14 Wake Forest L. Rev. Online 20

C. Isaac Hopkin


This Note begins with the story of two investment managers. Manager One was an investment manager in Texas who oversaw funds exempt from registration with the Securities and Exchange Commission (“SEC” or the “Commission”).[1] Manager One set up two private investment partnership funds that held about $24 million in assets and had a little over a hundred investors.[2] These funds were described as “hedge-fund like” investments for sophisticated investors.[3] Following the 2008 crash, the funds failed.[4] In 2013, the SEC charged Manager One with fraud.[5] The SEC alleged that Manager One had (1) misrepresented who served as prime broker and as auditor; (2) misrepresented the funds’ investment parameters and safeguards; and (3) overvalued the funds’ assets to generate greater fees.[6] The SEC tried the case in an administrative forum.[7]

In 2014, the SEC administrative law judge (“ALJ”) found Manager One liable.[8] Later, the Commission granted an expedited five-year review before issuing its final order in September 2020.[9] The Commission imposed a monetary penalty of $300,000 on Manager One, ordered his fund to disgorge $685,000 in ill-gotten gains, and barred Manager One from securities activities.[10] Manager One repeatedly requested a jury trial in an Article III court and was repeatedly denied because the SEC, in its sole discretion, chose an administrative proceeding.[11]

Manager Two was also an investment manager in Texas who managed funds exempt from registration.[12] Manager Two set up multiple funds to pursue a hedge-fund-like strategy for sophisticated investors.[13] Following the 2001 crash, the funds collapsed due to a combination of mismanagement and market factors.[14] The SEC charged Manager Two with fraud for overvaluing his funds.[15] The SEC brought the action in federal district court, where the jury found Manager Two liable and imposed a civil penalty of $50,000, a permanent injunction, and a disgorgement of $900,000 of ill-gotten gains.[16]

Why were Manager One and Manager Two treated so differently? The difference is timing. When Manager One was charged, the SEC had to bring all civil enforcement actions against unregistered funds in an Article III court, where the jury right automatically attaches.[17] Unfortunately for Mr. Jarkesy (Manager One), he was charged in 2013 when the SEC had the discretion to choose between an Article III forum or an administrative forum to adjudicate its civil enforcement actions against unregistered funds.[18]

This dramatic shift in the SEC’s power was no accident. In response to the 2008 financial crash, Congress passed the Dodd-Frank Act, giving the SEC sole authority to pursue civil or equitable remedies in either an administrative forum or an Article III court.[19] Nothing limits the SEC’s discretion in this choice.[20] Moreover, the legislative history makes it clear that the SEC’s unbounded discretion was what Congress intended:

This section streamlines the SEC’s existing enforcement authorities by permitting the SEC to seek civil money penalties in cease-and-desist proceedings under Federal securities laws. The section provides appropriate due process protections by making the SEC’s authority in administrative penalty proceedings coextensive with its authority to seek penalties in Federal court. As is the case when a Federal district court imposes a civil penalty in a[n] SEC action, administrative civil money penalties would be subject to review by a Federal appeals court.[21]

As written, this provision puts the Seventh Amendment in the hands of the SEC. The Seventh Amendment protects civil jury trials “in suits at common law.”[22] The Supreme Court has held that when the government is litigating an action in an Article III court that is “analogous to suits at common law,” the Seventh Amendment attaches.[23] So how can the SEC can pursue the same remedies in a district court that requires a jury or in its own administrative courts that do not? The answer lies in the messy public rights exception, which allows the government to litigate in a non-Article III forum and where the Seventh Amendment “poses no independent bar” to non-jury factfinding.[24]

Despite the public rights exception, the SEC’s unfettered discretion is troubling.[25] As the statute stands now, the SEC could theoretically choose to grant one defendant’s Seventh Amendment rights while denying a similar defendant her Seventh Amendment rights.[26] This is the crux of the matter in Jarkesy.[27] When Jarkesy challenged the SEC, saying its discretion was unlawful under the Seventh Amendment, the Fifth Circuit agreed.[28] It found the SEC’s discretion unlawful suffered from two “constitutional defects.”[29] First, the court held that the SEC was not litigating a public right, and thus the Seventh Amendment required a jury trial.[30] Second, the Fifth Circuit held that Congress could not delegate forum choice to the SEC.[31] Both holdings reached the right result, but for the wrong reasons.

This Note analyzes the Fifth Circuit opinion in Jarkesy v. SEC by examining the interplay between administrative adjudication and the Seventh Amendment. Part I first explores the history of the Seventh Amendment and its importance at America’s founding. Next, Part I surveys the evolution of the public rights doctrine, specifically explaining how the public rights doctrine allows Article-III-like fact-finding outside Article III courts. This tension between the Seventh Amendment and public rights serves as the backdrop to the Fifth Circuit’s opinion.

Part II of this Note contends that the Fifth Circuit reached the correct outcome for the wrong reasons. The Fifth Circuit’s first holding was that the SEC’s cause of action was not a public right.[32] But this holding is likely wrong because the cause of action fits well into the Atlas Roofing[33] framework. Second, the Fifth Circuit held that the non-delegation doctrine prevented the SEC from choosing the forum.[34] This second holding defies relevant precedent surrounding the non-delegation doctrine.[35] Even so, the result of Jarkesy was correct. As this Note will explain, the opinion should have focused on how the SEC’s unique power over the forum fails to meet the exclusivity requirement found in Granfinanciera,[36] and thus was not a proper assignment. As a result, Mr. Jarkesy—along with others prosecuted under this statute—should have the right to elect a jury. Put differently, the defendants should control their Seventh Amendment rights, not the SEC. This framework provides an easy out for the Supreme Court, which recently granted certiorari in this case. Indeed, the Granfinanciera exclusive assignment requirement would allow the Court to preserve the administrative adjudication status quo while protecting Seventh Amendment rights. In that world, the Supreme Court could have its cake and eat it too.

I. Background, History, and a Battle of Fundamentals

The Seventh Amendment preserves an individual’s jury right in both common law and statutory civil actions.[37] Even so, when the government brings civil actions, the Seventh Amendment does not attach if the government is litigating a public right in a non-Article III forum.[38] This exception is called the public rights doctrine.[39] When a public right is involved, “the Seventh Amendment poses no independent bar”[40] to a non-Article III adjudication so long as “Congress properly assigns a matter to adjudication in a non-Article III tribunal.”[41] Whether a matter is properly assigned is a two-part inquiry: (1) whether the suit is analogous to one that existed at common law; and if so, (2) whether the government civil action is exempted by the public rights doctrine.[42] If either answer is no, defendants like Jarkesy do not have a Seventh Amendment right in the government’s civil action.

Cases like Jarkesy’s highlight two fundamental but conflicting goals in American law. On one side, the American commitment to a jury trial is as old as the country itself.[43] On the other, our Government prioritizes efficiency by using agencies and other bureaus to provide quick resolutions.[44] Thus, to understand Jarkesy, one must understand the history of the Seventh Amendment and the public rights exception.

A. Juries: The History, the Analysis, and the First Inquiry of Jarkesy
1. The Ancient Origin of Juries

“In Suits at common law . . . the right of trial by jury shall be preserved, and no fact tried by a jury, shall be otherwise re-examined in any court of the United States, than according to the rules of the common law.”[45] This is no small thing. Indeed, the Seventh Amendment was “paid for by thousands of years of slow progress and sacrifice of brave people who stood up for liberty.”[46] The concept of a jury dates back as far as ancient Greece,[47] but it did not evolve into the form contemplated by the Seventh Amendment until eighteenth-century England.[48]

In England, before trial by jury, two primary methods existed in judicial factfinding.[49] One method was trial by combat, where God would bring the truth to light.[50] God would do so during the trial by “giving force to the victor’s arms” while the two litigants fought on foot with a baton.[51] This method soon fell out of favor because trial by combat often lead to the death of noblemen whose life could be “otherwise employed.”[52]

The other, similarly dubious, method came in the form of sworn testimony.[53] With sworn testimony, the litigant presented a witness or witnesses, called compurgators, who swore to the litigant’s innocence or guilt.[54] This method was also problematic because many compurgators were chosen for their willingness to lie in exchange for payment.[55] The structure for factfinding in English law was a mixed bag ripe for reform.

