A Seat at the Sitting - November 2022

The November Docket in 90 minutes or Less

Event Video

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Each month, a panel of experts convenes to discuss the Court’s upcoming docket sitting by sitting. The cases that will be covered are included below.

  • Securities and Exchange Comm’n v. Cochran (November 7) – Whether a federal district has jurisdiction to hear a suit in which the respondent in an SEC administrative proceeding seeks to enjoin that proceeding based on an alleged constitutional defect regarding the removal of administrative law judges.
  • Axon Enterprise, Inc. v. Federal Trade Comm’n (November 7) – Whether Congress stripped federal district courts of jurisdiction over constitutional challenges to the FTC by granting the courts of appeals jurisdiction over FTC cease-and-desist orders.
  • Haaland v. Brackeen (November 9) – Equal protection clause; whether the Indian Child Welfare Act of 1978 violates the anti commandeering doctrine of the 10th amendment.

Featuring:

  • Jennifer Weddle, Shareholder, Greenberg Traurig
  • Margaret A. Little, Senior Litigation Counsel, New Civil Liberties Alliance
  • Alison Somin, Legal Fellow, Center for the Separation of Powers, Pacific Legal Foundation
  • Elyse Dorsey, Partner, Kirkland & Ellis LLP
  • Moderator: Amy Howe, Howe on the Court

 

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As always, the Federalist Society takes no position on particular legal or public policy issues; all expressions of opinion are those of the speaker.

Event Transcript

  [Music]

 

Nathan Kaczmarek:  Good afternoon. Welcome to “A Seat at the Sitting.” This special webinar series is presented by The Federalist Society’s Practice Groups and is designed to preview the November Supreme Court docket in 90 minutes or less.

 

      Today, we are pleased to have with us a panel of great experts, and we are excited for them to inform us of what is up next for SCOTUS. My name is Nick Kaczmarek. I am Vice President and Director of the Practice Groups. As always, please note that all expressions of opinion are those of our guests.

 

      Today, we are certainly thrilled to have Amy Howe lead today’s conversation. Amy, how are you?

 

Amy Howe:  Doing well, thank you.

 

Nathan Kaczmarek:  Very good. Amy is well known to our audience as a co-founder and now independent reporter for SCOTUSblog. She blogs at her own website, Howe on the Court. Prior to September 2016, Amy served as editor and reporter for SCOTUSblog.

 

Before full-time blogging, she served as counsel in over two dozen merits cases at the Supreme Court and argued two cases there. She has co-taught classes on Supreme Court litigation at Stanford and Harvard Law Schools. Amy is a graduate at the University of North Carolina and holds a Master’s Degree in Arab Studies and a law degree from Georgetown University. Full bios for Amy and our entire panel are available on our website and the promo emails we sent out for today’s program.

 

In a moment, I’ll turn it over to Amy. Once our panel has thoroughly covered the upcoming cases, we’ll go to audience Q&A. So please prepare the difficult questions that you’d like to ask them. Audience questions can be submitted by the Zoom Q&A function, and we’ll do our best to address as many of them as time will allow.

 

With that, thank you, everyone, for being with us this afternoon. Amy, the floor is yours.

 

Amy Howe:  Thank you so much, Nate, and thanks to The Federalist Society for inviting me to moderate this panel. I think you can say this about pretty much every argument calendar this term—which is full of blockbusters—but this is a really interesting argument session. And we’re very lucky to have an all-star panel here to discuss it.

 

      I’m going to start by briefly introducing our panel and the cases that they will focus on, and then we’ll dive in one by one. So we have Alison Somin, who’s going to cover what’s known as “Colloquy as the Affirmative Action Cases: Students for Fair Admissions v. Harvard College, and Students for Fair Admissions v.—my alma mater—The University of North Carolina. Elyse Dorsey is going to cover Axon v. Federal Trade Commission. Peggy Little will cover Securities and Exchange Commission v. Cochran, and Jennifer Weddle will cover the Indian Child Welfare Act cases.

 

      We are, as Nate said, looking forward to your questions. Please feel free to submit them at any time in the Q&A function on Zoom. And so let’s go ahead and get started because we have a lot to talk about. I’m going to go through the cases in the order in which the Court will hear them.

 

      So we’re going to start with Students for Fair Admissions v. Harvard College and Students for Fair Admission v. The University of North Carolina at Chapel Hill. They are, as many of you I’m sure know, challenges to the consideration of race by Harvard and UNC in their admissions process. The challengers have also asked the justices to overrule Grutter v. Bollinger—the Supreme Court’s 2003 decision holding that the University of Michigan Law School could consider race as one factor in its admission process as part of its desire to have a diverse student body.

 

      So Alison Somin is going to cover the case for us. She is a lawyer for the Pacific Legal Foundation. Before that, she also worked as a special assistant and counsel to Gail Heriot, a member of the bipartisan U.S. Commission on Civil Rights. And she filed an amicus brief supporting the challengers in this case. So, Allison, please take it away.

 

Alison Somin:  Thank you so much for that kind introduction, Amy, and thank you to The Federalist Society for inviting me. As Amy nicely set up, I’m here today to address two cases that challenge the legality of race-preferential admissions—as Amy, again, said—one against Harvard University and one against the University of North Carolina.

 

      The question at the heart of both cases is simple: Should students applying to a college or university be admitted or rejected solely based on their academic or other qualifications for attendance? Or should the university be permitted to use their race as a plus or minus factor in their decision making?

 

      In almost every other area of government decision making, the answer is simple: no, the government isn’t allowed to use race. It’s not really surprising why we have that rule. There has been a long and insidious use history of the misuse of race in government-based decision making. And it’s not surprising, therefore, that the Constitution has been generally interpreted to prohibit the use of race by decision makers. Similarly, the Civil Rights Act prohibits recipients of federal funding who aren’t themselves part of the government but receive federal money to not use race in their decision-making process.

 

      There are some exceptions, but they have historically been very limited. They must be compelling to use the doctrinal term, and they’ve been carefully circumscribed to particularly significant areas, such as, for example, national security. These race preferential admissions cases have, therefore, never really fit with the rest of the Supreme Court’s equal protection jurisprudence. So it’s not surprising that they’re headed back up to the high Court again.

 

      Today, I’m going to talk a little bit about how we got here. I’m going to pick apart the Court’s leading opinion regarding race-preferential admissions, Grutter v. Bollinger. I’ll talk a little bit about what I think the Court might do and why these cases are important—even for other areas of government decision making.

 

      Grutter v. Bollinger went up to the Supreme Court in 2003. It was joined with a twin case, Gratz v. Bollinger. Gratz involved a University of Michigan undergrad where a point system was used. Students who came from certain favored racial groups received a set amount of points when edging their applications forward.

 

      I want to be clear. This was not a small thumb on the scale; this was not a small edge. It’s what one of my former Civil Rights Commission colleagues referred to as “an anvil on the scale.” The bonus given for race in the University of Michigan undergrad was the equivalent of adding about a full point—moving from a 3-0 to a 4-0—added to one’s high school GPA.

 

      The bonuses given for race in the Grutter case were similarly large, but they weren’t officially given in the same amount to each applicant. Supposedly, admissions officers were using race flexibly, but in practice, admissions officers almost always used their discretion in the same way to give the same size preference to applicants from a particular racial group. Justice Rehnquist, in his dissent in that case, really picks apart the numbers and shows what’s going on.

