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Twelfth Annual Executive Branch Review Conference — EBRXII

The Constitution and Regulatory Overreach

April 16, 2024
The Mayflower Hotel
1127 Connecticut Avenue
Washington, DC 20036

Twelfth Annual Executive Branch Review Conference — EBRXII
Theme: The Constitution and Regulatory Overreach

Tuesday, April 16, 2024
The Mayflower Hotel
1127 Connecticut Avenue, NW, Washington, DC

Online registration is now closed.
Onsite registration will be available.

Lunch Address featuring Speaker Mike Johnson

Speaker Mike Johnson
56th Speaker of the U.S. House of Representatives


 Opening Address featuring the Honorable Paul J. Ray

Hon. Paul J. Ray
Director, Thomas A. Roe Institute for Economic Policy Studies, The Heritage Foundation

CLE Info


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

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

Lunch Address with Speaker Mike Johnson
12:00 p.m. – 12:15 p.m.

12:15 p.m. – 12:45 p.m.

Luncheon Panel
12:45 p.m. – 2:30 p.m.

Breakout Panels
2:45 p.m. – 4:30 p.m.

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


  • Is the Whole of Government Greater Than the Sum of its Parts?
  • Environmental Law and the Constitution: Exceeding the Limits?
  • Law and Order on the Border?
  • Is Humphrey’s Executor still relevant?
  • Testing the Tension: How Do Nondiscrimination Regulations Interact with Religious Freedom?
  • U.S. Financial Regulation: Principles, Opportunities, and Challenges


  • Hon. Paul Atkins
  • Ms. Julie Blake
  • Mr. Braden Boucek
  • Hon. Mark Brnovich
  • Mr. Anthony Campau
  • Dr. Sohan Dasgupta
  • Mr. Jeffrey Dinwoodie
  • Mr. Eric Grant
  • Prof. Gail Heriot
  • Hon. Robert Jackson
  • Mr. Matthew Kuhn
  • Prof. Martin S. Lederman
  • Prof. Jennifer Mascott
  • Hon. Timothy Massad
  • Mr. Michael McGinley
  • Prof. Andrew Mergen
  • Mr. David S. Mitchell
  • Ms. Andrea Picotti-Bayer
  • Prof. Jed Shugerman
  • Mr. Brett Shumate
  • Hon. Jonathan Skrmetti
  • Ms. Elizabeth Slattery
  • Ms. Corinne Snow
  • Prof. Ilya Somin
  • Hon. Jill Sommers
  • Hon. Stephen Vaden
  • Hon. Beth A. Williams

And More to Come!


  • 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: Opening Address & Is the Whole of Government Greater Than the Sum of its Parts?


Grand Ballroom
The Mayflower Hotel
1127 Connecticut Avenue
Washington, DC 20036


Event Video


During its first hours, the Biden Administration promised a Whole of Government approach to implementing its policies. Ever since, the administration has delivered, with every federal agency using all the tools at their disposal. Through “Interpretations,” “Dear Colleague” letters, guidance documents, employee manuals, litigation, notices of proposed rulemaking, controversial new criteria for cost/benefit analyses, and more, agencies are implementing the administration’s goals regarding “climate change,” “equity,” and other of its priorities. This panel will discuss the many methods the current administration is using to achieve its policy objectives and, where relevant, how they are faring against challenges to their legitimacy.


  • Braden H. Boucek, Vice President of Litigation, Southeastern Legal Foundation
  • Anthony Campau, Principal, Clark Hill Public Strategies
  • Hon. Gail Heriot, Professor of Law, University of San Diego School of Law
  • David S. Mitchell, Senior Fellow, Washington Center for Equitable Growth
  • Moderator: Hon. Jonathan Skrmetti, Attorney General of Tennessee


Event Transcript

Nate Kaczmarek:  Good morning. Good morning and welcome to the Twelfth 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. On behalf of my colleagues and the practice group leadership, we are thrilled to once more be gathered at the Mayflower to discuss the current state of the Executive Branch and the administrative state. I also want to welcome our audience joining us via the livestream. We appreciate your viewership and look forward to your feedback. One quick logistical item, if you are seeking CLE for your attendance today, please be sure to check in and check out using the QR code on the back of your program.


This year’s conference theme is the Constitution and Regulatory Overreach. If you ask some on Capitol Hill about our topic, they will tell you that we live in a target rich environment and that the current administration is “burying Americans in red tape.” Supporters of the administration, however, praise the efforts to expand regulatory protections and enforcement and modernize the regulatory review process. That is all the table setting I will be doing this morning. Our practice group executive committees have been hard at work to put together a full day of debate and discussion on these matters, so much so that every moment from now until 6:00 tonight is spoken for.


So I will quickly turn to the task of introducing our excellent first speaker for this morning’s opening address, the Honorable Paul Ray. I’ve known Paul for years, and together we’ve discovered a shared interest in good books. Often, when we get together, one of us will bring to the other a new book we have recently finished for the other to enjoy. We’ve agreed that we both like much of the exceptional writing of the novelist Mark Helprin, and in thinking about introducing Paul today, I was reminded of a famous quote that a New York Times critic once wrote when reviewing one of Mark Helprin’s books. That critic stated on the front page of The New York Times “I find myself nervous to a degree I don’t recall in my past as a reviewer about failing the work and inadequately displaying its brilliance.” I feel much the same about introducing Paul.


Paul is the director of the Thomas A. Roe Institute for Economic Policy Studies at the Heritage Foundation. He previously served in government as the administrator of the Office of Information and Regulatory Affairs or OIRA. Before that, he served as counselor to the U.S. Secretary of Labor. He clerked for Judge Debra Ann Livingston of the United States Court of Appeals for the Second Circuit and for Justice Alito on the Supreme Court. His law degree is from Harvard, and his undergrad was at Hillsdale. Go Chargers.


He is a deep thinker, a constitutional scholar, but unusual in this town is that his considerable intelligence is only outpaced by his genuine warmth and kindness. He is a great friend, and I think I can say without hesitation that for all his accolades and titles his favorite roles are more recent: those of husband and father. Please join me in welcoming Paul Ray. Let me get out of the way.


Hon. Paul Ray:  Nate, thank you very much. It’s a beautifully generous introduction. It’s a real pleasure to be here. Even if it weren’t such a pleasure to be here, it’d be totally worth it just to share a platform with you. So thank you so much. It’s very generous of you.


It’s a great honor to be here to offer a few thoughts on today’s topic, which as Nate said is “The Constitution and Regulatory Overreach.” I’ve titled this short talk “Beyond the Parchment Barriers.” This famous phrase, as many of you know, comes from Federalist 48. And I want to quote the passage that is its home in full. “Will it be sufficient to mark with precision the boundaries of these departments in the constitution of the government and to trust to these parchment barriers against the encroaching spirit of power? This is the security which appears to have been principally relied on by the compilers of most of the American Constitutions, but experience assures us that the efficacy of the provision has been overrated and that some more adequate defense is indispensably necessary.”


I begin with this passage because in the Supreme Court term especially we are concerned with marking the boundaries of power with precision, though it is the boundaries of the agencies rather than of the three branches named in the Constitution that we are concerned with marking. SEC v. Jarkesy considers the necessity for articulating boundaries to agency authority, and of course Loper Bright Enterprises v. Raimondo presents the question of how to resolve ambiguity at the boundaries. Both cases have aroused great interest in the administrative law community, and rightly so. For one of the gravest problems with today’s administrative system is that agency authorities are open ended and vague. Sound decisions in Jarkesy and Loper Bright would result in clearer limits around agency authorities, and that would be a tremendously positive step in the right direction.


But at the same time, we mustn’t overlook matters in this point in Federalist 48. There’s a danger that in this term of all terms we’ll focus too closely on marking with precision the boundaries of agency authority and forget about the structural protections that can make those boundaries more adequate, to quote Madison. We learned about these protections beginning in Federalist 51. They have to do with both motives and means. The Framers sought to give officials in each branch of government the motives to act in the way they’re supposed to act and the means to check each other. We might say the first defense was meant to prevent officials from pressing to hard against the parchment barriers, the second to ensure that officials effectively man the barriers against each other.


This morning, I’d like to sketch a few ways the administrative state fails to provide the motives and means the Founders believed vital to make parchment barriers effective. These failures mean that even if Congress could be made to draw relatively precise boundaries around agency powers and even if the courts could be made to give effect to them, we’d still have good reason to worry about the administrative state. First, let’s reflect on the ways the Founders gave lawmakers the right motives to play their constitutional role.


Pride of place, of course, must go to elections, which motivate congressmen to vindicate the views and interests of their constituents. Madison famously observed that the sweeping extent and diversity of the young republic would bring a vast array of opinions and interests into the legislature. This diverse representation means that particular factions cannot easily ram through legislation to their exclusive advantage. It also means that legislative proposals are subject to criticism from the perspective of every interest and opinion.


The result is a legislation that takes many concerns into consideration and makes intelligent tradeoffs among them. As the Supreme Court has explained, no legislation pursues its purposes at all costs. It’s not enough to conclude that a bill would advance some objective or another. For enactment, it must do so at no greater cost to other objectives than legislators interested in those objectives are willing to pay. Indeed, as the Court has put it, deciding what competing values will or will not be sacrificed to the achievement of a particular objective is the very essence of legislative choice.


The Founders, of course, did not rely just on elections to give lawmakers the right motives. They also sought to create a “communion of interests and sympathy of sentiments” between Congress and the people as Federalist 57 puts it. They did so by drawing representatives from the people and returning them to private life at short intervals, at least in the House. Madison explained further in Federalist 57 that members of Congress “can make no law which will not have its full operation on themselves and their friends as well as in the great mass of the society,” a connection which he says has always been deemed one of the strongest bonds by which policy can connect the rulers and the people together.


“If the people,” and again Madison’s words, “shall ever be so far debased just to tolerate a law not obligatory on the legislature as well as on the people, the people will be prepared to tolerate anything but liberty.” One of the main guarantors of the communion of interests and sympathy of sentiments between Congress and the people is the separation of powers. For as Montesquieu explains “Where the powers are united, the same body of magistrates will be possessed as executors of the laws of the whole power they have given themselves and the quality of legislators.” The ability to enhance their own power through legislation would mean that members of Congress would experience legislation in a very different way from the people. For a statute that severely diminishes an average citizen’s ability to carry out his plans might dramatically enhance a member of Congress’s ability to carry out his legislative agenda. And this difference in perspective would disrupt the union of interests and sentiments the Founders wished to create.


Now, let’s think for a minute about the motives that the administrative state’s architecture is likely to give regulators. The first thing we notice, of course, is that regulators are unelected. They lack what both the Federalist and Common Sense tell us is the main vehicle for aligning the government’s motives with those of the governed. Further, unlike Congress, agencies are specialized. Often, their specialization appears in their names. It’s no mystery what the Environmental Protection Agency protects or the Federal Energy Regulatory Commission regulates. We need only read James Landis’s The Administrative Process to realize how large a role specialization played in the New Dealers’ hopes that agencies would be both effective and insulated from politics.


Specialization is driven not just by statutory mandate but by agency staffing practices. Agency staff, especially high ranking staff, usual join agencies whose mission they believe is important. Agencies are thus filled with employees whose own interests push them toward the very specialization that their statutes demand.


Now, agencies specialize by focusing on some concerns to the exclusion of others. EPA, for instance, specializes in fighting pollution precisely by not worrying too much about national defense, the stock market, etc. We should therefore not be surprised when we find that agencies often develop tunnel vision. Michigan v. EPA from several years ago offers us an illuminating if extreme example. The agency there took the position that regulation to control mercury emissions from power plants would be necessary and appropriate even if the harmful collateral consequences vastly outweighed the good that controlling these emissions would achieve.


Agencies regularly succumb to similarly if less striking myopia. They are motivated to pursue their own special missions with little thought for other priorities. In this way, agencies’ motives differ from Congress’s whose members’ diverse interests push it towards an all things considered approach. Nor are agencies likely to experience the communion of interests and sympathy of sentiments for which the Founders hoped from Congress.


Members of Congress tend to reflect the values of the people who elect them. Not so for agency staff who self-select into their agencies. Nor do agency staff return to the people as the Founders expected members of Congress would. It’s quite common for agency staff to spend their entire carriers in federal service. But most tellingly agencies don’t live under the regulations they issue in the same way the people do. Of course, agency staff are not formally exempt from their own regulations. Someone who works at DOL and also happens to run a business must follow DOL’s wage and hour regulations, for instance.


The point is that agency staff are not likely to engage in the activities they regulate just because their line of work is regulating rather than working in a regulated field, nor are the staff who set policy, overwhelmingly resident here in Washington, likely to be a part of the communities that experience their regulations main effects. But agency staff do not just experience regulations differently than the people. The union of legislative and executive power allows agencies to expand their own executive power by using their legislative power.


And this means agencies’ interests in a given regulation may be opposite to the people’s, for what an agency experiences as enhancing its power may diminish the people’s and vice versa. Regulatory clarity and stability, for instance, help regulated parties to plan but restrict agencies’ ability to respond to changing needs. All this can give agencies a very different perspective on regulations than the people have.


Now, let me be clear. My point is not at all that agency staff have bad motives. To the contrary, during my time in government I formed the highest regard for the public spirit of very many agency employees, both political appointees and career civil servants. I saw men and women of both descriptions seek what they believed was best for the country simply because they believed it best. But public spiritedness isn’t the same as the communion of interests and sympathy of sentiments that the Founders aimed to create. The former, taken by itself, is compatible with a high degree of deviation from the people’s views. Indeed, dedication to the public good can itself be the motive for seeking regulatory power that the regulated public would prefer to withhold.


I’d like to turn now to the second of the protections I mentioned earlier, the means by which the founders enabled officials to man the parchment barriers against each other. Let me begin with Federalist 63, which famously explains that the true distinction between the ancient republics and the American regime lies at the total exclusion of the people in their collective capacity from any share in the latter, again, Madison’s words. The need for this exclusion is clear. Because in a popular regime the people are sovereign and hence irresistible, constitutional commitments can succeed only insofar as they’re the commands of the people and not limits upon them. And the only way to keep a constitution from degenerating into the latter is for the people to exclude themselves from active governance.


To carry out this exclusionary approach, the people committed in the Constitution to govern only through representatives, but they went further. They also gave each of the three branches of government a democratic mandate so that no official or group of officials may claim to stand in perfectly for the people and thus reintroduce them into governance. Because each official has some claim to speak for the people but none has a total claim, officials can check each other each invoking the people’s own authority to counter the other’s and, in this way, making good on the Constitution’s limits.


One goal of the architects of the administrative state was to overcome the Constitution’s system of checks, which they felt thwarted necessary federal action. In his book Constitutional Government, Woodrow Wilson explained that the president, because he can embody and direct the aspirations of the nation, can assemble a weight of public opinion that makes him irresistible and conflicts with other political actors. Wilson thought the president would be able to appeal to the people over the heads of congressional factions and thus bring unity of purpose to federal action.


Of course, Congress has its own democratic mandate on which it can draw when resisting presidential pretensions, but the courts are far less able to invoke the popular will. That’s one reason for their “natural feebleness,” to quote Federalist 78. And while conflict between a popular president and the courts has erupted from time to time throughout our nation’s history, the prospect of such conflict should always give us pause since at its worst, it pits the Constitution against the self-proclaimed tribune of the people.


Now, the courts have been reviewing agency actions for decades. Pretty often such review goes unremarked by the public. If you want proof, just try talking to your airplane seatmate about recent developments in APA case law. I’ve tried it. What’s new in recent years is the rise of presidential administration, and this has fundamentally changed judicial review of rulemakings in at least two ways.


First and most obviously, presidential administration means that courts reviewing administrative action sometimes find themselves facing not just an agency with a modest public profile but the president and his millions of supporters. Second, as the public has become accustomed to aggressive presidential use of agency rulemaking authorities, presidents have encountered growing demands for regulatory action to solve all the day’s most pressing problems. The difficulty is that presidents do not in fact have the powers to play in William Howard Taft’s words “the part of a universal providence” and set all things right.


So rather as Congress passes the buck by enacting statutes that foist the ultimate policy decision onto administrative agencies, presidents seek to pass the buck by appearing to act on problems they cannot solve. They can pass the buck to the courts by directing regulations that respond to popular demands very visibly but that are very unlikely to survive judicial review. Their incentives to do this can only increase upon realizing that campaigning against the courts can be electorally rewarding.


While I don’t wish to be too controversial, the student loan forgiveness episode appears to be a case in point. The legal basis for that action was very weak, and so the ultimate outcome of the litigation was entirely predictable. The result was that the President received credit from his supporters for addressing an important problem. That a solution didn’t ultimately work was of course the Court’s fault, not his. Within hours of the Court’s decision, he sought to turn it to his electoral advantage and televise remarks in which he identified himself with the, in his words, millions of Americans who felt angry about the Court’s decision.


Now, bucks cannot be passed forever. Even those that don’t stop in the Oval Office have to stop somewhere. I fear that more and more often on important national issues the buck will stop with the courts who are far less suited than Congress to bear the brunt of frequent conflicts with the Executive. Sound decisions in Jarkesy and Loper Bright cannot avoid that danger. Indeed, clearer lines around agency authorities may bring the courts into more frequent conflict with the White House.


Now, that’s not a good reason for the Court to avoid its duty in these two cases. It is, though, a good reason for all of us not to expect the Court to fix all that’s wrong with the administrative state. The Court is not a universal providence any more than the president is. While we should be pursuing administrative law reform in the courts with vigor, we should also seek more properly political solutions, solutions that bring Congress back onto the field for instance and that make the most of the willingness of states to push back on federal overreach. Reinvigorating these and other checks would revive the healthy tensions on which the Founders relied to make the Constitution’s parchment barriers effective. Thank you. (Applause).


Nate Kaczmarek:  Thank you, Paul. I didn’t oversell you. Appreciate your brilliant remarks. You gave us a lot to chew on. As I mentioned, we have a tight schedule, so we want to move quickly to our excellent first panel of the day. And I would ask each of those speakers for the first panel to please join me up here. This plenary session is titled “Is the Whole of Government Greater Than the Sum of Its Parts?” And it was put together by the great chair of our Administrative Law Executive Committee Eileen O’Connor and several other members of the committee. Our thanks to all of them.


As you’ve come to expect from our conferences, we have an embarrassment of legal expertise with us here today, and we are pleased that the moderator for this session is the Honorable Jonathan Skrmetti, the Attorney General of Tennessee. His abbreviated bio is as follows. General Skrmetti was appointed to by the Tennessee Supreme Court to serve an eight year term, and he was sworn into office in September of 2022. Prior to his current role, General Skrmetti served in several capacities in the Tennessee government, in private practice, and as a federal prosecutor first at the Civil Rights Division and then as an Assistant U.S. Attorney in Memphis.


General Skrmetti’s degrees are from George Washington University, the University of Oxford, and Harvard Law School. He clerked for Steven Colloton on the U.S. Court of Appeals for the Eighth Circuit. Full bios for AG Skrmetti and for all of our speakers today are available to you on our website, fedsoc.org. With that, please welcome a good friend of the Society, General Skrmetti, and our distinguished panel. (Applause).


Hon. Jonathan Skrmetti:  Good morning, everybody. It is my privilege to be able to introduce this panel. I’m going to move fast because we have a lot to talk about, and they have a lot to say.


I’ll start to my immediate left with Braden Boucek, who is the Vice President for Litigation at the Southeastern Legal Foundation. He previously served as the Vice President of Legal Affairs at the Beacon Center of Tennessee. And in both roles, he was involved in active litigation to promote liberty and check the government. He’s been a litigator since 2001. He was a decorated federal prosecutor in both Nashville and Memphis for almost a decade. He also served as a state prosecutor, and he worked in the Tennessee Attorney General’s Office. If any of you know young lawyers looking for jobs, we’re always hiring. Braden obtained his law degree from Florida State University and his bachelor’s from the University of Richmond.


Proceeding further down the line, we have the Honorable Gail Heriot. Professor Heriot serves as a professor of law at San Diego School of Law. Since 2007 she’s also been a member of the United States Commission on Civil Rights. I think anybody who comes to one of these conferences appreciates her enduring commitment to protecting civil rights and promoting the Constitution and its appropriate application by the federal government. She also serves on the board of directors of the National Association of Scholars and the California Association of Scholars. She previously served as the Civil Rights Counsel to the Senate Committee on the Judiciary and worked in private practice.


David Mitchell serves as a senior fellow at the Washington Center for Equitable Growth, focusing on tax and regulatory policy. He previously served as Director of Government and External Relations there. And prior to joining Equitable Growth, he was the Associate Director for Policy and Market Solutions at the Aspen Institute Financial Security Program, where he led a team responsible for amplifying research and spurring action to address short- and long-term financial challenges facing low and moderate income Americans. He previously worked as a legislative aide to Senator Sherrod Brown handling healthcare and social security issues and held positions with the Senate Finance Committee, the White House National Economic Council, in private practice with Hogan Lovells, and at OMB as well as Citizens for Tax Justice and the National Association of Community Health Centers. He holds a BA from Tufts, an MPA from Princeton, and his law degree from Georgetown University Law Center.


Finally, we have Anthony Campau, who is principal at Clark Hill Public Strategies and an attorney at Clark Hill PLC. He previously served as chief of staff and counselor at the Office of Information and Regulatory Affairs within OMB overseeing the development of most new federal regulations and guidance. He clerked for Judge Naomi Rao on the D.C. Circuit, has served as in-house counsel and assistant secretary of the board of a large university, and served as a regulatory fellow at a major think tank in Washington, D.C. So thank you to each of you for serving on this panel.


We are here to discuss the whole of government approach to regulation, and the whole of government approach is as it sounds: focused on using the entire apparatus of the federal executive, or in other countries all of the ministries, to pursue solutions to the same policy area. So you’re looking from every angle of federal regulatory authority and solving certain problems. In the current administration, we see a whole of government approach to unions, to climate change, to sexual orientation and gender identity issues.


There are a variety of these whole of government policy priorities. And as you heard Paul discuss, this is a relatively novel approach to the use of the administrative state in the United States. So I’m going to give each speaker approximately eight minutes to talk through your initial reaction to whole of government and highlight salient points. Then, we’re going to have an exchange between the speakers, and then we’ll have some time to open it up to questions. With that, Gail, would you like to kick us off with the --


Hon. Gail Heriot:  I thought Braden was going to go first.


Hon. Jonathan Skrmetti:  Oh, Braden, go ahead.


Braden H. Boucek:  That’s fine. I think I’d rather lead for Professor Heriot than the other way around. I’ll talk about one whole of government approach in particular that I find alarming. That’s the whole of government approach to equity that’s currently the priority for this administration. And the position I’ll take is that the whole of government approach contravenes the central promise of the Declaration of Independence that all men are created equal as well as threatening to undermine important separation of powers principles.


Now, the whole of government equity approach is attributable to a day one priority of this administration. On day one this administration declared by Executive Order that the American dream was “out of reach for too many Americans” and that it would pursue an ambitious whole of government equity agenda. And in subsequent Executive Orders the administration makes equally clear about what steps it would take and what goal it intended.


It said that it would “continuously embed equity into all aspects of federal decision making,” and it would require agencies to implement a “comprehensive equity strategy” that would yield—and here I underline the phrase—equitable outcomes. And the EOs were then equally clear about precisely what it meant when it was trying to generate equal outcomes. It specifically defined the racial categories and other supposedly persecuted minority groups that it thought the federal government should ensure equitable outcomes for.


Now, it might not be totally evident what they meant by the phrase “equity.” Now, maybe this high sounding and vague euphemism is nothing but an aspiration, and maybe it doesn’t mean that they’ll sacrifice equality in the name of achieving so-called equitable outcomes. But when you go a little bit further and see how agencies are implementing this strategy, you will find that overt discrimination is precisely what this administration means when it pursues an overt whole of government approach to equity.


Let me give you just one example from an agency I know well because I sue it with regularity, the United States Department of Agriculture. The United States Department of Agriculture pursuant to the equity agenda has instituted what it calls an equity action plan. A lot of the agencies have these equity action plans. And it proclaims in the equity action plan that equity is “more than a catchphrase. It is a promise.” And it stated that it strives to institutionalize this emphasis on equity.


Now, many of you are aware of the effort in 2021 of the United States Department of Agriculture to forgive the loans of every farmer in America who it deemed to belong to a category it called “socially disadvantaged.” What many of you may know is that the United States Department of Agriculture itself defined socially disadvantaged farmer to mean express racial categories. And so in other words, the United States Department of Agriculture, entirely based on skin color, was proposing to waive away the loans of every farmer in America who belonged to a certain racial category. Many of you also recall that through an avalanche of preliminary injunctions that were correctly entered, this program was immediately halted hardly before it ever came into effect.


Now, rather than continue to allow USDA to defend the indefensible, Congress wisely decided to repeal the program. All of these cases were subsequently deemed moot by any court to consider the question. Now, you would think that if the United States Department of Agriculture is going to be arguing that these definitions are now moot and not capable of repetition, then that would mean it had abandoned the definition of socially disadvantaged altogether. Not so.


In fact, the United States Department of Agriculture continues to employ this racially problematic term, smearing it all throughout its regulatory code, in many instances in regulations that it has promulgated since the 2021 loan forgiveness program was halted. USDA continues to maintain these categories of socially disadvantaged, and it does so through a form that it self-administers on the local level that categorizes whether or not farmer belongs to the socially disadvantaged category. And these racial categories are the same categories that as David Bernstein has thoroughly demonstrated are as incoherent as they are contrived. Why are Pakistanis socially disadvantaged but not Afghans? Nobody knows.


And right now, the United States Department of Agriculture is continuing to give more disaster relief to farmers to the races that it has deemed to be socially disadvantaged than other farmers for the same amount of loss. Now, as we keep saying in our lawsuit challenging this program at Southeastern Legal, natural disasters don’t discriminate, so why is the United States Department of Agriculture? Even worse, unlike the farm loan forgiveness program, this lacks any kind of congressional authorization altogether. This is entirely something that the United States Department of Agriculture has come up through funding formulas that it is administering internally. So this is things like notices of funding availabilities or proposed rulemakings, all of which do not need to go through the regular legislative process.


Now, nothing could better illustrate the dangers of a whole of government approach. It started with one word, “equity,” but it ultimately ends with just another box on a bureaucratic form. In this way, equality has been devoured by the whole of government’s enthusiastic appetite for equitable outcomes. And while the promise of the Declaration of Independence that all men in America are to be treated equally by their own government has always been subjected to stress testing throughout our nation’s history, nevertheless this still marks something new.


Never before has the federal government so enthusiastically thrown American values overboard and devoted the full might of the American government to a contrary policy without congressional backing. Now, typically when equality has been tested throughout our nation’s history, it’s the federal government who’s been the good guy. But now, aided by an overeager and unaccountable bureaucratic class, racial classifications are proliferating. And even worse, it’s all too easy to overlook unless you are well acquainted with the minutia of the Code of Federal Registrations, a fate I wish upon no one in this room.


Now, the role of the courts as Paul alluded to is certainly to enforce the Constitution’s guarantees, all of them, and that means equality. But the principles of separation of powers cannot be overlooked as well. Perhaps no issue should be considered to be politically significant than the use of a so-called benign racial classification in a government program. It is, after all, discrimination against an American citizen. And so in addition to ruling that such classifications are unconstitutional, courts should find that the use of a racial classification is a major question that requires clear congressional authorization that is lacking in something like a routine outlay for funds for disaster relief.


We shouldn’t lose confidence, however. Equality is a remarkably durable idea. It has survived everything from kings, slave-ocrats, eugenicists, Nazis, communists, and segregationists. It is certainly up to the challenge posed by bureaucrats and celebrities hungry for likes. But it will fail if we fail to lose confidence in it, and we should not let our own government undermine it for any reason, certainly not a mere desire for efficiency in government operations. Thank you.


Hon. Jonathan Skrmetti:  Thank you, Braden. I will note this might be the one room in the United States where people would appreciate a chance to dive into the CFR for a while. Professor Heriot, would you like to follow?


Hon. Gail Heriot:  Okay. It’s going to be hard to say something worthwhile in eight minutes, but let me give it a try here. I’ve been asked to comment on the Biden administration’s so-called whole government approach to equity, which isn’t really a whole government approach at all since it doesn’t include the Judicial and Legislative Branches. It’s a whole Executive Branch approach.


Mind you, I don’t think it’s a terrible thing in itself for a president to want the whole Executive Branch to act on his priorities. That sure beats a situation where a duly elected president is being undermined by unelected career civil servants. But here, as Braden has described, the heart of the problem may be that the President’s concept of equity is deeply flawed.


This flawed concept of equity isn’t new. Some advocates have long been pushing the notion that any racial, ethnic, or sex disparity is inherently a bad thing and must be remedied with preferential treatment or with abolishing standards. Some advocates have even been pushing the notion that all of our history is about racial, ethnic, and sexual oppression and that it is the government’s duty to fix it right away. What’s new, I think, is that this view has come close to a level of obsession by the government itself. The Executive Branch, in a word, has gone woke.


Now, in some cases it seems that the whole government approach is aimed at circumventing the other branches. I think some of the effort in the transgender area fits this category. I think some of the things that Braden has been talking about fit that category.


But to me, what is most troubling is that in other cases the courts and Congress, especially the courts and Congress of decades past, have been enablers in this flawed approach to equity. Think, for example, Griggs v. Duke Power Company, which defined liability for discrimination under Title VII to include liability for mere disparate impact. Because virtually everything has disparate impact on some race, sex, national origin, or religious group, Griggs made virtually everything an employer could do presumptively illegal and thereby gave the Executive Branch enormous discretion to go after employers for whatever they wanted. Congress acquiesced in Griggs when it passed the Civil Rights Act of 1991, and then the Supreme Court expanded the concept to include fair housing in Texas Department of Housing and Community Affairs v. the Inclusive Communities Project. I could give you other examples of cooperation from the other branches, but let me go on.


It seems to me that the Executive Branch isn’t paying a lot of attention to the Constitution when it implements and expands the programs. The number of federal grant programs that discriminate on the basis of race and that stand very little chance of surviving strict scrutiny, especially in view of the Students for Fair Admissions case -- the number seems to be growing. We’ve got the USDA case mentioned already. Let me mention a couple more: the National Institutes of Health and the National Science Foundation take race into account in their funding decisions in many different ways now.


But all of these programs have not yet been challenged in part because there aren’t that many people or entities withstanding that are willing to sue. When something does get challenged, other programs that also discriminate on the count of race seem to pop up in their place. One way you can tell how serious the Biden administration is about its equity program is Executive Order 12985, which is titled in full Advancing Racial Equity and Support for Underserved Communities Through the Federal Government. So important it was to the Biden administration that it was ready to go on Inauguration Day, and the President signed it then.


Among other things, it revoked the Trump administration’s Executive Order that prohibited training programs for federal employees and employees of federal contractors that teach -- and I’m going to have to read here from what the Trump Executive Order said. They wanted to prohibit training to the effect “1), that an individual by virtue of his or her sex is inherently racists or sexists whether consciously or unconsciously, or 2) that an individual’s moral character is necessarily determined by his or her race or sex, or 3) that an individual bears responsibility for actions committed in the past by other members of the same race or sex, or 4) traits such as hard work ethic are racists or sexist or were created to oppress a particular race.”


Now, those are the things the Trump administration didn’t want taught to federal employees, and golly, I think most people would agree with the Trump administration on that. I don’t think that’s that controversial. But that’s what was repelled on day one of the Biden administration.


I could understand repelling it if the Biden administration had replaced it with something, with a policy that they thought would work better for that purpose. But that’s not what happened. They just revoked it, and the thinking was that this kind of training was fine and dandy. Executive Order 13985 further states—and again, I’m going to have to more or less quote here—“It is the policy of my administration that the federal government should pursue a comprehensive approach to advancing equity for all, including people of color and others who have been historically adversely affected by persistent inequality. Affirmatively advancing equity, racial justice, and equal opportunity is the responsibility of the whole of our government”—there’s that term—“because advancing equity requires a systematic approach to embedding fairness in decision-making processes. Executive agencies must recognize and work to address these inequities.”


Now, if I had just arrived from the planet Neptune armed only with a dictionary of American English, I’m pretty sure all that would’ve sounded good to me. Yeah? Yeah. I wouldn’t have known that in progressive circles equity has come to mean equal outcomes for groups based on race, sex, national origin achieved by preferential treatment or by abolishing standards altogether. Nor would I have grasped that the term “embed,” which gets used over and over again these days, was important here.


But I think in the context of Executive Order 13985, and later Executive Orders that made that Order’s institutional framework and reporting requirements permanent, it means that every single Executive department or agency, large or small, must have rules, practices, and most importantly institutions, committees, that are in there good, embedded the way a nail gets embedded in your tire. And they must have equity teams led by a senior official that must produce annual equity action plans that are to generate more and more ways to advance this agenda. Budget requests must then be made to fund these plans. The senior official must be held accountable for implementing the plans.


I fear that all of this is going to be difficult to fix. The federal bureaucracy is unlikely to just snap out of this ideology. All the public interest lawsuits and Supreme Court decisions in the world are not going to be enough to solve it if it’s embedded in the bureaucracy. Instead, it’s going to require a lot of really meticulous work from within the Executive Branch.


Bear in mind that not everything that’s produced in these equity plans is going to be bad. Some of it will be fine, but a lot of it is going to be focused on these notions of equalizing outcomes, even if that requires preferential treatment based on race, ethnicity, or sex or what is sometimes even worse, abolishing standards. Republican administrations tend not to be good at dealing with issues of race, ethnicity, and sex. For one thing, they tend not to have the number of people with expertise in that area of the law that they need, and in part because they don’t have the number of people with that level of expertise, they tend to be very timid when it comes to ensuring true equal protection of the laws.


When some low level functionary within the department of such and such tells them, well, we’re required to do this by law, the Republican appointees back off because they don’t have that much expertise themselves. There just aren’t enough of them for that. A lot of what needs to be done is going to be very unglamorous work. Someone needs to examine the equity action plans and the budget requests being made for them and for that matter the whole budget needs to be searched line by line figuring out when the money is going to programs that consider race and sex and why, whether that in the context of the particular program constitutes discrimination, what incentives are being created by those programs, and are those incentives something that can be upheld within the law or not.


An example, someone who needs to know the law -- who actually knows the law needs to understand exactly how the National Institutes for Health and the National Science Foundation consider race, national origin, and sex in deciding who gets funded and who doesn’t. They need to figure out if it is the problem that some people think it is, and if so, how to stop it. This is going to require both legal expertise and expertise about the culture of the particular agencies that we’re talking about. Most of all, it's going to require political will, which is something that is in short supply. And I’m going to stop there because I suspect I’ve gone over my eight minutes. But oops, sorry.


Hon. Jonathan Skrmetti:  Thank you, professor. And next up, David, do you want to address the mechanism for embedding some of these policy priorities?


David S. Mitchell:  Yeah. Sure. Appreciate that and thanks very much for having me. This should be fun. I come at these questions from a little bit of a different perspective. Equity is embedded in my organization’s name, so I think you can kind of tell that we sit at a little bit of a different place. The Washington Center for Equitable Growth, which is an economics think tank, not a legal entity -- and we are a nonprofit researching groundbreaking organization dedicated to advancing evidence-backed ideas and policies that promote strong, stable, and broad-based economic growth.


And as the Attorney General mentioned, I think I’ll probably narrowly focus a little bit on how equity is playing a role in what’s known as the Circular A-4, which is a cost-benefit analysis guidelines that are given to agencies about how to do some of the work. But I’ll also comment just briefly on at least from the economics point of view why equity does matter, why it is important in my view, and why we’re all better off for prioritizing it among the many other policy preferences that we all have at that the President and his administration seems to me justified in pursuing. I should say I’m not speaking for this or any administration, but I do feel like a defense of that agenda is probably called for, just to make for maybe some interesting conversation here.


So on the first point of equity being a useful, I think, goal for policymakers to consider is the idea that economic growth and -- there’s long been a thought within economics that there’s this inherent tradeoff between efficiency and equity. And I think we’ve run an experiment over the last two or three decades around this where we have prioritized whether it’s in the fiscal policy space, kind of a trickle down approach of let’s get the incentives right. Let’s make sure that high income folks, investors are able to get tax cuts or use money in order to invest. And then we’re hoping that it’s going to trickle down to everybody else. Let’s not prioritize equity. Let’s prioritize efficiency.


And in the regulatory space as well we’ve had an obsession with efficiency, with what’s known as Kaldor-Hicks or potential Pareto efficiency where let’s not worry about who’s getting the benefits or who’s paying the costs. Let’s focus on maximizing output, maximizing the social surplus and then worry about how the pie is divided up down the road. And I think, unfortunately, that that approach has led not just to exploding inequality. We see it not just on race or income or wealth but also between urban, coastal areas and rural heartland areas, between small business and big business, between young and old. So we’ve seen an explosion in inequality, but we’ve also I think more counterintuitively have seen a slowing of economic growth. The last few decades growth has actually been slower than it was in the middle of the Twentieth Century when tax rates were much higher, minimum wage was much higher, union strength was much higher.


So I just would like to push back a little bit on this idea that equity is somehow at odds with broad prosperity and a flourishing economy. Yeah. So I think that’s the larger equity question, again, speaking not on moral terms or legal terms or political terms but really narrowly on the economics. And on the regulatory approach as I mentioned, I think in regulations there has been often an obsession with efficiency, with maximizing net benefits but not paying attention to who is paying the costs and who is getting the benefits, or at least not an explicit reference to that.


It’s actually been mentioned in all of the executive orders that govern the regulatory review process that policymakers should consider distribution, should consider equity for many years, going back to the 1990s. Republican and Democratic presidents have affirmed that, but agencies actually just haven’t really been doing it. It’s technically difficult, and it’s also goes against this obsession with Kaldor-Hicks efficiency.


And so I think a lot of folks on the left were probably pushing this administration to just jettison cost-benefit analysis entirely. And to their credit, I think really the headline for what the administration has done on regulatory review is they’ve reaffirmed the Reagan approach from the 80s that basically sets up a centralized review process, tries to coordinate government. I don’t think maybe they had the words “whole of government approach” back when Reagan set up this review process, but I don’t see anything nefarious about what he and other presidents have done in trying to coordinate Executive Branch action around regulatory review.


And so Biden has revised the Circular A-4, which like I say is this guidance document that helps agencies better understand how they should be doing cost-benefit analysis. Equity is definitely part -- I think it’s maybe five to six pages on distributional impact in a 90 something page document that is very technical about all the different ways that agencies should be thinking about how to do their work. On the exact way that Biden has gone about trying to emphasis equity, I’m happy to get into the details at some point, but the main thrust is that, going back to my earlier point, I think if you really want to maximize net benefits, you have to understand who exactly is gaining and who is paying the costs.


Let’s see. Is there anything else? The other, I think, important thing about the emphasis on equity in the Circular A-4 is that it really brings to light, I think, probably decisions that were already being influenced by distributional analysis. So I don’t think any of us are so naïve to think that political actors within the Executive Branch were not thinking about who wins and who loses when they were issuing regulations. It’s the essence of politics. But now, if the agencies follow some of the new guidelines, they will be more transparent, and there’ll be more accountability around exactly what agencies are considering when they’re making these decisions, which I think is something we should all be able to agree on. So I’ll pause there and look forward to questions and discussion and appreciate the attention.


Hon. Jonathan Skrmetti:  Thank you. And Anthony, did you want to talk a little bit more about the contrast between the mechanisms of regulation and the policies and which matter more?


Anthony Campau:  Yes. Thank you very much, General Skrmetti, and to the group here. This is a great discussion. I think that taking a crosscutting approach to managing administering the Executive Branch to me is not necessarily problematic. In fact, I think that there’s a pretty good case to be made that we want a vigorous Executive.


Obviously, Article II Section 1 vests the executive power in the president, not in cabinet secretaries, not in career staff. It’s in the president. The president should provide direction and guidance for the agencies that serve under the president’s power, that work under the president’s power given to them and the statutory programs obviously created by Congress but managed by the president at the top.


So I think that that is overall we want the administration to be -- we want -- I guess having a crosscutting approach to administration management is not necessarily a problem. I think it is on the policy side, the extent to which we are sort of making law through the Executive Branch instead of setting out having a particular approach to administering the Executive Branch. So as Gail said, I think, first of all, I’m going to say that the whole of government is a bit of a misnomer. We have a very sophisticated system of government where we are balancing federal government with state government. We have -- state governments obviously play a very important role, and then within the federal government we have Executive, Legislative, and Judicial. So we really are indeed talking about whole of the Executive Branch, not whole of the government.


And even within the Executive Branch, largely today the independent agencies are off sort of doing their own thing and not reporting in directly to the president. So it’s not even really whole of the Executive Branch if you think of the independent agencies as being part of the Executive Branch and operating under that power. So it’s a whole of a subset of the Executive Branch.


But within the Executive Branch, we want the president’s direction. We want coordination and direction, I think. But it really should be at the margins. It shouldn’t be lawmaking. And to a significant extent, this problem I think exists because we have had so many open ended grants of rulemaking authority to the agencies. There’s a lot of flexibility, and then after that obviously I think our deference doctrines in the Court have allowed agencies a lot of run room to go and make law to a significant degree. And so in that framework, I think that hopefully what happens I think in Relentless and Loper Bright will help to address some of this in the near term, in the nearer term.


The president cannot really make law, but having the correct approach to administration I think is important. We had, of course, crosscutting mechanisms for administering the Executive Branch -- policy making in the Executive Branch. We had Executive Order 13771 that set out a regulatory budget, Executive Order 13777 that created regulatory form task forces, which were charged with carrying out the regulatory budget as well as direction from Presidents Clinton and Obama on previous Executive Orders. We set up task forces.


There are also a lot of other kind of crosscutting approaches to again on the policy management and administration side. Some of them are in statutes. Some of them are in Executive Order. We have the Regulatory Flexibility Act, the Unfunded Mandates or FORM Act, the Congressional Review Act. We had Executive Orders on guidance, so a lot of kind of crosscutting management programs of the Executive Branch. And I think that’s appropriate. That’s what we want.


I think we don’t want the president, though, to sort of use that position to really be making the law. So then to just kind of talk briefly about how I think -- just to talk within the Executive Branch the policymaking process, there are two key parts of how I think there has long been a whole of government approach if you will. One is on the policymaking process. Generally, you have an interagency group, folks from all the different agencies, from all the different White House components gathered together to discuss policy ideas and directions and to figure out where at the margins in particular rulemakings they can drive those policy outcomes. So that has been around for a very long time.


And then on the back end, you have similar interagency processes around specific rules that gather all the wisdom and interests of the Executive Branch to share perspective and figure out how to guide a particular rulemaking to an outcome that is rationally integrated across the government. So again, I think that these kind of -- I think of it more as crosscutting rather than whole of government coordination, integration, but it really is a focus on how you administer the programs, not necessarily on driving kind of the sort of legal change. I think the more that it is about administration I think the better. The more it is sort of quasi-lawmaking I think is where it gets a little bit tougher.


So David just talked about OMB Circular A-4. That has been around for a very long time. I thought the old version was great. It was about having a consistent approach to economic analysis that cut across rulemakings and across the years and the decades. The new approach basically takes a lot of -- in my view, it takes a lot of policy judgments that have always been appropriate to consider, and it puts it into the underlying analysis, which I find to be very troubling because to me the idea of the analysis is to have one kind of rail that runs throughout the decades that you can look and you can evaluate policy choices against that rail.


And there were plenty of things that I don’t like about it. There are things that David didn’t like about it, but as he mentioned, there was always a part that was focused on distributional effects. So every administration could have looked at that, did look at that to various extents. But once you start to weight those considerations and you put them in the analysis, it kind of -- I think it actually flows a little bit from in my view a misunderstanding of the role of analysis.


The analysis was never meant to determine the outcome of a rulemaking on its own. It was to provide sort of a reference point. It was to provide an input into the policymaking process, and I think there’s been a little bit of an idea that it controls the outcomes, and it really has not for a very long time. If it did, we would have I think a lot fewer rules and a lot less onerous regulatory state, but it has been an input into the decision making process.


So I think that anyway what happened with OMB Circular A-4 and with Executive Order that occasioned the rewrite of A-4 recently I think that there is a real effort to kind of drive policy outcomes that are more quasi lawmaking, that really focuses on the lawmaking side -- the quasi lawmaking side of the agencies. And that’s where I think it gets a lot tougher. But just administering in a crosscutting way the Executive Branch under the direction of the president, to me that is not in itself problematic.


