that’s been my impression, and I’ve sort of lived through some of that as it was changing, and there was some friction with justice, but not that much. But with the decision making, I think it’s now squarely in the hands of the White House Counsel’s office. That’s my impression.

 

Hon. W. Neil Eggleston:  I can talk about it when I was there. I know less about it now. Although, my ethics deputy is now the White House Counsel, Dana Remus, and the person doing judges, I think, is Paige Herwig, who did judges for me before she went to the Justice Department, so it’s probably pretty similar.

 

Look, when we did this, I was the memo to the president recommending that he nominate somebody. So that was me writing to the president this “We recommend that you nominate this person,” and so that was me on the line. And so it was important to me that this is – because he would call me in, every once in a while, and say, “Really, what is this about, and who is this, and why should I do this? And this person has the following issues.”

 

And so I was personally on the line for these, and whenever I made a recommendation, I had to be ready to go down and talk to him and tell him why it was. And so I think there’s a sense in which that focuses the mind a little bit, and because the ultimate responsibility was really on me to make that recommendation and defend it if the president wanted to understand why I had made the recommendation.

 

But I agree with Boyden. My sense is that more of that has been consolidated in the White House Counsel’s Office over the years. I had the impression—and Carrie, you may know better than I do—that in the Trump era, the Department of Justice was more involved than it had been despite the notion that the White House Counsel writes the ultimate memo. But the Department of Justice, it was more heavily than it have previously been in the recent past in the process, but that’s just an impression. It’s not like they consulted with me, so I don’t know for sure.

 

Ms. Carrie Severino:  Yeah. My impression just based on particularly looking at it for justice on trial and looking at the Supreme Court vetting process is that it did seem to be very tightly controlled within the White House Counsel’s Office.

 

I can’t say that – my impression is that that went through appellate court nominees and lower court nominees as well; although, I’m assuming that more White House Counsel focus might have been heavier on the – at least, in terms of the initial vetting process might have been heavier on the White House Counsel for Supreme Court nominees than others, but I can’t speak to the historical changes really having looked at it more over a smaller shorter period of time.

 

Obviously, the DOJ had a huge role in other aspects of the process, but I’m just thinking about the upfront vetting, but again, I know more about that with the Supreme Court than with the other levels.

 

Hon. W. Neil Eggleston:  Yeah. Let me just be clear, when I said I thought maybe in the Trump administration there was a little less, I was not talking about the Supreme Court nominations. I think that’s always very focused and centralized in the White House. I was really thinking – I had the impression it was a little less at the district judge and court of appeals level, but again, I’m not sure about that.

 

Hon. Andrew S. Oldham:  Great. We have a raised hand from Kenneth Marcus if we can activate his mic.

 

Hon. Kenneth L. Marcus:  Hi. Great presentations, everyone. I wonder if people would be interested in commenting on the tendency of presidents to nominate younger and younger judges to the federal judiciary, and whether that’s a good thing in bringing either more age diversity or more energy to the judiciary, or whether it’s a bad thing in that it would be helpful to have a greater amount of years of experience in people who become federal judges?

 

Hon. Andrew S. Oldham:  That’s a great question. Whoever would like to go first, just jump in.

 

Ms. Carrie Severino:  Yeah. I think it’s a – I’m not sure that they’ve gotten consistently younger. I think of Joseph Story who was 32 when he was nominated to the Supreme Court even. Obviously, that’s an outlier, but I do think it’s a process that does have a – there’s a floor, and there’s a natural floor, thinking from perspective, of looking at vetting people is, you do want to find someone who’s young and is going to have a long time at the bench, but if you’re looking for someone where you really understand the judicial philosophy, you simply don’t – you need to have a certain amount of experience and life experience, as well.

 

And one of the things that Mollie and I, for example, wrote about in our book in terms of things that they were looking for wasn’t even just have they articulated this philosophy, but having life experience of having shown that you know how to stand up to difficult experiences in your life or difficult opposition because then you know this is someone who has the backbone to do that when they’re under the pressure, that they would be in both the confirmation process and then also on the bench. And those are things that it’s going to be hard to find at too young of an age, so I feel like it’s a process that is going to naturally end up stabilizing somewhere in the middle.