 

      Nonetheless, despite what I and other observers have perceived with the similarity between these two cases, the Court handled them differently. It struck down the use of race at stake in the Gratz case involving a Michigan undergrad, but it upheld it in the Grutter case in Michigan’s Law School.

 

      Grutter is kind of an odd opinion even to supporters—both in the general public and in academia—who like its results. When I talk to people who don’t know a lot about the Court’s history of race-based decision making who, nonetheless, defend race in admissions decision making, they tend to defend it as being about making up for past historic wrongs against minority groups. They see this as giving a hand out to make up for past discrimination.

 

      And while I don’t agree that this is the best tool or a constitutionally-permitted tool, that argument does have a certain moral weight and a certain appeal. Certainly, race-based decision making in government history has been bad, and I certainly understand the urge to want to use something—whether it’s race preferences—as a remedial action.

 

      That’s not, however, what the Supreme Court did in Grutter. Justice O’Connor upheld race preferences in admissions when narrowly tailored to serve a compelling interest in student body diversity. This diversity rationale isn’t about healing historic wrongs, but rather about ensuring what she perceived as “pedagogic excellence in classrooms.” She believed that everybody learned more when racial and ethnic minority students are present in classrooms at selective schools.

 

      One big problem, though, is that if you look at how most selective universities actually use race, they don’t use it in a way that makes sense if their real goal is diversity. They tend to use it in a way that makes more sense if their real goal is compensatory justice for historic wrongs or even just ensuring proportional representation in ensuring a certain balance among students from racial groups.

 

      For example, one sees very large racial preferences being given in admission in areas like math and science when one wouldn’t really expect racial diversity to have much—if any—impact on classroom discussion about as much or more as one sees in areas where you’d expect diversity to matter more—like government, political science, or sociology.

 

      The groups that get and don’t get race as a plus also don’t really make sense if your goal is really diversity of experience or pedagogical diversity in the classroom. For example, Asian American students tend to be treated as one school group for purposes of preference in admissions—even though that group is extraordinarily internally diverse. Chinese American students and Pakistani American students come from groups that have very different histories, very different cultural traditions.

 

      The same thing is true if one looks at Hispanic and Latino American students who, again, come from groups that have very different histories and would tend to have diverse perspectives within the group. Professor David Bernstein of GMU recently wrote an excellent book, Classified, that really picks apart that part of the diversity rationale, how these classifications don’t make that much sense if one’s real goal is diversity.

 

      Notwithstanding these apparent contradictions or problems with Grutter, there’s been relatively little litigation trying to challenge most universities' use of race under the Grutter decision. One can speculate about why that is. But I think that part of the problem is just that it takes an extraordinary amount of time and resources to bring one of these cases. And, for an individual applicant—even if that person suspects wrongdoing—it’s almost never worth it. I believe the Harvard and UNC complaints were both first brought in about 2014. So anyone who was harmed in that admission cycle has long since graduated and gone on with life.

 

      There was one attempt in the Fisher v. Texas case that challenged the University of Texas for use of racial preferences. That made it up to the Court twice in the last decade. However, the Texas case, essentially, just leaves the Grutter framework untouched.

 

      Given that this Grutter framework doesn’t seem to make much sense on its own terms and fits poorly with the Supreme Court’s earlier decisions on race, it’s not terribly surprising that Students for Admissions has brought this round of cases and has asked quite straightforward in their petition for review for the Court to straightforwardly overrule Grutter.

 

      Predictions are hard, especially about the future. But we do have a Court that, I think, is more sympathetic to overruling race preferences, overruling Grutter, than any Court in a generation. This is a Federalist Society audience, so I expect that some people will be skeptical of Chief Justice Robert’s true bona fides. Nonetheless, he has been pretty steadfast in his past opinions about not liking race-based decision making by government about believing that, in many such instances, violates the Constitution.

 

      There’s less clear evidence about Justices Gorsuch, Barrett, and Kavanaugh. But given their overall orientation philosophy of judging, if you are a critic of race preferences and admissions, I think there’s some reason to be optimistic.

 

      Why is this case important? In some ways, I feel like it’s relatively easy to convince people of why it is. There’s been plenty in the media, and many people in this room may themselves have been through an admissions cycle, in which they’ve seen their friends, loved ones treated differently for no reason than the basis of race. There’s plenty of news stories in the media about how cases of student applications seem to be mishandled based on race.

 

      Nonetheless, I want to be clear that Grutter just doesn’t have implications merely for the world of higher education. Grutter is cited in cases involving the expansion of diversity-based justifications for using race in selective magnet schools, in the K-12 arena. At the Pacific Legal Foundation, we’ve handled cases challenging the uses of race in COVID relief programs, in the allocation of COVID-19 therapeutic treatments. States were talking about using race and, in some cases, actually using race in the allocation of COVID-19 vaccines. Hospitals are now saying that they’re using race based on diverse considerations of diversity, equity, and inclusion in determining who gets cardiac care.

 

      It may not matter greatly who gets into a particular university and who gets sorted to a slightly less selective one. But I would submit, humbly, that there are a few things that matter more than whether one gets cardiac care when one needs it.

 

      So, if the Court doesn’t cut back on race-based preferences in admissions in this case, one can expect to see the expansion of Grutter into many different areas of government-based decision making, and one should find that indeed troubling. Thank you for your time. I look forward to answering your questions about these cases.

 

Amy Howe:  Thank you so much, Alison. I have questions. Do any of the panelists have any additional questions or comments on Alison’s presentation? Okay. One question I had just, first, from a legal perspective. You talked about -- and the goal of the case is to overrule Grutter. What are some of the other ways that this case could play out in terms of some of the other results that the Court could reach?

 

Alison Somin:  So the Court could try to cut back on the widespread use of race-based preferences without straightforwardly overruling Grutter. They could say that Harvard is in violation of Grutter even if it stands untouched.

 

      One thing that’s interesting that I would be happy to draw more in response to future questions, both of these cases involve discrimination based on race against Asian American students. Occasionally, if one wanders onto popular media, you will hear criticism of race preferences be accused of being about preserving white privilege, which is somewhat ironic given that at many selective universities, it appears that the group that’s discriminated against the most is actually Asian Americans.

 

      So the Court could say that Harvard and UNC are unfairly discriminating against Asian Americans, even under Grutter, but leave the framework untouched. I think that that would be important since there is often unfair discrimination against Asian Americans by these selective schools.

 

      It does concern me, though, that if the Court tries to cut back on Grutter without overruling it that schools are just going to easily find ways to circumvent that. And so the status quo of widespread discrimination would just stick in place, and nothing will really change. The Constitution and civil rights laws will largely sit unvindicated.

 

Amy Howe:  One thing that Justice O’Connor in her opinion for the majority in Grutter said was that, essentially—and I’m paraphrasing here—”The country has come a long ways since our decision in Bakke v. Board of Regents, and we hope that in another 25 years, the interests that we endorse today will no longer be necessary.” Do you think that that line—that reasoning from Grutter—is going to carry any weight on either side of the calculus?

