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Eleventh Annual Executive Branch Review Conference — EBRXI

Transparency, Accountability, and the Administrative State

April 25, 2023

Eleventh Annual Executive Branch Review Conference — EBRXI
Theme: Transparency, Accountability, and the Administrative State

Tuesday, April 25, 2023
The Mayflower Hotel
1127 Connecticut Avenue, NW, Washington, DC

Registration CLOSED at 12pm ET on April 24

Featuring a Fireside Chat and Book Signing with Vice President Mike Pence

Hon. Mike Pence
48th Vice President of the United States


Welcome & Plenary Session
9:00 a.m. – 10:30 a.m. 

Breakout Panels
10:40 a.m. – 12:00 p.m.

12:00 p.m. – 12:30 p.m.

Luncheon Panel
12:30 p.m. – 2:00 p.m.

Breakout Panels
2:15 p.m. – 3:45 p.m.

Fireside Chat with Vice President Mike Pence
4:00 p.m. – 4:30 p.m.

Closing Reception
4:30 p.m. – 6:00 p.m.


  • Censorship by Proxy?
  • Regulatory Review Reset?
  • The Administrative State on Trial?
  • Fireside Chat on the State of Antitrust
  • Environmental Justice, Civil Rights, and the Rule of Law
  • $64,000 Questions — Obtaining Information from the Executive Branch
  • The Role of Executive Branch Lawyers and The Presidential Records Act Compliance

Confirmed panelists to date:

  • Ms. Elise J. Bean
  • Hon. Susan P. Bodine
  • Hon. Steven G. Bradbury
  • Hon. Mark Brnovich
  • Mr. Anthony P. Campau
  • Mr. Horace Cooper
  • Hon. John Cruden
  • Prof. Susan E. Dudley
  • Mr. Will Duffield
  • Hon. Gregory G. Garre
  • Mr. Andrew M. Grossman
  • Mr. Brian Hauss
  • Ms. Allison Hayward
  • Mr. Brian Israel
  • Mr. Erik S. Jaffe
  • Mr. Alex Joel
  • Hon. Gregory G. Katsas
  • Prof. Sally Katzen
  • Mr. Gary Lawkowski
  • Hon. Jon Leibowitz
  • Mr. Ryan P. Mulvey
  • Hon. Carl J. Nichols
  • Mr. Andrew Olmem
  • Hon. Noah J. Phillips
  • Prof. Richard J. Pierce, Jr.
  • Hon. Neomi Rao
  • Hon. Eleni M. Roumel
  • Ms. Alina M. Semo
  • Prof. Chad C. Squitieri
  • Ms. Katie Townsend
  • Hon. Stephen Vaden


  • Conference (with no CLE) - $50 ($25 for Members)
  • Conference with CLE - $100 ($50 for Members)


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9:00 a.m. - 10:30 a.m.
Welcome & Plenary Session: Regulatory Review Reset?


Topics: Administrative Law & Regulation • Regulatory Transparency Project
Grand Ballroom
The Mayflower Hotel
1127 Connecticut Ave NW
Washington, DC 20036


Event Video

Listen & Download


Earlier this month, the White House released much-anticipated changes to federal regulatory practices, including a new Executive Order 14094 on “Modernize Regulatory Review,” draft revisions to Circular A-4 governing regulatory impact analysis, and draft guidance on meetings with entities outside of the executive branch. The Office of Information and Regulatory Affairs (OIRA) has the lead for implementing these changes, which comprise the most significant regulatory policy initiatives of the Biden administration. In this opening session, OIRA experts, including several former OIRA administrators will review these developments.


Event Transcript

Nate Kaczmarek:  Good morning and welcome to the Eleventh Annual Executive Branch Review Conference. My name is Nate Kaczmarek, and I am Vice President and Director of the Practice Groups for The Federalist Society. We are delighted that you could be here with us at the Mayflower. We’d also like to greet those of you who are watching us remotely via the livestream.


      The other day I was watching the first opening session of the first Executive Branch Review Conference more than 10 years ago. That panel was titled “Is the Administrative State on the Rise?” In his initial remarks, Dean Reuter was encouraging the audience to find a handout with a true novelty—a QR code—from The Federalist Society. He waited for everyone to locate it in their seats and then directed them on the card -- to take the card home to their children so that they can show them how to read the QR code with their cell phone.


      In the decade that has passed, some things have changed. We now charge to attend this event; we now livestream every panel; we are familiar with and use QR codes all the time, including to help us with important tasks like signing in and signing out for CLE at our conferences. There’s a QR code on the back of your program to do so.


      But other things remain the same. Our senior vice president and general counsel, Dean Reuter, who provided excellent leadership for this conference since its inception, is still here today, and we look forward to his fireside chat with former Vice President Pence this afternoon. Our 15 practice group executive committees remain devoted to hosting excellent panel discussions and asking important questions about the executive, this year particularly focused on transparency and accountability. And brave souls like Clinton administration administrator of OIRA and NYU law professor, Sally Katzen, are still willing to come here to engage with us candidly in order to enrich our discourse. Thank you for joining us once again, Sally.




      Thanks as well to my great Federalist Society colleagues who work very hard to put together today’s conference.


      So let’s get things started by turning to our opening plenary session, which is co-sponsored with our Regulatory Transparency Project. This session is titled “Regulatory Review Reset.” We certainly have an all-star panel and are very pleased that Andrew Olmen is here to moderate our discussion.


      Andrew is a partner with Mayer Brown, where his practice focuses on complex financial services, regulatory and public policy matters. He previously served as Deputy Assistant to the President for Economic Policy and Deputy Director of the National Economic Council. Prior to that, he served as Chief Counsel at the U.S. Senate Banking Committee -- I’m sorry, U.S. Senate Committee on Banking, Housing, and Urban Affairs. For full bios of our speakers today, you can visit our website, fedsoc.org.


      One last note before I hand it over to Andrew, at the very end of this panel, we will be showing two quick upcoming Federalist Society film trailers, so please stay in your seats at the end of this session and we will show those trailers.


      With that, thanks all very much for being here. Andrew, the floor is yours.


Andrew Olmem:  Thank you for that introduction. Well, it’s my pleasure to moderate this panel on the Biden administration’s recent proposals to perform the regulatory review process of the Office of Information and Regulatory Affairs, also known as OIRA, at the Office of Management and Budget. This is an apt starting place for today’s conference on important developments in the executive branch. This is because OIRA, while it’s not well known outside of Washington and is little understood within, OIRA plays an essential and pivotal role in the development of federal regulation. If one wants to understand federal regulation, one has to understand OIRA.


      And the timing of our panel couldn’t be better. Earlier this month, President Biden issued an executive order on modernizing the regulatory review process, and concurrently, OIRA issued several supporting reform proposals, which collectively, these proposals would substantially revise and modernize the way that OIRA conducts regulatory reviews and when it does and how agencies develop regulations, including how they use cost-benefit analysis.


      So to discuss these proposals and their potential impacts on public policy, we are very fortunate today to have with us several of the nation’s leading experts on OIRA and federal regulation. So let me begin by introducing our panel.


      Starting at my far right, Susan Dudley is the Director of the George Washington Center -- George Washington University Regulatory Study Center and a distinguished professor of practice in the Trachtenberg School of Public Policy and Administration. She served as the OIRA administrator in the Bush administration from 2007 to 2008. She had previously served as an economist at OIRA for five years. So she has lots of time in the building, as we would say.


      Previously, Susan had also directed the Regulatory Studies Program at the Mercatus Center and taught courses on regulation at the George Mason University School of Law. And she also previously served as a staff economist at the EPA and the Commodity Futures Trading Commission. She was also the past-president of the Society for Cost Benefit Analysis, which is highly relevant for our discussion today.


She’s a graduate of the Sloan School of Management at MIT and the University of Massachusetts. She is also an author. She literally wrote the book on regulation called Regulation: A Primer.


      Our next panelist is Sally Katzen, who is Professor of Practice and Distinguished Scholar in Residence at the New York University School of Law. She is also the Co-Director of the Legislative and Regulatory Process Clinic. Sally served in the Clinton administration as the administrator of OIRA from 1993 to 1998—also having some significant time in the building.


      Also, very importantly, she served as the deputy assistant to the president for economic policy and the deputy director of the NEC, which maybe we should have another conversation about. As much as being the head of OIRA must’ve been great, I assume NEC deputy was equally, if not a better, job. She was also deputy director at OMB.


      Before joining the Clinton administration, Sally was a partner at the law firm of Wilmer, Cutler & Pickering. And earlier in her career, she served in the Carter administration as the general counsel of the Council on Wage and Price Stability in the Executive Office of the President. Given what’s going on in inflation, maybe we have to come back to that experience later in our discussion. She’s a graduate of Smith College in the University of Michigan Law School. She clerked for Judge J. Skelly Wright on the U.S. D.C. Circuit.


      Our final panelist is Anthony Campau. Anthony is a Principal at Clark Hill, where he focuses on complex regulatory privacy data and compliance and corporate governance issues. Anthony previously served as the chief of staff and counselor at OIRA from 2017 and 2019. In that role, I can personally attest Anthony was the person who made the office run and function, which I think we’ll hear more about.


      Anthony also was previously an in-house counsel and assistant secretary of the board for a large university and also served as a regulatory fellow at the Heritage Foundation. He previously clerked for the Honorable Neomi Rao on the D.C. Circuit. He is also a graduate of the University -- Georgetown University Law Center and Southeastern University.


      So with those introductions behind us, I think we want to start out with just a little 101 on OIRA for those of you who are not familiar to build a base of common knowledge. So, Susan, why don’t I start with you? Just walk us through. What is OIRA? What’s this weird acronym we have here? And what does it do, and what’s its function in the federal government?


Susan Dudley:  Thanks, Andrew. How many people in the room have heard of OIRA? Excellent. I’ve never seen so many hands raised for that question. So maybe you don’t need this introduction. But OIRA is a small agency in -- within the Office of Management and Budget in the Executive Office of the president. It was technically created by the Paperwork Reduction Act, which Jimmy Carter signed in 1980.


      All right. People behind me, I’m going to have to talk in the mic, so I’m not looking at you.


Sally Katzen:  Yeah. Why don’t you move over, seriously?


Susan Dudley:  Yeah.


Sally Katzen:  And you guys move over. We won’t call on anybody.




Susan Dudley:  Well, I might. When Reagan was elected in 1981, he gave this new office responsibility for reviewing all the regulations of the executive branch. So under Executive Order 12291, Sally and I were comparing notes at how many of these old executive orders we can just rattle off.


      When President Clinton was elected, there were a lot of people who hoped that he would abandon this office and this interagency review process. But with Sally at the helm of OIRA, he did not. Instead, he issued Executive Order 12866, which is still in effect today. So think about that—an executive order that can be rescinded with the stroke of a pen has survived for almost 30 years. We’ll celebrate its 30th birthday in August.


      So OIRA is a small staff. And Andrew pronounced OIRA right. That’s important to know how to pronounce it. And also, the staff of about 50 are “OIRAranians.”




Susan Dudley:  And Sally and I are still OIRAranians. You never lose that—headed by a PAS administrator. So quickly, what it does is it wears -- the OIRA staff wears four hats: one is what President Obama called a “dispassionate and analytical second opinion on agencies’ actions.” So that’s looking at the regulatory impact analysis, focusing on economic efficiency, but also bringing in scientific, legal, engineering, other arguments—statistics. The chief statistician of the United States has a branch chief in OIRA.


      The second hat is interagency coordination. So often, OIRA review of a regulation and sharing it with other relevant agencies may be the only time that -- it may be the first time that agencies have seen things that are relevant to them that others are doing. I know Cass Sunstein empathized that after he left as OIRA administrator.


      The third is that they ensure that the president’s policies are respected and reflected in their regulations. And that’s an important component that I’m sure our former NEC leads will agree with that OIRA is a career staff within the EOP, which is largely non-career—largely political. And they bring that institutional knowledge to it. And so it helps a president understand what agencies are doing and are relevant. I mean, I think about Elena Kagan’s article, Presidential Administration, and the important role that OIRA plays in that.


      And then finally, we might touch on this today is meeting with the public. So when a regulation is under review, OIRA will accept requests for meetings with the public. So with that, Andrew, maybe a too long-winded explanation given the number of hands.


Andrew Olmem:  That was perfect. So why don’t I turn it over to Anthony then to give us a little bit more detail about how that mission of OIRA is actually undertaken. As chief of staff, you’re the point person on making sure the organization works. So walk us through exactly -- what does that mean on a day-to-day basis.


Anthony Philip Campau:  Great, thank you very much, Andrew. So one of the things that we really try to emphasize, I guess, as a sort of preliminary step was the unified agenda. We really tried to breathe life back into that document and process. So the agenda is this mechanism by which the executive branch tells the public everything that it’s working on, everything that’s in the pipeline.


      So a preliminary thing we did was to try to get everybody aligned across the EOP and across the executive branch on what exactly is the president’s agenda, and let’s make sure that we’re reflecting that in this public document—not just at a high level of policy, but at a very granular level of implementation: what are the exact regulatory instruments that are going to be used to implement and achieve that agenda and have them in that document.


      And then the process starts generally at each review. So OIRA reviews roles, as Susan said, and that starts with a significance determination process. A desk officer in the course of regular conversation with agency counterpart says, “This rule, we think, is economically significant or policy significant, legally significant,” something else, brings it in for review, and circulates it around the Executive Office of the President and to interagency stakeholders that have an equity in that process.


So perhaps it’s an EPA rule, and they want to make sure that the Interior Department or FERC or some other sibling agency has an opportunity to see it, contemplate it, think about the interaction of the various legal and regulatory jurisdictions and make sure it all works together rationally.


      And so it runs that process. And that can be as simple as an email exchange on the policy, or it can lead to 20 rounds of policy conversations around big tables with lots of people talking to each other nicely or not so nicely, discussing, debating the substance of the policy, discussing the analysis, discussing the legal rationale, and really benefiting from the various strengths of the executive branch.


So perhaps you have justice department lawyers there who’ve litigated the -- basically, the five different permutations of this policy in the past that can tell you what the status is of it in the courts and that sort of thing—bring all those various perspectives to bear. And now those can sort of escalate all the way up to the top as necessary. That’s at the review process.


      But there are also -- Andrew and Sally and lots of others sort of ran policy processes within the EOP and within the executive branch. And OIRA’s staff, often we had OIRA staff attend a lot of those to be a part of the conversation before even pen maybe gets to paper on the drafting process to say, “No, no. You’re thinking about this completely wrong. There’s a different area where you should be -- a different regulatory docket that maybe addresses this more rationally”—something like that.


      So participating in kind of the ordinary policy development processes and then, on the back end, once the policies are developed, to make sure everything works consistent with the architecture that we’re going to talk about a little bit more.


Andrew Olmem:  That’s good. And I’ll just say, as somebody who engaged a fair amount with OIRA during my time in the Whitehouse, I always found the staff incredibly professional and very constructive and helped give the White House a more orderly process for following all of the regulations that the entire federal government does.


I think that’s one thing that, when you get to the White House, you realize that how many different agencies and departments are issuing regulations. And OIRA really does provide a way to organize and to come up with a process to make sure that each are appropriately considered.


      Now, with that background, let’s jump into what the Biden administration has proposed. And I’m going to ask you, Sally, can you just give us some background, I think, that’s essential for understanding what these reform proposals involve by talking about, first, Executive Order 12866—which is the kind of building block executive order that Susan mentioned—and how the Biden administration’s proposals would modify its requirements?


Sally Katzen:  Thank you, and I’m delighted to be here. I’m always surprised when The Federalist Society wants to invite me. I wear a D jersey and have served in Democratic administrations and often perform the function of the skunk at the picnic at these discussions. Today, I think we’re all like-minded in respect of OIRA and trust in its principles. So I don’t think there’ll be quite as much differences of opinion. But we have them, and I’m sure we will share them.


      Susan mentioned the Reagan executive order, 12911. And that was the first time that it was established that there would be a review—a centralized review by an office close to the president—and second, that there would be decisional criteria, that there would be an economic analysis. And it was incumbent upon the agency to say that the benefits were greater than the costs of any proposals that were to go forward.


      And that was the essence of the Reagan—and then Reagan/Bush—order that was there for 12 years. It was wildly hated by the Democrats on the Hill for a number of reasons, including, one, they had delegated authority, in their infinite wisdom, to the agencies. And what was the White House doing screwing around in the merits of this?


      Two, it was meant to be deregulatory, and there was an emphasis on costs rather than benefits. And this was seen to be deleterious to the objectives of many of those in Congress. And three, it was a big, black box. No one knew what was happening, who was meeting with whom, how long it would take, what was going on. It was the world’s greatest held secret.


      And so, as Susan said, it was assumed that when President Clinton was elected, he would disband OIRA, and that would be -- rescind the executive order, and that would be the end of it—but it was not to be. We revised the executive order, and we gave birth to 12866. The numbers just trip lovingly off my tongue.




Sally Katzen:  It did a number of things. It was more selective. The Reagan order had called for all regulations to be reviewed. The Clinton order called only for those that were significant—a term used by Anthony, a term used by Susan. And it was designed to be more transparent. There were rules made about who would be meeting with whom and who would be in attendance. It was more flexible.


      I used to say that the cost benefit analysis was informative but not definitive and that we were interested in non-monetized—even non-quantifiable—benefits that are difficult to quantify or monetize. There were time limits imposed and other such things. And that was signed by President Clinton on September 30, 1993.


      Every administration since has touched the document in different ways. George W. Bush, in the middle of the second term but right before Susan arrived, put out a series of amendments, which President Obama disapproved of and removed on day one. President Obama added a series of provisions whereby he reaffirmed 12866 but focused extensively on retrospective views of regulations so that agencies would try to figure out what they did right, what they did wrong—and perhaps get rid of a lot of them.


      President Trump, who did not write off the books—either the Obama or the Clinton executive order—may or may not have followed them precisely. He used a different approach with his two-for-one regulatory budget and other executive orders, in which his approach was clearly deregulatory. Let’s get rid of -- there’s this picture of him with stacks of paper and red tape. And he was holding a giant scissors.


Susan Dudley:  Golden scissors.


Sally Katzen:  Golden scissors? Oh, thank you.




Sally Katzen:  Golden scissors to cut the red tape, which -- and his executive orders were disapproved and eliminated on day one by Biden. So everybody has done a little bit, some of which has been maintained, others of which has not.


      This one by President Biden puts most of its emphasis on bringing in marginalized communities—something that he had spoken about during the campaign and was a day one memorandum to modernize the regulatory process. He was worried about underserved communities who had not participated in the regulatory process.


      Now, the actual executive order that he released last week or 10 days ago -- time flies when you’re having fun. My last class, and now I have to grade exams. Oh, my God. There is some updating. For example, he changes the 100-million dollar threshold for an economically significant regulation to 200 million, which exactly tracks inflation—so not new.


      He also suggests, or actually provides—and this was Susan’s pick up. I want to give her full credit for this—that every three years, this number would be increased by the inflation. And I think Susan is absolutely correct when she says, “That makes it seem so precise in a way that really doesn’t make a whole lot of sense.” Review is for things that are important, that are for things that are big, and nothing hovers right at the line.


      I know that when we wrote 12866, we kept the 100 million that Reagan had used because we looked at the inventory of what was before us. And is this either a couple million dollars or almost a million dollars? I mean, nothing was hovering at the 100 million. But if you changed it by two percent, it’s going to bring in lots more. So I’m not sure what all that does for us on this one.


      He also changed the process for the fourth category. There are three categories of significance which remain essentially unchanged, except for the update: economically significant budgetary impacts and inconsistency with other agency actions. He also changed the description of the fourth, which was novelty—as we had written in a novel.


      And that’s kind of interesting. We had thought of it as a stop gap. What was novel? What was novel was, “Oh, that was the question I got all the time.” How are you defining novel? And I searched for a definition, and what I came up with was, “I don’t know, but your communications director will know. Walk down the hall and talk to your communications director. When we release this, is it going on the front page of the Washington Post or The New York Times, or is it going on the last page of Inside EPA?”




Sally Katzen:  “If it’s the latter, we don’t want to see it. If it’s the former, we do want to see it.” And that was the description of novelty which I lived with and which I thought actually was pretty crisp but turned out to be more difficult to manage.


      And while it was a real backstop for us—and we only picked up a few—it has turned out over the years to be an increasingly large percentage of what has been brought in as significant. And I think the agencies are saying, “Woah, this is undefined. Who is doing this? What’s happening?” And so you have that.


      Well, what I really love—if I can take a few more minutes—what I really am particularly intrigued by is the bulk of this executive order is an attempt to deal with these meetings that are held by OIRA with people outside the administration. Now, when we started, these meetings were relatively infrequent. On the big ticket items, we’d get a lot of requests.


      At that time, I went to every single meeting. As a result, a very senior person at the agency went to every single meeting so that they were hearing what I was hearing. And I didn’t like to hear about law, even though I’m a lawyer by training. I told them, “I want to talk about the policies involved here and the mechanics,” or I would say, “Humor me. There is a problem. Just accept that. What would you do?”


      And I learned a lot, and I got a lot of information from these, as did the agency representative. And when we had a lot of requests, I put them together. All the oil companies are going to come in at one time or all the public interest groups are going to come in at one time, and we’re going to listen to you all.


      And so there, A, weren’t that many meetings, B, I attended them all, and, C, they were productive. Fast forward—I guess you say—fast forward 30 years, and now, I have been told it is legal malpractice if you do not request a meeting whether you have anything to say or not. You got to go in there. You got to plead your case.


      Two, they do talk a lot about the law, and they talk about everything else in between. And because these meetings are held without any disclosure by the OIRAranian staff as to what the document says, there’s a weird thing going on where people are speculating all over the place about what’s really happening, and the OIRA staff is sitting there, “Hear no evil, hear no evil, talk no evil”—whatever the thing is.


      But they’re stone silent. This is a colossal waste of time. It is a colossal waste of resources by a very small staff. And I have been pleading for the last 20 years to “get a grip” on this process and tighten it.


      So here we see some tightening, but also some loosening. On the one hand—and this is the tightening part—the executive order says that OIRA shall come up with a scheme in which to discourage the frequent visitors who take advantage of every opportunity to argue every single thing, and that’s for OIRA to try to figure out.


      I think they should be even more aggressive on that front. They say twice in the document that they’re going to take all meetings. Why? That’s absurd. The second piece is that the executive order calls for enticing, welcoming, accepting marginalized communities to participate. Now, this has raised some issues in the administrative law world.


      The thought of comments—a notice comment—the thought of comments is to do analysis is to either critique the agency’s analysis or provide your own analysis. It’s substantive. It’s to educate the agency, or it’s to shed new light or provide new ideas. These “marginalized communities” do not have the resources—easy for me to say—do not have the resources to develop these kinds of inputs. And we know that rulemaking is not a plebiscite. So it’s not appropriate for them to come to the table and say, “I vote against this.”


      On the other hand, I fervently believe that they have something to contribute. They can say, as no one else can, “You’re doing this to help me. I’m the regulatory beneficiary, right? This ain’t going to do it. This doesn’t meet what I need, or this is off kilt from where I am.” That’s important to hear because so many times, we assume, A) full compliance, and, B) accomplishment of the objectives. That may not matter, or you may not get the full compliance.


      And to hear people say, “Not going to work in my community” or, “That’s not my experience; that’s not my problem. Here’s where I’m coming from,” I think is incredibly important. And so that piece of this executive order, I think is tremendously important. It’s consistent with President Biden’s attempt to take a government-wide look at embracing all of our citizens and bringing everyone to the table. And I’m sorry I took so much time.


Andrew Olmem:  No, that’s perfect. So I want to move to Susan now to follow up on the other aspect of the Biden EO, which is the updating on Circular A-4.


Sally Katzen:  Oh, yes.


Andrew Olmem:  Well, I’m going to have Susan address that. But this sounds incredibly bureaucratic and technical—the ’ol Circular A-4. What’s going on here? But Susan, I think this is a really important -- an equally important part of what the EO is doing.


Susan Dudley:  But you should care.


Andrew Olmem:  So can you walk us through? What is Circular A-4? What does it do now, and what are the proposed changes to it?


Susan Dudley:  Yeah. And I know you meant to talk about that because there were three changes to -- the executive order did three main things.


Sally Katzen:  I just got caught up.


Susan Dudley:  Yes. And let me just add one more thing on the definition of “significance,” which means which rules come into OIRA on that fourth category that -- the novel category. Not only was the definition changed, but the OIRA administrator needs to personally approve those before they are brought into review.


      So Circular A-4, yes. Andrew is right. It may sound like you -- but you should be interested in this. So A-4 is regulatory impact analysis guidelines that were published after going through notice and comment and getting pure review in 2003. They had been built on economic analysis guidelines that came out in Sally’s -- during Sally’s time.


      So given the amount—so we’ve got another 20 years—it may well be time to see what needs to be modernized and what needs to be updated. I haven’t digested it yet. It’s 91 pages compared to the 48 pages in the existing Circular A-4, plus a 34-page preamble. And if you’re interested in this, I strongly encourage you to read the preamble as well as the draft guidelines. The guidelines are open for public comment until June 6. And it is something that I think they are very open to, and that preamble tells you what topics especially they’re interested in.


      So I would say just an overarching change is there’s less -- it seems less focused on efficiency than the previous order and does bring in things, like what Sally mentioned—having more consideration of distributional impacts. I keep looking down, but I don’t have any notes.


      So to that point, for example, there is a discussion of distributional impacts. And previous orders also had that. 12866 talks about understanding who is bearing the cost, who is receiving the benefits. Reagan’s order did. I think Carter’s order before that also talked about that as part of the analysis. He required agencies to perform. But we really aren’t doing it very well. We still do these analyses and get an, on average, this -- these are the benefits, and these are the costs. So that’s an important aspect of the new order.


      What concerns me about it is that instead of laying out clearly who is receiving benefits and who is receiving costs or how they differ across different communities of interest, there’s a discussion of putting weights on benefits. And I think once you do that, you really do get the black box that Sally was talking about.


      So the decisions, the policy decisions, get made in the analysis rather than by the policy officials when the analysis is laid out before them. And I think that’s the real value of regulatory impact analysis is to lay out for policy officials what we expect to be the likely advantages, disadvantages, benefits, and costs and then allow -- so that with that information, the policy official makes a decision.


      As Sally said—and she always says, and I love this phrase—“RIA is meant to be informative, not dispositive.” So trying to put some of the policy judgments into the analysis itself, the resulting analysis, I think, will be less valuable. We also see some of that more normative prescriptive rather than descriptive in -- I think, in the discount rates. And this might be the most significant change.


      The Circular A-4, the 2003, the existing circular, asked agencies to analyze their benefits and costs using both the three percent and a seven percent rate. And the current one says 1.7 percent for everything. What that does is that it makes the value of future benefits relative to upfront costs of achieving those benefits much higher. So, for example, appliance efficiency standards.


      If the value of the energy savings that consumers get from buying a more efficient clothes washer is discounted at 1.7 percent, it’s going to look as if you’re saving consumers a lot of money. And low-income consumers who may not be able to borrow at 1.7 percent, they are really not saving that money, and that’s the kind of thing. So I think the discount rate is very important -- that waits for distribution as opposed to clearly laying out the distributional impacts.


      And talking about the scope, the previous order A4 says, “Your scope is domestic benefits and costs. If you think that the global benefits or costs are particularly important, do that as a separate analysis.” This doesn’t really stray -- well, it does stray from that, but it still talks about the importance of understanding the benefits and costs domestically.


      But it does open a much wider door for making decisions based on global impact, and that’s something that, I think, since there are a lot of lawyers in the room, that’s a question to be able to think through in terms of statutes. If the statutory authority addresses impacts on citizens of the United States and if the -- using domestic benefits, it doesn’t pass a cost/benefit test.


      It costs U.S. citizens, as consumers or workers, a lot more than the benefits than they get. Is that consistent with your statute? So I’ll just lay my non-lawyer analysis out there like that. I’m sure there are other aspects of it that I’m forgetting, and I’m just going to stop because we’ll probably come up with it during our discussion.


Andrew Olmem:  Perfect. So why don’t I turn to Anthony, who is a lawyer, and we’ll get the legal analysis. Also, Anthony, can you take -- building on what Susan said about what A-4 -- the reforms A-4 would do? What are the kind of policy implications, and how is it going to change on how federal regulations are developed?


Anthony Philip Campau:  Right. So I guess there are going to be a lot of changes in the near and medium term that flow from this in the sort of day-to-day policy making process. But I guess where I’d like to start is in the longer -- over the longer term.


      I think I am pretty concerned that this is going to -- look. We took a pass on these kinds of changes. We very much wanted to reform A-4 in a different direction, and we took a pass on that. We talked about it. We debated it. We went over it for years. And same with 12866. And Sally mentioned some of the changes that we made.


      But you will note that our changes were all supplemental to 12866 and A-4. They did not open in any way. We changed not one word or comma or anything about 12866 or A-4. All of the requirements were still in place. We enforced them. Sally may not think we did a good enough job of enforcing them, but there’s a 12866 discussion in all of our rules.


      And we went through the analysis carefully. Cost/benefit analysis was integral to the regulatory budget. The regulatory budget was built on top of the A-4 and 12866 framework. We did not throw anything away. And so I think I -- personally, I’m sort of a little more frustrated than my co-panelists here, I think, in seeing this because we took a lot of criticism for our regulatory budget. They said, “You’re dismantling the foundation of the administrative state.”


      We did something separate. We layered on top of everything that was already there a new framework for thinking about how to make regulatory policy choices. And we did not discard anything underneath—despite the fact that this was the sort of running discussion, that we were throwing it all away, throwing it all in the garbage can. We did not do that.


      Today, we have a rewrite of the foundational documents of the administrative state. 12866 is open. It’s on the table. You can go comment on it now. These changes are to the text of 12866 that Sally, as she mentioned, labored so intensely for so many years. Here I am protecting Sally’s baby.


      But she worked very hard for 12866, and I have a lot of problems with it. My fellow travelers, we -- there are all kinds of things we wanted to do to that document, and we didn’t do it. So again, I’m sort of, I think, a little frustrated. And I think what’s going to happen is if the administration proceeds with these -- okay.


      Susan put it very kindly, as she always does. She said that sort of seems less focused on efficiency. The phrase “economic efficiency” appears nowhere in the text of A-4, the proposed A-4. Nowhere. It appears one time in a footnote in reference to distributional effects and why we need to have more distributional effect analysis and provide an extra waiting for distributional analysis. I’m perfectly fine with analyzing distributional effects, as I have said for many years.


      I think it’s an important part. It may not be the part that we emphasize as much, but it’s been there for a long time with respect to that long-standing bipartisan consensus and agree to let it remain and be part of the regular sort of flow of analysis. But that’s the only context in which economic efficiency is mentioned at all in the new A-4. I think that’s disastrous. It’s a move away from economic efficiency intentionally, directionally, and it’s significant.


      And I think that this proposal will commence a process where every four years or eight years, we rewrite the foundational documents of the administrative state. And if you are a sort of small C conservative who thinks that one of the objectives of competent administration is stability over decades and being able to have not a lot of disruption, I think you should be very concerned about these changes—not to put too fine a point on it.


      But I think that there will be, from sort of for the foreseeable future, a sort of full revisiting and rewriting of these documents. And I think that, again, we took a pass on that last time around. I don’t think that’s going to happen next time, and it’s going to be very interesting to see how it all unfolds. So we can get into the specifics of it more.


Andrew Olmem:  So let me just do a follow up with you on this because I think this is really a key issue to discuss on this, which is, you make a very good point about the importance of stability and predictability in the regulatory process, particularly across administrations. And we’ve certainly had that here.


      And the idea, though, is to make sure that the president has a reliable process to make sure that agencies are fully informed before they make decisions and, most important, that presidential policies are reflected in regulations. Why can’t one simply look at what’s happening here as President Biden determining that he wants to make a policy change on how regulations are promulgated throughout the federal government?


      So in a way, what’s happening here is that this is just another stamp of presidential priorities is that his priorities on how cost/benefit analysis is conducted, how the regulatory review process is conducted is simply different. And here, we’re actually seeing presidential -- this is not a case of where agencies are off doing something contrary to what the president would want to do. This is a case of where the proposals are in line with what the president wants. So, in other words, which is -- do you value more, stability and the regulatory review process or presidential priorities?


Anthony Philip Campau:  Yeah. Well, and to be clear, I mean, I played a big role in sort of developing and implementing the regulatory budget with the goal of sort of rolling back rules. So don’t be confused that I’m just focused on the long-term consistency of programs or something.


      But I do think for the foundational documents, there’s something to be said for some more strong dose of stability across the decades. But you’re absolutely right. I mean, I think that if the administration sort of owned these and said, “Yes, we are intentionally putting normative value judgments into our analysis and thereby exerting presidential control and direction for the administrative state,” that would be -- I think that would be appropriate. That is what this is.


      This is an effort to sort of put sort of policy judgments into the underlying analysis. I mean, Susan and Sally, correct me if I’m wrong. I’m sure you will. But my view of this has been that the focus, efficiency, and the cost/benefit analysis framework to date is not -- it is not intended to replace other policy considerations. It’s a supplement to them. So there are all sorts of factors that go into decision making on a policy.


      And so those other types of considerations are on the table in every policy, interagency policy discussion. The economic analysis provides a rigorous analysis of the efficiency of competing alternative solutions so that you can make a rational choice. But you sort of lay that alongside of the policy judgment. This puts the policy -- all the policy right into the analysis. But yeah.


      I mean, I think it’s one -- that is one way to sort of flex the president’s muscles on policy making, and they certainly have the right to do it. It’s their documents they’re in charge of now.


Andrew Olmem:  Now, let me flip back to Sally, though.


Sally Katzen:  May I?


Andrew Olmem:  This is on the other side, which is -- Anthony’s point, I think, is definitely a strong one here, which is that consistency is helpful in how regulation is developed. Now, I want you to expand on that, which is -- I remember in law school reading some of the early documents from the Roosevelt and Wilson era when federal agencies were first being established, right?


      And a lot of the theory there was that if we only had really smart career officials who could simply sit down and look at all of the facts and get politics out of policymaking, they would come up with really good -- make really good decisions, and that would be better for public policy.


      But as you can hear from what Anthony is saying is that the -- even the process by which one gathers the data and kind of gets all the facts so to speak involves some political decisions, and hence kind of really calls into question whether or not agencies really can make decisions in a depoliticized environment. Doesn’t this just kind of support further kind of the idea that—again, this supports OIRA—that presidential control over OIRA is very important because, inherently, all public policy decisions are political?


Sally Katzen:  I’m going to come at this in three different directions because I disagree with Anthony on virtually everything he said to the extent I understand it.




Andrew Olmem:  Well, that’s good because I think you were earlier worried about a lack of disagreement here.




Sally Katzen:  That’s true. That’s true.


Andrew Olmem:  It’s not a good panel if we don’t have some disagreement.


Sally Katzen:  Let me start by saying I think elections have consequences. And as a result, when a Biden is elected, it’s very different from when a Trump is elected, and it’s very different from when an Obama is elected. And you will expect to see differences in policies and in the implementation of those policies.


      And I don’t think it was any secret that President Biden was concerned about bringing more Americans to the table—whether it was to vote, which is an issue, or to participate in their economic lives. So I think that’s part of it.


      Going to your addition to the question about the original concept of a neutral bureaucratic -- and I do not say that with a sneer. I actually like bureaucrats. I think they’re dedicated, responsible, hardworking, and bureaucrat bashing is a disservice to this country big time. Having said that, the idea was to have people with technical, scientific, economic—even lawyering skills—apply neutral principles to a problem.


      I think we continue to have that with the civil service, and I think we have that actually also at OIRA, where the staff is virtually all civil servants. And what they do is produce analysis for the policy decision makers. So what they do is, “Here are the facts.” Do you remember Sergeant Friday in Dragnet? “The facts, man. Just the facts.” There’s not enough people in the audience that are old enough to remember that.




Sally Katzen:  But that’s what they do. “Here are the facts. Here’s the analysis. Here are the pros and cons.” And then let the policy people figure out what they want to do because, going back to the first principles, elections have consequences.


      But now, I want to come to what Anthony was saying, and that is stability, consistency, yes. Foundational documents, yes. You did not touch 12866. They did but with a very light hand. I mean, there are three things in there. There is the updating of the definition of economic significance. And as Susan was saying, you need the administrator’s approval now for the fourth category. But that’s not the one that calls for the massive cost/benefit analysis. That’s the one that calls for a simplified version of that in the first instance.


