A Thought-Provoking Look at Independent Agencies

So as all of you doubtless already know (and probably discussed over lunch), today the D.C. Circuit in In re: Aiken County rejected as unripe a challenge to the Department of Energy’s decision to withdraw its application to the Nuclear Regulatory Commission for a license to build a permanent nuclear waste repository at Yucca Mountain, Nevada (the site Congress selected).

The Bush Administration (after a long delay) filed the application in June 2008, but in March 2010, the Obama Adminstration’s DOE filed a motion to withdraw the application with prejudice.  The NRC’s Licensing Board denied the motion.  The NRC is now simultaneously considering DOE’s license application and reviewing the Licensing Board’s decision to deny the motion to withdraw. The Court, in an opinion by Judge Sentelle, agreed with the government that there is a lack of finality and thus the petition for review is unripe until the independent Nuclear Regulatory Commission grants the motion to withdraw or rules on the license application.

Back in August 2008, Judge Brett Kavanaugh argued that the removal restrictions for members of the Public Company Accounting Oversight Board were “Humphrey’s Executor squared,”  after the Supreme Court decision, Humphrey’s Executor v. United States, that upheld the constitutionality of removal restrictions on personnel at independent agencies.  His conclusion in that case was vindicated by the Supreme Court.  Today, in a scholarly and lengthy (18 pages, vs. 16 for the majority) concurring opinion in Aiken County, Judge Kavanaugh explored the problems that plain old Humphrey’s Executor to the first power causes for “accountability, liberty, and government effectiveness.”  

He wrote:

This case is a mess because the executive agency (the Department of Energy) and the independent agency (the Nuclear Regulatory Commission) have overlapping statutory responsibilities with respect to the Yucca Mountain project. In particular, both agencies have critical roles in interpreting the relevant statutes and in exercising discretion under those laws. Of importance here, the statutes give the independent Nuclear Regulatory Commission the final word in the Executive Branch on whether the Executive Branch may terminate the Yucca Mountain project.

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Reading only the text of Article II, one would assume that the Nuclear Regulatory Commission would report to the President, not the President to the Nuclear Regulatory Commission. If two agencies in the Executive Branch were not on the same page (as may happen in this case if the Nuclear Regulatory Commission rejects the Department of Energy’s withdrawal application), the President presumably would have the authority to resolve that disagreement. If an agency were departing from the President’s preferred course (as the Nuclear Regulatory Commission may do), the President presumably would have the authority to prevent that. And if an agency were taking too long to make a critical legal or policy decision (as appears to be the case with the Nuclear Regulatory Commission), the President presumably would have the authority to fix that as well.

But of course, that “turns out to be inaccurate with respect to independent agencies” such as the NRC because of Humphrey’s Executor.  Kavanaugh argued that “[t]his case is a dramatic illustration of the continuing significance and implications of Humphrey’s Executor”:

If the Commission rejects the President’s policy decision . . . by rejecting the pending application by the Department of Energy (the President’s subordinate) to withdraw the licensing application for Yucca Mountain – then the President may be forced to continue with the Yucca Mountain project simply because the Nuclear Regulatory Commission has told him so.

Reproducing ten lengthy block quotes from the Supreme Court’s opinion in Free Enterprise Fund, Judge Kavanaugh concluded that the opinion’s “wording and reasoning are in tension with Humphrey’s Executor and are more in line with Chief Justice Taft’s majority in Myers [v. United States, 272 U.S. 52 (1926)],” which recognized the President’s authority to remove subordinate officers in the Executive Branch.

The most interesting passage of the opinion for me was when Judge Kavanaugh placed Humphrey’s Executor in historical context, noting that the case was “one in a line of decisions issued in 1935 and 1936 . . . by a Supreme Court seemingly bent on resisting President [Franklin] Roosevelt and his New Deal policies.”  Indeed, the case was decided on the day (May 27, 1935) that “became known as Roosevelt’s ‘Black Monday,’” when the Court announced three decisions relevant to FDR’s programs:  Humphrey’s Executor, Louisville Joint Stock Land Bank v. Radford (invalidating provisions of the Frazier-Lemke Farm Mortgage Act), and Schechter Poultry Corp. v. United States.   Judge Kavanaugh noted that “[t]he other cases in that line have long since been discarded as relics of an overly activist anti-New Deal Supreme Court,” but somehow, Humphrey’s Executor is the one product of the age of the Four Horsemen that “lives on.” 

For more on Black Monday, see here, beginning at page 96.  For more on Judge Kavanaugh and Black Monday, see here.