 

Alison Somin:  So I do think that that line is important in articulating a limit on Grutter’s reasoning. This precedent wasn’t expected to live forever. It was something that was supposed to wither away as race relations improved. There was, apparently, an op-ed in The New York Times this morning suggesting that some interpret it differently as giving an extra five years for universities to get their act together before race preferences can reasonably be challenged.

 

      Be that as it may, I think that if Justice O’Connor saw this as a temporary measure that would help get us closer to equality, I don’t think it’s worked that way. As I said earlier, it appears that most universities aren’t easing up on their use of race since 2003. Many are using it just as aggressively—or more aggressively—and race-based decision making seems to be expanding into new areas rather than contracting.

 

      That strongly suggests that the way to end using race is not to temporarily use race for mere purposes, but to just—as Justice Carlos Bea first said in his Ninth Circuit opinion—to stop making decisions on the basis of race.

 

Amy Howe:  All right. My last question for you for now, you talked about what happened if the Court doesn’t overrule Grutter. What happens if the Court does overrule Grutter?

 

Alison Somin:  So I think that that would be a step forward for those who oppose the use of race in admissions. I am not so optimistic as to think that every university will just stop trying to find ways to covertly use race.

 

In California, for example, Prop 209—pretty clearly by the terms of its text—bans the use of race in university admissions decision making by public schools. Nonetheless, California’s universities have tried to cheat in lots of different ways. They’ve tried using preferences based on zip code—where a zip code is pretty clearly a pretext for race. They’ve tried to use socioeconomic status. That’s worked less well in achieving their racial goal in that there’s a lack of it between that proxy for race and race itself.

 

I expect many universities and colleges will try to do things like this. I’m not opposed to universities pursuing geographic diversity or class diversity as ends in and of themselves, as long as they’re not using those goals as proxies for race. I expect that there will be litigation challenging use of those kinds of measures, if it appears that some colleges and universities are using those alternatives as proxies for race rather than as admissions criteria in and of themselves.

 

Amy Howe:  Terrific, thank you. We are going to move on now to our next case, SEC v. Cochran. This is a case brought by an accountant who was the subject of administrative proceedings—alleging that she had failed to comply with federal accounting standards. So Peggy Little is going to talk more about it. But briefly, the question before the Court now is whether federal district courts have the power to consider claims challenging the constitutionality of the SEC’s administrative law proceedings.

 

Peggy Little, who is going to focus on this case for us, is the Senior Counsel at the New Civil Liberties Alliance. She has over three decades of experience as a trial and appellate litigator on a wide range of topics, with clients ranging from individuals to Fortune 50 companies. Peggy, please take it away.

 

Margaret A. Little:  Thank you, Amy, and thank you for having me here. You correctly stated the question presented in Cochran—and this is also true of Axon. I think there’s another aspect of the case that doesn’t get much attention, and it’s whether people are able to challenge the constitutionality of their administrative law judges before the proceeding takes place or after.  And that’s a critical distinction to understand because the way the SEC—and most administrative agencies involved in these litigations—would like to have it happen is that you have to go through the proceeding.

 

      You might have to have the administrative law judge issue an initial ruling on his or her own competence to sit and preside over your case, and then you have to wait until there’s a decision, and then bring the issue up on appeal to the circuit court that would apply in your case or in the D.C. Circuit Court. That’s actually insane because, if you have an unconstitutional adjudicator, you need to be able to raise that before a proceeding takes place.

 

And in order to understand Cochran—and I think Axon too—you have to understand two other cases. There was a blockbuster case in 2018, Lucia v. The United States. And in that case -- or rather SEC. And in that case, Ray Lucia challenged the appointment of his administrative law judge. And he had to fight it all the way through the agency, through the commission review—where he got two dissents, by the way, in his favor.

 

He went to the D.C. Circuit. The D.C. Circuit split, and only at the Supreme Court did they reach the question that his ALJ had not been constitutionally appointed. In addition, the solicitor general, in that case, made the argument that the ALJs had too many removal protections. They were too insulated from removal. The Court declined to take that issue. But as Justice Breyer pointed out in the Lucia decision, that’s embedded in the appointments case.

 

And so what we’re seeing is the follow-on to Lucia. The ALJs have been determined by the Supreme Court to be officers of the United States that have to be properly appointed. And the question that is in Cochran and Axon is whether those judges are too insulated from removal by the president and then whether you can raise that issue in federal district court before the constitutional proceedings take place.

 

The second case that needs some explication before we can get into the merits of Michelle’s case is called Free Enterprise Fund. And in that case, the Supreme Court decided unanimously that there was jurisdiction to hear a challenge to the PCAOB on their removal protections.

 

So Free Enterprise Fund, for purposes of this litigation, provides not only the rule of decision on jurisdiction—and it provides that rule of decision unanimously—but also provides the rule of decision on the question of undue removal protections. Free Enterprise Fund held that only one layer of removal protections was permissible. And the SEC ALJs have at least three—as I count them—layers of removal protection. So understanding that those precedents are out there is key to understanding this litigation.

 

Now, let me tell you a little bit about Michelle Cochran. She is a feisty Texas accountant, who was in a job from hell. She had a terrible boss, who, apparently, was also dishonest. So, in 2013, she quit her job. He wouldn’t let her finish her audits. It was just a terrible situation. And that situation was acknowledged in the SEC ALJ’s opinion.

 

So three years after she walks away from this job—as any self-respecting person would do—she gets slapped with a SEC case, mostly going after her boss. But he settles, and they chase Michelle for ancillary charges. These are what are known as paperwork violations and whether her audits had been completed.

 

She went before an administrative law judge that was the same one that was in Ray Lucia’s case, and he slapped her with a $22,500 fine but also suspended her license to practice for 5 years, which is devastating to someone who has worked hard to get a CPA and needs to support their children and not be delicensed for those periods of time. I would also note that those penalties, once they’re assessed, they are a lifetime smear on your reputation. And it’s very difficult—not only to get a job as a CPA—but to get any job at all.

 

But before Michelle’s decision could become final, she was informed that the Lucia decision had come down, and over a hundred cases of the SEC got set aside because of the fact that their adjudicators had been unconstitutional. That sounded like good news until you realized that she now has to go through the proceeding all over again before a different ALJ, and that different ALJ still has unconstitutional layers of removal protections.

 

So Michelle came to the New Civil Liberties alliance, where I worked at the time in -- let’s see -- it was 2019. And we brought suit in federal court on her behalf to stop her from having to go through a second proceeding before judges who were unconstitutionally insulated from removal. The district judge following what was, at that point, five circuits’ courts of appeals felt he could not recognize her right to raise the removal violations in the Court.

 

But she said the following when he dismissed her case: “The Court is deeply concerned with the fact that the plaintiff already has been subjected to extensive proceedings before an ALJ who was not constitutionally appointed. She should not have been put to the stress of the first proceedings. And if she is correct in her contentions, she, again, will be put to further proceedings undoubtedly at considerable expense and stress before another unconstitutionally-appointed administrative law judge.” And it’s the illogic of forcing people to wait until the proceeding is over before they can challenge the constitutionality of their adjudicator that the judge was putting his finger on.

 

So we brought suit in federal court. We lost, and the judge dismissed the case because of the five circuits against us. We were able to get a stay at the Fifth Circuit, which was a good sign. We lost 2-1 with a good dissent in the Fifth Circuit. And then the Fifth Circuit, sitting on Bond ruled 9-7 in Michelle’s favor. So the case is not only whether you can raise the defect in your administrative law judges’ qualifications to rule in your case, but when.