      Two, the meetings—meetings with outsiders. You know as well as I do that’s a tiny part. It’s a big time sync for staffers at OIRA to have to go to those meetings, and it’s of very little value. But that is a small piece of 12866, and it’s mostly saying to the agencies, “Think about ways of getting more involved, and the OIRA staff, think about ways of tightening it up.” There are no demands made in that section.


      And the third is rethink A-4. Now, is A-4 a foundational document that has produced stability? To the extent that I can read A-4, without falling asleep, I think it’s the best answer for insomnia. I mean, it really is. Just pick it up. Keep it in your nightstand. If you ever can’t fall asleep, start reading it.


Susan Dudley:  Don’t listen to her. It’s fascinating.




Sally Katzen:  But as I read A-4, it’s, “You could this, or you can do this, or you could do this, or you can do this.” There are options put out. There are ways of doing different things, whether it’s cost/benefit analysis, cost efficiency studying, and then all these other names that I can never remember of sophisticated analyses that take place in there.


      So it is a foundational document? No, it’s a, “Here’s various ways of doing -- of producing the data”—and I’m coming back to where I started—“of the analysis for the policy people to make a decision. And it’s not foundational. And I happen to think that the 241, even though you say it’s on top of 12866, the 241 really squelched decision making for new rules.


      And that was what Trump had campaigned on. And as I say, elections have consequences. And I’m not saying you guys destroyed 12866. You never got to it—usually, most of the time.


Susan Dudley:  I think Anthony has a quick response to that, and then I have something.


Andrew Olmem:  So yeah. I was going to say, why don’t we have Anthony respond, and then I’m going to have Susan talk about some of the implications here.


Anthony Philip Campau:  So on the executive order itself, I mean, it is no throw away clause. In Section 1(f)(4), the final clause says, “As specifically authorized in a timely manner by the administrative of OIRA in each case.”


      This, to me, is just an affront to the professional staff of OIRA because it says, basically, that they cannot -- they are not capable of making the judgment about which rules can come in for this review—despite the fact they are the ones that managed the -- they managed the dockets in these areas over the course of generations.


      This is part of their tremendous value add to the process is that they can -- they know where all the bodies are buried. They know all the things that I did to this rule, and they can say, “Hey, those crazy people, they were doing all these things. You need to pull this in and fix those.” And that is something that they can -- they know where that is and every rule. And by taking that -- I mean, how else should I read this clause?


      It basically says that they cannot make these judgment calls on their own. I just think that’s --


Sally Katzen:  On their own, but no one is stopping them from having the thoughtful conversations that I had with all of my staff people before we took matters up the chain.


Anthony Philip Campau:  Yeah. No, that’s right. That’s right. I mean, it doesn’t take it away, but it’s certainly designed to limit the number of those. It seems to me to be designed to limit the number of those that are reviewed and takes away -- I mean, the idea is that the sort of experts should manage it.


      The people who manage these dockets, they’re the experts, and they know which of those rules should fall into that category. So that, to me, is interesting. I mean, also, you mentioned that 30 years ago, you put the meeting provision in there for a particular reason, and that’s changed over time. I would say, actually, that 30 years on, the administrative state is much bigger. There’s a lot more power and authority and decision making and quasi law making within the executive branch.


      I think it’s a sort of constitutionally dire situation. And with that general framework, I would say we want more participation in all of the executive branch processes, more comments, more engagement. And that is part of -- as you said, the effort to have more affirmative outreach, fine.


But I think that there should be -- we should -- part of -- when we were there, part of the objective was to have trying to inject more of the sort of APA norms and values into the process as much as we can to try to make slightly -- this whole project slightly more constitutional.


Sally Katzen:  I think we should probably not slip into nondelegation doctrine and some of the other constitutional law issues, which I am a lawyer too. I’m happy to debate.


Andrew Olmem:  Let me turn to Susan here. And so I think we have a little consensus that the president, at the end of the day, can determine how the OIRA process works. I think the question there then is, are the changes going to improve public policy, right? And that’s, at the core—the question here.


So let me ask you, Susan, is, where do you see -- if the Biden reforms are adopted, where do you see the biggest impacts on public policy? Are there particular agencies or policy areas where you think these changes will have their greatest impact?


Susan Dudley:  Yeah. Let me step back from agencies first. Of the three main reforms that were in the executive order, which are the definition of significant rules for rules that get covered by OIRA interagency review, second is the public engagement—both by agencies and by OIRA—and then the third is A-4.


      I think the definition of significance, it looks like a sleeper that could be important. I understand that the CEA, Council of Economic Advisors, has estimated that OIRA will review 20 percent fewer rules as a result of this. What I don’t know and haven’t gotten an answer to is whether that’s 20 percent fewer of these economically significant rules because of the 200 -- 100 to 200 million change or if it’s that other significant category.


      I think the other significant category may be more -- a more important one, and we’re just going to have to wait and see. So I did some estimates and thought it could be as many as 60 to 80 percent of the regulations that OIRA reviews could be not deemed significant. That’s probably the higher end, but I think we just have to wait and we’ll have to see: does it really significantly change—I shouldn’t use significant twice—but does it change the number of significant rules? And that, I think, is important for various reasons, but I think we’ve kind of touched on it because we all agree that OIRA review brings value.


      On the meetings, and I don’t want to spend a lot of time on the meetings because I really do agree that there are way too many, and they take time away from a very small staff’s ability to actually do the review and the interagency coordination.


      But in a way, so the one big difference between Sally’s time and now is that those meetings are posted on the internet. And so that’s why Sally mentioned any lawyer worth their salt has to get in and get a meeting. And so you do see, as my experience when I was at OIRA -- when I was administrator was that there were too many meetings, and too many of them actually didn’t help. They weren’t valuable and constructive.


      But I’m not sure. The genie may be out of the bottle. I’m not sure how best to try to bring those in and only hold the meetings, except the meetings that are going to be substantive, as Sally pointed out, and not the ones that just are going to take time.


      On A-4, I’m concerned about the specifics. I don’t think it’s unreasonable, though, to open it up after 20 years. And one thing that I want to impress upon everyone is that it isn’t baked yet. What’s in that draft isn’t necessarily what will be in the final version that the executive order says should come out by April -- by next April within the calendar year.


      So there are problematic parts. You need to bring economic literature, legal experience to that review process. And just to be clear—and I know since you’re mostly lawyers—the executive order itself, not open for comment. It’s done, so you can’t suggest changes to that. It is very possible that the next Republican president will rescind it on day one, as have -- presidents have rescinded previous orders -- previous amendments to the Clinton order.


      But the two things that are open for comment are both circular A-4. So you have until June 6 to comment on that. And until the end of this week—or maybe even Thursday—to identify peer reviewers. So you can recommend who would be able to peer review that document. So they plan to -- and I think that’s very important.


      And then the other thing that’s open for comment is on how OIRA holds those meetings. So they have guidelines, draft guidelines for how they will do that and try to achieve the two goals that Sally talked about. And so that’s another thing that especially if you’ve had those meetings and have ideas on how to improve, and I’m not sure I do. But I think those are things that they’re not baked yet.


Andrew Olmem:  Sally, I want to ask you then, where do you see the biggest impacts on policy then? Are there particular agencies or policies that typically would be reviewed by OIRA that won’t be?


Sally Katzen:  I don’t see the latter very much. I think if there’s something that’s important, it’s going to be seen by OIRA. And that is not going to be an issue. In terms of what areas, my sense is that this is across the board, that it is not for environment only or healthcare only or labor policy only or even primarily in those areas.


      OIRA has always been quite expansive in its subject matter and its concerns. And I think this speaks to the process rather than the substance. So, of course, I smashed my --


Susan Dudley:  Crystal ball.


Sally Katzen:  -- crystal ball in 2016. I figure it’s not very valuable. And so I’m not sure I can see ahead to how this will play out. But I suspect that it will be relatively even handed. And you might find areas like -- I’m sorry -- like HUD or education that have not had the kind of microscopes necessarily drawn to them that may feel some of this where the actual regulatory beneficiaries—if I could call them that—are on the ground and want to speak to what’s being done for them rather than to them.


Susan Dudley:  Andrew, could I jump in since I think I didn’t fully answer your question before?


Andrew Olmem:  Sure.


Susan Dudley:  Just quickly. You asked specific agencies, and you mentioned EPA or Environmental. I do think two things in the revised circular, which isn’t final yet, would alter EPA’s rules. One is the global benefits, and that seems to be specifically designed for climate change, climate emissions, the social cost to greenhouse gasses, and the other is the discount rate.


      So in terms of the process changes, I think the fourth definition of significance may matter, but that remains to be seen. But in terms of the substantive, I think, first of all, a lot -- all of Circular A-4 -- and I remembered one more thing I wanted to mention, one change that I thought was important, and that is identifying the need for the regulation in the first place.


      Both President Clinton’s order—Executive Order 12866 and Circular A-4—talk about a compelling public need, including material failures of private markets. This new A-4 or draft A-4 still does think about that, but there’s less appreciation, emphasis on how markets -- what competitive markets do for improving wellbeing and human flourishing and are much more comfortable with identifying other reasons where government can override individual’s decisions and make them better off.


Andrew Olmem:  I want to pivot real quick and let Anthony talk just a little bit about the regulatory budget concept. He referred to it several times, and he’s written a really fantastic article on it because I think it is part of this discussion about alternatives on how to think about how regulation should be overseen. So Anthony, why don’t you walk us through? What’s a regulatory budget?


Anthony Philip Campau:  Yeah. Thanks, Andrew. So Sally mentioned two for one. I guess one of the things that I tried to point out in this paper is that the regulatory budget that President Trump put in place, it attempts to look at the overall efficiency of rules by focusing on the costs side of the ledger and integrating into a budget the standards of cost/benefit analysis so that that is fully contemplated as well.


      But it’s a way of making policy choices, of making regulatory choices. Part of what we did was to basically put that onus on the agencies to make those calls, so we did not direct from OIRA that you can’t do this, you can’t do that because you have an offset -- it was more of a ground-up exercise based on what was articulated. And Sally is ready to jump out of her chair.




Anthony Philip Campau:  But the idea is to basically give us another framework for decision making that integrates with the existing framework.


Andrew Olmem:  So you said how much total cost agencies can devote towards regulations can impose on the economy overall and broke it up?


Anthony Philip Campau:  Yeah, that’s right. So in the first year, it was zero dollars in net new regulatory costs and then a number in the second year to be determined by the administrator of OIRA in collaboration with the agency and various stakeholders within the executive branch and then modify it on a rolling basis.


      That was really a ground-up process. The agencies came in and said, “This is what we think our budget ought to be.” If you go to -- families have budgets. Businesses have budgets. Religious organizations, everybody has a budget. If a business says -- does say it is -- the CEO doesn’t say to sales team, “Go out and maximize my profits” without any sort of budget for maximizing it, which is, I would say, here, we maximize net benefits. But we need some sort of basic cost budget to get there. And so that was what we tried to do: put in place a cost framework.


      I think that there will very likely be a return of a regulatory budget. I think it’ll be interesting to see where this lands, as Susan pointed out. This is a live, open discussion, and I think it’s really important for everyone to engage in that robustly. I think there’s a lot here. When I last checked the Federal Register page, there were something like 400 views total of the announced change—so still not a lot of eyes on the actual changes. And I think it’s really important for folks to get in there, read the proposed A-4.


      Go back and read the original A-4. It’s great. And actually, a lot of it lives here. So to be fair, I’ve been pretty tough. This is a lot of it. Actually, what I would love to see is a sort of red line. I haven’t attempted to do that, but I know we are on regs all the time. I’d love to see a red line against A-4 because there is a lot of --


Andrew Olmem:  I’ve done it. It’s pretty messy.


Anthony Philip Campau:  Is it? Okay, yeah. Well, I’m sure that it could be provided in a cleaner fashion so that we could see the --


Susan Dudley:  Yeah. Chris Walker on Yale Journal on Regulation, their blog has a red line.


Anthony Philip Campau:  Do they? Okay, okay. Great. Yeah, I’m going to go and take a look at it. But a lot of it does carry forward.


Andrew Olmem:  Well, I’m going to pivot to Sally again. So clearly, the Biden reforms are going to lead to less regulations going through OIRA. Now, let’s talk about what are the practical results in the White House for that? I want to kind of go back to your prior services as Deputy Director of the NEC. Does that effectively mean that the regulatory reviews are going to move more towards the policy consoles because, if it’s not going towards OIRA, somebody in the White House clearly is going to have to make sure that the regulation is consistent with presidential priorities.


And if they’re not going through OIRA, does that mean that what we’re really going to see in practice is a strengthening role for the policy counsels to work either on probably a more informal basis to review and engage with the agencies about rulemaking—so in a sense that all the reforms are doing are changing the distribution of the review process in the White House and moving it away from OIRA?


Sally Katzen:  I hope not.


Andrew Olmem:  But --


Sally Katzen:  No, let me -- I’m sorry.


Andrew Olmem:  But how would that not happen if you’re trying to have a White House --


Sally Katzen:  Well, let’s start with the assumption. The premise is that there are going to be fewer regulations going through OIRA. I think Susan was very careful in saying she wasn’t sure how that was going to play out. I’m not sure how that is going to play out, and I don’t think anyone else can be sure.


      And then is the question, of those that don’t go through, what are they? Are they fairly simple, straightforward, less controversial? I don’t think the White House should be seeing every single solitary clause, sentence, paragraph, that comes out of the agencies.


We’ve already moved in the last 50 years or 60 years that I’ve been in this town, we have moved from having departments and agencies that are expert—as you were quick to point out—being made into second-class citizens by a growing White House staff, growing powers in the counsels, growing concentration of things in the West Wing with people who do not have the knowledge, the expertise, or sometimes even—I’ll leave it there before I get in trouble—to make those kinds of decisions and to worry that an unknown quantity of efforts by agencies will suddenly be unleashed and that the White House will be embarrassed or terrified by something that is happening at the agencies is, I think, to blink reality.


      Those people know what they’re doing. And they are led by political appointees, and those political appointees are responsible. And it takes only one mistake to capture the interest of the White House and to shut down that effort.


      I mean, we talked earlier about the definition of novelty. No one knew what it meant, and I came up with this scheme of checking with the communications people. And it was about a month and a half or two months after President Clinton had signed the executive order. And I was sitting at breakfast, and I read about a department that had issued a notice of proposed rulemaking that I thought was, “Oh, my God.”


      And I went into the office, and I said, “Have we seen this? No one told me about this.” “No, we had never gotten it.” I called the general counsel of this department. You know what? It never happened again, never. In the five years I was there, I was never surprised. All it takes is one instance of some stupidity or slip—however you want to define it or describe it—and that stops.


      So I think fears of rampant policy decisions coming up all over that nobody can control is probably unfound, that I also think that -- and the reason I said, “No, I don’t want it to go to the policy council” is that OIRA is defined by its public meetings, its availability. That is not the case with the NEC and the DPC or the NSC, for example.


Andrew Olmem:  Or the NEC.


Sally Katzen:  And so I don’t want to move it across the street. When I was there, I honestly thought that if nothing ever crosses Pennsylvania Avenue, I’ve done my job. And the more that goes over to the policy councils or the West Wing, I’ve screwed up.


Andrew Olmem:  Well, and I will interject to say, when I was at the NEC, anytime OIRA could do work that we didn’t have to, I was very happy because there’s plenty for the policy councils to do, so I pretty much agree with that sentiment.


Susan Dudley:  Yeah. My concern is a slightly different scenario. Not that novel issues will get out without any oversight, but that the policy councils will find—who are already working closely with agencies—will bring regulations -- will review regulations but say, “Don’t worry, OIRA. You don’t need to see it.”


      And that’s the scenario that Sally has, is that you have these politicians making some decisions. And I agree. Elections have consequences, but it is much less transparent. One of the real benefits of the OIRA review is it is a transparent process, and I think you lose of that if that’s what happens: if regulations that OIRA is told are not significant are actually managed elsewhere, that’s a concern.


Andrew Olmem:  Yeah. The review process will happen someplace, whether it be formal and transparent, or will it be informal someplace. After all, at some point, the president has to weigh in on significant regulations, right?


      With that, why don’t I pivot to -- another question here is the scope of OIRA here. And one thing that this didn’t do -- and it’s an important thing for -- to understand about OIRA is they -- oh, okay. Questions, Q&A. Actually, let me skip to Q&A because we only have five minutes left. Thank you. Right here. If you can just identify yourself, and just keep it to --


Susan Dudley:  There’s mics -- there are mics here and here.


Andrew Olmem:  Oh, mics? Good. If you can just keep it to a question, too.


Roman Buhler:  Roman Buhler with the Madison Coalition. I don’t think I’ve seen four more qualified experts on the regulatory process. And my question is, as you probably know, there is out there a proposal called the Regulation Freedom Amendment to require the major -- the Constitution will require that major new federal regulations be approved by Congress.


      What do you all think of the principle that, at the end of this OIRA process, major new federal regulations ought to be approved by Congress as opposed to simply being dictated by the bureaucracy?


Sally Katzen:  Okay. Well, without any descriptive, I think it’s stupid. I think it’s insane, and I think the other words that come to mind should not be repeated, even if there are no children present.


Andrew Olmem:  Can you be a little clearer, Sally?




Sally Katzen:  You want me to hold back?


Susan Dudley:  I should probably defer to the lawyers over there. But I don’t think it’s quite as stupid as Sally does. I think it could be a solution to the excessive delegation problem. How it would work out in practice, I think it’s challenging.


Andrew Olmem:  Anthony, real quick?


Anthony Philip Campau:  I would prefer more front-end fixes than back-end fixes. The Congressional Review Act is one back-end fix that’s already there. There are other ones that are contemplated, like the REINS Act and GOOD Act, and I think there’s a pretty broad view on the right end of the philosophical spectrum that that should -- those are all good and should happen and should move forward. So I expect that Republicans will push those, and that would be fine by me.


Andrew Olmem:  Next question.


Devin Watkins:  To me, there seems to be two things that are missing --


Andrew Olmem:  Can you identify yourself, please?


Devin Watkins:  My name is Devin Watkins from the Competitive Enterprise Institute. In my mind, there’s two things missing from the modern thought around regulations. First is that it sets up the cost and benefit, but we all know that there’s going to be tradeoffs that have to be made between certain costs and benefits or risks.


      But it treats it as if it doesn’t matter who makes those tradeoffs: whether it’s a bureaucrat or an individual or Congress. It treats it as if liberty and freedom have no value whatsoever. And that, to me, seems to be a major problem.


      The other thing it seems to be missing is error. Anytime you make a measurement of a value and try to say what the facts are, you’re never going to be a hundred percent correct or know all the facts. And yet, that error really isn’t quantified by this process at all. It’s done in science all the time to evaluate what your error is and what the likelihood of these being the actual facts are.


      And yet that uncertainty is kind of waived away in the modern A-4. So I was wondering what the panelists’ thoughts on those two factors were.


Andrew Olmem:  Those are great questions. Susan, do you want to --


Susan Dudley:  Yeah. Thanks, Devin.


Andrew Olmem:  How do you quantify freedom?


Susan Dudley:  Yeah. So I think that’s a very important point, and that was one of the comments I made briefly that establishing a need for regulation requires respecting freedom to make individuals to make choices. And just starting with a benefit/cost analysis—that presupposes that we know what’s good for people better than they do—is a problem. And I think this new -- the draft A-4 takes us further down that path maybe than we already are.


      On the error and uncertainty, it’s a huge problem. And one of the things is we do these ex-ante analyses and spend lots of agency resources and estimate benefits and costs down to the dollar. And then we don’t go back. First of all, we don’t put a range in and say, “Here are big assumptions. We’re supposed to, but here are the big assumptions that could alter our decision.” And we don’t go back and see whether we were right.


      So that is something that Sally mentioned the Obama administration orders. They both put a real emphasis on retrospective evaluation. It wasn’t done. It hasn’t been done, and this new order seems to reduce the value of that. I mean, the closest they might have been Anthony’s -- the regulatory budget because that forced agencies to look at, “Gee, do I really need this existing regulation, or is it not working? I could get rid of that one and then do something that’s going to be more effective.”


Anthony Philip Campau:  I would just note that there is discussion of uncertainty analysis in the new A-4, and it’s good to read it and comment on it because it gets into a little bit.


Susan Dudley:  Yeah. This is kind of in the weeds, but it removes the assumption of risk neutrality, and I think that changes things when it comes to [inaudible 01:26:26].




Andrew Olmem:  Let’s go to our last question here because we’re almost out of time.


Sally Katzen:  Can I just say that the --


Andrew Olmem:  Thirty seconds.


Sally Katzen:  -- three seconds -- is that the attempt to include the marginalized community is an attempt to bring to the table an aspect of freedom and liberty to groups that have had things done to them without their consent, without their input. And I think if one is going to value liberty, one should value liberty for all.


Jerry Cox:  My name is Jerry Cox. I’ve been dealing with federal bureaucrats for the last 35 years. And Professor Katzen, I do not love them. I think if you had spent more time doing what I’ve been doing and less time in the classroom, the main thing you would’ve learned would’ve been, “Talk to the hand.”


      The administrative state, those folks up there in many of those bureaucratic positions, have their own agendas. It’s not necessarily affected by the election. I think the Trump administration barely made a dent in the administrative state. And if something that is going to have to happen, I hope it will happen. But that is just a comment rather than a question. But anybody certainly is welcome to respond to that. That’s just based on practical experience.


Sally Katzen:  Well, I had 25 years in private practice before I went into the government. So I have not been in the classroom even half of my career. I have also spent time in several administrations. And so I have worked with bureaucrats in different capacities. I don’t think any organization is perfect. None is, including the private sector, where you can sit on the phone and wait for a human being to answer a question or whatever as well.


      And they all have their own private agendas. This is not a pissing contest. This is an attempt to try to bring the best that we can. And we may have different views of the value of the civil servants. But I for one am more optimistic, apparently, than you are.


Andrew Olmem:  I’m just going to give Anthony --


Jerry Cox:  The people who are being --


Andrew Olmem:  Excuse me. I’m just going to give Anthony the last word, and then we’re running out of time. Thank you.


Anthony Philip Campau:  I would just say that I was privileged to work with professional staff across the government. And these interagency processes bring together all kinds of economists and scientists and subject matter experts from all different sibling agencies. And I was just bowled over by the professionalism and skill.


      And we often did not agree on the outcomes, but I found often to have respectful engagement with the staff across the government to -- that things worked very well, and we were able to have very productive engagements.


Jerry Cox:  I would just encourage everybody to think about the people who are being regulated.


Anthony Philip Campau:  Yeah, absolutely.


Andrew Olmem:  I want to thank our panel here and ask to give them a round of applause for just a fabulous discussion.






10:40 a.m. - 12:00 p.m.
Environmental Justice, Civil Rights, and the Rule of Law


Topics: Civil Rights • Environmental Law & Property Rights
Palm Court
The Mayflower Hotel
1127 Connecticut Ave NW
Washington, DC 200036


Event Video

Listen & Download


This panel will evaluate efforts in the Biden administration, building upon executive actions dating back to the Clinton administration, to refocus federal agencies in a “whole of government” manner on “environmental justice” (EJ). The Civil Rights Act and various executive orders are cited as the primary legal support for these initiatives. On this basis, enforcement priorities are being adjusted across all federal agencies. Agency budgets for EJ programs are being increased and new EJ offices opened.

The panel will explore the myriad legal, regulatory, and policy issues that arise in this context. It will offer a primer on administration EJ actions, and evaluate the use of disparate impacts under current law as well as related issues.


Event Transcript

Jeff Wood:  Well, good morning. Welcome to this segment of The Federalist Society's Executive Branch Review Conference with a panel discussion entitled "Environmental Justice, Civil Rights, and the Rule of Law."


      My name is Jeff Wood. I'm a partner in the Washington, D.C. office of Baker Botts. I also serve as the Chair of The Federalist Society's Environmental Law and Property Rights Practice Group. And I'm really honored and privileged to be here today with all of you.


      Our Practice Group holds events monthly, sometimes several each month, and we aim to produce publications on a wide range of topics at the intersection of constitutional governance, environmental law, and property rights. Our main mission is to host debates between leading scholars and practitioners from diverse viewpoints, and today is certainly no exception.


      This morning's panel is also cosponsored by The Federalist Society's Civil Rights Practice Group led by Ken Marcus, who we greatly appreciate. That Practice Group's—and Ken's here as well. Say hello. Thank you, Ken. And we appreciate the opportunity to cosponsor with them.


      A panel of distinguished attorneys will evaluate efforts in the current administration building upon executive actions dating back to the Clinton administration to refocus federal agencies in a whole-of-government manner on environmental justice or EJ for short.


      Establishing justice is in the first sentence of our Constitution. Justice, rendering to each what is rightly due, is a cardinal virtue and is deeply rooted in our legal heritage. It's our duty to preserve it. It's our duty to pursue justice, and it's our duty to never take it for granted in any corner of the law.


      So how should we consider a concept such as environmental justice? How is EJ defined? What are its origins and its ends? What are statutory and other legal bases? What do long-standing and newly instituted executive orders on EJ -- including the order issued just last week by President Biden, what do they require? And how do they affect the daily workings of the federal government? These and other questions are on the minds of our panel and will be the topic of discussion today.


      Before introducing our moderator, I'd like to take a moment to also recognize those who helped assemble our distinguished panel today and put this program together. Professor Jonathan Adler, Tony Francois, Alison Somin, and Dan Morenoff. So thank you all for your help with this as well.


      And one quick note on CLE, if you'd like to get CLE credit, there is a QR code that you'll see on your programs as well as on the posters outside. Please sign in and sign out using the QR code.


      So now it's my privilege to introduce our moderator for today's event. The Honorable Mark Brnovich served as Attorney General of Arizona—the 26th Attorney General of the state—from 2015 to 2023. The son of immigrants who fled communism in Eastern Europe, Attorney General Brnovich has spent most of his professional life serving as a prosecutor at the local, state, and federal levels. In fact, he met his wife, now U.S. District Court Judge Susan Brnovich while they both worked as prosecutors for the Maricopa County Attorney's office.


      He has also served as an Assistant Attorney General with the Arizona Attorney General's Office. From there, he went on to serve as Assistant U.S. Attorney for the District of Arizona. Attorney General Brnovich has also been a Judge Pro Tem of Maricopa County Superior Court, a Command Staff Judge Advocate in the U.S. Army National Guard, the Director of the Constitutional Government Center at the Goldwater Institute, and the Director of the Arizona Department of Gaming. And he's also served as Chairman of the Conference of Western Attorneys General, a nonpartisan organization comprised of AGs from the western states.


      General Brnovich, thank you for your service to the State of Arizona. Thank you for agreeing to moderate this important discussion today. The floor is yours.


General Mark Brnovich:  Well, thank you very much, Jeff. And thank you, everyone, for being here. And I will say I had the honor of knowing Justice Scalia and rest his soul. And I was introducing him at an event one time, and I asked how he wanted me to introduce him. And he said, "The more important your job, the shorter the introduction." So thank you for that lengthy introduction. That was way too long. I'm going to keep these introductions a little shorter today because we do have a distinguished panel here.


      So I will start off by introducing John C. Cruden, who's a Principal at Beveridge & Diamond. John was a career civil servant with the Department of Justice before becoming Assistant Attorney General of the Environmental and Natural Resources Division under President Obama. He also served as President of the Environmental Law Institute and Chief Legislative Counsel for the United States Army. John is a West Point graduate and a Vietnam veteran. He will be going first, but I want to introduce everybody so that way we don't interrupt the flow.


      Next, will be -- speaking will be Horace Cooper, who's a senior fellow with the National Center for Public Policy Research. He's chairman of the Project 21 National Advisory Board and a legal commentator. He is formerly a constitutional law professor at George Mason University and served as Senior Counsel to House Majority Leader Dick Armey.


      Going next, third, will be Brian Israel who's a Partner at Arnold & Porter where he chairs the firm's Environmental Practice Group and co-leads the firm's ESG working group. Before joining Arnold & Porter, Brian was an Honors Trial Attorney in the Environmental Enforcement Section of the Department of Justice.


      And then batting cleanup will be Susan Bodine, and she is a partner at Earth & Water Law. She formerly served as Assistant Administrator for the EPA’s Office of Enforcement and Compliance Assurance. She was also Chief Counsel for the Senate Committee on Environmental and Public Works and the House Committee on Transportation and Infrastructure.


      So we do have a very distinguished panel today. And the plan will be for each of the speakers to give about a five to eight-minute opening statement, and then we'll ask some questions, and then we'll open it up for the audience. And our plan is to end at noon, and then lunch will be served right across the hall.


      So we know that this is a timely panel for a lot of reasons. And we did not have this planned as much as folks think The Federalist Society is planning everything. Just last week, President Biden announced that he was going to create a new Office of Environmental Justice within the White House. We know that there have been a lot of recent initiatives, both in the policy front and legislative front, dealing with the very topic we are here to discuss today. So without further ado, John, can you start us off?


John Cruden:  Thank you, Mark. What a great conference. Good to see you all.


      The Mayflower Hotel's kind of special to me. I'll try to tie this into my presentation. And so, 2005 I got elected. It was an election to be D.C. Bar President, and they were announcing it at the dinner at the Mayflower. At that same day that that was happening, my youngest grandson was being birthed at Reston Hospital, which I would not want to miss. And so, I am there with my daughter doing what every parent does if you have two child. You take care of the first one while the second one was being born there. It was successful. I then raced from Reston to here. I park in the back. I'm changing into my tuxedo in the car so I could rush in. As I walk into the Mayflower, they're announcing me as being the next D.C. Bar President.


      Okay, now I'm going to tie it in, try to make it relevant. The main speaker at that time, at the D.C. Bar dinner, was Kurt Schmoke, who was then the mayor of Baltimore—by the way, he's now the president of University of Baltimore—and he spoke eloquently about civil rights in general. And then, at the conclusion, said environmental justice is the new civil rights.


      I'm not exactly sure that all of that happened. It's probably the way that Kurt would have thought through, but it's certainly true that environmental justice has become a word that we're all familiar with. And it's now gone through numerous administrations. It was born quite a long time ago, actually, born in, largely, out of the civil rights movement. And most of the people here know the history of that where there were lots of -- there were protests. There were studies out there. Church of Christ did a big one reaching the conclusion, not surprisingly, that the pollution problems was disproportionately on minority and low-income communities, which I'm sure surprised absolutely no one.


      But out of that then, became a series of administrative actions. Actually, President Clinton is given credit for starting it with the executive order, but actually before him President Bush— when I was still at the Department of Justice—had established what was the beginnings of environmental justice at the Department of Justice.


      So we have the executive order by President Clinton. And since that time, virtually every administration—it's like a sine wave curve—have gone up or down of really pushing it strongly, making it -- integrating it into enforcement in EPA decisions or just watching it. But nobody has backed off. So it is a term now that has more strength to it than when Kurt Schmoke spoke here at Mayflower and talked about it being the next civil right issue.


      Certainly, during my tenure during President Obama's administration, there was a White House task force on environmental justice led then by Gina McCarthy. Gina was the administrator of EPA. And there were, without question—largely emanating from EPA—efforts to improve the minority poor community with grants with -- we established—I established with -- inside of Department of Justice an environmental justice coordinator looking at cases to see whether or not there were cases that should be brought or cases that we should handle somehow differently, largely trying to give a voice to the community, giving a voice to the people who otherwise would not have a voice in that process. And I think things improved. But clearly, there was much more to be done. And there was really an absence of good data, as well, trying to tie in where were the problems versus where were the communities that needed the most help.


      So all of that, then, comes ultimately to where we are right now. You'd have to be on another planet not to realize that President Biden's environmental tower—twin peaks of his tenure—was climate issues and environmental justice. So from Day One, President Biden, emphasizing by executive order and by his own speeches, the -- what you already heard from Mark was this issue of the whole-of-government approach. So what does that mean? That means all of the various components of the government have new responsibilities—and I'll come to that later when we talk about the new executive order—in environmental justice. So they have responsibilities. It's part of their mission. They're talking about it. They're supposed to have plans that are there, and so it had really took on new emphasis, I would say, during this administration.


      Parallel to that, we have states. States that are taking actions. Probably the most well-known right now is New Jersey, which has legislation. The California Attorney General's office has established their own environmental justice task force—and so has a bunch of other states -- have done things in environmental justice. And even those that have not now look at that terminology and say, "Some of the things that we've been doing already were really environmental justice." And so, you see some of the labeling out there. Environmental Protection Agency's come out with a screening tool so that it makes easier to identify where there might be issues.


      And so, again, without question, more emphasis during this administration. I am not part of the administration. Anything I say about the administration would be my own view, not their views, for sure. But again, just as a practitioner looking at what's happening, a lot of energy -- a lot of energy put into it. Some of the appointees are coming with that background, and not just in EPA, but in other places as well.


      All right. So we have the sine wave curve starting out with environmental issues led then by President Clinton coming out with his own. Obama adds to it. And now Biden does it further. And what you already told—kind of timely—from Mark is, on Earth Day, then President Biden comes out with a new executive order, a long executive order. My law firm, Beveridge & Diamond, put out a summary, so you can go on the website, and you can get that. You can also get the executive order itself, from there.


      What I'm going to do—which is completely unfair because it's a long executive order with a lot of parts. I just want to bring to your attention—largely because it might influence the discussion, which I look forward to—a half dozen things out of this executive order that I think are important.


      First of all, process is always important. Labeling is kind of important to everybody, and so now environmental justice gets a real home for the first time. During the -- during my tenure at Department of Justice, there was a White House task force on environmental justice—which I was a part of, and I told you Gina McCarthy led it—but there wasn't really a home there. So President Biden has created a home within the Council on Environmental Quality. So that's a White House office that does environmental things most well-known because they do all the National Environmental Policy Act regulations, so that's how they're most well-known. But they also do coordination of environmental issues inside of all administrations. That's now the home. So CEQ will establish the Environmental Justice Group there, and that's going to be the new coordinating entity.


      I may have told you before that I thought early on one of the challenges in this area was good data. There was apocryphal sorts of things there, but I thought this was actually a plus. They're going to establish within their Office of Technology a new office that's doing data collection and doing good science. I thought that was important. This is all the government again. This is now an executive order that tells all the agencies, "This is part of your mission, number one." Well, it was already kind of part of their mission. "But now, more importantly, you're going to create a scorecard. So you're going to be telling people how you are doing, and then you'll get evaluated. And that evaluation will be public."


      I've often said that one of the most effective of all environmental laws has almost no enforcement mechanism. The Toxics Release Inventory, which only has publicizing what kind of emissions that you have come out of your factory, and without questions that had a gigantic impact lowering emissions because who wants to be at the bottom of the Toxics Release Inventory? Well, you can see the same thing happening in federal agencies. If you're reporting how you're doing by whatever criteria is established—and I'll come back to that—you don't want to be at the bottom of that. So that's going to happen. Where -- how do you get the information? Well, the President also said within six months that this new group within the Council of Environmental Quality has to come out with their own guidance as to what these agencies will do. My guess is that's how they're going to have the scorecard for the other federal agencies.


      It shouldn't be lost on anybody looking at where they placed it. They placed it inside the Council on Environmental Quality, which I already told you has National Environmental Policy Act responsibilities or NEPA. And so, it would seem pretty clear that environmental justice, which is already included in a number of NEPA analyses, now will be that way -- will be way more routine for that to happen. There will be an annual report there. And now, it was kind of true already, but in concept of environmental justice, which we think of as pollution, disproportionate on poor people, they very intentionally have included Native American issues, tribal issues, in that as well. So the concept of environmental justice has been formalized a bit to include environmental -- excuse me, to include tribal issues.


      Within the Department of Justice—my old home there—the person that I established to be the environmental justice coordinator inside of the Environmental and Natural Resources Division, long-term career prosecutor Cynthia Ferguson—terrific woman—is now responsible for environmental justice coordination writ large now. Now way beyond the environmental division, so it picks up civil rights issues and other sorts of issues inside, grant issues. Grant issues are important because money came out of IRA to environmental justice issues. So grant issues are important. So she now has that. And we've seen some investigations labeled as environmental justice investigations coming out of the Department of Justice.