Hon. Jonathan Skrmetti:  Thank you, Anthony. So one thing that comes to mind is the difference between the more traditional procedural oriented whole of government approach that you just talked about in terms of regulatory budget, in terms of the use of guidance documents, things that do apply across agencies that are a relatively light touch. It’s just telling people hey, here are the mechanisms that you’re going to focus on; here’s how you’re going to use them. And I think the embedded equity idea to the extent that you’re incorporating that into calculations of regulatory costs and just providing distributional information for the purpose of policymakers to evaluate the decisions in front of them seems like a lighter touch than what we’re seeing now, which is relatively aggressive policymaking sometimes contravening what Congress has said or at least going far beyond the interstitial regulatory approach and seeing a robust policymaking in the Executive Branch.


But one of the concerns I have is the agencies are not freestanding agencies to assert the president’s will. Even if you accept that there’s a unitary Executive, the structure of the Executive Branch is established via legislation. Congress is creating these agencies where the president executes certain parts of the law through these agencies.


Do we have to worry about competence being impacted because the agencies are suddenly having to focus on significant policy questions that may at best tangentially touch upon what they’re supposed to be looking at? And do we have to worry about almost a commissar oriented approach to government where because you’re talking about finite resources and a government that at best can sometimes get things right -- and that’s nonpartisan. Being part of the government, I can confess that we do our best and often either miss the mark or do execute as well as we should no matter how hard people are trying.


So if you’re trying to do a hard job already and then you have to start looking at significant other pieces of law that are outside the scope of what you ordinarily worry about, is that going to give us worse government in the long run as the Executive Branch leadership focuses on more whole of government approaches? Gail, do you have a -- Professor Heriot?


Hon. Gail Heriot:  Yeah. In a word, yeah, I think it will. But I think maybe it’s like the things that are likely to be adopted with a whole of government approach these days are often things that are almost quasi-religious. You can imagine, well, first of all the equity case, but I can imagine another whole of government approach being climate change.


What is the post office going to do about climate change? What is this department, that department, and the next department going to do about this? And it does. It’s going to -- it’s like a windup toy. You’ve got the windup toy that’s supposed to be like deliver the mail, deliver the mail, deliver the mail, and now suddenly they’ve got to do a 180 degree turn and be involved in climate change or equity or something. And I think it’s just part of the way the times are that what is likely to be adopted with a whole of government approach is going to be those things that are highly controversial and that maybe just maybe a segment of society has become obsessed with an idea that’s going to turn out not to be such a great idea.


And I think we’re seeing that already with the transgender issue where Europe is already turning away from it, and we’re still marching full speed ahead in part because we embedded it in the law. Whereas other countries might not be quite so quick to make it a legal matter. As Tocqueville observed, we make everything a legal matter. And therefore, it’s hard to get things back on track once there’s been a problem.


Hon. Jonathan Skrmetti:  David, would you like to follow up?


David S. Mitchell:  I was just going to point out I think if I heard our keynote speaker earlier correctly, Mr. Ray, he was kind of professing a concern about the opposite: that these agencies are so specialized that they’re going to miss the forest from the trees. They’re going to be so focused on delivering the mail they’re not going to realize that -- and this is one of the reasons I guess Congress is better suited to do this work because they have to bargain over the big picture.


So I guess I could see it being framed in the opposite way as well, which is that, yeah, to the extent that climate change is an existential threat, which maybe not everybody here agrees, but I think -- and to the extent that equity has been a longstanding challenge and that there has been racial discrimination in our country and that these are major priorities that the President ran on and won on -- these weren’t things that he has been hiding the ball on. He has clear policy preferences on these areas, and so he’s pursuing an agenda in that way. I don’t think the fact that agencies are being asked to do more than just one thing is necessarily a bad thing, harkening back to the earlier comments about there’s also a tunnel vision problem as well if you don’t allow that holistic thinking.


Anthony Campau:  I would just add that most of these Executive Orders conclude with a provision that says to the extent permitted by law, and the extent permitted by law may change dramatically in the near term if some of our friends in this room are successful as we think they may be at the Supreme Court. And so some of the things that we put in an Executive Order that would say here’s how you should manage processes of the government I think the administration function of the president is totally appropriate. But the quasi-lawmaking stuff, when you’re adding considerations that are outside of the normal consideration in a program designed by Congress, those may start to get feedback a little bit more.


Hon. Jonathan Skrmetti:  Braden?


Braden H. Boucek:  Yeah. I couldn’t agree. To the earlier point, sure, this administration and this presidency campaigned on equity, but show me one instance of the President defining that term and saying by equity what I mean is racial categorization of the following five races and then treating some Americans differently on the basis of race. So there is always this -- if you’re in the academic context or the litigation context, you become accustomed to this slippery use of language. Equity is a high sounding and vague phrase.


The example I illustrated the United States Department of Agriculture we start with say equity. Then you’ve got an equity action plan saying it’s a priority, and then you get to the end of the road. And Congress sets aside $25 billion for disaster relief for farmers affected by natural disaster, and it’s just a form on file and a box you check. And that’s not what anybody has campaigned on. I dare say that if anybody did the American people would recoil in horror. And so you do see these whole of government approaches being used to do things that I think the American people are just not aware of. And if they want to generate awareness, the constitutionally hygienic thing to do is to present these questions to the American people through legislation.


Hon. Jonathan Skrmetti:  I want to follow up, Braden, because you had touched on the nondelegation issues, but at the same time the president does have discretion in how the law is executed once Congress legitimately delegates that authority. It provides the legal basis for execution. Obviously, Congress can’t delegate plenary lawmaking authority, but how much latitude does an administration have in adjusting the execution of the laws based on their priorities?


Braden H. Boucek:  Well, I think at a minimum it can’t contravene the Constitution, and the guarantee of equality is pretty firmly embedded in our nation’s history and our nation’s tradition. So part of the whole of government approach, it isn’t just as I said earlier the rejection of equality, but it is the tension with the separation of powers doctrine. And again, to address the rhetorical slippery language, when we talk about whole of government, the problematic part of it isn’t that we’re trying to make government more efficient or that we don’t want the Executive Branch all rowing in the same direction. Of course we do.


The problem is that there’s now an open embrace of aggressive muscular Executive Branch action even when either Congress won’t act and we know that that’s the reason why the Executive Branch is acting or the Supreme Court has said you can’t do this. And the Executive Branch turns around to try to find an exception to doing it anyway. And we see recent examples of that from everything ranging from immigration to student loans. And so that’s the problem with the whole of government approach, not the efficiency in government operations.


Hon. Jonathan Skrmetti:  Professor Heriot, you talked a little bit about the difficulty in remedying whole of government run amok via judicial or congressional oversight. Braden just talked about that as well. Do you care to elaborate a little more? I know you had some time to talk about it, but you were a little truncated because of the time.


Hon. Gail Heriot:  Yeah. The problem is look at the most recent decision of the Supreme Court, the most recent big decision on race issues, and that is Students for Fair Admissions v. Harvard. You’re dealing with institutions that are as small as a public university, which it’s kind of big, but it’s not like the federal government. And even with that, the first thing that happens is that universities start announcing how they’re working to get around this.


Well, we’re going to get the same thing with the federal government. Only, the federal government is bigger than Harvard University, and there are so many more ways in which you can get around what the Court has said. It’s an old story. These Supreme Court decisions on race issues whether we’re talking about Brown v. Board of Education or we’re talking about the SFFA case, there are ways in which government officials try to get around them. And they’re definitely going to do that here.


Right now, the federal government is riddled with these race programs, and they can read. The lawyers for each one of these departments and agencies, they can read the decision. In theory, SFFA deals with college admissions, but if you read the case, it’s very clear the Supreme Court has now taken a much stronger line on race preferences. And this is going to apply not just to universities; it’s going to apply to just about everything you can think of. And yet, the world hasn’t changed. The federal government did not say we’re going to get rid of all these programs that we have now, and each one is going to have to be rooted out individually.


And when you’re talking about grant programs like those administered by the National Science Foundation, every time a panel decides upon whether or not to give a grant to a particular academic who wants to investigate something to do with chemistry or whatever it happens to be, every time they’re taking into consideration, well, is this group sufficiently racially diverse. How are you going to get to those individualized retail decisions that are being made? It’s going to be hard. It means actually changing the culture of these agencies, not just changing what the Supreme Court says or not just changing what Congress says, not just changing what the regulations say but getting to where a particular panel that is investigating whether or not to make grants to a particular kind of researcher, whether or not they are willing to say, look, we’re not going to look at race.


Hon. Jonathan Skrmetti:  David, do you want to comment on the separation of powers concerns?


David S. Mitchell:  I have to go back to my Georgetown Law days. I don’t practice law, but I will say that it doesn’t seem to me that the moment that we’re in and the interplay that’s being described between the courts and the Executive Branch and Congress is particularly unique to this moment in time. There’s been -- again, as Mr. Ray was talking about, the branches of government are set up to compete against each other, and that’s one of the major checks on the system.


To use the Gail imagery from before about the alien from Neptune coming down, I just don’t see an alien from Neptune coming down and seeing the President’s equity agenda as the threat to the rule of law in this country. It seems like there’s much, much bigger more serious threats to the rule of law in this country at the moment. And yes, courts change law. Executives have to respond. Congress tries to assert itself.


All of that seems to me a very natural way that our system works, and I don’t think that the President’s focus on equity, which again is really about removing barriers so that all groups and all people can fully participate in the economy, is what I’m most concerned about. But in the democracy, I think, is another obvious goal -- I don’t see that as a hugely nefarious or real threat to the Constitution that maybe some of my fellow panelists do.


Hon. Jonathan Skrmetti:  Anthony, did you want to add anything?


Anthony Campau:  Well, on that last point I do kind of always find it interesting that not to pick on David but those who embrace sort of lawmaking through the Executive Branch or through the agencies talk about democracy when actually -- obviously, the president is elected by the people. Members of Congress are supposed to make the law. The democratic lawmaking should happen in Congress, and making quasi-law through the rulemaking process is like the least democratic way to do things. So I would say if you love democracy, push for Congress to make law and push all that lawmaking over there.


I think that this is a great -- as David said the moment we’re in. I think the moment we’re in is a great moment for Congress to just really vigorously embrace its role as the lawmaking body. I think this is sort of the core of the issue that gives rise to why we have some of these deference standards is that we have such broad grants of discretion to the agencies. And the agencies are using the authority that they have as they see it to push policy.


There are fewer barriers to pushing out policy in the Executive Branch. You don’t have to have hundreds of members sign off. You don’t have bicameralism and presentment. You have a lot easier path to pushing your policy out. And that creates some real challenges. I don’t think that’s really how it’s supposed to be, so we want to push that lawmaking back to Congress. Congress could go and narrow and cabin those grants of discretion, particularize instructions to the agencies instead of leaving open ended grants out there. I think that’s a great thing for them to run with now.


Hon. Jonathan Skrmetti:  I think that’s a really important point. The whole of government approach as I understand it originated in parliamentary systems where it really was the whole of government, where the executive authority and the legislative authority are combined. And so it’s entirely plausible for somebody to claim that they’re speaking on behalf of the government as a whole. Here because of our separation of power system, the whole of government is to some extent overstating it, and speaking on behalf of the states, the concern is because Congress is not engaged in lawmaking to the extent that they should be for a variety of very frustrating and complicated and intractable reasons, you see more and more power accreting to the federal Executive Branch.


And that doesn’t just undermine the ability of the other branches to serve their appropriate roles in the overall policymaking and policy enforcing agenda. It undermines the states because the bigger the federal government, the more robust the policy pursuits of the federal agencies the less room there is for state decision making and the more preemption we see. So it’s a real concern.


We have time now to open it up for some questions. As is traditional at these events, I will say this is for questions. If you have a lengthy commentary, there are other opportunities for you to express those opinions. But we certainly welcome questions for the panelists. Yes, sir.


Questioner 1:  My question arises from two things I think that have characterized the theme of this discussion. One is that the whole of government approach has emerged as a way of dealing with gaps or things where Congress hasn’t acted where the president would like to act and two, where the president would like to avoid judicial review. My question is doctrinally what should the courts do to address this? Because we’ve seen things like the major questions doctrine which deal with an individual agency’s power grab, but we haven’t seen something where if it gets cut up into a bunch of different pieces, what one judge called regulatory smurfing, like the way that you hide a large financial crime by dividing it up into little bits -- how should courts approach that? It seems to me a problem that’s very much unsolved by the current doctrine.


Hon. Jonathan Skrmetti:  That’s a great question. Anthony, do you --


Anthony Campau:  I was going to say if Braden wanted to --


Braden H. Boucek:  I thought that was for you guys; right? What’s the question?


Hon. Jonathan Skrmetti:  I think the question is how do the courts deal with it when -- there are significant problems with the Court coming in and saying this policy as a whole is bad, so every agency should stop doing it. There are a lot of fights going on in which we’re saying hey courts, your jurisdiction is limited to the parties in front of you. And I love the image of smurfing, which comes from people sending out lots of folks to buy small amounts of meth precursors. Interesting metaphor there.


Braden H. Boucek:  You might’ve been a prosecutor on that.


Hon. Jonathan Skrmetti:  Possibly. How do we deal with this? Is that part of the reason the courts can’t appropriately respond, and is there some sort of jurisprudential doctrine that would help?


Hon. Gail Heriot:  I wish it were easier to deal with guidances in court rather than having to just -- an agency puts out something that purports to be an interpretation of a statute, but really what it is is it’s the law. And it’s very difficult to challenge them in court. And I think it should be easier.


Braden H. Boucek: Probably like a lot of people who litigate for a living in my world, I think that the courts standing doctrine I’d love to see some rethinking of that. But until that happens, I agree with Professor Heriot. It’s going to make it very difficult to challenge even things like EOs until they actually matriculate into cases and controversies. There is some real need for it. You’ve seen it on illustration today where there’s back and forth on what the meaning of the term equity is. The EO uses the term equity, but it’s only until you get to the actual practical application of it that you see that it involves overt race discrimination. And that’s the part that’s constitutionally and legally problematic.


Hon. Jonathan Skrmetti:  That’s not the most reassuring answer, but I think the question highlights a serious structural problem here. Judge Vaden?


Hon. Stephen Vaden:  Yes, I have a question for Braden. Braden, you noted that the United States Department of Agriculture took the actions that you’re currently suing them about after being subject to injunctions across the country for similarly race based distinctions that the Department drew. Of course the difference being that in that case the race based distinctions were actually congressionally authorized. Here in your case they’re not.


The Small Business Administration similarly found itself under injunctions. Your question and the timeline of it to me raises questions about future accountability for the officials who have taken these actions. The current administration has set a lot of precedents that will be hard to erase as the professor noted. One of those precedents involves very aggressively going after officials from the prior administration for civil and even criminal sanction for actions that they took in office.


I’m curious given how the standards go about qualified immunity and particular how one loses qualified immunity if the law is clear, would you have any advice for the current Secretary of Agriculture and Undersecretary for Farm Programs and Conservation, as well as the civil servants who are administering this program, as to what might be in their future when at some point, either in January or four years hence, the administration changes?


Braden H. Boucek:  Right. Well, I’m not in the business of dealing legal advice to people that I don’t represent, so take that for what it’s worth. But I think the point that you raise is a totally valid one. Every court to look at the question socially disadvantaged in the racial categories has determined that they are constitutionally unlawful or likely to be declared to be constitutionally unlawful. And you have an instance where the Secretary of Agriculture then withdraws from that category but then proliferates it in other aspects throughout the code.


Is that not a situation where, to borrow from the 1983 analogy, you have an official on actual knowledge that what they’re doing is unlawful, in which case in the 1983 context that would give rise to potential individual liability suits? Judge Vaden posed the question, yeah, there are civil rights laws out there too that are going to contain a mens rea requirement. You can easily imagine that the actual knowledge that these programs are unlawfully discriminatory might generate some kind of -- might make it plausible that there’s a civil rights violation going on that’s actionable by a future administration if they were so inclined.


Ultimately, what I would rather see -- and this was sort of alluded to by Paul’s comments. I want to get back to a sense where we have a shared sense of constitutional values. At the time of the Founding, there was a sense that the Constitution wasn’t just going to be written law. It was going to be a value system that all of our elected officials and all of the Americans would openly embrace. And I don’t think that we have that shared sense of constitutional commitment in our culture anymore, particularly from high level officials who are oftentimes just really feel like they have competing imperatives and they want to see if they get away with it. And I think that’s really unfortunate.


Hon. Jonathan Skrmetti:  Could the Antideficiency Act also potentially apply?


Braden H. Boucek:  I’m not going to comment on the Antideficiency Act.


Hon. Jonathan Skrmetti:  Yes, sir.


Questioner 3:  Hi. I had a question for all of the panelists kind of bringing it to a lower level, but sometimes we’re debating a level of abstraction. What is equity? We want this policy, that policy, or the Supreme Court opinions.


 In terms of what happens really at trial courts and sort of the enforcement mechanism, what do you see the barrier to things like SFFA or cases in other contexts really trickling down into real wins for plaintiffs and real shifts in policy? Because we just heard about whether government officials have criminal liability in the future or civil for violating civil rights, from engaging in discrimination and kind of putting the shoe on the other foot. What is the obstacle? Is it the circuit courts? Is it the trial courts?


Is it some other doctrine the Supreme Court hasn’t changed enough, qualified immunity, standing doctrine? So what’s really preventing these things from trickling down and changing society the way that society was changed by the left in the 1960s through the Civil Rights Movement, both litigation, constitutional and statutory changes?


Hon. Gail Heriot:  Facts are standing in our way, and that is you have to prove facts in court. And if a university is discriminating in admissions, for example, they’re not stupid. They’re going to come up with a way to hide it. The Supreme Court had the discretion to accept the Thomas Jefferson High School case just a few months ago where the board controlling admissions to Thomas Jefferson made it very explicit that they thought they had too many Asians, so they changed the rules. They didn’t change the rules to say no Asians. They changed the rules in ways that made it so there would be fewer Asians and more of other races.


And the Supreme Court didn’t take the case even though I thought it would’ve been a good one for them because there was a Fourth Circuit decision that I think was clearly making errors about what the law is. But if every time cases have to be litigated in front of a court and it has to be proven that the motivation of the university or college or high school in deciding on admissions was to affect the racial composition of the students, that’s going to get very difficult. And there aren’t enough lawyers willing to work on something like this, and the facts are going to be hard to prove. And so it’s going to be difficult. It’s not going to be easy.


Questioner 3:  But if the races were flipped, for example, if it was Hispanics instead of Asians or Blacks instead of Asians, do you still think there would be a factual problem for the plaintiffs to win?


Braden H. Boucek:  You wouldn’t even need to worry about bringing lawsuits because governmental agencies would enthusiastically jump in before it even got to that point.


Hon. Gail Heriot:  Well, that’s what happened with the laws as they developed after Brown v. the Board of Education. The courts were getting nowhere in the 50s on Brown. They were not able to bring individual school districts into compliance with the Brown case. It was not until the federal government with Title VI had the ability then to say, look, we’re going to cut you off, cut your federal funding off if you don’t get in line that you started getting a lot more compliance because it was much easier to deal with that way. And so it takes more than the Judicial Branch.


It took the Executive Branch to make that work. And even just to take an example, Lewis Powell, he becomes the hero of the civil rights group after the Bakke case. But when he was on the board of the Richmond School Board, he wasn’t so helpful on implementing Brown. He was not exactly a civil rights hero at that point, and it takes a lot. It took a lot to make Brown work. It’ll take a lot to make the Harvard case work.


Questioner 3:  Thank you.


Hon. Jonathan Skrmetti:  Thank you. And I apologize. We’re over time. Please join me in thanking the panelists. Thank you for that wonderful commentary.


Nate Kaczmarek:  Yes. Thank you very much. We will take an eight minute break. We will have the criminal law breakout panel in this room, and if you’re going to the religious liberty discussion, that’ll be down the hall in Palm Court. Thank you all very much.


10:40 a.m. - 12:00 p.m.
Breakout Panel 1 - Testing the Tension: How Do Nondiscrimination Regulations Interact with Religious Freedom?


Palm Court Room
The Mayflower Hotel
1127 Connecticut Avenue
Washington, DC 20036


Event Video


This session will discuss the Biden administration’s efforts to expand sex nondiscrimination protections to cover sexual orientation and gender identity rights through agency regulations. Discussion will center around three major proposed (or soon-to-be final) regulations involving education, healthcare, and employment: the Department of Education’s Title IX rule, the Department of Health and Human Services’ Section 1557 rule, and the Equal Employment Opportunity Commission’s harassment guidance. Pro-LGBT groups praised these proposals while many religious organizations and people of faith raised concerns. Do the agencies’ regulations correctly balance SOGI rights with religious freedom and conscience rights? Did the agencies overreach by expanding sex nondiscrimination protections? Can the First Amendment, the Religious Freedom Restoration Act, or other federal laws protecting religious freedom and conscience rights trump the administration’s nondiscrimination regulations? This panel will tackle these important questions.


  • Julie Blake, Senior Counsel, Alliance Defending Freedom
  • Prof. Martin Lederman, Professor of Practice, Georgetown Law
  • Andrea Picciotti-Bayer, Director, The Conscience Project
  • Moderator: Ms. Elizabeth Slattery, Director of Constitutional Scholarship, Pacific Legal Foundation


Event Transcript

Austin Rogers:  Everyone, welcome to this segment of The Federalist Society’s Executive Branch Review. Our panel today is entitled “Testing the Tension: How Do Nondiscrimination Regulations Interact with Religious Freedom?” My name is Austin Rogers. I am the Chief Civil Counsel for the Senate Judiciary Committee. I also serve on the Religious Liberties Practice Group on the Executive Committee here at The Federalist Society. If you have any questions about our practice group and what we do, please feel free to reach out Nate Kaczmarek or myself. But just, in general, the Religious Liberties Practice Group hosts debates, discussions, panels, much like The Federalist Society does writ large, and our topics pertain to religious liberties, First Amendment, religious clauses, etc.


      So with that, very excited about our panel today. We will be having discussion about a very important topic. Over the last decade or so, religious liberties and nondiscrimination protections have grown to be in increasing tension with each other, and this has often found expression through cases that you’re all familiar with, including Masterpiece Cakeshop, Fulton v. Philadelphia, 303 Creative. But it’s also grown in tension more recently through executive action, and that includes agency regulations pertaining to SOGIE. I’m not going to get into any of those agency regulations today, but our panel will, and I’ll leave it to them to introduce those and flesh those out.


      I will, however, introduce our moderator, who we’re very fortunate to have with us today. So we have with us today Elizabeth Slattery, moderating our panel. She serves as the Director of Constitutional Scholarship at the Pacific Legal Foundation. And there, she leads a team that produces and promotes legal theories among elite legal audiences, which, of course, in my mind, includes you guys, and that is all to prepare the grounds for courts and policymakers to uphold the rule of law. Elizabeth’s scholarship focuses on the separation of powers for she’s an ardent evangelist, and her work has appeared in the Harvard Journal of Law & Public Policy, The Federalist Society Review, Washington Post, The Wall Street Journal, and even, notably, in Justice Neil Gorsuch’s Supreme Court opinion. That’s just to name a few.


      Elizabeth has testified before Congress and is a frequent legal commentator in print, radio, and television. In fact, as a Supreme Court superfan, Elizabeth has also created, produced, and hosted two hit podcasts about the Supreme Court, and her newest project, scotusladies.com, chronicles what’s happening at the Court. Elizabeth received her J.D. from George Mason’s Antonin Scalia School of Law, where she learned the art of originalist interpretation, and she got her undergraduate degree from Xavier University, where she learned the art of questioning absolutely everything, and she learned it from the Jesuits. And those are her words, not mine.


      So with that, we’ve got an impressive moderator today. We have an impressive panel. Thank you all for being here, and I’ll let Elizabeth take it away. Thanks.


Elizabeth Slattery:  Thank you, Austin. So on January 20, 2021, President Biden announced an executive order directing agency heads to review all existing regulations, guidance, documents, and the like to ensure they comply with the Supreme Court’s reasoning in Bostock v. Clayton County. In that case, the Court held that Title VII’s prohibition on sex discrimination in employment extends to discrimination based on sexual orientation and gender identity. The Court acknowledged concerns that expanding the scope of sex discrimination under Title VII may require some employers to violate their religious convictions. Writing for the majority, Justice Gorsuch noted, “We are also deeply concerned with preserving the promise of the free exercise of religion enshrined in our Constitution.” But he observed that how RFRA and other statutory protections interact with Title VII is a question for future cases. Justice Alito’s dissent anticipated many of the regulatory actions that we’re going to talk about today that would extend Bostock.


      This session will discuss proposed regulations involving health care, education, and employment, among others. While LGBT groups have praised many of these proposals, religious organizations and people of faith have raised concerns. Do these regulations correctly balance the interests on both sides? Did the agencies overreach by expanding Bostock to new areas? And how will the First Amendment, RFFA, and other federal protections for free exercise and conscience rights interact with these regulations? Our panelists will tackle these important questions and many others.


      I’m going to keep their introductions brief so you have more time to hear from them and less from me. First up -- and I’ll introduce them in the order that they’ll speak. First, we’ll hear from Andrea Picciotti-Bayer. She’s the Director of the Conscience Project, an organization dedicated to the advancement of religious freedom, conscience protections, and parental rights. Prior to leading the Conscience Project, Andrea served as a trial and appellate attorney in the Civil Rights Division at the Department of Justice. She’s also a legal analysis for EWTN News, a regular columnist for the National Catholic Register, and her work has been featured in a number of outlets, including The Wall Street Journal. And notably, she’s the mother of ten children, which I think is the biggest accomplishment.


      Then, we’ll hear from Julie Marie Blake. She serves as senior counsel for regulatory litigation at Alliance Defending Freedom. Over the last decade, Julie has been on the front lines of high-profile, precedent-setting cases challenging federal overreach in courts across the country. She previously served as deputy solicitor general for the state of Missouri and as assistant solicitor general for the state of West Virginia. And Julie was once the recipient of the National Association of Attorneys General’s coveted Best Brief Award for her Supreme Court work.


      And then last, but not least, we’ll hear from Marty Lederman. He’s a Professor from Practice at Georgetown University Law Center, where he teaches courses on constitutional law and the law of religion, among others. Marty served as an Attorney Advisor and later as Deputy Assistant Attorney General in the Justice Department’s Office of Legal Counsel. And he’s a regular contributor to Balkinization, SCOTUSblog, and Slate, among many other outlets.


      So with that, Andrea, the floor is yours.


Andrea Picciotti-Bayer:  Let me know if there’s a problem with the sound, but thank you, Elizabeth, for that nice introduction. Yes, the ten children are things that I’m most proud of. And it’s really an honor to be with such a distinguished panel today to talk about something that I think is really important and something that I hold dear to my heart. I’d like to start off our conversation this morning with what sounds like a radical idea to some people in America today. Because religious freedom is a universal human right, it’s the obligation of the executive branch to both safeguard it and promote it. This is particularly true when the executive branch advocates policies that are objectionable to people of faith using nondiscrimination laws.


      Now, to make such a claim, I’ll start with the first assertion that religious freedom is a universal human right. As a Catholic, I’m guided by the Church’s teaching on religious freedoms. Specifically, Dignitatis humanae explains that “the right to religious freedom has its foundation in the very dignity of the human person as this dignity is known through the revealed word of God and by reason itself. The right of the human person to religious freedom is to be recognized in the constitutional law, whereby society is governed, and thus, it is to become a civil right.”


      My friend Daniel Philpott of Notre Dame adds additional thoughts to this notion of religious freedom as a human right. He explains that religion is a natural human phenomenon, which is “sufficiently distinct from and irreducible to other phenomena, such as speech, assembly, expression, and conscience. And because religious -- religion is intrinsically valuable for human beings, the right to religious freedom must be considered a right of its own. Failing to safeguard it must be seen as destroying a dimension of intrinsic human flourishing and thus violating the dignity of the human person.”


      Now, obviously, limits on this freedom, relating to safety and order, can be imposed to avoid grievous injustices committed in the name of religion, but such limitations ought to be imposed very carefully. Now, I needn’t tell a room full of lawyers that protection for religious freedom finds a place twice in the First Amendment and that this Supreme Court, consistent with the intent of the Founders, has made clear that these two clauses work in tandem with each other. And the Universal Declaration on Human Rights, which celebrated its 75th anniversary this past December, also gives place of pride for religious freedom, stating that everyone has the right to freedom of thought, conscience, and religion and that this right includes “freedom, either alone or in community with others and in public or private, to manifest his religion or belief in teaching, practice, worship, and observance.”


      And let’s not forget that just 30 years ago, Congress passed the Religious Freedom Restoration Act, which mandates that “government shall not substantially burden a person’s exercise of religion, even if the burden results from a rule of general applicability.” Some of the names involved in the ultimate passage of RFFA may surprise you. Then Senator Joseph Biden introduced an initial version of the legislation in 1990, and three years later, RFRA was introduced in the House of Representatives by Congressman Chuck Schumer. A unanimous House and nearly unanimous Senate passed the bill, and President Bill Clinton signed RFRA into law.


      Fast forward three decades. Former champions of religious freedom are now skeptics, questioning religious freedom’s distinctiveness. Some even brand traditional religious beliefs as bigotry in the face of demands for unfettered access to abortion and the inclusion of sexual orientation and gender ideology in nondiscrimination laws and beyond. Freedom of belief and conscience is replaced by insistence on total conformity and acceptance. In my opinion, that’s pretty scary stuff.


      My co-panelist Julie Blake will be discussing the current administration’s proposed rules related to Title IX and Section 1557, so I’ll highlight four other examples of the administration failing to protect religious liberty in advancing what it claims to be mere nondiscrimination policies. As Elizabeth mentioned, the current administration pounced on the Supreme Court’s expansion in Bostock v. Clayton County of the reach of Title VII’s prohibition on sex discrimination in the workplace to include sexual orientation and gender identity, failing to give proper notice to the fact that the Court specifically mentioned that it was not reaching the issue of religious objections.


      On the day of his inauguration, President Biden issued an executive order, directing federal agencies to fully enforce Title VII and other laws that prohibit discrimination on the basis of gender identity and sexual orientation. Consistent with Biden’s order, the Equal Employment Opportunity Commission, an extensively bipartisan federal agency, has issued proposed guidance that “sex-based harassment includes harassment on the basis of sexual orientation and gender identity, including how that identity is expressed.” Harassment, according to the guidance, includes “intentional and repeated use of a name or pronoun inconsistent with the individual’s gender identity,” also known as misgendering. Also included as a force of harassment is the denial of access to a bathroom or other sex-segregated facility consistent with the individual’s gender identity.


      So what if employers and employees are not willing to abandon traditional religious beliefs grounded in biology reality in order to adopt preferred pronouns or do away with sex-specific restrooms or locker rooms? The guidance is unforgiving. “Employers do not and cannot provide Title VII religious accommodations for behavior that is considered harassment.”


      Meanwhile, the State Department has proposed rules which apply to award recipients and contractors for foreign assistance. The rules would impose nondiscrimination requirements that extend to gender identity or expression. Granted, the State Department can grant waivers, but given the President’s directive to impose gender ideology across all departments and agencies, this is a bit of an empty promise. Faith-inspired organizations, in particular, are likely to find their religious convictions excluding them from participating in government-funded relief work. And while waivers are allowed for a religious entity to hire co-religionists, that doesn’t mean that they’ll be allowed to make hiring and firing decisions based on the organization’s founding principles. All this makes a mockery of our commitment to promoting religious freedom as a foreign policy priority as enshrined in the International Religious Freedom Act.


      Now, using the power of the purse to impose ideological conformity is also at play and a final rule jointly issued this March by no further than nine agencies related to federally funded social services. Among other offenses, the rule calls for rescinding existing regulatory language that clarifies that the exemption in Title VII, Section 702, which permits religious organizations to employ individuals of a particular religion to carry out their work and includes acceptance or adherence to religious tenants of the organization. This change suggests that employees don’t actually have to believe in or agree with a religion’s teaching. They just have to identify as a member of that religion.


      And finally, HHS has proposed a new rule requiring state child welfare agencies to ensure that each child in their care who identifies as LGBTQI+ receives “a safe and appropriate placement in services.” Now, that sounds reasonable. But look at what comes next. The rule adds that “to be considered a safe and appropriate placement, a provider — foster parent — is expected to utilize the child’s identified pronouns, chosen name, and allow the child to dress in age-appropriate manner that the child believes reflects their self-identified gender, identity, and expression.” If this proposed rule is finalized, we could be looking at widespread rejection of prospective foster families for children, particularly those who identify as LGBTQI+, simply because they hold sincere religious beliefs about the nature of the human person, and for any child desperate to be placed in a loving home, reducing the number of homes is beyond cruel.


      Two last points to consider. First, many people of faith, who are unwilling to submit to these demands for conformity, are not discriminating based on sex but instead acting on the basis of religious adherence. And second, some argue that instead of just making religious freedom arguments in response to these demands, it’s important to make truth arguments. And my response is to note that for people of faith, who are raising religious freedom objections, they do so precisely because they believe the religious teaching they’re adhering to is true. Thank you.


Elizabeth Slattery:  Thank you, Andrea. Julie.


Julie M. Blake:  Well, thank you so much for having me, and thank you for my co-panelists, especially Marty, for joining us today. We all appreciate a good debate here. So my thesis is simple but takes a little issue with the premise of the panel. Religious freedom is important, but religious freedom is not enough. And that is more true than ever when it comes to the Biden administration’s whole-of-a-government agenda on the subject of gender identity and its very related subject of abortion, where many of these civil rights laws, sex discrimination laws are being redefined to encompass both new categories.


      The issue that we have in society is if religious groups respond to these laws simply by saying, “I’d like my exemption, please. You can apply it to everyone else but not me,” we are failing to engage with the real issues about the common good, about truth, and about reality. And we should not cede the public square. We have an obligation to care for everyone, whether or not they belong to our same religion or not. And I think that that is profoundly true in the context of the Biden administration’s forthcoming rules on Title IX and Section 1557. So I’ll take them one by one and show you that while religious freedom is important, it is not enough for each of these rules.


      So first of all, Title IX. What is the new Title IX rule? So Title IX is a federal statute. It applies to every person who takes federal funding, in any form, from the federal government, if you have any form of educational entity receiving the funding. So most of the funding goes to the Department of Education but not all of it. Sometimes, it can go through the Department of Agriculture, like for school lunch program.


      But the Department of Education is creating a new Title IX rule. It’s replacing the Trump Title IX rule. The Trump rule really dealt with things like due process, campus speech. Those are important concerns, but they’re not going to be the focus of this panel today. The Biden Title IX rule, in addition to addressing the due process issues on campus, is also redefining the substantive categories of Title IX in reliance on the President’s executive order interpreting Bostock. And they are redefining sex to include gender identity and termination of pregnancy, meaning abortion.


      And it’s important to realize that the Biden administration has technically proposed two rules. One is a main Title IX rule where it says this redefinition applies to all aspects of education, whatever that is. So that could be in the classroom. It could be PE classes, sports teams. Nothing’s excluded from this redefinition.


      And then, they had a second rule about sports where they said, well, maybe, in theory, there might possibly be one time that a male couldn’t play on a female sports team, if he wants but under a very difficult balancing and evidentiary test. That second rule apparently has been canned and is not being released before the election for fairly obvious political reasons. So what we’re left with is the main Title IX rule, which is expected to be released any day now. It’s already left the White House’s review. And this Title IX rule will affect all operations of any school that receives federal funding. So that includes school districts, public universities as well as private universities that take federal funding.


      So to move then to the next question of this panel. Did the agencies overreach be expanding sex nondiscrimination provisions to encompass gender identity in this rule. My answer is simply, yes. The point of Title IX was to help women achieve equal educational opportunities, and Title IX is not a sex blindness statute. Title IX is an accommodation statute. It is an equal opportunity statute.


      And by redefining sex to mean gender identity, the Biden administration is threatening the equal opportunities that women fought so very hard to achieve. And I’d submit further that it is a major question that Congress would have debated to allow men onto female sports teams and to end women’s sports. I think, up until very recently, everyone knew the whole point of Title IX was for women’s opportunities, was for their equal athletic opportunities, not to make women spectators in their own sports. And that really underscores the importance of this rule when it comes to -- is religious freedom enough? And it’s not enough because there’s no woman who should be forced to compete against a male on an athlete team.


      Everyone knows that men have, on average, great physical advantages. Their hearts are stronger. Their muscles are stronger. They can run faster. Having females play against males in sports creates physical danger for females. And it only takes one male to make the playing field unequal as we all saw so very vividly with Lia Thomas and Riley Gaines when he took the women’s titles in the NCAA swimming championships.


      Regardless of a female athlete’s religion, regardless of whether she attends a religious school or not, she should not be forced to compete against males in sports. And that’s something that we should all be able to agree -- and religious freedom categories simply don’t address that important question. And ignoring the biological reality that males and females are different is not going to help the problem. I think that it’s important to realize, then, that Title IX’s religious exemption will help solve some of these problems but not all of them.


      So in -- Title IX has a religious exemption saying that Title IX shall not apply to any entity controlled by a religious organization. So in theory, that means that if you have -- take my alma mater, Notre Dame -- Notre Dame is a religious entity. If it conflicts with Notre Dame’s religion, it won’t apply to Notre Dame as such. Well, that’s all very well and good. But what happens when Notre Dame wants to take the basketball court against UConn, and let us say, hypothetically, that UConn is allowing a male to compete on the basketball court. What is Notre Dame to do then?


      And this isn’t hypothetical. It’s real. My organization, Alliance Defending Freedom, represents female athletes who have already lost countless podium spots, championship opportunities by being forced to compete against males. We represent a school in Vermont, Mid Valley Christian (sic), where they had to forfeit a match when they unexpectedly were asked to compete against a team that was fielding a male athlete, and their female athletes were unable to do so. In response, the Vermont Principals Association kicked Mid Vermont Christian out of the sports league entirely. Do we want that to happen to the NCAA? I think not.


      So what we have then is a situation where, even if religious schools themselves are not subject to Title IX directly, there are going to be serious collateral effects of this Title IX rule on religious schools. We’re seeing it already in Vermont. And so, that’s why we need to consider that -- do we want a world where college sports are going to be separated based on these principles, or do we want to maintain the vibrant sphere of athletics that our country has historically had?


      I think there’s also some additional religious freedom questions at the margins about policing the Title IX religious exemption. What I found is that, in practice, there are people who would like to get rid of the Title IX religious exemption entirely. There’s a case in Oregon called Hunter v. Department of Education, where a group of students sued, claiming the Title IX religious exemption violates the Establishment Clause. My organization represents several intervening schools defending that exemption, and thus far, it has been successfully defended. However, that question is before the Ninth Circuit right now.


      Additional questions are made about the enforcement of Title IX’s religious exemption in practice. When the U.S. Department of Agriculture redefined Title IX for purposes of the national school lunch program, the state-implementing agencies didn’t pay attention to religious freedom at all. One of my clients, Grant Park Christian Academy, a low-income school in a predominantly black neighborhood was told that “you don’t need to participate in the school lunch program.” And it took a federal lawsuit to get the Department of Agriculture to walk back and restore the children’s lunch money. California, not to be outdone, then denied a lunch money program to the Church of Compassion, which operated a preschool and daycare. And it -- it held to its proceedings throughout -- to its position throughout administrative proceedings and even in federal court until facing a prospect, again, of a federal lawsuit, it eventually backed down and agreed to a settlement with a large amount of attorneys’ fees. But none of these things should have taken lawsuits to police the Title IX religious exemption.


      So then, moving on to the Section 1557 rule, and you would be forgiven if you’re like, “What is the Section 1557? This sounds like a bunch of garbled numbers I don’t know about.” Just think of it this way: it’s Title IX for healthcare. Obama Care, the Affordable Care Act, incorporated Title IX into healthcare. It simply said Title IX shall apply to healthcare.


      So redefining sex in Title IX did not stop within education. It applies to all healthcare operations in America, and the Biden administration’s making it very clear that applies to all healthcare providers as well as to most healthcare insurance programs. And this creates even more serious programs because if biological reality matters in sports, it matters even more in medicine. It is simply dangerous for doctors to ignore good medicine and biological reality in the service of a new nondiscrimination principle. And frankly, it is very hard to overstate the impact of this threatened rule change in medicine. The rule forces healthcare providers to perform gender transition procedures and abortions under its redefinition of sex discrimination. It is apparently discrimination to discriminate against gender dysphoria.


      So for example, if a doctor is a surgeon who performs hysterectomies, the doctor that is willing to perform a hysterectomy on a woman with cancerous uterus to save her life, the Department of Health and Human Services says that same doctor must perform a hysterectomy if the woman seeks to more physically resemble a male and no longer have a uterus. That means doctors who use medicines to treat precocious puberty will have to prescribe puberty blockers to halt the natural development of minors. Pro-life clients that offer abortion pill reversal with the use of progesterone will have to provide cross-sex hormones for so-called gender transitions. Doctors who manage miscarriages will have to do abortions under the same nondiscrimination rule as applied to abortion. Doctors who refer pregnant teens for OB care will have to refer them to Planned Parenthood. They must use patient self-selected pronouns. Everyone in the medical field will — and this is an example from the rule — have to refer to a woman on demand as a man, even if she is giving birth or pregnant.


      Simply put, this will turn medicine upside down. It will force doctors who do good to do evil, and it will harm patients. The Biden administration has grossly abused its power. It says that the Title IX’s religious exemption does not apply to the Affordable Care Act, that it incorporated all the parts of Title IX it likes but not the religious exemption and definitely not Title IX’s abortion neutrality provisions as well. And so, the religious freedom conflicts are going to be teed up even more acutely in this healthcare context. You’re going to have serious problems under RFRA involving free speech as well as all of the questions under federal conscience laws that protect against participations in abortion, sterilizing procedures.


      At HHS, in response to all those concerns, it’s taken the position of, well, if you think you’ve got some constitutional or other statutory rights here, go ahead. Take your chance in enforcement proceedings. That is simply not enough, whether you’re religious or not. No one should be forced to harm patients.


Elizabeth Slattery:  Thank you. Marty.


Prof. Martin Lederman:  Thanks so much, Elizabeth and Andrea and Julie. It’s a pleasure to be here again. I’m grateful that so many of you turned out. I figured with the adjacent room dealing with interposition and battles between states and the federal government at the border, there’d be no one here. But I’m glad to see some of you care about these issues as well.


      I’m going to focus a little bit more on the stated topic of the panel, that is to say, religious liberty when it comes to nondiscrimination rules in the Biden administration. Let me start by saying I served at the Department of Justice for the first 30 months of the administration, was very familiar with many of the rules and other policies discussed here, though, not all of them, including a couple more recent ones that Andrea has brought up. But I’m obviously not going to convey any confidential information. I’ll base this completely on the public record, and I don’t know what’s been happening since July. I’m like you. I’m just on the outside, looking in. And in particular, the Title IX and 1557 final rules have yet to be issued, and so, I will be making -- my comments will be based on the NPRM -- on the proposed rules, which, in certain areas, are much more noncommittal than Julie has suggested, I think.


      My basic theme is that I don’t recognize the description that my co-panelists have given for the administration’s posture toward religious liberty or, for that matter, toward abortion and gender affirming care. It is not a surprise at all, to me — having served in the Clinton, Obama, and Bush and Biden administrations — that Senator Biden proposed RFRA and that President Clinton signed it. It was one of President Clinton’s most -- proudest achievements to work with this bipartisan coalition.


      The Biden administration is very much committed to religious liberty, and it’s taken extraordinary steps over and over to ensure that exactly the sorts of principles and values that Andrea so eloquently described are preserved in federal law and that Congress’s balance between nondiscrimination rules and religious liberty are honored. I’ll just tick off some, but I could -- there are more. And then, I’d like to focus a little bit on a couple of the things that my co-panelists have said to give what I think is a quite different picture of how these rules would work, what they would do, and how they would apply both to religious objectors and to persons who don’t have a religious or a conscience-based objection because some of the statutes protect both religion and conscience that is not religiously based.


      So on his first day in office, President Biden rescinded the Muslim ban -- right? -- rescinded probably the ugliest form of religious discrimination that we’ve encountered from the federal government in recent years. He also has taken steps to preserve sacred sites of tribal nations, such as the Continental Divide National Monument, Bears Ears and Grand Staircase-Escalante National Monuments and the like. He’s signed hate crimes legislation to protect against violence on the basis of religion, among other characteristics, and the Justice Department, in which I worked, is deeply committed to enforcing such hate crimes laws, including against very vituperative and horrifying anti-religious forms of violence.