 

So this was a very exciting development. The Fifth Circuit opinion is a fascinating read—not just the majority, but also the concurring opinion. And we are hoping that the fact that the Court has accepted cert on this that we will be able to turn this irrational ship around. I think it was Justice Scalia who once said, “Having case law and precedent for you is great. Having doctrine for you is great. But if you got logic going for you, you’ve really got a case.” And this case has it because it makes no sense whatsoever to put people through years of protracted proceedings that are destined to be set aside because of their unconstitutionality. So we’re hoping that the Supreme Court will see the logic of affirming the Fifth Circuit’s decision in Michelle’s case.

 

Now, we only have one justice who has actually spoken to this question, and that’s Justice Kavanaugh. In 2015, in an opinion called Jarkesy v. The Securities and Exchange Commission—one of the earlier challenges in one of the five circuits that had gone against us. Now, that decision was authored by Judge Srinivasan, but it was joined in by Justice Kavanaugh—then Judge Kavanaugh.

 

And it’s an interesting decision because at that same time—and this is about 2015—a lot of district courts were actually getting this question right, in my view. We had a district judge in the Northern District of Georgia, who recognized that these constitutional claims had to be decided in federal court before the proceedings took place. Judge Berman in the Southern District of New York and a couple of other judges there also had ruled that you should be able to bring these claims before the proceedings take place. But then five circuits overturned those rulings or affirmed district courts that felt they could not take jurisdiction.

 

What makes this really interesting right now is that we know what Justice Kavanaugh ruled in Jarkesy in 2015. But we’ve got powerful new information about what happens afterwards because Jarkesy—having gone through seven years of administrative proceedings—has had his case—his appeal to the Fifth Circuit—after his proceedings decided.

 

And the Fifth Circuit decided that the administrative proceedings denied him his Seventh Amendment right to a jury trial. It held that his administrative law judges had been unconstitutionally insulated from removal, and they also held that there was a non-delegation question in the case that made his proceedings need to be set aside.

 

So we have what is a preliminary ruling when Justice Kavanaugh was on the D.C. Circuit that is informed now by a subsequent circuit court consideration of all the constitutional violations that are present in these administrative law proceedings. And we are hoping that the Jarkesy decision will inform the Court in terms of how insane this is for people to go through years of proceedings that ultimately get set aside.

 

One of the things that I found when I was arguing for the en banc Court of Appeals was I was recited to them that Michelle had been in the administrative maw for at least five, maybe six years. Ray Lucia was stuck in that administrative jungle for eight years, Jarkesy, seven years. A guy named David Bandimere in the Tenth Circuit had been in that administrative proceeding for ten years.

 

I honestly don’t think the judges had any understanding or knowledge that people get stuck in these proceedings that last so long. The average time from filing to a decision in a federal district court hovers around two, two and a half years. And I know that includes settled cases, but still.

 

There’s a huge disparity between the time it takes to get an administrative proceeding decided. So that is one of the many compelling factual things that we had developed in some of our amicus briefs in Cochran filed by Ray Lucia and George Jarkesy—amongst others—in terms of how long these proceedings take place. 

 

One of the contributing factors to the length of those proceedings is that the SEC’s deadlines get strictly enforced against the respondents, and they keep giving themselves extensions—even when the rules require them to rule within a certain number of days. They give themselves extensions that go on for years.

 

Now, why is all of this important? It’s important because, in the agencies, they enact thousands of rules every year. Sometimes, those rules—as in Ray Lucia’s case—are made up out of whole cloth by the administrative law judge. And that is, by the way, what two SEC commissioners said in Ray Lucia’s appeal.

 

So you have these thousands of rules that, sometimes, are made up by the administrative law judges. Then the prosecutors—by the agency—and the judge is then employed by the very agency who is prosecuting him. That is a concentration of power that our Constitution does not permit. And so this is important so that people can get into a real court before a real judge with the constitutional protections that the Constitution requires.

 

Amy Howe:  Thank you, Peggy. I have a question from the chat that I think would be interesting to answer right now, which is, “Has Cochran been able to earn a living while this is pending?”

 

Margaret A. Little:  She’s employed, yes. That’s because she doesn’t have a decision against her—unlike with Ray Lucia. He had a decision against him, and so it was very impossible for him to find other employment.

 

So Michelle is in a slightly better position because her proceedings got vacated. So if someone does a job search on her, then they’re not going to turn up that she has a securities law violation. But many of these people—certainly George Jarkesy and Ray Lucia—in fact, do have those smears, really, if they have not been treated fairly in the proceedings that last a lifetime and make them unemployable.

 

Amy Howe:  And I’m just curious, actually. What is the government’s responses when you raised either the legal question or the practical question that you’ve raised about how long this can go on?

 

Margaret A. Little:  Well, in my opinion, it’s quite illogical. What they say is the structure of the statute -- which, by the way, argues strongly in our favor if you read the statute correctly, okay? There’s nothing in that statute that precludes either implicitly or explicitly federal court jurisdiction for constitutional claims.

 

      But they misread the statute and say, “Well, if you have a final decision from the administrative proceeding, then you have to bring that to the circuit court.” That’s correct, but there’s no final decision here. And so they take that language and assume that it applies from the start of the proceeding against the party to the end, and it simply does not. There’s no textual support whatsoever for the SEC’s argument.

 

Amy Howe:  Thanks so much, Peggy. We are going to move on now to Axon Enterprises v. Federal Trade Commission. This is a case brought by a company that makes body cameras for law enforcement, and it ran into antitrust issues when it tried to acquire a competitor. And so it’s a very similar question. The question in this case is whether the district court has the power to review constitutional challenges to the FTC’s structure.

 

Elyse Dorsey is going to discuss the case for us. She is a partner in the Washington office of Kirkland & Ellis, where she works on antitrust and competition issues. She’s been Counsel to the Assistant Attorney General for the Antitrust Division at the Department of Justice, and she’s worked as an Attorney Advisor at the Federal Trade Commission.

 

So, Elyse, please go ahead whenever you’re ready.

 

Elyse Dorsey:  Yeah. Thank you so much, Amy. I’m really excited to be here and be part of this discussion today. I think these two cases, in particular, seem to follow on a recent trend of challenges to independent agency, jurisdiction, their authority, and their constitutionality, and which the courts as a whole, I feel, are seeming to be a bit more amenable to in recent years. So I think it’s a really interesting time for administrative law and regulated industries.

 

      I also have the distinct benefit of getting to follow Peggy, who provided a really excellent overview of some of these issues already. And so I get to freeride off of her excellent work a little bit.

 

      One thing I wanted to pick up on in the beginning is this timing point that Peggy noted, where there’s this real distinction between the parties’ briefs in front of the Supreme Court, I think, where the government is really focusing on “There is meaningful judicial review. It just needs to happen at the appropriate point in time.” And, to Peggy’s point, if that requires a final resolution, well, that could take several years.

 

And I think the Axon case—when we’ll get into the facts—is kind of a good example of why waiting for that final decision might not be reasonable or feasible in the interim. Also, to Peggy’s point, it can take several years. So I was looking through at the beginning of one of the briefs. They note some of the change in the commission composition since this case was first brought. And, I mean, there’s been even more recently.