      Okay. That's quick and short as a summary of kind of where we are. But you're—this is kind of cutting edge because I'm sure everybody will talk about what we think the new executive order means. But I would urge again for certainly those of you that are practicing, take a look at the executive order itself because it's long, it's arduous, and it's going to affect every agency within the federal government. Thank you.


General Mark Brnovich:  Thank you, John.


      I will note for the record or for anyone scoring at home or anyone paying attention, at least, that John took about 10 minutes, so I know we said five to eight minutes. So if everyone else wants to take 10 minutes for purposes of fairness, feel free to go over a little bit.


      And also, I will say—and I'm sorry—that I just realized because if I'd been good at math, I'd have gone to medical school. But I just realized that the speakers are actually in the order they're speaking. So, Horace, you're next, and then of course we'll go on. So anyway, go ahead. Carry on.


Horace Cooper:  Well, my grandmother told me fairness was overrated. So I will not take my entire 10 minutes that maybe justice would allow me to.


      What I would say is that—and this is likely part of the whole process—when I was a young man, my mother and father when they married—they married right out of high school—and they had two children. And then they decided, "Well, wait. We need some skills. We need some talents. We need some training." And my grandmother ended up being a backstop. And very often over about a six-year period, we were just dropped off with my grandmother. And many of the skills, many of the success strategies that helped me become a mature, developing, and independent person came as a consequence of that. And so, it is somewhat of an ode to my grandmother when I say that today what I'd like to talk about is when environmental justice isn't.


      Now, one of the observations is that there hasn't actually been federal authorization of this. Yes, there's been some funding, but Congress hasn't actually gathered, sent to the President legislation making sure that this entire enterprise was formally adopted and mandated on the rest of America. Our founders intended if you're going to have this kind of macro policy, of course, it would come from Congress, go to the President, and then be imposed. Instead, some 28 years since that initial William Jefferson Clinton executive order, successive administrations have managed to fund these types of EJ programs, environmental justice programs.


      Now, I would argue that it is largely a consequence and a testimonial of the power of the administrative state that such a far-reaching incomprehensive effort has been able to be established all but unilaterally by political appointees and then allowed to flourish. It's billed "environmental justice" as the fair treatment and meaningful involvement of all people regardless of race, color, national origin, or income with respect to the enforcement of environmental laws, regulations, and policies.


      But that is not what environmental justice is. It is premised on a phony notion, and that is that America's environmental remediation efforts have been primarily focused on aiding what it describes as the mainstream of America. That's progressive speak for whites. But what it is instead is a redistributionist belief system which masquerades as environmental policy. It is -- environmental justice today is the latest iteration of environmental alarmism. And most importantly, it raises the specter that the odious policy where the government looks first at your race and ethnicity before offering or withholding services.


      My grandparents lived in a world where to be of a certain race, or a certain ethnicity meant you either had a benefit—most often not—or you had a detriment. The people that they saw on the other side of the equation often had a benefit, whereas they had a detriment. When we, as a nation, came together with a welcoming policy of equality, we didn't premise it on "Now we're going to go after a new group by their race and their ethnicity." We announced, as a society, we were ending this idea. There's no "whites only." There's no "blacks enter this way." And the evil of what happened to Rosa Parks wasn't evil because she was black. It was because she was an American. EJ says, "Let's return back to the days where the best way to assess whether a policy ought to be offered is first 'Let's make an inquiry about race.'" And it has to allow for a major and dramatic concentration of political power as a way of doing this.


      Just as when my grandmother and grandfather grew up, the world couldn't operate to stymie their aspirations without the overarching power of government, today that is still true. When the Depression occurred, my grandparents found that many of their neighbors—who happened not to be black—were just as much harmed and just as much willing to collaborate, just as much willing to share from the eggs that were grown on the farm or just as much willing to share resources from the vegetables or just as much willing to share what happened in the pond. Necessity caused them to be willing to break down that barrier. And it required a very, very extreme and coercive effort.


      Why I mention this is Americans who lived under segregation suffered. Let me repeat that. Americans suffered. If you were white, and you operated a dress shop, you couldn't sell to everybody, and you suffered. If you were black, and you operated a dry cleaner, you couldn't sell to everyone, and you suffered. Today the environmental justice system is going to bring us right back to that same phenomenon. The consequence is going to be that those who are at the least among us are going to be those that suffer the most.


      Environmentalists have captured, those activists, have captured this policy arena, and they have arrested it away from America, not racists have done so. But the consequences have been that many minorities often are harmed. Whether it's fuel economy standards, whether it's energy restrictions, the clean energy agenda has a huge and harmful consequence. Black Americans, minorities, working-class Americans find there's far more month left over at the end of the paycheck precisely because the alarmists have put in place policies that price them out. It limits their schooling. It limits their wealth creation. It creates far more problems than it solves.


      In closing, I recommend that you look at our website, Project 21. We have a document. It's called "Environmental Justice: What It Means for Black America." But you can replace that with any group. We at Project 21 don't believe that it will be possible until America recognizes that an out-of-touch elite operating more like a religious cult than a movement based on science gives back their undue influence and power. That will let America have environmental justice.


General Mark Brnovich:  Thank you, Horace.




Brian Israel:  Thank you very much. I'm very happy to be here. And I was asked to speak to defend the Biden administration after Horace Cooper -- which I talked to my dad this morning. He was the last Democrat in Tennessee or one of the few last, and he said, "Get off the stage. This is not a good setup." So I'm going to do my best.


      I'm not actually -- it's actually a strange choice for me to necessarily defend the Biden administration. I'm not part of the Biden administration. I'm at a law firm. I represent companies. Just last week, I filed a petition in the Third Circuit opposing this EPA for some chemical regulation as being out of touch with reliable science, so -- but at any event, I'm going to give a little bit of a perspective.


      I have a -- I do have a background on environmental justice issues. I worked my first job, while in law school at NYU, was working for the West Harlem Environmental Action committee in my first summer job as a law student and was working for the lawyers' committee for civil rights on environmental justice issues. And my boss at the time, a woman named Deeohn Ferris, said, "Environmental justice is not about equal pollution. It's about equal protection." In a sense, what Jeff Wood and -- how Jeff Wood introduced this panel about really understanding environmental justice in the context of our shared commitment to justice is important. And I think environmental justice -- my perspective is that it really shouldn't be controversial. A lot of the technical aspects of what environmental justice -- the environmental justice agenda is trying to achieve should not be that difficult for us to embrace.


      One example—a little bit technical—but as many of you know, environmental regulation, environmental policies, the cleanup of Superfund sites, the regulation of chemicals is based on risk assessment. Risk assessment is -- while it is true, as Horace said, there is not a -- there is no congressional mandate that says, "Thou shalt do risk assessments in a certain way." Risk assessments are part of our administrative regulatory process in all aspects of environmental law. And it has been observed -- and one of the features of risk assessment, essentially, is to find out how much of a chemical is dangerous. When you're exposed to a chemical, will it hurt you? At what levels? And one of the goals of a risk assessment—and it has been for years—has been to understand that chemical -- not just on the general population, which is great if you're protecting the average. But also, what is the impact of that chemical at certain levels on susceptible populations such as the elderly or children? That's been part of risk assessment for a long time.


      However, one thing that risk assessment, until recently, hasn't looked at very rigorously is what happens if you're exposed to more than one chemical. If you live in a neighborhood where you have multiple sites or Superfund sites or factories or pollutions sources, how do those chemicals interact? And are there cumulative impacts, synergistic impacts? What are your particular susceptibilities because you have access or don't have access to healthcare? There are a number of elements that people experience. That risk assessment, which is the underpinning of all of our environmental regulation, doesn't look at it. And so, one, environmental justice shouldn't be controversial. One environmental justice imperative is to expand how we think about risk assessment to consider -- to consider those additional impacts on a particular site.


      So I'm just going to point to four -- John, I think, gave a great introduction to the executive order. I’m going to point to four elements, concrete elements, of this administration's—in a descriptive, not an advocacy way—four elements that I think are noteworthy from the Biden administration.


      Number one is while it is true that environmental justice is not new, while it is true that President Clinton issued an executive order, we have not seen, until the Biden administration, the degree of comprehensiveness and systematic metrics and concrete objectives and goals, numerical goals. We've not seen anything like what we're seeing today in the environmental justice space. Putting aside whether that's good or bad, it's a very important thing to know. This EPA has a strategic environmental justice plan. I'll give you an example. They have stated a goal to have 55 percent of all inspections of plants. 55 percent of all inspections will be at "environmental justice communities," communities that have been identified as overburdened.


      So, again, without advocacy, we have to know that. We have to recognize that this EPA is very serious and very quantitative about environmental justice. It's not aspirational in a generic or a qualitative sense. It's very quantitative. That's number one.


      Number two, it's very clear that to get a permit from this EPA or from a state that's being monitored or guided by this EPA, you have to consider cumulative impacts. We can give example after example after example already in this administration in Alabama, in Illinois, and Texas, and Houston where permits have been denied because the applicant had failed to consider cumulative impacts. What is the impact of this proposed facility or expansion or highway in light of other stressors on the neighborhood or the community? Again, without advocating, without saying good or bad, we need to know that if we're representing companies that are trying to do business in today's world that cumulative impacts—sometimes under NEPA, sometimes under other statutes—cumulative impacts are critical to this government, to this administration.


      Number three is Justice40. We're not talking so much about climate policy and climate justice. But it actually goes, I think, to the point that Horace was making, Justice40 is the government's initiative to ensure that 40 percent of all benefits, all spending, all of the initiatives that this administration is pursuing, 40 percent of those benefits are being experienced by overburdened or disadvantaged communities.


      And then the fourth and last thing, which is huge—and it's been alluded to—but the Inflation Reduction Act—I think everyone knows—includes $3 billion -- $3 billion -- of grants and technical assistance that is directed to go to disadvantaged communities for environmental justice projects. This includes hiring of scientists. It includes remediation. It includes creating green space, etc., and all of that money has to be allocated by 2026. So this is, actually, a congressional authorization related to environmental justice, and it's serious. And there's a lot of money that's going to be put into the system, and that's going to affect business.


      Which brings me to my last point. I represent companies that are trying to get -- trying to clean up Superfund sites, trying to get permits, trying to get grants from the Department of Energy for hydrogen projects, whatever it is. You cannot operate as a business today without having a serious environmental justice perspective, in some cases a policy, a sophisticated approach to interacting with communities, to dealing with cumulative impacts, etc. You have to have -- you have to be, whether you like it or not, and whether you like -- whether you anticipate the Biden administration will be around for how -- two years or six years, it's a phenomenon that's in many states. In order to operate as a business in today's world, you have to have an environmental justice -- you have to have attention to environmental justice concerns. And that's one of the, I think -- one of the most important takeaways and one of the aspects of my job, which is very interesting and what I find critically important as we try to help companies navigate today's reality.


      So those are my opening comments. Thank you very much.


General Mark Brnovich:  Thank you, Brian.


      Susan will be the final speaker on this panel before we do open up for questions.


Susan Bodine:  So I get to pick cleanup. And I think I also bring to the discussion some of a practical, kind of real-world implementation examples from all the hats I used to wear, not only the head of enforcement, but in the Bush administration, the head of the office called OLEM now, Land of Emergency Management, that does the Superfund cleanups, does the regulation of hazardous waste, so lots of different aspects there.


      I'm going to talk about the new executive order. I'm going to talk about injunctive relief. I'm going to talk about targeting, which I think Brian already mentioned. And then I'm going to talk about new enforcement priorities, just like that.


      So the new executive order, so the Clinton executive order's been around since 1994. Agencies are very accustomed to applying that, and what it says is that federal agencies must identify and address the "disproportionately high and adverse human health or environmental effects of" their actions on minority and low-income populations to the greatest extent practicable and permitted by law. All right. You need adverse, and you need disproportionate.


      I'm concerned that the new executive order no longer actually requires an analysis of that but might assume it. And I have to say as an aside that may or may not be intentional. Back in the Bush administration, I worked on a rulemaking, and some of the environmental advocates, including Deeohn Ferris, disagreed with the order and thought it had EJ impacts. The staff had written up the analysis that said, "No. This protects everybody equally."


      When the Obama administration came in, they redid the rule, and they did a new EJ analysis that assumed noncompliance with the rule. And if you assume noncompliance, you are always going to have an adverse impact. And so, depending on locations, you'll have an EJ problem.


      The new executive order defines communities with environmental justice concerns based on income, color, race. But the executive order also says—and this is not a question. This is not an analysis. It's a statement—that "communities with environmental justice concerns experience disproportionate and adverse...health or environmental burdens."  So that isn't an analysis. That's an assumption. And so, if you start with that assumption, you're always going to have an environmental justice problem that you need to resolve.


      The executive order, of course, goes on and on and on. And I do encourage folks to read it. There's a lot embedded in there. It's important because executive orders are issued by the president. I personally think it's the president's prerogative to provide direction to his or her administration staff. It is not law; it is policy; it's direction. But again, within the authorities that are in law, it's totally a presidential prerogative to say, "Do things this way." No problem with that. That makes it very powerful.


      And so, if you look at the section there -- some of the -- one of the sections actually gets into a little bit on the enforcement issues. It talks about -- it talks a little bit about increasing things like fenceline monitoring, increasing public information, increasing reporting. Now, that can be done in two ways. That can be done through regulation. And I have absolutely no problem with imposing all that through regulation because that's known as uncommon EPA. Fine. The other way that can be done is through enforcement settlements. And so -- and that I do have somewhat of a problem with if it ends up becoming regulating through enforcement because then, of course, you're creating an unlevel playing field.


      After the -- well, let me go back. When I was the head of the enforcement office at EPA in the last administration, I remember being briefed by the Department of Justice on a settlement, and there was something in there—and I don't remember whether it was fenceline monitoring or third-party audits or something—and I said, "Why is that there?" And the DOJ line attorney looked at me and said, "Because the OECA AA requires that something like this be in every settlement agreement." And I'm like, "What? I'm the OECA AA."


      And so, I went back, talked to the staff, and ended up rescinding a 2015 memo that my predecessor had issued on next-generation enforcement, which didn't say "must" be in every settlement but definitely was being read by the staff that it was a must in every settlement. My memo said that injunctive relief has to be case-by-case. It didn't say no. It didn't say yes. It just said there's no presumption.


      One of the first things that -- after the Biden administration came into office, of course, on Day One I think President Biden had an environmental justice executive order agencies implemented, and my old office did rescind my 20—I think it was 2018—my 2018 memo, did not reinstate the prior one, and instead, maybe took a middle ground. But there's a lot in there on what kind of injunctive relief there should be, including fenceline monitoring, including things like increased reporting or putting up information for communities, etc.


      So my question there is, "Okay. Are we going to go ahead and go back to regulating through enforcement? Or is the thumb on the scale? Are the DOJ line attorneys going to say it has to be in every settlement?" Well, we'll have to see. That I actually don't know.


      There are some legal constraints. I guess I'd have to say mitigation of past environmental harms, that's pretty normal. Some statutes are more express than others, but nonetheless pretty normal. I, personally, have no problem with supplemental environmental projects. I know some have had problems with that. And I certainly don't mind injunctive relief that says, "Come back into compliance."


      I get concerned when you start getting into things that are not mitigation, not SEP, and beyond compliance. And frankly, an example of that was the VW settlement with the $2 billion investment for the EV, electrical vehicle, charging stations. That was not labeled. If you look at that consent agreement, it's not labeled—I'm sorry—in any of those categories. It was kind of an add-on, and I won't go into the history of it. I wasn't there. I've only heard. But the troubling thing about that was that it was already -- a market decision had been made by VW. And the stations that they were building across the country were the fast-charging ones, which at the time, only their vehicles could use. So it was a benefit—a marketing benefit—to them that they were getting credit for in a settlement. Now, the other cars have all caught up, so it's no longer a marketing benefit, but it was at the time. So I had a concern about that.


      The other thing about the injunctive relief is that it may not always -- the new kind of expanded injunctive relief may not always be possible. And I would point to an Eighth Circuit case in August of 2021—I think it was. Yes. Ameren coal fire power plant, the settlement which went through in the last administration had mitigation by putting controls, not only on the offending plant, but also on a plant owned by the same company. And it was about a couple billion dollars' worth of missions' controls. The court said, "You can't do that." The court said, "Clean Air Act requires you to mitigate for a violation at the" -- or, actually, it requires injunctive relief to address the violations. And of course, the other plant had no violations. It was merely owned by the same company. So I think that's interesting. It may be interesting to see how that plays out and how -- if people want to challenge injunctive relief.


      Most of these have settled. And basically, a settlement's a contract, and somebody can agree to anything. You might argue it's coercive, but nonetheless, a settling party can agree to pretty much anything. And a court and a judge acting in his equitable role, or her equitable role, can approve anything. So that would only really be a constraint if somebody is not settling but, in fact, taking it all the way through litigation.


      Targeting -- I'm already going over my time, but --


General Mark Brnovich:  That's okay. I'll ask the first question. Talk to us about targeting.


Susan Bodine:  Thank you. I'm so glad you asked that.


      I think that -- Brian already mentioned it, but in the President's budget, they have set budget metrics for targeting. The goal for 2022 was -- or is 45 percent of inspections and 50 percent in 2023 and 2024 in EJ communities.


      Philosophically, the—actually, I don't think it's just me—I think the office of OECA has had a problem with that because you go after environmental violations. You don't target based on the makeup of a community. EPA has always looked and done EJ screenings on their enforcement actions, but it's not targeting. It's, "Okay. We're taking actions, and then let's look at the environmental justice impacts." And then, of course, in establishing injunctive relief, that could be relevant. Fine.


      But putting it upfront, the question is, "Okay. Are you going to misallocate resources?" It may not matter as a practical matter because when you do your retroactive review, huge number -- a lot of the cases are already in EJ communities. I think that certainly in 2017, it was over 33 percent. 2018, I didn't see the stat. It was like 900 screenings, though. That was '18. '19's over 619 enforcement actions in EJ communities. 2020, there was 531. That was the COVID year, and 778 EJ screenings. Okay. And that was the last year, actually, ironically, that EPA has reported on their EJ actions. I think maybe under the new executive order we'll see more reporting. But the question—the philosophical question—is do you target up front, or do you look at it afterward?


      Finally, priorities. The question -- so we set new -- we set priorities that applied from 2020 to 2023. So, actually, the current administration is still operating under the previous administration's enforcement priorities. They have out for comment—or did, time period's closed—proposing new priorities. EJ, specifically, isn't one of them because it's supposed to apply throughout, which is fine. But the question I had and what I did when I changed the enforcement priorities was say, "No. We should be aligned with the strategic plan." That's what they're proposing to do, which has a lot of climate and EJ in it. No problem with that. And that, "We shouldn't be going after specific industries. We should be going after environmental problems."


      They don't -- on its face, they don't do that, but when you look at their federal registry notes and their documents, it looks like the oil and gas sector, in particular, is going to have a big X on its back for a variety of reasons. So it remains to be seen how these are implemented. And is it going to become targeting industries, not environmental problems? But again, remains to be seen.


      If I may just talk, like, one sentence on Title VI?


General Mark Brnovich:  Go.


Susan Bodine:  Okay. Sorry.


General Mark Brnovich:  It's all right.


Susan Bodine:  All right. Title VI.


General Mark Brnovich:  All right. That's one sentence. No, I'm just kidding.


John Cruden:  I knew you were going to do that. I knew you were going to do that.


Susan Bodine:  All right. All right. One minute. May not intentionally discriminate. There's no private right action, but people can petition EPA back. Fine. EPA can withhold funding. Threat is usually enough, so it can be an enforcement tool—a powerful tool.


      Here's what people need to know. Compliance with environmental law is no defense. So somebody can say -- ask the agency to withhold money under Title VI even though -- and with -- and ask the state to withhold your permit even though you're completely in compliance with the law and the test is discriminatory effect, not intent. And a discriminatory effect can be based on any increase in your cumulative burden. One molecule is enough on paper. So that's -- if that gets fully implemented, that too is an enormously powerful tool.


General Mark Brnovich:  Thank you, Susan.


      We will open up to questions if people want to step up.


      And before we do that, let me just kind of prime the pump by asking a question.


      Brian, as you were talking about the commitment to 40 percent of funds benefiting disadvantaged communities, and we've heard a lot of these conversations recently about environmental justice. And I think one of the fundamental questions I, like a lot of other people, have—we'd like to hear all the panelists' answers—is environmental justice about the environment and preserving the environment? Or is it really about justice for disadvantaged communities? What is the focus of it? Or is it just a way to blend a couple of things together to, essentially, redistribute wealth in some way?


      So I just don't know if anyone has any thoughts on is it really -- should the focus be on the environment, or should it be on disadvantaged communities? Anybody want to take a shot at that?


Horace Cooper:  Well, you said Brian, but --


General Mark Brnovich:  Well, I mentioned because you said the 40 percent, so --


Horace Cooper:  Okay.


Brian Israel:  Well, it's interesting. I think Horace made the point that the clean economy, the clean -- I think you called it the clean-energy agenda will adversely impact black communities, communities of color, and poor communities. I think Justice40, while maybe a crude tool, is trying to address that concern by stating that, "Look. We're about to spend a lot of money transitioning to a low-carbon economy. There's going to -- left organically, there'll be winners and losers. Let's try to direct that to communities that would otherwise not be participating in that transitioned economy.


Horace Cooper:  So for a different take, one thing I think is important for us to understand, and that is that the so-called environmental remediation agenda is largely motivated by one of the most politically well-connected groups in America. And those individuals end up actually driving policy. If we were looking at them racially, they're almost monochromatic. Nearly 66 percent of your typical ecowarrior is white American. Now, the idea that that group for the last 25 or 35 years which owns, which dictates, which directs largely the environmental agenda has purposefully singled out minorities on the basis of their race beggars disbelief.


      What they have, however, done is just simply ignored the interests of the population so that we have energy poverty. Working-class Americans, many minority communities find that the cost of keeping the home warm is a choice that must be made between that and getting grandma's medicines or foods, certainly no tutor.


      What we end up with—and it was mentioned earlier—that there are states that are voluntarily opting in to regulate or enact statutes where the federal government hasn't. What we end up seeing is an exacerbation of differences in terms of wealth and income with regard to minorities. This so-called environmental justice agenda, which is supposed to address the lack of inequities, is going to exacerbate it. It is going to make it far worse. A lower cost access to energy, policies that say to distressed communities, "We will make it easier for permitting. We'll make it easier for construction. We will make it easier for infrastructure development. We'll bring income, resources, job opportunities to many of these communities." Policies that say, "We must protect you from that," will only push those communities further to the back of the political bus.


John Cruden:  Mark, I like to answer a question with an example. So I was Assistant Attorney General, but long before then, I was Chief of Enforcement at Department of Justice for environmental issues. So here's my example. We saw it. Susan saw it.


      Wastewater treatment plants in the United States are extraordinarily important. We have one in District of Columbia, Blue Plains, that discharges into the Potomac River very often, like Blue Plains. The Potomac River is a drinking water source for all of us here by the way. And so, as we were doing cases, we found, not surprisingly, that the impact of discharging in an over-year permit—so that's an illegal discharge—that it had -- the impact was a downstream impact. Not surprising. Those tended to be disadvantaged communities. Those tended to be communities that simply didn't have the same voice as you and I did to object to all of that. We didn't call it environmental justice, but when I think about it now, I think it's that combination, Mark. It's a combination of a disadvantaged community and an environmental issue, and very often, those were health issues.


General Mark Brnovich:  Thank you very much.


      Okay. Now we'll open it up to the audience questions. And if you can step up to the microphone, maybe say your name.


      Go ahead.


Devin Watkins:  Hi. My name is Devin Watkins from CEI.


      It appears to me that environmental justice really has a problem under the equal protection of the law, specifically, as it applies to the way this administration seems to be implementing it, not generally and not all administrations. But the way the way that it uses disadvantaged communities, in my mind, seems to be very associated with certain racial groups. I know that the tool that they're using to identify what areas are disadvantaged does not include race explicitly as a part of it. But the way that it seemed to be created, at least from my perspective, was one that seemed to be trying to associate other factors that aren't race with certain racial groups to ensure that those racial groups were a part of the disadvantaged communities.


      And so, while it is facially neutral and not racially discriminatory, it does seem in my -- to me at least, to be -- have the intent of racial discrimination of targeting specific racial groups. And if it is intentionally discriminatory in that way, it would seem to be a violation of the Fourteenth Amendment, and I was wondering what the panelists' thoughts were on that.


General Mark Brnovich:  Anyone want to tackle that? Anyone want to --


Brian Israel:  Go ahead.


Horace Cooper:  Okay. It's interesting that you focused on the intent as opposed to the impact.


      What so much of the left has told us is that we need to measure it at the end, not the inputs at the beginning. I will just tell you that typically poorer communities have less likely the ability to update their households so that they are using much more efficient energy capabilities or capacities.


      When you talk about automobile purchases, in a community where the market environment is open, more minorities end up—as we saw during the four years of the Trump administration—buy some of the most safe, some of the most fuel-efficient, and some of the most technologically advanced vehicles. What we've seen in the last three years has been a complete reversal of that.


      So if the test is impact, it's pretty clear that the policies that make it more difficult for people to have access to resources, to energy, to the ability to have a growing, vibrant, and expanding economy disproportionately hurts minority communities.


      Now, as I made in my opening statements, it is clear they haven't specifically said, "We have a trigger, that it's going to be your race." But when my grandmother was growing up, they didn't have time—the community that she lived in—didn't have time to put up signs everywhere saying, "No. You can't because of your race," or "Yes, you can because of your race." But pretty much, people understood this.


      Now, the courts have, in fact, ruled, starting in the early 1920s and heading prior to the civil rights period, that the provisioning of government services may not be predicated on the basis of your race. The boast of environmental justice is that we're going to start provisioning a remediation on the basis of race even if the specific trigger isn't one of intentional discrimination, it feels like it. It looks it. And it's all the more reason why Congress needed to act to authorize this instead of allowing it to go forward.


      Yes, ma'am.


Susan Bodine:  Mark? Yeah.


      Just some limitations on Justice40. So it is an executive order, but it's a goal. And to your point, and to Horace's point, there are constraints -- there's constraints under Title VI as well as equal -- as the Fourteenth Amendment. But in my view, the real constraints are the authorizing statutes that authorize the funding.


      The vast majority of funding is actually going out through formula programs because that's the easiest and fastest way. And my lens is EPA, so I'm not speaking for the rest of the government. When I look at EPA's money, it's the fastest and easiest way for them to get the money out the door. The states, then, have to allocate it. Congress set up the funding programs. They did -- Congress did talk about disadvantaged communities for these programs and said very specifically whether it's Clean Water or Safe Drinking Water Act, it's particularly in the Clean -- in the Drinking Water Act that states decide. States have to decide what is a disadvantaged community. It's not race. It's disadvantaged, and a state decides.


      And frankly, it's going to be different in various parts of the country what is a disadvantaged community. So, yes, there's a goal out there, but the ability to implement it actually is constrained by law.


General Mark Brnovich:  Yeah. And then we can move on to the next one. So I would just add this. I think that if I -- I'm not a panelist, but if I understood the question, obviously there's constitutional challenges based on the statute being facially unconstitutional versus as it's applied.


      And so, I think what we're talking about -- what your question essentially says is that "Well, it looks like you're trying to craft policies that are essentially facially neutral but aren't." So I guess at some point, someone's going to have to bring a challenge and, say, well, as applied challenge versus a facial challenge.


      Okay. Next question.


Mike Penders:  Hi. I'm Mike Penders, Environmental Security International.


      I remember being on the 10th floor of EPA in 1992, at what turned out to be the last year of the first Bush administration, when we were approached by environmental justice groups and civil rights groups to consider this concept, environmental justice, in our target and other resource allocations by what became OECA, eventually, some years later. And for the reasons, Mr. Cooper, you're identified, as a former prosecutor, myself, this was problematic to target enforcement, particularly criminal enforcement of laws because, firm believer, as our previous questioner, that any time you try for more than due process under law, someone gets less. And it was -- seemed an inappropriate basis for targeting.


      And also, with respect to targeting, the famous dissent by Justice Jackson when it comes to targeting individual or groups, how problematic that is, and what issues that raises as an exercise of investigative or prosecutorial discretion. So we took that under advisement then. And then the Clinton administration came in.


General Mark Brnovich:  Do you have a question?


Mike Penders:  Yeah. Sorry. The question --


General Mark Brnovich:  I didn't mean --


Mike Penders:  No, no. The question -- I was compelled to give --


General Mark Brnovich:  I'm sorry.


Mike Penders:  -- a little background.


      But we came up with a document to inform the exercise of investigative discretion based on harm and human health to the environment and to be able to set that forth as an investigative discretion document. And if you target on that basis, as an exercise of investigative discretion with limited resources—the question to Mr. Cooper—do your issues go away as long as you show the nexus between the exercise of enforcement, discretion, and environmental harm, and human health based on risk assessment principles?


Horace Cooper:  Well, I think the catechism of the radical progressive movement gets upset that they aren't able to pick and choose.


      Let me just explain. Here's what I want to see. I want to see analysis and data presented in a hearing that is part of the authorization process that shows that, in fact, there are roads that are racist. There are bridges that are racist. I want to actually understand, and I think America deserves to understand. It is a very, very convenient trope to simply say, "We're taking hundreds of millions—if not billions—of dollars and placing it over here because there was once a problem."


      Now, in the EEO context, an employer is not allowed, because of an allegation of a prior mistreatment of some of his workforce, to systematically discriminate against a new workforce as a way to remediate that. They're required to go into court. They're required to have a finding made and make sure that this is the least most intrusive way to operate.


      What I'm watching is that we make these broad declarations by the very community that has yet to come forward and explain, "Mea culpa, we, the activists, we have systematically denied the Native American population. We have systematically denied indigent groups." There's been no such claim of that sort. And the idea that in the 1990s, the early 2000s, or even the 1980s, that American environmental policy, without that kind of showing, has been systemically under including protection for groups that need it today. Just the data does not appear to show that.


General Mark Brnovich:  Brian Israel.


Brian Israel:  But I think there could be a healthy debate on the data. There are definitely studies that, I believe -- studies that show enforcement dollars are lower in certain communities, that remediations are slower in certain communities, that there's certainly more pollution sources in certain communities. And you can kind of -- you can go through the litany of environmental issues and show data.


      But independent of that, as a reality, this government and the state governments, within their enforcement discretion and their permitting discretion, are going to be concerned—or are concerned—and have been for some time on environmental justice considerations. So if you're a company trying to get a permit or trying to get a grant or try to get funding or try to get a cleanup of a site, you need to be aware of that. And you need to address -- you need to understand what are cumulative impacts at your site, at your -- for your program. You need to understand how you're going to engage with communities because this is the reality. This is the reality that companies are living with.


General Mark Brnovich:  Thank you.


      Okay. We've got time for about one more question, so you can step on up.


Bonnie K. Wachtel:  One more question. Thank you. First, Mr. Cooper, delighted to make your --


General Mark Brnovich:  Yeah. What's -- who are you? What's your --


Bonnie K. Wachtel:  Oh. My name is Bonnie Wachtel, and I'm in the investment business --


General Mark Brnovich:  Okay.


Bonnie K. Wachtel:  -- which is the basis for this question.


      First, just wanted to say, Mr. Cooper, I hadn't experienced you before. I'm definitely going to look up Project 21.


      So if one studies the automobile industry, recently, the point that's most obvious is that interest in electric vehicles has come almost entirely from the generous tax subsidies that go to buying them, all of which go to wealthy Americans who are buying wealthy new cars with a generous tax subsidy. There's really no question about that.


      It's also known that we don't have enough battery technology and minerals to actually make a large-scale transition to electric vehicles for everyone. Pair that with café standards, in places like California, there's just no question that the government, in its environmental efforts, is making it much more difficult for people at the lower end of the spectrum or middle Americans to afford an automobile.


      So when I look at that general mosaic of what's happening, it's antithetical to what is supposedly the idea behind environmental justice. In a sense, it looks like misdirection. Don't look at where the money's really going, which is to wealthy Americans because we'll have this big environmental justice program largely going to Democratic donor groups. Is there some way to bring an action under this statute on the basis of people who are being hurt along the lines that you're describing, Mr. Cooper? That's probably a rhetorical question.


      So the real question will go to Mr. Israel. Why on earth should -- why on earth should this be noncontroversial? It's basically changing the bedrock of what a lot of us think America's all about.


Brian Israel:  I think you identified some difficult problems. I think there are several of the subsidies -- I'm not an expert on subsidies for electric vehicles, but I believe that many of those -- the new iteration of those subsidies are -- do have income limits, but others can speak to that. In any event, that's clearly one way of addressing your concern.


      Susan [inaudible 1:11:01].


General Mark BrnovichDoes anybody else have any comments? Anybody else?


Susan Bodine:  I just -- so not an expert on subsidies since it's outside of environmental law, but kind of going to -- and maybe hearkening back to the prior discussion about using economics to make policy decisions -- and frankly, from my 14 years also working at Capitol Hill, when there's a lot of money out there, you have a lot of corporate interest going after the money, helping direct the policies, and then benefiting from it. So it is -- it's not about EJ. It's really not about the environment either. It's about the money. And that's how you see huge subsidies allocated. Reality.


General Mark Brnovich:  Horace.


Horace Cooper:  I worked on Capitol Hill, and one of the things that I found fascinating -- I guess it was 1997. We had the administrator, NHTSA administrator come in and give us an update on some of their safety mandates. And they were forced to admit that the initial airbag safety mandates that now all of us take for granted—we really wouldn't want to go out to buy a car without one that contained airbags—was actually leading to the loss of life of more children under the age of four than it saved until they decided to modify what the airbag power or strength capability was. Automakers brought to their attention this problem, but because the agency could dictate, that was ignored until the number of deaths started to rack up.


      With environmental justice, what we are witnessing is a move that is going to ensure that more young inner-city residents do not complete graduation. They are not going to be equipped as marrying capable because they don't have the skills to be attractive in the marketplace. Their children are not going to create wealth. And the reason for this is these policies. Divest. They're too expensive for communities to bear.


      And now, even under the most benign view, where we're just now getting more focus, that more focus is going to concentrate more enforcement in the very communities that really need the space to have a chance to prosper, create wealth, develop, and mature.


      Environmental justice, as I said when I stood up, isn't.


General Mark Brnovich:  Well, I want to thank all the panelists today.


      And just one postscript to your question. Well, I guess, I was just doing a really quick post scripting. I think that really goes to the issue of crony capitalism, which really cuts across all ideological lines. Because what happens is when the federal government gets bigger and bigger and bloated and bloated, it becomes unresponsive. And then you end up with these K Street lobbyists that essentially start picking winners and losers in the marketplace, and the government starts allocating resources to their favorite industries. But I am not here as a panelist, so I'm sorry for that comment. Different topic, different subject.


      Anyway, I just want to thank all the panelists for being here today. Let's give a round of applause. Thank you.




10:40 a.m. - 12:00 p.m.
The Role of Executive Branch Lawyers and The Presidential Records Act Compliance


Topics: Professional Responsibility & Legal Education • International & National Security Law
Grand Ballroom
The Mayflower Hotel
1127 Connecticut Ave NW
Washington, DC 20036


Event Video

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At the end of an administration, the President and Vice President are required to relinquish control over certain documents, pursuant to the Presidential Records Act. Recently, it has come to light that former officials of both parties have brought certain classified documents to their private residences and other non-governmental property.

This panel will explore the legal, ethical, national security, and policy issues that confront executive-branch lawyers as they assist Presidents and Vice Presidents to comply with the law.



Event Transcript

Eric Kadel:  All right. Good morning. I think we're ready to get started. Welcome. My name is Eric Kadel. I am here today to introduce our panel on behalf of the Professional Responsibility and Legal Education Group, which I'm not a member of, but also the International and National Security Law Group, which I am a member of. Our chair, Matthew Hyman, could not be here today, and he sends his regrets.


      Just a word about our group. We do cover a wide range of topics. Please take a look at our programming. Just to give you a flavor of the kinds of things that we cover, in addition to today's panel, we’ve had recent panels on Taiwan and the understanding of the military dynamic of a potential U.S./China conflict, on the War Powers, on the Abraham Accords, the expansion of export controls in order to secure U.S. technological leadership, especially in semiconductors, the situation in Ukraine, and the future of U.S. counterintelligence. So, quite a wide range. And expect additional programming in the near future.