The transformation of the English judicial process began with King Henry II.[56] He established professional judges and authorized “recognitors” or juries.[57] These juries resembled a modern grand jury.[58] The jury’s job was to “accuse” rather than to “try”
the cases.[59] Judge Pope, in his article, explained the process:

“Four persons from a vill, under oath, would report matters of public fame to twelve knights, also under oath. The knights were chosen from a larger area known as the hundred or the wapentake. If the twelve agreed, a presentment was made to the sheriff. After accusation came the trial.”[60]

Those indicted by the accusing jury could still be tried in front of a judge with the accusing jury serving as witnesses rather than triers of fact.[61]

Yet the problem of malicious prosecution remained. As a result, those accused of crimes could go before another jury to show that the charge was “procured out of hate and spite.”[62] If the jury found that the prosecution was false or malicious, the case was over.[63] Soon, the role of the second jury transformed from judging the jury to deciding the case itself.[64]

This process began as early as the thirteenth century.[65] The defendant could bring the same case to a second group “composed of men of a higher rank” called an “attainting jury.”[66] If the second jury disagreed with the first jury, the members of the first jury could be subject to imprisonment, forfeiture of lands, denial of credit, and sometimes death.[67] Out of the “attainting jury” system emerged our system of jurors who judge rather than accuse.[68] The attainting jury would consider what evidence was before the original jury and whether the prior jury accused properly on that evidence.[69] The attainting jury could only consider what was before the prior jury and could not draw any information outside the record.[70]

By the sixteenth century, however, the common law replaced this system, and judges gained the authority to grant a new trial rather than being subject to an attainting jury.[71] To do so, judges now had to hear the evidence along with the jury.[72] The jurors who brought the case had to disclose under oath anything they knew about the facts underlying the case.[73] Rather than jurors being the prosecutor and then the attainment jury determining facts, judges now could usurp the fact-finding function if they found the prosecuting jury’s evidence unsatisfactory.[74]

Perhaps poetically, the “critical moment” for the independent jury as we know it came in a trial against William Penn.[75] Penn, the twenty-six-year-old leader of the Quakers, was charged with “disturbing the King’s peace by preaching nonconformist religious views at an outdoor meeting in London.”[76] After hearing the case, four jurors “refused to convict Penn of the most serious charge.”[77] The judge sent the jury back to reach “the proper verdict,” but the jury again refused.[78] After reaching the wrong verdict again, the court sent the jurors back without “meat, drink, fire, or any other accommodation; they had not so much as a chamber-pot, though desired.”[79] Even in these dreadful conditions, the jurors again returned a verdict for Penn.[80] The court accepted the judgment, but the jurors were fined and jailed for contempt of court.[81] These jurors sued for habeas corpus.[82]

Lord Chief Justice Vaughn, in a monumental opinion, established that juries were entitled to reach their decisions independently.[83] Justice Vaughn observed:

[I]f the Judge having heard the evidence . . . shall tell the jury . . . the law is for the plaintiff, or for the defendant, and you are under the pain of fine and imprisonment to find accordingly, . . . every man sees that the jury is but a troublesome delay . . . and therefore the tryals by them may be better abolish’d than continued; which were a strange new-found conclusion, after a tryal so celebrated for many hundreds of years.[84]

This landmark opinion allowed jurors to be charged with facts, and the judge could no longer override those findings.[85]

Thus, by the eighteenth century, the English court system roughly resembled the forum we know it as today.[86] Judges presided over the trial, and jurors drawn from the community would judge the facts of the case.[87] Jurors were selected because they could determine the facts impartially and attorneys could challenge a juror for cause.[88] Witnesses were subject to open court and gave sworn testimony, and judges ruled on objections.[89] Then, jurors were allowed to privately deliberate until they reached their final verdict.[90] Thus, the common law system produced the modern jury system through the slow drag of time.

2. Juries and the Founding

The new independent jury system became “the grand bulwark of [English] liberties.”[91] Blackstone explained that trial by jury is the glory of the English law and “the most transcendent privilege which any subject can enjoy or wish for, that he cannot be affected, either in his property, his liberty, or his person, but by the unanimous consent of twelve of his neighbors and equals.”[92]

The right to a jury gained equal importance in Colonial America as “[it] was the germ of American freedom–the morning star of that liberty which subsequently revolutionized America.”[93] That is because the jury was one of the few protections against British overreach.[94] The colonists did not get to vote for Parliament, but they could make their grievances against the government known through the local jury.[95] The jury became a vehicle of resistance against British oppression, which in turn led to the British government avoiding jury trials.[96] For example, the Stamp Act cases were tried in admiralty courts in London, depriving many Americans of the local jury.[97] The British government’s manipulation of the system outraged the colonists to the point that the deprivation of their jury rights was a chief grievance in the Declaration of Independence.[98]

The jury protected the community from government overreach and served as a check on judges appointed by British officials.[99] In fact, civil juries were so important that the debate over the Bill of Rights was triggered by a casual comment by George Mason, in which he noted that “no provision was yet made for juries in civil cases.”[100] The Pennsylvania Anti-Federalists nearly prevented ratification of the Constitution because they believed the Federalists were attempting to abolish civil juries.[101] When the Federalists promised the Bill of Rights to assuage the Anti-Federalists concerns, seven of the states proposed amendments including the protection of the civil jury right.[102]

Yet, despite its apparent importance, little is known about the original purpose of the Seventh Amendment.[103] From the contextual history, a general guarantee of the civil jury was widely desired, but there was “no consensus on the precise extent of its power.”[104] For example, during the Constitutional Convention on September 15, 1787, a motion was made by General Thomas Pinckney and Elbridge Gerry to add the following to Article III: “And a trial by jury shall be preserved as usual in civil cases.”[105] Nathaniel Gorham responded to the motion, “The constitution of Juries is different in different States and trial itself is usual in different cases in different states.”[106] The motion was rejected and the convention ended without a guarantee of a civil jury trial.[107]

Even less is known about the debate surrounding the current language of the Seventh Amendment.[108] Madison originally proposed the language from the Virginia ratification convention, “In suits at common law, between man and man, the trial by jury, as one of the best securities to the rights of the people, ought to remain inviolate.”[109] The house committee then revised this language to say, “In suits at common law, the right of the trial by jury shall be preserved.”[110] The house passed the committee version without discussion.[111] The Senate then added, “where consideration exceeds twenty dollars.”[112] The record is sparse after that, but the Seventh Amendment was passed with little debate and ratified later on.[113] This Amendment—that inspired a revolution, that sparked the bill of rights, that was considered “the germ of American freedom–the morning star of that liberty”[114]—provides little light to those invoking it today.

3. Seventh Amendment Analysis

In cases like Jarkesy, Seventh Amendment history is an important prong that decides whether the trial can be held in an administrative forum or must be held in an Article III forum.[115] To determine whether a plaintiff is entitled to a jury, a court first evaluates whether the litigant has a Seventh Amendment right per Tull v. United States.[116]

To determine whether the Seventh Amendment applies, courts examine if the cause of action is “analogous to suits at common law” as existed at the time of the Seventh Amendment.[117] In Tull, the Court determined whether the Seventh Amendment applied against the government when it imposed a civil fine for violating the Clean Water Act.[118] The Supreme Court held that Tull was entitled to a jury trial because the action was analogous to the common law action of debt brought before juries in England.[119] In reaching its holding, the Court reasoned that common law extended not only to common-law actions—such as torts, contracts, or fraud—but also to claims created by congressional action.[120]

Following Tull, courts evaluate (1) the nature of the action and (2) the remedy sought.[121] If the nature of the statute and its remedy are analogous to actions and remedies that existed in eighteenth century England, then the Seventh Amendment attaches.[122] That said, in making this analysis, courts prioritize the nature of relief over the cause of action itself.[123] Thus, if the remedy is similar to one that at the time of the ratification of the Seventh Amendment would have been sought in a court of law rather than a court of equity, then the action is subject to a jury.[124]

4. Jarkesy’s Seventh Amendment Rights

Jarkesy is not William Penn, but his desire to pursue his right to an independent jury is understandable. It is even more understandable when a litigant sees the SEC’s astonishing win rate in administrative proceedings. According to the Wall Street Journal, the SEC won ninety percent of contested cases before an administrative law judge, compared to its sixty-nine percent success rate in federal court over the same time frame.[125]

This disparity is especially relevant because the SEC uses the administrative forum much more often than Article III courts.[126] A litigant such as Jarkesy faces three potential SEC actions: (1) actions against brokers, (2) actions for reporting or accounting, or (3) actions against investment advisors. The SEC brought ninety percent of actions against brokers, eighty-four percent of actions for reporting or accounting, and seventy-four percent of actions against investment advisors in an administrative forum rather than an Article III court.[127] Anyone subject to the SEC’s enforcement could understandably feel like a litigant in Eighteenth century England where “every man sees that the jury is but a troublesome delay” rather than a “new-found conclusion, after a tryal so celebrated for hundreds of years.”[128]

B. The Public Rights Doctrine: History, Confusion, and the Second Inquiry of Jarkesy

In cases such as Jarkesy’s, the public rights doctrine is the greatest difference between an Article III forum, which carries a Seventh Amendment right, or an administrative proceeding, which is exempt from many Article III procedures. A public right is a government action related to an executive or legislative power.[129] In essence, public rights allow the government to litigate civil matters because it is enforcing them on behalf of the public. Consider securities laws. In response to the Great Depression and the stock market crash that precipitated it, Congress passed laws that allowed the government to initiate civil actions against bad actors.[130] Unlike every-day common law actions where the SEC initiates an enforcement action under securities law, the SEC is not validating the rights of a particular individual or itself, rather the SEC litigates on behalf of the public.[131] In those cases, the SEC is enforcing a public right. So long as a matter is a public right, Congress may properly assign it to a non-Article III forum, exempt from the Seventh Amendment.[132]

The public rights exception emerged before the twentieth century.[133] Yet since the founding, the executive and legislative branches have grown in both size—through new agencies—and scope—by said agencies enforcing civil penalties.[134] Accordingly, the public rights doctrine has had to adapt and change along with those branches to reflect the values that existed at the founding while also recognizing the new reality of a larger and broader federal government. Here, the Note explores the emergence of the public rights doctrine, the transformation into its modern form, and what makes a right public and thus exempt from jury trials.