 

Chairman Simons, Commissioner Chopra, and Commissioner Phillips were all at the FTC when this was first initiated. All three of them have left. The new chair, Chair Khan, is in now, and so is Commissioner Bedoya. So it’s a very different agency composition. In the meantime, the respondent—the defendant, in this case—is still trying to muddle through this process.

 

And so, given all of that, I wanted to start with a little bit of a description of the facts in this case and some background on the FTC to give us some background on Axon’s journey to the Supreme Court here. So the FTC is comprised of five commissioners appointed with the advice and consent of Senate.

 

They are supposed to be appointed for seven-year staggered terms, and they’re removable only for an inefficiency, neglect of duty, or malfeasance, which is language that the Supreme Court in the Seila case had previous construed to materially limit presidential control over the agency.

 

The FTC’s administrative process is often referred to as its part three litigation because of its statutory basis. And the FTC’s ALJ is removable only for good cause established and determined by the Merit System Protection Board. So again, the ALJ here has at least a couple of layers of insulation from any sort of presidential removal power. And at the FTC, they’ve only had one ALJ for several years now. As long as I can remember, it’s just been the one ALJ handling all of their internal cases.

 

And another background point that is important in Axon’s brief and makes an appearance -- it’ll be interesting to see, I think, how the Court addressing this issue or doesn’t. But there’s this question of clearance as between the FTC and DOJ. So both agencies share jurisdiction to enforce the vast majority of the antitrust laws, including this kind of merger review.

 

And how Axon got in front of the FTC as opposed to the DOJ is really a black box. It’s pretty unclear from the outside. So having worked at both agencies, I can tell you there’s, sometimes, just often disputes about who gets clearance. They try and look at who has more expertise in a certain industry, but there’s so many—and especially in the new economy where there’s a lot of tech stuff and a lot of blurring of lines between different industries that used to be distinct. So I think fintech, generally, is a good example.

 

There can be a lot of fights over who gets what. And so, Axon, part of their argument is, “Well, we, by happenstance, ended up in front of the FTC. If we had ended up in front of the DOJ, we wouldn’t be facing any of the issues we’re currently facing. We would’ve gone into federal court much earlier, had a meaningful judicial review right away. But because we’re in front of the FTC, the FTC has a choice as to whether they’re going to pursue a case in their own administrative litigation—or in part three.” And, essentially, that’s entirely up to the FTC.

 

If the FTC wants to seek a preliminary injunction, they do have to go to federal court for that. But if it’s a case like this where they’re not looking for a preliminary injunction in the interim, they can just bring it internally and not have to face a federal court for several years potentially, right? They really get to keep that internal for a long time.

 

So turning a little bit to Axon here, you mentioned they made body cameras and other equipment for law enforcement. In May 2018, they acquired one of their competitors, Vievu, and about a month later, got a letter from the FTC stating that this acquisition raised some antitrust concerns, and they were going to look into it.

 

And so for the next 18 months, Axon cooperated with the FTC’s investigation. And I think this is, again, when we’re thinking about timing and what meaningful review looks like here, the FTC had 18 months before they even got to the point in the process where they would be making the decision as to whether to go to federal court or to go into part three litigation.

 

And during these negotiations, Axon had offered to divest all of Vievu’s assets, as well—as it’s described in their brief—inject a divestiture buyer with millions of dollars to get started. So they thought they were creating a meaningful competitor.

 

But in December 2019—and I’m going to read from the Ninth Circuit’s decision here—“The FTC demanded that Axon turn Vievu into a ‘clone of Axon using Axon’s intellectual property.’ And if Axon refused the settlement demand, the FTC threatened to initiate an administrative proceeding to obtain the relief.” And so, at that point, Axon filed its action in the district court—challenging the constitutionality of the FTC’s administrative proceedings.

 

And so I think that’s pretty significant here because, again, one of the things we’re looking at is what kind of relief could they actually get in federal court if they had to go in front of, not just a potentially more favorable internal ALJ, but to an Article III judge and actually present their case and defend the remedy that they’re looking for? I think that’s a really big question here.

 

And so, in the Ninth Circuit, Axon was challenging the clearance process that was used to determine whether the FTC or DOJ would review a merger. The fact that the FTC combines all of these powers—investigatory, prosecutorial, adjudicative, and appellate functions, and also the dual layer of protection that the FTC ALJs have -- and they ended up with a split decision with Judges Siler and Lee forming the majority and finding in favor of the FTC—and Judge Bumatay dissenting.

 

And reading through this opinion, I really feel like you can see the Court’s struggle with the application and the conclusions they see the law is demanding. Even the majority notes that, if they were writing on a clean slate, they would agree with the dissent. They just kind of find that they’re not writing on a clean slate. They have to apply the law, and unfortunately, it demands that they find for the FTC in this matter.

 

Another thing even the majority notes—and Axon makes a lot of use of in its brief, I think, rightfully so—is the fact that the FTC has not lost a part three litigation in at least a quarter century now. As an antitrust practitioner, I think this is an especially striking statistic at this moment in time because it sits at a really stark contrast with the DOJ Antitrust Division, which has lost quite a few high-profile cases in federal court recently, including three merger challenges within just a few weeks of one another this fall.

 

And so, if you’re looking at the disparity between what happens when the agencies go to federal court versus what happens when the FTC takes it internally, you see a bit of a disconnect that I don’t know that there’s a good explanation for.

 

Additionally of note here is that the ALJ at times over these 25 years has actually found against the commission and dismissed complaints during the time period—only to have the commission come in and overturn his findings and rule for the commission. So when we talk about the deck being stacked against defendants -- and in this internal process, I think, the perception is that’s a real concern and a real issue. I think I kind of wanted to wrap it up here and take any questions or further discussions.

 

Amy Howe:  Fantastic, thank you. There are questions. I want to make sure that Jennifer also has time to talk because, although she’s theoretically covering one case, she’s actually covering four.

 

So I’m going to turn it over to Jennifer Weddle to talk about the four consolidated cases that go by the name of Haaland v. Brackeen involving the Indian Child Welfare Act. And then we will come back and have more questions and more discussions. So, Jennifer, take it away, please.

 

Jennifer Weddle:  Thank you, Amy. So nearly 50 years after its enactment by Congress in 1978, the Indian Child Welfare Act is back again at the U.S. Supreme Court in 4 consolidated cases, that are collectively known as Brackeen, which is the name of an adoptive couple challenging the statute.

 

This is the Court’s first revisiting of ICWA—as it is generally known—since its 2013 5-4 holding in a case called Adoptive Couple v. Baby Girl. Many of you may remember that that case drew a lot of national and social media attention: ripping away an Indian child from her Indian father after she had been with him for years, finding that ICWA’s preference for the Indian parent—who had relinquished his parental rights while serving in the military—later changed his mind, and later was successful in petitioning a South Carolina court and at the South Carolina Supreme Court in getting custody of his daughter.

 

The U.S. Supreme Court, in an opinion by Justice Alito in 2013, threw all that out and said that because the Indian father had not been the custodial parent at the time of the relinquishment of his parental rights, ICWA’s preference for the Indian biological parent did not apply. And therefore, the child was adopted by a non-Indian couple.