      Today, we're going to cover a subject that has been very much in the news since August of 2022, when the FBI executed a search warrant at Mar-a-Lago, the home of former President Trump. And then, since that time, it has come to light that documents, in addition to being held in President Trump's former residence, were also found in the residences of our current president and other locations.


What we're focusing on is the legal side of the question. At the end of an administration, the president and the vice-president are required to relinquish control over certain documents, pursuant to the Presidential Records Act. And our expert panel today will explore the legal, ethical, national security, and policy issues that confront executive branch lawyers as they assist the president and the vice-president to comply with the law.


We have some expert panelists here today. My role is to introduce to you today the moderator, Judge Carl Nichols. He will introduce you to the rest of the panelists. Judge Nichols and I have known each other for — I don't even know — 20, 25 years, probably, or more. I followed him in clerking for the late Judge Silberman on the U.S. Court of Appeals for the D.C. Circuit, and then Justice Thomas. I think, actually, Carl, Judge Nichols, you interviewed me for that position, so I'm kind of surprised I got it, maybe.


But, in any event, Judge Nichols has been, in addition to his clerkship service, with the U.S. Justice Department from 2005 to 2009. Then he was a partner at Wilmer Hale, here in Washington D.C., from 2009 to 2019, when he was appointed to the bench to serve as a district judge on the U.S. District Court for the District of Columbia. With that, I'll turn it over to Carl. Thank you.


Judge Carl Nichols:  Thank you very much, Eric. I think we've known each other for probably 27 years, actually.  Thank you for the introduction. Here today with a very distinguished panel, who cover a wide variety of experiences relevant to the topics we're going to discuss today. I'll go from farthest away from me to closest, beginning with Elise Bean. The other thing I should note is we have three Michigan Law panelists today. I think, maybe, the first time I've seen that.


      Elise graduated from Wesleyan University, then University of Michigan Law School. Following that, she clerked for the chief judge of the U.S. Claims Court, and worked for two years at DOJ, as well. Perhaps most importantly, as to our discussion today, from 1985 to 2014, she worked as an investigator for Senator Carl Levin, including for 15 years at the Senate Permanent Subcommittee on Investigations, which many of you may know as the PSI, which is known for being a bi-partisan, fact-based committee that investigates various complex issues, many of which end up hitting the front pages of the Journal and the Times, and the like.


      She was appointed Senator Levin's PSI staff director and chief counsel in 2003, and handled investigations, hearings, and legislation, and the like. After Senator Levin retired in 2015, she helped establish the Levin Center for Oversight and Democracy, a nonprofit whose primary mission is to strengthen bipartisan oversight capacity in Congress and state legislatures. She now serves as co-director of the Levin Center's Washington D.C. office. 


To her right is Alex Joel. Alex went to Princeton, and then Michigan. He then served in the JAG Corp, worked as a law firm lawyer, and then, as is particularly important today, spent very many years in the intel community. He worked in various roles, including in the Office of General Counsel at the CIA, and then, for many years at the Office of the Director of National Intelligence, ODNI, in various roles, including as the chief of the Office of Civil Liberties, Privacy, and Transparency. He was the civil liberties protection officer. So, Alex knows a lot about classification and declassification-related issues. He is now a scholar-in-residence and adjunct professor at the Washington College of Law.


And then, immediately to my left is Steve Bradbury. Steve went to Stanford, and then Michigan. He clerked for Judge Buckley on the D.C. Circuit, before clerking for Justice Thomas. During the Bush 43 administration, Steve served in various capacities at the Office of Legal Counsel at DOJ. He was the head of that office from 2005 to 2009, advising the president and the executive branch on a wide range of constitutional and statutory issues, including, I believe, issues relating to the Presidential Records Act, but certainly classification issues, as well.


More recently, Steve served in the Trump administration as the Senate-confirmed general counsel of the Department of Transportation. He also had other roles at Transportation. He has served as a partner, mostly in the litigation practice, I think, at both Kirkland and Dechert. And he is now a distinguished fellow at the Heritage Foundation. So, thank you all for being here. I think your varied experiences will be very helpful to the discussion today.


So, it seemed to me that there are really three topics that we're going to cover their overlap on. One of them is the Presidential Records Act, of course, which Steve is going to give us a primer on. But the Presidential Records Act overlaps, in some respects, with questions around classification and declassification. And, obviously, we're not going to talk about any specific cases or issues today, any specific news stories. But obviously, as Eric said earlier, the press reports last year about the Mar-a-Lago search warrant -- it wasn't just about Presidential Records Act issues, but they're about classified documents. And so, we're going to talk also, not just about the Presidential Records Act, generally, but about classification issues and declassification issues, over-classification issues, and the like.


And then, because this is, in part, a panel sponsored by one of the committees that Eric identified, we're also going to talk about the rules, or how lawyers should conduct themselves, who are working on classification or Presidential Records Act issues. We'll probably cover that at the end. So, just to give you a bit of a primer, I'm going to ask each of our panelists to do sort of a five-minute overview of a topic relevant here. And then we'll get into my directed questions, then leave some time at the end. So, Steve, if you could give us a 30-thousand-foot view of the Presidential Records Act, to frame the rest of our conversation.


Steve Bradbury:  Great, Judge, thank you so much. I really appreciate it, happy to be here. In August 1974, right after President Nixon resigned, he pretty promptly entered into a contract with the general services administrator, somebody he had appointed. And this contract purported to give him the right to destroy the records of his presidency, including the tapes of conversations in the oval office. Congress immediately kicked into gear and passed legislation, which President Ford signed in December 1974. This was the Presidential Recordings and Materials Preservation Act. This is a precursor to the Presidential Records Act we have today.


And what it did is it abrogated that contract that former President Nixon had entered into and transferred title to all of his presidential records to the administrator of general services. And it required the administrator to go through the materials and identify what was personal and return it to Richard Nixon and maintain and preserve all the rest of the presidential records. It also, by its terms, respected any claims for executive privilege in those materials.


So, President Nixon challenged the law, and it went before a three-judge panel in Judge Nichols' court, the District of D.C. And the three-judge panel rejected his request for an injunction. And the Supreme Court upheld that 7-2. And a majority of the Supreme Court rejected — Justice Brennan writing — rejected separation of powers challenges, property interest challenges, First Amendment challenges, and Bill of Attainder Challenges. The legislation actually referenced President Nixon personally.


Then-associate Justice Rehnquist wrote a dissent, in which he said, "I think this will chill future president's staff from their willingness to provide candid information if they know that all of the records are going to be maintained and subject to later review. The Supreme Court rejected that, because the review was going to be done within the executive branch, and they thought it was consistent with the separation of powers.


So now we have the Presidential Records Act, which was passed four years later. And sort of building on that foundation, what it does is it declares by statute that all presidential records — which are any kind of record that reflects the business of the president, that relates to the official duties of the president, or has an effect on them, including ceremonial duties — are the property of the United States. Basically, it declares that the title in all presidential records is with the United States.


It requires the incumbent president, while in office, to have systems in place to preserve all of those presidential records. And it provides an official roll for the archivist of the United States, the head of the National Archives, to participate in the preservation and handling of presidential records. It requires that the records are transferred to the archivist upon the termination of the president's term in office. And it provides detailed requirements for restricting access to presidential records.


At the end of the administration, before he leaves office, the president can identify a period of time for restricting access to certain categories, six categories of presidential records. Those are classified documents, properly classified under executive order; documents relating to the appointment of federal officials; documents that are exempt from disclosure by statute; documents that constitute trade secrets or confidential commercial information; documents that reflect deliberative advice given to the president, or between presidential advisors; and documents that involve personnel records or medical records that could be an invasion of privacy.


And what the president does is he can say how long those categories are to be restricted from public access, up to twelve years. Any other records that don't fall into those categories are protected for up to five years. And after these periods of time run, then all these records are subject to FOIA, because they become records of the National Archives, and are treated like agency records, and subject to FOIA, except that the ordinary rules for agency records involving deliberative agency records are not -- that B5 exemption to FOIA does not apply. And we can talk about what that might mean.


And, just to finish up on the Presidential Records Act, it has provisions that allow for members of the public, historians, etc., to ask for materials and for decisions to be made by the archivist as to whether the materials fall into the restricted categories. It provides for notice to the former president and the incumbent president. And then, whenever the archivist is going to propose to make something public, it gives an opportunity for the former president and the incumbent president to ask for an assertion or to assert executive privilege, and provisions for the resolution of that. It also provides access to Congress and access to others by court order to materials that are preserved. So let me wrap up there, and we can get back to fleshing out some of the details of the [inaudible 00:15:19]


Judge Carl Nichols:  Thank you Steve. As you said, one of the categories that the PRA specifically gives the outgoing president is a role in deciding how long to protect our classified records. Obviously, the White House has classified information, but so do other agencies and the entire executive branch. And Congress has access to classified records. Alex, could you give us, again, a 30-thousand-foot overview of, I guess, the classification world, generally? Why is it that documents are classified? Under what authority? Where are they housed? How are they housed? How are they protected, and the like? I know that's a big topic, but --


Alex Joel:  I can neither confirm nor deny. Yeah, it is a big topic. I'll try to be very quick. So, the reason classified information exists, the whole system of classification is designed to protect information from public disclosure, the disclosure of which would harm national security. So, it's really information that, if known more generally, would harm national security. And so, you can think of a lot of different kinds of information that might fit within that. And then, as you start thinking about, how do you design a system to protect that when you have a large government with a lot of operations and activities, it becomes an enormous challenge.


      And the way the United States has done it is through executive order, the president signing out an order. And those of you who are separation of powers students and followers of all of those debates can imagine the back-and-forth, in terms of who has the authority to do this. The courts have been fairly clear that it's the president's primary authority to protect information, the disclosure of which could harm national security, which is why the president is the one that signs these executive orders. And so, right now, we're under Executive Order 13526, which was signed in 2009. And, just before we started, I was reminiscing with Steve about my recollection of what the hangup was in trying to revise the prior executive order to this one.


      New presidents tend to revise and issue their own executive order. President Trump did not. President Biden, his administration has announced that they are looking at this executive order and trying to figure out how to update it. So, basically, we all have heard of the different classification levels. It establishes that you can have top secret, secret, confidential, three levels of classification. There are certain kinds of information you can classify. There are certain kinds of information you cannot classify. You cannot classify information to conceal violation of law, or to protect an individual or agency from public embarrassment, things like that.


      But you must classify information, the disclosure of which would harm national security. There are original classification authorities. It's kind of a complex scheme, but, obviously, the president, the vice-president, the secretary of defense, the director of national intelligence, the director of the central intelligence agency, etc., have been designated as original classification authorities. But, if you work at one of these agencies, you aren't the director. You are somebody working at that agency. And yet, you are the one who's going to be generating mountains of information through email and through memo-writing and everything else, and cables and everything else that intelligence agencies have to do.


And so, how do you decide what information -- you've just written a memo based on a meeting you attended. How is that supposed to be marked? Well, the order requires that you mark it appropriately, and it has something called "derivative classification." So, if you're going to work at an intelligence agency, you are going to be viewed as a derivative classifier. You are going to be applying markings to documents you create and handle, based on a guide that the agency produces and tells you, well, if this information could reveal the identity of a human source, it needs to be marked "Top Secret," blah, blah, blah. And so, you, therefore, mark it accordingly.


So, the executive order very clearly says that information is not to remain classified forever, and that it must be de-classified when it no longer meets the standards for classification. So, how does that happen? It lays out certain avenues for de-classification. So, I'll just quickly say, there's an automatic declassification timeframe. It typically is 10 to 25 years. And, among the intelligence agencies, they tend to use 25 years. Well, now, you go back 25 years in time, and you start thinking about the onset of digital technology in all of our workspaces and all of our lives. You can start thinking about this huge amount of electronic data that's coming up on the 25-year automatic declassification mark.


Now, of course, intelligence agencies would never agree to automatically declassify everything, regardless of what happens. So, they're going to want to take a look at that information. There are provisions by which they can extend the classification period. So, that's automatic declassification. There's also something called mandatory declassification. If you know of a document, let's say a document's been released and it cites a memo dated such and so from somebody. It seems like it was a top-secret memo, but it has not been released along with this document.


You could submit a mandatory declassification review request for that document. If you identify the document, you can submit an MDR request. And then, there's a process within the executive branch to review your request and determine whether or not that document can, in fact, be released. It's a very slow process, and it's obviously a manual process. But it does exist. So, I'll just mention those as a couple. There's also something called public interest declassification, which, as the former civil liberties protection officer, I was extremely interested in, which is, in some extraordinary cases, you can declassify a document if it's in the public interest, even if it continues to meet the standards for classification.


And that was the authority that was used following the Snowden disclosures to put out a large amount of information about how intelligence activities were conducted that were the subject of a huge amount of attention, and still are. We have FISA coming up for reauthorization and there's a lot of information that could helpfully persuade those on the fence on what to do about either the value or the problems associated with it. I think I'll stop there. And, happy to dive in further on classified information.


Judge Carl Nichols:  We'll do that. So, we've talked mostly about the executive branch. Obviously, Steve mentioned the fact that the PRA was passed by Congress, as was the earlier statute directed at President Nixon. Elise, there are both other players involved, other branches, and some agencies that we've only mentioned in passing. So, can you give folks sort of an overview of the relevant players, some of whom we haven't really talked about, but, in particular, the role of Congress in both the classification world and the Presidential Records Act world?


Elise Bean:  Sure. And thank you very much for inviting me to be on this panel. It's a complicated topic that goes in a lot of different directions. But here are just some of the key players in the process. First of all is the president, the original source of classification. They can also make an initial determination, under the Presidential Records Act, if something is a personal or presidential record. They can declassify documents. They can store both unclassified and classified documents. And they're required by law to turn over presidential records at the end of their term.


      They have a national security staff that helps them out. They provide the president with classified documents. They help track and store them. And they should document the declassification of any classified materials. There are also the White House lawyers. They can help categorize documents as personal or presidential records. They can help document any declassification that goes on. And they can help ensure that the records are turned over to the archives at the end of a president's term.


      Then there's the archivist and the national archives. They are responsible, under the law, for obtaining and storing and preserving presidential records at the end of a president's term. If they find that some are missing, they're supposed to go out and get them. And they are also responsible for responding if there are requests for records. The Department of Justice also gets involved. They help the National Archives if they have to go looking for missing documents. They can also help them to determine classification issues. And they can use, if necessary, the FBI to conduct a search.


So, then there's the current president. We've been talking about the president who is leaving the term of office. Now we have a current president. As we just heard, presidential records are normally kept confidential for anywhere from five to twelve years after they leave office. But sometimes requests are made before that limit is up. There is procedure in the law itself, where the archives give notice to both the former president and the sitting president.


The former president has 30 days to assert executive privilege. If they do, then the archives goes to the current president to say if they want to uphold the privilege. If the current president disagrees with the former president and waives the privilege because they feel it's in the interest of the United States, archives must produce those records then to the person who requested them within 60 days, unless they receive a court order to the contrary.


      And that brings up the role of the courts. Courts have reviewed document disputes between former and sitting presidents on executive privilege. They typically — it's a gross generalization here, but — defer to the sitting president. But there are issues that have come up about that in the courts recently. The courts have upheld the constitutionality of the Presidential Records Act.


And, finally, there's the role of Congress. And they play several different roles in this. First of all, they like to request documents from the archives, so they have a great interest in making sure that presidential records are transferred to the archives and that they are accessible to Congress. So that's their incentive. They want this law to work. They can also conduct oversight of issues related to the Presidential Records Act. For example, they can look at classification procedures, standards, systems. They can assess the national security risk if there are some missing records. They can look into the circumstances if the FBI does a search of a former president's property.


And, finally, of course, they can amend the Presidential Records Act if they feel there are some changes that should be made to make it work more effectively. So that's a big echo system around the Presidential Records Act. And it's part of the reason that we'll be talking about it today.


Judge Carl Nichols:  Elise, I want to ask Alex a question about the discussion around overclassification, but could you just say a little bit about how Congress deals with classified information before I do that?


Elise Bean:  Well, Congress has the right to see classified information. And there are many people on the Hill who have authority to look at classified information. There is some dispute about whether Congress itself can either classify documents or declassify them. This is an area that has been in various Congressional investigations in the past, and has been a very serious issue. So, I don't if you want me to go into more detail than that.


Judge Carl Nichols:  Why don't we see what we get to with Alex? So, Alex, there's this debate about whether, and to what extent, we, as a government, over classify documents. Where do you come out on that? Or, perhaps, what are the relevant considerations in thinking through whether we are, in fact, doing so?


Alex Joel:  So, I don't think there's any question that there's overclassification. But I think it's important to think of that in a non-pejorative way, but rather just as a factual observation. So, you will see instances where I could pull almost any document up and see that some of it is clearly unclassified, but yet has been marked as classified. And I don't ascribe malicious intent to that. That is natural human behavior.


If you're working in a classified environment, and you're seeing, on a daily basis, all of this information, and it pertains to some intelligence operation or activity, there may be something in there that's innocuous, and maybe you shouldn't have marked it "classified." But your default is going to be, "I'm working on this stuff. It's pretty sensitive overall. I'm not going to spend time reading each and every paragraph and trying to think about it so carefully. I'm going to basically mark the whole thing 'classified.'"


      There was a famous email from the CIA that was eventually released under FOIA. I think it was the CIA. I can't remember the agency, but they were passing around a menu. Maybe it was for Taco Tuesday or something. And they had marked it "secret." And so, everybody mocked that. It's like, "Oh, my God, the CIA thinks that Taco Tuesday is secret." I'm not sure exactly what the menu said. But, to me, it was understandable. Normally, that's what they would mark their emails. And so, they did that out of habit. So, I think there's a lot of information that is going to be marked more conservatively than it should be, on a more careful review. And that's what I try to tell people.


I'm a transparency advocate, so I want more information to be out in the public. But you have to understand the problem the government is dealing with. The most efficient way to protect classified information has been, the traditional thinking has been, I'm going to create this safe space. I'm going to put people in there who have clearance. I want them to mark the documents in a way that allows it to flow within the safe space but doesn’t go outside, so it's all within the cone of silence. And we can all talk to each other.  And it's great and we're being very efficient, but it's not going to go out.


But if I dip in and pull any of those documents out, it's like, "This shouldn't be classified." So, you have to come up with a system that allows the experts to work efficiently with each other in a way that they trust the information will not leak out. But you also need the public to have better trust and the ability to see what's going on within the government. So, I think it's a difficult problem but, yes, objectively, there are many more things marked "classified" than probably are merited.


Judge Carl Nichols:  Elise, you look like you wanted to say something.


Elise Bean:  I was just going to add a couple of examples of where this clash started to happen in Congress, in the past. So, people may remember the Church Committee from the 1970's. That's when the Church Committee, which was a Senate committee from Congress, started looking to covert operations, and found a lot of things that they found outrageous, and made a lot of that information public. So that was a big dispute at the time about the extent to which they could make specific information public. Then, a number of years later, starting in 2004 and on, we heard about – photographs surfaced of detainees in U.S. custody that had suffered abuse.


      And there were two different investigations — one by the Senate Armed Services Committee, one by the Senate Intelligence Committee — that wrote up reports about the information that they had found. The Senate Armed Services Committee went through a very lengthy declassification process, where they ended up making their report public. The Senate Intelligence Committee — which I think had, like, a 6000-page report — they went through a process to make the executive summary public, a declassified version of it. But the body of the report has never been made public. It's still classified. So, those are the kinds of issues. And the Pentagon papers, there was a whole dispute about whether Congress could simply put them in the Congressional record and declassify it that way.


Judge Carl Nichols:  Thank you. I remember those cases well. I litigated some of those detainee photograph cases. It seems to me that there is a -- when you're talking, Alex, about the bubble, or the cone, where you try to have a classified safe space, that is easier done at an agency than at the White House. I've never worked at the White House, but my experience representing it is that is it -- obviously, there are people there dealing with highly classified information, but it is both a consumer, in a sense, of classified information coming in from agencies, and you have people there who are dealing with a million things at once, some of which are classified, and some are not. So it is an ecosystem, to use a word, in which it's harder to maintain that bubble.


      And it seems to me that presents some unique challenges around protecting classified information. Do you agree with that, generally? And, if so, in your experience, do White Houses handle that challenge well?


Alex Joel:  So, I also have never worked at the White House, but what you describe does sound like a very challenging environment. So, one of the helpful things — it's frustrating, but also helpful — if you work in the intelligence community, when you go to work, it's all considered a vault, essentially. Literally, your office doors, some of them have some kind of combination lock on them. And so, you are in a vault. And you know that, in that space, that's where you can have your classified information, your classified discussions.


When you go home, you should not be carrying with you any classified documents. So, there's this sort of sharp dividing line between when you're at work in a classified environment, and when you're not. If there isn't that sharp dividing line, it becomes much more difficult, I think. And if you're fluidly moving papers around and engaging with the public as well, I think it can be very challenging.


Judge Carl Nichols:  Right. So then, in my mind, Steve -- it's not the most natural transition, but then there's the question of declassification and the president's authority to do so, and the procedures, if any, that a president is required to go through to declassify. Without talking about any particular president or set of documents, what are your thoughts around the authority question and the procedure question?


Steve Bradbury:  Thanks. Well, I think Elise kind of touched on the basis for classification and the source of the power. I think she mentioned that it flows from the president. That's the fundamental point I think I would make. It gets into interesting issues when you talk about whether Congress has authority to declassify something that the executive branch has classified, or to classify something. But, fundamentally, as a constitutional matter, I would say the authority to classify information flows from the president.


The president is the commander-in-chief. The president is the principal spokesman for the nation on matters of foreign policy. And, classified information, national security information focuses on the security of our military defense of our country and our interests, and our relationships with our foreign allies. And that information, from the very first presidency, George Washington identified that information as critical for protection for the national interest. And he, from the beginning, asserted authority to protect it, to keep it confidential, and not to share it with Congress, even in response to requests for specific materials from Congress.


So that's sort of, in terms of the constitutional structure, it really flows from the president. But then we've, of course, created, we have a whole administrative state, a whole bureaucracy, multiple agencies created by Congress, administered and supervised by the president, that have lives of their own. And they exist and they undertake duties and have operations and responsibilities. And they need to handle classified information some of them generated. The president delegates down to the heads of these departments and agencies, the authority, as an original matter, to classify information. And some of them deal with foreign allies. Some of them deal with intelligence information, military secrets, etc.


But there's a bias in the bureaucracy to generate classified information and to maintain it as classified. And so, presidents have really inclined toward pushing to declassify. They often have an interest in spreading information around. Congress has an interest. The president wants to respond to that. So, presidents have signed executive orders that provide detailed procedures, as Alex described, for declassifying and trying to facilitate the declassification. There's an inertia against doing that in a bureaucracy because nobody down in the bureaucracy wants to be the one who made the decision to declassify something that turns out to be critical to national security.


But none of those documents, none of those procedures, speak to what the president has to do to declassify. And the president has a role in approving declassification. You set up a structure for appeals and everything to do that. But, because the authority flows from the president, as a matter of a constitutional analysis, the president has authority to declassify in his own right. And there's no necessary procedure he has to follow to do that. He can make an on-the-spot decision that this information is in the national interest to make it available to some other party that's not cleared to see it, or to the public, or to Congress. And he can do that on his own authority.


But that leads to lots of difficult questions for the White House counsel and for others in the bureaucracy and others who are advisors to the president to be sure that that's documented, to be sure that's it's known, to explain how and why it was done, so that all of the other people who have a need to handle that information or those documents are protected against potential legal liability and whatnot. So, it raises very interesting questions, if a president, on his way out the door, makes a snap decision to declassify some important materials. How is that going to be documented? How is that going to be handled? What does that mean for other people around the president? And, also, what's the proof of that, if it comes to a case in court?


Judge Carl Nichols:  So, perhaps, stepping out of the pure classification, perhaps declassified on the way out the door context, but there are the procedures in the statutes that we talked about, requiring some robust preservation efforts around presidential records when there has been an election and a new president. And you just identified the White House counsel as having a very important role in maintaining records around classification issues. But, more generally, the counsel's office is very critical to PRA efforts. And one of the topics we're discussing today is the role of executive branch lawyers in ensuring compliance with the PRA. So, can you talk a little bit about what the role of the lawyers is, and, in particular, the role of the counsel's office?


Steve Bradbury:  It's critical. It's a critical role. Working with the Archivist from day one of an new administration, the White House counsel really needs to ensure that all of the many characters who work in the White House complex who come in and out, participate sometimes for very short periods of time, sometimes for the entire administration in advising and assisting the president, understand the strict requirements of the Presidential Records Act, understand that their communications, the documents they create, the chats they may send, even the WhatsApp messages they may send that relate to the work, the Tweets, the draft Tweets, all of it that relates to the work of the president and the White House is not their property. Those are not only their private communications. Those are the property of the United States.


      So, the White House counsel, really, from day one, has to try to educate, and repeatedly educate, and, I would say, take an affirmative role in ensuring that systems are in place, the people understand the requirements. Every time a record is created in the White House, there has to be a classification decision made as to whether it's a presidential record or a personal record. They need to be filed separately. And there are usually systems in place to get the presidential records into an archive that's maintained by the National Archive, even during the president's term in office.


      Now, the president maintains control and custody over those records during his term in office, but there are record-filing systems to get those into the right archives to help, so you don't have utter chaos at the end of the administration when everything, in a big dump, goes to the archives. But you have to have those systems in place. White House counsel is one of the main actors to ensure that. And, these days, a critical issue is the use of personal email, personal smartphone devices, and these apps and other things where there's a mixture of official business and personal business. And that is the number one issue the White House counsel has to work on and police.


There's a provision of the Presidential Records Act, Section 2209, the last section in the act, requiring that all these advisors in the White House, and, actually, the president and the vice president themselves, are not supposed to use personal communications devices or personal accounts to communicate. And if they do, they're supposed to copy their official account or provide a copy within 20 days to their official account. That's already kind of obsolete. That's old technology, even right there. Right now, people are using these apps. And some of these apps delete the message as soon as it's sent. And so, probably, there's a need to reconsider and amend the statute to keep it up to date.


But the White House counsel's got his or her arms full, ensuring that those lines are maintained. There is a liability of disciplinary action required for employees in the White House complex who violate that stricture. And then there's also criminal liability under 18 U.S.C. 2071, for anyone who removes official presidential records from the White House or conceals them. And that liability, potentially, does even reach the president, a former president. So White House counsel has got a critical role in ensuring that these requirements are met, and that liability does not come into play.


Judge Carl Nichols:  I want to ask Elise, in a second, about the role of Congress and lawyers at Congress, and then, perhaps, some efforts that can be and have been taken, in certain cases, to try to get documents that perhaps weren't turned over. But can you also just say a little bit, Steve, about the role of the lawyers at NARA and DOJ working with the counsel's office on these issues?


Steve Bradbury:  Yes. So, most primarily, when there's requests to NARA to disclose information that's either restricted, or even information past the date of a special restriction under FOIA, there's notification given to the former president whose documents these are and to the current president that NARA is about to disclose material. And NARA works with the Office of Legal Counsel at DOJ and White House counsel if either the former president or the incumbent wants to assert executive privilege over those materials.


And there's a close working relationship there. And there's also a close working relationship all the way along, really, through the presidential term, to help educate people in the White House. NARA comes over. They give presentations, etc. And then, organizing the materials, as they go over to NARA. But once they go over to NARA, and NARA is in the process of processing them, that doesn't mean the issues end. That's really only the beginning, in a lot of respects, because requests come in. Because it's really the archivist that makes the decision.


I mentioned those six categories where the president can identify a length of time for restricted access. But the president doesn't identify which documents fall into those categories. It's actually the archivist who goes through the process of identifying which documents fall into those categories. And, number one, if the requestor doesn't agree, doesn't like NARA's conclusion that the documents are restricted, there's an internal appeal process, but no judicial review of NARA's decision.


If NARA decides they're going to be disclosed, and the former president doesn't like that decision, the former president can actually go to Judge Nichols' court in a special action to try to prevent the archivist from producing them. Lawyers are involved in all of these questions. And there's close collaboration or, at least, input, between the archivist and the archivist's lawyers, and the Office of Legal Counsel at DOJ for the attorney general, and the White House counsel.


Judge Carl Nichols:  So, Elise, we've been talking about a couple of different issues, one of which is documents that have made their way to NARA that are asserted to be privileged or otherwise protected. But there are documents that maybe don't make their way to NARA, for whatever reason. Perhaps someone was using a personal email or an app, and didn't adequately preserve those documents, or takes the position that they aren't government property, or something else.


      So, for people who are no longer at least executive branch employees, what tools does the government — and I'll put the government, generally, either the executive branch or Congress — have if there is an effort or a desire to try to get those documents produced to NARA?


Elise Bean:  When I was hearing Steve talk about how the White House counsel's arms were full trying to deal with this issue, and he sure is right. A recent case that went through the D.C. district and circuit courts involved a former White House official, Peter Navarro, who used a ProtonMail account that had both, as you said, personal and official emails. He identified about 250 to 300 emails that, arguably, were involving his work for the White House. But he declared they were his personal emails, and he wasn't going to turn them over.


And I think it's actually the first case where the Department of Justice went to court and used a D.C. replevin law to say "those documents belong to the United States. He's got them. We should get them." And Mr. Navarro responded, "There is no enforcement mechanism in the Presidential Records Act itself. So, you're out of luck, and I'm not turning them over." Well, the courts agreed with the Department of [inaudible 00:48:32 - 00:48:48] We haven't had too many cases where a White House official is saying, "No, I have these documents that had to do with my work, but I'm not turning them over." So that's one tool that people have used.


      Another way that Congress gets involved, as I mentioned earlier, is they just want to make a request for documents that should be with the archives. And one recent example of that is the January 6 Committee, which asked the archives for a number of presidential records. In accordance with the law, the archives notified the former president. He exerted executive privilege. The sitting president said, "Well, there may or may not be executive privilege, but I'm going to waive any privilege that exists, because I believe it's in the interest of the United States in this very unusual set of circumstances involving the attack on the U.S. Capitol.


      And it went to court. And we had the district court, circuit court, and the Supreme Court all got involved. And they went along with the sitting president to allow these documents to be disclosed to Congress. But they all emphasized that these were very unusual circumstances, that the former president didn't have a really good argument about why they should be privileged or kept confidential. And one of the Supreme Court justices, Justice Kavanaugh, made a specific point of saying, "I disagree that the sitting president's opinion always wins and that we should defer to the decision of the sitting president. A former president, under certain circumstances, could have an equally forceful argument. So, the law is not resolved. But that's another mechanism that Congress uses to actually make this request to the archives.


      And then, finally, what I'll mention is we had this whole situation where classified materials were found at the residence of two former presidents and a former vice-president as well. And Congress wanted to know what those documents were, because they wanted to do a national security risk analysis. The executive branch resisted and said, "That's up to us. It's not really up to you, Congress."


But the Senate and the House Intelligence Committees insisted, on a bipartisan basis, and some of those documents have now been turned over. And that process is now going on where the Congress itself is taking a look at the classified materials and trying to determine what the national security risk really is. So those are some ways that Congress can get involved and the kinds of tools that can happen, both when documents aren't turned over, and when they are.


Judge Carl Nichols: Thank you. Alex, we've been talking about the Presidential Records Act. But to go back to the classification question, can you talk a little bit about the role of the lawyer, at least in an agency that has a significant amount of classification information, and the role of the lawyer at that agency in making classification decisions, protecting classified information and the like?


Alex Joel:  Sure. And, as a lawyer, I can say that the role of lawyers is absolutely essential. You can never have too many lawyers. But seriously, when you think about our democracy and our system of government, so much of it depends on the assumption that you will have access to information. So, if you have an adversarial process in a court, you've got discovery, you assume that you will have access to information, in order to make your case. If you are going to be tried for a crime, of course, you need to have access to information. We have the Freedom of Information Act, the Privacy Act. These are statutes that, at their core, assume that there will be access to information.


So, our legal system, in any democracy, is premised on the idea that you will have the ability to get information you need to vindicate your rights or to check to see that the law has been followed. And yet, every county has a system that, by necessity, protects classified information from disclosure. So, it creates this tension. And lawyers are essential to managing that tension. Because I always say that a democracy, its legal framework must do two things at the same time and be equally good at both. It must enable agencies to protect the nation's security, which includes secrecy.


But it also must protect people's privacy and civil liberties. It must prevent those agencies from, themselves, becoming a risk to the democracy that they are sworn to protect. And so, lawyers are fundamental to managing this tension. And it plays itself out in so many ways, so, making sure the executive order is being followed properly, that things aren't being marked "classified" to conceal violations of law. They get involved in managing the declassification process and the review processes, under the executive order. The Freedom of Information Act, obviously, has an exemption for classified information. There's litigation under the Freedom of Information Act that continues to evolve, that, obviously, lawyers have to be intimately a part of. There are private litigations.


There's something called the State Secrets Privilege, which is based on classified information. So, lawyers have to be involved in making sure that the State Secrets Privilege is properly being asserted and applied. And there are all kinds of processes for doing that. Agency lawyers work very closely with the Department of Justice. The Department of Justice, obviously, is the lead on assertion of State Secrets privilege and those kinds of things. But they rely on agency lawyers to do a lot of the underlying work and analysis for the agency's particular equities. And it goes on and on.


I mentioned previously the Foreign Intelligence Surveillance Act, Section 702, being up for reauthorization. This is a key legal authority. Lawyers are all intimately involved in figuring out what information can and should be made available to the public in support of the debate for deciding whether that law should be reauthorized. And, mentioning the Church Committee, one little-known finding of the Church Committee was that agencies should have more lawyers, and they now do. So that recommendation was implemented.


Judge Carl Nichols:  So, I'm going to turn it over to the audience for questions in one second. And then I'll make one last comment, which is about the State Secrets Privilege, because I think it's a place where the role of the lawyer is particularly important and unique. State Secrets Privilege – as many of the folks know here, I'm sure -- is asserted by the executive branch in litigation where the litigation requires the production of information that, if produced, would harm national security.


And the assertion of the State Secrets Privilege must be done by the head of the department that has the information. That is, obviously, if the information is from a non-DOJ agency, it's going to be the head of the department, the director of national intelligence, the head of the CIA, through a signed declaration. And, in my experience, when the head of a department is signing a declaration, asserting the State Secrets Privilege, every lawyer in the chain is working on it and is thinking very hard about whether it's appropriate to assert the privilege, of course, whether the declaration is completely true and the like.


And, at the same time, DOJ is involved, because DOJ is the litigating entity, obviously, for the executive branch. And so, if the information is CIA information, not only does the director of the CIA have to be willing to assert the privilege, with the assistance and advice of the counsel there, DOJ has to be willing to advocate for the assertion of the privilege. And, in my experience, the assertion of the privilege by DOJ goes up to the highest levels, briefing to the attorney general, the DAG, the associate.


And so, in that world, lawyers play a critical role at multiple agencies, ensuring that there isn't an overuse of the privilege, that it's appropriate and the like, and that everyone has thought about all of the implications you've identified, because, not only in the State Secrets Privilege are you protecting information, but, typically, the result of the assertion is dismissal of a suit. So, someone who might actually have a potentially viable claim, that suit is dismissed by the mere implication of privilege.


Alex Joel:  If I could just piggyback on that, and that's one reason why, in my experience talking to agency lawyers who work on privilege issues, they are very careful. And people are cognizant that overuse or perceived overuse of their privilege puts it at risk. Even though it's a privilege that's been identified by the Supreme Court, you still put pressure on it, if it's clear in some situations that it should not have been asserted. And so, people are, in my experience, very careful.


Judge Carl Nichols:  Yes, I agree. Okay, anyone in the audience have a question? Happy to hear from anyone. Please. There are microphones so everyone can hear you and it can be picked up in the live feed.


Brady Marzen:  Yeah. Thank you all for speaking. This has been really wonderful.


Judge Carl Nichols:  Your microphone might have a button on it.


Brady Marzen:  Sorry about that, I had no idea. Is it on? Can you hear me?


Judge Carl Nichols:  Yes.


Brady Marzen:  Wonderful. There we go. Thank you all. I'm Brady Marzen, first year at Georgetown Law. This has been really wonderful. It seems like there's been a bipartisan issue between the advent of leaks coming out across different departments. How does that fit into this conversation? Is there any remedy to that issue that's now spanned multiple administrations? Thank you.