      He has released a national strategy to counter antisemitism, announced the development of a national strategy to counter Islamophobia and related forms of bias and discrimination and taken all sorts of other steps to do that. And in the context of anti-discrimination laws, in particular, all of these agencies and the President have been quite remarkably -- not remarkably -- I think quite unremarkably but predictably and consistently insistent that the many statutory — and in some cases, constitutional — protections for religious liberty will be enforced and will be honored by this administration and are important. The HHS has promulgated — this was after my time — promulgated a conscience rule that goes through in elaborate detail of all the different statutes -- and including RFRA but also including particular health and abortion-based conscience statutes that will be honored the way in which the agency will do so and the like.


      I just don’t recognize this picture of an anti-religious administration at all. And I’m not just saying that. It was part of my job to make sure that these statutes were understood and were enforced within the federal government. And it just doesn’t describe the daily reality that I can assure you really is present in all of the agencies and in the White House. Now, are there times in which religious liberty claims come in conflict with other important norms that the President is very much committed to: reproductive freedom, nondiscrimination, and the like? Of course.


      But the point here is that Congress has, in many cases, in the First Amendment and others, has created some balance and some room for religious exceptions. And those are being honored by the administration. I’m unaware -- Elizabeth asked before am I aware of cases in which the administration has actually rejected a -- any serious claims for religious exemptions under any of these statutes or any litigation in which this issue has really been teed up, and I’m not really aware. There hasn’t been a lot of post-Bostock -- I think, a little bit surprisingly, there hasn’t been a lot of post-Bostock litigation of religious objectors wanting exemptions to -- for sexual orientation discrimination laws under Title VII or Title IX or 1557 or Title VI or what have you.


      There’s been a few cases. The one that reached the Fifth Circuit, the EOC in that case didn’t object on the merits to the religious exemption claim that was being made. They thought it was premature, that the plaintiff hadn’t described what their objection was, and that they weren’t trying to enforce the statute -- the Title VII against the plaintiff. So I may be wrong, but I think there’s not a lot to talk about in terms of post-Bostock litigation and certainly not any indication of hostility from the Biden administration to religious liberty and religious exemption claims. And in fact, the solicitor general has filed some briefs and cases, and what many of you are familiar within the Supreme Court supporting religious liberty and free speech and free exercise rights, including the brief that the Court unanimously followed in Grafton, the undue hardship Title VII accommodation case last term; including a brief in Shurtleff, another unanimous decision about the right of a Christian organization to raise a Christian flag during its event in the city of Boston and the like.


      So I think that -- I think it’s fair to say -- I don’t -- I’m not going to claim the administration has done everything right or in every case made the judgments that everyone in this room might agree with, but I think, on the whole, caricaturing -- characterizing it as anti-religious and hostile to religious liberty is somewhat of a caricature. And it’s really interesting when you look at some of these recent cases, you go look at the Justice Department briefs where plaintiffs are bringing claims arguing that the administration is, for instance, requiring people against their conscience to provide gender-affirming care. And the Justice Department comes in on behalf of HHS and says we’re not requiring any such thing. Then, you get very conservative jurists, both in writing and in the Fifth Circuit’s recent oral argument in one of these cases, saying there’s no ‘there’ there. What are you complaining about? The government is not trying to force you to do these things.


      So we’re going to get into some of the details of this in our back and forth of these things, but I did want to just say a few things about that -- about the things that Julie has raised first very quickly, and then, maybe we can get further into the weeds. I want to make sure we cover things that you folks are all interested in in the question-and-answer session. So Julie mentioned, for instance, the Hunter case in Oregon, involving a claim by plaintiffs that the Title IX religious organization exemption is unconstitutional. Well, the Biden Justice Department is in court, vigorously arguing against that, successfully, on Julie’s -- on ADF’s side, side by side with the ADF and has successfully defended that religion exemption. But let me talk for a minute about 1557, in particular.


      When we -- during the Q&A and during our discussion, if you guys are interested, I’m happy to talk about Title IX and the athletics rule, in particular, although, as Julie pointed out, that one has been -- my understanding is that the final rule has been postponed. I think even the proposed rule there was quite moderate and quite an exception to the ordinary Title IX rules and was quite cautious in what it was proposing but was very open-minded in inviting comments, and they got tens or hundreds of thousands of comments. So that rule’s not there yet. I know that’s the issue du jour that people probably want to talk about, transgender women competing with cisgender women on sports teams. Happy to do so if that’s what people want to talk about, but the administration on that topic has been rather cautious and hasn’t done anything very dramatic yet, in any event.


      But on 1557, I want to make -- one thing that I think is important. Julie suggests that the rule -- the proposed rule -- we don’t know what the final rule would look like. The proposed rule would require, even apart from religious objections and religious exemptions, which the rule, by the way, sets up an entire system for people raising religious objection claims and having them honored. The rule goes to great lengths to say that the rules -- that the substantive rules that are put in place will be subject to all of the conscience and religious statutory and constitutional exemption claims that are available. But apart from that, Julie suggested if you’re not -- if you don’t have one of those exemptions, if you don’t satisfy it, you simply don’t want to do what the HHS would have you do. It will require people to engage in gender-affirming care and to actually either perform or subsidize abortions against their will. So that’s just not the case.


      So the rule doesn’t do either of those things. It doesn’t suggest that people have to perform abortions. And in fact, Section 1802 -- 18023 of the ACA has a specific provision, saying -- cited in the NPRM that says that no one can be required to perform abortions. The principal thing the statute does is simply to say, which it’s said since 1975 in the Title IX, that a termination of pregnancy, like bringing a pregnancy to term, is not a ground on which someone can discriminate against you. And ADF itself agrees that when it comes to miscarriage, for instance, the law is such that you can’t discriminate against someone for having had a miscarriage.


      Well, this says, in addition, you can’t discriminate against people for having exercised their right to have an abortion either. But it doesn’t require anyone to provide or pay for an abortion — at least, the proposed rule didn’t. I’m not -- I don’t know what the final rule will say — nor does it require folks who don’t provide particular services to engage in gender-affirming care that they, otherwise, would not provide. Now, there are -- there is a provision in the 1557 rule that suggests that not providing care simply because of a belief that treating gender -- that treating dysphoria itself through transition care of any kind is wrong, would raise questions under 1557. Even on that, it’s quite ambiguous, and I’m looking forward to seeing what the final rule would say. But so far, there’s been no movement at all by HHS or any other federal agency to require anyone to engage in gender-affirming care that they oppose or that they don’t otherwise provide let alone to provide abortions.


      And whenever these cases get into court complaining about that, what you’re seeing now is judges saying there’s no ‘there’ there. Why can’t -- literally, one of the judges said, “Why can’t you take ‘yes’ for an answer?” So I would like to push back and suggest that things may not be quite what they appear to be under some descriptions of what the Biden administration is doing and that it is actually quite committed to religious liberty and to compliance with all of the relevant constitutional and statutory provisions.


Elizabeth Slattery:  Thank you. So we’ll have time for audience Q&A, but I want to pose a question or two before we get to that. So the first one — Julie, we’ll start with you, although I’d love to hear everyone’s thoughts on this — the administration is plowing ahead, assuming that the court’s interpretation of Title VII’s definition of sex discrimination applies in other contexts -- other statutory contexts. Is that a valid assumption, or are these statutes different enough that they should be treated differently?


Julie M. Blake:  Thanks. So I think that’s the real question. Is President Biden right that Bostock just applies to every other federal sex discrimination statute, every other civil rights statute, or are there meaningful differences between Title VII and other statutes like Title IX, Section 1557, or other laws with their own sex discrimination provisions? And I think that’s the issue that these rules are going to force to a final decision, probably by the U.S. Supreme Court to make a decision is it the same or not. Bostock itself was clear that it concerned hiring and firing only within Title VII. It said it didn’t concern restrooms, bathrooms, locker rooms, or anything else of the kind. And it made that caveat knowingly that there can be important biological realities that need to be recognized in those contexts. And it also said that it was deeply concerned about religious freedom, so Bostock certainly recognized the rule of RFRA and other constitutional provisions as well.


      And then, you get to the question of whether Bostock’s hermeneutic necessarily carries over to the interpretation of other statutes, and I think that’s the issue that’s so important to realize. What Bostock identified in Title VII was essentially a sex blindness but-for test, but not every statute requires blindness to the protected category. So for example, when you have the Americans with Disabilities Act or Section 504, the Rehabilitation Act, you have accommodation for disability, not blindness to a disability, because ignoring people’s disabilities don’t actually give disabled people equal opportunities so, too, with Title IX.


      Ignoring women was not going to solve the problem the country faced in 1972 of a lack of women’s equal opportunities and education. And so, that’s why Title IX and, then by extension, 1557, when it incorporates Title IX, are different from Title VII. They are equal opportunity statutes, accommodation statutes, not statutes that have the same but-for causation, strict standard that Title VII has been interpreted to have. As well, I think many of the conflicts under these statutes are going to encounter questions well beyond the narrow hiring and firing context that Bostock had, things like equal access to locker rooms, sports teams, medical decisions.


      And if I could just briefly respond to Marty. It’s true. If a doctor’s scope of practice does not include, say, performing hysterectomies or providing hormones, they won’t be required to do so, but if they provide hormones or hysterectomies for one diagnosis, they will be required to do so for a diagnosis of gender dysphoria. Or at the very least, they cannot take a categorical position that gender transition efforts are, per se, experimental, dangerous, or harmful. And then, although the rule itself was deliberately vague on abortion, it led one to think that the same procedures — that they could be applied to a miscarriage — would need to be applied to an abortion under the same rationale that the Department of Education was doing. So that’s why I think you’re going to have a lot of fights here well beyond religious freedom. But certainly, you’re going to have serious problems for religious freedom when these rules come out, if they are what they appear to be at the proposal stage.


Elizabeth Slattery:  Do you have any comments?


Prof. Martin Lederman:  Oh, I do. Andrea.


Elizabeth Slattery:  Andrea? Marty?


Andrea Picciotti-Bayer:  I don’t want to jump on Marty.


Prof. Martin Lederman:  Jump, jump, jump. That’s what I’m here for.


Andrea Picciotti-Bayer:  You’re awesome. No, I wanted to say, first off, I wanted to celebrate and agree with you the points that you mentioned that -- where the administration has taken very pro-religious positions, especially on combatting antisemitism, Islamophobia, and that is consistent with the American tradition. And it is something that, I think, everyone in this room needs to be celebrating. These are serious times that we’re in.


      There have been examples, though, where the administration’s response has been either nonexistent or anemic. Right? So with a vigorous enforcement of the Freedom to Access to Clinic Entrances Act against anti-abortion protesters, the administration’s protection of church entrances, which is included in FACE, has basically been zero, and that’s a problem. And it’s not -- unfortunately, not unique to the Biden administration. This has been a problem with people’s understanding of what FACE should cover but particularly necessary. A response has been particularly necessary. After the rise in vandalism and attacks to both churches and pro-life pregnancy centers after the leaked Dobbs memo and its decision.


      The other thing that I would mention is your -- with all due respect, saying, “There’s nothing to see here.” I think that there is nothing to here see. And that’s a problem. There are enforcement actions that are not going on. And Julie will speak, in particular, about stuff involving HHS, but I can think of a case involving Vermont University Hospital where there was an HHS investigation under the prior administration, and that was kind of fiddled out. And a nurse in that university hospital who had made her position on not wanting to participate in abortion was -- found herself in the midst of that and had to actually engage in that. That’s a problem.


      There’s also a problem just -- personnel is a policy. I don’t know if -- you probably know Eric Treen. Adorable. Love him. Maybe a lot of the people here in our gathering know him. He was the Civil Rights Division’s person on religion there for -- through several different administrations, retired. And where is the next person on religion? And if you look at DOJ’s highlighted briefs, you’ll see very few outside of RLUIPA, which, again, great -- that the Justice Department is very engaged in defending the religious rights of people that are in institutions, incarcerated, but getting out there with amicus briefs, especially in the context of the conversation that we’re having right now. Where religious freedom and nondiscrimination laws appear to clash, you hear crickets.


      And -- or in the case of the Court’s recent review of that, not specifically on a free exercise issue but on free speech in 303 Creative, the administration took the side of the respondents and not the side of Lorie Smith. And they lost, so they were taking the wrong side. But I would expect that the administration would be more robust in its defense of religious freedom because I don’t think these need to necessarily be either/or rights, and that’s something that I think we need to build.


      And with all due respect to Julie as well, I think that religious freedom as a placeholder is crucial and indispensable. We can think, for example, of the amazing Little Sisters of the Poor, who fought repeatedly, won repeatedly to create that placeholder to not have to capitulate and include abortion pills and contraceptive, in general, in their employee healthcare plans. Their employees are nuns, so that was a fight that was fought hard and for a very long time.


      And I’m concerned that the rules that were created with all of the stakeholders, those that had concerns about the Affordable Care Act’s overreach, have since been watered down, and I think it’s important. If the administration wants to be recognized as being pro-religious freedom, then there needs to be a lot more effort on the ground to bring in stakeholders and try to figure out what their concerns are while they’re crafting rules. And the rules that I mentioned that were finalized, there were a “gagillion” comments. In reading through those “gagillion” comments, not much was done to respond to them as far as preserving religious freedom. So I think that there’s -- there is -- it’s an important time where we can come together — defenders of religious freedom, advocates for expanded nondiscrimination laws — find a way in which we can all get along, and the first step is that we can say absolute conformity isn’t necessary, that we will, just as the Supreme Court has said repeatedly, respect that good people, people of goodwill, will have different positions on this, many of which are grounded in their religious beliefs.


Prof. Martin Lederman:  So I’m pleased to say that I have a great deal of agreement with both Julie and Andrea in their latest comments. Certainly, that’s the sense that I have within the Biden administration as well, Andrea. I’m not -- I don’t know as much as you probably about some of the particular, either enforcement or nonenforcement, decisions that might have been made. That wasn’t my job, really, in the way that these broader policy and rulemaking and litigation issues were in compliance with the statutes were.


      My sense is that I don’t think there’s been a lot of litigation in which the -- in which people have been bringing RFRA or conscience claims against nondiscrimination laws in which the U.S. even had a decision to make whether to appear as amicus. I may be wrong about that. I haven’t tried to keep up with that. Maybe folks in the audience know otherwise. But I generally share that sentiment, and my sense is that so does the President and so do the people around the President. Certainly, people in every agency do.


      I will say I am very familiar with one of the rules you mentioned, the nine-agency rule involving Social Services. And I think those of you who are very interested in Supreme Court doctrine involving doctrine — Zelman and Mitchell v. Helms and Bowen v. Kendrick and Fulton and Trinity Lutheran, all of the -- and Carson v. Makin — will see that we took those questions extremely seriously and dealt with the extensive comments on those questions in that rule. And I, for one, think that the result is correct and actually implements President Bush’s executive order, which -- to a tee, almost verbatim.


      Another thing I would -- another thing I’m particularly proud of -- partly, I’m proud of the Department of Education for doing it, but I’m been involved in several iterations of -- some of you may have seen it; it didn’t get a lot of attention, but the Department of Education put out a new version of the -- now statutorily required guidance on prayer and religious expression in public schools last year. It’s the third or fourth iteration of that. This is a post-Kennedy v. Bremerton version of it. I think it’s quite good and extremely useful for public school officials, students, and teachers going forward. And that’s the sort of thing that a lot of energy is expended on.


      But let me just respond quickly to Julie. We agree -- I very much disagree about the high-level premise, which is that there’s a hard question of whether Bostock applies to discrimination on the basis of sexual orientation and transgender status with respect to all these other statutes. I think that’s an easy question. I think the courts of appeals are getting it right. I don’t think there’s going to be any dispute.


      I think the rationale of Bostock carries over quite readily when you talk about it, and that’s on the assumption that sex -- the word “sex” in all of these statutes — I’m quoting from Justice Gorsuch here — “refers only to biological distinctions between male and female.” And that’s been the predicate, actually, for these rules -- has been, assuming arguendo that “sex” means biological, physiological — right — anatomical differences -- treating someone differently because of their anatomy is a form of action on the basis of sex. That’s the rationale of Bostock. I think that carries over very naturally and almost unobjectionably to these other statutes.


      Where I agree with Julie, however, is that, unlike in Title VII, these other statutes allow for -- in certain contexts, allow for either separation of or distinct treatment of people on the basis of sex in certain contexts more than Title VII does, even before you get to religious liberty claims. And it does so in two ways. This is described in great length in the NPRM on Title IX. The first is that certain -- is that, in certain respects, if a -- the general rule is schools cannot separate boys and girls, male and female on the basis of their biology in educational programs. That’s the baseline rule, but there are exceptions to it. And the way the Education Department has understood it — and I think correctly — is that where the harm -- where there are de minimis or less harms of such separation is not a form of prohibited discrimination.


      And even -- in a couple of contexts, even where there might be those sorts of harms as to certain students, such as transgender students, the statute itself provides its own exemption or exception to allow for certain things that otherwise would be prohibited sex discrimination. The most obvious example of which is Section 1686, which allows schools to have male and female dormitories. Right? Living facilities can be separated on the basis of sex. So Julie, I think, is right about that, that -- I think it’s pretty -- I disagree with her. I think it’s absolutely clear that actually discriminating against someone on the basis of their biology. So for instance, not treating the broken bone of a transgender man but you treat one of a cisgender man will obviously be a violation of 1557 and will be a violation of Title IX in the educational context.


      The harder questions are, as she’s pointing out, when in the educational context and in the health context is treating people differently on the basis of biological and anatomical considerations -- when is that legitimate? When can it be done? How much equity has to be required and the like? Those sorts of questions are hard under Title IX. They always have been, particularly in the area of athletics where Congress actually passed an amendment to Title IX couple of years after Title IX was enacted, the Javits Amendment, which encouraged the Secretary of Education, then HEW, to treat athletics differently for some of the reasons Julie described and others and to come up with distinct rules that are supposed to result in general equality in the athletics sphere. And that’s what the Education Department is trying to in that NPRM, although I think that it looks like that’s at least several months off before that will become a final rule.


      So I’m in -- although I disagree with Julie about the top line about Bostock’s application to these other statutes, I do agree that Title IX and 1557 raise issues about what counts as prohibited discrimination and what is exempt from the prohibition on discrimination on the basis of sex in areas that aren’t -- that Title VII does not, and the statutes aren’t on all fours in that respect. So in that respect, I very much agree with her.


Elizabeth Slattery:  So I want to invite anyone who has a question. Come up to the microphone. We don’t even need to fill any extra time. There you go.


Questioner 1:  I guess my question is for Julie Blake. It strikes me that some of the -- of your comments were going to involve the courts in overturning majority views, and by this, I mean that the religious exemption normally is you can go to your catacombs, and they won’t come burn you out. But some of what you’re discussing is Constantinism, which is that we should rule regardless of the majority. And I think the majority has a lot of wrong views, and I certainly think on the transgender and the rest of it, it’s really bad. But if they get it in a statute, what are the courts supposed to do?


       In other words, if they say we -- the law gets passed, and it says transgender men can play on women’s sports team. Doesn’t religious freedom let us start our own sports leagues, but how would we win? How can you overturn under current doctrine majority rule if they actually have passed statutes that are going to be based on what I consider — and I think most people over all time have considered — false readings of reality?


Julie M. Blake:  All right. So I think your question focuses on if Congress hypothetically were to pass the Equality Act --


Questioner 1:  Or states.


Julie M. Blake:  Or states. If they were to pass the Equality Act or the Women’s Health Protection Act, which has similar principles for abortion, or other laws and to put it in the text that says, yes, these sex discrimination statutes mean this. Or if they simply were to say these are characteristics on their own that we are protecting in whatever way, then, yes, you wouldn’t have the same claim under the Administrative Procedure Act that the agency’s rule is contrary to law or lacks statutory authority in the same way. Of course, my thesis is that Congress never passed any of these laws. Congress refused to pass these laws. Congress, instead, passed laws that said sex, knowing very well what gender identity means and that it was something different and, moreover, that it would be a major question if, when everyone was passing Title IX in 1972 and thought they were protecting women’s educational qualities, if they were, in fact, requiring the end of them.


      But yes, I think, if you were in the realm of where you have a statute that requires these things, you would have different questions arise. And some of these questions actually would apply to these rules, too, but let us assume that there was a statute that provided all of this. Well, one question would be is it a Spending Clause statute? If so, the language would have to be very clear. If the language were clear, is it still unduly coercive in the amount of federal funding that it threatens similar to the Affordable Care Act and the Medicaid expansion? Would there be other problems with the preemption of states law under the Tenth Amendment? Perhaps.


      And then, when it comes to individual rights, if any of these laws apply in some of the ways we’ve described — coercing the speech of students or of teachers, affecting parental rights by having secret gender transitions in schools, telling doctors they can’t give their full medical opinions to patients — I think you’d walk into a host of problems under the First and Fourteenth Amendments wholly about from the religious freedom concerns, which would, of course, still be there under the First Amendment.


      Now, one really interesting question would be, well, what if that statute said RFRA doesn’t apply to this statute? Then, you’d definitely be in the realm of a constitutional question. But thus far, Congress has not carved out any statutes from RFRA’s scope, and of course, my hope is that it will not do so.


Questioner 2:  Thank you. I had a question about the Smith problem. So aside from whether it’s good law or not, my question is how the different panelists see essentially the accommodations. So I think, nondiscrimination, the Supreme Court maybe dealt with satisfactorily to most of our panelists, if not all. But when you move to accommodation, just how much accommodation is appropriate, especially considering the very broad differences that people can have in terms of what they consider religion so religions that are based on fallen laws or books or certain rulings, going to a building once a week and saying prayers as opposed to other types of faith. So how far should accommodation go? So obviously human sacrifice, no. Right. We can all agree. But -- or Jehovah Witnesses maybe that don’t want to give their children medical treatment.


      But how far would you go, and would you consider history and tradition as sort of the limiter of what is religion, sort of where the states’ police power ends to the basic things, like ensure public safety and health and some morals at the state level? And if you choose history and tradition for limiting the First Amendment this way, would you also use history and tradition for dealing with sex issues more broadly that came up, where, of course, the First Amendment of the Constitution -- the First Amendment and the Fourteenth Amendment were all passed during a time when the history and tradition was of coverture and no female involvement at all in any of these, which necessitated the Nineteenth Amendment to give the right to vote, not -- it’s wasn’t the Fourteenth Amendment that did it by implication. So my question is how you would reconcile that at the second level as well.


Andrea Picciotti-Bayer:  I’m so excited that you asked those questions. There are so many issues in the question that you raised, but my favorite is what do we do about Smith. Right? And it seems not that relevant right now, but in light of the people that continue to want to present the Equality Act or the Do No Harm Act, which would undermine RFRA’s force in certain areas, I think it’s important, when talking about the executive branch and nondiscrimination laws, to tackle what do we do about Smith. Right? And I think that the Supreme Court is wrestling with that. I tend to love Justice Alito’s concurring opinion in the Fulton case that basically eviscerated Smith, and then — with all due respect to Justice Scalia — pointed out we need to give life to the First Amendment’s protection for religious freedom.


      At the same time, I think that Justice Barrett, I think it was reasonably, said we need to come up with a workable rule. Workable rules are really hard for courts to do. It’s much preferable that Congress lawmakers do that in -- and with the benefit of insight from administrative agencies, but I think that the most important legislation that could come out of Congress is to figure out how do we move forward. And I’d love to see that be done in a -- in not by the executive branch but be done much more in the open with lawmakers wrestling with some of these and taking into account people’s concerns.


Prof. Martin Lederman:  I agree with Andrea and particularly in the areas that we’re talking about on this panel, and I know the questioner knows this. But this is an area so suffuse with statutory protections for conscience and religion, starting with RFRA but then in the particulars here, as well. And when it comes to medical treatment, abortion and the like, that one doesn’t really need to worry about what the First Amendment does. I will say I teach the law of religion this semester, and both I and my students, maybe it’s the way I’m teaching it, don’t quite understand what’s got the justices in such tension with one another about whether or overrule Smith because what they’ve created with Fulton and Masterpiece and similar decisions is so much more robust than the pre-Smith/Sherbert/Yoder regime in terms of guaranteeing religious exemptions that it’s not clear what the stakes are about whether Smith -- if we went back to Sherbert and Yoder, religious exemptions would diminish vis-à-vis what the Court has been doing recently. So it’s something of a mystery.


      I do want to use this just to pivot to one other thing that happened in the last week or so, in part, because it raises issues Julie was raising about what folks in this room and folks on my side of the aisle think about religious exemption and religious liberty claims vis-à-vis the -- in relation to the substantive debates that are being had about sex discrimination, transgender athletes, abortion, and the like, which, as many of you may know, Indiana has a mini RFRA. It has a statutory RFRA. And claims -- and then, Indiana has recently enacted, in the wake of Dobbs, a very restrictive abortion statute. And that abortion statute was challenged by several different women who claim that their religion requires them to obtain abortions under circumstances that Indiana law would otherwise prohibit and saying that Indiana’s RFRA law entitles them to exemptions. And so far, it’s gone up through two levels of the Indiana state courts, which have ruled in favor of the women’s right to obtain abortions, strangely not discussing at all how they would get them because there were no doctors in the case.


      But putting that aside, what was really striking to me is the hostility towards this litigation from folks who have spent many years passionately committed to religious exemptions, including the Becket Fund, which actually shockingly, in my view, filed a brief suggesting that these women among all of the religious exemption plaintiffs of recent years are insincere about their beliefs about what their religion requires -- a remarkable brief that I think is worthy of some attention and some concern, to my mind about what’s really going on here. And I wonder whether religious liberty is really what’s driving a lot of this litigation or whether it isn’t, in fact, more along the lines of the substantive debates on both sides, mind you. People care about the substantive questions. Obviously, these are very important substantive questions on which people have very deeply held beliefs apart from religious exemptions. The Indiana case is really one to watch, in particular how the religious exemption groups and committees treat that case as it goes forward.


Andrea Picciotti-Bayer:  I feel incredibly validated because I just wrote about the Indiana case --


Prof. Martin Lederman:  Oh, great. I’m looking forward to --




Andrea Picciotti-Bayer:  Yeah. No, you’d love it -- you’re going to love the piece. But I actually take the side of Becket on both this specific case of people presenting a religious claim to an abortion similar to claims by the Satanic Temple. I don’t know if you follow this line of cases. Both -- they’ve argued -- and I guess they -- Satanists do believe that there’s a religious ritual behind abortion, but the Satanic Temple, which is different than Satanists, are claiming it because they want a mockery of religion. And they’ve done that in Texas. They were actually trying to force, I think it was, HHS to provide abortion consist with religious freedom, responsibilities.


      They’ve also, incidentally, gone after elementary schools, where Bible study clubs are held after school on school facilities, to ask for after school Satan clubs, using religious freedom principles in order to push that agenda, mind you, claiming at the same time that they’re not really Satanists. So it’s a little hard to figure out. But I think that there is a very big issue at stake that religious freedom is kind of the hard issue in the Court right now, and I would love to see its proper understanding and its proper application. That’s where I’d love to see the Supreme Court and the Department of Justice provide measured briefs.


      I thought that Becket’s brief was very measured. I do think that there are issues. In general, we don’t question the truth of a person’s belief, and we’re reluctant to question the sincerity. But when it looks like religious freedom is being an argument that’s convenient as opposed to a genuine argument for advancing a claim, then I do think that it’s appropriate for the Court to question that. And I would say — and I may get people disagreeing with me — I saw that there were people making political arguments under the guise of religious freedom during the pandemic to oppose masks and things like that. And I think that it’s worth questioning the sincerity of the belief as being either religious or politically grounded.


      So I do think that it’s I disagree with Professor Lederman on the validity of the claims, but I do think that it’s a really important issue that the courts are going to be facing, not just in Indiana, but there are, I think, eight states where their laws -- their regulations surrounding abortion have been challenged on religious freedom grounds in twelve cases in those eight.


Prof. Martin Lederman:  Do we have time because we have at least one question? I could -- we could go on all day on this topic as well, and it’s really interesting. But I want to make sure you get your question in.


Elizabeth Slattery:  We are actually at the end of our time.


Prof. Martin Lederman:  Can we do a -- can she quickly interject? Maybe there’s a quick --


Elizabeth Slattery:  Very, very quickly.


Prof. Martin Lederman:  She’s been very patient.


Questioner 3:  I was -- I -- thank you very much. I was going to take the invitation to jump on Marty --


Prof. Martin Lederman:  Jump. But you got to do it quickly. Quickly.


Questioner 3:  All right. I’ll just say it seemed to me you took -- spent enormous amount of effort in your comments to say that the administration was culturally very attune to religious freedom, and on the cultural level, I was struck by the fact that you opened with repealing the Muslim ban, which, of course, was not religiously founded — that was directed to national security — and talking about Indian tribes. And if you have time to talk, I would just raise the issue of what’s going on in the Ivy League. No one takes more federal money than them of the energy that is putting in -- being put into very real antisemitism and whether there is a distinct lack of energy by the administration in pursuing that. So if that was the -- feel free to answer, but if that was the last word, thank you.


Prof. Martin Lederman:  No, no. I think that --


Elizabeth Slattery:  Thank you.


Prof. Martin Lederman:  -- I mentioned the fact that the President is and his administration’s deeply committed to efforts to stop antisemitism and Islamophobia. I think that’s pretty apparent. I disagree with you about the Muslim ban, but that’s an honest disagreement.


Elizabeth Slattery:  Agree to disagree.


Prof. Martin Lederman:  Agree to disagree.


Elizabeth Slattery:  Well, please join me in thanking our panelists.






10:40 a.m. - 12:00 p.m.
Breakout Panel 2 - Law and Order on the Border?


Grand Ballroom
The Mayflower Hotel
1127 Connecticut Avenue
Washington, DC 20036


Event Video


In 2023, U.S. Customs and Border Protection recorded more than 3.2 million encounters with illegal immigrants entering the country; 169 of those apprehended while attempting to enter the country illegally were on the terrorist watchlist. Estimates of the number of people who cross illegally and are not apprehended continue to rise and in December 2023, there were 302,000 CBP encounters along the southern border, the highest monthly total ever recorded. In the last year alone, CBP seized 27,293 pounds of fentanyl along the southern border but it is estimated that this is only 5-10 percent of the total that crossed the border.

Texas recently passed SB. 4 a law that allows state and local authorities to apprehend anyone whom they believe is in the country illegally. The federal government administration has challenged the law’s constitutionality in court arguing that Texas is interfering with the federal government’s exclusive authority to regulate the entry and removal of noncitizens.

How is the federal government addressing immigration and pursuing enforcement policies? Is the Administration issuing regulations and executive orders that comport with the law? What role should states and their law enforcement authorities play? This panel will discuss these and other important related issues.


  • Hon. Mark Brnovich, Former Attorney General, State of Arizona
  • Dr. Sohan Dasgupta, Partner, Taft Stettinius & Hollister LLP
  • Prof. Ilya Somin, Professor of Law, Antonin Scalia Law School, George Mason University
  • Moderator: Hon. Beth A. Williams, Board Member, U.S. Privacy and Civil Liberties Oversight Board


Event Transcript



John Richter:  I'm John Richter. I have the privilege of serving as the Chair of the Criminal Law and Procedure Executive Committee for The Federalist Society. And it's my privilege to introduce this panel and, in particular, introduce the leader of this panel, the Honorable Beth Williams. I won't get into her biography too deeply. I will say that it's a darn impressive one. 


She, obviously, has hit all her marks academically: clerked for the right judges, been involved in confirmations of judges to the United States Supreme Court and otherwise, and, obviously, most recently, prior to her present position, served as the Assistant Attorney General in charge of the Office of Legal Policy at the U.S. Department of Justice, which, of course, plays a critical role. Presently, she serves as a board member of the U.S. Privacy and Civil Liberties Oversight Board as, obviously, we're dealing with debates presently in Congress over Section 702. The debate of the balance between ensuring we keep ourselves protected against terrorism and foreign threats and preserving our civil liberties remains an active issue. 


But, obviously, today, we are focusing our panel on the issue of the border and immigration, and the question of overreach and underreach. I'm going to make a bet that this panel will agree that there is both overreach and underreach. But when it comes to executive state and local authority pertaining to this issue, I suspect they will not agree on what is overreach and what is underreach. But, without further ado, let me introduce the Honorable Beth Williams, and look forward to hearing the panel today. Thank you so much for participating and doing this.


Hon. Beth Williams:  Great. Thank you so much, John. I'm really happy to be here. And I have to start with just the quick disclaimer that I'm here in my personal capacity and any views expressed don't reflect the views of the U.S. government or the Board or any other board member. But, with that, I am really excited to welcome our wonderful panelists who are all very distinguished, and I'll give you some brief introductions so we'll have more time for discussion.


      So, let's start with Attorney General Mark Brnovich, all the way on the left. Mark Brnovich served as Arizona's 26th Attorney General from 2015 to 2023 and is now a partner at Boies Schiller Flexner. He was first inaugurated as Arizona's attorney general in 2015 and again in 2019 after winning reelection. Attorney General Brnovich has spent most of his professional life serving as a prosecutor at the local, state, and federal levels. He's been a Judge Pro Tem of Maricopa County Superior Court, a Command Staff Judge Advocate in the U.S. Army National Guard, and the Director for Constitutional Government at the Goldwater Institute. 


On behalf of the State of Arizona, he's been a litigant in cases at the Supreme Court involving immigration issues. He recently testified on the southern border crisis before the U.S. House Subcommittee on the Constitution and Limited Government. While in office, he served as the Chairman of the Conference of Western Attorneys General, and personally argued three cases before the United States Supreme Court.


Next, we have Professor Ilya Somin.  Professor Somin is Professor of Law at George Mason University. His research focuses on constitutional law, property law, democratic theory, federalism, and migration rights. Among many other publications, he is author of Free to Move: Foot Voting, Migration and Political Freedom; and Democracy and Political Ignorance: Why Smaller Government is Smarter.


Professor Somin's work has appeared in numerous scholarly journals and his writings have been cited in decisions by the United States Supreme Court and multiple lower courts. Professor Somin clerked on the U.S. Court of Appeals for the Fifth Circuit. He earned his bachelor's summa cum laude at Amherst, his Master's in Political Science from Harvard University, and his J.D. from Yale Law School. 


And next we have Dr. Sohan Dasgupta. He is currently a partner at Taft, Stettinius & Hollister in its D.C. office. And he's the former Deputy General Counsel of the U.S. Department of Homeland Security. And I hear they handle immigration matters. He also served as Special Counsel of the U.S. Department of Education. 


Dr Dasgupta earned his undergraduate degree from Columbia University, his law degree from the University of California at Berkeley, where he was elected to the Order of the Coif, and his master's from the University of Oxford. He served as a clerk on the U.S. Court of Appeals for the Ninth Circuit and the U.S. District Court for the Southern District of West Virginia. 


Please join me in welcoming these wonderful panelists. So, we're going to start with some opening statements, and to kick it off will be Attorney General Brnovich. 


Hon. Mark Brnovich:  Thank you very much. And, I must admit, as you were doing the introduction I couldn't help but thinking about one of the times I had introduced the late Justice Scalia at an event. And, if you know, Justice Scalia had that kind of gravelly voice and was short and to the point. And I had asked him, I said, "How would you like me to introduce you?" And he said, "Mark. Have you ever heard the President of the United States introduced?" And I said, "Yeah. What are you talking about? Because you've done all this stuff. You were a law professor, appellate judge, Supreme Court judge."


And he says, "When they introduce the president, all they say is 'Here he is, the President of the United States,' because the more important your job, the shorter the introduction." So, thank you for that lengthy introduction of all of us. I really do appreciate that. I know where we stand now. In all seriousness, this is a very, very serious issue regarding the crisis, the invasion, whatever you want to call it, at our southern border. And the reality is, by any measure, it is unprecedented. 


Frankly, on Joe Biden's first day in office he issued executive orders which helped incentivize and decriminalize illegal entry into our country. I think the Biden administration's lack of concern for the security of our southern border knows no bounds, no boundaries, literally and figuratively. I remember early on, while I was still Attorney General in President Biden's first year in office, talking about the crisis at our southern border. I would say things like, "Every state is going to be a border state," something you hear now being echoed by people across the political spectrum. I used to talk about the unprecedented nature, and I would try, as a former trial attorney, as a former prosecutor, I would always try to put things in perspective that people could understand.


And I remember that first year — as we were nearing the one million mark in less than a year under Joe Biden's presidency — I remember being on Fox News and saying, "This border crisis, literally, if you look at the amount of people that have illegally entered our country, it could literally fill the entire population of Alaska and Wyoming, two states." Now, I think most people here recognize that those are smaller states. So let me put that in perspective as we fast-forward a couple of years later. 


Now we're talking about 13 million people, by some estimates, enough to fill Joe Biden's home state of Delaware eight times over, enough to fill the stadium where the Baltimore Ravens play 100 times over. So, these are astronomical numbers we're talking about when it comes just in the form of the number of people illegally entering our country. Now, do I think everyone entering our country illegally right now means harm to the United States? No. But I also know that every single person that enters our country illegally is putting money into the pockets of the cartels.


The cartels, literally, depending on what the going rate is, will make thousands of dollars off of every single person entering into this country illegally. Since this border crisis began under the Joe Biden administration, we are talking about billions of dollars. And anybody that cares about the national security of the United States, who has been to countries like Mexico, should recognize Mexico is on the brink of becoming a failed state. And, quite frankly, it might already be in the category of a narco-state. 


Now, all that being said, when we talk about the raw numbers, there's obviously a cost in this associated to states: Arizona, Texas, other border states. I'll give you a quick example. Just last week, I was talking to a senior healthcare official. This person was telling me that their hospital that's along the southern border of the United States, the amount of people they're having to treat now and see that don't have health insurance — that the hospitals, essentially, are picking up the cost — is astronomical.


If you listen to the mayor of Yuma Arizona, he will tell you that in the average quarter, they're talking about $20 million of these small regional hospitals in rural parts of the country that are having to absorb these astronomical costs. And this healthcare executive was telling me that when people come into the country, sometimes legally and sometimes they'll hop over the border fence, they get caught in barricades or they become dehydrated after trekking through the desert, whatever happens, DHS will drop them off at the local hospital. They'll agree to pay for a couple of days of healthcare. And, many times, people with significant injuries end up staying in the hospital for a month at a time. And then they just walk out with no bill.


And the reason why that matters is because I think so many people that I know that are immigrants, that went through the legal process, it really bothers them that so many people now — and it's building this resentment — that so many people now seemingly come here and the hardest question they get asked when they enter this country illegally at the southern border is whether they want a hotel room with one king bed or two queen beds. And I say that half in jest, but that's the reality.


You look at what's happening in places like New York and Chicago. Literally, there's people that have entered the country illegally that are getting gift cards. And I'm going to tell you another anecdote in a second, related to that. But this is the point I wanted to make. And I don't know if there's a timer here, or how much time I have or don't have. But what should bother or what should worry everyone in this room is not just the millions of people entering this country illegally and whether our system can absorb it financially and the empowerment and the enrichment of the cartels. 


But what keeps me up at night, as a former gang prosecutor, as an Arizonan, is the "gotaways." And this is a term that's used in DHS and the Border Control community. These are people that are evading capture. These are people that don't want to be caught. So, of that big group of people, literally, if you go to the southern border — and I've been there many a time — people will literally just walk across the border with backpacks, with carry-on luggage. You will get more of a hassle going through TSA security at the airport than they do coming in through the border.


They literally are processed, and they go to this van. And then they know where they're off to. They get paperwork to report in four or five years. And it's a fairly easy process right now to enter the country illegally. All that being said, ask yourself, why is it, since Joe Biden took over as president, there have been more than a million "gotaways"? The "gotaways" are primarily, almost exclusively, males between the ages of 18-35 years old, very often wearing dark clothes, camouflage clothes. They wear carpet on their feet, usually, so that way they can't be tracked, to avoid detection. 


So, ask yourself, if you could enter this country right now, without any sort of legal consequences, even getting government benefits, why have a million people — males between the ages of 18 and 35 — done everything they can to avoid capture and detection. And that's what keeps me up at night. Because we know that since Joe Biden took office a record amount of people on the terror watch list have been apprehended. We know that in places like southern Arizona people that are under the age of 18 now, the number of overdose deaths has gone from about 4% to 57% of the deaths.


And I think Speaker Johnson is speaking at this conference later. He's mentioned the fact that the number one cause of deaths among people in the age group 18 to 49 now is opioid and fentanyl overdoses. So, we have a record amount of drugs coming into the country. We have a record amount of profits for the cartels. And we have more than a million people in this country that snuck in that are military age. And we have no idea who they are or where they're going. And so that is what should concern everyone. 


So that brings us to what our office did. We had issued an opinion, the first in the country, that basically says what is going on at our southern border constitutes an invasion. Now, when we issued this opinion, there was a lot of blowback, a lot of criticism. And, quite frankly put — and I know there's going to be more discussion on this — but the reality is that the states created the federal government. The federal government didn’t create the states. And there are all sorts of references in our Constitution to that sovereignty and those powers the states still retained.


And if you look at, specifically, Article 1 Section 10, a state has the ability to defend itself when actually invaded or in such imminent danger. Additionally, Article 4 Section 4 provides that the United States shall protect each state against invasion. So, quite simply put, when the federal government will not do its job, the states have the ability to protect themselves. And the reality is that this doesn't come easy for someone like me, especially as a first-generation American. I understand that when it comes to national defense, foreign policy, immigration policy, that is when the executive is at the height of his or her powers. 


But what we've seen thus far is an abject failure of the Biden administration. So, whether it was incentivizing by getting rid of the public charge rule, which our office sued the president over, whether it was failure to build a border wall, which, apparently, now they're going to start building.  There's a myriad of things the Biden administration did to incentivize and essentially decriminalize illegal border crossing and illegal migration. So, if the federal government won't do its job, the states have the ability to protect themselves.


And let me just close with one last story. As I said, I'm a first-generation American. And a lot of people that attend the church I go to are either refugees or first-generation Americans as well. And one day, as I was walking out of church, someone I know, a friend of mine from Chicago, whose family -- he was born, actually, in the former Yugoslavia. He came up to me and I thought he was going to, like, troll me or say something nasty about my stance related to the border. 


And, instead, he came up to me and he said, "Thank you for all you're doing." And I said, "Well, I'm kind of surprised. You're a democrat. You're from Chicago. I thought you would be against what we're doing on the border." And he said, "No, no. Absolutely not. You know what Cesar Chavez said about immigration? Do you?" And I said, "Cesar Chavez, the migrant rights worker who Joe Biden, literally, has a bust of Cesar Chavez in his office?" And he said, "Yes, that Cesar Chavez. Go back and look it up," which I did. Cesar Chavez and his brother were adamantly opposed to illegal immigration.


In fact, his brother, they would do patrols along the southern Arizona and California border and beat up people that were trying to enter the country illegally because they felt — and they came at it from a left perspective — they felt that when people were coming into the country illegally, that would mean that they would be exploited, that it would undermine the ability of farm workers, auto workers, anyone else that was working in blue collar jobs, to be able to earn a better standard of living, because corporate America would hire cheap labor. 


Now, putting aside the economics of that argument, I can't help — as he was talking to me —     think about what Milton Freedman also said: that you can't have open immigration policies if you have a welfare state. And so, the reality is that, look, there's a lot of people, including myself, that have benefited from a legal immigration policy. But there's a lot of people that are in this country legally who really don't like what's going on. They feel like -- if I had a dollar for every time I hear someone say, "Well, no one gave me money to go visit my cousin in New York. No one gave me a free gift card. No one's paying for my hotel rooms, my healthcare."


And I think that what is happening is fundamentally unfair to everyone. I actually think it stigmatizes immigrants in a bad way as we move forward as a country. And I think that, when you see these numbers, we have to keep in mind every one of those numbers, those millions of numbers, means someone was exploited, taken advantage of. And the cartels are getting richer and illegal drugs are flowing into this country every single day. We are paying a price, not only fiscally, but in lost lives. Thank you.


Hon. Beth Williams:  Thank you, Attorney General. Now we're going to go with Dr. Dasgupta.


Dr. Sohan Dasgupta:  Thank you very much for your gracious invitation. And I'm honored to be here with our venerable moderator and my illustrious co-panelists. We all know that in June of 2022, in Biden v. Texas, the Supreme Court held that the present administration's recission of MBB, the Migrant Protection Protocols, didn't violate the Immigration and Nationality Act. And in June a year later, the Court held in United States v. Texas that the states — Louisiana and the border state of Texas — they lacked standing to challenge the current administration's immigration enforcement guidelines that prioritize the arrest and removal of certain non-citizens from the United States. 