1. Emergence of the Public Rights Doctrine

The public rights doctrine is supported by two different constitutional rationales: separation of powers and sovereign immunity.[135] Under the separation of powers theory, a public right may be tried in a non-Article III court because those causes of action are an exercise of executive or legislative powers, not judicial power.[136] The broad constitutional grants of power to the legislative and executive branches in Articles I and II of the Constitution necessitate some form of dispute resolution when that power is exercised.[137] When such dispute resolution is required, the public rights doctrine determines whether those branches can create their own fora, or whether such dispute resolutions are subject to the same restrictions constitutionally imposed on the judiciary.[138] Put another way, the public rights doctrine clarifies which actions stemming from Article I and II must be resolved by Article III courts and which actions are legislative or executive in their function and thus exempt from mandatory Article III court procedures.[139] As a result, the cause of action has no place in an Article III branch because the judiciary cannot exercise legislative nor executive power.[140]

The sovereign immunity rational for the public rights doctrine stems from the common law tradition. At common law, an individual was barred from suing the sovereign without its permission and the sovereign rarely (if ever) brought civil suits.[141] But the Article III language implicates many government actions: “All cases . . .[and] controversies to which the United States shall be a Party” are subject to Article III.[142] Thus public rights resolve the incongruence between when Article III applies to the sovereign, Thus, the public rights doctrine resolves the contradiction. If the cause of action is not a public right the sovereign would be subject to Article III litigation; when the cause of action is a public right the sovereign is shielded from Article III courts by the common law tradition of sovereign immunity.[143] Under this rationale, if Article III waives sovereign immunity, then Seventh Amendment protections attach.[144] Otherwise, the common law allows the government to form its own forum of dispute resolution, such as proceedings in front of an administrative law judge. Regardless of the underlying theory, the public rights exception allows the government to litigate on behalf of the public in a civil setting.

The first case to recognize the public rights doctrine was Murray’s Lessee v. Hoboken Land & Improvement Co. (Murray’s Lessee).[145] There, a dispute arose over property ownership where one party took lineal title while the other was a bona fide purchaser from the United States.[146] At issue was a statute that allowed the Treasury Department to issue a lien before it made findings in federal court.[147] The lineal title claimant challenged the statute, arguing that only Article III courts had the power to issue a lien and the Treasury-Department lien on his land was therefore invalid.[148]

The Court disagreed using the sovereign immunity rationale:

[T]here are matters, involving public rights, which may be presented in such form that the judicial power is capable of acting on them, and which are susceptible of judicial determination, but which Congress may or may not bring within the cognizance of the courts of the United States, as it may deem proper.[149]

Put differently, if the government is the owner of the land, it must consent to suit in an Article III court; otherwise, Congress may allow an executive department to grant relief.[150]

Public rights extended as the administrative state grew. In Crowell v. Benson,[151] a commissioner found Benson liable for injuries sustained by one of Benson’s employees as part of the Longshoremen’s and Harbor Workers’ Compensation Act.[152] The employee brought the action in an administrative forum as authorized by the statute, instead of the typical judicial forum, where the commissioner found him liable.[153] Benson challenged the act, arguing that the statute authorizing private suit violated inter alia “provisions of article 3 with respect to the judicial power of the United States.” [154]

The Supreme Court agreed using the public rights rationale. The Court explained that Congress may establish “legislative courts” for matters that “arise between the Government and persons subject to its authority in connection with the performance of the constitutional functions of the executive or legislative departments.”[155] But when matters arise between two private persons “to enforce constitutional rights[,]” Congress’s power to assign the matter is “an untenable assumption.”[156] Put another way, the separation of powers requires that the executive and legislative branches be exempt from Article III restrictions when using their powers because “functions of the executive or legislative departments” are not judicial powers. By comparison, when the matters relate to a judicial power, here maritime jurisdiction, such a matter cannot be assigned outside of Article III courts.

2. The Expansion of Public Rights to Reflect the Modern Administrative State

The drafters of the Seventh Amendment and Article III did not contemplate a world in which the government would try common law actions.[157] At the founding, litigation between citizens and the State was rare outside of criminal matters.[158] In the civil context, government actions brought in common law courts were mostly contractual disputes.[159] Thus, the language of the Seventh Amendment and Article III do not contemplate actions like Jarkesy where the government brings an action analogous to a common law fraud claim.[160]

The Court addressed the increasing divergence between historic practices and the modern government in Atlas Roofing Co. v. Occupational Safety & Health Review Commission.[161] In Atlas Roofing, the company challenged the administrative proceeding against it, arguing that conducting the action in an administrative forum deprived the company of its Seventh Amendment right because the proceeding involved a common-law claim.[162] The Court rejected this argument, explaining that OSHA had litigated a public right and therefore did not require a jury trial.[163] The Court held that when Congress creates a new statutory public right, Congress may assign the adjudication of that right to an administrative agency.[164] “The distinction is between cases of private right and those which arise between the government and persons subject to its authority in connection with the performance of the constitutional functions of the executive or legislative function.”[165] The Court’s holding consolidated both the separation of powers and sovereign immunity rationales by requiring the government to be a named party and Congress to create “a new cause of action unknown to the common law” for the public right doctrine to apply.

But in later holdings, the Court held that the first condition of Atlas Roofing, which required that the government be a party to the suit, was no longer necessary for a right to be deemed a public right. In Thomas v. Union Carbide Agricultural Products Co.,[166] the Court examined “whether Article III of the Constitution prohibit[ed] Congress from selecting binding arbitration . . . as the mechanism for resolving disputes among participates in FIFRA’s pesticide registration scheme.”[167] The Court found that it did not because the matter was a public right and thus exempt from Article III.[168] The majority explained that Congress may choose “quasi-judicial methods of resolving matters” when those matters concern “an integral part of a [Congressional] program.”[169] Put differently, the focus is on substance rather than form.[170] This case returned the Court to the separation of powers rationale where a matter became a public right when it was an exercise of Congressional power.[171] Thus, as the doctrine stands today, a matter becomes a public right when it concerns an exercise of legislative or executive power; when the matter becomes a public right, the matter can be assigned to a non-Article III forum.

In sum, the distinction between a public right and a private right is whether the right is “integrally related to a particular federal government action.”[172] If it relates to an executive or legislative function, then the right is public.[173] If a party is litigating a public right, then the Seventh Amendment “poses no independent bar to the adjudication of that action by a nonjury factfinder.”[174] Simple, right?

Yet scholars and courts agree that determining what a public right is creates a procedural and judicial mess.[175] This mess is apparent in Jarkesy.[176] On one hand, the action involves the government acting in its sovereign capacity to enforce securities law.[177] On the other hand, this action is eerily similar to the action in Tull where an administrative agency was enforcing a civil penalty based on a common law cause of action.[178] This tension is at the heart of both the public rights doctrine and Jarkesy itself.

3. Separation of Powers Analysis and Jarkesy

Typically, administrative adjudication does not trigger the Seventh Amendment because it enforces public rights assigned to non-Article III forums.[179] Accordingly, when Congress properly assigns such a matter to an agency, then no jury right attaches.[180] Congress may properly assign the matter when no Article III powers are implicated.[181] Agency adjudications do not exercise Article III powers and are thus properly assigned in three instances:

(1) those where there is no deprivation of life, liberty, or property; (2) those deprivations that nonetheless satisfy due process such as in Murray’s Lessee; and (3) those where the agency exercises no power at all, because it serves as a judicial adjunct.[182]

Under the first type of case where there is not a deprivation, non-Article III adjudication is permissible because there is no due process concern. For example, when the government issues a benefit and then revokes that benefit, such an action would not—absent unusual circumstances—be subject to a to an Article III court because there is no deprivation involved.[183] The Fifth Circuit found that this type of exemption is not the type in Jarkesy’s suit because he was subject to a civil penalty—i.e., a deprivation of property.[184]

The second framework is permitted even in cases of deprivation where due process and fair procedures are present.[185] For example, in Murray’s Lessee, the litigant was only subject to a temporary lien that he could later contest in court.[186] Congress could properly allow the executive to issue a lien because it was temporary “until a decision should be made by the court.”[187] Consequently, any deprivation in life, liberty, and property without adjudication in the courts was minimal. By contrast, Jarkesy is not concerned with mere temporary deprivation. In fact, Jarkesy was barred from his chosen profession of securities trading for years until the final adjudication took place.[188] The deprivation, while potentially subject to review, has been far too punitive for far too long to qualify for the Murray’s Lessee exception.