 

Hon. W. Neil Eggleston:  So I agree with Carrie on that. I think there’s a natural – I’m about to say this, although, I’m not sure what the age is, but you want them to have had enough experience that they’re comfortable in whatever role they’re going to have. I actually think that people shouldn't be nominated to be district judges unless they have experience in courtrooms and some amount of experience in courtrooms. Judges shouldn't be learning about trial practice as a judge because they’re supposed to be deciding the trial practice, and so there has to be some amount of experience.

 

I suspect that if you graft this, you’d probably see younger and younger over the last couple of presidencies. I sometimes wonder whether these judges, who are quite young, are actually going to stay and serve out. As Justice Marshall used to say, “I was confirmed to a life term, and I intend to serve it out.” I wonder as people have children who need to go to college and financial, we don’t pay these judges all that much.

 

And it’s one thing for somebody who’s 55 and has been practicing and maybe have some money put away, as somebody else who’s 35, probably hasn’t put any money away, and may end up with financial obligations, whether they’re – so how likely they are to stay for decades and decades on the bench.

 

That’s a different issue and a different consideration I assume they’re all asked, and they all say they’re going to say, but it’d be interesting to see empirically what happens on the time on that. But I agree with Carrie, you want enough that you know what you’re getting, and getting a young person who turns out not to be what you thought he or she was going to be, that’s not a great outcome for somebody advising the president.

 

Hon. Andrew S. Oldham:  Ambassador Gray, do you have any thoughts on relative age or youth of nominees?

 

Hon. C. Boyden Gray:  All I can do is think of, I think, the anecdote about Oliver Wendell Holmes. I think they had to sweet talk him off when he was in his nineties, but he certainly represented the experienced part of this. You know his famous line about the life of the law is not logic, but experience. Having life tenure and being able to stay on the court until you really weren’t able to do it anymore was very important. There's a great angle of him walking to the court one day with Brandeis, and some pretty young girl walks by, and he does a doubletake, and says to Brandeis, “Ah, to be 70 again.”

 

So he kept his energy up until very late in life, and so I don’t – this is a question maybe about life tenure and putting term limits or whatever. I’m against that because some of the – Ruth Bader Ginsburg, in some ways, got wiser and wiser and wiser the older she got. So I’m not for term limits, and I’m not for confirming people who are too young to have, as Carrie has put it, life experience.

 

Hon. Andrew S. Oldham:  I’m curious of our other two panelists if you’ve thought about term limits, and obviously, that’s a constitutional question, but I’m curious if you think that that would help or hurt as what you understand to be the concerns associated with the nominations and confirmations process.

 

Ms. Carrie Severino:  I’m not opposed in principle. I obviously would be a – the challenge would be creating a system where you could institute term limits in a way that didn’t have a disproportioned effect in one party or the other. The good news is in order to pass a constitutional amendment, you do need an overwhelming and necessarily bipartisan support, I think, to get that level of support. So you would have to come up with a system that hopefully instituted in such a way that didn’t preference one party over the other.

 

So I’m definitely open to considering those ideas. I do think we have to be careful thinking about “What’s the problem that we think we’re solving with term limits and make sure that we actually would be addressing the problem.” I think one problem is the concern that people are staying until they’re not able to function effectively, and I don’t think we’ve actually seen that in recent retirements. I do think that Justice Ginsburg was functioning fine. I think Justice Breyer is functioning fine, so I don’t think we’re having the Justice Douglas issue of people overstaying their mental capacity to do so.

 

But I do think it could provide some consistency to be able to predict it. It’s a challenging problem though to try to game out what the best system is without being unduly complicated. I think one of the reasons people stay on the court isn’t even so much, sometimes, the political issues. It’s just that it’s such a great job, and it’s hard to let go of that incredible – and not just power in a sense that they’re trying to grasp, however, but it’s a thrilling thing to be making these important decisions.