Judge Carl Nichols:  There's even an interesting question about what's the line between a leaker and a whistleblower? Alex, you want to tackle this one first?


Alex Joel:  Sure. Yes, leaks are a perennial issue. And, obviously, we've had a very public one. And there's still reporting coming out about it. And it's obviously on something very current and damaging. So, it brings up so many different thoughts, but I'll try to just limit it to a couple. One is, this particular, the latest leak that's been in the news, brings to mind some of the early challenges and debates that we had within the intelligence community following 9/11, which contrasts between the traditional view of classified information, which is that you share it on a need-to-know basis. I mean, that's in the executive order, you need to know.


      But, on the other hand, following 9/11, where there was a huge emphasis on connecting dots, and agencies not sharing with each other, we worked extremely hard to find ways to share information and became -- also there was a contrasting saying, "There's need to know, but there's also responsibility to provide," particularly to the military, particularly to help them prepare for military operations or support their military activities. So, you have these contrasting desires to make sure that everybody has access to the information without having to go through unnecessary gates.


But then, also, being worried about if too many people have access to the information, it could be released in a harmful way. And, from a privacy perspective, the more people know information, the less private it is. So, there's also a concern around privacy there. I don't think you should view this as, once you achieve the balance, the balance is always great, we're done, we've closed the door, we've moved on.


It's a constant motion back and forth between, "We dialed it back too far here. We need to dial it further this way." I think our government will always be seeking to find the right equilibrium point, and it will change over time. So, right now, I know DOD is doing a review, trying to figure out if they need to dial back on some of their processes that made that information available. And it is a bipartisan, nonpartisan issue. It happens across administrations.


Judge Carl Nichols:  Elise, let me perhaps ask a difficult question, which is, would there be fewer leaks if we had stronger or better whistleblower protections or laws?


Elise Bean:  Well, as you said, there's a fine line between a leak and a disclosure by a whistleblower. There are a lot of whistleblower protections now that say if you are disclosing something that shows misconduct or a violation of law, that's not a leak, that's a whistleblower disclosing the truth of the facts of what's going on. If we had stronger whistleblower protections would there be fewer leaks? I guess the leaks are unauthorized. But a lot of people would say when a whistleblower gives something to Congress or to the press, it's also unauthorized.


There are a lot of pressures on whistleblowers. Whistleblowers can be a two-edged sword for Congress. You have a person, often, who has been -- they feel that they've been mistreated by a government agency. And they often have an agenda. And you can't trust everything they say. And even if they truly believe, and they're giving you all the information as they understand it, they only know a certain piece of the pie. And they don't know what they don't know. So, with whistleblowers, we always had to do a lot of double-checking to see if their information was authentic, and how it fit in with everything else.


I think there should be stronger protections for whistleblowers, particularly with respect to classified information. That's sort of where we're weakest. But leaks -- this town is just built on them. Congressional oversight loves them. And sometimes it has nothing to do with classified information. We got a leak from an accounting firm that disclosed all kinds of tax shenanigans going on by the accounting firm itself, KPMG.


And we had a whole hearing, just on that, on how they were manufacturing tax shelters. So, no classified information there. But when the people gave us the information from within the firm, we were like, obviously, they had just taken it from the firm. I don't think they had authority to do it. And we had a serious discussion about can we use this information? We determined that we could, since we didn't tell them to do it. But, as you said, there are very difficult issues here.


Alex Joel:  I'm sorry. I forgot, Judge Nichols, that part of your question. And just to piggyback on this whistleblower issue, it's really important to understand, in the intelligence community, whistleblowing does not equate with going public about something. So, when you blow the whistle, it's very clearly defined that you have to go through the inspector general, the head of the agency, to Congress. That is the channel through authorized channels that protect classified information.


But, to your point, if somebody feels that they've uncovered illegality, or something that really must be seen, it's so important for the agency to protect that person from retaliation, and to encourage that person to use authorized channels, and to take that complaint seriously. And so, certainly, when I was a civil liberties protection officer, we took those complaints very seriously. We investigated them carefully.


And we didn't want the person to feel frustrated that the system wasn't listening to them. And that can also include transparency. So, sometimes, the action is legal, but the person is still upset, and they think the public should know. And that's why it's important to understand these mandatory declassification review channels, public interest declassification. Is there a way to be more public about something?


Judge Carl Nichols:  Steve, what do you think on these topics?


Steve Bradbury:  Well, I strongly agree with Elise in her point that so-called whistleblowers are often independent or free agents. And those who rely on them shouldn't assume they are controllable. And, in my experience, often, when a whistleblower is communicating with an IG, or with a committee of Congress, for example, by email, don't be surprised if the whistleblower is bcc-ing a reporter at a local newspaper. A lot of the whistleblowers have strong egos. And they have, as Elise said, their own agendas. And Alex made that point that there's a process for whistleblowers to go through: first, the IG, then the head of the agency, then Congress.


So, I would question how often does a whistleblower make that stop at the head of the agency? I think there's a lot of instances where that little part of it is circumvented. And Congress has an interest in getting information. And so, they make it easier and easier for whistleblowers to disclose to Congress and get protection, without stopping up the chain to their ultimate supervisor, the head of the agency. But, in a lot of cases, that whistleblower is actually pursuing his own agenda, and sometimes has communications that you don't know with whom all this information is being communicated. When it's classified information, those disclosures can be criminal.


Judge Carl Nichols:  I could ask another question of the panelists on this topic, but I wanted to make sure that anyone who might have a question from the audience could ask one. Please, sir.


Charles Keckler:  Thanks. Charles Keckler. Just a quick question. So, I'm thinking back to my own sort of government service. Obviously not the president. But when I would get the mix of personal material as well as official material, of course, you try not to have any personal material enter into the government account, and so on. But, to the extent that that ever happened, I would immediately remove it into a personal folder. Because, of course, as a regular government official, my materials were FOIA-able immediately. And so, anybody could just ask what I'd done yesterday. And they could come and try to get it.


      So, I'm curious what people's thoughts are, with the distinction between personal and presidential records, to make it a -- as we do with classification, to classify something in a very, more deliberate way, as personal. It gets stamped "personal" immediately. And so, if you want to not make it personal, then that has to be depersonalized or declassified in that way. And that's a very sort of systematic way that it has to happen.


      And, related to that, if we have this system, as you brought up, where, if you're using personal accounts, and the government business happens on it, then you're supposed to copy it. You're supposed to bring it into your official records. But maybe that default is wrong. If you're regularly using some particular account for government business, unless you classify it as personal, and you know that you're using this system, everything's assumed to be no longer personal. And so I'm just curious what people -- this is sort of reform ideas, but I'm thinking about what people are thinking about it.  Thank you.


Judge Carl Nichols:  Steve, you want to take a crack at that first?


Alex Joel:  Sure. So, what the Presidential Records Act requires is that when any record is created, a decision is supposed to be made as to whether it's personal or a presidential record. And think of somebody who works in the White House complex, involved in assisting the president. And White House counsel should give clear directions to ensure that that happens in a formal way. But you can't police that every day, everywhere, every office.


      And so there will inevitably be circumstances where there's an intermingling, or some personal records are created that are not classified or stamped in the right way. And I don't think you can have the kind of flipping of the default that you describe, and assume that it's all presidential records, when, in fact, they are personal, and they don't relate to the president's business. The personal interest still is retained in those records. And what was the second question?


Judge Carl Nichols:  Well, they're related. Are you talking mostly about the president's personal, versus the president's presidential records? What if you're talking instead about, say, the deputy counsel to the president --


Steve Bradbury:  Yeah.


Judge Carl Nichols:  --who is, obviously, engaged in a lot of official business. But might be receiving emails from his or her kid at college or something like that. Is the same concern present?


Steve Bradbury:  Oh, for sure. Everybody has personal lives. And so, the concern is there, and it's respected. But even for the president, the president can keep a personal diary. And if the personal diary is not circulated or made reference to or used in policymaking or something, it's still personal, and it's the president's.


Judge Carl Nichols:  To refine the proposal a little bit, what about a universe in which, at least for certain senior officials at the White House, the records are deemed Presidential Records Act records, unless there's an affirmative decision to pull them out. They are presidential records unless a step is taken to effectively classify them as non.


Steve Bradbury:  Yeah, well, I think, even if that were followed, those materials which are clearly, on their face, personal, go over to the national archives. The archivist would identify those as personal. And I think those would probably be destroyed or returned to the people whose interest was there. I don't think you can, just by assumption, extinguish people's personal interest in their truly personal records.


      I do remember the second part of the question I just want to address, and that's the use of these other systems, personal devices, and whatnot. The statute is pretty clear that you're not supposed to do that, and it gives you limited circumstances. But everybody sort of thinks in their mind, "Oh, I can do that, as long as I copy my email account, my official account, or in 20 days, send a copy to it or something." But that's not the way the White House counsel approaches it. This is such an area for potential abuse and misuse.


      The White House counsel, typically, when they send a memo around to everybody in the White House complex, will be very stern and direct that you're not to use any personal devices, personal email accounts, personal apps, etc., for conducting business. And only in extreme emergency situations when you cannot get access to your account can you do it. But then you've got to immediately, blah, blah, blah. So, they really try to prohibit it because, otherwise, it just gets out of control really quickly. And the potential for abuse --and this is only going to grow, with new kinds of communication sources, as we saw in the case with Navarro.


Elise Bean:  If I could reinforce what Steve was saying, I worked for Congress for 30 years. I worked pretty much around the clock. I didn't even have a personal email. So, all my personal stuff was on the Senate server because I was just always working. That's just the way it was. Congress, in virtually every investigation I ever did, we would come across truly personal emails. And Congress really never had any interest in those. You're picking up your kid. Somebody's sick, whatever. So, I agree with you that it doesn't lose its personal character, no matter what, even if you send it to the archives, and that's the way it should be.


Judge Carl Nichols:  I know we're just about out of time, but Alex, I wanted to ask one question for you about, really, in the classified world, it's been a while since I worked in the executive branch and with classified information. But, at the time, at least, you had entire systems that are classified only, email systems that are only classified emails, servers that are only classified. And it always seemed to me that one benefit of those systems was you weren't ever going to be sending an unclassified or personal email over those systems. Is that still the case? Or is there a commingling risk, even within those, what we used to call "high side" servers or email systems?


Alex Joel:  Yeah, we still call them high side.  So, just to be clear, though, on the high side, you can send all kinds of unclassified stuff. It's supposed to be official business, but you are allowed incidental personal use of equipment. They don't really distinguish high side and low side, in that sense. But the high side would be much less likely. It should not have your personal communications, obviously, with your family, because you would use a low side system. And many people have low side access because they have to. They have to do internet research.


      The other thing I'll just say in response to the question about marking is that that's the same issue that comes up with classified information. And the marking is just that. It's a marking. And it's going to eventually have to be reviewed by somebody. So, even if you mark something "personal" it's still subject to review. And somebody could say, "Well, this was not marked correctly." Like, you can't just mark something and then forget it. It's going to be reviewed by somebody, at some point.



Judge Carl Nichols:  Thank you. Thank you for the questions. And I want to thank the panelists for this conversation today. I really appreciate the insights, especially given your varied backgrounds. So, let's give a round of applause to the three of them. Thank you all. 

12:30 p.m. - 2:00 p.m.
Luncheon Panel: Fireside Chat on the State of Antitrust


Topics: Corporations, Securities & Antitrust
State Room
The Mayflower Hotel
1127 Connecticut Ave NW
Washington, DC 20036


Event Video

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Antitrust law has made recent headlines for a host of reasons, ranging from Chairwoman Lina Kahn’s approach to running the Federal Trade Commission to the Department of Justice’s Antitrust Division’s high-profile cases against tech giants such as Google. In this lunch session, former FTC Chairman Jon Leibowitz, a Democrat, will join former FTC Commissioner Noah Joshua Phillips, a Republican, and moderator Judge Neomi Rao to discuss recent developments in the antitrust world and debate what might come next, including for the future of independent executive branch agencies in general.


Event Transcript


Nathan Kaczmarek:  Good afternoon, everyone. For our lunch plenary session, we have a great fireside chat focused on antitrust. From the FTC to the DOJ, we have much to talk about. And we are delighted to have a former FTC chair and a former FTC commissioner here to share their perspectives.


      Our thanks to our Corporation, Securities, and Antitrust Executive Committee and its co-chair, Svetlana Gans, for helping put this session together. Svetlana wanted to be here to introduce this session but had a last-minute conflict.


      And now, let me introduce our moderator. She has been a regular at this conference since the beginning, so she really doesn’t need an introduction for this audience. But Judge Neomi Rao has had a very impressive career with service in all three branches of government. She was appointed to the United States Court of Appeals for the District of Columbia Circuit in 2019. Prior to the bench, she served as the administrator of OIRA. Before OIRA, she taught for 11 years at the Antonin Scalia Law School. In 2014, she founded the Center for the Study of the Administrative State. From 2005 to 2006, she served as special assistant and associate White House counsel to President George W. Bush. Judge Rao clerked for Judge J. Harvey Wilkinson on the U.S. Court of Appeals for the Fourth Circuit and Justice Clarence Thomas in the Supreme Court. She is a graduate of Yale, and her law degree is from the University of Chicago Law School.


I have to confess that we recently did a prep call with this group for this session. And I don't want to oversell it, but between the contrasting views of these former commissioners and Judge Rao's commanding understanding of the law, I think we are in for a real treat. So please join me in welcoming Judge Rao and our panel.


Hon. Neomi Rao:  Nate, thanks so much for that kind introduction. It's really a pleasure to be back here at this conference. Hard to believe it's the 11th one. I think I have been at every single one of these conferences, and it is great to be back. And also, with events in recent years, there's a lot more of the executive branch to review, so it gives us a lot of things to talk about.


And one of the things that has perhaps most been in the news is the Federal Trade Commission. There's been the recent noisy exit of Commissioner Wilson. There's been discussion about the FTC as rulemaking authorities. There is a lot of pending litigation, which, of course, I will not speak to, but there's a lot going on with this particular agency, and I can think of two no better people to talk about this issue with.


Their full bios are in the material, so I'll just give them a -- just tell you a little bit about who we have. We have Jon Leibowitz. He was a commissioner at the FTC from 2004 to 2009. He was then elevated to be the Chairman of the FTC where he served until 2013, and he also served as a partner at Davis Polk for many years.


And we have Noah Phillips, who was also a commissioner of the FTC. He served from 2018 to 2022. Prior to that, he was Chief Counsel to Senator Cornyn, and he is currently a partner at Cravath. So I think we have a lot of things to talk about, so we can jump right in. Today, we're at the Executive Branch Review Conference, and so my first question—I hope this is not controversial—is do we all agree that the FTC is a part of the executive branch?




Hon. Noah Phillips:  I'm happy to take the first answer, but let me just begin by thanking Nate and the whole team at The Federalist Society for the kind invitation to be here. It's such an honor to be here with all of you, and in particular with Jon and Judge Rao. I'm privileged to know both of them, and they're tremendous public servants and human beings.

The answer is, yes, it's part of the executive branch, but I should add that I have sitting on the mantel above my desk a portrait of former Commissioner Humphrey.


Hon. Jon Leibowitz:  Can I interject for one second, if I may?


Hon. Noah Phillips:  In the middle of my Humphrey story?


Hon. Jon Leibowitz:  In a complimentary way --


Hon. Noah Phillips:  No, you cannot.


Hon. Jon Leibowitz:  -- because I don't think of ourselves in contrast; I think of ourselves as complements. And when I was the chair of the FTC, I did not have a picture of President Obama in my office, although many of my fellow independent agencies within the executive branch chairs did. I had a picture of William Humphrey because I also believed in the independence of independent agency. But I didn't give you that -- I would have given you one if you had asked me, but you came to it yourself.


Hon. Noah Phillips:  I don't think it's right to pin me with confusion, Jon, because I didn't get to finish the sentence. The reason I have the portrait of William Humphrey is because I never quite understood what -- Sorry; that's William Humphrey of Humphrey's Executor. The firing protection that FTC commissioners enjoy is cognizable under the Constitution because the agency is quasi-judicial and quasi-legislative.


I still don't know what that means. I see little echoes of it in the statute, but I don't think there's anything wrong with what Justice Kagan said when she was describing the FTC in Seila Law and said, "Well, those look like executive functions." I think that's absolutely right.


Hon. Jon Leibowitz:  So now I do see some daylight between us.


Hon. Neomi Rao:  Jon, you said the FTC is an executive agency, but it's an independent agency within the executive branch. What does that mean?


Hon. Jon Leibowitz:  Well, I think what it means is, at least when I was at the agency and I was at the agency as a non-chair commissioner and a commissioner, you tried very hard to keep politics away from your decision making. And I think that's a wonderful -- At least when a commission is functioning properly, an independent commission, I think it's a wonderful virtue of an independent commission.


And I'll give you one example, if I can. So one of the issues that every commissioner, Democrat and Republican, agreed on was stopping a kind of behavior by brand pharmaceutical companies and generic pharmaceutical companies. Brand pharmaceutical companies would essentially pay the generics to stay out of the market for a period of time, and we called it pay-for-delay pharmaceutical payments.

And yet, the brands and the generics were -- And we finally won a case in the Supreme Court stopping the practice, or at least under a rule of reason approach, stopping the practice 5-3. That was an Actavis. But there is no doubt that the generics were very close to the Democrats. The brands were very close to Republicans and also to Democratic senators from various states around, let's say, New Jersey, Pennsylvania, Delaware where they were headquartered.


And yet, I think all of the commissioners -- And it was win-win for these companies and lose-lose for consumers because brands have big, high margins, generics have tiny margins, and the brand could pay the generic more not to compete, to sit it out than to compete. And yet, every commissioner, after thinking about this issue—because not all of us came to the agency with any knowledge about this, or much knowledge about it—came to the conclusion that this was worth a fight.


We lost in a couple of appeals courts, and we designed a circuit split. We tried to create a circuit split to get a case to the Supreme Court. We ultimately did, and we won, and that saved consumers, all of us, billions and billions of dollars a year. Now, I'm not saying it wouldn't have happened if we were controlled by the executive branch, but I think it would have been -- it could have been much more complicated.


Hon. Neomi Rao:  Do you have any thoughts about that? Do you think that -- What does it mean to you to be part of an independent agency?


Hon. Noah Phillips:  So what I hear in the colloquy already is a little bit of two different concepts. One is the concept of independence and the other is the concept of not being political. And to some extent, the latter, to me, is fairly faithful to the progressive design of the agency by President Wilson. There was a belief in expertise, that you could have a group of people who were really deep in the weeds of business conduct, and they would be given special authority to study business conduct, and they would fashion policy on their own, but critically, they would advise the Congress, which they did. They would even advise the courts. And there's provision in the FTC act that permits that, although I don't know that it's ever been used.


So there's a notion of expertise, as opposed to politics. I don't know how coherent that notion is, right? At the end of the day, even if we're dealing in things that a lot of people would agree as a matter of public policy ought to be technocratic, there are inevitable political judgments that must be made, right? There are tradeoffs. We saw some of this in the discourse, I feel like, around COVID.


Yes, there was a risk, but you were going to shut down education, and that's a real thing we need to weigh. And maybe that's not a doctor's opinion; that's a social judgment someone is making. But the separate concept is the one of independence. And there, I think that's a different idea. There is this firing protection, at least as of today, April 25, wherever we are, 2023. It still exists. And so the FTC has some theoretical, at least, room to move away from what the White House directs, because it's the White House. The presidency is the institution to which that independence is sort of directed.

But I think as a practical matter, what we see is a lot of interplay between the agency and the executive. We also see the agency having a lot of interplay over time with Congress. Now, Congress is clearly not executive, but it certainly can have an impact on the independence of an agency. And so I think it's important for us to decouple those concepts and then take each of them as they are and analyze them.


Hon. Neomi Rao:  So I want to ask you both about FTC rulemaking, but first, I have a question. How do you feel about OIRA review of FTC rules? I'm just asking for a friend.


Hon. Jon Leibowitz:  So I have no -- If a legislative scheme were to send rulemakings to OIRA, I don't think I would have any objection to it.


Hon. Neomi Rao:  It would have to be by statute, not by executive order, like the rest of it.


Hon. Jon Leibowitz:  Yeah. So it would have to be by statute. It would have to be by statute, and the statute doesn't direct us to do that. Now, when we did rulemakings, we always looked at costs and benefits. I think under Mag Moss, you have to do a cost-benefit analysis when you do a Mag Moss rule, and the FTC has multiple Mag Moss rulings that are ongoing now. That's the form of rulemaking at the FTC, for those who don't know it. It's different than APA rulemaking and a much more medieval form of rulemaking; it takes longer to do rules, usually five, six years.


So I would not be -- Just to come back to your question, I would not be averse to it. I know there's always a tension between -- or I gather there is sometimes a tension between OIRA and independent agencies. Independent agencies act like an independent agency, or should, but I think if there was a statutory designation, that would be very workable.


Hon. Noah Phillips:  Yeah, I guess where I fundamentally start -- Let's leave aside the institutional arrangement and the law. As a matter of policy, is it a good idea to have another set of eyes on proposed rules, and in particular to help answer the question, what are the potential costs of this rule? Inevitably, if the agency is proposing the rule, they support the policy, and so having a set of eyes that may not be married to pursuing whatever policy that is take a look and assess the cost, I think, is important.


Even in the context of enforcement action, whether or not you really buy the distinction between the political and the expert, I do think it's very important for the agency always to get things right and to look very carefully and consider very carefully the arguments being made and the facts and circumstances. That applies a fortiori in the context of rulemaking because the impact of the thing is so much greater.


And when I was a commissioner, one of the things I got very -- Well, one of the things that led me to dissent, I suppose most prominently, in one rulemaking matter was I didn't feel like the agency had done sufficient homework in scoping the rule and thinking about the implications. And so having another set of eyes, to me, would be helpful.


Hon. Neomi Rao:  Is that a yes?


Hon. Noah Phillips:  That's a yes.


Hon. Jon Leibowitz:  But can I just add one thing? The design of any commission—and not only commissions, but particularly commissions—is such that you have political appointees on top of bureaucrats. And those political appointees in an independent agency are from both parties, or at least only three can be from the president's party. And so you should have some degree of creative tension, I think, in any decision that an independent agency makes between the career staff and the political appointees on top.


Hon. Neomi Rao:  So what about rulemaking? There's been a lot of talk recently about rulemaking efforts in the current FTC, and I'm wondering if the two of you would be interested to share your thoughts about that to the extent to which maybe this rulemaking is a break from previous rulemakings and the legitimacy or authority for current rulemaking efforts.


Hon. Noah Phillips:  So Judge Rao mentioned earlier that the job that I had before I was a Federal Trade Commissioner was as a counsel to Senator Cornyn on the Judiciary Committee. And so that was a seven-year period, and I spent a lot of time thinking about a lot of constitutional issues, but I think perhaps above them all the separation of powers.


So I vividly recall the first time someone presented me the concept -- Oh, sorry, let me back up. There was a constant back and forth on the Federal Trade Commission about what the phrase "unfair methods of competition," which Section 5 of the statute allows the agency to enjoin, what that phrase means, and critically, whether and to what extent it exceeds the scope of the Sherman Act. Some people also say the Clayton Act; that's another discussion.


So there's already a debate about what do the words mean, what kind of conduct the agency can condemn on a case-by-case basis. The moment I saw the concept that you could make a rule, a regulation, about an unfair method of competition, I immediately came back to those separation of powers issues with which I'd familiarized myself on the Judiciary Committee because it struck me that, if people couldn't agree on what it meant, we had a delegation problem.


And lo, you go back to Schechter Poultry, and what is it that the NIRA, the National Industrial Recovery Act, gives the president the power to make rules about? He gets the power to do codes of fair competition, which sounds a lot -- It's the linguistic obverse of unfair methods of competition, so it strikes me as a constitutional problem. But the other thing is this: To me, the case upon which this is all based, a Skelly Wright decision from your court, from the U.S. Court of Appeals for the D.C. Circuit --


Hon. Neomi Rao:  I never sat with Skelly Wright.




Hon. Noah Phillips:  National Petroleum Refiners just doesn't hold up in terms of the way that we think about statutes and the way we think about rulemaking power today as a general matter. And I think in light of the major questions doctrine, again, a fortiori, it really just doesn't look like the agency has the power.


Hon. Jon Leibowitz:  Let me just say that National Petroleum Refiners, though it is written by Skelly Wright, and though I think that, in that decision—which is actually fairly brief, his opinion—he does say something along the lines of, "Well, it's not clear to me that the FTC has this rulemaking authority, but it clearly effectuates what we all believe to be the spirit of the FTC Act. And so, therefore, we are upholding it," but it was a unanimous decision, it is precedent, right? It is the closest thing we have to precedent.


And, by the way, what they were fighting about then, which was a big fight and now is taken for granted, was the octane rule. It's the rule that requires gasoline stations to post the octane of the gasoline that we're all filling up with. So I think it will -- I don't want anyone to prejudge Judge Rao here. And thank you; I'm honored to be on this panel with you and, of course, with my friend Noah.


But, look, I do think that the FTC, because there is this precedent and because, particularly for low-income workers, there is a very serious problem with non-competes -- Maybe they're not enforceable, but if you're making $13 an hour at McDonald's and you want to go earn $15 an hour at Burger King, you may not know that. And so I think they get a chance to take a shot down the field at something that is arguably—and I believe is—within their bailiwick, and that would be effectuating their mission.


Hon. Noah Phillips:  I guess the one thing I'd add to what I said before: The law on non-compete agreements is very old. It's well older than the Republic. This goes back to old English law and the relationship between artisans and their apprentices, and it's always been a rule of reason. So forget the legal authority, forget the constitutional considerations, just brass tacks antitrust law. Not just in the context of low-wage workers, all workers, and workers broadly defined, and what non-compete clauses are broadly defined, they've drafted a per se rule for conduct that is very clearly not governed by that.


Hon. Jon Leibowitz:  In the draft rule, right, not in the final rule? So you get to -- They get to modify whatever they do, and then it's subject to the courts. And I'll just say this: Obviously, you're right about the history, Noah, but it is also true that non-competes have become much more -- have become much broader, have become much more abused.


And I'll just give you one example that involves my family. I have a daughter; she works for a 12-person interior design company in Brooklyn. And when she was asked to sign her most recent contract, it had a 10-year non-compete. She's 25 years old. It had a 10-year non-compete with no geographic boundaries whatsoever. Now, not everybody gets to call up someone who works on the Federal Trade Commission and say, "Dad, is this enforceable?" So I hear you, and reasonable people can disagree. And we'll see where they come out and we'll see what happens.


Hon. Noah Phillips:  So I'll end on a point of agreement, which is I agree with you that we have, apparently, far too many non-compete agreements in this country. I agree that many of them appear to be unenforceable and many others appear also to be unjustified. So I think, as a matter of public policy, that's a discussion we ought to have, and Congress is having that discussion. States are very actively having this discussion. The Notice of Proposed Rulemaking goes through all of the recent legislation. So I'm not unsympathetic on the policy, but I do think that doesn't answer the question of the legal authority.


Hon. Jon Leibowitz:  And I don't disagree that sometimes you can't bring an enforcement action when you're at the FTC or you can't write a rule. And we did a fair amount of rulemaking. We didn't consider ourselves a rulemaking agency; we considered ourselves more of an enforcement of policy agency because, actually, I believe sometimes it's appropriate for the legislature to do it and it's not appropriate for an agency, independent or otherwise, to draft a rule. So I agree on that point as well. I think we're in sympathy or complementary or something.


Hon. Neomi Rao:  What about Noah's concerns about the non-delegation principle, or maybe more mildly, the major questions doctrine?


Hon. Jon Leibowitz:  Well, there's a major questions doctrine. It's been articulated by the Supreme Court. It's going to be something that the FTC is going to have to confront if it goes forward with its rule. And we have a system where it's going to be challenged in the courts, and the courts will make the ultimate decision on that. So I think it's a -- Now, some would say that the major questions doctrine, non-delegation is probably a recently emerging doctrine—I'm no expert in this area—and really hadn't been front and center in jurisprudence until fairly recently.


But having said that, they have to confront it. They can promulgate a rule. And again, sometimes you promulgate a rule and it gets thrown out. And that's the way our system works, and we should all be -- We should all be glad that rules that don't meet judicial standards, as a general matter, aren't upheld.


Hon. Neomi Rao:  Okay. Maybe we can talk a little bit about the structure of the FTC right now. So one Commissioner Christine Wilson had a noisy exit where she resigned her post at the Commission and raised some pretty serious allegations against the way the Commission is currently operating. The current makeup of the Commission is three Democratic commissioners. There are no minority Republican commissioners at present. So I'm wondering, what do you think about the noisy exit, some of the charges that were leveled there, and also, how does it affect the legitimacy of the Commission to have vacancies of this sort?


Hon. Jon Leibowitz:  Do you want me to --


Hon. Noah Phillips:  Sure.


Hon. Jon Leibowitz:  So it's unfortunate. I know Christine Wilson. I like her a lot. I know Lina Khan. I have enormous respect for her. It's bad for the stature of the agency when you have a -- let's just call it a fiery exit like that on the editorial page of the Wall Street Journal.


Hon. Neomi Rao:  I just said it was noisy, not firing.


Hon. Jon Leibowitz:  Excuse me. I know. I characterized it as firing.


Hon. Noah Phillips:  In fact, she knocked over the pitcher of water.


Hon. Neomi Rao:  Right.


Hon. Jon Leibowitz:  And my view—and it may be antiquated, or quaint—was that the Commission -- This is another reason why I really liked the independent agency structure is because the Commission functions better when everyone is sitting around and trying to solve a problem and you try to come to a consensus.


Now, this was probably not your experience on your commission, but it was certainly the experience on the commissions I served on. And so I hope they add new commissioners sooner rather than later. And I'll just say one other points on this. So take, for example, a lot of your antitrust lawyers, that they're promulgating a new merger guidelines.


And one of the things we tried to do when we did the last round of merger guidelines in 2009 and 2010, was we tried to make sure that we had a consensus. We had a consensus on the commissioners. We had some degree of consensus around stakeholder interest, stakeholders.


But if you end up writing -- And we did that for a very -- And we thought we pushed very hard in many ways to make certain types of mergers involving nascent competitors and other things like direct evidence more a part of merger reviews, but we wanted to make sure we had a consensus because the most important thing about the merger guidelines was that they get adopted by the court, and they very quickly got adopted by the courts.


So I think, if you're a three-person Democratic FTC and you are proposing guidance on mergers, you want to be very careful that you still try to strive for consensus because there's not really much value in promulgating merger guidelines that won't be adopted by the courts.


  Hon. Noah Phillips:  So a lot baked in there. I guess I'd start with this. When I was in the commission majority, we had some very loud dissents, and those dissents drew a lot of attention, negative, on the agency. And if you're the object of those dissents, on some level, that's a hard thing to deal with, and if you're a chair trying to run an agency, that's even harder. It's not easy to herd cats. It's especially hard to herd Senate-confirmed cats. It's true.


Hon. Neomi Rao:  Independent cats.


Hon. Noah Phillips:  Independent, un-fireable, unaccountable, all the things, cats. What Nate did not mention is there's a musical number at the end, and so that's where we're going here with --


Hon. Neomi Rao:  Are you going to dance?


Hon. Noah Phillips:  I only sing. No dancing.


Hon. Jon Leibowitz:  Costumes are right back over here.


Hon. Noah Phillips:  So then, when I found myself in the commission minority, I saw some things I didn't like and would call those out. And it's very clear from the paper record for the public the number of things that were concerning Commissioner Wilson increased over time, probably almost certainly culminating in her dissent in the meta within a recusal matter.


There is, however, a benefit, hard as it is to run an agency, I think, to the public and also—I don't want to overstate this—but to the courts who are sometimes looking at matters as they come up. And I was once a dissenting commissioner on a matter that ended up in court against a Republican chair.


There is a benefit to the ability of someone noisily to exit, and you can't rely—and people shouldn't have to rely—on career civil servants to try to make the kind of noise and waves that may not be appropriate. One of the benefits that the commission structure gets you is where things are wrong. And yeah, it's subject to which people you have. There is at least an opportunity for that to get out, and I think that can invite a positive sort of scrutiny. Again, I was the object of some of this. It wasn't always easy, but I think, kind of glad it's there.


Hon. Neomi Rao:  But dissenting is different from exiting. Once you've exited, you can no longer dissent.


Hon. Noah Phillips:  Correct.


Hon. Neomi Rao:  So what do you think about the -- Should you stay and dissent? Should you --


Hon. Noah Phillips:  This is obviously something I struggle with. The decision whether to stay in a job and leave depends on a lot of different things. Some of those are personal things. Some of those are professional things. I would say, personally, I very much enjoyed the occasional florid dissent. I was less interested in rat-a-tat, lots of little things because you want to produce good work product. And, to my mind, you want to save the really loud dissents for the things that matter most.


Hon. Jon Leibowitz:  I'll say this: The dissents should generally be because you disagree with outcomes and you want to put that on the record. And I dissented plenty of times. And I'm not saying in -- And I think, in the most recent departure of Commissioner Wilson, it was both a substantive disagreement and it was also "I'm very unhappy with the way the commission is being run," right?


So I think, to your question, you can't dissent when you're gone. But of course, people get to decide when they're leaving. And also, there are different ways to dissent and be heard.


Hon. Neomi Rao:  Just what percentage of FTC decisions have a dissent? Do you have a sense of that, what percentage draw dissent?


Hon. Noah Phillips:  My guess is it's fairly low.


Hon. Neomi Rao:  Low. Yeah.


Hon. Noah Phillips:  Because most of the work on which the commission is voting, on average over time, is enforcement matters, and most of those enforcement matters are probably not that controversial. My guess is, if you did the statistical work, you would see a trend toward more overtime because I think the commission is less interested in what used to be garden-variety work and more interested in edge stuff, and edge tends to raise controversy. There's also a lot more rulemaking and stuff like that, but my guess is the numbers are still pretty weighted in favor.


Hon. Jon Leibowitz:  I think that's right. And there also is a practice, going back to when I was chair and before, that sometimes there would be a -- there would be a -- there would be a close matter where reasonable people could disagree, and there would be some internal discussion and you would find yourself in the minority. And then you would just vote for -- you would vote for the consensus decision because you want to just show a consensus on a particular matter. So I don't think that happens anymore, does it?


Hon. Noah Phillips:  No, I think it still happens, but probably less.


Hon. Neomi Rao:  Let me ask you another structural question. So one of the things I learned from my government service talking to many independent agency heads or chairmen is that, in practice, a lot of independent agencies can operate like a single-headed executive agency because the chair controls the balance of power. In most independent agencies, they have significant control over staffing and agenda setting and things like this. And so I'm wondering, how much does the bipartisanship of these multi-member commissions really -- Does it matter? Does it make a difference where the chair controls the balance of power and the agenda, in most cases?


Hon. Noah Phillips:  So I think where I would start in answering that question is, it really depends a lot on the chair and the people. This is as much a personality-driven thing and the views of the individuals-driven thing because there's no guarantee that the chair controls the members of their party. That's a decision that those commissioners are going to make whether to follow the chair. Jon, you had a lot of fun.


Hon. Jon Leibowitz:  So I would say, look, the chair controls most of the agenda, the vast majority of the agenda, but I think, from my perspective, at least in the commissions I served in, we were always talking about ideas. And when I became chair, I went and talked to all my colleagues, all of whom I liked and trusted, and we worked through a consensus, proactive agenda.


One thing was on stopping reverse payments, pay-for-delay pharmaceutical settlements. Another issue was doing more on in the privacy area. We had a few others. And then we had vigorous disagreements sometimes on matters. And by the way, I'm thinking about this. No one from OIRA ever invited me in to go talk to them, or no one ever wanted to come over. Maybe Cass Sunstein came over once.


Hon. Neomi Rao:  I would have invited you over.


Hon. Jon Leibowitz:  -- and gave a talk. What?


Hon. Neomi Rao:  I invited them all over.


Hon. Jon Leibowitz:  What? I'm sorry. What?


Hon. Neomi Rao:  I said I invited them all over.


Hon. Jon Leibowitz:  Well, you were a really good head of OIRA, and that's a really smart thing to do. Anyway, I think it does depend a lot on the chair, although I do think the chair often speaks for the commission certainly on consensus issues, and the chair sort of runs the agency on a day-to-day basis.


Hon. Noah Phillips:  Yeah.