The third category—the one that likely fits best in Jarkesy—allows non-Article III adjudication when the agency is not responsible for the exercise of judicial or executive powers.[189] For example, in Crowell, administrative agencies could participate in factfinding because the source of the power was “determin[ing] various matters arising between the government and others, which from their nature do not require judicial determination.”[190] When the government is bringing a case analogous to common law fraud, this power has been called a “replacement right.”[191] A “replacement right” refers to when Congress substitutes an existing common law remedy with an administrative one and assigns the right’s adjudication to a non-Article III forum.[192]

This description best fits with Jarkesy because the SEC’s action against him was subject to Article III authority until the Dodd-Frank Act.[193] Following the Dodd-Frank Act, the SEC now has the power to exercise its replacement right selectively,[194] so the jury right attaches only when the SEC chooses to bring the action in an Article III court.[195] Therefore, like in Crowell, it is a public right because the SEC is vindicating the public interest.

Yet replacement rights create separation of powers issues because Congress is supplanting existing judicial authority.[196] Indeed, to do so, the legislation must be an exercise of legislative or executive power. This is especially unique in a case such as Jarkesy, in which the SEC sometimes chooses to bring the case within Article III powers and other times exercises its own adjudication powers. This is where the heart of the matter lies in Jarkesy—what power is the SEC exercising when trying the suit in its own forum?

II. How the Supreme Court Can Have Its Cake and Eat It Too: The Fifth Circuit Was Right in Jarkesy but for the Wrong Reasons

Jarkesy’s reasoning “cuts against [] Supreme Court precedent on the applicability of the Seventh Amendment to agency proceedings involving ‘public rights.’”[197] The question presented to the panel was whether Jarkesy had the right to a jury trial in the SEC’s proceeding against him.[198] The Fifth Circuit held that Jarkesy was entitled to a jury because the SEC was not litigating a public right, or, alternatively, Congress had violated the non-delegation doctrine by allowing the SEC to choose its forum.[199]

The opinion focused on whether the statutory cause of action was a public right.[200]This inquiry assessed “whether Congress may assign” the matter to a non-Article III forum.[201] As explained below, [202] Congress could assign it to the SEC because it likely was a public right. Instead, the panel should have focused on the other aspect of Granfinanciera which asks “whether Congress . . . has assigned resolution of the relevant claim to a non-Article III adjudicative body.”[203]

Despite the cause of action implicating a public right, Congress did not properly assign it to the SEC. Under Granfinanciera, “[u]nless Congress may and has permissibly withdrawn jurisdiction over that action by courts of law and assigned it exclusively to non-Article III tribunals sitting without juries, the Seventh Amendment guarantees petitioners a jury trial upon request.”[204] By allowing the SEC discretion to pick a forum with or without a jury, Congress has not satisfied Granfinanciera because it has not exclusively assigned the action to a non-article III tribunal. Consequently, without proper assignment, the action is subject to Article III protections.[205]

This sets up a simple solution for the Supreme Court. At minimum, a defendant should have the same right to invoke Article III as the SEC. Granfinanciera provides the way. By finding that Jarkesy is entitled to a jury because the action was not “exclusively assigned,” the Court can allow Jarkesy his Seventh Amendment rights without undermining the entirety of administrative adjudication. Rather, administrative adjudication would maintain its status quo because Atlas Roofing and Granfinanciera remain unchanged. By this narrow ruling, the Court can have its cake, maintaining a complex administrative structure, and eat it too, strengthening Seventh Amendment rights.

A. The Jarkesy Framework

In this Subpart, the Note explains what the Fifth Circuit’s relevant holdings were and why they were not right in light of Granfinanciera, Atlas Roofing, etc. This Subpart is split into the two major portions of the opinion: first the public rights framework and second the non-delegation framework. These portions of the opinion were alternative holdings about Jarkesy’s right to a jury trial.

1. Public Rights Framework: Part I of the Opinion

The first holding in the Fifth Circuit Opinion was that the SEC was not litigating a public right and thus Jarkesy was entitled to a jury.[206] Courts answer two questions to determine whether an administrative litigant is entitled to a jury: first whether the cause of action existed at common law under the Seventh Amendment, and second whether the cause of action is a public right.[207] In this case, it is not disputed that the first inquiry is met. The SEC’s civil penalty is just like the civil penalty evaluated in Tull––an action at debt.[208] For the second inquiry, determination of whether public rights are implicated, the court considers: (1) whether “Congress ‘creat[ed] a new cause of action, and remedies therefor[e], unknown to the common law,’ because traditional rights and remedies were inadequate to cope with a manifest public problem;” and (2) whether jury trials would “go far to impede swift resolution of the matter.”[209]

The Fifth Circuit’s analysis under the first prong is questionable given current caselaw. The panel held that the SEC was not litigating a public right because the action was analogous to common law fraud.[210] But this contradicts Atlas Roofing, which found that a tort like action without damages is “unknown to the common law.”[211] To distinguish Atlas Roofing, the majority explained that “OSHA empowered the government to pursue civil penalties and abatement orders whether or not any employees were ‘actually injured’ . . . .”[212] The court continued, “The government’s right to relief was exclusively a creature of statute and therefore was distinctly public in nature.”[213] The majority then analogized the SEC’s cause of action to common law fraud.[214]

This point is puzzling because the panel proves the SEC’s point. The SEC argued that its fraud claims are unique because the agency need not demonstrate loss.[215] In fact, just like in Atlas Roofing, the SEC’s analogous action lacks the damages component.[216] Proving actual damages is vital to common law fraud.[217] Here, the statute Congress passed creates a new action different from the common law because, even though it mirrors the most of the elements of common law fraud, the SEC need not demonstrate damages.[218] In this way, the statute is nearly identical to the statute at issue in Atlas Roofing, which also mirrored a common-law claim lacking damages. Thus, the Fifth Circuit’s attempt to differentiate Atlas Roofing fails because the panel’s focus was misplaced. What makes an action “unknown to the common law” is not a lack of similar elements, here misrepresentation.[219] Similarity is inevitable. Rather, an action is “unknown to the common law” when it lacks one of the common elements, here damages.[220]

The panel also tried to reason that Atlas Roofing was unique because it asked “factfinders to undertake detailed assessments of workplace safety condition and to make unsafe-conditions findings even if no injury occurred.”[221] But again on this point, the SEC’s power is similar in that it investigates securities fraud actions, makes findings on whether fraud occurs, and brings actions even if no damages have occurred.[222] For this reason, analogy to common law is not enough to overcome the public rights exception outlined in Atlas Roofing because fraud without damages is “unknown to the common law.”[223]

For the other element of the Atlas Roofing test, whether jury trials go far to “impede swift resolution” of the action, the Fifth Circuit’s reasoning has more support.[224] To begin with, the current litigation took seven years.[225] Seven years is not considered a swift resolution, even in judicial-time.[226] And the SEC still brings similar actions in district court which cuts against the argument that jury trials impede swift resolution.[227] Requiring an Article III trial would not “impede swift resolution” because even the SEC agrees that Article III courts can handle these claims.[228]

In sum, the opinion ignored the comparison between the cause of action in Atlas Roofing by OSHA and the cause of action brought by the SEC. Consequently, under current case law, it is likely that the action brought by the SEC is a public right and thus exempt from the Seventh Amendment requirements.

2. The Non-Delegation Non-Starter: Part II of the Opinion

The Jarkesy court was “almost certainly wrong” in the non-delegation part of its opinion.[229] In that portion, the panel held that even if the Commission’s cause of action were enforcing a public right, Congress improperly delegated a legislative power to the SEC.[230]

The majority observed that the language of Article I provides that all legislative powers must be vested in the Congress.[231] The Court also reasoned that forum selection is a legislative power.[232] It is a legislative power because “assigning disputes to agency adjudication”[233] “alter[s] the legal rights of, duties, and relations of persons . . . outside the legislative branch.”[234] In addition, “the mode of determining which cases are assigned to administrative tribunals ‘is completely within congressional control.’”[235] Thus, because forum selection is a legislative power, Congress must articulate “an intelligible principle” to control the exercise of that power if delegating it to an agency.[236] The Jarkesy court reasoned that Congress did not give an intelligible principle when delegating forum selection to the SEC and it was thus an unconstitutional delegation.[237]

The non-delegation requirement has only been applied “when Congress has delegated power directly to the President—never when Congress has delegated power to agency officials.”[238] Although some Justices have signaled this may change, that reception has only been in dissents and concurrences.[239] In fact, the Fifth Circuit rejected Congress’s delegation to an administrative agency by citing those dissents instead of any majority opinions.[240] In essence, the Jarkesy court tenuously relied on the expansion of an already disputed doctrine.