 

And when I was clerking, Justice O’Connor had retired not too many years before, and I felt like she didn’t seem to be perfectly happy with having taken a backseat at that point. I often wonder whether that didn’t influence Justice Ginsburg’s decision not to retire because watching Justice O’Connor, who’s office was right across the hall from her at the time—I don’t know where it stood more recently—but in not being part of this process, that she was part of for so long, didn’t have an effect on her.

 

Hon. W. Neil Eggleston:  So for me, this is a little, also, another one of these in the category of “not going to spend a lot of time thinking about it because it’s not going to happen.” I do agree with Carrie that I’m not entirely – unless we’re back to the court-packing issue, and if you could do it in a way that didn’t advantage one party or the other, the notion that there’s more turnover might put less pressure on each individual selection. Although, I suspect that’s actually not true that, even with a term limit, whoever’s going to be there will be serving long enough that there’ll be an enormous amount of attention and pressure.

 

And I think also Carrie’s right that there really hasn’t been an issue where justices have stayed, that in my knowledge and memory—let me put it that way because there may be ones that I just don’t know about or haven’t really thought about. But other than Justice Douglas, who it was – I think everybody thought it was quite fine until the very end.

 

Justice Scalia died in office, but I think everybody thinks he was sharp as a tack until the end. It wasn’t a mental capacity issue. Justice Breyer obviously firing on all cylinders, as was Justice Ginsburg until her death, and so I’m not – unless we’re going back and fixing some other problem, I’m not sure what that solution really accomplishes. And just as I say, since we’re not going to have that constitutional amendment, it’s better discussing in my law school class probably.

 

Hon. Andrew S. Oldham:  Great. Thanks. We have a raised hand from Roger Severino.

 

Roger Severino:  Hey, how are you? Question about Justice Breyer. There’s been a campaign of sorts, especially, from liberal media outlets and groups to try to not so subtly pressure him to retire, and I’m wondering, in the experience of the panelists, how new is this development, where does it end, and what is your reaction to it?

 

Hon. W. Neil Eggleston:  So why don’t I take that one first? I know the people are pushing this most actively. Chris Kang worked for me in the White House and did judges for me, and I know him quite well. And look, I was on his White House Counsel. I thought about this in connection with Justice Ginsburg, and I just decided that I had nothing to add to the information that she already had.

 

And again, I’m talking now from the point of view as the White House counselor or coming to the White House, so I never talked to the president about it, but I just thought I’m not doing that. I’m not going to call her and suggest to her that it’s time for her to step down. It’s unseemly. I’m not really going to do it.

 

I kind of got the same reaction to this. I think Justice Breyer doesn’t need – the liberal media and people, progressives like me, are not turning on him. He’s, in our view, a fantastic justice, and we’re not going to turn on him if he decides not the retire. And he’s going to make whatever decision. It’s entirely in his control, and he’s going to make whatever decision he’s going to make.

 

And I don’t think he’s going to decide to retire because somebody’s bought a van with “Retire Breyer” in writing, driving it around the Supreme Court. I think he’s got the information he needs in order to make a decision about what he’s going to do, and I think he’s pretty much going to – pretty much he’s going to do it.

 

The other odd thing about the timing of all this, is that if he were to retire today, there are a lot of cases yet to be decided, and you would lose his vote. And even if you confirm somebody before the end of the term, the tradition of the Supreme Court is that if a justice hasn’t heard argument, the justice is not going to vote.

 

So I don’t know if there are 5-4 cases that would go some different direction. Probably, not so many anymore. If he were actually to retire before the end of the term, he’s out of voting and being a part of the decision-making process before the end. And I’d be quite surprised if he retired before the end of the term.

 

Typically, when justices decide to do this, as Boyden and Carrie both know quite well – if they’re going to retire—as opposed to Justice Scalia obviously didn’t make his own decision about it when he was going to leave the court—but they typically retire shortly after the end of the term. And so this pressure on him, I’m just not really sure what the theory is here.