      There might actually be a constitutional elephant in the room. And it concerns national security broadly, the border, to be sure, but also matters from cybersecurity and biological weapons to combat operations. What has not frontally been addressed by the Supreme Court in recent years is whether the Constitution requires the president to protect our national security regardless of whether the context is to ward off an invasion or something even more insidious, or for the president to do so preemptively, and, if so, whether there is an administrable judicial standard to so enforce. 


      Sooner rather than later, the Court is going to have to grapple with this issue. Cases echoing that theme have been filed in the lower courts. So, the framework to consider that question is very important. To be sure, Justice Thomas has observed in the Guantanamo Bay cases Hamdan and Hamdi that the president has broad constitutional authority to protect the nation's security in the matter he deems fit. Justice Thomas has used the word "responsibility," which I take as some kind of synonym for "duty" and "obligation."


      And, historically, going back to the mid-19th century, there are the intra-bellum prize cases and Fleming v. Page, which say — kind of as dicta, kind of as holding of similar things — in the prize cases, the sufficient condition was if a war be made by invasion of a foreign nation, the president — this is the necessary condition — is not only authorized but bound to resist force by force without waiting for any special legislative authority. And, in Fleming, the Court said that the president has the constitutional power to employ the national security means at his disposal in the manner he may deem most effectual to harass and conquer and subdue the enemy.


      But some might argue that the presidential power to do so is different from the duty to do so. And reacting in the face of an invasion is not the same thing as being commanded to do so proactively and preemptively. On that side of the ledger, judicial pragmatism sort of reigned supreme. "Either we, the judges, run the country's security, or the executive with all the resources at its disposal does so. And we are just not well-equipped to do this, and there's just too much writing on it for we judges to meddle in this most sensitive or preserves," often goes the judicial thinking.


      How could the judges know what is a genuine national security interest, national security basis, and what is mere obfuscation or pretext? How could the judges choose between competing claims with the president arguing that his inaction potentially advanced national security and the challengers arguing that it hurt the same? Judges are not in the situation room. They might be able to construe only a very limited quantum of the vital national security information in camera.


They don't know the ponderous equities that are weighing on the executive's mind. They don't know if even an ostensibly minimalist judicial intervention can have disproportionate ramifications in the national security theater. They don't know the cost/benefit analyses and tradeoffs. They don't want to stage-manage national security from the bench. And, for these reasons, in the Supreme Court's own words, the judiciary has neither aptitude, facilities, nor responsibility to stage-manage national security, which belongs in the domain of political power, not subject to judicial intrusion or inquiry.


And two other pragmatic considerations seem to make judges reluctant to weigh in on some of these questions. Because national security is so prominent and volatile a topic, voters will know, expeditiously, whether it was a good call or a bad call. And the remedy is a political one. They can punish the president or his party at the polls. And, secondly, once the judges enter the national security ticket, sort of like the political ticket, they would be stuck there against a recalcitrant executive. And if they have to sound a retreat sooner or later, due to executive inertia, which is not out of the question, then that might embarrass, lead to mockery, and irreparably damage the structural integrity of the judiciary. 


      That said, it's appropriate to examine the school of thought which believes that the president does have these constitutional obligations, even if, in the view of some of the proponents of that school, beyond some point the federal courts either may not or prudentially should not intrude in national security matters. After all, the president and members of Congress take the same oath that judges do. And not all duties and rights given by the Constitution are judicially enforceable because of justiciability or other obstacles. 


And those that the court declines to enforce, Congress may enforce through all the tools that are at its disposal: appropriations, refusal to confirm nominees, ambassadors, state department officials granting letters or withholding letters of marque and reprisal and so on and so forth. Furthermore, they argue that many of these preceding arguments are red herrings hyper-focused on the borderline, difficult cases. Because most of the time, whether the president has hurt or advanced our national security would be reasonably clear, both to Congress and to judges. 


And they also say that judges don't apply this evenhandedly. They are very tendentious about it. Sometimes national security is just sort of an appropriate invocation to decline to adjudicate a case when the subject matter is to the liking of the court, and sometimes not. And, under this view, the historical argument is that the living community existing at the time of the Constitution's framing committed that power and duty to the president. Only he could do the job right in numerous national security circumstances and, therefore, must do so.


The Executive Vesting Clause of our Constitution authorized the president to protect the national security. The Commander in Chief Clause doubled down on that power to protect the nation. But then, there's the Take Care Clause. There's the Oath Clause. What do those clauses do? They convert the power, it is argued, to protect the nation, into a duty to do so, for the Constitution itself will not endure in any meaningful way if the nation itself does not endure and its security does not endure. 


According to this view, the executive's failure to protect our national security contravenes the executive's constitutionally appointed duty. And that's from the majority opinion, not Justice Scalia's dissent. I know the General, very graciously, brought up Justice Scalia earlier in Morrison v. Olson. And at least that sheep was allowed to come as a sheep. No dissembling, no camouflage. And the duty to protect national security entails, it is argued, the power to do so. But it imposes an obligation on the executive as well. And it draws some support from late 19th century cases.


Probably the most fascinating of these cases, in my view — and I've always thought this case was a significant development in structural constitutional jurisprudence — was Neagle. Neagle is from 1890. And there, it was held that the Take Care Clause requires the president to execute any command that is statutory or is treaty-based, or one whose provenance are the rights, duties, and obligations growing out of the Constitution itself, our international relations and all the protection implied by the nature of government under our Constitution.


That's capacious language. And it goes well beyond specifically spelled-out rights, duties, and obligations and salient legal instruments. And what could grow more out of the Constitution than the executive obligation to protect our national security? Similarly, what could be more implied by the nature of government under our Constitution, a la Neagle, than the president's national security duty and obligation? The Take Care Clause, in that regard, serves as a bridge between the president and his legal duty, even a general one, with some conceivable root in the Constitution statutes or treaties.


Similarly, the Oath Clause confers on the president the unqualified absolute obligation to take care that the laws, including the broader national security imperatives to make the country itself stand, are faithfully executed.  The equation — I think I've alluded to it earlier — is very simple. If national security is undermined, the existence of the nation may well be undermined. And then there is no question of the laws being faithfully or otherwise executed. 


The presidential power and duty — this school of thought believes — of protecting our national security go hand-in-hand. That authority and duty to protect the national security was conceived of by the framers and the living community that so believed. That's why when Hamilton had said that energy in the executive is a leading character in the definition of good government, "Federalist 70." He had grounded this in the "decision, activity, secrecy, and dispatch which would generally characterize the proceedings of one man in a much more eminent degree than the proceedings of any greater number." 


And since the nation cannot do without national security, not only may the president use all the powers at his disposal, but he must do so. That's the argument, sum and substance thereof.

President Lincoln — the proponents of this school of thought point out — did not believe he had any choice. The Constitution required him, he believed, to put down the rebellion. To this end, Lincoln reminded the rebels, "You have no oath registered in heaven to destroy the government, while I shall have the most solemn one to preserve, protect, and defend it." Thank you very much.


Hon. Beth Williams:  Thank you. Professor Somin.


Prof. Ilya Somin:  Thanks to The Federalist Society for organizing this event, and all of you for coming. In my talk, I'd like to focus on two issues: first, the argument advanced by the State of Texas in two cases currently before the courts which says that illegal migration and cross-border drug smuggling qualifies an invasion under the Constitution, thereby authorizing Texas and other states to engage in war in response. And then, second, I'll talk a little bit more broadly about the issues raised by the situation at the border and how they can be best addressed, which, in my view, is by making legal migration easier. Because most of the problems we have at the border are the result of creating an illegal market, which creates predictable incentives for people to do illegally that which is virtually impossible for most of them to do in any other way.


      So, Article I Section 10 Clause 3 of the Constitution states that "No state shall without the consent of Congress engage in war unless actually invaded or in such imminent danger as will not admit of delay." And I think the invasion being referred to here is, pretty obviously, a military attack, not merely cross-border drug smuggling or illegal migration. The very text strongly suggests this. What states are allowed to do, if there is an invasion, is engage in war. That's the kind of thing, normally speaking, you would only be allowed to do or want to do in response to an actual attack, as opposed to various kinds of illegal activity.


      Moreover, other references in the Constitution to invasion point in the same direction. For example, in Article IV, the Guarantee Clause, it pairs invasion with "domestic violence." Domestic violence in the founding era did not mean what it means today, that is, sort of violence in the home between intimate partners or family members. It meant something like a violent rebellion or uprising. So that, too, seems like large-scale violent attack, not merely law-breaking of less significant kinds.


Similarly, in the Suspension Clause, which gives the government the power to suspend a writ of habeas corpus, invasion is paired with rebellion as one of circumstances that would allow suspension of the writ of habeas corpus. And that, too, suggested it's a matter of large-scale violent attack, not merely illegal migration, drug smuggling, or similar phenomena of that kind. If you look at original meaning evidence, once again, overwhelmingly, it shows the founding generation understood invasion as meaning a military attack. 


James Madison, the founding father who addressed this issue most directly, wrote in his report of 1800 criticizing the Alien and Sedition Acts that "Invasion is an operation of war," clearly indicating his view that it requires a large-scale violent attack. Moreover, if this argument advanced by Texas in these two cases is accepted -- so far, courts have uniformly rejected the argument. But both cases are on appeal before the Fifth Circuit. If this argument is accepted, then very dangerous implications follow.


One is that states, or at least border states, could initiate war at virtually any time. Because since we've had significant immigration restrictions, and since we've had the war on drugs, there has never been a year where there have not been hundreds of thousands of people crossing the border illegally or large-scale drug smuggling and the like. There has been more the last two or three years than in some previous years, but it surely can't be the case that having a million a year is enough to qualify as an invasion versus, say, 300,000 a year is not.


So, it would mean that states could initiate war with their neighbors at virtually any time that they want. That's obviously dangerous, for any number of reasons, especially in an era when a number of prominent republican politicians have, in fact, called for military intervention in Mexico in response to these situations. So, it's not just a purely hypothetical or theoretical danger. Another dangerous implication, as I mentioned earlier, is the federal government has the power to suspend the writ of habeas corpus whenever there is an invasion, and, on this reasoning, it could do so any time it wants.


And that means they could detain without trial not just suspected illegal immigrants or drug smugglers but other people including U.S. citizens. The suspension power applies to them as well, not just to migrants or to non-citizens. And the federal government would have the power to do this virtually any time they want. Do you really trust Joe Biden with the power to suspend the writ of habeas corpus any time he wants? I certainly don't. But even if you do trust Biden, you may not trust the next president, and so on. 


So, this is a very dangerous power that the framers of the Constitution specifically limited to certain extreme circumstances like actual warfare or actual rebellion, as during the Civil War. It is not something that was supposed to be able to be done in response to illegal migration or drug smuggling, things that happen on a significant scale virtually all the time. It is sometimes said, "Well, maybe there's an invasion because there's a threat of terrorism." In the 50 years or so for which we have data, the number of Americans killed by terrorist attacks on U.S. soil by people who illegally cross the southern border is zero. That's right. The number is zero. That seems, to me at least, too low a number to be an invasion.


It is also sometimes said, "Well, there are people on the watch list." The terrorism watch list is not what it sounds like. It includes large numbers of people who have never engaged in any active terrorism or have any reason to do so against the U.S. But they had some sort of connection, or the U.S. government thinks they did, to various insurgencies in Latin America, in countries like Colombia or El Salvadore and the like. And so, that is simply not the same thing as people belonging to terrorist groups that actually have any meaningful plans to attack the U.S. And, similarly, the fact that some people or many people crossing the border are military-age males does not qualify as an invasion. 


Throughout history, migrants have been disproportionately younger males. And in this case that category is defined as any male between the ages, I think, of 18 and 45. The obvious explanation for that is that those are people in their prime working years, and they want to cross in order to be able to find opportunities. The fact that somebody is a male in that age group does not mean that they're somehow unusually dangerous. So, the bottom line is an invasion must be an actual operation of war, as James Madison said. And what is going on at the southern border is simply not that.


Now I'll talk, also, a bit more broadly about what can be done to address this situation in a way that's beneficial to the United States, to migrants, and generally reduce problems rather than increase them. The fundamental problem at the border is that by making legal migration virtually impossible for the vast majority of those who might want it we have created a large black market. And it is predictable that people will try to engage in the black market, just as when we had alcohol prohibition, by making it nearly impossible to acquire alcohol legally we predictably incentivize people like Al Capone and others to provide it illegally, and, similarly, with the war on drugs today.


And with illegal migration, if you don't want cartels to benefit from illegal migration, make legal migration feasible, then people wouldn't resort to the black market in order to do it. Why has it increased in recent years? For two obvious reasons. One is we have a hot economy with a hot labor market which, predictably, needs more workers. So, it attracts some people for that reason. Secondly, conditions in several of the major sending countries have gotten much worse. In places like Cuba, Venezuela, and Nicaragua, we have socialist and communist tyranny which has gotten even worse in recent years than it was before.


In a country like Haiti, there's a vast outbreak of violence. And there's also severe economic problems in those areas. Combined with the hot U.S. labor market, that predictably leads to more illegal migration. We also know that making legal migration easier helps with the problems of disorder at the border. In January of 2023, the Biden administration introduced the CNVH program, which stands for Cuba, Nicaragua, Venezuela, and Haiti. It enabled up 30,000 people per month, from those four countries combined, to enter the U.S. legally and work if they have a U.S. citizen or a U.S. resident sponsor.


In the months after the introduction of CNBH, illegal border crossings from those countries declined massively, by as much as 70% or more from some of them. But the figure went up again in the fall of 2023. Why? Because the 30,000 limit was reached. And so, there was a massive backlog in these programs, such that people entering the waiting list would have to wait years to get in. So, once it became, again, for most of them, infeasible to cross legally, they had no choice but the illegal option. And, frankly, I don't blame them.


If you're a person suffering from horrible tyranny and oppression and your only options are either to endure that for the rest of your life until, perhaps, you go to an early death, and the same thing for your children, or you cross the border illegally, I certainly would cross the border illegally, faced with those two choices. And those people who are doing it, they're in that situation. So, if we, as the CNBH program example shows, and other historical examples as well, if you make it easier for people to migrate legally, you will have less disorder at the border, you will have less black-market activity, and so on.


And allowing the legal entry has large benefits, even aside from reducing problems at the border. One is immigrants contribute to our productivity and growth. They disproportionately start businesses at higher rates than native-born Americans. They disproportionately contribute to innovation of almost every kind, including scientific and healthcare innovation. And they also improve the fiscal position of the United States. The overwhelming evidence shows that the vast majority of immigrants, including illegal immigrants, actually contribute more to the public fisc than they can take out. And we can further improve that ratio by making it easier not just to migrate, but to work.


Most of the problems that you see with asylum-seekers in cities like New York arise from the fact that, under current rules, a person awaiting their asylum hearing is not allowed to work legally for at least six months. And, in practice, it takes longer than that. So, of course, if you can't work legally, you face the choice of either working illegally — which leads to much lower income, usually, if you can do it at all — or trying to depend on some kind of charity or welfare. So, if you let them work legally, as the mayors of those cities are urging the federal government to do, then they contribute to the economy. They don't strain public services and so forth.


      It is true that Milton Friedman, at one point, said "You can't have free migration in a welfare state." He also said, "Illegal migration is great, because illegal immigrants are actually ineligible for most welfare benefits." Moreover, in a later entry, he admitted he had not thought of the possibility of simply limiting immigrant eligibility for welfare, which, by the way, we already do under the 1996 Welfare Reform Act. And, even under current rules, people who are allowed to immigrate and work legally overwhelmingly put more money into the public fisc than they take out.


      Finally, a brief word on Cesar Chavez. I think we should not base our economic and migration policies on the advice of a far-left socialist who hated free markets. And it is true, I'm a law professor. If immigrant law professors come in — and I mean ones other than me — if they come in and compete with me, that's bad for me. But it's good for all the people who consume the services of law professors, and it's good for the economy as a whole. And so, any negative effects that come from people who directly compete with me are usually offset by the vast improvement in the economy overall. 


Economists estimate that if you had free migration throughout the world, the world's GDP over time would double, we would have so much extra productivity. That's an enormous amount of wealth. And I would hope that we could capture at least a little bit more of it. Thank you.


Hon. Beth Williams:  Okay. So, the first question is for Professor Somin, actually, focusing on SB4 for a second.


Prof. Ilya Somin:  Yes.


Hon. Beth Williams:  There have been various criticisms of the law. In your opinion, is the problem with the law itself, the criminal statute? Or is it with the remedy, the removal power? And so, is it a problem that Texas actually passes a law? Or is it a problem that Texas can effectively deport someone?


Prof. Ilya Somin:  Sure. It's a good question. For those who may not know, SB4 is a law recently enacted by the State of Texas which has many provisions that allow Texas to, first, detain undocumented immigrants and then deport them. And this is one of the cases where Texas is making the argument that illegal migration and drug smuggling qualify as invasion, though this is by no means the only argument in those cases. To my mind, in addition to the fact that the invasion argument is wrong, Texas' position suffers from a couple of weaknesses, though there is a sense in which Texas is right — or, at least, I think it's right — and which I'll get to in a moment.


      One problem is that under the Texas law, as the Fifth Circuit recently pointed out in their decision issuing a preliminary injunction against it, Texas authorities would have the power to deport people who actually have the right to remain in the U.S. under current federal law while their asylum cases are adjudicated. Another issue is that deporting people to countries that don't want to take them might raise foreign relations issues. I'm not entirely sure what I think about that. But it's at least a plausible argument that that interferes with the foreign relations power of the president.


      But there is an ironic way in which Texas is right in that if you look at the original meaning of the Constitution, as James Madison argued in the 1790s — and Jefferson and others — it does not seem to give the federal government a general power to restrict migration. And, in fact, in the founding era and through the first century of American history, it's actually mostly state governments that had power over migration. So, if you go back to that original meaning, then it may well be true that Texas and other states would have a fairly broad power to deport migrants they didn't want. 


But the trade-off, of course, is that other more liberal states would have the power to accept migrants that the federal government might not want them to accept. I would be willing to take that trade-off of going back to the original meaning. But it's very unlikely that the Supreme Court is going to do that any time soon, if ever. And until they do do that, then federal immigration law does preempt state law when the two conflict. And, at least, I think, significant parts of SB4 are in conflict with current federal immigration law, particularly when it comes to asylum, possibly on some other issues as well.


And that doesn't mean that every single part of SB4 is illegal under current federal law. But I think it's likely that at least significant portions are, which is why they have resorted to that invasion argument. Because, from Texas's perspective, the benefit of the invasion argument is that they argue that if there is an actual invasion then the state can engage in war in response, even if federal statutes would otherwise forbid them from doing so. Sorry, that was a long answer. But it's a complicated case that has several different elements.


Hon. Beth Williams:  I appreciate it. Attorney General Brnovich, so I want to give you an opportunity to respond to the "Milton Freidman loves illegal immigration" point. But I also want to ask you what else this administration can or should be doing, in your view, to be stemming illegal immigration.


Hon. Mark Brnovich:  Well, first of all, I must admit, when I was listening to the law professor, I had a flashback to law school. And I remember one day I was bringing up a point to one of the law professors and he said, "Yes, that's the way it works in reality. But will your idea work in theory?" And so, a lot of times we talk about these issues in theory, but here's the reality of what's happening. I think, as the Professor acknowledges, these are unprecedented numbers. And so, I will get to the Milton Friedman thing in a second, but I just want to make sure we understand the context.


      When he's making an economic argument about the people that are coming in predominantly being males, because they're working age they want jobs, I think we all appreciate that. But what he didn't address is when 13 million people can come into this country illegally and get transportation, hotel rooms, hearings set for five years later, why on earth would a million people cross, risking their own lives in the desert, trying to conceal themselves, wearing camouflage, trying to evade capture and detection? Why would they be doing that? And I would submit to everyone in this room that that's because they're not here to go work at a fast-food restaurant. 


They're not here to work in the hospitality industry. They're here for other reasons. And I think we all know why. And if you look at the amount of unprecedented violence on our southern border, if you talk to the border sheriffs, for example, they will tell you the number of car pursuits has increased two to three-fold. They will tell you the number of cross-border shootings has dramatically increased. If you talk to ranchers and farmers — these are tough people, fourth, fifth-generation Arizonans that I've met along the border — they will tell you that they have never seen so many armed young men crossing through their property and their ranches, so this is definitely unprecedented.


And I don't want to make this debate be about Milton Friedman. I only pointed out the Milton Friedman quote because I know a lot of my libertarian friends worship at the altar of Milton Friedman, as maybe they should, because he was an amazing economist. But the reality is, as the Professor pointed out in his own remarks, that then Milton Friedman started making a distinction about, "Well, you're not eligible for benefits if you're in the country illegally."


The problem is all you've got to do is open the New York Times, or any major publication in this country, and you will see that not only are states and cities handing out thousands of dollars in benefits, you have even the federal government providing housing, you have hospitals having to provide free healthcare, you have luxury hotel rooms that are being cleared out so people that have entered the country illegally can stay in those hotels. And I am just pointing out — and even when I mentioned the thing about Cesar Chavez — that it's fundamentally unfair to the migrants. And it's fundamentally unfair to American taxpayers.


And anybody that's recently been to a city like San Francisco or Los Angeles or New York, when you look at the amount of homeless problems and the other problems we have in this country right now, they will tell you, even with our veterans, that the priority should be on making sure, before we assimilate or have any more immigration, whether it's legal or illegal, we need to take care of the problems domestically. So, in sum, I also want to bring up one point. So, I think I addressed the Milton Friedman comment. Because, quite frankly, people here are getting benefits.


I mean, heck, I think New York City is talking about allowing people to vote that have entered the country illegally. So, I think that, even under the quote he just gave up, Milton Friedman would not approve of what is happening now. So, lastly, I want to mention one other thing about the invasion. Look, the reality is that the Professor brought up James Madison. Literally, during the Virginia ratification debates of the United States Constitution, James Madison, the example he used in those ratification debates was smugglers, rum and molasses smugglers, off the coast of Virginia.


And he said during those debates, "Of course, Virginia can protect itself from this invasion, or this illegal liquor coming in. They have a right to affirmatively do something to protect themselves." And it's one of the reasons why I would just say I think we all agree in this room, wherever we fall on the spectrum, that the words of the Constitution have to mean something. So when you look at Article IV Section 4, when you also look at Article I Section 10 dealing with the Export Import Clause and the ability of states to monitor what is coming into their states, those goods, even when you look at that clause, if the Biden administration wants to create another port of entry, a 28th or 29th port of entry in Texas, they have the ability to do so.


What the state of Texas is arguing, and the other states are arguing, is that you, first and foremost, have to enforce the existing laws as they are. And if you don't, the states are not engaging in immigration enforcement. What they are doing is using their powers in the Constitution to protect themselves. And all you have to do is look at, in recent history, every time there's a riot in Los Angeles or somewhere else, or there's a terrible natural disaster like flooding, states do what? They call in the National Guard. They mobilize their National Guard to protect the public and to protect the citizens. 


So, what Texas is essentially arguing is that if Joe Biden refuses to enforce existing laws, and states like Texas are being overwhelmed on so many different levels, then the state has a right to defend itself and deter, defensively engage in defensive actions to stop the flow of illegal drugs and people coming into this country illegally that are being supported by the gangs and the cartels


Hon. Beth Williams:  Thanks. So, we'll do a quick lightning round, and then make sure we can open it up to questions from the audience. So, President Biden recently commented that his people are examining whether or not he has the unilateral power to close the border. Do you all have thoughts on this legal inquiry, or the timing of it? I figure if his folks are watching, maybe they can get the benefit of this panel. So, let's start with Dr. Dasgupta.


Dr. Sohan Dasgupta:  Could you please repeat the question?


Hon. Beth Williams:  Sure.  Does the president have the unilateral power to take action to close the border?


Dr. Sohan Dasgupta:  Under the Constitution, or under some statute? So, in the Trump administration, Title 42 was a pretty capacious statute which went back, I believe, almost a century. And that was invoked in order to shut the border — not entirely, but to a very large extent — in order to protect that public health angle of national security at the time.


Hon. Beth Williams:  Thank you. Professor Somin?


Prof. Ilya Somin:  I suppose it depends on what is meant by "closing the border." He certainly does not have the unilateral power to completely shut down all trade and migration at the border. He does have various other powers to do other things. We could talk about details later. But the fundamental problem, as I said before, is that what you have is a vast black market that has been created. To make it even more of a black market by making legal migration even more difficult than it already is would simply, predictably, create more of the same effect on a larger scale.


And it is actually not true that Biden has simply said that we're going to let everybody into the country. He's actually deported more people than were deported in a given equivalent period under the Trump administration. He has also reintroduced asylum rules that are, in some ways, similar to those of the Trump administration. Those rules are being litigated. But, for the moment, the Ninth Circuit has actually let them be enforced. 


So, the fact that there are these deportations and the like, and that millions of people do get caught and deported, is one reason why the military-age males, and, obviously, some people who are not military-aged or male, also do cross in areas where they hope to remain undetected. And it is also why we have not, in fact, seen the formation of some large army of terrorists or spies or whatever, rather, these people crossing.


Yes, many of them do, in fact, end up in the boring work of working at fast-food restaurants and the like, which we might think is not great. But it's much better than their available alternatives. And that's also what asylum-seekers in the cities would do. It's not like they're living high on the hog in expensive hotels and the like. They're in a bad situation because they're not allowed to work legally. The cities are in a bad situation for that reason. If we did let them work legally, that is what the vast majority of them would do.


Hon. Mark Brnovich:  I can't help but think of the old Mark Twain line that there's "lies, damn lies, and statistics." And so, who are you going to believe? The Professor, or your lying eyes? Because the reality is that this is an unprecedented crisis at our southern border, if you just look at the raw numbers. We talk a lot about economics. If you look at the price of fentanyl, for example, it's dramatically declined. It declined by 75% in the southwest. And any time you get more of something, and it's cheaper, you're going to end up with more people dying, especially in a dangerous drug like fentanyl.


So, the question was should President Biden, can he do anything? And the answer is yes, of course. When you look at what happened during the Trump administration, the numbers were declining. But I don't want to make this even about Trump versus Biden. Because the reality is that if you look at the Obama administration, look at the Bush administration, when there were issues related to every time Congress talks about passing a law that's going to grant amnesty, or this is going to happen, we start to see a surge. And what's happened, historically, it starts with just enforcing the existing law.


In 2005, the Bush administration implemented Operation Streamline which aggressively prosecuted people for illegally entering the country. There was a surge. Not the surge in Iraq. But there was a surge at our southern border with prosecutors and federal judges. And the numbers of people entering the country illegally dramatically declined. Because people that were coming into this country illegally knew that if they had been convicted of a crime, their chances of ever getting a green card or citizenship were none. And so, you can create incentives. You can create disincentives.


And in the first month of the Biden administration, there was — depending on how you count it — 10, 11 executive orders that did everything from stopping the building the border wall, ended up revoking the remain in Mexico policy. When I was AG, we had sued the Biden administration at one point because they wanted to give more authority for DHS to grant amnesty and take that or expand it from immigration judges, which, once again, you worry about the politicization of this issue.


What's happened is, yeah, the incentive the people are responding to right now is they think that there's no consequences to breaking the law. They think they're going to be rewarded, that they're going to have the ability to get these six-month or year-long transitions with free housing and free healthcare. And so, what's happened is the federal government, the White House, President Biden, have created all these perverse incentives. So, the simple answer is it starts with enforcing existing law. And you can't address the broader issue of what do you do in the future with the border until you stop the flooding that's overwhelming the boat right now.


Hon. Beth Williams:  If anybody has questions, please come up to the two microphones. But I've got another question for Dr. Dasgupta. So, what does the future look like for legal immigration? Professor Somin is talking about expanding legal immigration so that you tamp down on illegal immigration. What does the future look like for legal immigration?


Dr. Sohan Dasgupta:  I think that it's very interesting that one of the most frequent channels of talent coming into our country are H-1B visas. And H-1B visas are for highly skilled individuals, often from China, India, elsewhere in the world. And there's a country cap involved. And the country cap is calculated based on how many applicants.


Part of the calculus is how many applicants, what is the need, and so on and so forth, in which, I believe, the Department of Labor, and USCIS — which is part of DHS — they engage and they calculate that. And, over time, the backlog there has become colossally long. Now, I know that for Indian immigrants, it can be 20, 25 years to get your green card. Chinese immigrants, I've been told, is a slightly shorter line. And so, that might be something for Congress to address.


Hon. Beth Williams:  I see a question.


Questioner 1:  Yes.  Professor Somin, you said, I think, your problem with SB4 with Texas was that it uses the idea of war or violent attack improperly because it's not what the original meaning of that was, based on the kind of response that they're using it for, I think. And so, if that is the case, is there another way that you think it is an acceptable way to respond practically the same way that uses some other sort of legal means?


Prof. Ilya Somin:  So, to be clear, the invasion problem is not a problem with SB4 as such. But it's a problem with one of the arguments Texas is using to defend SB4 in court, because they're saying even if SB4 is otherwise preempted by federal law we get to do it because, under the invasion clause, we can engage in war in response to illegal migration and drug smuggling and the like. If you set aside the argument and just look at SB4 itself, then the legal problem with SB4 is that it conflicts with current federal immigration law in various ways. 


That might not be a problem if you go back to the original meaning under which the federal government has only very limited power over immigration, and that power is mostly up to the states. But it is a problem under current Supreme Court precedent, dating back to the Chinese exclusion case which says that the federal government has nearly unlimited power to restrict immigration. I think that the Chinese exclusion case was wrong. But it's unlikely to be overturned any time soon.


And therefore, if you accept the idea that the federal government does have power over immigration, it turns out that at least significant parts of SB4 are in conflict with federal laws, particularly when it comes to asylum, and some other things as well. So, that's the problem with SB4, at least under current Supreme Court precedent. And there's also a problem with an argument they've advanced to get around that first problem.


That is the argument that illegal migration and drug smuggling qualify as an invasion, which is both contrary to the original meaning and has dire implications if courts were to accept it, such as that states could essentially attack their neighboring countries any time they want. And the writ of habeas corpus could be suspended by the federal government at virtually any time.


Hon. Beth Williams:  Okay. Attorney General?


Hon. Mark Brnovich:  I would just add to this that it's important to note that the federal government does -- as I said, they're at the apex of the president's — his or her — power, when it comes to dealing with immigration. But states like Texas are not trying to enforce immigration law. What they are saying is they're using their authority, that's explicit in the Constitution, to repel what they believe constitutes an invasion. And they've set forth those arguments. I will note that we talk a lot, as lawyers, as judges, about, "Well, what do these words mean?" And you go back to that meaning of what constitutes an invasion.


So, I just want to note for the record, or for anyone else listening there, that according to Webster's 1806 dictionary, the first American English dictionary, "invade" is broadly defined as meaning "to enter or seize in a hostile manner." Webster's 1828 dictionary also defines "invasion" or "invade" broadly to include not just an entrance of a foreign army into a country, but also "to enter as an enemy with a view to conquest, plunder, attack; to attack, to assail, to assault; to attack, to infringe, to encroach on, to violate."


      And so, I think, when you look at those words, they have the effect of what is going on. And I would invite anyone to go to the border first-hand and see what's going on. And you will see that. And, like I said, I don't say this lightly, as a first-generation American, but it's heartbreaking to see what's happening at our southern border, and just the chaos that's ensued in the last two or three years.


Prof. Ilya Somin:  Just a brief point. I think those definitions, pretty much all of them, do actually refer to warfare, as in entering as an enemy. There were then, as there are now, secondary definitions of "invade," such as invading someone's rights or the like. But, again, you have to look at the context in which it is used, which is the context of engaging in war in response. Or also a context of rebellion and the like. And James Madison and others made clear that that's what it is. The Attorney General, earlier, referred to another quote by James Madison about using militia to deal with smuggling.


But that was not a reference to the Invasion Clause. That was a reference to the power to call forth the militia to enforce ordinary laws. That power is in the Constitution, but it's distinct from the invasion clause, which is not merely a power to use, say, the state National Guard for law enforcement purposes, which Texas can do if it wants, so long as the laws in question are not otherwise unconstitutional. What Texas cannot do in response to illegal migration or drug smuggling is engage in war under the Invasion Clause.


I can't resist noting, since we've been talking about smuggling and Milton Freidman, that one other thing that Milton Friedman opposed was the war on drugs, which is also at the root of many of our problems at the border. That, perhaps, could be a whole additional discussion. But if we don't like the current situation with fentanyl, the war on drugs is at the root of it. It's a predictable effect of a war on drugs that a so-called iron law prohibition that, over time, the drugs that people take illegally become stronger and more dangerous. It was predicted by many, including by Freidman. And we are reaping the consequences of engaging in a war on drugs.


Hon. Beth Williams:  Drugs might be the next conference, so we'll wait for that.


Prof. Ilya Somin:  I'm sorry.


Questioner 2:  Hi. This question is for Professor Somin, but I would appreciate responses from other members of the panel, if they so choose. I think a lot of people — in this room at least — appreciate market solutions to problems. And you talked a lot about applying a market-based approach to immigration. But the nature of markets, at least, as I understand it, is that they do have losers. There are winners, and then there are losers.


And for all of the sort of general benefits of immigration that you mentioned — starting businesses, etc., etc. — I would think there are at least some people who, in some way, do lose, whether it's because their wage was depressed by a more competitive labor market, or because they lose their job entirely, somehow, or simply because the place they live suddenly has a lot more people who are very different from them in many ways. So, my question is do you acknowledge that there are at least some losers, in addition to winners, that emerge from the immigration process? And, if so, how do you help the losers, from a legal or policy perspective?


Prof. Ilya Somin:  Sure. Of course, I acknowledge that there are losers. In any large-scale social process, there are always some losers. That's virtually unavoidable. I would say two things about that. One is there are vastly more winners, both immigrants and also natives, including natives whose lives are literally saved by migration because it creates more innovation of almost every kind.


For instance, immigrants are disproportionately at the root of various kinds of medical and scientific innovations which save millions of lives, including recently in the COVIC pandemic where the first two vaccines that were allowed by the FDA were both developed either by immigrants from third-world countries or the children thereof, thereby saving millions of lives. With freer migration, we could have more of that.


To the extent that there are losers, I would say a couple of things. One is, it's not possible to avoid losers entirely in any market system. Secondly, to the extent that you want to provide assistance to losers, the vast new wealth created by migration can help us do that. In my book, Free to Move, in chapter six, I talk about how, for instance, if you think there is a category of native-born workers who are negatively affected and you want to help them, you could have a larger earned income tax credit to give them whatever amount of compensation you think they're due for having worse job prospects. You can create other kinds of benefits for them.


That's much better than spending a vastly larger amount of money trying to keep migrants out, creating a large illegal market, helping organized crime, and depriving ourselves of the many economic benefits of freer migration. It's better to use some of the wealth, including that created by migration itself, to help whatever losers you think are deserving of that assistance, rather than by adopting a set of policies which confine migrants to lives of poverty and oppression and deprive native-born Americans of the large economic benefits of migration.


Hon. Beth Williams:  Next question?


Ed Morrison:  Good morning, everyone. My name is Ed Morrison. I'm a 2L at George Mason University and I really appreciate this panel. I'm actually missing one of my last evidence classes to be here because I'm very interested in this. And I stepped out earlier to take a phone call and I'm hoping I didn't miss it.


But I wanted to ask your opinion, for any of you — especially Mr. Attorney General, as a state actor, or prior state actor — what you thought about when the Supreme Court told Governor Abbot to stand down and allow his border patrol agents to cross. And he generally disregarded that order. Did you think that was within his power to do during the Article IV talks? Or was he out of line on that one? I'm just curious.


Hon. Beth Williams:  Do you want to start, Attorney General Brnovich?


Prof. Ilya Somin:  Either you can go first, or I can go ahead.


Hon. Mark Brnovich:  No, the Professor can start. He's apparently filibustering anyway. So why doesn't he start the next question?


Prof. Ilya Somin:  No, no.  Please go ahead.


Hon. Mark Brnovich:  No, no, no.  Every time I say something, you've got to get another five-minute response.


Prof. Ilya Somin:  Oh, okay.


Hon. Mark Brnovich:  So, this time I get to go last.


Prof. Ilya Somin:  Okay. If you want me to go first, it's fine. I don't have much to say about that particular case other than that, technically, what happened there, I think, is that the posture there was not that there was an order against Texas from the Court, but rather that there had been an order, an injunction against the federal government engaged in the action that it was engaging in.


And that injunction against the federal government was then lifted by the — if I remember correctly — or stayed by the Supreme Court. So, while I'm not a fan of the things that Texas has been doing in this area, in general, here there was not actually an order or an injunction against Texas for the governor to disobey. So, so far, at least, he's not, in that case, disobeying any injunction. It's all yours.


Hon. Mark Brnovich:  I would just say, as someone who's prosecuted cases in federal court — and for full disclosure, I'm actually married to a federal judge — that no one in their right mind disregards an order of a federal judge. I think, if you do, you should plan on bringing your pajamas and toothbrush to court the next time you go. So, I do agree. This is good, we're agreeing on something. I do think that, technically, Texas didn't violate any order.


But I don't know if you heard this discussion earlier, but in Arizona, when we issued an opinion when I was AG, we clearly set forth the arguments as to what the states can and can't do. And I totally believe that one of the things the state has a constitutional ability to do, in order to repel an invasion or to make sure, under Article I Section 10, that goods and services are coming through the right ports of entry, is they have the ability to erect barriers and to essentially create, like I said, barriers, barricades, to stop people from entering their states illegally.


The other thing I will just add, because I know we're short on time here -- I believe the Speaker is speaking soon, right? I'm not going to say anything else, but I just want to leave everyone with one last thought on this. There's a lot of talk about the economics and the cost benefit. The last person asked a question about the winners and losers. But here's the reality. There's sometimes costs you can't measure.


And one of the things that I have talked about a lot is that, as a first generation American, if I moved to Poland tomorrow and lived the rest of my life there and died in Poland, they would be like, "Oh, this is the American who came back to his Slavic roots." That's what it would say in my obituary. I was really into the martial arts. In fact, there's a video people like to play of me doing my nunchucks. And I'm very proud of that.


I almost moved to Japan before I met my wife. And I wanted to live in Japan and study the martial arts. And if I had lived in Japan the rest of my life, I would never be Japanese. I could never become Japanese. What's so amazing about this country, no matter who you are or where you come from, how you spell your last name, you have the ability to become an American. We don't have a national church. We don't have a Church of America. We don't have a Vatican. We don't have a comic ethnic identity like many countries in the world do. And that is something special. 


And I worry all the time — even going back to this question about whether Governor Abbot violated or didn't violate a judicial order — what holds this country together? We don't have a national church or a national religion. It's our documents. Those are our sacred documents: the Constitution and the Declaration of Independence. And when people start overwhelming the system and we don't have any sort of common understanding of what the rule of law means, what the Constitution means, that social fabric is really, really easy to start tearing apart.


And that's why I believe whole-heartedly in the right of people to protest. But less than 25 years after 9/11 you have people in New York with Hezbollah flags and people in other states chanting "Death to America." Clearly, there's something wrong in our immigration system where, when people come here, at least previous generations, they wanted to become American. They wanted to assimilate. It didn't mean they didn't keep their roots and customs. But they tried to assimilate. They tried to believe and live the American dream.


And I worry right now because so many people are coming over unvetted and given status here that they're not assimilating and accepting the notion that the Constitution and Declaration are our founding documents. And they need to respect those. And when that leaves, I just worry, as Americans, we ain't got nothing else left. So, I think it's important, for reasons you can't put an economic price on, that we need to enforce our existing immigration laws.


Hon. Beth Williams:   Thank you. And, with that, we're at time. So, thank you to The Federalist Society for hosting. And thank you to the wonderful panelists for this discussion.



12:00 p.m. - 12:15 p.m.
Lunch Address with Speaker Mike Johnson


State Room
The Mayflower Hotel
1127 Connecticut Avenue
Washington, DC 20036



12:15 p.m. - 12:45 p.m.


State Room
The Mayflower Hotel
1127 Connecticut Avenue
Washington, DC 20036


12:45 p.m. - 2:30 p.m.
Luncheon Panel - U.S. Financial Regulation: Principles, Opportunities, and Challenges


State Room
The Mayflower Hotel
1127 Connecticut Avenue
Washington, DC 20036


Event Video


This panel will bring together four former senior policymakers from the SEC or CFTC to discuss the current state of U.S. financial regulation. They will cover foundational concepts such as: the importance of evidence and data-based regulation; the need for regulators to recognize and appropriately adapt to changes in technology and markets; and effective enforcement. These former officials will also offer views on regulatory opportunities to further strengthen and increase the competitiveness of financial markets—while maintaining investor protections. The discussion will also cover several of the “hot button” policy topics of the day, such as disclosure rules for companies and crypto regulation.


  • Hon. Paul S. Atkins, Chief Executive Officer, Patomak Global Partners LLC
  • Hon. Robert J. Jackson, Jr., Professor of Law, New York University School of Law
  • Hon. Timothy G. Massad, Research Fellow, Harvard Kennedy School
  • Hon. Jill Sommers, Chair of the Derivatives Practice Group, Patomak Global Partners LLC
  • Moderator: Jeffrey T. Dinwoodie, Partner, Cravath, Swaine & Moore LLP


Event Transcript

Hon. Ryan T. Holte:  ...where his practice focuses on advising clients across the financial services on a broad range of regulatory, transactional, and enforcement matters. We have an impressive group of panelists for this session, and I think that you’re in excellent hands.


Over the years, Jeff has advised financial institutions, market participants, companies, as well as government officials, on legal, regulatory, and policy matters. During the last administration, Jeff served in a number of impressive roles in government, including Chief Counsel to SEC Chairman Jay Clayton and Principal Deputy Assistant Secretary for Financial Institutions at the Treasury Department. And he had one awesome office I was able to visit a couple times. With that, I’ll hand things over to Jeff and our panel. Jeff.




Jeffrey T. Dinwoodie:  Well, thanks very much, Judge Holte. I really appreciate that nice introduction. Let me kick off by introducing our panelists in order along the row here—Tim Massad.


Tim is currently a Research Fellow at the Kennedy School of Government at Harvard University, an Adjunct Professor of Law at Georgetown Law School, and a consultant on financial, regulatory, and fintech issues. Tim served as chairman of the CFTC from 2014 to 2017. Previously, he was Assistant Secretary for Financial Stability at the Treasury Department, and before his government service, he was a corporate partner for many years at Cravath, Swaine & Moore.


Paul Atkins is currently Chief Executive at Patomak Global Partners, which he founded in 2009. Paul served as an SEC commissioner from 2002 to 2008. Earlier, he served on the staffs of two SEC chairmen and was a partner at PricewaterhouseCoopers.


Robert J. Jackson is currently a Professor of Law, Co-Director of the Institute for Corporate Governance and Finance, and Director of the Program on Corporate Law and Policy at the NYU School of Law. Rob served as an SEC Commissioner from 2017 to 2020. Previously, Rob taught at Columbia Law School and served as a senior policy advisor at the Treasury Department.


Jill Sommers is currently Chair of the Derivatives Practice Group at Patomak Global Partners. Jill served two consecutive terms as a CFTC commissioner from 2007 to 2013. Jill has also held a variety of roles within the derivatives industry, including as policy director and head of government affairs for ISDA, and Managing Director of Regulatory Affairs for the Chicago Merc.


So, as you can see, we have a really exceptional group of panelists. It’s probably obvious to everybody. But one thing I wanted to highlight, which is so unique about this group, if you think back 20 years, we have representation: early 2000s, during the financial crisis, post-financial crisis, and onward—a lot of changes in our markets, a lot of changes in the law and regulation. And the panelists here were really on the front lines of that. And so it’s really wonderful to have you all here. Thanks for joining us.


Our plan is to spend some time first looking backward, then looking at some current topics, and then some time looking into the future. We’ll also save some time towards the end for audience questions. And so, with that, let’s kick it off. And I think a nice place to start is for each of you to spend a couple minutes talking about, just in a nutshell, what were the basic principles you kept in mind in your role on the commissions? And we’ll just go down the line. And Tim, we’ll start with you.


Timothy G. Massad:  Well, thank you, Jeff. And let me thank The Federalist Society for inviting me. It’s a pleasure to be with you all. Jeff told us he was going to ask that question, so I was thinking about it, trying to scratch my head, remembering, “What were my principles?” So I went back and looked at some of my old speeches.