The court was, in my opinion, correctly wary of the SEC’s complete discretion over forum. But its holding misconstrued existing case law and relied on non-delegation, which has not applied to this sort of action before. Alternatively, the Fifth Circuit could have held that Congress did not exclusively assign the action to the SEC, allowing Jarkesy to invoke an Article III forum. This is directly supported by the case law, particularly Granfinanciera.

B. Did Congress Assign the Action? The Exclusivity Principle: A Way Out for the Court?

This Note agrees with the Fifth Circuit: the SEC should not have complete discretion over forum. Congress should choose the forum and the SEC must follow. Yet, the Fifth Circuit’s holding ventured far beyond the caselaw to reach this result. Rather than base its holding on broad (and novel) interpretations of the caselaw, the Fifth Circuit instead should have issued a narrow opinion based on Granfinanciera. In doing so, the court could have reached the same result—a jury right for Jarkesy—without relying on a Supreme Court dissenting opinion for its rule.[241]

Granfinanciera answers when the Seventh Amendment prevents non-Article III adjudication.[242] The test is whether Congress “may and has assigned resolution of the relevant claim to a non-Article III adjudicative body that does not use a jury as a factfinder.”[243] Congress may assign any action that is a public right.[244] Under Granfinanciera, it is likely that the SEC was litigating a public right against Jarkesy because the action is unknown to the common law.[245] Thus, Congress may assign it. The question then is whether Congress has assigned it. Under Granfinanciera, the answer is no.

Congress has not assigned a public right unless adjudication of that right is given “exclusively to non-article III tribunals sitting without juries.”[246] Otherwise, “the Seventh Amendment guarantees petitioners a jury trial upon request.”[247] Thus, to assign means to exclusively assign. Without exclusive assignment, the Seventh Amendment requires a jury trial upon a defendant’s request.[248]

The requirement for exclusive assignment is found in many of the Court’s public rights precedents. In Atlas Roofing the Court stated, “Congress has often created new statutory obligations, provided for civil penalties for their violation and committed exclusively to an administrative agency the function of deciding whether a violation has in fact occurred.”[249] In Ex parte Bakelite Corp.,[250] the Court stated, “Congress may reserve to itself the power to decide, may delegate that power to executive officers, or may commit it to judicial tribunals.”[251] The Court stated in Thomas that “the public rights doctrine reflects simply a pragmatic understanding that when Congress selects a quasi-judicial method of resolving matters that ‘could be conclusively determined by the Executive and Legislative Branches,’ the danger of encroaching on the judicial powers is less than when private rights.”[252] In sum, exclusivity ensures actual assignment, which in turn secures the rights of the parties before litigation ever starts.

Here, unlike other public rights cases, the relevant statute did not exclusively assign the matter outside of Article III courts. In fact, the statute gives the SEC complete autonomy to litigate in an Article II forum, its own administrative court, or an Article III forum.[253] The SEC’s autonomy violates the exclusivity requirement found in Granfinanciera and other public rights cases. Whether the Seventh Amendment applies “turns not solely on the nature of the issue to be resolved, but also the forum in which it is resolved.”[254] In Jarkesy, the SEC chooses the forum and thus had complete control over Jarkesy’s Seventh Amendment right. Granfinanciera does not tolerate this level of agency autonomy. Indeed, by requiring exclusive assignment, a court ensures that control over the Seventh Amendment is not left to an agency’s whims. Instead, Congress may both create a new right and define the parameters of that right.

Thus, the Fifth Circuit improperly based its opinion on non-delegation rather than proper assignment. When the matter is not exclusively assigned, the Seventh Amendment steps in and assures the litigant has a jury right if they so elect. This holding would have resulted in the same outcome, a jury trial for Jarkesy, without going against Atlas Roofing’s precedent, or alternatively relying on a theoretical doctrine not adopted in any controlling precedent.

C. Proposal

The exclusivity requirement opens an easy path for the Supreme Court to follow. One of the concerns consistently expressed by the Justices is how finding for Jarkesy could upend agency adjudication.[255] Yet another consistent concern is how easily Congress could deprive anyone of a jury right if they wanted to.[256]

In responding to these concerns, Granfinanciera gives the Supreme Court a chance to have its cake and eat it too. Rather than upending practically all administrative adjudications or further weakening the Seventh Amendment, exclusive assignment allows the Justices to take a small step in preserving both. The Supreme Court could reject the Fifth Circuit’s opinion under Atlas Roofing and still hold that Granfinanciera requires exclusive assignment. Under that rule, Jarkesy and anyone else similarly prosecuted may elect for a jury trial or consent to an SEC trial because Granfinanciera requires it.[257] Thus, the Supreme Court can have its cake and eat it too.

Alternatively, the SEC could moot this issue today by giving litigants the option to choose Article II or Article III forum.[258] The SEC can accomplish this without Congress, as it will simply be an administrative procedure which is exempt from notice and comment rulemaking.[259] By selecting a forum through notice and comment procedures, the SEC would protect its interest in efficiency while preserving a litigant’s Seventh Amendment rights. Either way, the resolution need not upend all agency adjudication. Rather, any solution could be tailored to preserve SEC efficiency and the Seventh Amendment rights.


In sum, juries are an ancient and an important right, though not an untouchable one. Juries may be abrogated when the action is not one “at common law” or when the right being litigated is a public right. Public rights are those rights which are closely intertwined with an executive or legislative scheme. Even so, just because an action may be a public right in theory, it still must be assigned to be litigated in a non-Article III forum. Without exclusive assignment to a non-jury forum, the Seventh Amendment attaches. In Jarkesy, the SEC brought a case in an administrative forum for civil penalties. The majority opinion held that this was unconstitutional because the SEC was not litigating a public right. Even still, this action reflects other actions brought by administrative agencies. It sounds in common law but is a new action because it lacks one of the vital elements of common-law claims, damages. But unlike other public rights, the SEC has the power to bring the action in one forum with a jury right and one without a jury right. This violates the exclusivity principle as explained in Granfinanciera. Exclusivity provides an easy way out for the Court and even the SEC itself. So long as the SEC has this right, the defendant ought to maintain it too. By doing so, the Court, the SEC, and other parties may protect the legislative scheme, the administrative state, and also the Seventh Amendment.

C. Isaac Hopkin[260]*

  1. . Brief of Phillip Goldstein et al. as Amici Curiae in Support of Petitioners, Jarkesy v. SEC, 34 F.4th 446 (5th Cir. 2022) (No. 20-61007), 2021 WL 1856946, at *6 [hereinafter Cuban Brief]; Brief of the New Civil Liberties Alliance as Amicus Curiae in Support of Petitioners, Jarkesy, 34 F.4th 446 (No. 20-61007), 2021 WL 1856951, at *3 [hereinafter NCLU Brief].

  2. . Jarkesy v. SEC, 34 F.4th 446, 450 (5th Cir. 2022), cert. granted, 143 S. Ct. 2688 (2023).

  3. . Brief for the Cato Institute as Amicus Curiae in Support of Petitioners, Jarkesy, 34 F.4th 446 (5th Cir. 2022) (No. 20-61007), 2021 WL 1149884, at *2 [hereinafter Cato Brief].

  4. . NCLU Brief, supra note 1, at *3.

  5. . Jarkesy, 34 F.4th at 450.

  6. . Id.

  7. . Id. at 449.

  8. . NCLU Brief, supra note 1, at *3.

  9. . Id.

  10. . Jarkesy, 34 F.4th at 450.

  11. . See, e.g., Jarkesy v. SEC, 803 F.3d 9, 30 (D.C. Cir. 2015) (denying Manager 1 his jury request because the court lacked subject-matter jurisdiction for the case).

  12. . SEC v. Seghers, 298 F.App’x 319, 323 n.2 (5th Cir. 2008).

  13. . Id. at 322.

  14. . Id.

  15. . Id. at 323.

  16. . Id.

  17. . Thomas Glassman, Ice Skating up Hill: Constitutional Challenges to SEC Administrative Proceedings, 16 J. Bus. & Sec. L. 47, 68 (2015).

  18. . Id.

  19. . 15 U.S.C. § 78u(d) (authorizing the SEC to seek monetary penalties); id. § 78u-3 (authorizing the SEC to choose the forum).

  20. . Jarkesy v. SEC, 34 F.4th 446, 450 (5th Cir. 2022), cert. granted, 143 S. Ct. 2688 (2023).

  21. . H.R. Rep. No. 111-687, pt. 1, at 78 (2010).

  22. . U.S. Const. amend. VII.

  23. . Tull v. United States, 481 U.S. 412, 417 (1987).

  24. . Granfinanciera, S.A. v. Nordberg, 492 U.S. 33, 53 (1989).