 

Ms. Carrie Severino:  Yeah. I’ll add that if you retire before the end of the term, it would also mean he has all these potentially decisions he’s in the process of writing, and who writes those decisions, so even if you’re not the deciding vote, someone else has to pick up all this slack at the end. That doesn’t strike me as likely. I assume even the people running the billboards can’t imagine he’s going to retire tomorrow.

 

From my perspective, I agree with Neil, it’s unseemly. It doesn’t make sense to me as a practical matter either. I think if anything, that response – especially coming as it did, almost immediately after Breyer’s own rejection of court packing at a speech he gave at Harvard and saying he didn’t like the way this was politicized in the court, it makes it – well, I don’t know if this was something they had planned before that, and the timing just happened to be that way or if it was specifically in response to it.

 

But it does give the impression of the “Hey, I do think a lot of people agree with Neil that they’re not – we do still like you. We don’t have no more use for you,” or something. But I think that was the impression that it gave from, at least, the people running these billboards, and some of the louder vociferous voices saying you need to retire now as “Hey, we have no more use for you here. We want to just get someone younger to warm your seat.” I don’t think that’s appropriate, and I think it also risks further politicizing that seat in the way that Breyer literally just said he doesn’t want to do. So I think if anything, it’s likely to be counterproductive.

 

A follow-up question for Roger is, who’s watching the kids if you’re asking me a question on the panel? But I’m hoping that they’re okay. The house is not burning down.

 

Hon. Andrew S. Oldham:  Ambassador Gray, what do you think?

 

Hon. C. Boyden Gray:  Well, more pressure was put on, I think, more than Ginsburg than is now being put on Breyer, from what I can remember, and I always admired Justice Ginsburg for not bowing to it. And I think Carrie had the right reason. It’s the most interesting job in the world, and Bork almost dug his own grave when he said it was an intellectual feast, but that’s exactly what it is.

 

And if I were there, I wouldn't walk away from it. I don’t care what kind of pressure was put on me. I would walk away if I thought I was going cuckoo, but in recent years, we just haven’t seen that, and I think the court has a way of dealing with that—has shown it has a way of dealing with that on its own.

 

Ms. Carrie Severino:  And just one story that I always loved relating to that is, Justice Marshall had allegedly said to his clerks, at one point, “If I die, just prop me up and keep on voting.” But then, actually, when push came to shove in his own life – at one point, apparently, it was his wife who reached out to him and said, “I don’t think you’re still – I think now the time has come. You’re really not able to do the job as well as you did.”

 

And he did step down, and he stepped down obviously, as Ambassador Gray knows, under President Bush, and that’s why we have Justice Thomas in his place. So he was able to make that decision in a way that if you were doing it for purely strategic ideological or partisan reasons, you would've stayed there, right? But he made that choice in a very principled way, and I think that speaks a lot.

 

Hon. Andrew S. Oldham:  Well, I think we’re out of time. And so I suppose we will leave it at that. Our greatest thanks to each of our panelists for their scholarly and deeply experienced contributions to the topics and The Federalist Society for hosting this discussion. With that, I’ll turn it back over to Dean.

 

Dean Reuter:  Terrific. Thank you so much, Judge Oldham. And thank you to Carrie, Boyden, and Neil for your remarks and your insights. This has been a terrific final panel and a great conclusion to our Executive Branch Review Conference.

 

I don’t know how it is that I’m hoarse, like I had been to the convention. I don’t understand that. I thank also all of the week's participants and audience members for spending time with us during EBR9 week. The entire proceedings have been recorded, so feel free to watch panels you might have missed on our website or another outlet and feel free to share the links with those recordings with your friends.

 

And in important Federalist Society news, recent changes in COVID policy by the D.C. Government make me cautiously optimistic about seeing all of you in person at this year’s National Lawyers Convention, now scheduled for November 11 through the 13 in person at the Mayflower Hotel here in Washington D.C. So please mark your calendars November 11 through 13. But for now, please standby for a few seconds for an alert directing you to join the lounge. I hope to see you there now. We are adjourned.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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