I was very, very pleased to find in my final speech on January 18, 2017, 2 days before President Trump was inaugurated, I reviewed my accomplishments during my tenure, and one of the final paragraphs was, “My principles throughout my tenure were the following”—I’m not making this up; it really is it—“focus rules on the areas of greatest risk; don’t be overly prescriptive; eliminate or reduce unintended consequences of regulation, particularly on commercial end users. They, after all, are the reasons these markets were created. Work with your fellow regulators domestically and internationally; harmonize wherever possible; don’t let minor differences or egos get in the way, but don’t sacrifice critical principles either; engage in robust enforcement, but don’t play ‘gotcha’ games; focus on the truly bad actors and the violations that really matter, and build consensus.” We’ve taken over 600 votes as a commission during my tenure, and I’m proud to say that over 95 percent of them were unanimous.


So during my tenure, the CFTC still had some of the Dodd-Frank swap reforms to implement. And so I followed those principles in doing that, in particular with the margin rule, margin for uncleared swaps. That was one of the most -- that is, to me, one of the most important rules. So we really tried to focus that rule on the big-swap dealers, the areas of greatest risk.


We exempted commercial companies from that, and we harmonized that rule with Europe and Japan, and then with a lot of the rules that were already done, I really tried to look at how well are those working and fine tune them, particularly with respect to their impact on commercial companies because the Dodd-Frank reforms were really directed at, in my view, swap dealers and areas of the greatest risk. We wanted to make sure the derivative markets still worked well for companies engaged in hedging and price discovery and so forth.


And we also focused on some of the newer risks in the market, such as cybersecurity and just clearinghouse resilience. And again, we tried to harmonize rules. One of the main things we did during my tenure that I’m proudest of is we reached an agreement with Europe on clearinghouse oversight called the “equivalence agreement” that ended what was becoming a very, very dangerous standoff between the EU and the U.S. on clearinghouses and whether their respective companies would be allowed to trade on each other’s clearinghouses. So I’ll turn it over to Paul.


Hon. Paul S. Atkins:  Oh, all right. Thanks, Tim, and thanks to The Federalist Society for having us today. So, like Tim, I, in confronting my tenure there and starting out, I’ve been chief of staff for Richard Breeden in the early ‘90s and then stayed on with Arthur Levitt for two years after -- during the change of administration there from Bush to Clinton.


So I came to the SEC with, like Tim was saying, being used to and having a directive always from, especially Richard and Arthur as well, but to try to find something that would be able to, to get through the Commission on -- without a split vote if necessary. But 4-1 could be okay, too, if there was somebody who just didn't want to -- whatever, didn’t want to deal.


So anyway, so I was really shocked that, especially in the post-serving Oxley time, that things had gotten rather politicized there, so much so that Harvey Pitt, who was chairman when I entered the SEC, was -- there was an off-year election there in 2002. And so I have in-laws who were in Missouri, and so Jim Talent (sp) was running.


And so there were these pictures by moveon.org that had just started, and it showed Harvey Pitt’s face transforming into the former CEO of Enron’s face. So that was pretty hilarious and -- but a fox running and chasing the chickens, and so that was the message that the SEC was fox guarding the hen house.


So anyway, so things got very politicized but not so much as now during that time. So, unfortunately, I think the good thing about the -- for the SEC at least is back in 1996, NSMIA, the National Securities Markets Improvements Act, Congress enshrined in the Securities Exchange Act, the SEC’s mission, and that’s to protect investors, of course, but to maintain fair, orderly, and efficient markets and to facilitate capital formation. So that is its mission.


And unfortunately, it’s kind of deviated from that here and there over the years. But at least that was what I was trying to drive myself and how I approached decisions on rules and rulemakings and enforcement actions, and then with a cost-benefit analysis, which has kind of shown its ups and downs over the years, but is something that obviously is incumbent on agencies to follow. So anyway, Attorney Rob?


Jeffrey T. Dinwoodie:  Rob?


Robert J. Jackson, Jr.:  Thank you, Jeff, and thanks so much to The Federalist Society for giving me the opportunity to be on this panel. I really have no business on this panel. These are really extraordinary panelists. Of all the colleagues I had when I was a commissioner on the SEC, Jeff Dinwoodie was one of my very favorite counselors to Chair Clayton.


What I want you all to know is that we need more Jeff Dinwoodies in government, not less. And I found a way to work very closely with him throughout my time. I was very grateful for that. Tim Massad was my boss at the Treasury Department back in 2009, so every mistake I’m about to make is his fault. And, of course, I stood on the shoulders of terrific commissioners who served for many years: Paul Atkins, one of the most influential commissioners in American history, in my judgment, and his colleague at the firm that he built, Jill Sommers. So I’ll be very brief, since I don’t think I have that much to add.


I tried to keep three principles in mind when I was a commissioner, and the first was to try and be data driven. So it turns out in financial regulation, the behavior of market participants gives us information about their preferences and choices, and it gives us a chance to look carefully at what the consequences, intended or otherwise, are of regulation over time. And I thought it was incumbent upon me as a regulator to try and learn first about what was happening in the market before I presumed to regulate it. And I tried very hard to do that. We can talk a little bit about the limits of data analysis and what it can and can’t do, but it always seemed like a good place for me to start first.


Second, I tried to be a critical consumer of arguments as a commissioner. So I’m a law professor, and I went to law school. But actually, my cardinal sin—don’t tell anybody—is I went to business school before I went to law school. And my own view is that economics, not law, dictates most of the choices we see around us. And for that reason, when someone would come to my office and say, “I would do the right thing, but the law,” I would be skeptical about that, not because the law was perfect, surely it isn’t, but because I want to understand exactly what’s driving your choices. And I’m a student of human incentives. I try hard not to blame people when they follow their incentives, but I also try hard to be critical consumers, the arguments they advance. So that was second.


And third, I tried very hard to think about the ways that regulation was getting in the way of healthy market competition. So the word “competition”—this is not widely understood, actually appears in the 33 Act, the founding act of the securities laws, the 34 Act, the act that created our agency and its other organic statutes. And one of the mandates of the SEC is to promote competition. But notice that financial markets are less, not more competitive, than they were 20 or 30 years ago.


When I graduated business school and wanted to work for an accounting firm, I interviewed with the big six. Now, it’s the big four. When I wanted to be an investment banker, I wanted to work at bulge bracket firms. There were 10. Now, there are five. For better or for worse, we can talk about why that happened, but it tells me that markets aren’t as robustly competitive as they could and should be. And one of the things I try to hold in mind is the degree to which regulation creates advantages for size, and those size advantages have real implications for the way markets function. So I tried to think about that, too. And Jeff will tell you, in the main, principles are great, but you’ve got to apply them to actual challenging decisions. But those are the things I tried to keep in mind while I was a commissioner.


Hon. Jill Sommers:  Good afternoon. Thanks for the invitation to be here. I was thinking, as Tim was speaking, that I sure do wish I would have served with Tim as a chairman at the CFTC because I happen to agree with all of the principles that he stated.


I think one of the things that I tried to keep in mind when I served at the CFTC is the mission statement at that time was to protect market users. That was the first part of the mission—and paraphrasing, to foster open, competitive, financially sound markets. The mission has changed over the years. The mission now says something like “promoting markets through sound regulation.”


And so I think looking at those words, parsing those words, I never really felt like more rules and more regulation were the answers to all of the different issues that we dealt with at the CFTC, and that just listening, simply listening to the people who use the markets -- and you could learn a lot about whether or not there was something that a regulator needed to do. So I felt during my time that I learned a lot, but it was in listening to those who use the markets.


Jeffrey T. Dinwoodie:  That’s great, and I thank all of you. Very interesting. Rob, I think to come back to something you were discussing, I think would be of great interest to everybody: the importance of evidence and data based regulation. Maybe expound upon that a bit more. I know you’ve thought deeply in your work as a commissioner, as you said, and as an academic. But reflect back what you saw looking ahead. What are the practical realities? And lay this out for us.


Robert J. Jackson, Jr.:  Sure. So one of the things I’ve tried to do as a scholar, as an empiricist, is let the evidence speak for regulatory choices that agencies face. It isn’t always decisive, and I’ll say more about that in a minute. But we can learn a lot from just watching how markets and individuals behave in response to regulatory change. And I tried very hard as a commissioner to be informed by those things.


When I gave speeches, I would have data. I put the data online and say to people, here it is. If you think I’m wrong, let me know. And they did. Bless you. I loved having those meetings because people would come in and say, “Well, I don’t like the choice you made there or the choice you made there. And I’d like to push back on it.” And that was a conversation I preferred other than -- rather than a conversation about, for example, political priors.


Let me give you a sense for what data can do and what it can’t in financial markets. So one thing data can tell us about is when a regulatory choice leads to undesirable outcomes. I’ll give you an example. A paper that I wrote a couple of years ago shows that the very worst financial advisors that FINRA oversees, when they get a bad record on their broker check record—that’s the website you can go to look up whether a broker’s hurt someone before—when they get a bad record, they drop out of FINRA, and they become state-insured salesmen. Why? Because it’s a lot easier to continue your work when you no longer have a bad record at this point.


Now, what we should do about that is an interesting question, but the fact that it exists helps me understand ways that the state and federal governments, for example, can coordinate between different areas of the financial markets. Here’s something data can’t do.


I can’t prove that regulating insider trading is a good idea. I can’t show you that because I don’t have two worlds, one where insider trading is legal and one where it’s not and compare investor welfare in both cases. I can’t prove that to you. So anybody who says you have to show, for example, that benefits exceed cost before rulemaking should occur, in my view, is making a category error. They’re assuming that science can show a thing that it can’t, for example, producing a counterfactual world in which regulatory choices have or haven’t been made.


So I think I tried to start with the premise that if data can tell us something, I should understand it first before I presume to regulate. And if it can’t, I should accept those limitations and make choices based on my best understanding of the facts in front of me.


Jeffrey T. Dinwoodie:  That’s great. Anybody else want to chime in on that topic, generally?


Timothy G. Massad:  I agree with that. And just maybe to add to the examples, I don’t know how many of you remember the Treasury flash crash from 2014 when Treasury prices suddenly dropped.


I always thought of the CFTC like that children’s book about this little train that could because it’s a relatively small agency, but it really has a lot of very, very talented people, and it does a lot of good things. And the CFTC actually had better data on the Treasury market and what was happening than the SEC, the Treasury, or the Fed.


And so we could quickly look at that data and say, “Well, okay, this was an aberration, but it’s not really a systemic problem. There’s nothing really, we felt, to be worried about it.” And the other agencies then, we all agreed then to do a very long exploration of all that but kind of came to the same conclusion.


At the same time, I also agree with Rob’s point that sometimes data, they’re just -- you can’t really get the data you want to prove a certain thing. Everybody likes the concept of cost-benefit analysis. We should do it, but it does involve a lot of counterfactuals and a lot of estimates, and you have to realize that, that it’s a very imprecise process.


Hon. Jill Sommers:  I’ll chime in just a little bit there on some things that you said, and I do totally agree that because of the market structure in the derivatives markets, you have one contract trading on one exchange. So the exchanges have not only the trade data but the order data. So the kind of data that the CFTC is able to access to be able to make informed decisions is just sort of exponentially better than the other agencies that may be concerned or looking at that -- those things.


But one of the other issues and looking specifically at swap data reporting, which was mandated under Dodd-Frank, instead of taking sort of a piecemeal approach that the agency could have taken to say, “Let’s make sure that we understand all the primary economic terms of a swap, every swap dealer reporting that to the agency, see how the agency can digest that. How does that help them in looking forward?” And we didn’t do that. Instead, we asked for 100 different fields that the agency doesn’t necessarily use and is really hard for market participants and market users to comply with. So a less is more sometimes is easier for the agencies to be more effective.


Timothy G. Massad:  Yeah, I have to agree with that, generally. I mean, I’m partly responsible for the swap rules. I mean, I kind of inherited them. And Congress mandated a very large reporting obligation, and I do believe another principle. I didn’t include it in my speech, but I think there’s often a lot of value to incrementalism in regulatory agencies, and I think this would have been one case where that would have been appropriate. Let’s start with a relatively narrow set of things and build on that and make sure we can use that data.


Jeffrey T. Dinwoodie:  So as we think about thoughtful, effective regulation, a big component is public engagement, right? Jill, why don’t you reflect a little bit in terms of best practices, the important role of public input. On the one hand, we’re seeing some criticisms currently around things like short comment periods on rulemakings; on the other hand, you see the CFTC. There’s a number of active advisory committees. At a certain point, does that become overkill? Reflect on that topic, generally.


Hon. Jill Sommers:  Yes, sure. So I think, generally speaking, FACA was created in order for the public to be able to have input to any government agency and for the agencies to be able to benefit from the expertise of companies that are regulated or firms that participate in our markets.


And so the concept of these advisory committees or the concept of putting things out for public comment or having firms engage in advocacy with regard to rules that agencies are trying to promulgate is a very good practice, and it’s needed because the expertise at the agencies is not always precise, and we can always learn something from the way that the markets work or in a way that participants are using the markets.


The shortened comment periods make it very difficult for the commissions and for staff to be able to ingest the type of information that we need to make informed decisions. And I think some of the comment periods on far-reaching rules may have thousands of comment letters, and having shortened comment periods makes that hard on everyone. So it makes no sense to me that you don’t want to move forward in the most effective way if you’re making these decisions at the agencies.


The advisory committees, particularly at the CFTC, I think a lot of people feel that it’s a persuasive way to be able to participate alongside the commissioners and the staff at the agency, to be able to have input on important issues. But I do think that, sometimes, the commissions are asking very high-level people at firms, whether it’s CEOs or COOs or whatever of companies to participate. And it’s a lot of work; it’s a lot of heavy lifting to be away from their kind of day job to be doing -- participating in these advisory committees.


The CFTC has five different advisory committees in each of the chair and the commissioner’s chair—one of the advisory committees. And at this point, I think that there are a few of them that have over a hundred members. So I think it’s evolved maybe into something that wasn’t initially envisioned as a way for people to participate. And I’m not sure if it hasn’t sort of lost some of its efficacy in that process.


Jeffrey T. Dinwoodie:  We’ll pivot to one of the most important things agencies do—enforcement, the cop on the beat. Paul, many years ago you read a very -- you wrote a very influential law review article on the history of SEC enforcement, practices, procedures, etc. Maybe take us back to that piece and level set in terms of what you’re seeing going forward, trends, etc.


Hon. Paul S. Atkins:  Yeah. Well, thanks. So, yeah. That was a piece in Fordham, and it basically focused on how the SEC’s Enforcement Division came about and how it grew up over the years since 1934 because, once upon a time, the SEC has kind of siloed into various divisions that are focused around the particular statutes that the SEC has. So corporation finance focuses on the 33 Act, trading and markets on the 34 Act, and then investment management on the 240 Act.


And so, in the old days, they had the both -- they had everything together in one division: the rulemaking folks, the examiners, and then also the enforcement folks. So then in 1970, when Bill Casey was chairman, he created the Enforcement Division. And so increasingly over the years, the enforcement division became more distant from the folks who were writing the rules and then also from the examiners who were out there seeing on a day-to-day basis what was actually going on in the marketplace. So anyway, now, it’s starting to come full circle where the enforcement division now is getting little nodes of expertise in asset management or what have you, broker dealer issues.


So anyway, so the argument of this article was to, at the same time that Casey created the Enforcement Division, he also created what’s called the Wells Committee, after a fellow who was a lawyer. And so this committee came up with -- they looked at due process issues around SEC enforcement because, basically, back then in the ‘60s and the ‘50s, you could open up your front door and then find a subpoena or whatever. I’m not joking here. But they’re laying on your doorstep, and that would be the first thing that you have ever heard about—being sued by the SEC.


So the Wells Committee came up with a process of advance notice, so the staff needs to tell you that, “We were thinking of suing you because of X, Y, and Z” and then to give an opportunity for the potential respondent to say, “I’m innocent” or whatever. “You’re off base, and this is why.”


So anyway, this was, basically, what we were calling for because things have devolved a bit. And, a lot of times, the -- there’s -- all this is recognized in kind of not really in practice but only in just more or less ignoring the true process where I even had, when I was a commissioner, people come up to me who are former AUSA’s saying the SEC staff—and this is obviously unethical, if not illegal—but would threaten criminal referral to the DOJ if you dare to submit Wells.


So anyway, the idea was to, “Let’s have a reexamination of the process and the organization of the Enforcement Division,” the way of sharing information -- at least sharing information, both exculpatory, but then also the information behind which the SEC staff is thinking of pursuing an action to try to get back to an even playing field.


Timothy G. Massad:  Enforcement is one of the most important things that these agencies do, right? I mean, it is so important in terms of preventing fraud and maintaining integrity in the markets, and yet you sort of get criticized by both the right and the left on enforcement.


Today, for example, a lot of people in the crypto industry are criticizing the SEC saying, “Oh, this is regulation by enforcement” whenever the SEC comes out with a new case. And it’s like, well, that’s partly what agencies do. They enforce the rules. And what the crypto people are really saying is, “We don’t really like the securities rules as applied to crypto. We want a new set of rules.” And the SEC has said, “No, we don’t think that’s right.” Now, you can debate that.


My own view on that—maybe we’ll get into this later—is I agree with a lot of their enforcement actions, but I also don’t think enforcement is enough. I think we do need to come up with some joint rules with the SEC and the CFTC.


At the same time, you get criticized by the left, right, because you decide to settle a case, and maybe the institution you went after doesn’t plead guilty. It just consents and so forth. So you get criticized, “Oh, why didn’t you go to trial? Why didn’t you make them agree that they were wrong?” And it’s like, “Well, you got to understand. We have a very limited enforcement budget.” And going to trial costs a lot of money. Doing any of these cases costs a lot of money. You’re up against the best and the biggest firms on Wall Street, so you have to pick your shots.


And it takes a long time to build these cases. It took us four years to build the case. When we had the stock market flash crash in 2010, we brought a case against a spoofer that we felt had kind of triggered that, but that took a long time to build. So it’s a very important task that they do, but it’s often the subject of criticism from both sides.


Robert J. Jackson, Jr.:  I’ll just add a thought or two. I’m going to say two super unpopular things, so apologies in advance. So first, I remember being a commissioner, and I really agree with something Tim has said about regulation by enforcement. Have you ever heard that phrase before? Do you like it? No. Boo. Yeah. Okay.


So I remember having meetings at the SEC where someone would come into me and say, “Commissioner, we’re very upset. You see, our client has been the subject of regulation by enforcement. There was ambiguity, it wasn’t clear, and they were suddenly sued. It’s not fair. And I would say, wow, that’s troubling.” Okay, great. Thank you.


And the next week, the same guy would come in and say, “By the way, Commissioner, you think about doing rules in this area. They’re very prescriptive, you see.” They detail exactly what conduct we’re supposed to pursue, and that’s not the job of the agency, you see? Aren’t you for freedom in allowing us to make our own choices? And I said to this person -- I mean, this happened. I said, “Well, which are you for: regulation or enforcement?” And I have to say, you have these moments in Washington where someone finally tells you the truth, and he said, “Neither.” [Laughter]


Look, here’s what I’d say about that. You can complain about regulation or you can complain about enforcement, but pick a lane because you’re either for one of those or for fraud. And that’s my second point, which is that you might abhor the notion of a large administrative state with all of its many tentacles in our markets, engaging enforcement.


But I want to share with you a benefit of that, which is there are many market participants out there. Many of them are clients, current and former, who are trying to do the right thing. And they’re doing that not because of the ex-ante probability of enforcement, which candidly, as Tim points out, is low because of limited enforcement but because that’s how you conduct yourself in a well-functioning market, the finest capital market the world has to offer, has ever had to offer. But when you fail to enforce the law against those who don’t abide by those rules, you punish those who follow them.


And I must tell you that this refrain about regulation by enforcement runs a real risk of encouraging people, as an economic matter, to engage in misconduct because the punishment for it is so slight. Or rather, you can hire someone who can go to a commissioner and complain on Monday about regulation and on Wednesday about enforcement and walk out with a straight face. And I would respectfully say that that strikes me as a non-trivial problem for those of us who care about the law.


Hon. Paul S. Atkins:  Well, one thing, I think, just to jump in on that one. There are, I think, undeniable cases, especially now with the current—at least SEC and I don’t know elsewhere—where the pushing the envelope issue is there, where there is precious little advance notice of where you might be as far as compliance goes. But we see this all the time where—especially gray areas—where I think instead of pursuing an enforcement case, the agency should -- especially where it’s widespread, I mean, to go ahead and then let’s make a rule in that.


And I think on the off-channel communications issue could be one of those where the problems are almost at every single firm, I think, that’s out there. And so the way the SEC is pursuing that, I think, in a different age, it would be being like the schoolteacher with a ruler wrapping it on the table. Class is having a problem here, so there must be something wrong with how people are viewing the rule and then obviously with comporting it, changes of technology, COVID, and all this other stuff. And even we as a regulator, we’re guilty of the same sorts of conduct, obviously, not as a market participant, but anyway, of other rules that govern government agencies and communications.


So that would be a different way and maybe a different time to proceed, rather than going seriatim down the cap table of SIFMA and everything else, boom, boom, boom, one to the next. But that’s where we are, and obviously, it’s in the power of the agency to do it, and people are settling so far. But I’m not sure that’s the most productive or the best paradigm for an agency to follow.


Jeffrey T. Dinwoodie:  Well, great. Well, sticking one last item on basic principles, look, we all know we have different agencies in our country assigned to look after different portions of the economy, different portions of our financial markets. So interagency coordination across the board is essential. Tim, you ran the CFTC. You were an FSOC voting member. You were deeply involved in other coordinating efforts, including in regards to Dodd-Frank. So why don’t you reflect on that. How are we doing now, and what are some best practices in that regard?


Timothy G. Massad:  Sure. Well, there’s maybe two ways we can talk about this: one is domestically and one is internationally because we were also trying to harmonize internationally. Maybe I’ll start with the international one because that was prominent during my tenure.


The G20 nations had agreed in the Pittsburgh Summit in 2009 that we have to do something about over-the-counter swaps. We’re going to agree on four principles. Standardized swaps should be cleared in clearinghouses. They should be traded on regulated platforms. There should be capital and margin requirements for swap dealers, and there should be reporting. Great. Okay, everybody agrees.


But, of course, even though we live in a global economy with global markets and global businesses, we have laws set by nations. So every nation then went off and did its own rules at different times, and then you’re stuck with how do you harmonize those? And I just remember so many industry participants coming into my office and complaining about our rules because, “Well, these aren’t really harmonized with Europe’s or Japan’s. And, gee, before Dodd-Frank, the rules were harmonized.” And I’d say, wait a minute, before Dodd-Frank, there were no rules. That’s why there was harmony.




Timothy G. Massad:  And then I’d go testify before Congress. And there were, of course, in addition to each nation doing its own rules, there were international bodies like the Financial Stability Board and the International Organization of Securities Commissions and the Basel Committee and so forth. And those international bodies try to set standards that they hope all nations will follow in order to facilitate harmonization of rules.


So I’d go up before Congress, and they’d say, “Well, what’s this Financial Stability Board, and why are you listening to them? Aren’t you giving away our sovereignty if you’re just agreeing with what they say?” And I try to explain, “Well it’s voluntary, and we’re trying to work together.” But then they’d say, “Well, now, why aren’t these rules harmonized? We hear from all these industry participants that the rules should be harmonized.” So it’s like, “Well, which do you want?”


So that’s a challenge, domestically, also a challenge because we have this terribly fragmented regulatory structure. Now, I’m not saying it’s bad. There are some good things that come out of that. But we have a number of different financial regulators with their own distinct jurisdictions.


Now, of course, sometimes those jurisdictions overlap, particularly because the financial sector is constantly changing. There’s constant innovation, and people are looking to do things outside the perimeter of regulation. That’s where you often get an advantage or at least you don’t -- you have fewer regulations. So then it’s a question of, “Well, does that fall into someone’s jurisdiction or not?”


Now, we created FSOC to try to address that. I think FSOC has been useful in bringing regulators together in facilitating dialogue and doing some reports. But I don’t think it’s really maybe lived up to the expectations of the drafters of Dodd-Frank that it actually could be -- have more force in terms of bringing about that coordination or addressing things that cut across.


A lot of it comes down to the individuals in these positions and being willing to work together and put aside their egos a little bit and try to find ways. There obviously are sometimes real statutory obstacles to that coordination or to figuring out who’s got jurisdiction. We’re seeing that in part right now with digital assets. It’s a tough problem.


Having said that, people say, well, why don’t we merge the SEC and the CFTC? Wouldn’t that solve this problem? And whenever I get that comment or question, I always tell them what Barney Frank said at the time when people asked him that. He’d say, “Well, we could do that, just not in this country.”


Hon. Paul S. Atkins:  He meant all the lobbyists and the vested interests in Capitol Hill to keep the two separate.


Jeffrey T. Dinwoodie:  So before we move into some current topics, I can’t help but ask—maybe each of you go down the line—biggest regret reflecting on your tenure? One or two things, take a minute or to each. It can be a personal regret or a regret as to the Commission as a whole, which you served on, reflecting back, missed opportunities, etc. We’ll go down the line.


Timothy G. Massad:  I’m first? Yeah. Okay. Well, I’m going to answer this two different ways because I’m going to tell you first what I thought about when I left the commission, and then I’m going to tell you what I think about today.


So when I left the Commission, I thought, “Gee. The one thing I didn’t get done that I really would have liked to have gotten done is something on automated algorithmic trading.” And I proposed a rule on that, but we didn’t have time to get it adopted. And I say that because algorithmic trading has fundamentally changed our markets.


The whole construct of the CFTC’s rules was first designed around floor traders. Okay, well, they left the scene many years ago. But it was still then really designed in terms of reporting obligations and who we were kind of focused on, it was designed around two principles. One is, “Are you using customer money because if you’re using customer money, then we want to make sure you report, we want to make sure you handle that money properly? We want to make sure you do certain things; we’re going to have a set of regulations that apply to you.


And then the second kind of principle was, “Are you holding open interest?” Open interest in the derivatives markets means you enter into futures contracts, and they remain open overnight for some period of time because you’re speculating; you’re hedging; you’re doing whatever. And if you’re one of those people, then you also hit certain reporting obligations and other things.


Well, today, about 70 percent of the trading is done by proprietary trading firms using algorithmic techniques. And they’re flat at the end of the day. They don’t hold open interest. They don’t hold customer money. And so the whole reporting regime and a lot of the ancillary rules don’t even really touch them.


So we tried to do something to create transparency, to also address if there’s a fat finger or a bad algo, what are we going to do? Didn’t get that done. One of my Republican successors finally did do something. I didn’t think it was enough, but at least it was a step forward.


I’ll quickly answer the way I would answer it today, perhaps, is I kind of wish I had done more on digital assets. It was early. But under my tenure, we declared Bitcoin a commodity. We didn’t do that to start this turf war with the SEC. We did that because the definition of a commodity under the law, it names all these things you’ve all heard of: wheat, corn, whatever. But then it basically says—and I’m paraphrasing here—“anything else that is the subject of a derivative contract.”


So we had people coming into the Commission saying, “We’re going to launch Bitcoin swaps.” This is 2014 when the market was quite young. And we said, “Well, if you do that, that makes Bitcoin a commodity, and you’re subject to our rules.” And that’s what we did. But again, it wasn’t because we said they’re not securities because you can actually have something that is both. A lot of people don’t appreciate that.


So I had a very good relationship with Mary Jo White, and I kind of wish, “Gee, maybe we should have gotten together and done something” because, now, I’ve done some writing with Jay Clayton, former -- who succeeded Mary Jo, Republican appointee under Trump as chair of the SEC. And he and I have been advocating for the SEC and the CFTC to develop joint rules for this market.


Jeffrey T. Dinwoodie:  Paul?


Hon. Paul S. Atkins:  Yeah. I wish you and Mary Jo had done that.




Hon. Paul S. Atkins:  It would have been a lot different right now. So yeah. So my biggest regret was a rule that I voted for. I voted to approve that we allow the Public Company Accounting Oversight Board to go forward with -- that’s called audit standard two, which grew out of Sarbanes Oxley Section 404. So, basically, it requires internal controls around financial reporting to be done by public companies and then to have them certified and then to have the CEO and the CFO certify that they’re hunky dory, basically.


So, anyway, this is in the early days, and I got all these assurances that -- AS2. This had been negotiated really well between the SEC and CFTC. And it sounded rather prescriptive, but whatever. Sometimes, those rules are good, and whatever. It would be for the companies, the auditors to figure them out. Well, it turned out to be a disaster—frankly, a huge paper chase of where the audit firms would go in and have to do process charts of every key internal control of a public company around the financial reporting.


And so I got these stories. I remember one. It was a German company that was listing here. And these rules were not imposed on foreign private issuers like this particular telecom company. And they said, “We’re doing this voluntarily.” So we went through, and we identified 500 key internal controls. Well, no. Our auditor tells us we have 20,000 key internal controls, each of which would have to be -- and this is not just Joe hands Sally a check, and then she signs it, and then someone else double signs a check. I mean, these things are -- can be a lot more involved and whatnot, pages and pages and pages.


So I gave that example one time on the Economic Club of Chicago and on the same panel, or dais, as I was the CEO of IBM. And he said, “Well, Paul” -- after when he got up there, he said, “Paul, 20,000 is nothing. Our auditors tell us we have 500,000.” Now, maybe that’s okay for something as big as IBM, but I kind of doubt that. And I don’t even know, as a board member, how one would do that.


So, anyway, luckily, I was on the Commission long enough where we basically forced the Public Company Accounting Oversight Board -- or implored them. So I wouldn’t say we forced them but to revisit audit standard two. We came up with audit standard five. We came up with a guidance for management as to how to address this stuff. So there’s a great case in point of how to kind of put -- try to put the genie back in the bottle. Internal controls are great. I am not arguing that they’re not, but something as excessive as what I described, I think is too much. But anyway, so that’s my regret but got -- able to turn it around.


Robert J. Jackson, Jr.:  So it’s hard to think of having regrets because it was such a privilege to have that job. I kind of think it’s -- I still think it was a mistake. Actually, a lot of people think it was a mistake. [Laughter]


But the idea that I got to serve that job and people in my country, I mean, I’m like some kid from the Bronx in New York. What an astonishing privilege. I don’t really think of it like regret. But there are things that if I had to do again, maybe I’d take another crack at, so I’ll give you three examples.


So, first, I think the best case for regulation tends to be where you’re worried about externalities: so where you’re worried that either some foreign state actor or some social cost or force will bring itself to bear upon our markets. And when I was in office, it was very clear and became clear over time that cybersecurity was becoming a huge issue. And I tried to persuade my colleagues to do more about it.


What really is happening on cybersecurity, just to share with all. It’s very clear. Twenty-four hours a day, seven days a week, foreign actors are trying to get access at Americans’ data which is kept as securely as possible, for sure, but with limits in these huge conglomerate firms that -- I mean, it poses real threats to the liberty and security and safety of the people of the United States. And I wanted very much to provide some more transparency in that area.


I didn’t succeed in persuading my colleagues to do that, and I wish I had. And I think if I’d had a little more time, I would have. What happened, of course, was COVID, and that, quite correctly, got people’s attention. Gary Gensler, Jay Clayton’s successor, imposed a rule that, in my view, is good but more prescriptive than it needed to be. If we had gotten ahead of it first and let market practices develop, I think we would have gotten a better fit rule, but I wish I’d persuaded my colleagues to work on that. That’s first.


Second, I’ll give you a really boring one. Shareholder voting in this country is governed by an incredibly anodyne, expensive system. Right now, if you own shares in a public company and you cast a vote, there is no way for you to know whether it was counted. This is not a thing that you can do. It’s not a service provided in our financial markets.


Now, maybe you don’t care—more on which in a moment—but if you do, it seems to me you’d be entitled to know how your vote was counted, and you can’t figure that out. By the way, lots of close votes are happening in American companies, and that really matters. I wanted us to fix that and push hard for it. You might remember, Jeff.


I didn’t succeed. Instead, my colleagues pursued a different path on shareholder voting, which was to regulate proxy advisory firms, which are, for reasons we can talk about, enemies of corporate management who are forceful advocates, and so they chose to regulate them instead. I thought that was a shame because one of the things we’ll talk about in a moment, I think, Jeff, is when policy shifts with political wins so far in financial regulation, it’s not a healthy thing for the market.


What happened is the previous administration regulated those entities quite substantially. The next one took over on a first day, reversed all those regulations, leading to an opposite problem, which is that there’s too many shareholder proposals. And in the middle, by the way, are companies and shareholders who just want to be able to talk to each other about their priorities. So I wish I persuaded Jay Clayton and others to deal with the fact that you can’t even get votes counted before we purport to regulate advisory services and such.


But then finally, I’ll say one thing. I wanted to add one thing that I didn’t regret, which is that I left. So I stepped down from office on February 14. That’s Valentine’s Day. And I did that because I was commuting back and forth to New York, and my wife and I wanted to have children. So as a wink to my wife, I left on Valentine’s Day. And sure enough, I’m sitting here a few years later. I have two kids [laughter]. Yeah. So yeah, thanks. I was surprised, too. Yeah.




Robert J. Jackson, Jr.:  But I’ll say that’s something I don’t regret, that I know all of us did our level best, but when it was time for me to attend to somehow even more important matters, I did.


Hon. Jill Sommers:  So I think, kind of like Tim said, looking back with 20/20 vision, I’m not sure I would have had the same regrets 10 years ago that I have today. But looking back, I probably would have voted “no” on every single Dodd-Frank rulemaking, knowing now how they affected the markets and the market participants 10 years later.


And for a lot of the reasons that we have mentioned up here today—lack of robust cost-benefit analysis, not as good of coordination with our international counterparts as maybe we could have had, and that the global standards for swaps reporting weren’t consistent—and so that was just a lot of things that maybe I didn’t really realize the -- what the effects would be years later.


And the other thing that we’ve also discussed talking about the CFTC/SEC merger, I’ve been a long proponent of a merger of the agencies and some of the things that Tim talked about in discussing the interagency coordination. When I started in the industry 35 years ago, the commodity markets or the derivatives markets were overwhelmingly based on agricultural commodities. So the market participants were different.


Financial futures were created in the ‘70s; the CFTC was created in the ‘70s. And since then, the markets have evolved to such that I would guess that the percentage of agricultural commodities that are traded in derivatives markets today are less than 5 percent. So the evolution of these products make them look more and more like financial products that could be regulated alongside the same -- their derivatives of equities or derivatives of securities, as well as the ETFs. A lot of the big ETFs that trade on securities exchanges are based on commodities.


And so it just seems to me, if we could rely on the agencies to coordinate a lot better than what they do today, that would be one thing. But typically, they have not done -- they don’t have a great track record of coordinating together to regulate these types of products. And I just think that the gray area between the regulatory jurisdiction of the agencies used to be very narrow, and it just -- it keeps widening. So I guess maybe continuing to talk about the possibility of merging the agencies, it’s never too late. Barney Frank’s not there anymore.


Timothy G. Massad:  Well, just to be clear, I didn’t maybe explain it, although Paul added. The reason is you’ve got the SEC and the CFTC. The oversight by Congress is within different committees, and you have to get those committees to agree. One of them has to give up some jurisdiction, and that’s a tough thing to do. I mean, that’s one of the main reasons.


Jeffrey T. Dinwoodie:  So let’s go back. We’ve touched on a couple of times, digital assets, cryptocurrencies, and here’s how I think we should take this. Jill, could you give us a level set in terms of what’s the state of play on the regulatory framework? I know that’s a long question. We could do a whole conference on it. Thoughts on a pathway forward? And then I want to come to Tim. As he touched on earlier, and he’s worked with Jay Clayton on a proposal, and maybe we can have you go over that. So over to you, Jill.


Hon. Jill Sommers:  Yeah, sure. So I’ll very narrowly answer this with regard to the CFTC, and I think my view here is that it’s pretty simple. The CFTC does not have jurisdiction over cash markets, not in commodities, not in digital assets. So it would be very helpful to the Agency if there were legislation that gave them the authority over cash markets for digital assets. And I think that they would then be able to promulgate rules that gave a framework for the industry to move forward.


I think part of the problem that you hear from the industry right now is uncertainty in whether they’re supposed to register, how they’re supposed to register, and just sort of the antiquated framework that’s been set up for market structure as we’ve known it over the last four or five decades. It doesn’t really fit perfectly with the way that industry works.


Timothy G. Massad:  Yeah. And just so everyone’s clear on this because, sometimes, people ask me, “Well, I don’t understand that. Why doesn’t the CFTC have that jurisdiction over the cash market?” And I say, “Well, think about cows for a minute. The CFTC has jurisdiction over cattle futures contracts. But when you go and buy and sell a cow, the CFTC has no role to play.” So that’s true with every single commodity. It doesn’t have jurisdiction to set standards over that cash trading. It has the authority to go after fraud and manipulation, but that’s not enough. So that’s problem number one.


And problem number two, of course, is, “Well, which bucket does each of these tokens fall in? And does that depend on exactly how it was offered or distributed or how long it’s been around” or so forth? So what Jay Clayton and I have argued for is, “Look. We’re too bogged down in that debate,” and we need some basic standards of investor protection here because we’ve got all these platforms.


I mean, the industry, for all its complaints about the lack of certainty and clarity, to my mind, a lot of them kind of like this because you have all these platforms—the Coinbases of the world, the Krakens, and so forth—that basically aren’t really regulated. So what Jay and I have argued is, “Look. Let’s have the SEC and the CFTC get together and ideally do this by creating a self-regulatory organization.”


Now, I use that term in a very specific sense, which is a self-regulatory organization under U.S. practice means an entity which is really supervised by the regulators, right? The board of directors is picked by the regulators. The rules are approved by the regulators. It’s not simply some industry body that goes off and decides on its own what it wants to do. But we could create that entity which would bring in industry expertise and also be a vehicle for joint development of the rules.


And let’s develop some joint rules, because the standards we want, at least with respect to the distribution and trading of crypto assets, are largely the same whether you put it in the commodity bucket or the securities bucket, that is, we want protection of customer assets, right? If you deposit money on Coinbase, that should be protected. We want prevention of fraud and manipulation. We want to address conflicts of interest. Should the Coinbases of the world not only be trading security crypto assets—in other words, you decide to trade on their platform—can they also have a proprietary trading arm that effectively could be trading against you? We wouldn’t allow the NYSE to do that, but we have no rules on that. So that’s the concept.


And it’s also a way to say, “Look. Let’s not try to rewrite the securities laws just yet, at least.” And there are a lot of proposals in Congress to do that to create kind of a whole new, oh, digital asset security or whatever the term is. I have some sympathy for that objective, but you’re going to very easily create a lot of unintended consequences because when Elon Musk decides to tokenize something and make it—whether it’s just his stuff stock or his bonds or something else—well, then, does that get the benefit of these new rules, or is that really just a security in a different form, and we should have it under the old rules?


So our proposal, think of it as an incremental step. We could put in place some basic investor protection measures, not rewrite the law, let the SEC still go after someone if it feels that a particular token is a security. We wouldn’t change their jurisdiction, but it would also address this absence of a federal regulator for the cash market. And it’s also a proposal that’s in sync with the way these markets work today because, otherwise, we’re heading down a road where we’re going to have Bitcoin and maybe ether—although it’s unclear—and maybe Tether traded on one platform that has no federal regulator and a bunch of other crypto assets traded on some other platform that maybe has to register as a securities exchange. It’s going to be a mess.


Now, having said all that, let me make clear. I have a lot of doubts about this whole sector. I mean, I think a lot of stuff goes on in this sector that may not have any value. But I fundamentally believe it’s not the government’s job to decide that. I fundamentally believe we’ve got to have rules that protect investors, that ensure market integrity, but let people decide, “Are these things worth investing in or not?”


Jeffrey T. Dinwoodie:  Paul?


Hon. Paul S. Atkins:   Yeah. Well, I think that’s great; it’s a good idea, and that really addresses a lot of issues around conflicts of interest and all that with market participants. But the problem right now, at least so from a securities lawyer’s perspective, is that when you talk about regulatory uncertainty, I mean, it’s humongous with respect to the actual digital assets themselves. Are they security?


And here’s where the regulation through enforcement comes in under the current regime. And I think the current chairman is very disingenuous when he says famously, “Oh, it’s easy. All you have to do is comply with the law. You can read it as well as I can or hire someone to help you. We have these easy forms on our website that you can just fill out, Form S-1. How about that?” But it doesn’t really address how -- who is the management? What is the ownership? How are you going to do audited financial statements of” -- whatever. Pick your coin out there—and especially on the DeFi area.


So it’s inappropriate for these rules to attach to them. And so that’s the real thing that maybe it’s Congress who has to do it. I think the SEC has enough authority under the Securities Act and Exchange Act to address it. But unfortunately, unlike historically, when you look back at SEC, it has accommodated new technologies.


So in the 1960s—before my time, I can say. But anyway, and in the 70s, there was what they call the “paperwork crisis.” There was this huge bull market on Wall Street, and they were still dealing in paper certificates where clerks had to shuffle them around from one brokerage to another, and then the transfer agent and blah, blah, blah, and they take their quill pens out and enter it into the registry—but before the big mainframe computers came around.


And so finally, Wall Street started to address those issues of data processing. And then came the bust in the 70s with oil embargo and whatnot. And so then broker dealers went out of business during that time. So the SEC kind of motivated and helped the industry come up with a depository trust and clearing corporation, which came up with the idea of global certificates, we’re going to stick them in the vault and then people can trade them by just with notation on the ledger.


And then in Breeden’s time, one day he came into my office and threw down this big thick file, and he said, “Why don’t you look into this and see why this hasn’t gotten cleared yet?” It had been wafting around the SEC for 5 years, and it’s what became spiders, the S&P 500 index—so the first ETF that we approved in the early 90s. And then Arthur Leavitt, we addressed alternative trading systems so with as far as institutions trading securities, so it wouldn’t have to be on an exchange but still get reported.


So in all those instances, the SEC reacted to developments in the industry and to try to help the technological development there. And I think that’s the real problem right now is relying on the Howey Test, which is 80 years old. Judge-made law, I think once in the Coinbases and others of the world, is now under litigation. And so sooner or later, I think Howard is going to go to the Supreme Court, and I bet the justices are going to look at this and think, “Oh, my goodness. This judge-made law has created even more of a mess as to how does one identify what a security is?” I hope that they will address it and kind of clear it up. But in the meantime, I think the SEC needs to address this really fundamental, underlying issue.


Jeffrey T. Dinwoodie:  Rob, do you want to say anything on digital assets?


Robert J. Jackson, Jr.:  So I’ll just offer two quick thoughts. So, first, I think that Tim and Jay Clayton, who was my chairman, I think your intervention has been extremely productive, and I agree with it.


I think, fundamentally, there will have to be some congressional action even to authorize—and I think this is consistent with what you guys have said—a self-regulatory organization to be overseen by both agencies. Before we had what is now FINRA, the National Association of Securities Dealers, Congress passed the Maloney Act in 1941 that authorized the creation of a self-regulatory agency to oversee broker dealers. That was a very sensible, helpful step. I think it continues to serve as well today, and I think that’s going to be necessary with respect to the creation of a self-regulatory organization.


And so I think the fundamental issue we have is Congress. I want to say whatever we think about that, I hope in The Federalist Society, we’ll all come to consensus about this. Whoever should make this policy, I happen to think Tim and Jay are right, that it should be private self-regulatory oversight combined with government accountability. But whatever you think, whoever should make this policy, it should not be federal judges.


I mean, I like the rogues. I’m a fan. I think the Federal Judiciary has served the American people extraordinarily well. It’s incredible innovation of our Founders. But the idea that we would ask them to take the Howey Test or take a law crafted by a Depression-era Congress and apply it to this technology, I think it’s simply not within their comp. And I worry that, just to build on something Tim said earlier, that by letting all this end up in litigation, we are inviting a branch not -- candidly, not equipped to make those kinds of policy choices, to make them.


I think that’s been extremely counterproductive. You can blame the SEC for being the plaintiff. You can blame the defendants for making arguments that I think don’t all pass the “Smell Test.” But whoever you want to blame, let’s just all agree that the people’s representatives in the Congress and the markets should together make these choices rather than the judiciary.


Hon. Paul S. Atkins:  Amen.


Jeffrey T. Dinwoodie:  So speaking of congressional in action, Robin, you touched on this earlier. The broader trend around partisanship and how these agencies—at least there’s a perception among some—as the pendulum seems to swing hard between administrations. Can you reflect on that? Is that a symptom of lack of congressional activity? Certain activity? Policymaking is pushed to these agencies more than it should? Just reflect on that topic generally. And what, if anything, should be done about it? Is it a problem?