  25. . See NCLU Brief, supra note 1, at *14; Jarkesy, 34 F.4th at 462.

  26. . See Cuban Brief, supra note 1, at *6.

  27. . 34 F.4th 446 (5th Cir. 2022), cert. granted, 143 S. Ct. 2688 (2023).

  28. . Id. at 459, 462.

  29. . Id.

  30. . Id. at 457.

  31. . Id. at 462–63.

  32. . Id. at 451–60.

  33. . 430 U.S. 442 (1977).

  34. . Tull v. United States, 481 U.S. 412, 425 (1987).

  35. . See infra pp. 34–35.

  36. . Granfinanciera, S.A. v. Nordberg, 492 U.S. 33, 49 (1989).

  37. . Tull, 481 U.S. at 417.

  38. . See William Baude, Adjudication Outside Article III, 133 Harv. L. Rev. 1511, 1570–71 (2020).

  39. . Thomas v. Union Carbide Agric. Prods. Co., 473 U.S. 568, 589 (1985).

  40. . Granfinanciera, 492 U.S. at 53–54.

  41. . Oil States Energy Servs., LLC v. Green’s Energy Grp., LLC, 138 S. Ct. 1365, 1379 (2018) (quoting Granfinanciera, 492 U.S. at 53–54).

  42. . Jarkesy v. SEC, 34 F.4th 446, 453 (5th Cir. 2022), cert. granted, 143 S. Ct. 2688 (2023).

  43. . See The Declaration of Independence para. 20 (U.S. 1776) (“He has combined with others to subject us to a jurisdiction foreign to our constitution, and unacknowledged by our laws; giving his Assent to their Acts of pretended Legislation: . . . For depriving us in many cases, of the benefits of Trial by Jury.”).

  44. . See Paul R. Verkuil, The Emerging Concept of Administrative Procedure, 78 Colum. L. Rev. 258, 279 (1978) (“It is equally important . . . to provide mechanisms that will not delay or frustrate substantive regulatory programs.”). Efficiency is the one of the SEC’s justifications for use of the administrative forum over district courts. “From the standpoint of deterrence and investor protection, I think we can all agree that it is better to have rulings earlier than later.” Andrew Ceresney, Director, SEC Div. of Enforcement, Remarks to the American Bar Association’s Business Law Section Fall Meeting (Nov. 21, 2014) (transcript available at http://perma.cc/C9HU-FB9V).

  45. . U.S Const. amend. VII.

  46. . Jennifer Walker Elrod, Is the Jury Still Out?: A Case for the Continued Viability of the American Jury, 44 Tex. Tech L. Rev. 303, 310 (2012). Judge Jennifer Walker Elrod was the Judge who authored the Jarkesy opinion. Jarkesy v. SEC, 34 F.4th 446 (5th Cir. 2022), cert. granted, 143 S. Ct. 2688 (2023).

  47. . Elrod, supra note 46, at 310.

  48. . Id. at 314.

  49. . See id. at 311.

  50. . Id.

  51. . Edward L. Rubin, Trial by Battle. Trial by Argument., 56 Ark. L. Rev. 261, 263 (2003).

  52. . Elrod, supra note 46, at 268–69.

  53. . See id. at 311.

  54. . Id.

  55. . Id.

  56. . Jack Pope, The Jury, 39 Tex. L. Rev. 426, 431 (1961). The reform process was not for some noble purpose, instead it was to keep revenue in the King’s Court rather than going to local tribunals. See id.

  57. . Id. at 432.

  58. . See id. at 431–39.

  59. . Id. at 434.

  60. . Id.

  61. . Id. at 435.

  62. . Pope, supra note 56, at 434.

  63. . Id. at 434–35.

  64. . Id. at 435.

  65. . Id. at 441.

  66. . Id.

  67. . Elrod, supra note 46, at 313.

  68. . Pope, supra note 56, at 441–42.

  69. . Id. at 442.

  70. . Id.

  71. . Id.

  72. . Id. at 442–43.

  73. . Pope, supra note 56, at 445.

  74. . Id.

  75. . Elrod, supra note 46, at 313.

  76. . Id.

  77. . Id.

  78. . Id.

  79. . Id. (quoting 6 Cobbett’s Complete Collection of State Trials and Proceedings for High Treason and Other Crimes and Misdemeanors from the Earliest Period to the Present Time 964 (1810)).

  80. . Id.

  81. . Elrod, supra note 46, at 313.

  82. . Id.

  83. . Id. at 313–14.

  84. . Bushell’s Case, 124 Eng. Rep. 1006, 1010 (C.P. 1670).

  85. . Pope, supra note 56, at 443.

  86. . See id. at 444

  87. . Id.

  88. . Id.

  89. . Id.

  90. . Id.

  91. . 4 William Blackstone, Commentaries *342.

  92. . Id. at *379.

  93. . Elrod, supra note 46, at 314–15.

  94. . Id. at 315.

  95. . Akhil Reed Amar, A Tale of Three Wars: Tinker in Constitutional Context¸ 48 Drake L. Rev. 507, 514 (2000).

  96. . Rachel E. Barkow, Recharging the Jury: The Criminal Jury’s Constitutional Role in an Era of Mandatory Sentencing, 152 U. Pa. L. Rev. 33, 52–53 (2003).

  97. . Id. at 53.

  98. . The Declaration of Independence para. 20 (U.S. 1776) (“He has combined with others to subject us to a jurisdiction foreign to our constitution, and unacknowledged by our laws; giving his Assent to their Acts of pretended Legislation: . . . For depriving us in many cases, of the benefits of Trial by Jury.”).

  99. . Akhil Reed Amar, The Bill of Rights as a Constitution, 100 Yale L.J. 1131, 1183 (1991).

  100. . Id.

  101. . Kenneth S. Klein, The Validity of the Public Rights Doctrine in Light of the Historical Rationale of the Seventh Amendment, 21 Hastings Const. L.Q. 1013, 1018 (1994).

  102. . Id. at 1019.

  103. . Edith Build Henderson, The Background of the Seventh Amendment, 80 Harv. L. Rev. 289, 291–92 (1966).

  104. . Id. at 299.

  105. . Id. at 293–94.

  106. . Id. at 294.

  107. . Id. at 294–95.

  108. . See Charles W. Wolfram, The Constitutional History of the Seventh Amendment, 57 Minn. L. Rev. 639, 730 (1973).

  109. . Id. at 728.

  110. . Id. at 729.

  111. . Id.

  112. . Id. at 730.

  113. . Id.

  114. . Julius J. Marke, Peter Zenger’s Trial, 6 Litig. 41, 55 (1980).

  115. . Atlas Roofing Co. v. Occupational Safety & Health Rev. Comm’n, 430 U.S. 442, 460–61 (1977).

  116. . 481 U.S. 412 (1987).

  117. . Id. at 417 (internal quotation omitted).

  118. . Id. at 414.

  119. . Id. at 418.

  120. . Id. at 417 (citing Curtis v. Loether, 415 U.S. 189, 193 (1974)).

  121. . Id.

  122. . Tull v. United States, 481 U.S. 412, 417 (1987).

  123. . Id. at 420.

  124. . Id. at 423.

  125. . Jean Eaglesham, SEC Wins with In-House Judges, Wall St. J. (May 6, 2015, 10:30 PM), https://www.wsj.com/articles/sec-wins-with-in-house-judges-1430965803.

  126. . See SEC, Addendum to Division of Enforcement Press Release Fiscal Year 2022 (2022), https://www.sec.gov/files/fy22-enforcement-statistics.pdf.

  127. . Id.

  128. . Bushell’s Case, 124 Eng. Rep. 1006, 1010 (C.P. 1670).

  129. . Stern v. Marshall, 564 U.S. 462, 490–91 (2011).

  130. . See Glassman, supra note 17, at 50.

  131. . Id.

  132. . Oil States Energy Servs., LLC v. Green’s Energy Grp., LLC, 138 S. Ct. 1365, 1379 (2018).

  133. . See Den v. Hoboken Land & Improvement Co. (Murray’s Lessee), 59 U.S. (18 How.) 272, 284 (1855).

  134. . See Ellen E. Sward, Legislative Courts, Article III, and the Seventh Amendment, 77 N.C. L. Rev. 1037, 1064, 1103 (1999).

  135. . Klein, supra note 101, at 1023.

  136. . Baude, supra note 38, at 1577.

  137. . Klein, supra note 101, at 1023–24.

  138. . Id. at 1024–25.

  139. . Id. at 1024.

  140. . See id.; see also Oceanic Steam Navigation Co. v. Stranahan, 214 U.S. 320, 339 (1909) (Congress could “impose appropriate obligations and sanctions their enforcement by reasonable money penalties, giving executive officers the power to enforce such penalties without the necessity of invoking judicial power.”).

  141. . See Sward, supra note 134, at 1064.

  142. . Klein, supra note 101, at 1024.

