When One Federal Agency Sues Another:

The U.S. Court of Appeals for the D.C. Circuit issued an interesting opinion today in Securities Exchange Commission v. Fair Labor Standards Authority, a case in which one agency sued another. In ruling for the government against the government, the opinion for the court by Judge Brown begins:

This is the sort of dispute that could only arise between public employees and a governmental agency. The Securities and Exchange Commission (SEC or Agency) was eager to pay its employees more money. The National Treasury Employees Union (NTEU or Union) complains the SEC implemented the raises too quickly. The Federal Labor Relations Authority (FLRA or Authority) agrees with the Union and has ordered the SEC to provide back pay to atone for the affront. Counterintuitive though it may be, we agree the FLRA has properly resolved this odd controversy so we deny the petition for review and grant the Authority's crossapplication for enforcement.

The case features an interesting concurring opinion by Judge Kavanaugh on which he wrote separately to "to point out the constitutional oddity of a case pitting two agencies in the Executive Branch against one another, and to explain why the Court can hear this dispute." He explains:

The caption of this case -- Securities and Exchange Commission v. Federal Labor Relations Authority -- illustrates an anomaly. Both the SEC and the FLRA are agencies in the Executive Branch, yet one is suing the other in an Article III court. This state of affairs is in tension with the constitutional structure designed by the Framers and set forth in the text of the Constitution. The Constitution vests the "executive Power" in one President. And the Constitution assigns the President the responsibility to "take Care that the Laws be faithfully executed." Because Article II provides that a single President controls the Executive Branch, legal or policy disputes between two Executive Branch agencies are typically resolved by the President or his designee -- without judicial intervention. Moreover, because agencies involved in intra-Executive Branch disputes are not adverse to one another (rather, they are both subordinate parts of a single organization headed by one CEO), such disputes do not appear to constitute a case or controversy for purposes of Article III. In short, judicial resolution of intra-Executive disputes is questionable under both Article II and Article III.

This analysis is uncontroversial as applied to disputes between two traditional Executive Branch agencies. No one plausibly thinks, for example, that a federal court would resolve a dispute between the Department of Justice and, say, the Department of Defense or the Department of State. But the wrinkle is that this case involves a so-called independent agency. Independent agencies are those agencies whose heads cannot be removed by the President except for cause and that therefore typically operate with some (undefined) degree of substantive autonomy from the President in a kind of extra-constitutional Fourth Branch. In Humphrey's Executor v. United States, the Supreme Court approved of independent agencies, at least in certain circumstances. Consistent with the post-Humphrey's Executor understanding that Presidents cannot (or at least do not) fully control independent agencies, and that an independent agency therefore can be sufficiently adverse to a traditional executive agency to create a justiciable case, the Supreme Court and this Court have entertained suits between an independent agency and a traditional executive agency, or as here between two independent agencies.

Our ability to decide this case thus follows from Humphrey's Executor and accords with courts' previous handling of disputes between an independent agency and a traditional executive agency (or another independent agency). Because this case is justiciable under the governing precedents and because the Court's analysis of the merits is persuasive, I join the opinion of the Court.

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