Robert J. Jackson, Jr.:  So the first answer is yes. So there’s no question. I think we’d all agree, although I don’t want to speak for my colleagues, that there’s always been partisanship. As Paul points out, around the, during the George W. Bush administration, there was partisanship in the agencies. But today it is somewhat more riven. And I think I heard Tim earlier point out that some -- what was it? Ninety-five percent of your votes were unanimous? That was true in my commission, too.


I think it’s really important to maintain bipartisanship in these commissions, and I want to say why. The reason is that the administrative state itself rests on a very, very careful balance of legitimacy. We’re asking the people to be governed by appointees of the president confirmed by the Senate. And to ask some of this, it’s important to have consensus to the degree you’re going to have some technocratic judgment that’s is going to be made.


And so when I was a commissioner, I tried -- we tried -- I mean, Jeff, you worked with me on this. We tried very, very hard where we could either be unanimous or to have some kind of consensus on the premises, even if not the details of the rule. And I think there are three reasons why that’s not as possible now as it was before, and I hope we can find a way to change that path.


The first is that these agencies are being asked to make decisions that they shouldn’t, to make decisions that candidly are better vested in the congressional or other branches of government or to carry sort of weight in the sort of national debate that I don’t think they can or should carry. It’s very challenging to ask agencies to solve problems beyond their ordinary ambit, and I think that’s happened in a few cases, first.


Second, I think there’s an expectation that if you’re appointed to one of these agencies, you’re just supposed to -- you have a side and your side has a view, and you’re supposed to vote accordingly. And I think that’s very destructive.


In the hundred-year history of the SEC, even though people will tell you I have my priors, there’s only been two non-chairman commissioners who were affiliated with either party when they were confirmed. I’m one of them. And I don’t mind telling you. I got yelled at a lot by people who were like, “Didn’t you get the memo? You’re supposed to vote ‘no’ on this.” And I was like, “No, I missed the memo. I’m from New York.” So I think that that’s increasingly true.


And then finally, I’ll say I think it’s very hard when you have an opportunity to express disagreement, dismay, etc., to let that -- to say nothing. And I’ll give you an example of what I mean that I’ve seen at our old agency. So when I was on the SEC -- you remember, Jeff. You and Jay Clayton had an agenda that you sent over to the regulatory -- the OIRA, the overseer of regulatory decisions in the government.


You would send your agenda, and I would say about this nothing because there was an election. The president chose Jay, who chose you. You guys wrote an agenda, and when we get to the details, I’ll have my views. But now, today, no agenda issues at the SEC without a dissenting statement. We dissent just what’s on the agenda. It’s like going to a restaurant on a date with somebody and they object to the menu. It’s like, “Look, if by dessert you think I’m a jerk, I understand. You won’t be the first, but we just got the menu.”


I have to say, Jeff, perfectly candidly, I would never have dissented from an agenda because, again, there, my objection is not with Jay Clayton or Jeff Dinwiddie but with the people who made a choice that maybe I’m not so sure about. But I’m just one of them, and so I don’t have an extra say in that respect.


I think we should get away from this, Jeff. My mother has a rule about what you say when you have nothing nice to say. It was a good rule. And I think it would be better if, with all respect, my colleagues who are now in these jobs do the hard thing, which is to sometimes say nothing, even where you disagree.


Hon. Paul S. Atkins:  Yeah. So to chime in there, so I agree with -- maybe I’m the second one who’s unidentified because, in Virginia, one doesn’t register with a party. And so anyway, but I was labeled Republican. I still remember the first time that somebody referred to that to me in an introduction to a speech, and I was so shocked. This is right after I got to the SEC -- and because we had been used to not even knowing who was of which party in general, maybe the chairman or whatnot.


Anyway, but things have changed a lot. And I think your expectation issue is true even so much as these are not public -- the closed commission meetings that are discussing enforcement actions and whatnot. It has changed a lot. I understand from the early years where there would be robust debate, and you couldn’t even tell who was a member of which party, just as to the bona fides of whether the -- this even stated a cause of action under the securities laws in a particular aspect. And now, there’s this feeling like, “Well, if I don’t vote for enforcement, I’m not strong on enforcement” -- and if I rather than holding rigorous standards to what’s going through.


But I think even a bigger issue is whether -- now, we have these independent agencies are about a hundred-ish years old if you leave across the -- leave out the Interstate Commerce Commission, which is a little railroad thing, that is about the only one that got put to its death. But the rest of the agencies have been around a hundred-ish years. And the idea growing out of the whole progressive era is we can have this group of mandarins, these nonpartisan bureaucrats, and they can figure out what the right efficacious path forward is.


And so I would argue that maybe we’re seeing the death actually now of the independent agency, especially -- so here, with ancient SEC, in the old days, again, the division directors would sign an undated letter of resignation and leave it in the chairman’s upper -- the drawer so when he’d come in, he’d see that the message is, “I’m happy to leave if you want me to. Just state it. I’m gone, or I’ll stay around as long as you want me to.”


So this was the first time ever in this current SEC where the transition team let every single division director know that, “Thou shalt be out by noon on Inauguration Day or else you’re gone.” And so that was pretty shocking, I think, to those people who were there. And when I heard about it, I was quite shocked.


And then you see the defenestration of Jelena McWilliams at FDIC and FTC’s games and whatnot. So I think that have we really crossed that bridge now of no return where we fully expect -- and I can’t remember the cases’ names. But in Tennessee, I think, a judge, when there was a challenge about whether or not a particular rule SEC adopted was under the -- proper under the APA. And he said, “Well, what do you expect? This all politics.” And so anyway, who cares about the different areas of the APA that should be abided by?


So the real question for the future is, “Can we ever put all these genies back in the bottle and get to where we can have very civil discourse, like what we’re doing here in an agency where, like Rob is saying, you have these different warring camps that are glowering down at the poor, unelected, unaccounted people who are on this commission to make a vote?”


Timothy G. Massad:  Yeah. Let me just add a few thoughts. I mean, it’s obviously a greater problem than just these agencies, right? I mean, we have deep partisan divisions in the country. Speaker Johnson couldn’t be here today because we’ve got a raging partisan dispute over funding Israel and the Ukraine. I would have thought those were no-brainers.


And one could say, “Well, can’t we just get people who really know these markets and not make the appointment process, not have these appointments be kind of political chips and some kind of broader political negotiation?” And I think that could help.


I think there are other factors that are affecting the financial regulators. And part of it, truthfully, I think, is still a hangover—maybe hangover is the wrong word—but the after effects of the global financial crisis where I was at Treasury during those times, and we did a great job stabilizing the financial sector, but -- I think. But what did we do well?


We provided capital to banks and to other large financial institutions who, frankly, were partly the source of the problems. And I think a lot of people looked at that and said, “Well, gee. I mean, that’s not very fair. I lost my job; I lost my house; I lost my college savings, my retirement savings. What about me?” And so I think we’re still living with a lot of that, and I think it’s also been aggravated by increasing inequality in the country when people read about CEOs that are making tens of millions of dollars, even if their company has a problem, a significant problem, as we’ve read recently. I don’t know how we get past those things, but it is a real problem for these agencies, I think.


Jeffrey T. Dinwoodie:  So I want to make sure we leave a couple minutes for questions. So our last point that I want to get thoughts from each of you quickly on, maybe a minute or two each—and we’ll start with Jill and come this way. As you look into the future, look, our markets are continually changing. Technology is changing as always; the law and regulation is changing. The next two to five years, what are areas that you think warrant focus going forward? Just maybe two or three minutes each.


Hon. Jill Sommers:  Yeah. I mean, I think there’s a couple of different issues at the CFTC that will potentially have implications broadly speaking. The way the market is structured right now, there’s not a path for customers to be able to go directly to a market. And there’s a lot of different market participants that want to see more of a vertical model so that you have an exchange is also your FCM is also handling customer money, is also the clearinghouse and having everything in one. And there’s a lot of challenges to that.


So I think the Commission is going to have its work cut out trying to make sure that they craft a market structure that is fair to everyone with that. And then I think, secondly, I would say the event markets in the CFTC space, trading derivatives on events, whether it’s sporting events, political events, and whether or not the law actually allows for those contracts to be traded on regulated exchanges.


Robert J. Jackson, Jr.:  Do they?


Hon. Jill Sommers:  I believe they do not. That’s just my opinion.


Robert J. Jackson, Jr.:  Online betting about this panel. So a couple of things that I think are going to be on the radar in financial markets for the next couple of years. First of all, I’ve mentioned already, I think cybersecurity is a very substantial threat. I think there are state-sponsored attacks happening to American publicly traded companies where people are trying to access Americans’ data. It is a fundamental threat to not just those companies but to the people of this country. And I think the SEC is going to have to continue to be vigilant about that first.


Second, I’m very concerned about the retirement crisis we have in this country. Just off the top of your head, Vanguard, where I say for my retirement, every year, they produce a report saying, “What is the fiftieth percentile balance in a retirement account of the average American -- of Americans who are over 65?” What do you think it is? It’s $75,000. That’s not going to do. It’s certainly not going to do in the inflationary world we live in. It’s not going to be a full stop.


And the answer to it isn’t to encourage these folks to buy lever leveraged ETFs or Bitcoin [laughter]. The answer to it, as Tim has pointed out, is fundamentally to address some of the broader issues, but also to really protect these people from predatory financial advice that they’re exposed to.


One of the things I saw at the SEC—and I know you guys know this—you see an incredibly -- incredible amount of just ordinary crime, just theft, where people take money, and they tend to target people on bases you couldn’t possibly imagine. There’s a huge amount of military affinity fraud in securities markets. I mean, there’s got to be a special place in hell. I mean, there’s a huge amount of faith-based affinity fraud in our financial markets. And these attacks are fundamentally to people who can least afford them. They’re the people who are in the wrong part of the median chart that I just described. So I think the SEC is going to have to work on that.


And then finally, I think there’s a degree to which the SEC is going to have to do something about the way corporations are being asked to address social problems in the United States. I think there’s a long history in my field of this. We can certainly do a whole panel on it.


But I will say this, that in the history of the United States, when we have asked companies, rather than the government, to solve social problems, it has never ended well. It’s always been disappointing because companies are not well equipped to address these problems. And we’re going through a period now where we’re imagining that, “Well, if we had the right disclosure rules or if we had the right governance mechanisms, these fundamental -- we could avoid Congress, which is challenging, and just solve these problems this other way.”


I think it’s a mistake to suggest to the American people that this could be done and that the SEC is going to have to be sure to police carefully the limits of the expectations we can have of -- on companies when it comes to solving these problems. I think that’s going to be -- continue to be an issue for the agency in the coming years.


Hon. Paul S. Atkins:  Yeah. Well, that’s definitely true. I also agree about cybersecurity. And there, I think the government has a special role to play also to help private companies try to figure out what the -- where the threats are coming from.


But anyway, just going back to when I was talking before about what’s going to happen to independent agencies or what should happen or their development, you know that if there’s a change of administration from the current one to whatever is coming -- may come next that it’s going to be the same kind of tit for tat that just went on in this one where the first thing happened was, “Let’s sweep away all of the rules that the preceding Commission had done”—or maybe not all but some of the ones that were more salient, I guess. So that unfortunately is probably going to happen, and at least at the SEC and maybe some of the bank agencies.


So I think hopefully we can get beyond that. And some of that is maybe not having so much hubris, at least for leaders of these agencies. And thinking further than what Rob was just saying, the SEC or CFTC or whatnot can look after its own patch, but it can’t really change the world. It’s going to arrogate unto itself that, “Yes, our disclosure regime will be able to solve whatever huge problems may exist.” That’s not really what either shareholders or corporations or whatever are best able to address, and then to weaponize disclosure and other things I think is a real problem.


So hopefully, we’ll have a better regime that way. There are certainly enough societal and economic problems that need to be addressed. But I think the agencies have got to figure out what is the highest and best use for them and then let Congress and others figure out what the public policy should be just.


Timothy G. Massad:  Just very quickly because I agree with a lot of what’s been said. Cybersecurity certainly would be way up on my list. I think that was -- it’s always the biggest worry you have, frankly, these days as chair of one of these agencies, that there’s going to be some major event that’s going to knock out financial infrastructure.


This politicization issue is a big one. The balance between public and private markets in this country, how we continue to encourage capital formation, but also make investment opportunities fair to a broad swath of the American people, digital assets, artificial intelligence. So anyway, let’s get to your questions, though, if we have time.


Jeffrey T. Dinwoodie:  Yeah, we have a couple minutes for questions.


Questioner 1:  Yeah, I have a question about SEC enforcement. Sam Bankman-Fried, Michael Milliken, all of them have been convicted, and they can discuss their conviction and what they did and didn’t do all they wat. But when you settle with the SEC on a tiny little thing, you are gagged from talking about it. Even the FTC has no admit, no deny, and you just don’t deny what’s in the complaint. But the SEC and Commodities as well has a gag. Should we get rid of the gag, or is there any good reason or constitutional support for it?


Hon. Paul S. Atkins:  The only support is that it’s an agreement. It’s a settlement. It’s an agreement between the agency and the respondent. So yeah, I agree with you. I think the First Amendment should apply, too, but it’s a thing that’s being negotiated away. And so, anyway, you could change that easily with a policy of agency.




Robert J. Jackson, Jr.:  Right? That would be great. Well, I mean, you could do --. Anyway, so, sir, it’s a great thing about being a law professor. Let me ask. What do you think?


Questioner 1:  I think it should be done [inaudible 01:27:42].


Robert J. Jackson, Jr.:  Okay. So, well, it’s interesting. So, Paul, because he tends to come to these things, looking thoughtfully about both sides, points out it’s a voluntary agreement.


Now, you might say, “No, it isn’t.” You have the giant arm of the administrative state forcing this upon you. And I must tell you. While I’m sensitive to that argument, I am. I have worked at a law firm and at the SEC and gotten a sense of the relative resources at each place with respect to power. Now, this isn’t always true, but I found the defendants that I worked with and then was across from to be pretty well advised and financed when it came to resisting things and settlement agreements they didn’t like.


I wonder, sir, whether or not I owe some deference to the agreement freely reached by those parties. Now, you might say, “Well, no, because it’s not so free,” to which I would say then defendants should not agree. And if they don’t agree and the agency were to try to impose this by rule, I would be right next to you urging that they thwart their authority.


But I must tell you, if the defendant voluntarily does this, his objection later sort of --


Questioner 1:  What does the SEC want? What’s the government [Inaudible 01:29:00]?


Robert J. Jackson, Jr.:  Well, this is straightforward because the defendant wants to say, “I didn’t do anything wrong,” and the government disagrees but can’t be in the business of constantly being in the public saying, “Yes, he did. Yes, he did. Yes, he did.” I don’t think you’d want the agency in that role. I sure wouldn’t. For that reason, I think it’s best -- actually, the agreement the parties have struck makes sense to me. You know what? We disagree. Let’s leave it there. I’ll pay my fine. You’ll move on to whatever unfortunate soul is next.


But whatever you think about this, I want to say I think anybody analyzing the question must do what Paul has done, which is start with the fact that it’s a voluntary agreement. Now, again, you can question the voluntariness, but I think that objection might be better directed at the defendant who signed the piece of paper rather than the agency.


Hon. Paul S. Atkins:  Well, the ultimate thing is for people to. What they’re doing now is fighting back. But anyway --


Jeffrey T. Dinwoodie:  Howard?


Howard Adler:  Yes. I just wanted to comment on something that Tim said when he spoke about the difficulty of our fractured financial regulatory agencies coordinating with one another and was disappointed that FSOC had not done a better job at making that happen. I was the DAS for -- at FSOC from 2019 to 2021, and I completely agree with you. But just a couple of brief thoughts.


The first thought is that one of the problems is that Democrats and Republicans look at FSOC differently. The Democrats tend to look at it as a vehicle for increasing regulation on non-bank players by declaring them as significantly -- as systemically important and subjecting them to regulation by the Federal Reserve. That’s not always a good idea because all of these institutions have regulators, and you often get much further by working with the original regulator than by subjecting them to new regulation. And the Republicans tend to look at FSOC as a creature of Dodd-Frank and, therefore, inherently bad. And thus, if FSOC did nothing, the world would be better off.


The truth, of course, is someplace in between. There are only two vehicles for interagency coordination in the financial services sector, and one is the president’s working group on financial markets, which has no infrastructure, set up by an executive order, and doesn’t include the banking agencies. It does include, of course, the SEC and the CFTC. And the other is FSOC, which does have infrastructure.


And I argued during my tenure that FSOC was a tent for these agencies to get together and to come up with the -- sort of reconcile the sort of differences that they would have. FSOC has a committee structure. And I think Secretary Mnuchin agreed with that approach. And I think had we had another four years, we would have gone further in doing that.


But by setting up additional committees—for example, there could be a committee for the banking agencies where, at the deputy level, they tried to resolve interagency differences, and where they couldn’t -- they were bucked up to the heads of the agencies—there could also be a similar committee for the CFTC and the SEC and securities issues. And maybe it shouldn’t depend on whether or not a particular SEC chair has a good relationship with a particular CFTC chair. It should certainly institutionalize it.


Jeffrey T. Dinwoodie:  Any quick reactions from our panelists? I know we’re hitting the time. Thank you. Thank you. Maybe one really quick -- one more question. Maybe one really quick, one more question.


Questioner 3:  Sure. Thank you. Wonderful panel. I wanted to ask, as a regulation -- as an admitted regulation skeptic, aside from the prophylactic effect of making sure that the people in the securities industry are not crooks or fraudsters, which even now some of them end up being, what does -- what do all of the regulations, what do all of the very detailed and byzantine rules for IPOs, for prospectuses, for who can issue to who, for all of these rules --


Timothy G. Massad:  Could you speak up? I’m having a little --


Questioner 2:  Sorry. Sorry. So basically, what do I -- what does the consumer, the person who is buying stocks or just wants to buy a simple ETF that generally tracks a market and they can’t even understand all of the financial statements that the companies are required to put out, minus the cash flow projection, of course, what do they get beyond the protection of, essentially, what would be common law fraud or general criminal law from the regulatory apparatus, aside from some degree of prophylactic effect [CROSSTALK 01:33:37]?


Timothy G. Massad:  Well, I think you have to look at the -- yeah. I mean, look. The way I look at the disclosure laws is I don’t expect individuals to read prospectuses. Of course, they’re not going to do that, nor do most people understand how to read financial statements. But we have intermediaries. There are a lot of intermediaries who do read that information. Whether it’s a registered investment advisor or a rating agency or your bank which is advising you, that’s the value here. I think you have to look at the entire market and the distribution of that information and then how it gets used by other intermediaries who ultimately might be making suggestions to their clients.


Robert J. Jackson, Jr.:  I think that’s absolutely right. So just to add two quick thoughts, I think this is probably true for all of you. One nice thing about being on these agencies, you go around the world. And the thing people ask me, at least I don’t know about you, Paul, is, “How do I get my market to be more like yours? You have the deepest, most liquid capital markets ever known to markets.” People list in the United States just to say, “I can list in the United States.” Why?


One reason is the reason Tim has given you, which is that the information that’s in our markets is used by professional investors to price accurately. So at any given moment, the price of a share of stock is as close to accurate as can be given the information in the market. Those investors—those professionals that Tim was talking about—use that information first.


Second, we avoid what economist George Akerloff famously called the “lemons problem,” where good companies don’t enter the market because they can’t be rewarded for being good companies. A mandatory rule solves that problem in ways that we can talk about in a moment.


But finally, most importantly, we believe fundamentally that by requiring people to disclose before the fact, you get them to be more thoughtful about their decisions ex ante. I know I’m going to have to disclose the decisions I made for this business. And so I’m going to act like someone -- even though I’m spending someone else’s money, I’m going to act like someone who’s going to be subject to some sunlight after the fact. This can be beneficial, too, not, by the way, notice in the form of actual -- what’s in the piece of paper because what happens is behavior change that you don’t observe before the fact.


So these are the standard justifications that have been given for the -- but I’ll tell you what my experience is, whether you believe me or not. When I went around the world, people didn’t say, “It would be better if American markets look more like ours.” Instead, they said, “How do I get mine to look like yours?” And that tells us something, I think, about the way wisdom of these laws.


Hon. Paul S. Atkins:  Now, one last thing to throw in, since we are at The Federalist Society, is this ratchet for disclosure only goes one way. There really is no sunset. Or the one thing that I heard both as a commissioner and now with my clientele going out to talk to asset managers is just, “Please, please, please. We have information overload. We can’t discern the wheat from the chaff oftentimes. And so can we have something more focused?” And that goes from the biggest asset managers down to the small stockbrokers. So that is one thing that we won’t solve that anytime soon. But for a sunsetting provision or something like that to be in effect, it might be helpful.


Jeffrey T. Dinwoodie:  Well, great. To the audience, thank you. And please join me in thanking the panelists.



2:45 p.m. - 4:30 p.m.
Breakout Panel 4 - Is Humphrey’s Executor Still Relevant?


East Room
The Mayflower Hotel
1127 Connecticut Avenue
Washington, DC 20036

Event Video


Earlier this year Judge Jones and Judge Willett released dueling opinions on the applicability of Humphrey’s Executor to the Consumer Product Safety Commission post-Seila Law. Parties have also asked courts to determine whether Humphrey’s Executor even still applies to the FTC given the dramatic expansion of that agency’s powers since the 1930’s. This panel will explore the ongoing applicability of Humphrey's Executor to modern day independent agencies, the proper constitutional role of independent agencies, and the future of independent agencies if the Supreme Court revisits Humphrey's Executor.


  • Prof. Jennifer L. Mascott, Assistant Professor of Law, Antonin Scalia Law School, George Mason University
  • Michael McGinley, Partner, Dechert LLP
  • Prof. Jed Shugerman, Professor, Boston University School of Law
  • Brett Shumate, Partner, Jones Day
  • Moderator: Hon. Stephen Vaden, United States Court of International Trade


Event Transcript



Adam F. Griffin:  All right, everyone. I think we’ll get started. Good afternoon. My name is Adam Griffin. I’m a Separation of Powers Attorney at Pacific Legal Foundation and a member of the Executive Committee of The Federalist Society’s Federalism and Separation of Practice -- Separation of Powers Practice Group. And our practice group is hosting this panel today on “Is Humphrey’s Executor Still Relevant?” On behalf of The Federalist Society, welcome, and thank you for being here today.


The Federalist Society’s practice groups consist of Federalist Society members, often subject matter experts in their fields. Each group meets once a month to schedule informative and engaging programming, like today’s panel. The practice groups also host FedSoc Forums and the panels at the National Lawyers Convention. If you would like to get involved in the practice groups—and I encourage everyone to get involved—please speak with Nate Kaczmarek for more information. And for those of you who don’t know, Nate’s standing back there in the back with the blue tie on.


With that, we turn to today’s panel, “Is Humphrey’s Executor Still Relevant?” Humphrey’s Executor was decided in 1935 and is a foundational decision in establishing modern independent administrative agencies. In Humphrey’s, the Court decided that agency heads could be insulated from presidential removal, laying the groundwork for today’s independent agencies. But there, in recent years, due to a series of Supreme Court decisions, there’s continued -- there’s a debate about the continued vitality of Humphrey’s Executor. Our panel will engage in that debate today.


Today’s panel is moderated by Judge Stephen Vaden. Judge Vaden is a judge on the United States Court of International Trade. Before joining the Court, Judge Vaden served as general counsel under his nearly four-year -- general counsel at the United States Department of Agriculture. During his nearly four-year tenure as the head of the office of general counsel, the Department won two cases before the United States Supreme Court and relocated and reorganized the agencies that comprise the department to better serve rural America, among many other achievements.


Judge Vaden also served as a member of the Board of the Commodity Credit Corporation and in the private sector as an appellate litigator at Jones Day and Patton Boggs. A native of Tennessee, Judge Vaden grew up helping with his family’s farms and real estate ventures. Judge Vaden, thank you for moderating today’s panel. The floor is yours.


Hon. Stephen Vaden:  Well, thank you so much. And it’s an honor to be here at the Twelfth Executive Branch Review Conference. I’ve come to this nearly every year, particularly since I came to Washington, D.C., to practice law. And I find that it is one of the best places to learn about things and trends that are going on in agencies that the news media, for whatever reason, does not cover, but that end up affecting the lives of everyday Americans.


Much of this morning’s focus for the panels that you attended was on how the administrative state has evolved to dominate our legal and policy landscape. Our panel here this afternoon is intended to look at one of the fundamental Supreme Court cases that gave birth to the modern administrative state, and, as you just heard, question whether that case continues to provide the governing framework for the administrative state and, if so, what that means for modern administrative agencies.


I want to say a little bit more about the case that you just heard, Humphrey’s Executor. I really encourage you, if you haven’t had the opportunity to read it since law school, to take a gander at it. First of all, unlike most modern Supreme Court cases, it won’t take you long. They got to the punchline very quickly. But it’s also a procedurally very interesting case. It comes out of the claims court—the predecessor to today’s court of federal claims—and it involved a suit by the executor of the estate of a former federal trade commissioner whose allegation was that he was wrongly fired by President Franklin Roosevelt having been appointed by Roosevelt’s predecessor, Herbert Hoover, to a term of seven years.


President Roosevelt, in a quite funny exchange of letters with the departed commissioner, explained that he would like for him to resign because they did not see eye-to-eye on policy matters. The commissioner refused. Roosevelt fired him. The commissioner sued for his salary, which was $10,000 at the time. And if you want to know what inflation has done to the value of the dollar, $10,000 in 1934 is approximately $240,000 today—in other words, roughly about 18 times the value in 1934.


But the case also got to the Supreme Court in an interesting way. It did not get there via cert petition. It got there via a certified question. The judge of the Court of Claims certified the question of whether there was a for-cause removal standard, statutorily for FTC commissioners, and, if so, was that for-cause standard constitutional? The Supreme Court answered that question in both respects. Yes, commissioners could only be removed for cause, and yes, that was constitutional under certain conditions. But what are those conditions, and are they still relevant or what we’re here to talk about today and what the Fifth Circuit debated in the recent case of Consumers Research v. Consumer Product Safety Commission? And we are very fortunate among our three panelists here today to have one of the attorneys who is litigating that case in the Fifth Circuit.


So, with no further ado, I’m going to get to introducing our panelists in the order in which they’ll speak. They’ll provide you with about 10 minutes of commentary to lay out some issues for discussion. We’ll have some cross-panel talk, and then we’ll save time for, hopefully, some questions from you all before wrapping up around 4:00 p.m.


So first, our first speaker is that aforementioned litigator, Mr. Brett Shumate, a Partner with Jones Day. Before returning to Jones Day, he served as Deputy Assistant Attorney General for the Civil Division and the Federal Programs Branch from 2017 to 2019, where, among other things, he served as my attorney when I was at USDA defending what we were doing in federal court. Before his service in the federal government, he was previously a partner at another D.C. law firm and clerked for Judge Edith Jones of the U.S. Court of Appeals—one of the judges whose opinion we will be discussing this afternoon.


Next, we have a face that is well known to FedSoc land. That’s Professor Jennifer Mascott. Professor Mascott is an Assistant Professor of Law and Codirector of the C. Boyden Gray Center for the Study of the Administrative State at Antonin Scalia Law School, at George Mason University, a place where I get a lot of my clerks. So thank you for training them so well, Professor Mascott. She focuses on administrative and constitutional law as well as the separation of powers. And in 2019, she took a leave of absence to also serve in the administration as Deputy Assistant Attorney General in the Office of Legal Counsel within the Department of Justice, as well as later serving as an Associate Deputy Attorney General, also in the Department of Justice.


Last but certainly not least, at the end of the dais, we have Mr. Michael McGinley, who is currently a partner at Dechert. He focuses his practice on litigation, particularly appellate and complex commercial matters. Prior to joining Dechert, he served as -- with Don McGahn in the White House Counsel’s Office as Associate Counsel and Special Assistant to the President, whose primary responsibilities included legislative and regulatory actions, as well as involvement in the confirmation to the Supreme Court of Justice Gorsuch. He served as a clerk to Justice Alito as well as then Judge Gorsuch on the Tenth Circuit, and he serves as an elected member of the American Law Institute.


So without any further ado, tell us about your case, Brett.


Brett Shumate:  Thank you, Judge Vaden. Thanks to my co-panelists, and thank you to all of you for being here. I think this is a very interesting topic. I’m looking forward to digging into it with my co-panelists.


I’m going to make the case today that nearly all modern independent agencies are unconstitutional. And to answer the question that our panel asks, my answer is yes. Humphrey’s Executor is still relevant, but it’s not controlling on today’s independent agencies given the enormous expansion in federal power among the executive branch agencies -- independent agencies today.


Now, everyone always wants to start this discussion with Humphrey’s Executor, as Judge Vaden discussed, but I actually think that that puts the cart before the horse. In my view, Humphrey’s Executor is just a narrow exception to the general rule that the Supreme Court established in a previous case called Myers in 1926 that held that the president has the executive power to remove all executive officers. In that case, it involved a postmaster. And Chief Justice Taft wrote the opinion for the Supreme Court holding that the statutory removal protections on the postmaster in that case had to yield to the president’s Article II removal power.


Now, Humphrey’s Executor came along about 10 years later, and, of course, that case involved a different agency—the multi-member Federal Trade Commission. And the Supreme Court distinguished Myers in that case on the basis that, unlike the postmaster in Myers, who was an executive officer, the FTC exercised no executive power at all. At least that’s what the Supreme Court said. Instead, the Supreme Court described the FTC as having quasi-legislative and quasi-judicial powers.


So the Court held in Humphrey’s Executor that the president could not remove the FTC commissioner in that case because the Court didn’t view the FTC commissioner as exercising any form of the president’s executive power. So that’s how things stood in 1935.


But fast forward to 2020, when the Supreme Court decided the Seila Law case. I’m sure you’re familiar with that one. And that case involved a challenge to the removal protections for the single-headed CFPB rather than a multi-member commission like the FTC. And the Supreme Court described Humphrey’s Executor in that case as involving a narrow exception to the Myers general rule, that multi-member commissions can’t exercise both substantial executive power and enjoy removal protection.


And under that test for the Humphrey’s Executor exception to the Myers rule, the Supreme Court held that the CFPB didn’t qualify for the Humphrey’s Executor exception because it’s both not multi-member, and, of course, the CFPB exercises substantial executive power. So the question that courts are now confronting is, “What does all this mean for traditional multi-member commissions, independent agencies that have both for-cause removal protection and exercise substantial executive power?” And we’re seeing this litigation play out in a number of different fronts: some cases involving the Consumer Product Safety Commission, others involving other boards like the NLRB. And I’m sure there’s more to come.


My view is that Myers and Humphrey’s Executor and Seila Law, under those cases, nearly all modern independent agencies are unconstitutional because none of them fit within the narrow Humphrey’s Executor exception to the general rule in Myers. Under Seila Law’s view of Humphrey’s Executor, multi-member commissions cannot enjoy both removal protection and substantial executive power. But today, nearly all multi-member commissions do exercise substantial executive power, from the FTC, the CPSC to the NLRB. They all exercise this substantial executive power by filing enforcement actions, issuing rules, and conducting adjudications, which I think, Professor Mascott, you’re gonna talk about in a little bit later today.


But what does all this mean for Humphrey’s Executor? Is it no longer good law? Is it a relic of the past? Does it need to be overruled? In my view, it’s simply just distinguishable from every other agency that exists today. Remember, Humphrey’s Executor was decided on a premise—whether right or wrong—that the FTC, at the time, exercised no form of executive power. It was a quasi-legislative, quasi-judicial agency exercising no form of executive power. But that’s not true of today’s independent agencies.


So, as Judge Jones wrote in the Fifth Circuit case that Judge Vaden mentioned involving the CPSC, Humphrey’s Executor is distinguishable in cases involving challenges to modern independent agencies because nearly all of them exercise substantial executive power, which means they don’t qualify for the narrow Humphrey’s Executor exception.


However, two of the judges on that Fifth Circuit panel disagreed and viewed Humphrey’s Executor as controlling in challenges to today’s modern independent agencies. And that view of Humphrey’s Executor is what allows the administrative state to continue to grow into the form it is today: exercising substantial executive power that is delegated to the president and yet independent from the president.


Judge Willett’s opinion for the Court viewed Humphrey’s Executor as controlling for all multi-member commissions that share the same structure as the FTC—that is, a multi-member structure involving five commissioners or five board members who also have removal protection.


Important to Judge Willett’s opinion for the Fifth Circuit is that the fact that there’s nothing historically unprecedented about this structure of a multi-member commission with removal protection. It’s been around, after all, for at least a hundred years—perhaps longer—if you trace it back to the Interstate Commerce Commission. And he distinguished the Consumer Product Safety Commission from the CFPB, which, in 2020, the Supreme Court addressed the CFPB in Seila Law and viewed that as a novel kind of unprecedented structure and distinguished the Consumer Product Safety Commission on that basis. I don’t think Judge Willis' view of Humphrey’s Executor is the best view of that decision.


The Fifth Circuit opinion, in my view, ignores or fails to really grapple with Seila Law’s characterization of the Humphrey’s Executor exception as being quite a narrow exception to the general rule in Myers. And according to what the Supreme Court said in Seila Law, only a multi-member commission exercising no executive power today would qualify for the Humphrey’s Executor exception. But almost no multi-member commission today would share that characteristic—almost none.


And so even though Seila Law involved an unprecedented decision situation involving a single headed agency with removal protection, that doesn’t mean that Seila Law is a fact-bound decision that only applies in the context of a single headed agency. I don’t think that’s a fair reading of Seila Law.


Now, it’s true that independent agencies have been around for a century or more, but the Supreme Court has never blessed giving multi-member commissions both removal protection and substantial executive power. So, in that respect, today’s multi-member commissions with substantial executive power divorced from the president’s control really is something that’s novel and unprecedented that the Supreme Court has never addressed.


So all of that said, I think Judge Willett’s opinion is probably not the last word on this subject. That case is still pending before the en banc Court. There are other challenges to independent agencies that are still pending. Certainly more will be brought challenging the current structure of the modern administrative state. But just to wrap up my remarks, I don’t think Humphrey’s Executor is controlling, but that’s not to say it’s not relevant. So I welcome other thoughts from the panel.


Prof. Jennifer L. Mascott:  Well, thank you. It’s so great to be here. And I guess I should start by saying that on these panels, we always like to have at least one counter voice, and for better or for worse, we’re missing ours today. I mean, Mike maybe will -- maybe he’ll argue with me a lot. But Jed Shugerman from BU was going to be here and unfortunately could not make it. So we are here to sort of discuss different aspects of the problem but maybe not directly contradictory views because I’m going to agree with Brett that, yes.


I think, unfortunately, Humphrey’s Executor is still very relevant. And just to step back for a second, as you all may know, the decision itself and lots of different aspects of it have been talked about. But essentially, it stands for the proposition that at the head of what are sometimes titled independent commissions or multi-member commissions, those commissioners can be protected by some form of tenure protection so that Congress can create their position and say the president can remove them only for some kind of good cause by statute as opposed to how the traditional executive department—like with the attorney general would operate or the Treasury secretary—where they can be fired at will.


And so not only does that create a legal limitation or a statutory limitation that the Supreme Court has found constitutional. That’s limiting the president’s ability to be able to fire someone on the back end. Essentially, Humphrey’s Executor, I think, in practice and in the mind of Congress and in the mind of courts, has come to stand for an even more broad proposition, and perhaps an even more troubling one, which is this idea that we’ve sort of given some kind of stamp of approval to the idea of multi-member so-called independent commissions.


And as a matter of practice, often presidents, or we think presidents should feel then less likely to direct these commissioners because the whole idea is that we want these independent agencies to act with expertise rather than carrying out some potentially nefarious political will, otherwise known as the will that is accountable to the electorate that has been supported the president’s election and for whom all executive power is supposed to be exercised.


So some of us kind of writing in this space, studying in this space, practicing in this space, I think, have reason to be concerned, just in general, about all that Humphrey’s Executor symbolizes, which is not just that there can be a modest removal protection for good government servants, but that the president really should not be able to direct commissioners.


And it’s not as though, I think, in our system, that we don’t want every government official, independently for themselves, thinking about the best way to serve the American public, the best way to fulfill their constitutional oath. The trouble is, of course, if the president is the only one who is selected by the electorate or the electoral college. So indirectly then really, we hope that commissioners or everybody else in the executive branch does a good job, fulfills their oath. But there’s no real means to make sure that those people are -- or no perhaps adequate means to make sure that they’re really carrying out the will of the people that they’re supposed to be serving subject to the president.


So I also agree with Brett that in a sense, however, Humphrey’s Executor, as a matter of law, arguably, is not -- could be seen as not still completely governing precedent in the sense that although the opinion is short, as Judge Vaden mentioned, it definitely relies on the idea that the FTC at the time, in the 1930s, was not really carrying out meaningful executive power. It was engaged more in studies, more in research, acting almost in a more advisory capacity, whereas now, of course, it is empowered by Congress over the decades to be bringing investigations and charges with large sums of penalties and other consequences at stake into federal court and so is exercising what we have come to understand in our system as some core executive functions.


And so, therefore, even if technically Humphrey’s Executor was saying that the statute governing the STC is constitutional, is the reasoning still valid today? Almost certainly not, although I think it probably would be helpful, given all that Humphrey’s Executor has come to stand for. If the Supreme Court were ever to take on again the question of the constitutionality of tenure protections, it would be good for the Court to not just rely on factual but in a full-throated way really reexamine where agencies are supposed to be situated within our system and also take on the idea about how closely the president needs to be able to direct the heads of the agencies.


So will the Supreme Court -- I mean, this -- obviously, this issue has been before the Fifth Circuit to an extent. Will the Supreme Court have a reason in the near future? How much reason to take on a full-throated reconstruction consideration of removal protections? Well, you all are probably aware that there’s a case dealing with some removal protections this term before the Court, Jarkesy v. SEC, where the Court can look at tenure protections for administrative law judges. So maybe it will take on at least the supervision over agency adjudicators this term.


Unfortunately, I think taking a broader look at removal protections among a variety of agencies, there’s less incentive for litigators to be bringing these cases these days because the Supreme Court, in certain instances, has suggested that the remedy -- the approach for fixing these cases is fairly limited. And there has to be a big showing reached before someone can establish that, actually, they were injured or harmed or their situation would have been different had the tenure protection not been in place. Some of these limitations are showing up in some of the separate writings of folks like Justice Thomas.


And the reason this becomes an issue is because in contrast to how Judge Vaden was describing the facts of the Humphrey’s Executor decision, where it’s actually the person who was removed and fired who’s bringing the challenge, a lot of times today, litigators, for better or for worse—litigators on either side of me—are bringing these cases in these challenges because there is a party who is unhappy with the action being taken by the agency. And so they’re using the constitutional challenge as one ground on which to challenge the basis of the underlying action. But no one is actually coming in directly as the party who was allegedly wrongly fired at will when they’re protected by tenure.


And so the Court is kind of -- the Supreme Court has, in a sense, been signaling that it’s going to clamp down, I think, on really providing meaningful relief in these cases. And actually, I oversee a clinic at Scalia Law School, and we had a litigator in this space recently who was going to bring a challenge to a removal protection in an agency and then decided not to because there’s not as much of a litigation incentive to do so.


So what’s the answer to that? Well, one potential answer—maybe with this we can kick up the intensity of the discussion a notch—would be for an administration to not just -- to actually -- is inclined to think Humphrey’s Executors wrongly decided to start actually instructing commissioners to effectuate the president’s agenda, maybe to just come into office and say, “I have an oath to the constitution. Humphrey’s Executor is no longer -- it’s not a constitutional precedent, and remove a commissioner who is sitting with the protection of potentially Humphrey’s Executor.”


And, all of a sudden there’s a test case, or perhaps that person would bring a challenge, or, if not, maybe the president would actually be able to carry out his or her will. And it’s not really that -- I don’t think -- it’s crazy to think such a thing might happen because my last comment I’ll make before handing it over to Mike is that the Biden administration actually, perhaps surprisingly, has been somewhat forward-leaning in this space.


Not only did they make a lot of efforts at the beginning to remove people who they statutorily had the authority to remove but by custom had always been allowed to remain in their spots—whether they be council members on the administrative conference of the United States or general counsels within agencies where we had a practice of just sort of treating them as independent—if they weren’t actually independent by statute, the Biden administration was sort of firing, getting rid of these people and putting in their own people.


And then they took an even greater step after the Collins decision by saying, “Oh, okay. So now, the CFPB head, the FHFA head, can be fired according to the Supreme Court. We’re going to now also get rid of the head of” -- was it the Social Security Administration? So they just did it the next day with an opinion justifying it, written by my old office. So, I mean, I don’t know why going in and firing a commissioner from another independent agency on the ground that this is most consistent with the Supreme Court’s modern decisions would be that much further of a step. But I challenge everybody here to tell me why that wouldn’t work. That’d be a really great, fun discussion. So on that, I’ll turn it over to Mike.


Michael McGinley:  Okay. Well, I’m happy to be here as well. Jen’s last comment actually reminds me of a joke I made when we got together to plan this panel, which was, “If you wanted to know how litigation occurred in the Trump administration as sort of this personal embodiment” because some agency, GC, in the White House counsel’s office, would conspire to do something crazy. OLC would bless it, and then Brett would have to go defend it in the Northern District of California or Baltimore.




Michael McGinley:  So I want to talk about something a little more mundane than that because, as Judge Vaden mentioned, part of my portfolio in the White House counsel’s office was the review of regulatory actions. And what that functionally meant was I spent a lot of time with OMB and particularly with a small office within OMB that is affectionately called OIRA, which stands for the Office of Information and Regulatory Affairs. If I were at any other conference, I’d probably, probably say, “You may have never heard of this agency,” even though it’s one of the most powerful agencies in the federal government. But I think everyone here probably has heard of it, which is why you’re at the Executive Branch Review Conference.


And the reason that I wanted to talk about OIRA review is because I think it’s one of the ways in which Humphrey’s Executor does remain relevant because while -- so just to take a step back and give a little history for those who may not be familiar with it, this process essentially was formalized under President Reagan in an executive order called 12291 that set up a system in which all major regulations—which is essentially defined by the economic impact or the significance of the policy—have to go through a process before they’re issued where they go into OIRA. OIRA comments on them, but OIRA also runs an interagency executive branch review process, involves the White House, involves other agencies that might have something to say.


And one of the key factors—but not the only factor—is whether the cost-benefit analysis checks out. There’s also legality review and also just the sort of basic function of making sure that agencies are all rowing in the same direction and not working across purposes.


Both parties have been very supportive of this process. I think it’s widely viewed as one of the best-functioning aspects of the federal government. During the Clinton administration, they adopted an executive order that’s called 12866, which is sort of viewed as the modern touchstone of OIRA review. The administrations after Clinton have sort of layered things on top of it. They kind of just flip flop back and forth like a lot of executive orders where Republican administrations will sort of emphasize the cost-benefit analysis in more economic terms, and Democratic administrations will generally be more qualitative and emphasize things that are more consistent with their policy goals.


During the Trump administration, we also had a few other executive orders that played into this process. One was called EO 13771. We called it “one in, two out,” which is basically the idea that any time an agency wanted to adopt a new regulation, they had to identify two regulations or more that they were going to get rid of. And OIRA essentially enforced that through that review process.


So why is Humphrey’s Executor relevant to this? Because by and large, independent -- so-called independent agencies have been exempt from the OIRA review process from the very beginning, even though OLC and other lawyers in the government and outside lawyers from -- on both sides of the aisle have said it would be perfectly fine to subject independent agencies to the OIRA review process. And, in fact, in 2019, when Jen was in OLC, that office issued a very well-done 31-page, I think, opinion saying that it’s entirely permissible to subject independent agencies to OIRA review.


And so the question is, “Why haven’t -- why hasn’t a White House done it?” And I think there’s a lot of answers, some of them practical. But I think the key answer is because of Humphrey’s Executor, because the question is, “What if a president says to independent agency heads, ‘You have to subject yourself to this process?’ and they say, ‘No, I don’t. What are you going to do about it?’” Really, the only recourse would be to fire them. And at least with respect to the multi-member agencies, I think there’s been a concern that nobody wanted to create a constitutional crisis, so to speak, over OIRA review.


But what does that mean as a practical matter? It means that those agencies—some of which regulate large swaths of the American economy and increasingly are doing so in aggressive and onerous ways—don’t go through that review process that people, as I said, from both sides of the spectrum, really think is good. It’s aimed at good government. It’s aimed at making sure regulatory actions are well considered, that they’re legal, that they are consistent with other actions, that the cost-benefit analysis has been undertaken in a very rigorous fashion.