 

A concurring opinion by Justice Thomas in the case sharply questioned Congress’s authority to enact ICWA in the first instance. Almost immediately thereafter, repeated challenges to ICWA sprang up, including those four consolidated cases that will take up the full argument time before the Court on November 9.

 

But before turning to discussion of those cases, I think some additional context about ICWA might be helpful. ICWA was passed, as I say, in 1978, at a time when one-third of Indian children were being removed from their Indian homes. Ninety percent of those children were placed with non-Indian entities: either families or institutions.

 

Those really shocking numbers about child theft flowed from ignorance and contempt directed at Indian families by state courts and child welfare personnel. And it also arose as a direct result of a now disavowed federal assimilationist policy that sought to subdue Indian tribes by removing Indian children from their families, forbidding those children access to their culture and tribal communities, and forcing them to assimilate to majority culture in really horrific ways. A lot of those atrocities are now being exposed—both in litigation matters and government investigations.

 

But in all respects, the goal of those policies was to destabilize tribal communities, really, at the root in hopes of the federal government seeking to avoid having to continue to deal with Indian tribes. All of that’s been long disavowed. But in the mid-1970s, those policies and their results were still in full force with the mass removal of Indian children from Indian homes. This included both private adoptions to non-Indian households and the mass internment of Indian children at boarding schools or the strenuous objections of their families and their tribal governments.

 

So in 1978, Congress moved to remedy that tribal instability created by the mass removal of Indian children. And they enacted ICWA, fulfilling what they described in the legislative history as their “long-neglected treaty and trust obligations to protect Indian children and to preserve the government-to-government relationship between tribes in the United States.”

 

What they enacted in ICWA was a procedural statute. It does not dictate outcomes. And since 1978 routinely, ICWA results in non-Indian parents adopting Indian children. What ICWA does do is it guarantees tribal governments’ certain rights that are purely procedural and jurisdictional in nature. This includes exclusive tribal court jurisdiction over reservation domiciliaries, presumptive tribal court jurisdiction over non-reservation domiciliaries, rights to intervene in state court proceedings, notice requirements that must be provided to tribal governments when an Indian child is involved, rights for that tribal government to petition for state court redress, and rights to obtain records—among some other things.

 

So what is all the fuss about? Shortly after the Court’s 2013 decision in Adoptive Couple v. Baby Girl, a Texas couple, the Brackeens, wishing to adopt an Indian child—the younger sibling of another Indian child they had already adopted—joined with the State of Texas and filed a suit in the Northern District of Texas against the United States and multiple federal agencies and officers claiming ICWA is unconstitutional.

 

They were joined by additional plaintiff potential adoptive parents from Nevada and Minnesota, as well as by the states of Louisiana and Indiana. The Cherokee Nation, the Oneida Nation, the Quinault Indian Nation, and the Morongo Band of Mission Indians intervened as defendants, and later the Navajo Nation intervened at the appellate stage. So tons and tons of briefing by lots of interested government actors and the three potential adoptive couples.

 

Judge Reed O’Connor held at the district court level that much of ICWA was unconstitutional. But ultimately, the US Court of Appeals for the Fifth Circuit threw most of that decision out in an en banc ruling in 2021. That en banc ruling includes 325 pages of opinions by judges Dennis and Duncan, which are joined in myriad subparts by the various judges who sat on the en banc court.

 

And I say this in short and with respect. The Fifth Circuit decision is a hot mess. And the Supreme Court may have taken up these four cases simply to admonish the Fifth Circuit not to do this to them again because trying to make heads or tails out of what’s in the 325 pages of plurality opinion is quite a chore.

 

The Court of Appeals affirmed the district court on some of the holdings, that specific sections of ICWA violated the Fifth Amendment's Equal Protection Guarantee and the Tenth Amendment’s Anti-Commandeering Principle. Specifically, the Fifth Circuit, in an equally divided Court, affirmed the district court’s holding that ICWA’s preference for placing Indian children with other Indian families -- the third ranking choice in ICWA’s order of preference and the foster care preference for licensed Indian foster homes violated equal protection. The Court of Appeals also concluded that the Tenth Amendment’s Anti-Commandeering Principle was violated because ICWA’s active efforts and qualified expert witness provisions and recordkeeping requirements violate the Anti-Commandeering Principle.

 

Finally, the Fifth Circuit held that certain provisions of the ICWA final rule violated the APA. The United States, the tribes, Texas, and the non-Indian adoptive parents all filed petitions for certiorari, and the Court granted all four petitions.

 

In the cases, Texas and the non-Indian prospective adoptive parents argue that Congress acted beyond its Indian Commerce Clause power in enacting ICWA, and that ICWA creates a race-based child custody system in violation of the Equal Protection Clause, and that ICWA violates the Anti-Commandeering Doctrine. Texas also argues that ICWA’s implementing regulations violate the Non-Delegation Doctrine by allowing individual tribes to alter placement preferences enacted by Congress.

 

The United States and the tribes and 23 amici states argue that Congress has the authority to enact ICWA, that ICWA does not violate the Anti-Commandeering Doctrine, that ICWA does not violate the Equal Protection Doctrine, and that Texas’s non-delegation challenge should be rejected.

 

There are dozens of amicus briefs on both sides, including a brief filed on behalf of 497 Indian tribes—that’s nearly all of them—and then 62 tribal and Indian organizations, as well as, like I say, 23 states intervening on behalf of -- or filing amicus briefs on behalf of the United States as well.

 

The Brackeens, Texas, and their amici, including just two states—Ohio and Oklahoma—argue that ICWA created a government-imposed and government-funded discriminatory sorting regime for children based on race and ancestry. But the United States, nearly all the tribes, 23 states, and many more amici organizations all argue that ICWA is not predicated on a racial classification at all, but instead on a child’s eligibility for citizenship in a federally-recognized tribe—as the term “Indian” has been routinely understood to be a political classification, both by Congress and the Court.

 

So what does all this mean? There’s a lot to read here. If you read only one brief in these four cases, I would suggest the brief of the National Indigenous Women’s Resource Center, which connects the dots on the Court’s longtime understanding of the term “Indian” as a political classification and the link of that understanding to the Court’s Indian Country law enforcement and criminal jurisdiction jurisprudence.

 

As Justice Gorsuch framed the majority’s ruling in last term’s Oklahoma v. Castro-Huerta decision, Texas’ argument that “Indian” is a racial classification is both ahistorical and a mistaken statement of Indian law. The Court’s 1974 decision in Martin v. Mancari—which I know is also cited in the Harvard cases—is the seminal case on this.

 

And there, the Court upheld the Indian Reorganization Act of 1934’s Indian Preference in Federal Hiring, finding that “Indian” was a political classification and not a racial one, and that the preference for Indian hiring was rationally related to the United States’ conduct of its government-to-government relationship with Indian tribes providing services through the Bureau of Indian Affairs.

 

That’s another interesting note on this case. There’s a raging point/counterpoint debate happening between legal historians, Robert Natelson and Ablavsky—both frequent Federalist Society contributors. A full vetting of that war is beyond the scope of this talk, but this debate among the historians is really significant because Justice Thomas relied on Professor Natelson’s work in his 2013 concurring opinion in Adoptive Couple v. Baby Girl. And that work has subsequently really been honed by Professor Ablavsky, which Professor Natelson does not appreciate.