Hon. Neomi Rao:  Did you often have your same-party commissioners breaking ranks with what you wanted?


Hon. Jon Leibowitz:  Well, that's an interesting question. So when I first became -- So when I was on the commission for my first four and a half years, I was the only Democrat. There was a Democrat, Independent, and either two or three Republicans. When I became chair, I was the only Democrat with an Independent and two Republicans.


When we had a full commission, we had a Democrat who was more conservative on antitrust issues certainly than I was, and then the other Democratic commissioner, and a Republican who was more aggressive on antitrust issues than one of the Democrats. So the answer is, from time to time, it happened.


Hon. Neomi Rao:  So what about transparency with a multi-member agency? There have been various allegations, part in the noisy exit of Commissioner Wilson, about lack of transparency. I'm wondering, is transparency different for an independent agency like the FTC as opposed to an executive branch agency? I know there are various laws, like sunshine laws, that apply to multi-member commissions, but, transparency is something that we often talk about, is really important in the regulatory space.


Hon. Noah Phillips:  So I haven't spent really any time in that part of the executive branch that understands itself properly as the executive branch, so I can't speak to the comparison. What I will say is this: When you have a multi-member Commission, each of the members of that commission, in theory, are superordinate to the whole staff. And so they can get, in theory, information about what is going on.


And there ends up being kind of a back and forth, where, especially if a member is concerned that something might be amiss or they're interested in a matter that they're going to have a problem with when it comes up to the commission, there is an exercise between the staff and the commissioner and the chair's office about, you know, what kind of information is delivered when.


And so it's not a transparency the vis-a-vis the public or the press. Congress is a little bit differently situated, but even within the Commission, there are real transparency issues that pop up.


Hon. Jon Leibowitz:  We had fewer of those issues, I would say, internal commission transparency issues, because Bill Kovacic, who was my immediate predecessor, wanted to make sure that every commissioner had a chance to see whatever was going on. And I thought that was a really good approach, and so we continued it. And not every commissioner -- or not every chair has done that over history, going back and looking.


Hon. Noah Phillips:  Yes, so this changed pretty early. After Chair Khan came on, one of the first things that the new majority did was they adopted a bunch of resolutions that essentially divested the commission of power to initiate antitrust investigations. It used to be the commission would vote to initiate investigations, and so everyone could have a chance to see what was going on. And in the name of efficiency, they took that power away from the commission, and that was a reduction in transparency. And you saw Commissioner Wilson and myself sort of -- Yeah, yeah, yeah.


Hon. Jon Leibowitz:  Although, as a practical matter, I don't know that it made much of a difference, right? We never had a problem when I was at the commission, as a non-chair commissioner or commissioner, getting processed to move forward on a matter, right? And I don't think anyone really resisted the process.


Hon. Noah Phillips:  No, no. I'd never seen an example of where process was a real issue. It was an opportunity to ask questions and say, "Is this really going to be a case? Are we wasting our time?" Whatever.


Hon. Neomi Rao:  Okay. I have a few more questions, but then we're going to open up to the audience. So there's a microphone if any of you have questions for our panel. So some of the things we were chatting about a little bit before we came on stage is what happens if Humphrey's Executor is overruled? I know you both have Humphrey's picture in your office. Maybe I should get one, too.




After Seila Law and Collins, what do you think may happen with Humphrey's? And if Humphrey's were to be overruled by the Supreme Court, what would the consequences of that be for the FTC?


Hon. Noah Phillips:  I don't know that the consequences are that huge, right? Seila has obviously impacted the course of the CFPB, but there are plenty of agencies in the executive branch that don't have formal independence in the sense that the FTC and some other agencies similarly located enjoy, but norms and pressure effectively protect agency heads from firing unless things are really bad.


You know, you think of the FBI or the Department of Justice. The president has complete authority to fire the heads of those agencies, but there's a cost, right? And it doesn't mean the president isn't always willing to bear, or isn't often willing to bear, the costs, but there is a cost. And I just don't know if you invalidated that part of the statute, would it really change that much? My guess is actually no. It might be right.


Hon. Neomi Rao:  It may not change in terms of actual firings, but what about presidential control?


Hon. Jon Leibowitz:  Well, it's a very interesting question. I agree partly with you. I concur in part and I dissent in part. That was a feeble attempt at a joke, but if you're not going to laugh, that's my last joke of the day.


Hon. Noah Phillips:  You got some laughs, Jon.


Hon. Jon Leibowitz:  So, look, I would say that if Humphrey's Executor -- Well, first of all, I should say, and I want to say, that if you go back and you read Humphrey's Executor, a unanimous opinion written by, I think, Justice Sutherland, he points out that the FTC is not exactly like other branches of the -- other parts of the executive branch, right? The FTC sits as a court, for example, on matters before it in its administrative proceedings.


And so I guess I think that, in normal times, if Humphrey's Executor is overturned, it won't be a -- it won't be a disaster and it may not even be a sea change, but I think it does change, to some extent, the character of an independent agency. And that's a character that, you've probably heard me say, I really like because I do think that independence allows you to get out from under political decision making. Not that it's always political decision making, the executive branch or Congress, but it allows you to do the thing you think is right regardless of what the politicians who appointed you or nominated you believe.


And I think that's generally a good thing. And I do believe -- I'll just make two more points quickly. I do believe that, in the back of some commissioners' minds, it would not be unreasonable to think, "Well, if the president wants me to do this and I do that, is it going to -- is it going to cost me in some way?" And by having a truly independent agency, I think that is a less likely outcome. And I guess one other point -- Well, let me stop there.


Hon. Neomi Rao:  So President Biden issued an executive order on antitrust in which he used the word "encourage" for various policies taken by the FTC. He said, "We encourage the FTC to do various things, take various policy positions." So what does that look like? So if it was, say, the Agriculture Department, the president could just issue an order saying, "Agriculture department shall pursue this policy." So is there a difference between encouraging and directing?


Hon. Noah Phillips:  So I think there is, and I think that's why we have these orders. And I vaguely recall from the July 2021 executive order for the rulemakings, there's a different verb used for the non-compete, or "shall enthusiastically with all deliberate speed consider." Yeah, that. But I think it comes back to the flip of the question, Judge, that you asked before, which is no, but at the end of the day, you can't be fired. Even if you enjoy independence under the statute, saying no to the President of the United States, whatever your statutory scheme, is not a little thing.


Hon. Neomi Rao:  But does the president call the chairman of the FTC and suggest policies, encourage, consider policies? I don't know if you want to speak to that, but you were the chairman.


Hon. Jon Leibowitz:  I had to stop taking President Obama's calls after a while because they were so incessant on what we should do.


Hon. Noah Phillips:  He just wanted a rematch on basketball, Jon. That's what he wanted.


Hon. Jon Leibowitz:  No. I certainly had a sense of what the administration was thinking because I paid attention to what they were thinking and I had friends who worked in the administration, in the executive branch of the executive branch, but -- No, I didn't mean that disparagingly.  I think the only handful of times I can think about a president—and when I was there, it was President Bush and President Obama—discussing policy issues, I think was when we maybe went over and tried to encourage them to put something on, say, pharmaceutical competition into their budget.


And there was a large breach at the VA in maybe 2006 or '07, and the president wanted us to do an investigation, which wasn't quite within our jurisdiction, and called up the chair. And the chair asked us what we thought, and we all thought it was a good idea, so we did it. But it's a little bit different now.


I think they were careful in that executive order not to direct because I think they recognize the distance between different types of agencies not to direct the commission to do it, but they coordinate much more now. I haven't quite gotten my arms around that. I don't think it's necessarily a bad thing, but I think it's certainly a new development.


Hon. Neomi Rao:  Okay. Why don't we take a question from the audience?


Questioner 1:  Thank you so much, but the gentleman over there was first, so if his president is currently in office, he gets to go.


Devin Watkins:  Hi, my name is Devin Watkins. I question whether the FTC's removal protections are still good precedent. In Seila Law, the Supreme Court said, “Instead of making reports or recommendations to Congress as the 1935 FTC did, the director possesses the authority to promulgate binding rules.” And that was one of the reasons they gave for eliminating the protection for removal.


Given that we all agreed today that the FTC of today has that binding rulemaking authority that didn't exist in 1935, why isn't, under current precedent, that protection unlawful?


Hon. Noah Phillips:  I think this is an argument being raised today in front of the commission, in front of federal courts. I think my allusion earlier to what Justice Kagan writes in Seila Law is about that issue, precisely. But the state of play right now, at least as a matter of Supreme Court precedent, is you've got Free Enterprise Fund and you've got Seila Law and you've got Collins.  And each time, the Court has walked up to freeze the executor and not yet upset the precedent. So I think it's a fair question to raise, and we're going to see what happens.


Hon. Jon Leibowitz:  Yeah, I agree absolutely with you. And I think Justice Roberts, who I believe wrote the Seila Law opinion, he's very careful about both distinguishing the FTC from the CFPB as a multi-member commission and then also says things like, "But is it really the commission that it was in 1935?" So I think we're all going to be watching to see where the court comes out.


And, you know, Axon was the amuse bouche for a revisiting of Humphrey's Executor, and my guess is that's going to happen in the next several terms. I'd be surprised if it doesn't, so we'll have to see.


Questioner 1:  To ask for an elaboration from a couple of small things from the beginning of the discussion, do you think it's possible, in a bipartisan way, putting cynicism aside, to come up with a clear, cohesive definition of where politics ends and where policy or scientific government or scientific decision making—which is sort of the way that these agencies, I think, were designed to work in the earlier part of the 20th century—is that really possible today, and how would you two really define that, putting party affiliation aside?


And the second point is, to what extent do you think the situation is frozen in time with a concept of government from the 1910s, '20s, and '30s, which may be developed with all good intentions? How do you think American society will overhaul these institutions which have been with us for almost 100 years in some cases and were unprecedented when they started out?


When will the next revolution in government happen, and is it realistic to expect that from the courts, or would it require Congress to do something, if that's possible, in a major way to change the way the system works? How would you see that happening if the current system really is outdated, as many people believe it is, or was founded in assumptions about how government would work that haven't played out?


Hon. Noah Phillips:  So a lot there; two different questions. Let me try to tackle the first one and hope I remember the second one when I'm done. What I would say is this: At least in my mind, there are probably some issues where you could build consensus around the notion that the thing being determined really is a matter of expertise.


I don't know why my mind goes to this, but like drug approval or -- I don't know. Okay. Bad example, right? Richard Pierce, keeping us honest every day. How to allocate spectrum, or maybe that's even a bad example, how the particulars of spectrum --


Hon. Neomi Rao:  Okay. Now find one example.


Hon. Noah Phillips:  I'm trying. I like to think there are some areas, but it doesn't take a lot of time or even a lot of my talking to get you into a position where people very clearly can spot where value judgments are creeping in. I don't mean that pejoratively. We have to make value judgments in government, writ large. Congress makes them. Prosecutors make them. Everybody makes them.


And so finding where that line really is, I think, inevitably going to be hard. I don't know that it lays along partisan lines, although maybe folks on the right tend to see more things as laden with value judgment. Folks on the left tend to see more things as matters of expertise like, I don't know, where the minimum wage ought to be or whatever your issue, but I think it's a very, very hard line to draw. So I think -- Sorry.


Hon. Jon Leibowitz:  No, no; finish.


Hon. Noah Phillips:  I think the next question was about when's the next revolution in government and the agencies not operating as maybe people envision them.  That's way above my paygrade, but what I will say is this: The tension I see isn't between how the independent agencies were conceived and how they're operating. The tension, to my mind, is they were conceived with a view in particular of the separation of powers and the Constitution at a time when that view of the separation of powers and the Constitution isn't where I see things moving.


And I see things moving in a return to where they originally were. It's not a response to how the agencies are behaving; it's more a response to the structuring of agencies. And this, by the way, leads me to an important point. I do hear a lot of people say things like, "Oh, the commission is overreaching, and so the constitutional response is going to be this."


To my mind, the constitutional response shouldn't be to a policy disagreement or the agency overreaching. It's is the structure inherently problematic from a constitutional perspective? To my mind, that's the big tension that all of these agencies are facing.


Hon. Jon Leibowitz:  Yeah, I agree with that, but I also think it is true that, when you take a different job, a job at an independent agency—whether it's the SEC, the FCC, the FTC—you have different functions, and you're supposed to behave that way. So Noah and I worked on the Judiciary Committee where we were involved in policy and politics, right? And we went over to the FTC and we tried to put politics aside.


I'm not saying we were like Thomas Becket, but we tried to distance ourselves from that because we had different obligations. And so we live in a 24/7 news cycle. We have people who, much more today, get their information from channels that reinforce their pre-existing views rather than more objective sources.


So you have to -- There's no doubt that there's a political -- The FTC is not supposed to be a political agency, but it lives within the swirl of politics, to some extent, and you have to be aware of that. But you have to try to distinguish what you're doing now from those other factors in the atmosphere.


And then, again, agreeing with Noah, I don't think that the independent agency system is broken. I think it works pretty well for doing the business that it's supposed to under its statute. And when commissions go too far, as some might have said commissions did in, let's say, the 1980s, they are very often chastened by the courts.


And so we'll have to -- It would have to be Congress, of course, or I suppose the Court in some way, but I think it would have to be Congress that changes the structure. But I don't think that structure is failed. And again, one thing you get on the FTC is a built-in dissent. For those of you in the audience who are antitrust lawyers and you think about the Tunney Act, I don't think there's ever been a single example of where a judge has reversed a settlement at the Justice Department under the Tunny Act.


On the other hand, minority positions on the FTC, whether they're Democratic minorities or Republican minorities, it gives you some leverage in negotiating an outcome or a procedure or pathway forward, and it also gives you a very clear voice of dissent. We've just seen that very recently in a very clear way.


Hon. Neomi Rao:  Yes?


Questioner 2:  I guess I just wanted to follow up on the preceding question and bring the conversation back, I suppose, to where it started on the reverse payment settlements between pharma companies. In the interest of full disclosure, I wrote an article and filed briefs against the FTC on this issue, so those were fighting words for me, but I don't want to relitigate the issue itself.


I guess the question is, why is it necessarily good to take the politics out of that question? As, of course, you know, the earlier version of that litigation had Department of Justice and FTC on opposite sides, right? So you had some very smart lawyers and economists on one side, some very smart lawyers and economists on the other side, and at least some of them thought that there's some consumer benefit in these settlements, maybe because drug companies ultimately get more money and develop more -- Whatever. You don't have to agree with it.


The point is that that was the view. And if that's the view, why is it inappropriate for political process to work out as to what do we weigh more? Do we weigh more that or that? It just seems a bit odd to say that we can't get a professional judgment on this.


Hon. Jon Leibowitz:  All right. Maybe I'll take this. The political process could have very much resolved this problem, and, as you may recall, we had sort of a two-pronged strategy at the FTC. One prong was to create a circuit split and get a case to the Supreme Court because we thought they would come out in a pretty good place, and they came out in a pretty good place. And the other prong was to try to get Congress to pass a law that would make these deals presumptively illegal.


We got that through the House. We got it into the Affordable Care Act Conference Committee. And then, for those of you who love obscure footnotes, Senator Kennedy passed away. They didn't have 60 votes, so they couldn't close debate under cloture, and the House took the Senate -- The House took the Senate version of the pay-for-delay legislation, so it never got passed because it wasn't in the Senate version.


So the political process was involved. I don't have a problem with that. If we had lost, I would have been unhappy, but if they had said these deals are absolutely legal but that would have been the end of the outcome --


Hon. Noah Phillips:  Just to be clear, it's pretty clear to me, at least, that Congress has delegated authority, both to the Department of Justice and the FTC, to enforce the antitrust laws. And, yes, some of the decisions about the kind of business conduct against which they might enforce may be laden with values and whatever, but prosecutors do have to make decisions about the law. And that's pretty much true for all prosecutors.


On some level, some decisions matter a lot, but that's part of the way law works. To me, I don't see that as -- Maybe you disagree on the policy question, but it's fairly well within the scope of antitrust consideration.


Questioner 3:  First of all, thank you all for being here. This has been very interesting. Are there any downsides to delegating rulemaking authority to these independent agencies? And if there are, is there anything more that can be done to protect individuals?


Hon. Noah Phillips:  I think the big downside is a Democratic deficit, right? When you get to a point where there's really no limit on the decisions being made and they're really being made by people who are not accountable to the public in the way that Congress is, or members of Congress are, I think that's the major problem. It also creates a -- It's an odd fit within our tripartite scheme of government.


In terms of what can be done, Congress can be clear in what it writes, right? And, to some extent, the pressure of the courts will apply if they're policing, whether it's the major questions doctrine, or the non-delegation doctrine, will force Congress into the position. You want to give them authority to write rules? Be clear about what that authority is, then these problems don't arise. That's how I think about it.


Hon. Jon Leibowitz:  Yeah, I agree with that. And again, we now have a judiciary, writ large, that is very skeptical of rulemakings, generally, by the executive branch. And so I think we'll have to see how that plays out, but in recent years, it has played out, I would say, not particularly well for some of the most edgy, controversial rulemakings.


And I guess I would say, aside from the Democratic deficit issues, I think the other big problem is, sometimes, agencies don't get it right. I think more often they do than they don't, but sometimes, even if it's not arbitrary and capricious, it's the wrong outcome. So I think, yes, Congress could make this clearer. No, they won't make it clearer because it's just not in their -- it's not in their DNA to do that kind of thing easily. It's a very difficult thing for them to do.


Hon. Noah Phillips:  Yes and no, right? People have other constitutional issues with the law I'm about to mention, but recently, the Congress passes the Horseracing Integrity and Safety Act, which gives the FTC all sorts of weird powers. But that's Congress pretty specifically writing to a topic. Now, there's a whole other discussion to be had about that particular law. I think Congress can still do this. They just have to want to.


Hon. Neomi Rao:  They do in tax --


Hon. Noah Phillips:  They do it in tax.


Hon. Neomi Rao:  -- pretty frequently.


Hon. Noah Phillips:  Yeah.


Hon. Jon Leibowitz:  Yes, but for example, I think Congress wanted, when it created the FTC, to create an agency that had much more limited sanctions and much broader jurisdiction. That's why they said unfair methods of competition, right? They wanted it to have broader jurisdiction than the Justice Department, and they don't put people in jail, and so very limited sanctions. And that, I think, was by design. And I'm not saying you're suggesting this, but if you wanted to pare back the jurisdiction of the FTC, that, I think, is unlikely to happen by Congress, and I certainly don't think it should happen.


Hon. Neomi Rao:  Question in the back.


Questioner 4:  In my research, I've been coming across some rare reports on intolerance in the World Economic Forum for dissenting views. Do either of you or do know of any others that are giving consideration to the impact of stakeholder capitalism and the World Economic Forum on the work on responsibilities of the agency with which you have been involved?


Hon. Noah Phillips:  I can't speak to the particulars of the World Economic Forum. Generally, the agencies invite a lot of stakeholder input, and the story of which inputs get credited and how the agency proceeds in light of the input it gets is the object of a lot of writing and administrative law.


Hon. Jon Leibowitz:  Agree.


Questioner 5:  So I have a question about vacancies. So many federal independent commissions and boards have gone significant periods with vacancies. As you mentioned, there are currently vacancies from the Republican side on the FTC, and one instance that comes to mind for me is the Merit Systems Protection Board, which from 2017 to 2022, lacked a quorum.


One of the reasons for that was because of one senator who disagreed with the constitutionality of the MSPB and, therefore, sought to hold up any nominees from moving forward. My question for you is whether or not you believe a senator who disagrees with the constitutionality of a specific board or commission holding up the filling of vacancies is a, one, legitimate under the separation of powers and, two, reasonable way of expressing that concern about the constitutionality of the board or commission?


Hon. Jon Leibowitz:  Well, I would say, without knowing the particular circumstances of who was holding it up and why, I think it's a good idea to have a quorum in these agencies, even if you believe that they are constitutional, because these agencies have functions, and people are before them, and their real lives are impacted. And so my sense is, you want to let agencies -- You want to make sure that agencies have quorums.


I'd also say that this is partly an issue—both Noah and I worked in the Senate—of Senate procedure. Sometimes you don't even have to surface if you are the one person putting a hold on something. And, at some point, they may think about ways—and, of course, they are—they may want to make their procedure a little more effective. But to your underlying question, I think it's a bad thing for agencies not to have quorums, even if you disagree with what they're supposed to be, even if you disagree with their constitutionality.


Hon. Noah Phillips:  I definitely agree with that.


Hon. Neomi Rao:  Well, after Axon, you can now bring your constitutional challenge directly to Court.


Hon. Noah Phillips:  Say what?


Hon. Neomi Rao:  Yes.


Questioner 6:  I think the way Republicans respond to this is the big elephant in the room. Pardon the pun. Do you see Republicans -- You both were in the Senate; you have experience there. Do you see Republicans going back to the consensus that existed for 40 years, or do you see Republicans accepting this idea that antitrust law can resolve social issues, and Republicans just happen to have other ideas about what those social issues are in adopting this enforcement galore?


Hon. Noah Phillips:  I think it's fairly clear that, especially in the last few years, the voices within the Republican Party for enforcement galore, pursuing social issues, what have you, through antitrust are growing, and they found really incredible allies on the left who absolutely want to do those things. Whether that lasts, how it manifests, I don't know. It's not a view that I share, and it was very interesting to be on the commission at a time where that existed.


One thing I used to say to members of Congress—I won't out anyone in particular—was big tech is a gateway drug. And I do think people need to be a lot more clear about when they sign up for what sounds like a politically appealing idea—or maybe a tweet that sounds good—what the long-term implications of that policy concession are because I think they are real. I think they will work.


Bad things for antitrust law, but critically, above all, bad things for consumers. We've seen a lot of normalization—I'll pick on one bill in Congress—of the idea that cartels are okay if they're people I like, right? So there's a bill right now to protect the news organizations and allow them to cartelize.


Whatever you think about the merits of that idea, it's definitely not pro-competition, right? The whole idea is to displace competition. And Commissioner Bedoya got up and gave a speech recently where he was like, "We shouldn't go after the honest, good laborer when they want to cartelize because John Sherman said something."


And, again, I tend to be a pro-competition person. Those are not competition ideas. They're distribution of rent ideas, but they also hurt people. If you make things more expensive, people pay more, and in particular, they hurt the poor. And I think we need to keep that in mind.


Hon. Jon Leibowitz:  Yeah. And I'm not thinking within the core of Republican circles, but watching all of this from the outside, I'd also say that you sometimes have to distinguish the rhetoric, which is very, very heated, from the actual action here. And it is meaningful, at least as I think about it, that last Congress, when there were Democratic majorities on both sides, Congress did not pass antitrust -- And I support a lot of that antitrust legislation, but Congress didn't pass it.


And so I wonder whether -- I questioned whether the rhetoric, particularly on the Republican side, over very, I think, legitimate concerns, will ground itself or come to ground in antitrust legislation. I'm kind of skeptical that it will.


Hon. Noah Phillips:  The mental exercise in which I like to engage is scrap antitrust. Just put in securities or tort. We don't think of these bodies of law. You could use them as a cudgel, right? You can direct political leadership to go after people you don't like, but it's, from South Park, like the underpants gnomes problem. You know that they get the underpants and then they make profits, but you're not sure how. There's a lot of like, "If we had more of this, we would get more of that, "and I'm just not seeing the middle in a lot of these cases.


Hon. Neomi Rao:  I think that analogy was unfamiliar to many of us.




Hon. Noah Phillips:  It's a very important cultural referent.


Hon. Neomi Rao:  Sorry. Question over here.


Questioner 7:  I never heard of enforcement galore. It sounds like a Bond villain. But my question is, the FTC has, well, been accused recently of working with the Europeans to do things they can't do in America. But even before this current commission, when the FTC went after Qualcomm, for instance, the other FTCs in other countries go after the American company.


They seem to take their leads from the American FTC, and this had some devastating effects. And then, when the FTC lost, a lot of those cases went away in Korea, I think, in Japan, certain other things. I think they affect what happened here. And so my question is, what should the role of the FTC be with American companies and its outlook with all these other what I'll call copycat FTCs in other countries?


Hon. Jon Leibowitz:  Well, it's a really good question. Well, first of all, whenever you have a merger, and often when you have parallel conduct cases, no matter where they started, it's appropriate for the agencies to share information, talk to each other. Often the target, and sometimes the target even in a conduct case, allows the exchange of confidential information. So I think that's a good thing.


I also think that the leadership -- And I've read a lot of stuff about Qualcomm. At one point, I did a little bit of work for Qualcomm, but not on the particular matter you're talking about, so I just wanted to disclose that. But it is also appropriate for the FTC and the antitrust division to show international leadership on antitrust issues.


And so it comes down to, are they exercising good judgment, right? And that's the most important thing from my perspective. Now, there have been some stories about certain instances in which the FTC was lobbying another agency. I certainly read about that. And I would certainly -- That gets you close to -- That gets you in a circumstance, if it's accurate, where there are legitimate questions being raised.


But I do want to say, one is appropriate to share information with your foreign counterparts, and two is we all want -- Believe me, we all want the FTC and the antitrust division to be leaders in the world antitrust community. Otherwise, particularly for American corporations, life would be far, far more difficult, I think.


Hon. Noah Phillips:  So I was both on the commission where both of the cases that you mentioned and alluded to were going on, and I'm now at a law firm that is representing the defendants in each, so I'm largely going to take a pass. What I will say is this: Jon is correct. Especially where you have international, cross-border mergers or you have conduct that reaches across state lines—state in the international sense of the word—it is inevitable that lots of enforcers are going to be involved.


And there are protocols. There are rules and there are laws about how they share information about things. And that can be good, but it is also critical that U.S. law enforcers -- Their job is to enforce U.S. law, and keeping that top of mind in any context is critical.


Questioner 7:  Thank you.


Hon. Neomi Rao:  I think we're out of time now, so can you all please join me in thanking our panel?



2:15 p.m. - 3:45 p.m.
The Administrative State on Trial?


Topics: Federalism & Separation of Powers • Financial Services & E-Commerce
Grand Ballroom
The Mayflower Hotel
1127 Connecticut Ave NW
Washington, DC 20036


Event Video

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The Supreme Court continues to accept for review cases that challenge agency authority on separation of powers grounds, and its decisions may fundamentally reshape the modern administrative state. This term, it heard challenges to the jurisdiction of federal courts to hear challenges to agency proceedings (Axon v. FTC; SEC v. Cochran), and to the Biden administration’s authority to forgive student loan debt (U.S. Department of Education v. Brown; Biden v. Nebraska). Next term, it will hear a constitutional challenge to the funding structure of an independent regulatory agency (CFPB et. al. v. Com. Fin. Services Assn.). And pending in the certiorari queue is a case that raises a triumvirate of issues about the SEC’s administrative proceedings: whether they violate the Seventh Amendment, the non-delegation doctrine, and/or the President’s removal power (SEC v. Jarkesy).

This panel will discuss the constitutional questions raised by these cases, the potential effect of the Court’s decisions on agency structure and practices, the rebalancing of power between the three branches, and the future of the administrative state.


Event Transcript

Brian Johnson:  Good afternoon. Today's panel discussion is entitled, "The Administrative State on Trial." My name is Brian Johnson, and I'm a member of the executive committee of the Financial Services & E-Commerce Practice Group and the Chair of its CFPB working group.


      Today's panel was jointly organized with the executive committee of the Federalism & Separation of Powers Practice Group.


      I have the privilege of introducing the moderator of today's panel discussion, The Honorable Eleni Roumel. Judge Roumel was appointed Judge of the United States Court of Federal Claims in February 2020. She previously served as the Deputy Counsel to Vice President Mike Pence from 2018 to 2020. Prior to her tenure at the White House, she served from 2012 to 2018 as Assistant General Counsel in the U.S. House of Representatives Office of General Counsel. Prior to her government service, Judge Roumel had a distinguished career in private practice.


      Judge Roumel, welcome. Thank you for being here today. I turn the program over to you to introduce our distinguished panelists and begin the discussion.


Hon. Eleni Roumel:  Thank you so much, Brian.


      Thank you, and good afternoon, everybody. For those of you who are in the crowd and for those of you who are joining us online, I am Eleni Roumel. I will be moderating today's discussion. We have a very interesting topic lined up for you today, for this panel will be discussing recent developments in administrative law and their potential impact on federal agencies. To do this, we'll generally be focusing on four lines of cases, and these cases have challenged agency authority on separation of powers grounds and have the potential to really affect agency structure and practices and perhaps the balance of power between the branches.


      So the first group of cases involve the jurisdiction of federal courts over administrative proceedings. And earlier this year, the Supreme Court ruled in Axon v. FTC—excuse me—and SEC v. Cochran that district courts retain original jurisdiction over constitutional challenges and certain agency proceedings, which means that plaintiffs must no longer wait until their agency proceedings end to file their complaint in federal court when challenging, for example, an agency's structure or a procedure or its existence.


      One of our panelists here with us today, Greg Garre, argued the Cochran case, and we're especially looking forward to hearing from him about his perspective and perhaps some of the next steps in his case.


      The next group of cases that we'll discuss are the student loan cases, United States v. -- United States Department of Education v. Brown and Biden v. Nebraska. And these concern the Biden administration's authority to forgive student loan debt under the Heroes Act. And these cases were recently heard in oral argument by the Supreme Court, and they raise important questions about the major questions doctrine, statutory interpretation, and of course, standing.


      And the third group of cases involve the constitutionality of the funding of the Consumer Financial Protection Bureau or the CFPB. The Supreme Court recently granted cert in CFPB v. Community Financial Services Association, and the case will be heard this fall.


      Notably, there is a circuit split on the issues in this case. The Fifth Circuit and the Second Circuit have issued contrary opinions on the topic. And this is a really fascinating case, not only because of the administrative law implications of the case but also because it involves interesting standing questions. And naturally, the outcome in the case could have a significant impact on how Congress can structure federal agencies. And that's something we'll explore more today during the discussion.


      And finally, the Supreme Court is also considering a cert petition in Jarkesy v. SEC. And in that case, the Fifth Circuit ruled that the Security and Exchange Commission's in-house administrative law proceedings violated the Seventh Amendment right to a jury trial, the non-delegation doctrine, and the Constitution's Take Care Clause.


      So as you can see, many of the same concepts such as the major questions doctrine and the non-delegation doctrine are implicated in these cases, and there's really no shortage of activity in the administrative law field this year. And the outcomes in these cases may potentially affect the current existence and the structure of our current administrative state.


      So to discuss these issues, we have lined up today really quite a distinguished panel. I'm so pleased to be on the same panel with all of you. And I think I will just go down the line here and introduce you one-by-one.


      I will start with Greg Garre, who is on the far right here. He is a partner in the Washington, D.C. office of Latham & Watkins and the Global Chair of the firm's Supreme Court and Appellate Practice. He served as the 44th Solicitor General of the United States acting as the federal government's top lawyer before the Supreme Court, and he's responsible, or was responsible, for overseeing the government's litigation in federal appellate courts throughout the nation.


      Prior to his nomination by the President and unanimous confirmation as S.G., he served as Principal Deputy Solicitor General from 2005 to 2008, and then as Acting Solicitor General. He also served as an Assistant Solicitor General from 2000 to 2004 spending almost a decade, it seems, in the office. And I am told that he is the only person to have held all of those positions within the Office of Solicitor General.


      Mr. Garre has argued 48 cases before the Supreme Court and has served as Counsel of Records in hundreds of other cases before the Court. And perhaps most notable for this panel, as I mentioned, Mr. Garre argued the Cochran case this current term, the case in which the justices ruled unanimously in his client's favor. Mr. Garre received his law degree with high honors from George Washington University Law School, where he served as the editor-in-chief. And he received his BA, cum laude, from Dartmouth College where he was the Rufus Choate Scholar. After graduating from law school, he served as a law clerk to Chief Justice Rehnquist and also to Judge Scirica of the Third Circuit.


      Also joining us today, next to him, is Professor Richard Pierce. Professor Pierce is the Lyle T. Alverson Professor of Law at George Washington University School of Law. Professor Pierce's academic work focuses on administrative law and government regulation with a particular focus on the energy industry. He is the author of over 20 books and over 150 articles on these topics. And his work has been cited in hundreds of judicial opinions including a dozen opinions of the United States Supreme Court.


      Since 1994, Professor Pierce has also served as an author of Kenneth Culp Davis' Administrative Law Treatise, the premiere reference guide for the field of Administrative Law. And his work in the field has led him to testify in the House before the Judiciary Committee and the House committee on the budget as an administrative law expert. He received his law degree from UVA School of Law and his Bachelor of Science in Economics from Lehigh University.


      And last, but certainly not least, is Professor Chad Squitieri. Chad Squitieri is an Assistant Professor of Law at Catholic University. It's Columbus School of Law where he teaches administrative law, constitutional law, and law and technology. He joined the faculty last year after having practiced at Gibson Dunn as a member of the Appellate and Constitutional Law and Regulatory and Administrative Law practice groups. Before that, he served in the Executive Branch as a Special Assistant to former United States Secretary of Labor Eugene Scalia and a law clerk to then-Chief Judge D. Brooks Smith of the Third Circuit.


      Professor Squitieri’s scholarship addresses administrative law and constitutional law topics. His scholarship has appeared in numerous law reviews:  the Missouri Law Review, the Harvard Journal of Law & Public Policy, and the Virginia Law Review, among many others.


      Important to today's discussion, he has also recently written articles about the non-delegation doctrine and the major questions doctrine. And we are interested and excited to hear your perspective as it relates to the discussion today. And he has also serves as a -- he serves—excuse me—as a Fellow with the Project for Constitutional Originalism and the Catholic Intellectual Tradition. Professor Squitieri also graduated from the University of Virginia School of Law and earned his Bachelor of Science from Florida State University double majoring in finance and economics.


      So, please, help me welcome this distinguished panel.


      So I think what we'll do is we'll begin by hearing 8- to 10-minute opening statements from each panelist, and then we'll move to a discussion of the cases that I mentioned. And finally, we'll open things up to questions from the audience, so please be thinking about and considering what questions you may want to ask.


      Why don't we go down the line? Greg, would you like to begin?


Hon. Gregory Garre:  Sure thing. Thanks, Judge.


      I'm going to talk about the Axon and Cochran case as well as touch on the Jarkesy case a little bit. And as the Judge mentioned at the outset, we—along with the New Civil Liberties Alliance, and including Peggy Little, who I see in the audience today—represented Ms. Cochran before the Supreme Court, so forgive me if this presentation is a little bit skewed. But I think it's fair.


      So the basic question in Cochran and the Axon case, which were two consolidated cases that were argued separately and decided together a week and a half ago, was whether the federal district courts have jurisdiction under 28 U.S.C. 1331 to hear structural constitutional challenges to agency proceedings before the SEC in the Cochran case and the FTC in the Axon case.


      And to just give you a general overview of the issue, Section 1331, as you probably remember from your law school days, grants broad jurisdiction over "all civil actions arising under the Constitution, laws, or treaties of the United States." And it's phrased in mandatory terms that the court, district court, shall have that jurisdiction. But the government has long argued that statutes creating administrative review schemes that give you an opportunity to petition a final decision of the agency for review to a federal court of appeals impliedly displace the federal district court's jurisdiction under Section 1331 to hear constitutional challenges to those proceedings at the outset. And if you looked at just the text of 1331, you might be a little bit surprised by that. But the Court, going back to a decision in 2009 called Thunder Basin Coal Co. v. Reich had developed a Three-Factor Test that largely placed a thumb on the scale of finding that district courts had been impliedly stripped of their jurisdiction any time Congress had enacted one of these administrative schemes.


      Just to give you a sense of the practical importance of this issue, I think the Cochran case illustrates that as much as any of the thousands of cases out there involving individuals who find themselves trapped in these administrative proceedings. So Michelle Cochran was a mother of two -- single mother of two who worked for a small accounting firm in Texas. After a few years, she decided to leave the firm because of the abusive treatment from her boss, who she also had concerns about his honesty as well. She thought she had moved on, but several years after she left, the SEC initiated an enforcement action against her old firm, her boss, and lo and behold, Ms. Cochran, herself. And Ms. Cochran's wrongdoing alleged by the SEC was that she had failed to, essentially, check various boxes as part of an audit auditing form. It was the quintessential paperwork violation in which no one had been harmed from it, and there was no monetary loss as a result of this, but she left a couple of boxes blank, and the SEC went after her.