There’s also sort of general -- a restraining force of review, particularly -- or interagency review within the entire executive branch. So we don’t get the benefit of that from these agencies. And then also just the efficiency that goes with, when that’s done well, the regulations that come out tend not to be -- not have much litigation risk. And so you don’t go through a process where a regulation is issued. An entire industry reacts to it, conforms to it. It gets challenged.  It gets struck down, and then some new regulation has to come in its place. And generally, that’s not an efficient way to run government.


So I would say, yes, it is still relevant, although I do agree with -- generally speaking, with what Brett and Jen have said about its constitutional validity, we’ll say. And maybe this is -- who knows? Maybe a new administration will come in and finally take the leap on the basis of the 2019 OLC opinion and say, “We are going to try to bring these agencies into OIRA review.”


It’s a way that you can end up with a conflict that maybe would be viewed as good cause. I mean, I suppose that’s one way it could get resolved, is that the statutes that provide for good cause removal, maybe not following the president’s directive to, at some level provide opinions to him, which is a constitutional power that he or she has would be good cause. But it’s an area where Humphrey’s Executor, unfortunately, remains quite relevant because it’s not allowing us to get the benefit of this review but also could be relevant as the way that the next case comes up. So I’ll stop there.


Hon. Stephen Vaden:  Well, thank you all for those opening comments. You’ve spurred a couple of questions in me, and hopefully, you’ve spurred a couple questions in our audience. So be thinking of those questions. But I want to play off of some things that the professor and Mike, you said, thinking about the future and how someone who’s interested in the president asserting control over the executive can take charge or at least attempt to take charge and the pluses and minuses of doing so.


So we’re, of course, currently in an election year. The candidate who is challenging the incumbent, if elected, could only serve one term because of the Twenty-Second Amendment. He could not run for reelection again. That means that if you’re looking at one of these multi-member commissions whose commissioners serve terms and that term of years is set up so that the president’s party typically has a majority on these commissions -- but it’s not guaranteed because it all depends on when the commissioner’s terms ends.


So you could have a situation where if the challenger wins the election this fall, that that challenger, having only four years in office, could find for the vast majority of his tenure these so-called independent agencies could be under the control of a majority appointed by the defeated president.


That would appear to perhaps give an incentive for the more important ones—maybe the National Labor Relations Board, to take an example, of one that’s been involved in a lot of hot-button litigation—to see whether or not you can fire one of these people to give yourself a majority and see to it that during your presidency, you might be able to actually get some things done.


On the other hand, one independent agency that we haven’t talked about is the Federal Reserve. And the Federal Reserve, for better or worse, is independent and controls monetary policy in the United States. There are a lot of interesting constitutional questions involving not just for-cause removal but also the appointments clause with regard to how the Federal Reserve and its board of governors is constituted.


There’s been a lot of controversy about the Federal Reserve, starting with the fact that your dollars are worth 20 percent less than they were four years ago, thanks to inflation, which is one of the primary jobs of the Federal Reserve, namely to ensure that inflation doesn’t happen. It’s also gotten involved in certain other political controversies involving DEI and ESG—to use two acronyms most people in this world room know.


And Jerome Powell is the head of the Federal Reserve. He has for-cause removal protection. He also presided over the worst inflation in 40 years. But there’s been a thought that I’ve heard expressed more than once that lurking in the background of the Supreme Court’s jurisprudence in this is a worry that if we go too far—that is to say, throw Humphrey’s Executor into the garbage can one way or the other—there might be worry about what a president could do to the independence of the Federal Reserve. And if you believe that the Federal Reserve is the guardian of our monetary stability, that might worry you.


So I’m wondering, if you were sitting in the White House counsel’s office again, Mike—and then we can turn to the professor—somebody came to you and said, “I’d like to the chairman of the NLRB so that I can have a majority and we can stop these things that are being done,” how would you advise them, and how would you weigh the pros and cons of litigation risk?


Michael McGinley:  Very interesting question. It gives me sort of chills and flashbacks to 2017, I guess. And I should, of course, as a law firm partner now, I should give the caveat that these are my personal opinions. I’m not providing anybody here legal advice.


I mean, look. The first question is always, “Is the game worth the candle,” as they say, right? Is it worth going through with it? Will it have a significant enough impact? That’s a practical question. The question of do I think that a case that went all the way up to the Supreme Court would result in that action being held unlawful? I don’t think so anymore.


I think I agree with Brett that, at some level, Humphrey’s Executor, in part because of the way it was reasoned is still valid. And I think the Fifth Circuit opinion is a very interesting debate about how to apply this sort of Shearson principle of whether lower courts should treat Supreme Court decisions as no longer valid before the Supreme Court has said so.


But I think probably what I would advise my client in that situation is that there’s a better than 50 percent chance that you win at the Supreme Court, but you have to get them to grant cert first, which they have discretion to deny. And there will be a lot of pain in between now and then, and you’d have to figure out whether it was all worth it in the end.


Hon. Stephen Vaden:  Well, I’m curious to hear Professor Mascott’s thoughts, but I’m also curious. Even if you lost, what’s the remedy? Is the remedy you get your job back, or is the remedy what Humphrey was asking for, his $10,000 salary for the remainder of his term? If it’s his $10,000 salary for the remainder of his term but he doesn’t get his job back, do you care?


Michael McGinley:  Yeah. I’ll say one really quick thing on that, and then I’m going to turn it over to Professor Mascott because she’s much better suited to answer this than me is I think that does raise interesting separation of powers questions on its own, whether the judiciary can enter an injunction that an executive branch has to be reinstalled against the wishes of the president. So maybe the remedial question you raise would be a middle ground, but I’ll hand it over to Jen.


Prof. Jennifer L. Mascott:  Well, I mean, yeah. So I’m here speaking with the luxury of a law professor, so I’m going to resist the hypothetical just a little bit.


Hon. Stephen Vaden:  Do you allow your students to do that?


Prof. Jennifer L. Mascott:  Well, do I allow them to do it? No, nobody would try. No, I’m just joking. So what’s the right thing to do here? I mean, I think just a few points.


First of all, I mean, everybody in the executive branch, elected or not, has taken an oath to fulfill the Constitution, follow the law. So to the extent I were advising any of us here, anybody in the executive branch, I would always advise to first and foremost keep the constitutional oath and comply with statutes in the Constitution, number one.


Number two, sometimes, we do like to think about these hypotheticals in the abstract or think about making a big splash or making a political point. I mean, so I don’t know. I’m not speaking now as executive branch advisor, but just in general, as a good governance, what would be the best thing for the country? I think you do what is required -- what is constitutional, and then required to do your job.


So it seems to me that the best thing—probably strategically—but also the right thing to do would be to think about what are the policy priorities that I believe are necessary for the country that I was elected to put into place. And if those policy priorities involve having to direct somebody—whether they’re on a commission or the NLRB or the treasury secretary, whoever it is—to do something, then I would try to talk to my lawyers about the best way to do it.


And it seems to me -- I mean, they’re probably, to Mike’s earlier point, how these good-cause statutes are written, I mean, the reality is the courts—particularly the Supreme Court—have never really done much to interpret them. So there’s a high likelihood that if the president could actually give a direction to these folks, and then their disobedience of it or direct flouting of it would actually be cause to fire them, you fire them. You say that’s cause. And then maybe a Court finds that was lawful under the statute. If they don’t, then they would have to -- they’d be pressed to have to come up with an interpretation of the statute that’s also constitutional that says the president, in really carrying out his elected agenda lawfully, cannot fire these people. Well, why? How could that be? That’s certainly not going to be constitutional in consistency with the reasoning of most of this modern Supreme Court’s recent opinions. So that’s the first thing I want to say.


The second thing to the FED reserve point, Judge Vaden, I do think that that is often used by people both for and against these doctrines to try to press a point. And I really would think as a policy matter and maybe even a constitutional matter or even a congressional matter that we’re not going to make a lot of headway on these issues so long as we keep conflating the Federal Reserve because there’s just a totally different set of things going on over there.


Of course, the Federal Reserve has a lot of power. It’s a different kind of power than what’s going on with the FTC, the SEC, the CFPB—these agencies that are basically making major decisions with ramifications in individual people’s and businesses’ lives. And it seems to me that we should be able to think constitutionally about whether we want an independent commissioner to be able to kick somebody out of their given profession, impose hundreds of millions of dollars of penalties, all free from any kind of meaningful accountability. And we have to be able to get a handle of that separate and apart from monetary policy.


And then the final point is, if the Federal Reserve constitutionally has independence concerns that gets conflated with everything else, it might actually be right that we don’t want to get rid of those if it’s going to mean the president—one person—is governing monetary policy. I mean, I don’t think probably -- maybe I’m going to say something controversial here. I wouldn’t even think the president would want to do that.


Probably the answer there is the Federal Reserve is doing too much, right? I don’t think that we should necessarily have an -- we don’t necessarily need to think that we should have an independent Federal Reserve to say perhaps one person should not be making those decisions. The Federal Reserve maybe shouldn’t be making them. I don’t know. I’m not a monetary person. I think everybody should just sort of categorically set that aside, if we can, and get a handle on the other really important things that are happening right now that are impacting business and personal rights in a very real way.


And then the final point is, if it can’t be done in litigation, I also think there needs to be a lot done to educate Congress staff members and get them looking at these policies that they put into place because who can immediately change these things overnight or by passing laws? It could be Congress just creating the structures because we’re not saying -- nobody has ever constitutionally said, “You must have tenure protections for the Federal Reserve or the SEC or anybody else.” It’s all because Congress is putting these things into place to try to effectuate control. And to the extent that it’s just not working for average citizens, maybe our lawmakers need to be persuaded as well.


Hon. Stephen Vaden:  I have one follow-up question to that just to push back a little on your point about the Federal Reserve being different. The Federal Reserve is currently engaged in a rulemaking proceeding that would markedly ratchet up the amount of reserves large banks have to keep on hand. That would have the effect, so bankers tell me, of limiting the amount of credit that they can pump out into the economy. If you’re Jamie Dimon, how does that rulemaking by the Federal Reserve -- how is that different than anything the Securities and Exchange Commission does?


Prof. Jennifer L. Mascott:  Well, so I’m just -- I’m making a character point. I’m not talking about the practical implications. I’m making -- because I’m talking about what’s happening in the adjudication space, the individual application to people’s livelihood. So again, I’m not talking about the vastness.


Obviously, the Federal Reserve has got to be doing things that systemically have way more impact than all of the other issues. I’m talking about the power to be able to bring an individualized charge, get a hold of individual people’s records and say, “You are no longer certified to practice in the securities industry. You owe us $300 million in penalties.” Those kinds of things are more principally the big-impact things in the adjudication space that are happening in a lot of these other commissions.


And figuring out the proper way to impact Americans lives—by the way lives that used to be protected with the jury trial right—is just a different character and category of question than getting the Federal Reserve under control, which is also absolutely 100 percent important. And I’m not saying we shouldn’t go after it. I’m just saying to the extent that it’s being used -- that the conflation of the two is being used to weaponize and paralyze and make us able to deal with nothing, we should take -- we should try to -- we should just try to separate them, either as a policy matter or strategic matter.


And the final point, I mean, sometimes, the reality about why these things don’t get done—whether it’s the application of the OIRA opinion or anything else—is because the politics and the practicalities of running any major administration are really complicated. And sometimes, as a -- just a governance matter, it might be in an executive’s best interest to apply these policies to some and not others.


And so sometimes, with the OIRA opinion, you have to sort of convince everybody across the administration that they all want it to apply to them. And maybe there’s not the political will to do it. So I don’t know what the answer is there. I don’t know if the answer is to just apply it where it works. I don’t know if the answer is just to convince people that the greater good is better than the parochial interest of each department that might be objecting to some of these things. But I just think some of these questions are complicated in Republican and Democrat administrations. And I would love folks to be willing to take a more theoretical, broad-based approach to really answer them because I think the liberty of the country in the future is at stake.


Hon. Stephen Vaden:  Brett, you litigate these things, and you’ve also defended presidential executive orders. What do you think?


Brett Shumate:  So I actually think if I were in the White House where Mike was, I would tell the president, “It’s really a question of your political risk tolerance” because, yes. You could advise the president, “There’s a 51 percent chance that you could win at the Supreme Court. There are good arguments. It’s going to be litigated.” But do you want to take that political heat of firing a commissioner of a multi-member commission that has a statute that says, “You can’t fire this person unless there’s good cause”?


And I think it’s telling. I can’t think of any example since Humphrey’s Executor where a president has actually fired a commissioner as part of a multi-member commission to kind of test Humphrey’s Executor. I think that’s a testament to the relevance of Humphrey’s Executor over the last nearly 90 years, the fact that presidents have not tried to remove the head of the FTC or other agencies because even more recently, President Trump did not remove the head of the CFPB until after the Supreme Court had ruled in Seila Law. And same thing with the FHFA. President Biden didn’t remove the director until after Collins, after the Supreme Court had weighed in and said to, basically, excise their removal protection.


So I think it’s a question of political risk because at the beginning of a term, is this going to be on the top 10 list of what a president wants to accomplish, or are they going to want to accomplish policy goals with agencies where they -- Jen, you want to jump in?


Prof. Jennifer L. Mascott:  No, no. Just when you’re done.


Brett Shumate:  Okay. Because there’s going to be immediate blowback from Congress, right? These are statutes that haven’t been violated, so to speak. And once a president kind of crosses that Rubicon, there’s going to be an impeachment risk, other political risks from Congress. And is that really a risk that a president politically wants to take at the beginning of administration when it has other policy priorities?


Hon. Stephen Vaden:  One further hypothetical that was just -- I took a look at -- I listened to what Mike was saying. He posited an executive order. That’s something formal. That’s a formal exercise of presidential power, a document that he would sign to say, “Guess what, FTC? You have to send all your rulemakings to OIRA.”


There are a lot of things that presidents can do that are informal. They nominate people for office. When it comes to independent commissions, they have the ability to designate who the chairman is. It doesn’t require a nomination. They can just come in on day one, as President Biden did, and said, “I want my person to be chairman instead of the previous guy’s person.”


Posit this. This would probably never happen, but you tell me if you think there’s a legal problem with this. New president gets elected, comes into office. He’s looking at all these multi-member commissions. He’s got to think about who he wants to be chairman of the commission. He thinks he’s identified someone who might be a good leader of -- I’ll just pick the FTC because it’s what everybody knows. It could be any of them—Federal Trade Commission.


Brings that current commissioner in, says, “Hello, commissioner. I think you’d make a great chairman of the Federal Trade Commission, but I need to know one thing. If I call you up and tell you to do something, will you do it because you have control over the agenda? As long as it’s not illegal. I don’t want you to do anything illegal. I just want you to put my policies in place. Now, if you tell me ‘no,’ I’m not going to make you chairman. I’m going to call that other person and see if they’ll do it. You want to be chairman? Say yes.”


Now you have the argument that maybe they can’t be fired. That’s still to be tested. On the other hand, if the president of the United States asks you to do something, that’s a pretty powerful incentive for most people—assuming it’s not blatantly illegal—to want to find a way to help the country. What do you think about that?


Brett Shumate:  I think the president could do that because, generally, these statutes give the president discretion to move the chairmanship around among the commissioners. So, for example --


Hon. Stephen Vaden:  He does have the ability to take that laurel away if you don’t do what he wants.


Brett Shumate:  Yes. Right. So, for example, FERC. He could say, “Okay. We’re not going to have a Democratic chairman, but he can invite the two Republican commissioners or -- into the White House and ask, ‘Okay. Which one of you are going to do my bidding?’” and then designate that person as chairman. I don’t see a problem with that.


Hon. Stephen Vaden:  Mike, any problem from your perspective?


Michael McGinley:  I mean, not having looked at the text of the statute, I think what Brett is saying sounds right to me. Or even in an appointment’s context, where the president has discretion, he or she has discretion to make that decision.


Prof. Jennifer L. Mascott:  Well, I just think, again, that with some of these issues, it’d be -- we’re used to thinking about them in the abstract, and we shouldn’t think about any of them in terms of fixing for a political fight or a test case. And I really think, even going back to the political risk and the NLRB that it doesn’t have to be evaluated in the abstract if the president is coming in and effectuating an agenda.


So, for example, with the FCC, why would that question have to be posed in advance? Just have a discussion, figure out generally the policy goals, put in place the chairman. If they don’t do what you’ve said later, then you remove them from that spot -- or the NLRB. You put in place a politically popular program that the president is smart about; the president wants to do it; it’s in the president’s interest, and the president’s going about doing his or her job and it’s directing the people who are serving him.


And then if the NLRB chairman says, “No, I’m not going to call on the carpet this head of this labor union or whatever,” then, at that point, you say, “Well, you haven’t done what I’ve told you to do,” and you fire them. And in a sense, it’s the same thing. I guess you still have a political risk management, but at least it’s because I’m trying to do something for the country and to carry out my job.


It’s not, “I’ve come in with some shock-and-awe strategy, and I’m doing this just for the sake of a fight.” And I just wonder if the political analysis in that context would be a little bit different. And I wonder if the discussion will look a little bit different if you’re on the ground actually trying to run the FTC rather than the president or whoever, forcing you to some commitment in advance because a lot of these things can be really hard to analyze in the abstract. And it seems to me the time there’s been the most chaos has been when people have been trying to make a political point or cite things in the abstract rather than govern for the good of the country. I don’t know.


Hon. Stephen Vaden:  As a trial judge, I appreciate your focus on building a factual record before you come into Court. That’s very important. I hope you all will start lining up in the microphones because I’ve just got one question, and I’m going to ask it so you don’t have to. There seemed to be a lot of focus in all of the cases involving this—whether it’s Humphrey’s Executor or the more modern interpretations—about multi-member panels, commissions that have more than one person on them that are partisanly split.


Now, I’m on the Court of International Trade, so we have limited subject matter jurisdiction. They may not give me a complete copy of the Constitution. But I don’t remember the Multi-Member Expert Panel Clause of the Constitution. And I’m just wondering what makes having more than one person with different partisan affiliations on a body so special, particularly since that’s an invention of the twentieth century node the eighteenth.


Brett Shumate:  I think the theory is that a panel of five will kind of moderate itself, whereas if you have a single independent agency head, that person could act kind of by himself or herself. But when you have kind of a partisan-balanced group, there needs to be consensus, a majority vote, and you have dissenting commissioners who can call out the majority when they’re going astray. At least that’s the theory behind a multi-member structure.


Hon. Stephen Vaden:  I mean, that’s a theory. I’m just asking what the legal basis in the Constitution for that is that somehow they get special protection.


Brett Shumate:  None.


Hon. Stephen Vaden:  You said it; I didn’t. Let’s go to our questioners. To my left first.


Curt Levey:  Thanks. Curt Levy, Committee for Justice. Question for Jennifer. You said that the Supreme Court has signaled that it’s not going to really take on Humphrey’s Executor as an alternative in a case where it’s an alternative argument. In other words, the FTC wrongly prosecuted me. Here are the merits. But by the way, also it’s unconstitutionally strict, structured because the commissioners can’t be removed.


I was wondering, one, could you elaborate in which cases the Supreme Court has signaled that? And then two, do you think that the Court has signaled that just with regard to removal of commissioners or more generally with the structural constitutional issues that people have been making now in -- as alternative arguments, such as the Seventh Amendment right to a jury trial or the fact that the commission acting as a judge and jury violates due process? Do you think the Supreme Court is not going to really tackle any of that unless it’s brought head on rather than just as an alternative argument?


Prof. Jennifer L. Mascott:  I don’t recall saying that the Supreme Court wouldn’t consider the argument. I do think that the Supreme Court, in separate -- some of the members of the Supreme Court in separate writings have suggested that for the removal limitations to actually -- like the error there to require meaningful relief, that you have to demonstrate that had there been a difference removal protection in place, the whole outcome of your case would be different and that litigants are finding it hard to be able to feel like they can bring a meaningful claim and have the financial incentive or otherwise to bring litigation with that in mind.


I don’t think the Supreme Court there -- it’s actually the members of the Supreme Court who are most predisposed to find Humphrey’s Executor entirely unconstitutional. I think they’re being motivated by a different concern, which is they’re trying to make sure they’re resolving cases and controversies and not refashioning administrative agencies under the auspices of litigation. So it’s just almost an unfortunate set of circumstances coming together.


The other thing I might have said is, in Jarkesy v. SEC, as you mentioned, there are several questions before the Court, and we don’t really know what the Court is going to conclude in that decision coming up from the Fifth Circuit, except that there’s a jury trial right claim. And so it seemed like, from oral argument, the justices are most likely to focus on how individuals have the right to jury determination of common-law fraud type claims, not to allow the SEC to determine those disputes in their own courts. Yeah. So, hopefully, does that answer?


Curt Levey:  Mostly. So I see your point, which is it’s very hard to argue that I would have had a different result if not for the fact that the commissioners are protected from removal. I think it’s easier to argue I would have had a different result if I didn’t have to go through an administrative proceeding, if my right to a jury trial was -- so do you think there, the Court would not have the same reservation that it would be willing to say, “Even though this is -- even though it’s an alternative argument, we are going to fashion a remedy”?


Prof. Jennifer L. Mascott:  I don’t think the Court -- well, I’m not trying to say that I think this current Supreme Court has a reservation about resolving Humphrey’s Executor. I’m making a comment about litigators. Litigators are not bringing it because parties do not have -- or not as motivated to bring these claims and press the envelope and get all the incremental cases up to the Supreme Court because they don’t feel like it’s going to help their clients.


Will the Supreme Court take on Humphrey’s Executor? I would have said in the past, I think maybe no, because, in the past, like, these chief justice opinions, like in Free Enterprise Fund, have been about as incrementalist as one can get. Although I feel like the last couple of years, I’m really rethinking this because we have Dobbs; we have Harvard; we have UNC. The court is in a full-throated way taking things on. And so I think actually maybe it could, and maybe we’ll see a bellwether this term with whether they take on Chevron.


Curt Levey:  Will they maybe take on the Seventh Amendment?


Prof. Jennifer L. Mascott:  What do you all think?


Hon. Stephen Vaden:  Let’s go to our next questioner.


Questioner 2:  Hi. Thank you all for being here. Is there a procedure for removing an independent executive branch official for bad behavior? And if so, what does that look like?


Michael McGinley:  So I think the answer is it’s all statutory. So for each relevant independent agency, there’s some organic statute that sets up what the tenure protections are. And they’re all generally phrased in similar ways that revolve around a concept of good cause. But some of them do use slightly different words. So I think in terms of a mechanism, again, without looking at the statute off of sort of memory or gut feeling, I think it would be -- the president would essentially send a letter saying, “I think you’ve -- I’m firing you for good cause. Here’s the cause. And you are to resign immediately, or you’re fired.”


Questioner 2:  Okay, thank you.


Michael McGinley:  Yeah.


David M. Wagner:  Hi. David Wagner, Free Families Foundation. I have a question about Humphrey’s Executor itself—maybe too basic a question. Quasi-legislative, quasi-judicial. I wonder, and I always have wondered, why—especially in the hands of a strict constitutionalist like Justice Sutherland—why the case wasn’t over in the plaintiff’s favor as soon as that concept hove onto the horizon because the Constitution creates an executive branch, a legislative branch, and a judicial branch. It doesn’t create a quasi-legislative branch or a quasi-executive branch. The only way something like that can be constitutional, it seems to me, is if it is executive, and if it executive, the president gets to boot the guys he doesn’t like.


Michael McGinley:  I think you’ve read Brett’s brief in the Fifth Circuit case.




Brett Shumate:  I think you’re describing why the reasoning of Humphrey’s Executor doesn’t really hold up. And the Supreme Court in Seila Law says, “Right or wrong, we just have to take the opinion on its own terms of what it said. And so President Roosevelt lost that case because the Court situated that officer outside of the executive branch. So therefore, the statutory removal protections were valid because this officer wasn’t exactly -- wasn’t exercising executive power.” But the Court didn’t explain what power -- which branch that power fit within.


Questioner 4:  Hi. I was just going to ask y’all to expand on a theme that I think a number of you guys have brought up in different contexts, and that’s sort of predicting out what we should expect to see from future Democratic administrations. My sense is that they’re sort of caught between both a sympathy for White House control of the executive branch when they’re in power but also, if they’ve got a civil service that maybe might be slightly more sympathetic to their policy agenda when they’re out of power, more sympathy for removal protections.


Obviously, you see the debate about the Schedule F issue, which may not be directly on point, but I think fits the same trend. So I wondered if y’all had anything to add in terms of sort of how you would see it going -- how you would see it unfolding going forward in either a second Biden term or in whatever near future Democratic administrations we might see.


Michael McGinley:  I’m happy to take a first crack at it. I think it does go to really Jen’s -- Professor Mascott’s point about it’s one thing to talk about stuff in the abstract. But then when you’re actually governing, you maybe have a different perspective. And then also, there’s -- I think part of the reason that you haven’t seen a frontal assault on multi-member commissions by presidents of either party is that there’s a sense of like, “Well, it is kind of helpful to have a dissenting voice on the FTC or the SEC or the NLRB” when that -- when your party is out of power because you have somebody who’s going to flag for litigants or for senators or Congress members or outside commentators, sort of what the best arguments are against a regulatory action or what some things that might be going on inside the agency that are less savory. So I think that’s part of it is just there’s that practical reality. I think probably, at some point, the OIRA review will happen in some capacity. They are required to at least submit regulatory agendas, and the independent agencies abide by that, right?


So I just don’t know when it will be, and it does go to the theme of just doing anything different requires political capital and human capital because it’s not even -- you get in, and the SEC commissioner might say -- the SEC chair might say, “I’m with you. Humphrey’s Executor is terrible. But I’m the chairman now, so trust me. I can do this. I can deregulate so much faster if you don’t make me go through OIRA review or if you don’t bother me or this or that.” So I think some of it is just at that human level.


Brett Shumate:  And one thing to add is that, sometimes, presidents like independent agencies because it gives them plausible deniability when they do things that are unpopular. So, for example, last year, the Consumer Product Safety Commission, the news leaked that it was going to ban gas stoves.


And the White House issued a statement saying, “The president does not support banning gas stoves. And by the way, CPSC is independent, so not my fault.” So the president and the White House can kind of work behind the scenes and shape policy and push things. But when the agencies go a little bit too far or things become unpopular, they can say, “Well, that’s not me. It’s an independent agency.”


Questioner 5:  So a question about the Fifth Circuit’s opinion. I’m wondering if people have thoughts on Judge Jones’ dissent. And also, do you all plan to file a cert petition? And sort of what will -- if it is already filed, what will be the question presented? How far could the Court go in this concrete case, and what will you be asking for?


Brett Shumate:  As a former clerk, I think Judge Jones is always right. So I’m obligated to say that the case is pending on rehearing en banc. So that petition is pending. We haven’t heard from the Court for a couple months. So we’ll have to wait and see if they take it up en banc or not. So more to come in that case.


Hon. Stephen Vaden:  All right. Do any of our panelists have any closing thoughts? Seeing none. Thank you all so much for joining us here this afternoon, and I hope you enjoy the reception in a little bit.




Nathan Kaczmarek:  Let me just say thank you to the judge and our great panel. If you would like to, the other panel that’s going on from our Environmental and Property Rights Executive Committee is still going on for the next half hour. You can join the last bit of that in Palm Court. And then our closing reception will be at 4:30. So thank you very much.

2:45 p.m. - 4:30 p.m.
Breakout Panel 5 - Environmental Law and the Constitution: Exceeding the Limits


Palm Court Room
The Mayflower Hotel
1127 Connecticut Avenue
Washington, DC 20036


Event Video


In his Sackett v. EPA concurrence, Justice Thomas suggested that "many environmental regulatory schemes” appear to "push the limits" of the Supreme Court's constitutional jurisprudence. The Clean Water Act and Endangered Species Act regulate land use without a clear connection to interstate commerce. States complain that federal environmental regulation unnecessarily intrudes upon state sovereignty and privileges some environmental states over others. And environmental regulatory enforcement raises some of the same constitutional and due process concerns that have been raised about SEC and FTC enforcement. Does this mean that federal environmental law, as currently implemented and enforced, is unconstitutional?


  • Eric Grant, Partner, Hicks Thomas LLP
  • Matthew Kuhn, Solicitor General of Kentucky
  • Prof. Andrew Mergen, Emmett Visiting Assistant Clinical Professor of Law in Environmental Law
  • Moderator: Corrine Snow, Counsel, Vinson & Elkins


Event Transcript

Stephanie Maloney:  Welcome to another excellent panel in The Federalist Society's Executive Branch Review Conference. This panel is titled, "Environmental Law and the Constitution: Exceeding the Limits." There's maybe supposed to be a question mark after the end of the title, but I'll leave to Mr. Mergen here to dispute that as we go on.


      My name is Stephanie Maloney. I am Chief of Staff and Associate Chief Counsel at the U.S. Chamber Litigation Center. And I'm also a member of The Federalist Society's Practice Group for Environmental Law and Property Rights, so very happy to be with you all today. That Practice Group is sponsoring today's breakout panel, and many thanks to members of the Practice Group who helped to plan today's program.


      It's my pleasure to introduce today's panel, and save for Matt, it feels a little like an ENRD alumni reunion, so I'm very happy to be a part of it. Of course, Matt has worked on enough WOTUS litigation to be considered an honorary member of the division, so we're happy to have him too. Litigation over WOTUS has seemed one of the constants in environmental law over the decades. But in his Sackett v. EPA concurrence, Justice Thomas suggested that this and "many environmental regulatory schemes" appear to "push the limits" of the Supreme Court's environmental and -- or should I say the Supreme Court's constitutional jurisprudence. What exactly does this mean for federal environmental law as currently implemented and enforced? Is it—dare we say—all unconstitutional?


      To kickstart this debate, I'm delighted to introduce our moderator, Corinne Snow. Corinne is Counsel at Vinson & Elkins and former Counsel and Chief of Staff in the Environment and Natural Resources Division of the Department of Justice. In that role, she helped manage the division's civil and criminal litigation arising under more than 150 environmental and natural resources laws, although I'm sure none of the unconstitutional ones. She also helped to manage the division's more than 400 lawyers. So with that experience, she's certainly well-qualified to moderate today's discussion. So I'll turn things over to Corinne to introduce our panel.


      Thank you.


Corrine Snow:  Thanks, Stephanie.


      So, as Stephanie said, we don't have a constitution that has a general regulatory clause in it, but we have federal statutes that govern things like our air, our water, critters, that don't necessarily respect state boundaries. So how do the agencies like EPA and the Department of Interior, who are tasked with managing those resources, deal with those issues? And are they respecting the constitutional boundaries between them?


      So I'm very pleased to get to moderate this panel who's very well qualified to discuss these issues. As Stephanie said, two of the members are former colleagues and men who I consider mentors, and the third one I've got to enjoy reading his briefing and writing and very much admired it as well.


      So we'll start from the end with Matthew Kuhn who is the Solicitor General of the State of Kentucky where he oversees all of the appeals of their civil and criminal litigation. Before that, Chief Litigation Counsel to the Governor of the State of Kentucky. He formerly practiced at Jones Day and was a law clerk to Judge Gruender before that. So very, very pleased to have him here. And he is—as Stephanie said—leading the charge on some of the Waters of the United States litigation going on right now.


      Sitting next to me is Eric Grant, who is currently a partner at Hicks Thomas. Before that, he served as the Deputy Assistant Attorney General for the Environment Division, overseeing all of the appellate litigation there. He saw a number of the high-profile pipeline disputes while he was there, including ones that went to the Supreme Court, like the Atlantic Coast Pipeline. He was involved in the Keystone XL litigation, the Juliana climate change kids' litigation cases that span from the district court all the way up through the Court of Appeals and the Supreme Court. He is a former law clerk to Judge Edith Jones on the Fifth Circuit, Justice Thomas, and was the last clerk to Chief Justice Warren Burger, which I invite you to ask him about after this panel.


      And then, Professor Andrew Mergen is now the Director of the Emmett Environmental Law Center at Harvard Law School. Before that, he spent his entire career at the Environment Division, starting as an honor grad after he graduated and working all the way up to being the Chief of the Appellate Division.


      And here at The Federalist Society, we are all about a robust debate, not fighting straw man versions of the argument on the other side. And I will say that Andy is about the furthest thing you could have from a strawman. I can't think of any major environmental or natural resource issue over the last couple of decades that he has either not been involved with or thought really deeply about. So we are really lucky to have him here with us today. And I'll also that, while he certainly does not always agree with us on everything, I think every conversation that we had with him about the issues while we were there, we all came out better for having heard his views on it, and so I hope you all do today as well.


      Before I turn it over Eric to start, just to give you a breakdown of what we're going to do, first each of our panelists will talk for about eight to ten minutes and give some opening remarks. Then I'll give them the opportunity to respond to each other's remarks, ask a couple of questions, and then we will open the floor up to questions from all of you. So please be thinking about what you want to ask, and I'll let you know a little bit before we're going to start, so everyone can start lining up.




Eric Grant:  Thank you, Corinne, for that kind introduction, and I thank The Federalist Society for inviting me to participate in this august conference. It's a pleasure to share the stage with my former colleague, Professor Mergen, and with Solicitor General Kuhn.


      Both Stephanie and Corinne mentioned Justice Thomas' concurring opinion in last term's Sackett v. EPA, including the suggestion that many environmental regulatory schemes appear to push even the limits of the Supreme Court's Commerce Clause jurisprudence, and so Sackett is a good place for us to start. That case began in 2007 when Michael and Chantell Sackett, who owned a two-thirds acre residential lot near Priest Lake, Idaho, began preparations to build a house on that lot. But in the words of the administrative compliance order issued by EPA, the Sacketts "discharged fill material into wetlands at the Site." Now, that's EPA speak for filling in part of their lot with dirt and rock. And because in EPA's view that one-half acre constituted jurisdictional wetlands, the filling violated the Federal Water Pollution Control Act, usually called the Clean Water Act or CWA.


      So being good Americans, the Sacketts sued EPA to challenge the agency's application of the act to their property. And it took five years for the case to reach the Supreme Court solely on the jurisdictional question whether that administrative compliance order issued by EPA was "final agency action" subject to judicial review under the Administrative Procedure Act. And the Court ruled unanimously that it was. It took another ten years for the case to reach the Supreme Court on the merits, the question whether the Sacketts residential lot fell within what the Court called the "outer boundaries of the Clean Water Act's geographical reach." And in the interest of the full -- in the interest of full disclosure, I must confess that I represented EPA when the case was most recently pending in the Ninth Circuit, but I secretly hoped the Sacketts would win.


      The geographical reach of the Clean Water Act is a question of statutory construction. And Section 404 of the statute prohibits the "discharge of dredged or fill material into the navigable waters" without a permit from the U.S. Army Corps of Engineers, which the Sacketts concededly lacked. Paragraph 7 of Section 502 of the statue in turn tells us that the term "navigable waters" means the waters of the United States, including the territorial seas. And the term Waters of the United States or WOTUS for the cognoscente is not further defined.


      If you're like me, you might conclude that this all boils down to federal waters are waters that are federal. But this is a good place to return to Justice Thomas' concurring opinion. It argues convincingly in my view that courts and Congress have long used the term "navigable water," "navigable water of the United States," and "the waters of the United States" interchangeably to signify those waters to which traditional channels of commerce authority extended under the Commerce Clause in Article I, Section 8 of the Constitution. And that argument relies on great 19th century authorities like Chief Justice Marshall's opinion in Gibbons v. Ogden in 1824, Justice Stephen Field's opinion in a case named after the steamship the Daniel Ball in 1871, and the Rivers and Harbors Act of 1899.


      Thus wrote Justice Thomas on the eve of the CWA's enactment—that was 1972—the term navigable waters meant "those waters that are, were, or could be used as highways of interstate or foreign commerce." And in the 1974 regulation establishing the first Section 404 permitting program, the Corps of Engineers interpreted the term Waters of the United States to establish jurisdiction over traditional navigable waters as determined by the expanded Daniel Ball test noting also that the term is limited by Congress' navigation authority. And so, we reach the bottom line for Justice Thomas, "it is vital that we ask the right question in determining what constitutes 'waters of the United States': whether the water is within Congress’ traditional authority over the...channels of interstate commerce. And here, no elaborate analysis is required to know that the Sacketts’ land is not...water, much less a water of the United States."  And I would add even if that land is in some attenuated sense wet, a wetland.


      And now, here's where Justice Thomas, as he often does, delves into the deeper questions.
"What happened to the CWA is indicative of a deeper problem with the Court's Commerce Clause jurisprudence." As he has been doing for literally three decades, the Justice again articulates his view that the Court's Commerce Clause jurisprudence has significantly departed from the original meaning of the Constitution. And by departing from this limited meaning, the Court's cases have licensed federal regulatory schemes that would have been unthinkable to the Framers and Ratifiers of the Constitution.


      And here's where environmental law comes into the Justice's sights. "Perhaps nowhere is this deviation more evident than in federal environmental law, much of which is uniquely dependent upon an expansive interpretation of the Commerce Clause." "And many environmental regulatory schemes seem to push even the limits of the Court's new deal Commerce Clause jurisprudence...to say nothing of the Court's more recent precedents reigning in the commerce power."


      And one of those schemes, which Professor Mergen will address, is the Endangered Species Act, or ESA. Justice Thomas gave a shoutout to then D.C. Circuit Judge John Roberts 2003 opinion dissenting from denial of rehearing en banc. Then John Roberts wrote, "The panel’s approach in this case leads to the result that regulating the taking," which is a term of art under the ESA, "of a hapless toad that, for reasons of its own, lives its entire life in California constitutes regulating Commerce among the several States.'"


      Oh, those were heady days. We property rights litigators had high hopes two decades ago of reigning in the ESA, which protects dozens, if not hundreds, of species that live out their vicarious, but protected, lives in but a single state. But even the Trump administration's Department of Justice defended the onerous application of the ESA to protect the Bone Cave Harvestman, a blind bug that lives only in the Texas Hill Country as a proper application of Congress' power to regulate commerce among the several states. Noel Francisco and Jeff Wall, call your office. Justice Thomas did not mention the Clean Air Act, but perhaps General Kuhn will tell us how the EPA's recent interpretation of that statute transgresses, if not the limits of the Commerce Clause, at least the limits of the cooperative federalism on which that act is assertively premised.


      That seems like a good time to turn it over to my fellow panelists.


Prof. Andrew Mergen:  Good afternoon. I'm Andy Mergen, and as explained, I'm a former DOJ lawyer where it was my great privilege to defend the constitutionality of the Endangered Species Act in a number of -- in a number of challenges. Thanks for having me. It's great to see my former ENRD colleagues and meet General Kuhn.


      Maybe the best thing for me to do is just frame up a little bit about what the Endangered Species Act does. This is a piece of legislation that is now slightly older than 50 years old having been signed by President Nixon in December of 1973. And for our purposes, there are four sections that I think are especially important.


      The first we can just get out of the way right away is what I think everyone thinks about when they think about the Endangered Species Act, which is the Section 9 prohibition on take of endangered species. This is what prevents you from killing an endangered species. This is what gives rise to, I think, the man on the street understanding of what the act does. Of course, take is broader than just to kill as it was interpreted in the Supreme Court's decision in part in Sweet Home.


      And so, Section 9 gives us what we all understand the ESA to be doing, which is to prevent the take, the killing, the destruction of habitat of these endangered species. Section 4 is the process by which animals get on the list. And there's a fairly rigorous process laid out by Congress, a five-factor test, a factor that incorporates some, I think, important federalist principles in that you can't list the species until you look at the adequacy of other regimes—legal regimes—that might be in place to protect the species. And in so doing, the agencies that are responsible for the Endangered Species Act, Fish and Wildlife Service and the NOAA, National Marine Fisheries Service, frequently looked to what the states have been doing in that place.


      Section 7, I think, is not the part of the act that the man on the street thinks about in terms of the ESA, but it's the part of the ESA that has turned out to be profoundly important, and that's the consultation provision. When you need federal approval to take an action, you have to ask whether that action will jeopardize the continued existence of the species or adversely modify its critical habitat.


      And so, what that means in practice—I think you're all -- most of you are pretty aware—is that if you need, for instance, a permit from the Corps of Engineers or EPA, Section 7 would kick in at that point, and the prodders of fairly extensive process that can range from just a quick look to see if there are any species implicated to a process that would authorize the take of some of these animals and put in steps to mitigate the harm to the creatures overall.


      And then, finally, also relevant is Section 10, which is a permitting process by which landowners, states, etc. can obtain coverage. And over time, the agencies have repeatedly, I think, tried to make that process easier, less bureaucratic, to open it up to land development, etc., etc.


      The biggest challenge, as Eric indicated, to the Endangered Species Act, has been this notion of interstate species. Maybe 68 percent of all listed species—let's call it over 60 percent—live solely in one state. And the question becomes: Where is the constitutional authority to regulate the take of those species? Well, if those species are on federal land, then it becomes easier. You can fall back on Property Clause authority.


      But what about the species living only in one state, inhabiting private land? Where does that authority come from? And that, I think, is what conservatives have been attempting to get before the courts—before the Supreme Court—for a very long time. And those attempts have been rejected twice in the D.C. Circuit and twice in the Ninth Circuit, at least twice in the Fifth Circuit and the Fourth Circuit, the Tenth Circuit, and the Eleventh Circuit by a variety of jurists including many conservative jurists like Ed Carnes in the Eleventh Circuit, J. Wilkinson on the Fourth Circuit, Judge Holmes on the Tenth Circuit, Karen LeCraft Henderson here in D.C. Circuit. So it's not an issue that has found a very hospitable resting space in the federal courts. In fact, it's been rejected. And in every one of these cases a certain petition has followed and been turned down. Most recently, during the Trump administration, in the Tenth Circuit case involving the Utah prairie dog, the PETPO case.


      So why have the courts found this statute constitutional? Well, if we go back to our Commerce Clause jurisprudence in cases like Lopez and Morrison, which I think are rightly conceived as some sort of reset, we know that Commerce Clause covers channels of commerce, instrumentalities of commerce, things in commerce, and activities that substantially affect interstate commerce. And the courts of appeals that have upheld the constitutionality of the ESA have relied on this third prong, and especially this third prong as it has been further defined in the Raich case, the marijuana case, the Controlled Substances Act case, where the Court said, leaning back on far older authorities that said like, "Where you have a comprehensive regulatory regime that has a substantial relation to commerce, that regime, even if there is some applications that have no relation to commerce, that aggregation is constitutional." And the courts have consistently found that the ESA is exactly, precisely, this comprehensive regulatory regime. And I would refer you to especially Judge Wilkinson's opinion in the Gibbs case and Judge Carnes' decision in the Alabama sturgeon as being very robust discussions of this comprehensive regime.


      And so, going back to Corinne's remark—and I think this is a point that we're going to discuss later on this afternoon—whether the agencies are adhering to constitutional boundaries. I think where you start with the ESA has Congress adhered to the constitutional boundaries. And I think the explications offered in those opinions is that it clearly has. The act is -- it is a biodiversity statute. It is focused on genetic material. When Congress enacted it and President Nixon signed it in 1973, they understood that commerce, economic activity, was going to be implicated. The statute specifically refers to the threats posed by trade, overutilization, habitat laws. These are all economic activities that affect these species.


      And you know we can talk more about this as the afternoon progresses, but it is important to note that for the pharmaceutical business, for trade in some of these species, there have been important commerce connections. Something like eight of ten of the most commonly used medications find their origins in plants. And in 1973 Congress understood the value of this genetic material -- the value that this genetic material might have in the future.


      So I think I'll stop there. I would say that I think the ESA is just really interesting as an issue that the criticism is that it's a land use statute. And I think that Judge Wilkinson really takes that head on in the Gibbs case, and he says, properly understood, the statute is very narrow in application. It is focused on a set of wildlife, of creatures that are at a precipice. It is not interfering with the traditional role that states have in regulating their resident wildlife.


      If we look at wildlife issues in general, those are issues of state concern. But for a very long time, Congress has involved itself in the preservation of species going back to the Lacey Act, the Migratory Bird Treaty Act. And the role of Congress in the relation of the species is without federal action, they would have no protection because of the way they're threatened. And then, the goal is ultimately—and this is really important—to hand over the management of these species to the states. So I think Judge Wilkinson has that exactly right.


