SCOTUS Scoop: One man’s regulatory flexibility is another man’s regulatory nightmare
There’s so much interesting stuff happening at the Court that you get not one, but two scoops of SCOTUS this week. In Part I, I’ll discuss all of the opinions that were released over the past two weeks. In Part II, we’ll recap some of the wild oral arguments. Let’s dig in!
Even after the demise of Chevron deference, the government is gonna win sometimes
The Court released its opinion in Bondi v. Vanderstok, also known as the “ghost guns” case. Here, a group of plaintiffs challenged an ATF rule that said gun parts kits are “firearms” under the Gun Contral Act of 1968, meaning they are subject to background checks, registration requirements, etc. The question was whether ATF had authority under the Gun Control Act to pass that rule.
The Act defines “firearm” as any weapon that is designed to, or may be readily converted to, expel a projectile, as well as its frame or receiver. The plaintiffs argued that gun parts kits cannot qualify as firearms because they are not weapons, and any of their frames or receivers are not fully finished.
Writing for the majority, Justice Neil Gorsuch upheld ATF’s regulation under the Gun Control Act of 1968—for now—but declined to give the agency a blank check. He reasoned that just as an author might refer to their unfinished manuscript as their “novel,” Congress could have meant to include parts kits as “weapons,” even if not yet fully functional. And there are at least some kits that may be “readily converted” to expel a projectile. He specifically pointed to the “Buy Build Shoot” kit, which includes everything needed to build a semiautomatic pistol in 20 minutes with common tools. Still, he left open that some kits might fall outside the statute. Just as a few lines on a page are not a “novel,” the same might be said of some kits that take too much work to truly be called “readily convertible.”
Justices Sonia Sotomayor, Brett Kavanaugh, and Ketanji Brown Jackson concurred. Justice Sotomayor wrote to dismiss any concerns that the decision left gun manufacturers and sellers with uncertainty. According to her, they know exactly what they’re doing, and anyway they can just ask the agency for guidance. (That’s… optimistic).
Justice Kavanaugh wrote to express concerns that, under the majority decision, people might not know if their kits are legal. But he added that he found comfort in the fact that government promised not to prosecute unclear cases. (Are we just trusting government now?) Justice Jackson said she would’ve deferred to the agency so long as it was acting within its delegated power, which kinda begs the question…
Justice Clarence Thomas, joined by Justice Samuel Alito, forcefully dissented. He objected to treating the case as a facial challenge—meaning that the plaintiffs had to prove that the rule was inconsistent with the statute in every application—arguing this tilted the scales toward the government. Under that reading, every agency definitional rule is permissible, because the agency can just incorporate something that is clearly covered by the statute. Instead, he said, the Court should’ve simply asked whether ATF’s rule was consistent with the Act. He also criticized the majority’s colloquial reading of the statute. Justice Thomas believed that, at best, the statute was ambiguous, and the Court should’ve applied a rule of lenity which weighs in favor of liberty rather than criminalization.
The case is significant because: 1) as a practical matter, ghost guns are popular precisely because some manufacturers argue they’re not firearms under the Act—this ruling says they are firearms; and 2) as a legal matter, the deeper issue is whether agencies can reinterpret old laws to expand their power. For years, courts gave agencies a deferential boost. Today’s opinion signals that deference may be fading—even if the agency won this round.
One man’s regulatory flexibility is another man’s regulatory nightmare
The Court also released its opinion in FDA v. Wages and White Lion Investments, yet another case that highlights the difficulty individuals and businesses have navigating the complex federal regulatory thicket created by the expansive administrative state.
Readers may recall that a vaping company, Wages and White Lions Investments, challenged the FDA’s denial of its application to market a new e-cigarette product—accusing it of creating a moving target. The Fifth Circuit agreed, calling the agency’s actions a “regulatory switcheroo.” For example, the agency had said that no specific studies were needed for companies to prove that their product “would be appropriate for the protection of public health” (a rather ambiguous standard, no?). But it later turned around and faulted the company for not submitting certain types of studies with its application. It had also told companies that submitting marketing plans was “critical” but later declined to read a single word of the plans. The Fifth Circuit called the FDA’s actions “the regulatory equivalent of Romeo sending Mercutio on a wild goose chase—and then admitting there was never a goose while denying he even suggested the chase.”