      The SEC settled the charges against the firm and with her boss, but she refused to settle. She was defending her innocence of this charge, and she proceeded before an SEC ALJ. That proceeding took several years. At the end of it, the SEC won, as it almost always does in its own courts, and imposed a $22,500 fine against Ms. Cochran and banned her from practicing in accounting for five years. She then brought that proceeding to the SEC Commission, itself. While her case was before the SEC Commission, the Supreme Court decided, SEC v. Lucia, in which it ironically held that the very ALJ that had considered her case was unconstitutional.


       You might think that was end of the proceeding, but it wasn't. The Commission sent it back before a new ALJ, and then she got smart and hired the New Civil Liberties Alliance to get involved and go to federal district court and bring a claim out of the box that the SEC ALJ was unconstitutional because it was protected by dual layers of removal from the president. SEC ALJs are only removable by cause by -- for cause by the Merit Systems Protection Board and the merit -- members of the Merit Systems Protection Board interred are only removable for good cause by the President creating a dual insulation from removal that the Court in the Free Enterprise case said violated Article II.


      The district court, however, believed that it did not have jurisdiction over Ms. Cochran's structural constitutional claim, that that jurisdiction had been displaced by the SEC scheme under the Thunder Basin analysis. She appealed to the Fifth Circuit, and the Fifth Circuit panel decision affirmed that conclusion.


      Now, the Fifth Circuit panel decision in Ms. Cochran's case was emblematic of decisions that the Court of Appeals had reached going back almost a decade. The D.C. Circuit, Seventh Circuit, Fourth Circuit, Ninth Circuit, and Eleventh Circuit had all held—applying the Thunder Basin analysis—that district courts had been stripped of their jurisdiction to hear structural constitutional claims in the first instance, that individuals had to endure the administrative process if they could. Most of them actually ultimately settled because they have to go on with their lives, but after that process they then could go to a federal court of appeals.


      I should note that there were three judges during this period who got it right and dissented. Judge Droney on the Second Circuit, Judge Haynes in the Fifth Circuit, and Judge Bumatay in the Ninth Circuit. During this period, the Supreme Court, itself, also denied certiorari twice on this issue, most recently in 2021, in a case that we worked on together with the New Civil Liberties Alliance.


      But the Fifth Circuit, in its wisdom, granted rehearing en banc in the Cochran case. And last year, ultimately held in a 9-7 decision that there was jurisdiction. The district courts had jurisdiction to hear Ms. Cochran's structural constitutional challenge to her ALJ. That created a conflict in the circuit. A case out of the Ninth Circuit, the Axon case, which actually dealt with this issue in the context of FTC proceedings, was pending before the court. The Court granted review in that case, and then the government brought the Cochran case up there, and it was just to hold it for the Axon case. We urged the Court and said to grant review of Cochran as well to resolve once and for all that district courts had jurisdiction over challenges to structural constitutionality of the SEC administrator process, and the Court agreed and so heard both cases together.


      The Court -- the cases were argued back-to-back in November. The Court issued its decision about a week and a half ago unanimously finding that the district courts do have jurisdiction to hear these structural constitutional claims.


      So Justice Kagan wrote the opinion for the Court and eight members. Justice Gorsuch, as I'll mention in a second, wrote separately. He concurred with the judgment. Justice Kagan's opinion applied the Thunder Basin factors though in a more forgiving way than the federal court of appeals had done for the decade prior. She first looked to whether or not delaying judicial review would foreclose meaningful review of the question and concluded that it would. And in doing so, she recognized that being subjective to an administrative process that was structurally in violation of the Constitution itself inflicts what the Court in Seila Law had recognized was a "here-and-now injury" that could not be redressed if the individual had been dragged through that process in the first place. And so, therefore, in order to get meaningful review, you needed to get review now. And so, she got past the first Thunder Basin factor.


      The next factor looks to whether or not the claims are collateral to the agency proceedings, and she concluded that Ms. Cochran's claim was. It was a claim to the structural constitutionality of the ALJ itself. It had nothing to do at all with anything that had happened in the underlying proceeding.


      And the third factor was whether or not the agency had expertise to resolve this type of claim. And once again, she easily concluded that it did not. And as the Court has recognized in prior cases, agencies generally have no special expertise to resolve structural constitutional issues. So she concluded, in a compelling fashion, that each of the Thunder Basin factors had been satisfied, and that pointed to the conclusion that neither the SEC Act nor the FTC Act in the Axon case actually could be interpreted to preclude federal district court's jurisdiction under Section 1331 to hear these structural claims at the outset.


      So Justice Thomas concurred in the result but wrote separately, too, as he often does to up the ante considerably. He wrote, in a concurring opinion, that he had "grave doubts" about what he called the "constitutional propriety of Congress vesting administrative agencies with primary authority to adjudicate core private rights"—rights affecting life, liberty, or property—"with only deferential judicial review at the back end." In other words, forcing an individual to go through a process where her life, liberty, property was at stake and only getting judicial review in a petition for review that proceeding in the Court of Appeals in which there are a number of deference doctrines that would apply to the agency's findings of fact and certain other determinations. He questioned whether that was consistent with the Constitution at all and said that if private rights were at stake, the Constitution likely requires plenary Article III jurisdiction over such claims. It wasn't necessary for Justice Thomas to go further in this case, but as we'll talk about later, this may be an important decision down the road in cases like Jarkesy.


      So Justice Gorsuch concurred only in the judgment. He wrote separately to say and argue strenuously that he would dispense with the Thunder Basin analysis altogether, as he would have analyzed it simply as a matter of statutory interpretation, looked to the text of Section 31, which broadly says the district courts shall have jurisdiction over all constitutional claims or claims under law or treaties, and then looked to the relevant agency statutes and find that nothing in those statutes remotely purports to strip district courts of that jurisdiction. He questioned the authority of the courts to engage in implied jurisdiction stripping at all, which is the import of the Thunder Basin analysis, and explained quite strongly, I think, that the Thunder Basin analysis carries real costs both for individuals seeking to vindicate their rights and for lower courts, who he said deserved better guidance.


      So thinking about the implications and significance of this decision, first, it very importantly provides a direct avenue of Article III judicial review for individuals or entities raising structural constitutional challenges to administrative proceedings. This could come in a number of different forms. In both the Axon case and the Cochran case, they raised an Article II challenge to the fact that ALJs are insulated from presidential removal unconstitutionally in the plaintiff's view. But you could imagine claims in the form of a more conventional Appointments Clause violations, perhaps challenges to agency funding, like in the CFPB case, possibly Seventh Amendment challenges to jury trial rights, nondelegation challenges, other challenges that people may come up with. So this is a very important class of fundamental constitutional challenges that can now be brought directly into district court challenging agency action.


      Second, I think it is important that the Court unanimously underscored that these sorts of structural constitutional defects do inflect a here-and-now injury, which I think magnifies the importance of this class of claims. Although the Court in majority opinion said that its decision shouldn't be read as professing a desire for more interlocutory reveal of this type, I think the fact that the decision was unanimous and the fact that it's written in fairly broad terms does signal a different approach to the Thunder Basin analysis. At a bare minimum, it shows that the Courts of Appeals that over the course of a decade had read Thunder Basin to require divesting district courts of this class of claims had been fundamentally wrong. And so I think it does require a new understanding of the Thunder Basin analysis and a more forgiving analysis for finding jurisdiction.


      And I think that Justice Thomas' concurring opinion and Justice Gorsuch's opinion concurring in the judgment both may have lasting importance on their own. Justice Thomas' opinion to the extent that it invigorates underlying constitutional claims in this context. And Justice Gorsuch's opinion to the extent that it ultimately leads to the abrogation of the Thunder Basin doctrine altogether.


      So let me just touch on Jarkesy briefly. So the SEC v. Jarkesy is actually one of the cases that had initially raised this jurisdictional claim and went up to the D.C. Circuit. And the D.C. Circuit in 2015 held that Mr. Jarkesy couldn't -- that it wasn't district court jurisdiction for him to bring structural constitutional challenges to the SEC proceeding against him. So he went back and through the SEC proceedings, they entered an order against him. He then petitioned for review to the Fifth Circuit and raised a host of important constitutional challenges to the SEC's authority, which a majority of the Fifth Circuit adopted in significant respect.


      So the Fifth Circuit, in this case, held that the SEC's ALJs' double layer protection from removal, the very claim in the Cochran case, had merit and that the SEC ALJs were unconstitutional for that reason alone. And then it went further to find that there was a Seventh Amendment violation in subjecting individuals to civil penalties in SEC administrative proceedings without a jury trial. And also, that there was a nondelegation defect insofar as Congress had given -- reportedly given the SEC the authority to proceed either in-house before its judges or in a federal court that that brought delegation of power, violate nondelegation principles. This is a very significant constitutional ruling in itself.


      The government recently petitioned for certiorari of the Jarkesy decision. That petition is now pending before the Court but given that the Fifth Circuit's ruling declares unconstitutional fundamental aspects of the SEC administrative scheme, I think there's a very strong chance that the Court ultimately would grant review in the Jarkesy case and hear it next term.


Hon. Eleni Roumel:  Thank you so much, Greg, that's -- and we'll definitely discuss more about Jarkesy coming up.


      I'd like to turn to you, Professor Pierce, for your opening statement.


Prof. Richard Pierce:  Let me start by congratulating Greg on his victory in the Cochran case. And as somebody who is on the other side on the merits issue that he's raised, I have to say I agree completely with the Court on the jurisdictional issue on which he's already prevailed unanimously. I think that opinion is well-reasoned, and I think it reaches the right result. I don't think anybody's interests are served by prolonged delay in knowing whether the basic structure of the administrative state is constitutional. And it's the earlier we all get answers to those questions, the better for everyone, so I really applaud the Court and Greg on that.


      By the way, I count eight constitutional and structural attacks that are likely to come before the Court in the next three years, so this has really opened the way to a lot of things that will allow those of us who make a living writing law review articles provide us endless work.


      Now, the merits issue in the Cochran case is the constitutionality of the for-cause limit on the power of the head of the agency to remove an ALJ. And on that issue, I disagree completely with Greg. So let me go through the history of this. During the 1930s, there were lots and lots of complaints to Congress about the systemic bias of what were then called hearing examiners, now referred to as administrative law judges. The allegation was that they were systemically biased in favor of the agencies where they presided. And there were a couple of studies that supported those complaints. So Congress was trying to figure out, well, what to do. Well, after over a decade of deliberation and consideration of a wide variety of potential solutions, they came up with one, and I think it was really quite clever, and it continues to do the job very well.


      The first thing is to try to provide as much decisional independence to the ALJ as possible. And there are actually six different provisions of the Administrative Procedure Act of 1946 that are designed to accomplish that. The most important of those provisions is the provision that says that the head of the agency cannot remove or otherwise discipline an ALJ without having a cause to do so. And that's critically important if you're going to try to minimize the role of systemic pro-agency bias. In the absence of that kind of a safeguard, it's pretty easy for the head of the agency just to say, "I'm the boss, sport. Decide it my way," with pretty big clout implicitly behind that command. And we have studies in the context of a couple of other agencies where they don't use ALJs. They use, instead, adjudicators that are not subject to those safeguards that those adjudicators report that they are subject to systemic bias pressure all the time from the political leadership of an agency to decide a case a particular way.


      So Congress said, "Okay. We're going to confer on ALJs these six different sources of insulation from potential pressure from the head of the agency in order to minimize the risk of systemic pro-agency bias, including most importantly the limit on the power of the agency head to remove an ALJ." Now, Congress at the same time, recognized that while most adjudications do not raise significant policy issues that should ever come to the attention of the President or any senior political official, sometimes they do. And so, in that same statute, the Administrative Procedure Act of 1946, Congress provided that the agency could, if it chose, replace the ALJ's decision with its own decision. And all of the regulatory agencies have procedures through which that could be accomplished through an inter-application of an inter-agency, intra-agency appeals process.


      So in the rare case where an adjudicatory decision issued by an ALJ raises some serious policy issue, the head of the agency can replace the ALJ's decision with his own decision. Well, that provides a much more transparent means through which the President can exercise control over policymaking within an agency. And I think the worst possible step we could take at this point is to maximize—to eliminate—that major source of insulation from systemic bias thereby leaving all that all ALJs subject to the whims and caprices of their political bosses to say, "I want you to decide this case this way," and thereby controlling the outcome of a lot of adjudications in a completely non-transparent way.


      So I'm against him completely on the merits issue that will come next before the Court in that case. But I continue to applaud his wonderful victory on the jurisdictional and timing issue. I think that was very important.


      I just want to mention briefly two other cases that we may come back to later in the discussion. One is the challenge to the funding of the CFPB as a violation of the Appropriations Clause as part of the architecture of the statute that created the CFPB. What Congress was trying to do there was to create an agency that was as independent of the Executive Branch as possible. And one of the means they chose to do that was to provide a mechanism through which it should be funded without going through the appropriations process so it could thereby avoid both OMB review and review through the appropriations process. And that has been challenged in another of the attacks on the structure of at least one agency. And I think that's a very serious challenge. I'm not quite sure how it should come out.


      I am a bit concerned, though, that the Court is likely to run into some serious line-drawing problems. There are many agencies that get a high proportion of their funding, in some cases, 100 percent of their funding through means other than appropriations, and therefore never have to go to OMB or to Congress to go through the appropriations process.


      In 1989, for instance, the Supreme Court upheld a statute that instructed the Department of Transportation to impose a tax on all pipelines in order to fund the newly enacted Pipeline Safety Program to be implemented by the Department of Transportation. Congress made that decision and then so instructed the agency, not to give the agency independence, but because Congress, in Congress's view, that was an agency that should be completely self-funded if the general public should not have to pay -- bear the cost of that agency. It was, after all, serving the interest of pipeline safety, and so the Supreme Court unanimously upheld that.


      Well, how is the Court going to distinguish between arguably impermissible ways of circumventing the appropriations process in the OMB process? They're intentionally designed to serve that purpose versus the many circumstances that for completely different and permissible reasons Congress has said that an agency should be wholly or partly funded through things like fees that it charges to get permits. That was the way that DOT exercised the authority that Congress conferred upon it in that case. So I think the Court, if it decides that the CFPB funding mechanism is a violation of the Appropriations Clause, it's going to have a lot of problems with line drawing in future cases.


Hon. Eleni Roumel:  Thank you so much, Professor Pierce. A lot of interesting -- a lot of interesting topics to discuss there during the discussion portion.


      I will turn it over to you, Professor Squitieri, for your opening statement.


Prof. Chad Squitieri:  Great. Thanks so much. So I think the AV's working, but someone let me know if that's not the case.


      So I want to spend the majority of my remarks talking about the CFPB case, in part because I have an essay coming out on it soon. But I want to start off by talking about a major theme that I think connects some of the cases we're talking about today. And that major theme is this concept that I like to call "bubble wrapping," which is insulating agency action from literally all sorts of public input, whether that public input is channeled through Congress, the President, or the judiciary. And the idea is that public input is dangerous. And we have technocratic expert agencies who need to make decisions outside of the public oversight, so we need to protect that decision-making process by all means. And I, of course -- I disagree with that, but I think we see this show up in a few different areas.


      So let's start with the President, how agency actions "bubble wrapped" or insulated from the President's input. So as those of us that follow administrative law know, there's lots of provisions—we've talked about some of them today—that purport to limit the President's authority to remove Executive Branch officials from the Executive Branch. And the Roberts Court has made clear for some time that these removal protection provisions can present constitutional problems in various circumstances. So free enterprise, we learned the accounting oversight board members, those are unconstitutional for being doubly insulated from the President's removal.


      Seila Law, we learned that if you want to have agency with a single head, that single head's going to need to be removable by the President. So it's unclear how much further down this path the Roberts Court might go to ensure that the President remains controller of the Executive Branch. But as mentioned in the Jarkesy case, one of the questions presented is indeed this double insulation question about ALJs.


      Next, I want to think through how agency action is insulated from congressional oversight, public input being channeled through Congress. And here I think the CFPB case is a great example. So most agencies have to go to Congress with hat in hand and say, "Please give us appropriated funds so we can continue on the agency's mission." And at that moment in time, Congress can pause, look at the agency policy and determine, "We are the people's elected representatives. Do we like this policy? Do we wish to continue funding it?" And as we hear from Professor Pierce, the CFPB was designed specifically to be taken out of that appropriations process. So rather than have the people channeling their will through the elected representatives who will determine, "Hey, how are we going to spend the people's money?" or "We do like this policy," we have a situation where the CAPP just sends a note to the Fed and doesn't have to be subject to that congressional oversight.


      Then, finally, I want to talk about the judiciary. So here we see efforts to insulate agency conduct from public input channeled through the public federal court system. And I think we see this in at least two scenarios. One, are exhaustion requirements. So here, of course, we have agencies saying, "No, no, no. You cannot subject us to review in a federal court until you go through this lengthy internal review process." And after the work of Greg and NCLA and others, now that we have Axon and Cochran, of course, a lot of these structural constitutional arguments can be -- can get their day in court a lot earlier than they would have about 10 days ago even.


      Another example of, I think, insulating agency conduct—bubble wrapping the conduct from judicial intervention—is the kind of aggressive action we've seen in the student loan cases. There we see the agency really making substantive changes to its policy mid-litigation on the fly for what looks to be the sole reason of insulating that agency action from judicial oversight. So that appears to be a pretty strong break with norms. Traditionally, you would present only those policies that you believe to be lawful and then defend the legality of those policies in court. So structuring a policy specifically to make it nearly impossible to challenge in court seems like another effort to kind of insulate—to bubble wrap—the agency action from public input, this time coming through the federal court system.


      So that's how I see the cases kind of connecting at a 30,000-foot level. But let me dive a bit more deeply into the CFPB case. So Congress' appropriations power is surprisingly not that -- it's not that well discussed, generally, and administrative law scholarship or really even with a lot of judicial precedent, and I think that's surprising because on the grounds, whether an agency's going to receive funding is very important. But I think this relatively clean slate that we have about the appropriations power gives an originalist court like the Roberts Court a lot of room to maneuver and to think through Congress' appropriations power from first principles.


      And when I say first principles, I really mean first principles. So what I think the Court should consider in the CFPB case is start with the basic question, "Where in the Constitution is Congress vested with any authority to appropriate funds?" And you might think, "Well, there's this thing called the Appropriations Clause." And, sure enough, there is. But as I think is relatively uncontroversial, the Appropriations Clause doesn't actually vest Congress with the authority to appropriate funds. It refers to an appropriation's power that is presumably vested elsewhere.


      The clause says, "No Money shall be drawn from the Treasury but in Consequence of Appropriations made by Law." And what this clause is doing is telling the President, "President, you can't unilaterally take funds from the Treasury. You need to go to Congress." Okay? So where might Congress' appropriations power be vested? Well, the only other constitutional reference to appropriations is, again, a limitation on some sort of appropriations power, not a grant of that power to begin with. And that, of course, is Article I, Section 8, Clause 12, which essentially says, "Congress, you can only appropriate funds for military ventures for two years at a time." Okay.


      So if those two references to appropriations don't vest the appropriations power, where does it come from? A lot of people would say the Taxing Clause, and that's probably where the Court is about now. But I think the best reading of the Taxing Clause is to recognize it as just that, a power to tax, to bring in money, not treat it as a power to spend. So you have the power to bring in money for various enumerated reasons, promote a common defense, general welfare, not to just spend blindly to promote those policies if they're unconnected to a specifically enumerated power.


      Okay. So where is the appropriations powers vested? Certainly, we know that Congress can appropriate funds. Where does it come from? Well, according to my theory, it comes from the interconnection between two groups of constitutional provisions. So the first is Congress' substantive powers. So these are Congress' powers to punish piracies, to regulate interstate commerce, to establish tribunals, on and on. So we have those powers, and then it's the interconnection with Congress' Necessary and Proper Clause authorities, which give Congress the power to make all laws necessary and proper, to carry into execution some other power that's vested elsewhere. So the idea, for example, is a necessary and proper means for Congress to carry, say, its power to punish piracies into execution is for Congress to appropriate funds to maybe go catch pirates on the high seas or what have you.


      Another example, a statute that appropriates funds to buy military equipment. That is likely a necessary and proper means of carrying the President's commander and chief power into execution. So Congress has the authority to make necessary and proper laws to carry some other power into execution, not just spend as Congress would like.


      Okay. So what power might Congress have been carrying into execution to fund the CFPB? I think arguably it's the Interstate Commerce Clause authority. So I think the question that the Court should be asking the CFPB appropriations case is whether this CFPB funding statute, which takes the CFPB out of the normal appropriations process -- is that a necessary and proper means of Congress carrying into execution a Commerce Clause authority? And in the research that I've done to date suggests that, no, that is not a necessary and proper exercise of the Commerce Clause authority. And why is that?


      Well, we start with a historical baseline of annual appropriations. This was the way that the governments familiar to the ordinary reader in 1788 when the Constitution was ratified, annual appropriations was how governments were funded. My understanding is England, early colonial American governments, and the first Congress adopted annual appropriations. The SG in the CFPB case, so far in its cert stage briefing, says, "Well, we have historical exceptions to this. Look at the way the post office is funded. It's funded through postal fees. Look at the way the National Mint was funded historically. It was funded through coinage fees." But if you adopt my framework, you realize that those examples are unhelpful to the government because those are examples of the government—of Congress—carrying its power to establish post offices into execution and its power to coin money—Article I, Section 8—into execution. And it turns out there's historical support that would have been familiar to the ordinary reader in 1788 that, "Okay. Yeah. The normal way of funding postal systems is through postal fees. And the normal way to fund the coining of money is through coinage fees." And I don't see any similar historical analog for Congress carrying its Interstate Commerce Clause authority into execution.


      So that's my pitch of what I think the Court should do with the CFPB case. But I enjoy comments, and I will look forward to see what Judge -- what questions Judge has for us.


Hon. Eleni Roumel:  Wonderful. Thank you so much for that overview.


      I think I want to start with you, Greg, and give you a chance to address what Professor Pierce was talking about. The Supreme Court's decision in your case that you argued now permits the plaintiff to challenge the agency's proceedings in federal district court. And I was hoping you could discuss the merits claims. I think you might want to in light of Professor Pierce's comments and also how they might differ or how they're the same from the claims in Jarkesy.


Hon. Gregory Garre:  Right. So on the last point, the insulation from removal question in Cochran is really the same as the insulation from removal question in Jarkesy because they're before the same agency and the same removal protections apply. And again, it's the SEC ALJs are only removable for good cause by the Merit Systems Protection Board, which in turn, their members are only removable by good cause by the President. And that creates exactly the same problem that the Supreme Court identified in the Free Enterprise Fund case, which dealt with members of the so-called Peekaboo Board.


      And so, the government's argument that Professor Pierce made well here today is that "Well, ALJs are different because they're engaged in judicatory functions, and so the free enterprise analysis doesn't really apply here. And I guess I'm skeptical of that argument. For one thing, the Court in the Lucia case has already held that SEC ALJs are inferior officers for purposes of Article II. For another, the argument goes that the SEC ALJs wield broad authority—essentially, an exclusive authority—over these important proceedings can impose punishment in those proceedings and enter orders that have very serious implications for the respondents in those proceedings. And so, therefore, are executive in that sense. Or at the very most, are a quasi-judicial-type officer that the Supreme Court in the Myers case had recognized were subject to the same sorts of removal protections.


      I think, though, that the professor raises a fair point to question whether or not at the end of the day if we're better off at the scheme in which the ALJs are directly accountable whether they're going to -- whether or not those protections from removal actually result in more independent decision making. I think that's debatable because the studies show right now that the SEC ALJs in these proceedings are ruling for the SEC in 90 percent of the cases. So I think if you look at the objective evidence, it does not suggest that we have independent decision-making going on at its finest right now. I also think you can debate whether or not you've got better SEC ALJs if they're truly accountable to the President versus just worrying about how the SEC or MSPB are going to view their actions.


      And at the end of the day, maybe the right answer is that these proceedings really belong in federal court and not the agencies, to begin with. The agencies have taken the easy way out in funneling cases before these in-house proceedings in which they win in virtually all the cases. There's a separate route that Congress has provided, and that's to take these cases to a federal court, which is the place that we know that they can get an independent decision-maker.


Hon. Eleni Roumel:  Professor Pierce, do you have anything you would like to add?


Prof. Richard Pierce:  Well, Greg just raised what I consider a completely separate issue of whether these cases should, instead, be resolved in federal court. And that gets back to Jarkesy, which is that's one of the issues in Jarkesy, although they -- the Fifth Circuit decided to use the Seventh Amendment right to a jury trial rather than the Article III judicial powers, the basis for its decision. And I have taken a pretty close look at Jarkesy -- that aspect of Jarkesy at what would happen if the Fifth Circuit's approach were to prevail in that case.


      What the Fifth Circuit says is the reason that the Seventh Amendment right to a jury trial applies is because there were fraud cases in 1789 that were triable before a jury, and that is one of the tests for determining whether Congress can allocate a class of adjudications to an agency. The problem is that the Fifth Circuit said, "Well, they weren't the same kind of fraud cases, but they 'akin to' this kind of fraud case." The Supreme Court has explicitly rejected that reasoning on two different occasions saying, "The fact that a provision is -- proceeding is analogous to a proceeding that could have been tried before a jury in 1789 is irrelevant. What we're interested in is whether this cause of action could have been tried before a jury in 1789." And that, obviously, is not the case with respect to this class of securities fraud cases. There were no such -- was no such cause of action in 1789.


      And if the Supreme Court were to adopt the Fifth Circuit's reasoning and change quite dramatically its approach to determining when Congress has the discretion to allocate a class of adjudications to agencies and say, "Well, whenever it's akin to"—in the words of the Fifth Circuit—"an action that could have been tried before a jury in 1789," well, we'd have a host of problems because I did a little Google search of the U.S. Code and discovered that there's over 1,000 places where the standard is "just and reasonable."


      Just and reasonable is a standard that has been around in federal statutory law in many contexts for a very long time, and it's implemented almost exclusively by agencies, the Federal Energy Regulatory Commission, the Federal Communications Commission, and on and on. And that same term was used as a basis for jury trials in cases in which people challenged the validity of charges made by innkeepers in England as far back as the 14th Century. It continued in England all the way through the time of England's arrival in North America. It crossed the pond with the Brits and was adopted as the common law of every colony in the United States. And you could get a jury trial on that issue.


      My God, if you can get a jury trial on the basis of anything that is akin to an action that you could get a jury trial on in 1789, well, the Supreme Court would have just multiplied the number of jury trials in the United States by a factor of somewhere between 100 and 10,000. And of course, we do not have the capacity to handle that volume in the Supreme Court.


      The problem with constitutional rulings is they can't just say, "Well, there's this one little slice of cases where we" -- you got to -- the holding is almost certainly going to be applicable to a very broad, large number of cases. And they've got to be really careful about how they decide these cases in a way that doesn't explode the entire legal system of the United States.


      That adoption of the -- the adoption of that Fifth Circuit decision in Jarkesy would just explode the number of jury trials that would have to be made. And anybody who knows anything about the institution of jury trials -- we use it only in less than 1 percent of civil cases. It is a real rarity when the right exists today for very good reason. We don't have the resources to staff jury trials in large numbers.


      And so, adoption of that theory would create tremendous practical problems that I don't think the Supreme Court wants to get into. So I suspect the Supreme Court will stick with its precedence and continue to say, "No. That cause of action was not triable before a jury in 1789, and hence, Congress does have the discretion to assign adjudication of that class of cases to an agency instead."


      But in any event, that is completely independent of the question of the constitutional validity of the for-cause limit on the power of the head of an agency to remove an administrative law judge.


Hon. Eleni Roumel:  Professor Squitieri, I was wondering. You've heard about the history of ALJs. What role do you think that they should play in our regulatory regime? And let's say the Fifth Circuit's ruling is adopted by the Supreme Court. Let's say first they take the case, and then it's adopted. How should our ALJ system be restructured, perhaps, to avoid constitutional problems? What would you suggest?


Prof. Chad Squitieri:  Yes, so I guess as an initial matter, I am okay with ALJs adjudicating at least some claims so long as the parties consent to that. Parties consent to arbitration, to litigating in front of magistrates, things like this all the time. So as long as the party's consenting, that's one way to carve a lot of cases off.


      If the Supreme Court were to adopt this ruling, I suppose I would want to see ALJs certainly accountable to removal by the President. I understand Professor Pierce's point that perhaps we want some to mimic Article III somewhat and make them relatively independent. But as Greg mentions, I don't think the stats really show that out. I think ALJs are very often ruling with their home institutions. Even if we were to centralize—I've seen proposals to centralize ALJs so they're not really connected to one of the agencies—I'm not sure that would do much good. So I think if they're within any branch at all, they're within the Executive Branch. And the President's head of the Executive Branch, so they should be removable by the Chief Executive.


Hon. Eleni Roumel:  Well, speaking of removal, several recent cases have touched upon Humphrey's Executor. And Jarkesy involves presidential removal power as well.


      Professor Pierce, do you believe that Humphrey's Executor is present -- precedent is likely to stay intact with all these cases—you said there's at least eight cases, maybe not on this, but coming down the pike—and especially in the face of challenges like the one presented in Illumina pending before the Fifth Circuit.


Prof. Richard Pierce:  Yes. So the -- yeah. This is going to be a really fascinating case to watch, the [Illumina] case. So here's what happened in outline form. [Illumina] wanted to merge with Grail. Frankly, I don't understand the market. I don't know the firms. I'm only interested in the legal issues. That proposed merger did not raise any horizontal problems, it raised in the minds of the leadership—the current leadership of the Federal Trade Commission—a vertical problem. Well, that in itself is a bit unusual since the FTC had not brought a case that -- not challenged a merger based on alleged vertical problems in 50 years. But in any event, they decided that this merger would create some kinds of problems through vertical means.


      And so, they sent the case to an ALJ. They only have one ALJ, by the way. There's only one ALJ at the FTC. But they sent the case to their ALJ, and their ALJ had a full trial. And the ALJ said, 'I don't see a problem." And so, he decided against the agency.


      Now, let me just stop there and ask you:  How do you suppose he would have decided that case if he could be removed at will by Chair Khan? I don't have any doubt how that would have gone done. But in any event, the --


Hon. Gregory Garre:  I think just to kind of -- I think that was the first time in the history of the FTC that an ALJ had actually not --






Prof. Richard Pierce:  Of course, today there's always the possibility that the FTC was right in those other cases and wrong in this case.


      But in any event, that's the facts of this case. The FTC overruled the ALJ, and they went to court and they're trying to enjoin the -- well, actually, the merger was already completed, so they're trying to force Illuminati [sic] to divest all of the assets of Grail. And Illuminati [sic] says, "Aha. What agency is trying to do this? The FTC. Well, the FTC is unconstitutional because the Supreme Court should overrule Humphrey's v. -- Humphrey's Executor.


      And so, we have teed up here another big challenge, a challenge -- and if they overrule Humphrey's Executor, then there's no question that would apply to virtually all agencies. There would be a couple that wouldn't -- would still be out there, like the Mine Safety and Health Review Commission and the Occupational Safety and Health Review Commission that has nothing but adjudicative responsibilities. But all the other agencies that are now considered independent because their heads are subject to this for-cause limitation would be affected the same way if the Supreme Court overrules Humphrey's Executor.


      I think there's an excellent chance that the Supreme Court will overrule Humphrey's Executor. My friend and colleague, Bill Kovacic, can go through a whole long description of how the FTC has completely changed since the Supreme Court decided Humphrey's Executor. And just the idea that it's quasi -- it's only got one ALJ, and he doesn't have much to do. They don't do a whole lot of in-house adjudication anymore.


      The Court in Humphrey's Executor said, "Well, their quasi-legislative." Well, that's because back in 1935, Congress had no staff, and so when Congress got complaints from constituents that there was a need that constituents receive for legislation in some area, they turned to the FTC and asked the FTC for advice. And the FTC sent these voluminous reports recommending what became the Natural Gas Act, the Federal Power Act, the Public Utility Holding Company Act. So there were and advisor of that. Well, of course, it made some sense to have some degree of insulation between the president and the FTC. That is not what the FTC does today. There's no resemblance to what the FTC does today. And I think there's a very good chance that the Supreme Court will wind up overruling the Humphrey's Executor holding. And I would applaud that. I think the whole idea of an independent agency these days makes just no sense at all.


      And what the agencies do today is not quasi-judicial and quasi-legislative. It is pure executive functions. And so, it's about time that the Supreme Court -- and I don't know how many of you were at lunch, but the question was asked of our two former FTC commissioners at lunch, "Well, would that make any difference?" And they said, "Well, probably not." I think that's totally wrong if you think not just about today's circumstances at the FTC, but you think more broadly.


      Here's an example. We are 30 months into the Biden administration, and Joe Biden has no control over telecommunications policy—none—because that agency has been too the entire time that he's been -- he may never get control. And I don't happen to like his policies in telecommunication, but I think a president should have control over it, not some people who were appointed long ago by his predecessor.


      And think about it another way. Suppose that a Republican is the next -- elected as the next president. Do you suppose that if that Republican president had the power to remove the FTC chair at will, that Lina Khan would remain the chair of the Federal Trade Commission for more than two minutes after the inauguration ceremony? It's incredibly important to overrule that precedent. I think there's a good chance they'll overrule it and [Illumina] provides a wonderful set of facts to justify that action.


Hon. Eleni Roumel:  Well, I want to keep moving because we're starting to run short on time.


      So let me just turn to CFPB. Professor Squitieri, this is a particularly interesting case, I think, because the decision concludes that congressional action, rather than executive action or judicial action, can violate the Appropriations Clause. Do you think this matters in this particular case that we're talking about, Congress, and will the Court, perhaps, be more deferential because we're talking about Congress delegating its own authority, perhaps, and be more inclined to respect the Article I branches decision?


Prof. Chad Squitieri:  Yeah. I think that's a very interesting distinction with the idea like normally we're reviewing perhaps Executive Branch practice with an agency. And should the Court be more deferential to Congress than the Executive Branch? My inclination is no. I think the judiciary is a co-equal branch with the Executive and with Congress. We shouldn't just overrule congressional decisions just for kicks, but if Congress is exercising -- operating outside of its legal authority, then it is the role of the judiciary to say as much. And I think often, particularly with Congress, the structural problems that we see of Congress are often Congress kind of giving authority to someone else. So in the nondelegation context, they tell the agencies to go be good and nice, and then they -- Congress can take all the credit and none of the blame when the agency doesn't go be good and nice.


      And I think similarly so here. Congress, perhaps, wants to duck having to fund controversial policies, and if this type of a funding procedure gets approved by the Supreme Court going forward, I think you're going to have a lot of agency heads lining up on Capitol Hill -- Capitol asking for this very same appropriations process. And I think Congress would be happy to duck a lot of those tough funding questions.


Hon. Eleni Roumel:  Do you think -- if plaintiffs win, will this ruling necessarily have implications for other agencies or perhaps be cabin to the facts of this particular agency and this particular ruling --


Prof. Chad Squitieri:  Yeah.


Hon. Eleni Roumel:  -- because it is slightly unique.


Prof. Chad Squitieri:  Yeah. Well, if they adopt my approach, they can restrict it at least to an exercise of the Commerce Clause authority in this instance. So one touched the post office. One touched the Mint. One touched something like patent boards. So I think the Court would be smart to be specific about the type of agency it's talking about, but because the CFPB is pretty unique and intentionally so, I'm not sure it would have wide ripple effects across the agency.


      However, if the CFPB wins, I think we will have wide ripple effects because, as I mentioned, I think other agencies are going to say, "We want that as well."


Hon. Eleni Roumel:  Let me turn to you, Greg. Let's say the Supreme Court does uphold the funding structure as Professor Squitieri led with. What do you think would be the consequence for Congress' role in our regulatory system? And coupled on that, how important is the appropriations power in terms of accountability for federal agencies in terms of oversight? Does it matter?


Hon. Gregory Garre:  Well, I think it unquestionably matters. And I think the Supreme Court probably would view this as critical to the separation of powers between the branches. And I think it's an interesting question to think about whether this case would look different if you just looked at it as the Court reviewing a statute versus the typical agency run amok. Although here I think that the two are really combined in the sense that you've got this CFPB, which has this extraordinary power, and the question is whether this one aspect of its power really is constitutional. And I think it's likely to play out a little bit like Seila Law case and other cases where the Court has looked  at the CFPB and looked at really "Is there any kind of historical analog for what we're seeing here?" The way in which they've set up for the funding that you can go directly to the Fed for the funding.