 

I would also commend to you Professor Ablavsky’s amicus brief here in support of the United States. It’s truly a masterwork, detailing the changes made to Indian policy in the Constitution—stepping away from the disastrous Indian policy experiments that had been in the Articles of Confederation. There’s about 16 different issues in these cases, including standing and redressability issues given that 2 of the 3 couples have adopted the Indian children they sought to adopt, and the third Indian child has been adopted by her biological grandmother.

 

As to the anti-commandeering issues, whatever commandeering there is seems to be tolerable to states, with 23 offering very full-throated support for ICWA and only 3 opposing it. ICWA has been generally easily implanted by states in the almost 50 years of its existence.

 

But here, we also have the reality that three of nine justices are adoptive parents themselves or have an adoptive parent sibling. There’s a lot of empathy and experience with this subject matter on the Court, and that’s overlayed with the context that the Court continues to struggle with the role of tribes in our modern federalism. And we’ll have to see whether they follow history and precedent or chart a new course or if they just express their displeasure with 325 pages from the Fifth Circuit.

 

Amy Howe:  Thank you, Jennifer. You are all -- all four of you such heroes for summarizing such complicated cases—each of them so concisely. I was in such a hurry to hear from Jennifer that I forgot to introduce her properly. She is a Shareholder in the Denver office of Greenberg Traurig. She is the Co-Chair of the firm’s American Indian Law Practice and has been involved in many of the cases involving tribal law at the Supreme Court.

 

There are several other cases before the Court in the November setting, which somewhat counterintuitively starts on October 31. I am going to discuss each of them very briefly, and that will give you time—if you are so inclined—to submit a question in the Q&A section. And many thanks to those of you who have already submitted a question. And we will have time to get to those in just a moment.

 

One of the cases the Supreme Court is going to hear is a case called Jones v. Hendrix, which is whether or not the district court has the power to review a claim that a federal prisoner’s sentence is invalid because of a Supreme Court decision that came after his petition for post-conviction relief.

 

This is a case in which the federal government is not defending the lower court’s reasoning, although it is defending the judgment. And so the Supreme Court has appointed an amicus, Morgan Ratner, who, until very recently, was an assistant to the U.S. Solicitor General, to defend the Eighth Circuit’s reasoning in this case.

 

Cruz v. Arizona is a case in which the justices are considering whether or not an Arizona Supreme Court ruling that a state rule of criminal procedure bars a death row inmate from obtaining relief is an adequate and independent state law ground for the judgment against him so that the Supreme Court wouldn’t be able to review it.

 

An interesting case called Bittner v. United States involves the Bank Secrecy Act, which requires taxpayers to report any foreign bank accounts that they might have using a special form—a businessman, in this case, who has dual U.S. Romanian citizenship and had several overseas accounts. He didn’t realize he was supposed to complete the form. He had five years when he should have done it, but he did not.

 

And so the question in the case is whether or not the fine that he has to pay is $10,000 per report so that he’d owe $50,000, or $10,000 each time he failed to report an account, which means that his fine would be $2.7 million dollars.

 

The Supreme Court has a case involving personal jurisdiction called Mallory v. Norfolk Southern Railway—the challenge to the constitutionality of a Pennsylvania law that requires a corporation to consent to personal jurisdiction as a condition of doing business in the state. It’s a case brought by a former railroad employee, who developed cancer, and is trying to hold the company responsible. The question is whether or not he can sue the company in Pennsylvania.

 

And then, last but certainly not least, a case called Health and Hospital Corporation of Marion County v. Talevski. This is a case about whether or not federal laws that are enacted using Congress’s spending clause power allow a plaintiff to file a federal civil rights claim for their violation.

 

So let me go ahead and take a look. There were already several questions in the chat. Let me see if we have more. This is a question that could go, I think, to both Peggy and to Elyse. This is a question about whether or not the independence of the ALJ is salvageable on the unitary executive theory. And, if it’s not, what about other appellate administrative bodies, such as the IRS’s Appeals Division?

 

Margaret A. Little:  Well, I’ll take a shot at it.

 

Amy Howe:  Great, thank you.

 

Margaret A. Little:  Okay. I think the supposed independence of the ALJs -- which is not at issue in either Elyse’s case or mine. This is just a jurisdictional question, so I’m traveling a bit far afield. But on the removal protections, I think the idea that if you pile them on, the ALJs are going to somehow be less inclined to rule as their employer would want them to do is really a fiction.

 

      The institutional built-in tendency to rule in favor of your boss is going to be there whether you’ve got one layer of removal protections or five. And Elyse very helpfully brought up the FTC 100 percent win rate. For the SEC, it’s 90 percent as compared to somewhere between 60 and 70 percent in federal courts. And I think that shows rather dramatically that there is an institutional bias.

 

That means that people just don’t have a fair shake before the administrative law judges. Our goal is to do away with administrative law judging altogether and send people back to federal courts where they have the full range of protections that the Constitution guarantees to them.

 

Amy Howe:  Thanks so much, Peggy. Jennifer, I had a question about Justice Gorsuch, who you mentioned briefly. He wrote the decision for the majority in McGirt v. Oklahoma in 2020 and then had a very strong dissent in Oklahoma v. Castro-Huerta this past year. You’re in Colorado, so is it his Colorado background that is the source of his sort of strong interest in Indian law issues? Do you have any light to shed for us?

 

Jennifer Weddle:  Yeah. I think Justice Gorsuch has always been very interested and informed about Indian law issues. Coming from the Tenth Circuit, he certainly dealt with a lot of those issues while on the circuit. He was widely endorsed by tribes and tribal organizations when he was nominated to the U.S. Supreme Court because of that familiarity and respect for tribal sovereignty.

 

      When he was on the Tenth Circuit, he went to every rubber chicken dinner on tribal rights issues in Colorado and made it his mission to be very informed. I always do a book plug for him. But his book, A Republic, If You Can Keep It, addresses some of those early notions of federalism and tribes’ role in that federalism. And I think he just has a lot of respect for that. Like I say, he’s a very informed student of history and, consequently, has very strong opinions, which he expressed in Castro-Huerta.

 

Amy Howe:  Thank you. I had muted it because my dog was barking downstairs, but fortunately, he has stopped. We have a question from the chat for Alison, which points out that because Harvard is a private entity, the claims against it are for violation of Title VI, which prohibit discrimination by institutions that receive federal funding, that only the UNC case directly involves claims for violations of the Fourteenth Amendment. Having said that, the claims against Harvard, under Title VI, present constitutional issues because of the previous decisions reading Title VI to impose sustained constraints on funding recipients that the Fourteenth Amendment imposes on states.

 

      And so the question is, “Which would be the heavier lift for the justices: to resolve the case by reversing Grutter’s Fourteenth Amendment precedent or to resolve the case by reversing those other cases equating Title VI’s requirements to those of the Fourteenth Amendment?”

 

Alison Somin:  So that’s a good question. The questioner is correct that the University of North Carolina case is brought under the Constitution, and that the Harvard case is brought under Title VI, and that, while the Court read the Protection Clause and Title VI as prohibiting exactly the same types of discrimination in the 1976 Bakke case. There are some experts who question whether that was appropriate.