  143. . Id.

  144. . Id. at 1024, 1031–32.

  145. . 59 U.S. (18 How.) 272 (1855).

  146. . Id. at 284–85.

  147. . Id. at 274.

  148. . Id. at 275.

  149. . Id. at 284.

  150. . Klein, supra note 101, at 1025.

  151. . 285 U.S. 22 (1932).

  152. . Id. at 36–37.

  153. . Id.

  154. . Id. at 37.

  155. . Id. at 50.

  156. . Id. at 60–61.

  157. . See Sward, supra note 134, at 1064, 1103.

  158. . Id.

  159. . Id.

  160. . See Jarkesy v. SEC, 34 F.4th 446, 454 (5th Cir. 2022), cert. granted, 143 S. Ct. 2688 (2023) (describing the SEC’s action as akin to common law fraud).

  161. . 430 U.S. 442 (1977).

  162. . Id. at 448–49.

  163. . Id. at 460.

  164. . Id. at 455.

  165. . Id. at 452 (quoting Crowell v. Benson, 285 U.S. 22, 50–51 (1932)).

  166. . 473 U.S. 586 (1985).

  167. . Id. at 571. FIFRA’s pesticide registration scheme is a matter for another law review article. For a summation of its process, see id. at 572–75 and Ruckelshaus v. Monsanto Co., 467 U.S. 986, 991–97 (1984).

  168. . Thomas, 473 U.S. at 593–94.

  169. . Id. at 589.

  170. . Id. at 587.

  171. . See id. at 589–93.

  172. . Stern v. Marshall, 564 U.S. 462, 490–91 (2011).

  173. . Id.

  174. . Granfinanciera, S.A. v. Nordberg, 492 U.S. 33, 53 (1989) (citing Atlas Roofing Co. v. Occupational Safety & Health Rev. Comm’n, 430 U.S. 442, 453–55 (1977)).

  175. . Baude, supra note 38, at 1520, 1542, 1547; Robert L. Glicksman & Richard E. Levy, The New Separation of Powers Formalism and Administrative Adjudication, 90 Geo. Wash. L. Rev. 1088, 1138 (2022) (“[T]he current doctrine concerning administrative adjudication is confusing and poorly defined.”). Efforts by judges to define public rights is equally confused. See Stern v. Marshall, 564 U.S. 462, 488 (2011) ([O]ur discussion of the public rights exception since that time has not been entirely consistent . . . .”); see also Transcript of Oral Argument at 6, SEC v. Jarkesy, 143 S. Ct. 2688 (2023) (No. 22-859) (“The court has never fully plumbed its outer perimeters.”).

  176. . 34 F.4th 446 (5th Cir. 2022), cert. granted, 143 S. Ct. 2688 (2023).

  177. . Id. at 467 (Davis, J. dissenting).

  178. . Id. at 454 (majority opinion) (citing Tull v. United States, 481 U.S. 412, 481 (1987)).

  179. . William F. Funk, Sidney A. Shapiro, & Russell L. Weaver, Administrative Procedure and Practice 558 (6th ed. 2019).

  180. . Oil States Energy Servs., LLC v. Green’s Energy Grp., LLC, 138 S. Ct. 1365, 1379 (2018) (emphasis added) (quoting Granfinanciera, S.A. v. Nordberg, 492 U.S. 33, 53–54 (1989)).

  181. . Baude, supra note 38, at 1577.

  182. . Id. Of course, this is not a perfect diagram that explains all the Court’s relevant holdings. Some cases are public rights because they embody a little bit of each category. See id. at 1578.

  183. . See, e.g., Matthews v. Eldridge, 424 U.S. 319 (1976) (rejecting court-like procedures in an administrative forum, because the plaintiff had adequate notice).

  184. . Jarkesy v. SEC, 34 F.4th 446, 453 (5th Cir. 2022), cert. granted, 143 S. Ct. 2688 (2023).

  185. . Baude, supra note 38, at 1578.

  186. . Id. at 1552–53.

  187. . Murray’s Lessee, 59 U.S. (18 How.) 272, 285 (1855).

  188. . NCLU Brief, supra note 1, at *3–4.

  189. . Baude, supra note 38, at 1578.

  190. . Crowell v. Benson, 285 U.S. 22, 50 (1932).

  191. . See Sward, supra note 134, at 1079.

  192. . Id.

  193. . Glassman, supra note 17, at 68.

  194. . Id.

  195. . Id.

  196. . Sward, supra note 134, at 1080.

  197. . Jonathan H. Adler, The Good, the Bad, and the Ugly of Jarkesy v. SEC, Volokh Conspiracy (Aug. 17, 2022, 6:10 p.m.) https://reason.com/volokh/2022/08/17/the-good-the-bad-and-the-ugly-of-jarkesy-v-sec/; see id. (“[T]he Fifth Circuit’s arguments that Atlas Roofing has been abrogated . . . [is] thoroughly unconvincing.”).

  198. . Jarkesy v. SEC, 34 F.4th 446, 450 (5th Cir. 2022), cert. granted, 143 S. Ct. 2688 (2023).

  199. . Id. at 451, 465.

  200. . Id. at 451.

  201. . See Granfinanciera, S.A. v. Nordberg, 492 U.S. 33, 42 (1989) (emphasis added).

  202. . See discussion infra Section II.A.1.

  203. . Granfinanciera, 492 U.S. at 42 (emphasis added).

  204. . Id. at 49 (emphasis added).

  205. . Id.

  206. . Jarkesy v. SEC, 34 F.4th 446, 451 (5th Cir. 2022), cert. granted, 143 S. Ct. 2688 (2023).

  207. . Granfinanciera, S.A. v. Nordberg, 492 U.S. 33, 53–54 (1977).

  208. . Jarkesy, 34 F.4th at 454.

  209. . Granfinanciera, 492 U.S. at 60–63 (quoting Atlas Roofing Co. v. Occupational Safety & Health Rev. Comm’n, 430 U.S. 442, 461 (1977)).

  210. . Jarkesy, 34 F.4th at 454–57.

  211. . Atlas Roofing, 430 U.S. at 453.

  212. . Jarkesy, 34 F.4th at 458 (citing Atlas Roofing, 430 U.S. at 445).

  213. . Id.

  214. . Id.

  215. . Oral Argument at 25:50, Jarkesy 34 F.4th 446 (No. 20–61007), https://www.courtlistener.com/audio/77971/jarkesy-v-sec/.

  216. . 15 U.S.C. § 78. Several of the Justices seemed to find this analogy fitting. See Transcript of Oral Argument at 100, 115, 146, SEC v. Jarkesy, 143 S. Ct. 2688 (2023) (No. 22-859).

  217. . See Jarkesy, 34 F. 4th at 455 (“The traditional elements of common-law fraud are (1) a knowing or reckless material misrepresentation, (2) that the tortfeasor intended to act on and (3) that harmed the plaintiff.” (quoting In re Deepwater Horizon, 857 F.3d 246, 249 (5th Cir. 2017)) (emphasis added)).

  218. . Jarkesy, 34 F. 4th at 472 (Davis, J., dissenting).

  219. . Id.

  220. . Id. at n.47.

  221. . Id. at 456 (majority opinion) (citing Atlas Roofing v. Occupational Safety & Health Rev. Comm’n, 430 U.S. 442, 445 (1977)).

  222. . See 15 U.S.C § 78u-2.

  223. . Atlas Roofing, 430 U.S. 442, 453 (1977).

  224. . Granfinanciera, S.A. v. Nordberg, 492 U.S. 33, 60–63 (1977).

  225. . Jarkesy, 34 F.4th at 456.

  226. . See id.

  227. . Id. at 455–56.

  228. . Id. at 456.

  229. . See Adler, supra note 197.

  230. . Jarkesy, 34 F.4th at 459.

  231. . Id. at 460.

  232. . Id. at 461 (quoting Crowell v. Benson, 285 U.S. 22, 50 (1992)).

  233. . See Oceanic Steam Navigation Co. v. Stranahan, 214 U.S. 320, 339 (1909).

  234. . Jarkesy, 34 F.4th at 461 (quoting INS v. Chadha, 462 U.S. 919 (1983)).

  235. . Crowell v. Benson, 285 U.S. 22, 50 (quoting Ex parte Bakelite Corp., 279 U.S. 438, 451 (1929)).

  236. . Mistretta v. United States, 488 U.S. 361, 372 (1989).

  237. . Jarkesy, 34 F.4th at 462.

  238. . Elena Kagan, Presidential Administration, 114 Harv. L. Rev. 2245, 2364 (2001).

  239. . See Brandon J. Johnson, The Accountability–Accessibility Disconnect, 58 Wake Forest L. Rev. 65, 74–80 (2023).

  240. . See Jarkesy, 34 F.4th at 460 (citing Gundy v. United States, 139 S. Ct. 2116, 2134 (2019) (Gorsuch, J., dissenting)).

  241. . Id.