At the time of oral argument, I observed that the justices seemed unsympathetic to White Lion. And indeed, the justices unanimously ruled for the FDA. Writing for the Court, Justice Alito ruled that the FDA’s position was “sufficiently consistent” that it couldn’t be said to have changed course. And while the FDA had been non-committal at times, it was not misleading or wholly contradictory. I don’t know about you, but I feel like non-committal is a bad trait in boyfriends and regulatory agencies.
In other words, if you couch something in wishy-washy-enough language—i.e., “likely,” “may,” “it depends,”—you can’t be held to any of your promises. And if you don’t give people specific instructions for securing approval, leaving them with what some people might call “regulatory flexibility,” you have more reasons at your disposal to ultimately deny them! I couldn’t help but notice that Justice Alito made explicit reference to Congress’s clear delegation of broad power to the agency, as well as to vaping’s appeal to minors.
In a concurrence, Justice Sotomayor said that, given the “well-documented and serious risks” of vaping to youth, it should’ve come as no surprise to the applicants that they would need to submit rigorous scientific evidence about their products’ benefits and risks.
The Court left open, however, the question of whether FDA can create all of this (shifting) guidance over time through adjudications or whether it must be done through formalized notice and comment. So we’ll likely see another challenge in the future.
If you say you ate three cookies when you ate 12 total, are you technically telling the truth?
In a short, 10-page opinion, the Court ruled that a statute criminalizing “false statements” does not prohibit statements that are factually true, but misleading. Patrick Thompson, a member of a Chicago political dynasty, had taken out three loans from a bank totaling $219,000 before the lender went bankrupt in 2012. He did not sign paperwork for two of the loans, meaning there was no evidence of them, and only repaid the bank just under $400.
When the Federal Deposit Insurance Corporation tried to recoup some of what was owed, it sent Thompson an invoice for the remaining principal plus interest on all three loans. Thompson then called up the loan servicer, disputing the full amount, saying he had taken out a loan for $110,000 and that he had “no idea where the 269 number comes from.”
Years later, he was charged with making false statements to a federal agency. Thompson argued that he shouldn’t have been charged, because while his statements were misleading, they were factually true, and the statute only bans false statements. The Court unanimously agreed, saying the statute only said “false,” even though others mention both “false and misleading” statements. By definition, statements that are true cannot be false—even if intended to mislead. But Thompson’s not off the hook yet. The Court sent the case back down to the lower courts to determine whether a reasonable jury could’ve deemed his statements not just misleading, but affirmatively false. In a concurring opinion, Justice Alito emphasized that context matters when determining whether a statement is actually false. He used an example:
After noticing that a plate of 12 fresh-baked cookies has only crumbs remaining, a mother asks her daughter, “Did you eat all the cookies?” If the child says “I ate three” when she actually had all 12, her words would be literally true in isolation but false in context. The child did eat three cookies (then nine more). In context, however, the child is implicitly saying that she ate only three cookies, and that is false.
Certainly context matters, but one wonders whether this hypothetical collapses the distinction between false and misleading. After all, the child’s statement is literally true. And I thought the majority said that false statements cannot be true…
In another concurring opinion, Justice Jackson said that whatever the lower courts have said on this question, the jury in this particular case was instructed to decide whether Thompson’s statements were false. Thus, their decision finding Thompson guilty should stand. Little sympathy from the former criminal defender!
The Court is putting out fires
Parties are lighting up the Court’s emergency docket. It’s dealing with petitions related to birthright citizenship, the president’s power to deport under the Alien Enemies Act, and the Department of Education’s cancellation of grants that include DEI initiatives. We’ll keep you apprised as the Court rules.
In which I prove my value to my employer
Here’s a news interview I did on the ghost guns case.
I was lucky enough to speak on an esteemed panel last weekend at the Federalist Society Western Chapters Conference. The topic was, “Have (legal) conservatives lost the argument for small government.” My thought is that politicians and cultural trends come and go. Principles endure. And the best way to ensure freedom long term is to stick to those principles, both when you have political power and when you don’t.
Join me next week as I discuss with Spike Cohen how government is monopolizing everything, including charity. Yes, they even put a man in handcuffs for handing a burrito to someone who was hungry.