 

      There is some original scholarship that pushes back on the idea that the Equal Protection Clause doesn’t allow so-called “remedial discrimination.” There’s at least one originalist brief that’s been submitted to the Court that makes that argument. I personally don’t find its logic fully convincing.

 

      First of all, it doesn’t really take on state-based discrimination or discrimination that would be occurring by state universities or equivalent state governments. The cases where the framers of the Fourteenth Amendment allowed race discrimination that they cite seem to be focused on the federal government, which is a different animal for Fourteenth Amendment analysis purposes. They also seem to look mostly at legislation, as I understand it, that’s targeted at Friedman.

 

      And while that class is highly correlated with race, it’s not exactly the same thing as race-based relief itself. For example, the children of free blacks, who were living in the north at the time, and their children would simply not have been eligible for relief—aimed at Friedman—despite their racial status.

 

      So it’s possible that the Court could choose to take that route as interpreting Title VI as prohibiting this type of discrimination -- whereas allowing some flexibility under the Protection Clause. I’m not convinced, though, that it’s necessary to draw that distinction or to question those precedents—including Bakke—that have gotten the Court there.

 

Amy Howe:  Thanks so much. Our next question is also for Alison, and it touches on something you have already mentioned. But talking about the influence of race-based decision making in many institutions besides colleges, is there any hope or expectation that the Court might use language in its Harvard decision, which acknowledges—as the Chief Justice said in the Parents Involved case—that the way to stop racial discrimination is to stop using race to discriminate?

 

Alison Somin:  So I agree that, as a legal and policy matter, the way to stop discriminating on the basis of race is stop discriminating on the basis of race. It’s hard to be clairvoyant about what the justices would do. But if they want to take that opportunity to include such language in the opinion, I think it would be valuable.

 

As I alluded to earlier, race-based decision making has expanded into many areas of law and policy, besides higher education. And in many of those areas, Grutter is cited favorably as a precedent for it. Or, in other cases, even if Grutter is not being officially cited, its language of diversity is cited as justification more informally. So I do hope the justices do that, although, obviously, there’s this veil of secrecy regarding what they can or will do.

 

Amy Howe:  Terrific, thanks so much. My next question is for Elyse. What do you make of the Supreme Court’s decision not to take up one of the questions that the justices have been asked to take up in the Axon Enterprise involving the structure of the FTC itself?

 

Elyse Dorsey:  Yeah. That’s a good question. As I alluded to at the beginning of the conversation, it’s a time when a lot of different aspects of independent agencies are kind of under fire. I think, in this setting, it really made a lot of sense with the Cochran case for them to take up the issue that they did and maybe start there and see how it goes.

 

I guess I’m trying to stay optimistic as to their willingness to consider that a little later on down the road after they’ve maybe had a chance to work through some of these earlier decisions and see how that fits in because I think questions like this as to, “If you’re a party, when can you actually go to federal court and get relief there?” might play into how the Court sees the constitutionality of the agency more broadly because I think the checks and balances. It matters how the things all fit together and work together as a whole.

 

Amy Howe:  Terrific. And then my next question would be for either Elyse or Peggy. And it’s something you touched on, but maybe you could elaborate a little. What are the potential ripple effects of a decision either for or against the federal government in these cases beyond these two agencies?

 

Margaret A. Little:  I’m happy to jump in. I think that it will have some profound effect, just as Lucia’s decision affected Cochran and Axon’s ability to raise these constitutional questions. I think that it is a situation where the constitutional protections build upon one another. Perhaps the best case showing that is Jarkesy, which came down as this blockbuster Fifth Circuit decision, which also recognized that the administrative process denied respondents their jury trial rights.

 

      Now, I want to be clear, too, that this is not all ALJ judging that would be subject to those issues. For example, the vast majority of ALJs are social security and veterans’ benefits ALJs. It’s actually a very small number who adjudicate cases brought against people by the government.

 

      When you have a social security case, that’s somebody seeking a benefit from the government. The same holds true for veterans’ cases. So you don’t have a right to a jury trial on those sorts of claims. You don’t have the same need for constitutional protections because the government is not bringing a case against the social security applicants or the veterans. They are simply seeking a government benefit. And all of the protections are very different than when the government is seeking—as in, say, Ray Lucia or Michelle Cochran’s case—to fine them potentially up to hundreds of thousands of dollars to close down their business, in the case of Axon, to halt a merger and force them to hand over their intellectual property to someone else or we sue.

 

      That was a shocking demand, I think, in Axon. And you’d never see a district court entertain such a thing. So I think that the important thing to remember, you’re talking about a couple hundred judges that decide these cases, and I think that caseload can readily be handled by district court judges or appointing a couple hundred more. And I do think that the ultimate goal is to get agency enforcement out of their in-house courts—which rule for them a hundred percent of the time—and back into federal courts where people have their constitutional protections.

 

Elyse Dorsey:  Yeah. And just to add onto Peggy’s point a little bit, some of the ripple effects that I’m at least hoping for also just kind of relates to the agencies themselves and how they’re thinking about bringing these cases against some of the FTC in particular’s decisions that I’m familiar with. Recently, seem to be putting them in a place where they’re just running head first into these constitutional questions, right? They’re kind of assuming they have all sorts of authority and can do all sorts of things.

 

      Again, to Peggy’s point, the demand in Axon was pretty unreasonable, and I cannot think of another example where they ever received any sort of relief like that—even in their own administrative proceedings. So I think, hopefully, some of these cases and the decisions will get them in the interim—maybe while we’re waiting—to get all of the cases into federal court and, hopefully, get them to make better decisions in the short term.

 

Jennifer Weddle:  And, Amy, I would just jump in here to say I echo that. And as somebody who doesn’t practice in that area of law but does do a lot of administrative law, I think we’re going to see increasing cases building off cases like the Cochran case and the Lucia case, where just nationally—and certainly on the Court—there’s a decreasing wedge of tolerance for living in an administrative state. And there’s this fundamental question of, “Where did you get this power over me? And was that constitutional to begin with?”

 

      And we saw that just last week with the Fifth Circuit finding the CFPB’s—the Consumer Financial Protection Bureau’s—funding structure unconstitutional. Cases and statutes that have been before the Court many times that are getting a much closer review, I think, in part because you see these really egregious cases of mission creep, like Peggy was talking about, where there’s no way you’d ever get away with that in federal court, and yet, you have federal officers doing it to ordinary people every day. And, at some level, that’s just offensive. And I think there’s a major course correction happening, not only at the Court, but across the circuits on that.

 

Amy Howe:  All right. Well, if or when these cases bubble back up to the Supreme Court, we know who the experts are to go to. So please join me in thanking our wonderful, wonderful panel: Alison Somin, Peggy Little, Elyse Dorsey, and Jennifer Weddle. You all were fantastic. And I’m going to turn it back over now to Jack Capizzi.

 

Jack Capizzi:  Well, thank you, Amy. We greatly appreciate it. And I guess I’ll take this time to just say thank you for helping us moderate this event, and then also thank you to all of our panel for sharing their truly valuable time and expertise today, and then to thank our audience as well for joining us.

 

      As always, we welcome listener feedback by email at [email protected]. And please keep an eye on the website and your emails for announcements about upcoming webinars. There is certain to be plenty for this upcoming docket.

 

      So thank you all for your time. With that, we are adjourned.

 

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