      And I would finally say that I think this is an issue that, unlike some other issues in the environmental space, that is I don't think that conservatives are a monolith on these issues. We see that reflective in the jurists that have upheld the act. In the mifepristone case, I was very surprised to see that Students for Life had filed a brief arguing that FDA's conduct violated Section 7 of the Endangered Species Act, and I was surprised. But their argument is one that environmentalists themselves have made that there should be a more robust Section 7 process for pharmaceuticals and the licensing of pharmaceuticals. So this is an issue that I think is not easily described as a left/right issue. And I'll stop there.


Sol. Gen. Matthew Kuhn:  Perfect. Well, I will jump in there. Thank you to The Federalist Society for having me here to talk about something that's taking an increasingly large part of my docket in the Kentucky Attorney General's office.


      For reference, I've been in the office for five years, and for the first four years of that time, I had almost no federal environmental docket. That was just not something that came across my desk on a regular basis, and that changed, for reasons that we can discuss, last year. And at present, I would say there's not a day that goes by that I'm not—not to make a water-based joke—but over my head in environmental matters on a day-to-day basis practicing law in Frankfort, Kentucky.


      So to kind of give you an idea of everything that's coming across my desk now and why I think the volume of rulemakings that started last year and that I think are going to lead up to the election this year, I think we're coming to a really important time to talk about whether expansive assertions of authority under some of these environmental statutes do, in fact, have a constitutional backstop in how robust or not that backstop is.


      So to kind of give you an example about what my last year has looked like, we have been involved in suing both pre- and post-Sackett on the WOTUS and the amended WOTUS rule. We dealt with last year the disapproval of our state implementation plan under the Good Neighbor provision, which I'll come back to. We've dealt with the follow-on imposition of a federal -- or a state implementation plan, a federal implementation plan under the Clean Air Act. We were dealing with reduced NAX for particulate matter that are affecting our industry. There's a new methane rule that's just dropped that would require one of our agencies to hire over a hundred new employees just to implement this one new rule. And that's just the beginning of it.


      There are rumors of other rulemakings that are on the horizon. The publication for the new tailpipe emission rule for model years 2027 to 2032 is expected in the Federal Register soon. What some are calling the Clean Power Plan 2.0 Rule is coming. The MATS rule is coming. It's all coming, and I never had an environmental practice before the beginning of last year.


      And so, I think all of that points to a lot of questions, some related to politics, some related to law. But I think the interesting question for today's panel is that each of these assertions of federal power that I've seen the last year occur under a statute, the Clean Water Act, or the Clean Air Act that, generally speaking, operates as a cooperative federalism statute. That's what the case law calls it, and the case law comes back to the cooperative federalism approach of both of those statutes again and again. What does that mean? I think it means that the statutes envision separate but meaningful roles both for the federal government and for the state that I represent.


      A common theme, I think, though, of all of these rulemakings that we've seen is that we've seen expansive assertions of federal authority that, in my view, all seem to come at the expense of the states. My submission, I think, to you today is not that all of these statutes are unconstitutional. I think that we can work through some potential constitutional issues, but the problem, I think, is that the cooperative federalism approach at the heart of both the Clean Air Act and the Clean Water Act is, in my view, what helps to keep those statutes in their constitutional lanes. The question, I think, become—because of these expansive assertions of federal authority—whether those assertions, which discard the federal state framework, run up against things like the Commerce Clause that's already been mentioned as well as the Spending Clause in the wake of the NFIB case.


      So where I fit in the introductions here is Eric gave a description of the Clean Water Act. Andy talked about the Endangered Species Act. And they left to me to discuss a statute that's, if anything, more difficult than both of those, the Clean Air Act. And so, any errors in discussing that are entirely mine because, as I said, I've only been doing this for a little over a year.


      So the Clean Air Act, it's a cooperative federalism statute. It creates separate roles for the states and the federal government. Here's how it works at a very basic level. EPA sets the NAX, or the air quality standards, and then states decide how to implement those standards within their borders. We do this by creating what are called State Implementation Plan or SIPs in environmental speak. EPA then reviews our SIPs on the back end. So we get to decide how -- in the first instance, we, the states, get to decide how to meet air quality standards.


      Only if the EPA says that a SIP is deficient does the EPA get authority under the Clean Air Act to regulate. If a SIP is found to be deficient, statutorily EPA can come in with top-down regulation and pose what's known as a Federal Implementation Plan, a FIP. So we have SIPs for states, FIP for the federal government. EPA has about two years under the statute, or two years under the statute to impose a FIP, which gives time for the state to craft an approvable SIP. So with every stage of the process after setting the NAX, it is a cooperative federalism framework in which, in the main, the states are to play the primary role, the primary driver, of meeting air standards within their borders. And I think this makes a lot of sense.


      We, the states, of course, have the general police power. The federal government doesn't. We are closer to our people. We understand that the air quality problems that affect Kentucky are thankfully not as bad as the air quality problems that affect California. And so, it makes sense that the states get to be the primary driver subject to back-end review by EPA.


      So what's the problem? So against this backdrop of cooperative federalism, consider what has happened recently. So this is -- what I'm about to describe is a big fight brewing about the Clean Air Act. And hopefully, by talking about it, I can tease out some of the federalism implications, and then we can go from there.


      So early last year, EPA disapproved, essentially en masse, roughly two dozen state implementation plans from states all over the map, all over the country, and they did so because the states allegedly did not comply with the Good Neighbor part of the Clean Air Act. And the Good Neighbor provision, simply put, it requires upwind states to account for the effects of their air pollution on downwind states, hence the name Good Neighbor.


      So they disapproved roughly two dozen SIPs, and so they had two years to impose a FIP, in which time the states could craft approvable SIPs if they wanted to. But instead of waiting for that process to play out, the EPA acted almost immediately before the SIPs were final. When the federal government acts this quickly, generally speaking, you know something is up, and something was up there. And so, we got a FIP imposed on us immediately before we could really even digest that our SIP had been disapproved, and that prompted a flood of litigation. And part of that is pending at the U.S. Supreme Court, the Ohio case, with a decision expected by June.


      I'm not here to talk about that. I want to talk a little bit more about the SIP part of it because I think it's more relevant to the federalism implications. And to do that, let me give you two minutes of talking about what happened to Kentucky, and then we can go back and have more of a panel discussion.


      So in Kentucky, we submitted our SIP in January of 2019, over five years ago. We spent a lot of time doing so, and we relied on a data set that EPA gave us to craft our SIP. And everybody's going to like go to sleep now while I start to talk about a data set under the Clean Air Act, but I promise it really is that simple. Everything is key to our data set. To understand the implications of downwind air pollution, you have to have a data set. That's how you tease it out. And we used what EPA gave us.


      And so, when our SIP was disapproved several years later, EPA said, "Oh, well, you didn't use the right data set. Here's the data set you should have used. And by the way, this data set wasn't available to you by the statutory deadline of your SIP. In fact, it wasn't available to us by our statutory deadline to act. And because there's this new data set, we're going to disapprove your SIP," and then immediately impose a FIP on us.


      And so, one of my sister states has used this great analogy of a law student taking a law school exam on an unsettled issue of law. You write a great law school exam analyzing the law. You submit it to your professor, and then the Supreme Court, the next day, decides the defining issue in the area, and the professor fails you for not discussing the decision that came after your law school exam was submitted.


      And so, that's effectively what has happened, not only to Kentucky, but to a dozen or more other sovereign states. We were dinged for not considering data that did not exist. And that denial, which we think was arbitrary and capricious, we're litigating that. That denial is the gateway for Kentucky to -- or for EPA to impose top-down regulation on Kentucky. And obviously, you can see the cooperative federalism implications of that. We never really got a serious chance to grapple with the data that the agency says is the one that matters.


      All of this points to why this topic is so important. The cooperative federalism approach of the Clean Air Act, of the Clean Water Act protects against incursions on the state sovereign prerogative with respect to our natural resources: our air, our water. It's the states, after all, that possess a general and plenary police power to regulate and protect our health and safety. And I think that's where Justice Thomas' opinion comes in. That's why it's so important.


      We're seeing unprecedented assertion after unprecedented assertion of federal power from EPA. And at what point does the cooperative federalism approach not protect against that such that the Constitution has to provide the backstop? I don't think we'd be having this conversation here had we not seen all of these unprecedented assertions of power. So that's where I'll leave it.


Corrine Snow:  Thank you, all. So before I ask any questions, do any of you want to respond to what any of the other panelists said? Eric, do you want to start?


Eric Grant:  I would. Thank you.


      Professor Mergen said a couple times that he thinks the ESA's application is narrow. And to be fair, that's a word that certainly, in part, is in the eye of the beholder. I guess as I beheld it filing about 800 merits, briefs, in the courts of appeals in over four years, that wasn't my experience.


      And I guess the first point is about Section 7 that Professor Mergen discussed. If you get a permit from any other federal agency, the Department of Interior, the Fish and Wildlife Service is almost always going to be involved as well. So think of all the trouble the Sacketts had with EPA and the Corps of Engineers. If the Sacketts went the permit route, they'd almost certainly have another hurdle with the Fish & Wildlife Service as well. So that, I think, militates against narrowness.


      Another thing that I observed is the theory of the ESA is to bring these species under the act's protection, do the right thing, preserve them, conserve them, get them on their feet so to speak. But like an addict, they never go off the list. Not never never, but almost never. And so, I think that vision of what could have narrowed the statute hasn't played out in practice.


      And then, I guess another thing that struck me is a species can be endangered in so many places at once. You think endangered means they're just -- it's a small population, but there can be a small population in California and a small population in Nevada and a small population other places. They're called distinct population segments if I remember correctly. And so, that's another aspect in which it's not narrow.


      And finally, I guess, if the Clean Air Act at least has the rhetoric of cooperative federalism, I don't recall hearing that, seeing that in the ESA context. I don't think there's even that window dressing.


Prof. Andrew Mergen:  Okay. I'm out of practice of sparring with Eric, so you'll have to forgive me, but I did have -- we did have this relationship for several years when he was at the Department of Justice.


      So I guess I would say like in the 800 whatever, I don't think they would -- that was 800 ESA cases.


Eric Grant:  True.


Prof. Andrew Mergen:  Okay.


Eric Grant:  True.


Prof. Andrew Mergen:  All right. So if you think about the subset of ESA cases you saw, probably the majority at DOJ, the big criticism, I think, on the right of the ESA is that it's a land use statute masquerading as a narrow environmental statute.


      And I guess I would say if you cast your mind back to how many of those cases actually involved people in the Sackett's position, I would say that's a very small number because many of the cases that we litigated at DOJ involve very clearly sort of federal interests, whether that's the case that many of us are -- hear a lot about, which is the Atlantic right whale, which is imperiled by fishing operations, but these are fishing operations that are federally regulated. These are animals that are occurring in federal waters.


      The Commerce Clause issue that is implicated for the small -- the landowner with a single toad on his property is not implicated by that, nor is it implicated by the debates over the spotted owl that occurred all of those years ago. So I think that to my mind, there's a sort of mythology about the act and how far it goes and how far -- how it regulates sort of ordinary liberty-seeking Americans. I think that doesn't actually happen very often.


      And I will also say it's going to happen a lot less following Sackett. I think the assessment by most folks now is that the universe of Waters of the United States has been significantly reduced by this statute, and some -- by the Court's decision in Sackett in some states, like New Mexico, tremendously in other states maybe less so. But a lot of times where the ESA comes up and E is in that Clean Water Act consultation, and that's really been reduced. So part of my pitch to you all today—and thank you for being so polite to me as the "liberal" here—is that you can put this way down on your to-do list because we don't know at all whether the ESA is really going to—in the post-Sackett world—really implicate the traditional criticisms of the act that have persisted previously.


      As to the cooperative federalism thing, I can't do better than Judge Wilkinson's decision in Babbitt. There are many places where states are mentioned in the act, including in the discussion of the listing in terms of whether the existing regulatory regimes are sufficient to protect the animals. There are issues related to other issues related to listing with regard to states, and the imposition on the states in terms of what I would consider the part of their federalism that relates to wildlife is incredibly modest. We all know that. If you're going to go fishing in Kentucky, you get a license from the state. If you're going to go hunting in Kentucky, you get a license from the state.


      So in the universe of sort of wildlife issues, the ESA takes up very small -- a very small space. And I think it's profoundly important. I think the public supports this. I think that there's a reason that Congress was pretty dramatic in its language. I think that there's a reason that twice CJ Burger did not raise any questions about the constitutionality of the statute. The first time in Cappaert in 1976 involving the Devil's Hole pupfish, and the second time in TVA v. Hill, where his gloss on the statute really defined the statute in the way that it is defined today.


      When I feel sad about the rhetoric about the ESA, I go back, and I read the brief that was filed by the United States in Cappaert. This is a case involving pumping by a farmer, very much an economic activity, but put the Devil's Hole pupfish in peril in this part of Death Valley National Park. And the brief there is -- it was written by a young lawyer in the solicitor general's office, Ray Randolph, and the solicitor general was—I may be the -- I'm the oldest person on this panel, maybe. I can't remember, Eric, how we stack up. But the solicitor general was Borg, and if you read that brief, it is a full-threaded defense of the ESA. And I think there's a reason that they were comfortable making that full-threaded defense.


      And if I just say one thing about the Clean Air Act, it is undoubtedly -- as a Justice Department lawyer, I always talked about the cooperative federalism of the statute. And the same for the Clean Water Act. And I think that what we need to keep in mind is the downwind states are also part of our federalism. And so, it wasn't just in the Supreme Court last February the solicitor general defending the scheme. It was also the solicitor general's office from the State of New York.


      And you know, geography's a funny thing. And so, for some things like the Clean Air Act, the industrial northeast may be more burdened. But here's the thing. All of these things -- everybody is burdened differently at one time or another, and that's all part of our federalism.


      And the final thing I'll note is that all of this seems to me, when you describe the Good Neighbor act litigation, this is not constitutional litigation. It is arbitrary and capricious, actually, APA ANC litigation. The question is whether it was fair as you set forth for them to like change the rules midstream. That's an ANC case. That is not a constitutional dilemma. That is a, "I'm going to sue you because your decision was arbitrary and capricious." And I think that sort of illustrates the fact that I think the constitutional concerns here are not as hyped as Justice Thomas might suspect.


      But I'll stop. Sorry.


Sol. Gen. Matthew Kuhn:  Yeah. And so, I'll add to that final point. It's well taken. I'm suing about the SIP disapproval, and I have not invoked the Commerce Clause in my petition for review in briefing since then.


      I guess my point was more of a modest one was that there are these structural protections in the Clean Air Act. There are similar structural protections in the Clean Water Act that protects states' sovereign prerogative that I would submit keep the statutes within their constitutional lanes. And when those structural protections are not respected, when there's too much on the federal side and not enough or none on the states' side, I do think that the bite taking such an aggressive reading of the statute, the EPA, I think is walking into constitutional concerns that perhaps would not address but for that.


      The step back point that I would make just sort of in defense of the states, our position is not that our air and water should not be regulated. We care about it a lot. We're very proud of our lakes in west Kentucky, our beautiful streams in the mountains of eastern Kentucky. We have an entire regulatory regime under state law that regulates "waters of the Commonwealth." We're a Commonwealth and proud of that. And we've got a whole division of our environment—an energy and environment cabinet—that regulates that, that does permitting under state law, that does landfill, any of that—all of that—is regulated under state law, and we're quite proud of that and take it seriously because of what a beautiful state we are.


      The point is is that we don't have the resources to do that because we're spending so much time under a Spending Clause statute doing the federal government's bidding with these expansive interpretations -- the Clean Water Act to give you an example. In WOTUS, the 2023 rule initially was based on Justice Kennedy's concurrence in Rapanos, the substantial nexus task that formed a big part of the 2023 rule. You know how many votes that Justice Kennedy's test got in Sackett? Zero. It was an expansive test that the states couldn't understand, litigants couldn't understand, landowners couldn't understand, and it got zero votes. Yet that formed a significant part of the rule that was rushed out after Sackett had been argued at the U.S. Supreme Court and imposed on Kentucky. No wonder we had to go to court and get a preliminary injunction, like 26 other states did successfully.


      I guess my point is the constitutional problem is arising largely—at least under the Clean Air Act potential problem—is arising only because the cooperative federalism part of this is just being forgotten.


Corrine Snow:  So I think that leads to the next question, which is: It sounds like we have three different views here. That it could either be that the statutes have constitutional issues, which, I think, Eric, I'm hearing you say. Solicitor General Kuhn, you're saying it's the implementation of the statutes, not the statutes themselves, that necessarily have the constitutional issues. And Professor Mergen, none of the above.


Prof. Andrew Mergen:  No complications.


Corrine Snow:  No problem.


      Is that right?


Eric Grant:  I think that's right. I mean, obviously interpretation and application of statutes by agencies and courts are critical in addition to the plain text of the statutes. We, at the Justice Department and the Trump administration, had to worry that our own clients were overreaching. So I guess I'm not surprised that Solicitor General Kuhn thinks that the Biden administration's agencies are overreaching. So that's clearly part of it.


      Just to go back to something. Professor Mergen talked about the Raich case, Gonzales v. Raich, from, I think, 2006, the substantially affect test. And while that's on the books—and it still is—probably the ESA fits under that test. So that's the dream to take out Raich. No more fainthearted originalism.


Corrine Snow:  Solicitor General Kuhn, do you think if the cooperative federalism aspects of these acts are properly policed that the acts themselves are constitutional?


Sol. Gen. Matthew Kuhn:  So I think it's -- the constitutional question is probably different for the Clean Water Act than the Clean Air Act. And I think a large part of Justice Thomas' opinion in Sackett was tracing how the terms "navigable waters" and "Waters of the United States" sort of carried the old soil with them from these were statutes that were interpreted pre-New Deal Commerce Clause precedence.


      And the big case, as Eric noted, is the Daniel Ball. And Daniel Ball interpreted the Clean Water Act's -- the language that went into the Clean Water Act in a way that really focused on the channels of commerce and took sort of a very narrow view of what it meant to be navigable waters and Waters of the United States. And so, I think there's a lot of statutory history with respect to the Clean Water Act that limits its language in a way that it could not be problematic. And I think that Justice Thomas' mention of constitutional concerns was an aside to that larger point about how we should be interpreting "of the United States" and "navigable" in the statutory definition.


      So I think that the constitutional issue, although it's lurking under the Clean Water Act, we do have constitutional claims, though, in our pending WOTUS litigation, so it's still there. And I think broad interpretations of the Clean Water Act run up against constitutional limits.


      It's different under the Clean Air Act. The sort of the history—statutory history—that led to the geographic terms in the Clean Water Act. I'm not aware of any sort of similar history that would similarly constrain the interpretation of the terms under the Clean Air Act. And you'll note that in Justice Thomas' opinion, he noted that other federal statutes contain much broader language than he would read the CWA to contain. And so, I do think that the Clean Air Act is one of those statutes that has much broader language, and so some of the statutory narrowing arguments that would exist under the Clean Water Act may not exist under the Clean Air Act.


      So one of the things that I do think is interesting on the Clean Air Act that we haven't really talked about or -- it's a Spending Clause statute. The states are doing the federal government's bidding on CWA permitting—or CAA permitting—and such under a Spending Clause statute, and the D.C. Circuit post-NFIB has looked at this from a Spending Clause perspective and has upheld the Clean Air Act under NFIB, under Chief Justice Roberts' opinion there. So that has not gone to the U.S. Supreme Court post-NFIB. The D.C. Circuit's case on that, I think, was a 2015 one where it was led by Mississippi and Texas, I believe.


      And so, there's been some scholarship after the D.C. Circuit ruled that, in particular, Professor Adler talked how he thinks the D.C. Circuit got that wrong and that there may well be a Spending Clause problem with part of the penalty for states is losing out on your transportation funding. And transportation funding can obviously be a huge part of a state's budget, and whether that gets big enough to be a gun with a head -- or a gun to the head, what Chief Justice Roberts called it in NFIB.


      So I think the constitutional issues are out there, and to the extent the agency continues to push, I think that naturally they're going to arise and have to be litigated in some way.


Corrine Snow:  Yeah. And so, Professor Mergen, I have sort of the same question for you but in reverse.


      Are there scenarios, hypothetical scenarios, you can see where the implementation would cause these constitutional issues? Or will it always be those issues only arise if the agency if being arbitrary and capricious and going beyond its statutory authority?


Prof. Andrew Mergen:  Yeah. So first off, you guys can call me Andy. This professor thing is a new thing for me, so --


Corrine Snow:  I'm pretty sure we called that before you were a professor, so --


Prof. Andrew Mergen:  No. I think that we have a constitutional avoidance cannon for a reason. I don't think that -- and this is part of where I come out on these issues. As a Justice Department attorney—and you guys knew me there, so you can disagree if you want—but I felt first and foremost I was an institutionalist and a small C conservative. I understood that the Justice Department acts as a conservative actor. I have spent a lot of my career making my friends in the environmental community very angry with various doctrines like standing and threshold justiciability issues, which I feel like should be fairly applied to all sides. I feel like they play an important role in our constitutional system, and the courts should adhere to those principles.


      I would say that, yeah, most of the time I think that these are going to be -- these are really APA issues. And to give you an example, these issues regarding SIPs and FIPs and the Clean Air Act and the Good Neighbor rule have been around for decades. So in terms of sort of like we talk about history definitely matters to the courts on several scales. And one thing we look at when we consider doctrines like major questions or whatever is regulatory antecedents. And I would submit to you, Solicitor General Kuhn, that what the agency has been doing here is not a significant departure in any way from what it's been doing for a long time. And that, to me, is an arbitrary and capricious issue.


      What has changed is a court that's pretty conservative and a sort of notion that this is the time to act. We see more stuff, more emergency stay motions, all of those sorts of things seeking an advantage from a court that seems less restrained on some of these threshold issues that I spent my time in the government defending.


      So I do sort of think that -- I'm not saying that constitutional issues never come up, or that agencies don't cross their lawn -- cross the line. I think importantly, one area where we see this come up is when an agency says no to somebody and the Fifth Amendment, Takings Clause, or Just Compensation Clause, is implicated. And that is implicated by agency action. It has nothing to do with, sort of them stepping outside of the bounds of the statute. It has them having taken an action that may require just compensation.


      But by and large, I think the agencies are in a lot -- in these cases are not on the outer limits of the Constitution. I think what's really interesting about the Clean Water Act -- I have a lot to say there, and there's not enough time, you can imagine. But I don't think -- Congress clearly in 1972 was extending the definitions of the reach of the statute beyond traditional notions of Daniel Ball and navigability, as it must.


      And I think if you step back and you sort of say like, "I am interested in what is happening in environmental law in this moment," I would look to what's happening in states like Idaho, Nevada, Montana with regard to groundwater. The federal government plays a huge role in water quality. Clean Water Act is a water quality statute. The states have always had primacy, in the West especially, on water quantity issues. And they are having to become creative and ambitious in changes in their legal regimes to deal with groundwater pumping.


      And these are not just like the Commonwealth of Massachusetts, where I spend a lot of my time. This is Idaho having to sort of be creative. And they're running up against the same issues of the federal government when it comes up. You've gone too far, etc., etc.


      But I think what we do see is that what those states are doing is responding to the connectiveness of these water regimes. And what we have lost in this decision in Sackett is sort of the science behind all of this, which is really, really important. And I think as we talk about justices -- this is my last point, sorry. As we talk about Justice Thomas' concurrence, we should recollect that it is a concurrence. It is not the majority opinion. He did not get -- he did not write the majority opinion. And I think -- I have lots of problems with the majority opinion, but I do think it's telling that the concurrence didn't -- was not the majority. And I'll stop there.


Corrine Snow:  Yeah. So your point is really good about the connectedness of all of these resources. And I think what we have seen more and more is that the science is not going to draw clear lines for us. In some sense, the air, the water, the entire ecosystem and all the species in it are going to be connected.


      At the same time, these statutes obviously contemplate a place for the states. As you said, the fishing, the hunting, the groundwater, so many of these issues we leave to states that are state waters. There's state land. There are species that are separately protected under state law. So where—and I'd pose this to all of you. Where do we think that that line drawing happens then in the regulations to try and implement these statutes?


Eric Grant:  My perspective on the science is, in one sense, I don't disagree with you. I think everybody recognizes interconnectedness. Everybody recognizes effects. But those -- that's not -- and I don't even think that's a 21st century insight. I don't think the Framers were so unsophisticated that they couldn't understand interconnectedness. That's the purpose of the national union is because the 13 states were interconnected, and that's why Congress has its express powers in Article I, Section 8 to deal with precisely those things as to which that generation understood that was connected.


      So the science -- I think progressives always want science to give us the answers, so we won't argue with each other, so there won't be politics anymore, there won't be the messiness of democratic give-and-take. And science can give us the information, but can't solve the hard problems that resources are finite and that you can't -- everybody can't have everything that he wants. We know this in Northern California, where I live, with the water. Not everybody can have all the water. There's just not enough to satisfy all the needs for the species, for homeowners, for agriculture, and I'm sure there are other things. But the science won't -- doesn't preclude politics, doesn't preclude the hard decisions.


Prof. Andrew Mergen:  Well, as a progressive I'm going to defend science.


      I think -- I mean, for sure, there are hard issues. And in your point about the finite resources, issues is an important one. But I think that the reality is that we know we can do better than we are in terms of incorporating, understanding that these issues are -- that things like wetlands, the science -- I don't think that there has been a shift. I think that you see that in legislation.


      There was an act called the Swampbuster's Act. And the science has changed around all of that. We understand that wetlands play critical -- provide -- I'm going to use a liberal term like ecosystem services. It just means is that it is beneficial to have wetlands around for filtration, to take the brunt of large storms. All of that matters. And when we construe the law in a way that I think is excessively narrow as a constitutional matter to lose the benefits of those interconnective systems, we're making a real mistake.


      And I just want to change topics for one point that I wanted to make earlier, which is that I think that, as I talk about the ESA, it's really important that we understand that we're not at the same place we were 20 years ago with the ESA. Things are changing. For Democratic administrations have often understood that the statute requires some buy-in and that they are working hard on sort of these permitting issues.


      And one example is a technological answer, which is that the service now has this IPaC system entirely intended to streamline permitting. And this program has gotten rave reviews in general. And I think it's just the start of the kinds of things that we can do to deploy technologies to make better decisions in this space.


      So I think we need to slow down on the litigation and ask ourselves—I mean, I'm with like -- I litigated the Department of Justice for 33 years. Like Eric, I've seen a lot of lawsuits, and I still feel the learned hand thing. Drat, right? There's got to be a better way. I know that we're litigators, so it's fun. It's fun to write briefs. Advocacy is fun. But there's got to be a better way. And that's why I think we can sort of slow down on the notion that all of these -- that the only way to take the pressure off is through litigation because I think there are other mechanisms available to us.


      And I think that when I am around my colleagues in the university who are not lawyers, they have very sophisticated ways of understanding what is important in the natural system and what is less important. And obviously to your point, Eric, there are tradeoffs. Progressives understand this in relation to renewable energy. You have to put solar somewhere. You have to put wind somewhere. And there are good ways to make those decisions, and I'm not sure that litigation facilitates that process.


      I'll stop there.


Eric Grant:  Tell your colleagues they're going to have to dig lithium out of the ground -- a lot of lithium, a lot of copper.


Sol. Gen. Matthew Kuhn:  Let me make two points.


      On the science point, I'm no progressive, but I also defend the science. I'll just say that the federal government doesn't have a monopoly it. We care about the science in Kentucky too. We've got a whole cabinet that's devoted to it with career public servants that care as much about -- maybe more about our natural resources in Kentucky that are unique and something we're proud of. And so, the notion that -- I think part of the mistake of the EPA's approach is that they think they've got a monopoly on it, and they certainly don't.


      The second point is just to defend some of the lawsuits that I've filed. So state-led lawsuits in the context of at least the Clean Air Act, this is nothing new. I would agree with you that state-led lawsuits have exploded in recent years, that we're seeing more than we've ever seen before.


      But in the Clean Air Act's space, if you go look at the D.C. Circuit docket for all of the 2000s, there are pick state versus EPA that have been filing lawsuits against the EPA. And why that makes sense because we're regulated under the Clean Air Act and under the Clean Water Act as states, qua-states, and so Andy was talking about all these state standing doctrines. State standing's not an issue in these cases. We are the object of the regulation. We have self-evidence standing, and so there is a long history of states stepping up when we think our sovereign prerogative has been invaded.


       I think, look at the early Clean Air Act cases in the 1970s when the EPA was taking the position—this was before New York and Printz—where they said that they could conscript states to do whatever they said. There were lawsuits filed, and the Ninth Circuit struck down that part of it. The D.C. Circuit struck down that part of it, and so these were all state-led efforts. This was 50, 60 years ago, and we had states suing on this. So I do think that the criticism of too many state lawsuits, you can levy that about a lot of -- a lot of things.


      But I think in the context of the Clean Air Act, especially given the cooperative federalism framework, I just don't think that criticism lands there because if not the states, then who?


Corrine Snow:  So I want to follow up on this point, but after that, I'd like to open it up to questions. So if anyone has one, if you could start lining up at the microphones.


      So we have seen, now routinely in environmental law, states lining up on either side. When any environmental law regulation comes out, you're going to have the coalition who comes out against it and a coalition who comes out in support of it. And they're playing two different theoretical roles there. You have some states that are saying, "There are versions of a downwind effect on my state. There are harms where I need a more stringent federal regulation to protect my interest." But then, you also have the flip side, which is states saying, "You are infringing on my sovereign rights. You are overregulating me."


      What do the three of you see as the proper role for states on either of those sides in litigation? And is this more probably a good or a bad thing that we now always have states involved in these challenges?


Sol. Gen. Matthew Kuhn:  I'll speak. I think that it's good for courts to hear from states that have diverse perspectives.


       I was involved in a case in the Sixth Circuit recently outside the environmental space, but 43 states weighed in through amicus briefs or as parties. I think that's a good thing, regardless of whether a lot of those states happen to disagree with me. But I think that courts should hear from the states.


      The particulate matter issue that I mentioned in the beginning, I think there were 25 states that sued to challenge it and 15 had or so have intervened alongside EPA. So we're going to see 40 of 50 states taking a position in the D.C. Circuit. I think that is unequivocally a good thing because the states, we have unique injuries. We have unique perspectives. We're closer to our people than the federal government is, and I think that the more of that we see, the better. So even when other states come in and disagree with me, I think it's great. My SIP oral argument in the Sixth Circuit it's going to be me, the federal government, and the New York Attorney General. I didn't think the New York Attorney General should get time at the podium, but I think again to the point the more, the merrier, I guess.


Prof. Andrew Mergen:  I'm not going to disagree that there's a role for states in this litigation. And I certainly agree that states have been involved in Clean Air Act litigation for a really long time.


       I guess what I think is regrettable is how partisan this litigation has become. I've practiced law for over 30 years, so I can remember a time -- and most of that time as an appellate attorney working with the National Association of Attorneys General. And at that point, that organization, I felt was states had different views and different politics, but it seemed far less partisan than it does today. And I think the partisanship results in amping up the rhetoric in a way that is unhelpful.


      And if I -- for every jurisdiction that I have been in -- I don't know if you've ever had this experience, but I wondered why is my Attorney General doing X or Y when I know that there are problems here? Why is my Attorney General in Amarillo today when there are problems here—or usually that's G. Sorry. Not the AG—when there are problems here. Or why is my SG in the northern district of California or the southern district of New York when there are problems here? And so that -- my point is I don't disagree with the Solicitor General at all that there's a role for states in this litigation. I guess I just feel like it has become a highly partisan endeavor and that amps up the rhetoric in a way that I think is unhelpful.


      And one other thing I'll just say, or sort of say, is that there have been interesting studies about the federal government in the environmental space. And what those studies show is that there is a ton -- like agencies like the Corps of Engineers take into account regional differences, regional concerns in their permitting decisions. So this notion that states are ruled by the federal government like Rome far away, not—and I do think about Rome every day for people who track that meme --


Eric Grant:  You're one of us.


Prof. Andrew Mergen:  Yeah. That the federal government's Rome and doesn't really understand what's going on in Kentucky and yet, a prof. out in California, Dave Owen, did a study on regional administration, and his point is like the Corps of Engineers is responsive to the local community. It's unfair to sort of suggest that these bureaucrats are all off doing their own thing.


Corrine Snow:  All right. We'll take a question in the front. Will you just say your name and who you're with?


Stephen Taft:  Sure. I'm Stephen Taft, a recent graduate of Richmond Law.


      So thinking back to my con law classes when I learned this, it was often alongside cases on other subjects that our Commerce Clause that people don't know are who aren't lawyers like Katzenbach and Heart of Atlanta Motel. And that immediately comes to mind for this reason. The way I interpreted the Rapanos concurrence of Kennedy was really an implicit subtle warning that if you take down this issue, if you take a sledgehammer to environmental Commerce Clause case law, other matters that we care even more about such as civil rights come under question.


      Now, I want to ask all of you, do you think there is a legitimacy to those concerns, and can they be allayed by those who would walk back like Thomas would to an earlier interpretation of the Commerce Clause?


Prof. Andrew Mergen:  I mean, I'll just observe that your point about Katzenbach and Heart of Atlanta Motel, those cases are also discussed in the Gibbs case by Judge Wilkinson, by Judge Carnes in the Alabama sturgeon case. And he -- they—both those judges—are making exactly the same point about the accommodation cases.


Eric Grant:  There's a spectrum of views about stare decisis, and I'm with Justice Thomas and that’s, “Get it right." And I think he's suggested cases. What? Calder v. Bull, I think, in 1798, so there's -- he's willing to go back pretty far. And again, I'm sympathetic with that view: Get it right even if it tosses out some more recent doctrine.


Sol. Gen. Matthew Kuhn:  I guess my point would be that I think the agency actions are sort of at the outer bounds of the Commerce Clause of '40. And to say that regulating a "hapless toad" to quote the Chief Justice in California to say that you can't do that is not going to call into question, especially under a sort of stare decisis principle, sort of some of those key precedents. I do think that the agency's claim to authority rests on cases like Wickard v. Filburn and Darby, and that's what Justice Thomas said. But I do think that, to the extent there are problems, I think my position has been that there are problems out only on the edges of the agency's exercise of authority. So I don't think we're going to see cascading effects, even if you can get four justices that would agree with Justice Thomas.


Corrine Snow:  Andy, I would tend to agree. If you think about it, environmental law and the cases involving it tend to be where we see expansions in a lot of these doctrines, which I think are designed to accommodate some of the unique issues in environmental law and how you fit them into court. And I think that's why so many of the seminal decisions that you see like Lujan, Chevron, Bennett v. Spear, Mass v. EPA, West Virginia v. EPA, these are all environmental law cases that then have broadening effects on other areas of law rather than kind of in reverse.


Stephen Taft:  Thank you.


Prof. Andrew Mergen:  I mean, I would say that if you look at Ginsburg's concurrence in the Rancho Viejo case, which is the arroyo toad case, what -- he's drawing a very -- he's slicing the salami pretty thin because he concurs in the decision. And the decision says that the ESA is constitutional in this application.


      Rancho Viejo is a large real estate concern, clearly commerce implicated there. What Ginsburg says in his concurrence is, "I just want to be clear that I have some doubts as to whether it would reach the guy hiking along on his own private property who squashes an arroyo toad or something like that." And when Justice—then Judge Roberts, now Chief Justice Roberts—writes his concurrence from the denial cert in Rancho Viejo, he's sort of saying like, "I think we should at least consider these issues." He's not saying, "I'm going to rule in favor of John Eastman in Rancho Viejo." He's saying like, "We should think this through." And if that's the limit, if Ginsburg gets the case where the guy squashes the toad on his own property and no commerce is implicated, that probably doesn't get at the accommodation cases, but that's a pretty thin victory for folks who are concerned about the reach of this statute.


Corrine Snow:  And I'll just say this is a great example of when we were at DOJ, and you were tempted to ever go in Westlaw, the answer was to walk down the hall first and just pose the question to Andy and get an answer like that.


Eric Grant:  I do think it was a dissent from the denial of the hearing en banc, but we'll --


Prof. Andrew Mergen:  It was a dissent. Yeah.


Eric Grant:  Oh, okay. Okay.


Prof. Andrew Mergen:  Okay. Yeah.


Corrine Snow:  In the back.


Bonnie Wachtel:  My name is Bonnie Wachtel. I'm in the investment business. I'm just going to amp up the rhetoric slightly. And this is addressed to our gentleman identified as a progressive, who's so kind to join us here at The Federalist Society.


      I was really struck by, in your comments, about the Endangered Species Act when you said you can put this way down on the list to be concerned about, and that's good because there is so much else for us to be concerned about.


      From what I see, if we look at environmental laws also encompassing all of the climate change considerations, in banking regulation we have efforts to ration capital away from fossil fuel and towards renewables. And just coming now to the -- in the SEC context, the climate disclosure rules I'm told are going to cost more than all the other disclosure rules put together. And from EPA we have the new café standards that are trying to put internal combustion engines out of business, although there is an excellent scientific argument that overall EVs are not better for the environment than I's. And of course, we have the Clean Power Plan, where the Supreme Court had to just throw up their hands and say, "Regardless, you're just way over the limit. It's too much."


      So for you, as someone who's obviously a very thoughtful and well-regarded progressive, do you support all of these efforts that are going on in the legal [CROSSTALK 01:22:06]?


Corrine Snow:  Please go on the record, Andy. We are recording this.


Prof. Andrew Mergen:  I mean, kind -- you said I was kind to show up. That's one word for it. Maybe there are others too.


      I guess I feel like, having been around this space for a long time, I recognize that there's a lot of rhetoric on both sides. But I would define myself as a progressive. I'm not sure all of my friends would put me in that box, but some would. And I am astute enough to know that on the other side, sometimes the benefits of a regulatory action are very overstated.


      I spend my time defending rules that I thought sometimes were like, in the Obama administration, very, very modest. And the rhetoric around those rules becomes sort of mind-blowing on both sides. The defenders of the Obama rules say, "This is a game-changing BLM rule." And on the other side, the oil and gas industry says, "Life as we know it will come to an end if this rule enacted."


      And I guess my advice is first off, for everything you said, I'm in favor. I feel like the SEC scaled back their ambition. That's true of some of the car rules too. Like notice and comment matters, talking to industry, getting the pulse of what they think is doable and undoable really matters. And I think administrations are generally committed to that process. There's a lot of opportunity for people to come in on the SEC rules. I think there's a lot going on in the EU that sort of lessens the effect of sort of what is going on for SEC.


      But I think the overall point I would like to make is that I think of all -- everyone here is a thoughtful person, and we need to drill down on the rhetoric. The New York Times isn't always right, and The Wall Street Journal isn't always right. And we have to take a hard look because it's in the interest of lots of people to amp everything up.


Roger Hanshaw:  I'll offer what I promise is a much less -- or much more abstract question. So it may even be one of federal civil procedure, but I would like the panel's perspective on this. My name is Roger Hanshaw, by the way. I'm a lawyer in private practice in the State of West Virginia.


      In states in which state departments of environmental protection or environmental cabinets or by whatever name we're known exercise delegated authority on behalf of the federal government with respect to the various environmental statutes, I'm interested in your perspective on the strategy of advocacy organizations to bring suit against the EPA for imposition of cases that are then resolved by consent agreement that result in imposition of, say, the Clean Air Act a finding of nonattainment or, in the Clean Water Act context, imposition of a TMDL outside the participation or involvement of the otherwise governing state entity in the federal courts.


Eric Grant:  In the Trump administration, we called that sue and settle, and we tried, I think, at least at EPA, to impose what I thought were a reasonable and -- was a reasonable and modest set of procedural safeguards that would enhance public participation. I think those are long gone by now with the new administration, but it's a problem. It's an issue. There is, perhaps, not an obvious single solution. But it is a problem that needs to be addressed and is problematic from a good government public participation standpoint.


Prof. Andrew Mergen:  Yeah. I would just say that I think the program mentions transparency. That is an issue that everyone is interested in: my progressive friends; clearly The Federalist Society also. And I'm not sure precisely what sort of consent decrees you are talking about. But you can go on ENRD's website today, and you can see tons and tons of consent decrees posted for comment because the department has, in the main, I think, very much promoted a full transparency of these sorts of settlements. And I think some are published in the Federal Register, notices publish. They show up on the ENRD's website, depending on the kind of lawsuit, and I would just agree with you that I think that sort of transparency is really, really important.


Roger Hanshaw:  Thank you.


Corrine Snow:  Yeah. See, this is something that we looked into there, and part of the problem I would say is actually resource-based and statutory driven. So you will have acts, for example—this comes up in the ESA—where there's a statutory deadline to take certain actions that the agencies just haven't taken. So in litigation --


Roger Hanshaw:  The state agencies.


Corrine Snow:  Oh. Oh, no. This would be federal agencies.


Roger Hanshaw:  Okay.


Corrine Snow:  So you're talking about a scenario where there's a challenge against the state agencies, and not federal?


Roger Hanshaw:  I'm talking about the growing practice of efficacy organizations of achieving imposition of de facto state standards through settlements by the federal agency in light of the state's decision not to take that very same action.


Corrine Snow:  So --


Roger Hanshaw: Give you a very specific example.


Corrine Snow:  Like an over suit?


Roger Hanshaw:  Let me just take it out of the abstract. Let me give me you a very specific example.


      Pending now in the southern district of West Virginia is such an arrangement, in which the advocacy organization has sued EPA. The case has been resolved—or it's attempting to be resolved now—by imposition of a TMDL in a portion of the State of West Virginia for ionic strength and ionic pollution. The West Virginia Department of Environmental Protection has three times rejected appeals by advocacy organizations to impose that very standard. And now, if our intervention is denied -- we have sought to intervene in the filed case to impose that standard. If our intervention is denied, we will now have had imposed in southern West Virginia a water quality standard that our Department of Environmental Protection, pursuant to our delegated authority under the CWA, has rejected. I'm just interested --


Prof. Andrew Mergen:  You were --


Roger Hanshaw:  -- in your opinion on that.


Prof. Andrew Mergen:  I missed who you represent. Do you represent the State or someone else?


Roger Hanshaw:  Well, I'm the Speaker of the House in the State of West Virginia.


Prof. Andrew Mergen:  Okay. I'm sorry I didn't know that.


Roger Hanshaw:  There's no good reason you should. But I'm a lawyer. This is my practice.


Prof. Andrew Mergen:  Right.


Roger Hanshaw:  That's what I do. It's what we all do. It's not an unusual practice. It just happens to be a very live scenario that I posit in.


Prof. Andrew Mergen:  But the State is in the litigation.


Roger Hanshaw:  It is not. It is not.


Prof. Andrew Mergen:  It's not? They have not intervened or anything like --


Roger Hanshaw:  We have intervened. We've not been granted -- our motion to intervene has not been granted.


Sol. Gen. Matthew Kuhn:  What I --


Roger Hanshaw:  There's the point.


Sol. Gen. Matthew Kuhn:  So let me give you a few things to look at. One of the things that happened between the changeover from the Trump administration to the Biden administration, of course, was a lot of regulatory changes, and there were a couple of attempts at sue and settle.


      The most prominent, initially, was in the context of the public charge rule, where the Supreme Court had granted certiorari, and then the Department of Justice, after certiorari had been granted under President Biden, agreed to dismiss an appeal such that a nationwide vacatur of the rule was there. A lot of states tried to intervene. This happened a couple of times in the immigration context during COVID, and there was a really persuasive dissent out of the Ninth Circuit in an Arizona case that talked about the importance of being able to intervene to prevent sue and settle.


      It got to the Supreme Court, and they ultimately dismissed cert as improvidently granted because there were a lot of vehicle problems. But the Chief Justice—Chief Justice Roberts—wrote a really persuasive opinion respecting "the dig," I think, is how he phrased it. But anyway, talked about the importance of issues like that being settled, about how sue and settle shouldn't happen, and that you shouldn't be able to circumvent the Administrative Procedure Act through that.


      So I think that you've got your finger on an issue that matters and that we're seeing litigation about. The Supreme Court granted cert on it, actually. They had -- that was the term that they had three intervention cases, and so there's a growing body of law out there. And so, I would just -- I would take a look, especially at what the Chief Justice said in the context of the Arizona case.


Roger Hanshaw:  Wonderful panel. Thank you very much.


Eric Grant:  Seems like you could hire the Solicitor General of Kentucky.


Sol. Gen. Matthew Kuhn:  I love West Virginia, so happy to help.


Corrine Snow:  They've got a pretty good one themselves.


      Well, if there are no further questions, are there any closing remarks from up here?


Eric Grant:  Always nice to spar with you, Mr. Mergen.


Corrine Snow:  All right. Well, then please join me in thanking our panelists today.

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


State Room
The Mayflower Hotel
1127 Connecticut Avenue
Washington, DC 20036


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