      Professor Pierce had mentioned the mining example earlier, and the government, no doubt, will come up with other examples. It might say that Congress has done similar things, but to the extent that the Court views this really as a first-time type of thing, I think the Court is not going to be particularly happy about it. And then the question will be, "How does the Court craft its opinion? How does it draw up the lines?" But I think it would be concerned if it felt that—even at the hands of Congress—it was setting up this agency that had this appropriations power that other agencies didn't. I think that Professor Squitieri is right that if Congress can do this for the CFPB, you can bet that agencies will be lining up to get similar power down the line.


Hon. Eleni Roumel:  Professor Squitieri, you touched upon this in your opening, but I'll ask you the same question. What does an agency's funding structure affect Congress' oversight power in a meaningful way?


Prof. Chad Squitieri:  Yeah. I think it does because to keep the lights on, you need to make sure that Congress likes what you're doing, or at least you're not doing something that's bringing too much-unwanted attention -- congressional attention on yourself. You have the head of agencies routinely going forward to the committees, updating Congress about what they're doing. And if congressmen are unhappy, not only will they let you know with letters and op-eds, and all that, but they could threaten to withhold your funding.


      So yeah, I think it's -- if you don't -- if you are not subject to congressional funding then I think that would make a big difference in the policies you proceed, which is why—if I might just add—I think the remedy in the CFPB case that the Fifth Circuit adopted is correct. If you -- the agency—we don't know—might have acted differently if it was subject to the constitutional limitations on funding if it might think, "Is Congress going to be happy if I do this or not?" So I think the remedy was correct that you're unconstitutionally funded, so you can't spend any of those unconstitutional dollars on anything.


Hon. Eleni Roumel:  We're running a little short on time, so I want to make sure I hit the student loan cases pretty quickly.


      Professor Pierce, these cases—before we get into the major questions doctrine—they really implicate standing. There was some significant standing issues in the case. And can you just go over the standing issue a bit? And we're talking about the government perhaps giving money. It's hard to find harm sometimes when that's happening.


Prof. Richard Pierce:  Yeah.


Hon. Eleni Roumel:  And because of this, do you think in these cases standing is, perhaps, going to be a more contentious issue going forward?


Prof. Richard Pierce:  Okay. And this is in the context of the student loan. Okay.


Hon. Eleni Roumel:  In the context of reviewing agency actions where there's a similar forgiving of debt or giving money out.


Prof. Richard Pierce:  Well, that would almost always be—and maybe always—be a presidential action if it happens at all. And that's certainly what this was all about. The President saying, "Well, this is a national emergency." No, it's ended. Hasn't it? "But there's national emergency, and therefore, I modify the terms of these contracts by canceling them."


      I think the government's argument on the merits is hopeless. I think it's extraordinarily weak. They will lose, for sure, if they get to the merits. What I think they were betting on was that the Court wouldn't reach the merits because the standing issue is very problematic. It's very hard to see how any of the parties that are attempting to challenge this have standing under the normal precedence of the Court. I think they clearly do not.


      However, on standing, I am in the cynics' camp. I think when a majority of the Supreme Court wants to decide a case, they find standing. When they don't want to decide a case, they find no standing. It's very clear that a majority of the Court wants to decide this case, so I think they'll find standing. And it'll -- but I will say that more broadly this is a problem -- a broader problem.


      Suppose that the next president is a Democrat and says, "I hereby authorize the spending of a trillion dollars to fight climate change." Who has standing to challenge that? Under the precedence, no one. Suppose the next president is a Republican, and he says, "I hereby instruct IRS not to collect any taxes on capital gains because I think they're immoral." Again, no one under their standing -- I think they're going to have to revisit standing law in order to allow them a point of entry into that class of cases because those, I think, would be totally outrageous presidential actions.


Hon. Eleni Roumel:  Greg, do you agree with that -- that point of view?


Hon. Gregory Garre:  That those are outrageous presidential actions?


Hon. Eleni Roumel:  No.




Hon. Eleni Roumel:  That standing might have to be revisited.


Hon. Gregory Garre:  I definitely agree that the standing issue's the more challenging aspect of that case. And based on the oral argument, it appeared that there would be a majority in at least one of the cases that would find standing, but it was unclear. So it come down that well could be a 5-4 ruling on standing, and then I think it would be more lopsided on the merits if they get to that.


Hon. Eleni Roumel:  Professor Squitieri, I want to—especially since you are an expert on major questions doctrine or at least have written extensively about it—the student loan cases implicate the major questions doctrine here. But it is in the context, in these cases, of an emergency authority. That is what the government is arguing. How should we think about the major questions doctrine in the context of authorities granted to Congress for agencies to responds to emergencies?


Prof. Chad Squitieri:  Yes. So as far as the major questions doctrine is concerned, I'm not sure that the emergency status really matters. At least two of the major questions cases, the CDC moratorium case and the OSHA/ETS case, both of those were emergency situations. And particularly, the OSHA case, the standard was called an emergency temporary standard, and still, OSHA lost under the major questions doctrine.


      So I definitely get the intuition that perhaps there might be moments when we might be more forgiving of a president in an emergency situation, but as far as doctrinally with the major questions doctrine as it's been announced in the last two years or so, I don't think the emergency situation really cuts in the agency's favor -- really cuts in any favor.


Hon. Eleni Roumel:  What do you think -- if Congress was considering future legislation to take action in an emergency, what do you think that Congress should consider in light of the major questions doctrine? And how granular does Congress need to get in detailing the action that the agency can take in responding to an emergency?


Prof. Chad Squitieri:  Yeah. I think it's a very interesting question because, on one hand, you might think the answer is, "Well, Congress should just be very specific about what it wants" -- what it wants the agency to do, the power it's granting the agency clear congressional authorization as the Court uses in the major questions cases. But the whole idea is that Congress really can't know what some future facts might present.


      So I'm not really sure Congress can adjust the way it drafts legislation much to respond to the major questions doctrine. They certainly can respond to nondelegation questions by just not being too vague. But as a major questions doctrine, I think part of what the Court is signaling is that, even in an emerging situation, like with COVID, we want to funnel decision-making authority back to the Article I, Section 7 law-making process back to Congress and have Congress quickly give power to an agency. So I'm not really sure an agency could predict with enough specificity the necessary language because they don't know what's around the corner.


Hon. Eleni Roumel:  And let me throw one last question to you, Greg, about if the Supreme Court upholds, on the merits, the President's actions in this case, or the administration's actions, I should say in this case, what would be the limit to the presidential authority here? How broadly do you think a president can interpret a statute to assume new authorities? I know we have West Virginia v. EPA.


Hon. Gregory Garre:  Yeah.


Hon. Eleni Roumel:  Is that the limit, or is there no limit?


Hon. Gregory Garre:  Yeah. I think it would take a major dent out of the major questions doctrine as it exists today. It would be hard to reconcile. And yeah. It goes back to the appropriations, the funding power, that if the President can do that, then I think there is a significant shift, at least in terms of we've understood the funding power and the need for the executive to go to Congress to get that authorized through the appropriations process.


Hon. Eleni Roumel:  Let me see if we have any questions from the audience. I want to make sure people get their questions asked.


      Yes, sir.


Devin Watkins:  Devin Watkins.


      My question is to Gregory. It concerns the Axon case. In deciding the Court's jurisdiction to be able to hear these cases, perhaps -- do you think the Court also decided the question for preliminary injunction as to whether there was irreparable harm? Because in deciding there was a here-and-now injury that can't be fixed by a Court of Appeals, it seems like for injunctions the only thing left is if they would actually prevail -- or likely prevail for a preliminary injunction. Is that your opinion of how you would read Axon?


Hon. Gregory Garre:  I think that's a good point. I think that would be a fair argument based on the decision. It wasn't really teed up in that way specifically as meeting the injunction factors, and the government probably would argue that. But I think it lends support to that argument that the Court's recognition of that here-and-now injury would be a type of irreparable harm.


Hon. Eleni Roumel:  Yes, sir.


Mark Chenoweth:  Mark Chenoweth, New Civil Liberties Alliance.


      Greg, thank you for mentioning NCLA's role in Cochran. We've actually been involved in all four of the categories that this panel covers, three of them with original litigation, and one as an amicus. So if you want to litigate, we are hiring.




Mark Chenoweth:  If this is the kind of thing that you want to do, drop us a resume.


      But my question for you, Greg, is what about stays on administrative proceedings? Are they going to be mandatory now, given that this has been deemed a here-and-now injury for proceedings to go forward in front of allegedly unconstitutional ALJs?


Hon. Gregory Garre:  Yeah. Thanks, Mark. And Mark was an integral member of the Cochran team.


      That may be the next battleground. So all these cases go back, and we'll see new Article III actions in the district courts challenging the SEC and FTC proceedings. And then the question will be, "Can the agency proceedings go forward, or do you have to adjudicate the district court action first?" And I certainly think the better argument is that you should adjudicate the structural constitutional claims first getting back to the here-and-now injury point that we just mentioned. But I think there will be litigation on that, and I suspect district courts might go different ways, and maybe that issue will get up to the Court at some point.


Hon. Eleni Roumel:  Thank you.




Jerry Cox:  I'm Jerry Cox, and I have a question for Professor Pierce.


      You predict that Jarkesy would result in this enormous increase in jury trials. Are you not assuming that the agencies would bring in district court all the cases they currently put in front of their own ALJs? And the reason I ask that question is because I have handled dozens and dozens of agency administrative enforcement actions, but I will tell you every single one of them was utter garbage. They would never, ever put that in front of a U.S. district judge to save their lives. They will only put it in front of ALJs who they know will rule 100 percent in their favor. So how do you get to the conclusion that you're going to have a huge increase from Jarkesy because of [inaudible 1:31:34]?


Prof. Richard Pierce:  When I was in practice, I handled a few hundred of those cases. And --


Jerry Cox:  On the garbage side or the non-garbage side?


Prof. Richard Pierce:  Well, I often differed with the agency. I never had occasion to characterize their position as garbage.


      Most of those cases are rate-making cases. The just and reasonable standard that was applied in jury trials as long ago as the 15th century and was applied and certainly in 1789 was applied to innkeepers in jury trials. Today all of that is done by the Federal Energy Regulatory Commission in determining rates and by the Federal Communications Commission in determining rates and the Surface Transportation Board in determining rates. And those cases -- I don't know what you mean by "garbage" because every one of those cases is the customers against the supplier. So --


Jerry Cox:  I'd be happy to give anybody a list of garbage cases that I guarantee you will never go, cases like those coming out of the Transportation Department, the Energy Department, and so forth. They would never go to a U.S. district judge with a straight face. It just wouldn't happen.


Prof. Richard Pierce:  Well, I don't know where else you're going to get ratemaking accomplished if agencies are not allowed to do it because the regulated firm is entitled to a jury trial in every case. As customers—and you're all customers of regulated utilities—you would have nothing if they don't go to court. And we had a hell of a lot of jury verdicts. And I don't know where they would -- we would come up with the resources to handle all those jury trials.


Jerry Cox:  I'm talking about a -- I'm talking about enforcement cases. I'm going to sit down now, but I'm talking about enforcement cases where agencies are trying to take away property of regulated entities by making allegations that --


Prof. Richard Pierce:  The regulated entities make that argument in every rate case. Every single rate case that is one of their arguments that the government is taking their property.


Jerry Cox:  All I can say is I hope that we get a favorable decision in Jarkesy, and you find out that you're wrong about the number that would -- jury trials that [inaudible 1:34:00].


Hon. Eleni Roumel:  I think we have time --


Prof. Richard Pierce:  You want to put some money on that, I'm glad to talk with you afterwards, otherwise, I'm through.


Hon. Eleni Roumel:  I think we have time for one more question.


      Yes, sir.


David Tryon:  Yeah. I have a -- David Tryon with the Buckeye Institute in Ohio.


      Just a similar question in jury trials. My experience with jury trials is you never get there. 99 percent of all civil cases end -- most criminal cases, but I don't know anything about those because I don't do that. But almost all are settled or either done -- handled through a magistrate that mediates them and gets them settled. Or otherwise, they're settled. So do you really believe that you would actually get to a jury trial in all those things? Or would they have a similar settlement rate?


Prof. Richard Pierce:  And that's a good point. Most cases that are theoretically subject to a jury trial -- well, we know the figures on that. We've got solid figures on that. Slightly over 99 percent never go to the jury where the jury trial -- but that, then, raises the question of what the hell is -- good is a right that nobody can exercise as a practical matter, and nobody does exercise except in less than 1 percent of all cases? I have a big problem with the Seventh Amendment generally.


David Tryon:  Thank you.


Hon. Eleni Roumel:  Well, I hate to end on that note, but I think that we have hit our time. And as you can see, there's so much to talk about with these cases. We could talk for hours about it, but unfortunately, we cannot today.



      I want to thank our wonderful panel for this discussion and our great audience for some really great questions. Thank you so much to all of you. 

2:15 p.m. - 3:45 p.m.
$64,000 Questions — Obtaining Information from the Executive Branch


Topics: Administrative Law & Regulation
Chinese Room
The Mayflower Hotel
1127 Connecticut Ave NW
Washington, DC 20036


Event Video

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We’ve grown accustomed to learning about government actions only because an enterprising person or group brought them to light using the Freedom of Information Act. Enacted in 1967 after a decade of debate and Congressional hearings, and most recently amended in 2016, FOIA was intended to correct what some viewed  as the Administrative Procedure Act’s tendency toward nondisclosure.

This panel will discuss the law, how FOIA requests are used by reporters, researchers, academics, interest groups, trial lawyers and others to obtain information from the government, how the government protects information it considers covered by FOIA exemptions, how courts review government denials of FOIA requests, and some of the more newsworthy disclosures obtained using FOIA.



Event Transcript

Eileen O'Connor:  Good afternoon, ladies and gentlemen. I'm Eileen O'Connor. I'm Chairman of the Administrative Law and Practice -- excuse me -- the Administrative Law and Regulations Practice Group. Thank you for choosing this panel this afternoon. There are two others going on at the same time, and perhaps, like me, you plan on watching them as a podcast as soon as they're available.


For now, I'll introduce today's moderator, who will introduce the topic and this afternoon's panelists, but first, let me mention just a little bit about how this panel came together. The Federalist Society has 15 practice groups, each of which focuses on a specific area of law. Each practice group has an executive committee whose membership consists of about two dozen or more attorneys engaged in government, academia, private practice, or the corporate world. Recently, also, we have begun adding law students as associate members.


These are some of the smartest, most knowledgeable people in these areas of law. We meet on the phone for about half an hour once a month to share information and ideas and plan events from which we think the membership could benefit, like webinars and this afternoon's panel. Members of the Ad Law Executive Committee had the idea for the topic this panel will address and carefully selected the best possible experts to speak about it from different points of view.


The Planning Committee for this panel consisted of Ken Davis, Aram Gavoor, Judge Vaden, and me. And speaking of Judge Vaden, he graciously agreed to moderate today's panel. If you're not yet a member of a practice group and are interested in joining one and in contributing your interest and expertise to an executive committee, please let us know; and by "us," I mean me and anybody that you see today wearing a nametag that has a ribbon on it that says "staff."


Judge Vaden comes to us today from New York, where he is a judge on the United States Court of International Trade. Judge Vaden joined that court in December 2020, having been nominated by President Trump late in 2019 and again in early 2020, the same day the Senate returned his nomination to the White House. But he was born and raised and—when he is not in New York judging—resides in Union City, Tennessee, where as a youth, he helped out with his family's farming and real estate businesses.


He earned his bachelor's degree in American history summa cum laude from Vanderbilt University and his law degree from the Yale Law School, where he was a senior editor of the Yale Journal on Regulation. Early in his career, Judge Vaden served two clerkships in Memphis, Tennessee, one on the district court with Judge Mays and one on the Sixth Circuit with Judge Gibbons. He followed that by practicing law as an appellate litigator at two top-flight Washington law firms: Patton Boggs and Jones Day.


Immediately before joining the court, Judge Vaden was general counsel of the second-largest department in the executive branch, the Department of Agriculture. In that capacity, Judge Vaden made numerous impactful improvements in the department, including dispersing its operations throughout the country to better serve rural America and reduce their concentration in Washington D.C.


Particularly relevant for purposes of today's panel is that, as general counsel, Judge Vaden was the department's chief Freedom of Information Act officer and reorganized the department's FOIA program to improve response efficiency. Judge Vaden.


Hon. Stephen Vaden:  Thank you so much, Eileen. Thank you so much for that kind introduction. And I just want to begin by commenting and complimenting The Federalist Society on its very sly sense of humor to have a discussion this afternoon about government transparency in the Chinese room. So I'll let you debate mentally what you think that indicates about the message we're supposed to deliver here today, but I thought it was noteworthy and just wanted to comment on it.


Like so much of our government today, the Freedom of Information Act actually has its origins in the Administrative Procedure Act. The old Section 3 of the Administrative Procedure Act allowed agencies broad discretion over the publication of information, but by the mid-1960s, the Congress was concerned that the Administrative Procedure Act was more a means of hiding information than disclosing it.


So over the original objections of President Johnson -- And you might query as to why he might not be in favor of government transparency if you've read about his tenure in office, but in 1966, Congress sought to change this by passing what became the Freedom of Information Act, and that bill went into effect one year later on the Fourth of July 1967.


One of the initial goals of that Act was that there be no secret law. The Act requires agency interpretations, rules of procedure, staff manuals, statements of policy and interpretation that have not been published in the Federal Register, but nonetheless had been adopted by the agency, all to be made public.


In addition—and its most well-known feature—it allows members of the public to request additional records from government agencies, which must be disclosed unless one of nine specifically enumerated exemptions applies. The agency bears the burden of proving that an exemption applies rather than the requestor bearing the burden of showing that they should get the document.


Furthermore, there's a right to go to court on a very quick timeframe in order to compel disclosure. One way to think about FOIA—and it's definitely the way many of our panelists here will think about FOIA today—is it has helped to privatize oversight of the federal government. It is no longer just the province of Congress to bring to light the inner operations of the federal government, but average citizens can do so as well for a host of different reasons.


We're going to talk about how the process works, how you go about filing a FOIA request, what happens once you do from the government's perspective, and then if you're unhappy with what you get or don't get, how you can contest that in court and what courts are ruling when FOIA cases come before them all here this afternoon.


We have four great panelists whom I'm going to introduce all at the beginning here so that we can immediately get to hearing their wise counsel. They are seated in order that they will present, so I will start to my right, your left, with Mr. Gary Lawkowski, who is currently counsel at Dhillon Law Group, where he works on political law, election law, administrative law, appellate issues, specifically dealing with nonprofits.


Before joining the Dhillon Law Group, Mr. Lawkowski served at the Department of Interior, advising the Secretary and other senior departmental leaders, as well as he served as a senior policy advisor on the White House Domestic Policy Council. He's worked at the Federal Election Commission under multiple chairmen and commissioners and earned his JD and his bachelor's degree both from the University of Virginia. So he's a double hoo, I believe they call them.


Seated to his left is Miss Alina Semo. She is the Director of the Office of Government Information Services for the Federal Freedom of Information Act's ombudsman's office—that's a mouthful—which is part of the National Archives and Records Administration before taking on that important role, which she will tell you about its important role, in serving as a non-adjudicatory—in terms of at least litigation—way to settle FOIA disputes.


She served as the Director of Litigation for the National Archives and Records Administration's Office of General Counsel. She's also served in the litigation unit for FOIA in the FBI—that must have been fun—as well as the Department of Justice trial attorney. She holds a Bachelor of Arts degree from the University of Maryland College Park, and her law degree is from Georgetown University Law School.


Seated to my immediate left is Ms. Katie Townsend. Katie is Deputy Executive Director and Legal Director at the Reporters Committee for freedom of the press, a nonprofit organization based here in Washington D.C. She oversees the litigation, amicus, and other legal work of Reporters Committee attorneys and represents the Reporters Committee, news organizations, and individual journalists—including documentary filmmakers—in court access, freedom of information, and other First Amendment matters.


She was previously an associate in the Los Angeles office of Gibson Dunn & Crutcher, and she's a fellow of the American Bar Association. She also graduated from the University of Virginia School of Law and got her bachelor's degree at the University of Florida, which has a slightly better football team.


And then, finally, at the end of the table is Mr. Ryan Mulvey. Ryan serves as policy counsel at the Americans for Prosperity Foundation. He also continues to serve in an informal role as counsel at the Cause of Action Institute. He regularly lectures on government transparency matters and litigates cases under the Freedom of Information Act and Administrative Procedure Act, and as a policy expert, he's called on to advise congressional staff about FOIA reform and other transparency issues. Ryan holds his degree from the University of San Diego and his law degree from Boston University Law School.


So join me in welcoming all of our panelists, and I will turn it over first to Gary, who's going to give us a little background on FOIA as well as how you kick the process off by actually submitting a FOIA request.


Gary Lawkowski:  Thank you, Judge, and thank you all for being here. It's a lovely afternoon. It's April 25th, so it's the perfect day, and I appreciate you all being here. So the U.S. Constitution begins with its three most important words: "We, the people." With these little words, the framers made a relatively new, relatively radical declaration that sovereignty in the United States rests with the people and the citizen, not with a king, not with a parliament, not with the government in general.


And that's important to remember in our discussion here today. As Judge Vaden mentioned, when we talk about FOIA and we talk about these things, it's about how we, the people, can hold government accountable, how we can understand what's being done in our name, how we can make sure that government is functioning in the way that it's intended to where it's responsive to us and where we understand what they're doing.


So it's a mechanism for providing citizens a better understanding of their government so they can properly oversee the men and women who act in their name. Now, if you've spent any time in government fielding FOIA requests from a particular respondent or yourselves and reviewing them, that probably sounds like a bit of an overly idealistic take on things, right?  That's not the feeling you get when you're going through your email trying to respond to these things. And in some ways, that probably is a bit of an overly idealistic view.


Even back in 1982, then-Professor Scalia wrote an article expressing concern about how this grand transparency measure was being co-opted by corporate lawyers and others at great expense to the government that had little to do with its grand transparency goals. And even today, that trend largely holds true to a certain extent.


According to a 2017 report from Columbia Journalism Review, 39 percent of FOIA requests are sent by businesses and nearly 17 percent of FOIA requests are sent by law firms, which constitute two of the largest groups of requesters, which are not the traditional thing you think of. But it's important when considering this to remember that, even in spite of that, where this comes from and why we have this, it comes back to that idea of we, the people, and how we, the people, are the ones who have oversight over the federal government.


So what is FOIA? What does it do? As Judge Vaden mentioned, it's a law that dictates how agencies make information available to the public. It was first adopted in the mid-'60s. It's been amended several times since then, probably most notably in '76, 2007, and 2016. And in general, it has provisions that are intended to, as Judge Vaden mentioned, prevent the rise of so-called secret law, the idea of we don't want governmental decisions to be high on a metaphorical pillar where they exist, but the people don't know what they are, they don't know what types of things are governing, what's happening to them, why decisions are being made, what's happening in their name, and what they're accountable for.


But it's best known for its ability for we, the people, the citizens, to request information from government, and under these provisions, any person can request an agency record. In order to make a request, a person just has to do basically two things: reasonably describe the records that are being sought and follow agency rules for submitting a request, including agreeing to pay any applicable fees.


In general, fees are limited to reasonable standard charges for documents search, duplication, and review. And once you make a request, the department generally has 20 business days to make a determination. That's become a bit of a term of art that we'll get into a little bit. And an agency gets an extra 10 business days when it can cite certain unusual circumstances that justify taking a little longer.


So first, what's an agency record? It's generally any tangible thing that conveys information. It's usually defined pretty broadly, particularly when you're talking about the core governmental activity, when you're talking about things that are created by government employees on government time for a traditional government agency.


In most cases, you're not likely to find yourself fighting about what an agency record is or whether it counts or not; however, there are a couple of big exceptions that come up every now and then. First, FOIA only applies to the executive branch. As Congress is wont to do, they did not apply a transparency statute to themselves; they applied it to another branch of government. It also does not apply to the judiciary.


Second, employees' personal notes and communications are not covered by FOIA. Now, that can be a little tricky, depending on kind of what counts as personal and what counts as official. We've seen that particularly when you're talking about the use of personal emails, personal phones to conduct agency business. When is that an agency record? When is that something that's within the possession and control of the agency versus when is that a purely personal thing? Now, the D.C. Circuit has said, at least in some circumstances, those records are FOIA-able, and that's a case called Competitive Enterprise Institute, v. Office of Science and Technology Policy.


Finally, governmental bodies that are not traditional agencies can also pose some challenges. So some things like Amtrak can occasionally be FOIA-able. The other big area is the Office of the President is not generally foible, although certain sub-agencies within the Office of the President are just to make things more confusing for the everyday requester.


Now, thinking about agency records can also help to think about FOIA exemptions, and we mentioned those. I think some of our panelists are going to dig into that a little bit more, but at the out-front, I'll just note a couple that are relevant in thinking about when you're putting together requests, what you're going to make and what you want to ask for.


For example, pre-decisional deliberative documents are generally going to be subject to an exemption, as are many law enforcement records. Those are things to think about when you're thinking, "What do I want from an agency? Is this something I'm going to be able to get?" So let's say you found an agency; you want to get information from it. What do you do next?


The next step is reasonably describe the information that's sought. Now, this tends to be one of the trickier parts in making a FOIA request. After all, in many cases, the whole reason you're asking in the first place is you don't know what the government's doing. You want to know; you don't know. So how do you square that circle?


There's an asymmetry of information in most cases. The agency knows what it's doing, in theory; you, on the outside, don't. The general rule is that the description of a record just has to be good enough for a professional agency employee familiar with the subject to locate the record with a reasonable amount of effort.


We're not asking people to kill themselves doing this. We're not asking for them to just be able to throw a dart on a wall and pick something. We're also not asking you, though, to come up with the exact title, internal database citation for a particular document you're trying to find.


So there are a few assumptions that are baked into the standard, and I think it's generally necessary to make the system work, such as it does work. One of them is that the agency employee tasked with evaluating your request is reasonably familiar with the subject area. Now, in my limited experience, such as it is, it varies from department to department, but particularly for a lot of larger agencies, this is a bit of a legal fiction.


In many places, FOIA officers and officers are somewhat separate from the program offices that are actually doing the work. The result is that, in practice, the person you're talking to in the FOIA office likely does not know a whole lot more than you do about what you're asking for or what the agency's actually doing. In many cases, they may even know less because you've researched this and you've decided this is something you want to know about.


So it's not always possible—it's not legally required—but there are a couple of things you can do to get around this problem. First, the more you can identify the people who are likely to have the records you're looking for, the better. Even if you don't know, "All right, I'm looking for Gary's records," if you can identify, "All right, I think the undersecretary for big muckety-muck government stuff is likely to have this," you can ask for that office or you can ask for that title or you can ask for certain people associated with that, and that can help narrow it down a little bit.


Second, if you can offer suggested search terms, that also can help a lot. Again, the agency officers you're interacting with often don't know who did what on a particular record. The result is that, in many agencies, when they talk about doing a search, especially now when so much stuff's been electronic and you have so much email, their search essentially consists of basically running a literal internet search through their -- or keyword search through agency employee emails.


So if you have a sense of what you're looking for, the more you can suggest, "Hey, here's some good words that are likely to pull up the type of records I'm looking for," that can make it a lot easier for them to go in and say, "Okay, I can figure out how to do that." They just type that into the little system, it pops up, and there we go. We're off and running.


And the third thing you can do is offer a date range. This is also helpful to avoid the charge of, "Well, you're seeking everything that's ever been created in the history of time." You could say, "Well, no, I'm looking for a two-month period here with the search term of 'Gary's a terrible lawyer,' and I want to find it in this set of emails." If you can do that, that's a very easy, reasonable search that an agency employee can run and that even someone who's not as familiar with the records as they're supposed to be can try to track down.


Now, there are also a few what I'll call trigger words you're going to want to avoid when writing FOIA requests, specifically words like any, all, and related to. The government is very fond of a case out of the D.C. District Court called Freedom Watch, Inc. v. Department of State. It's from 2013. In that case, the Court stated, since the request asked for all records that relate to each subject area, they were inevitably subject to criticism as overbroad since "life, like law, is a seamless web and all documents relate to each other in some fashion."


So those are words you may want to try to stay away from to try to avoid them saying, "Well, anything could relate to anything else" or "Well, how am I possibly supposed to find every, all, or any record?" Now, I think that quote kind of overreads the case about the problem that comes up a bit.


Now, moreover, in at least one district court case, Gun Owners of America v. Federal Bureau of Investigation, the courts clarified there's no bright line prohibiting that language, but it's still better to avoid it when you're writing a request. Also, frankly, it doesn't get you very far in terms of getting more of what you want.


The government and the agency's obligation is to conduct a reasonable search for responsive records, which means that they're going to do what's reasonable regardless of whether you said all, any, every. So it doesn't really add a whole lot to what you get, but it can make it harder to get through the motion to dismiss stage.


The next thing to consider is whether you want to request a fee waiver. The first thing to know is, following the FOIA Improvement Act, agencies generally cannot charge fees if they fail to make a determination within the statutory time limit. So, as you may guess, government moves at the pace that government moves. They often miss those deadlines, especially for more complex requests that are likely to have a higher fee at the end of it. And for many that have a strong public interest, these are also going to be the same types that are likely to miss that deadline.


There are a couple of limitations on the agency's ability to charge fees. First, they can be reduced or waived if disclosure is in the public interest because it's likely to contribute significantly to the public understanding of the operations or activities of government and is not primarily in the commercial interest of the requester; in other words, that classic "we, the people" oversight-type function.


Second, fees are limited to duplication costs—which, in the electronic age, is not a whole lot to put it on a disk or put it in an email and send it to you—if a request is not for commercial use and it's made by an educational or scientific research institution or representative of the news media.


Now, if you're trying to avoid fees, I would say take a close look at whether or not you're a representative of the news media, particularly if you're not acting in the name of a corporation or a law firm. So if you're coming in, in a public interest group, I would take a real close look on if you're a member of the news media. That's because of a case that I believe a couple people over there may be very familiar with, Cause of Action v. FTC, from 2015 where the Court set out of five-part test for the news media.


So it gathers information of public interest to a segment of the public, uses skill to turn that into some sort of distinct work, and distribute it to an audience. Now, when they're doing that, though, that can be as simple as drafting a press release about what you found and putting it out. The courts say, "Look, it doesn't matter how big your audience is. It doesn't have to be something elaborate. It doesn't have to be you're writing the Pentagon Papers, you're writing 1000-word expose for the New York Times." It can be as simple as writing a press release about, "Hey, here's what I found" and sending it out to a relatively limited group of people. 


And that can make you the press in this new media age. So it's something to consider if you're worried about fees and you're more of a public interest group and you don't necessarily want to go through the public interest prong of the request because you may be a member of the media. It's something to check out.


Now, if you're making a request that may be of the public interest, there's an additional reason you may want to ask for a fee waiver, even if you're not sure you're going to get it, even if you're not sure you're going to need it, even if you think, "Oh, they're never going to get this done on time."


When evaluating whether a request reasonably describes the records that are sought, courts have said that the agency has to look at the other context in the request to figure out if there are vague words in there. What are they really asking for? And if you describe what your public interest is, which is required, to try to get that fee waiver exemption, that also puts the agency on notice of, "What's the core of what I'm asking for? What's the nucleus of what I'm seeking?" It makes it a lot harder to say, "Hey, this request is way too broad. We can't possibly figure out what you're saying" if you say, "Well, I want X, Y, and Z records because of these reasons." So it can help you -- It's another way to help make sure your request isn't overbroad.


So you've made a valid FOIA request. It's gone to the agency. You're requesting your fee waiver. Your documents are super important. You can't wait to get them and tell everyone about them. What comes next? Well, by statute, the agency is supposed to make a determination within 20 business days with that option, again, to extend by 10.


Now, you may think "Great, I'm going to get my documents in 20 days. I can wait that long." I see at least one person laughing. You must have made a request before and tried to get them within 20 days. This being the government, it does not quite work that way. Under the leading case, which would be CREW v. FEC from 2013—I believe it was written by now-Justice Kavanaugh—an agency need only indicate within the relevant time period the scope of documents that it will produce and the exemptions it will rely on. They don't actually have to give you the documents yet.


Now, that may sound like, "What is this? That's terrible," but that's actually a huge improvement over what agencies were trying to do, which was basically say, "Well, we told the requester we'll get to it at some point. We determined. We're good, right? We'll get to it when we feel like it." The court said, "Well, no, you got to do a little more than that."


So if an agency -- and it's important because if an agency doesn't make a determination within the appropriate time, you're considered to have exhausted your administrative remedies, which is your first step into court to get a judicial oversight over the executive branch. Now, under FOIA, if you're worried about the timeframe, there's also the possibility of seeking expedited processing. That is, "I want the documents faster." Here's a process to do that.


These requests are granted by establishing a failure to obtain the records will pose an imminent threat to life and personal property, which is usually a relatively high bar to clear, or if you're a person primarily engaged in disseminating information and you can show that there's an urgent need to tell the public about this. It's tough to get expedited processing on a lot of stuff. I'll just throw that out there early on. And even if you do, it doesn't always get you as much as you would hope it gets you, but there is that process there.


Now, there's a lot more I could say about that, but in the interest of time, I'll just flag three other issues that we may discuss as we go through the panel or as we get through question and answer. First is what I've termed Schrodinger's FOIA request. These are requests that are both somehow simultaneously alive and dead until a court observes them.


And where this is coming from is, in CREW, there's a footnote that says the clock doesn't start ticking on a determination until agencies have a valid FOIA request. So what we're seeing is the government coming into court when you finally say, "All right, I'm sick of this. It's been X number of days. We're going to go to court. We're going to try to get these records from you." What we're saying then -- What we're seeing then is the government coming in and arguing, "Joke's on you. You never actually had a valid FOIA request. We never had any obligation to process it. Therefore, we don't have to do anything. Thank you for coming."


We're seeing this even after they present requestors' messages saying, "We are processing your request. We've conducted the search for your request." They're still coming in and making this argument of, "Well, it was never a real request to begin with. The only way you could possibly know is sue us and I guess you'll find out."


Second, there's another question that's come up and it's related is, do agencies have a duty to confer with requesters under FOIA if a request is overly broad before rejecting it? At least two courts in D.C. have taken different views on that question. The court in American Center for Law and Justice v. DHS held there is not such a duty under the Act. There's no duty to confer. By contrast, the court in Charles v. United States found there is such a duty under both FOIA and DOJ regulations.


Now, those issues are related and both get to the question of what happens when an agency sits on a request for a while, strings them along, and says, "We'll get to it some time." This is the intention with the CREW decision, which held that, "No, you really need to give a better answer than that," but it's something that's still developing. It's something to keep an eye on. I suspect courts will be reluctant to impose something like almost estoppel doctrine on agencies if they sit on things too long, but it will be interesting to see how they resolve those two questions going forward.


The final point I'll raise and then wrap it up is, it's one thing to say you'll get the documents. It's another thing to say when. And we're starting to see agencies more and more say, "Oh, yeah, you'll get them," go into court and say, "Oh, yeah, we'll get those to you," but then push down what the pace of production is, so it's taking longer and longer.


And that's one big difference between, say, FOIA and discovery is, if I went to a court and said I need two years to process 6000 documents for discovery, the judge is gonna laugh me out of court and possibly hold me in contempt by the time I'm done making that argument. Somehow the government, though, can go into court and try to make that argument with respect to FOIA and do it with a straight face. And with that, I'll move on.


Alina Semo:  Tough act to follow. Hello, everyone. Thanks again for inviting me to participate in today's panel. I am Alina Semo, Director of the Office of Government Information Services, or OGIS, which is part of the National Archives and Records Administration. Just a disclaimer: I don't know anything about what's going on with the presidential records or vice presidential records. I had a friend who invited me over for dinner a few months ago who thought that I would have a lot of information for him and was pumping me. I said, "I know nothing," and that's a good thing. I just know as much as what everyone else is reading in the paper, so I can't answer any questions on that.


So for those of you who are not familiar with our office, OGIS was created by the Open Government Act of 2007, and our mandate was expanded substantially through the FOIA Improvement Act of 2016. I'll talk about that in a minute. We opened our doors in September of 2009.