  242. . See Granfinanciera, S.A., v. Nordberg, 492 U.S 33, 51 (1989).

  243. . Id. at 42.

  244. . Id. at n.4.

  245. . See discussion supra Part II.A.2.

  246. . Granfinanciera, 492 U.S. at 49.

  247. . Id.

  248. . Id.

  249. . Atlas Roofing Co. v. Occupational Safety & Health Rev. Comm’n, 430 U.S. 442, 450 (1977) (emphasis added).

  250. . 279 U.S. 438 (1929).

  251. . Id. at 451.

  252. . Id. at 589 (quoting N. Pipeline Constr. Co. v. Marathon Pipeline Co., 458 U.S. 50, 68 (1982) (plurality opinion)).

  253. . See Jarkesy v. SEC, 34 F.4th 446, 461 (5th Cir. 2022), cert. granted, 143 S. Ct. 2688 (2023).

  254. . Granfinanciera, S.A. v. Nordberg, 492 U.S. 33, 49 (1989).

  255. . See, e.g., Transcript of Oral Argument at 119–20, SEC v. Jarkesy, 143 S. Ct. 2688 (2023) (No. 22-859) (Justice Sotomayor expressing concern that finding for Jarkesy could nullify all agency adjudication).

  256. . See, e.g., Transcript of Oral Argument at 27, SEC v. Jarkesy, 143 S. Ct. 2688 (2023) (No. 22-859) (Justice Kavanaugh expressing concern that the government throws a different label on a suit and can deprive litigants of jury trials and other due process rights in civil litigation).

  257. . Consent overcomes any assignment problems. “The entitlement to an Article III adjudicator is a ‘personal right’ and thus ordinarily ‘subject to waiver.’” Wellness Int’l Network, Ltd. v. Sharif, 575 U.S. 665, 678 (2015) (quoting Commodity Futures Trading Comm’n v. Schor, 478 U.S. 833, 848 (1986)).

  258. . Transcript of Oral Argument at 135–36, Jarkesy, 143 S. Ct. 2688 (No. 22-859); see also Christopher J. Walker & David Zaring, The Right to Remove in Agency Adjudication, 84 Ohio St. L.J. (forthcoming 2024) (manuscript at 33), https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4644940.

  259. . 5 U.S.C. § 553.

  260. *. J.D. Candidate 2024 Wake Forest University School of Law; B.S. Finance Brigham Young University; incoming associate at Morris Nichols Arsht & Tunnell. The biggest thank you goes to my wife Brooke, and our kids Scott, Liam, and Sonya (Sunny), their love and support means more than I can express here. Also thank you to Christian Schweitzer who has been a mentor to me since my 1L year and provided so much help and support as editor of the note. For helpful feedback and discussion, I would like to thank Professors Christine Coughlin, Lee-ford Tritt, and Sidney Shapiro. Finally, a huge thank you for the Law Review team, specifically Keegan Hicks, Dylan Ellis, and Haley Hurst, each of them made my note much clearer.

14 Wake Forest L. Rev. Online 1

Sam Kiehl[1]*


Should an independent school that maintains a § 501(c)(3) tax-exempt status be obligated to comply with Title IX? The answer comes down to how you define “federal financial assistance.”[2] Two recent federal court decisions from opposite ends of the country came out four days apart in July 2022, seeking to address this exact question. The U.S. District Court for the District of Maryland and the U.S. District Court for the Central District of California both expanded Title IX coverage, ruling that independent schools may be subject to Title IX based on maintaining a § 501(c)(3) tax-exempt status.[3] Both courts noted that the United States Supreme Court has never directly addressed whether a tax-exempt status under § 501(c)(3) constitutes federal financial assistance for purposes of Title IX.[4] No federal appellate court has considered the issue either. This Note argues Congress should amend 20 U.S.C. §§ 1681–89 (Title IX) to include a provision that defines “federal financial assistance” and specify that the term includes educational organizations that maintain a tax-exemption. By appropriately distinguishing how “federal financial assistance” is defined, Congress will ensure the judiciary is not operating in a legislative capacity while also fully honoring Title IX’s purpose.

Part I of this Note explores the connection between 26 U.S.C. § 501(c)(3) and 20 U.S.C. §§ 1681–89 and addresses the reasoning for why the Buettner-Hartsoe[5] and E.H. ex rel. Herrera[6] courts concluded that an independent school maintaining a § 501(c)(3) tax-exemption constitutes “federal financial assistance” for purposes of Title IX. Part II analyzes the appellate cases that have further defined the meaning behind terminology used in § 501(c)(3) and Title IX, and it considers several district court cases that have split on whether maintaining a tax-exemption constitutes “federal financial assistance.” Part III reviews scholarly arguments in favor of expanding the public policy doctrine to incorporate Title IX and tax-expenditure theory and ultimately concludes that each argument provides an inadequate or unlikely remedy.

Last, Part IV of this Note argues the Legislature should amend 20 U.S.C. §§ 1681–89 to include a provision which defines “federal financial assistance” and specifies that the term includes educational organizations that maintain a § 501(c)(3) tax-exemption. By doing so, Congress would honor the intent behind Title IX and fulfill the statute’s purpose. In addition, such legislation would prevent the judiciary from legislating by creating a judicial answer to a term not defined by the applicable legislation.

I. Bringing the Issue to Light: Buettner-Hartsoe and E.H. ex rel. Herrera

Both the Buettner-Hartsoe and E.H. ex rel. Herrera cases have brought the relationship between 26 U.S.C. § 501(c)(3) and Title IX to the forefront.[7] The most notable component of Title IX when considering the interplay between the statutes is § 1681(a), which states that “[n]o person in the United States shall, on the basis of sex, be excluded from participation in, be denied the benefit of, or be subjected to discrimination under any education program or activity receiving federal financial assistance . . . .”[8] Neither Congress, the IRS, nor the Supreme Court have provided an exact definition regarding what “federal financial assistance” fully entails. Meanwhile, 26 U.S.C. § 501(c)(3) provides a list of organizations that are exempt from taxation. This list states that any corporation and any community chest, fund, or foundation organized and operated exclusively for the following eight categories qualify for this exemption: (1) religious, (2) charitable, (3) scientific, (4) testing for public safety, (5) literary, (6) educational, (7) foster national or international amateur sports competition, or (8) prevention of cruelty to children or animals.[9] The crux of the issue returns to how “federal financial assistance” is defined under Title IX and whether it includes tax-exemptions under § 501(c)(3).

A. Buettner-Hartsoe v. Baltimore Lutheran High School Association

In Buettner-Hartsoe, the U.S. District Court for the District of Maryland considered five cases brought by separate women against an independent school, all alleging sexual assault and verbal sexual harassment by male students at the school.[10] The plaintiffs brought several of the claims under Title IX.[11] The defendant-school argued it was not subject to Title IX jurisdiction, as it was not a recipient of “federal financial assistance” during the times of the allegations.[12] Ultimately, the court found the defendant’s tax-exempt status maintained under § 501(c)(3) constitutes “federal financial assistance” for the purposes of Title IX, and the court deemed the plaintiffs had viable causes of action.[13]

To support this conclusion, the court first looked at how Title IX’s regulations clarify that a “recipient” under the statute is any entity or person to “whom Federal financial assistance is extended directly or through another recipient and which operates an education program or activity which receives such assistance.”[14] It further noted that neither the Supreme Court nor the Fourth Circuit had directly addressed the issue but provided that key decisions of both courts supported the District Court’s conclusion.[15] The cases that the court relied on involved the following issues: (1) when an entity qualifies as a direct, as opposed to indirect, recipient of “federal financial assistance” for purposes of Title IX;[16] (2) whether an institution must receive federal aid directly for the aid to qualify as “federal financial assistance” under § 501(c)(3);[17] (3) what the purpose and scope of tax-exemptions under § 501(c)(3) are;[18] (4) whether tax-exempt institutions must be in harmony with the public interest;[19] and (5) whether the remedies Congress created in Title IX were modeled after and comparable to those Congress created in Title VI.[20]

Additionally, the court referenced how the Eleventh Circuit had noted in dicta that tax-exemptions qualifying as “federal financial assistance” under Title IX were “neither immaterial nor wholly frivolous.”[21] The court concluded that enforcing the mandates of Title IX in schools with a § 501(c)(3) tax-exempt status aligns with the principal objectives of Title IX, which is to avoid the use of federal resources to support discriminatory practices and to ensure citizens have effective protection against discriminatory practices.[22] It thus found an independent school that maintains a § 501(c)(3) tax-exemption must comply with Title IX requirements.[23]

B. E.H. ex rel. Herrera v. Valley Christian Academy

Meanwhile, in E.H. ex rel. Herrera, the U.S. District Court for the Central District of California heard a suit that involved a female football player at a public high school alleging sex discrimination in violation of Title IX against a private school that refused to play the plaintiff’s football team entirely because of the plaintiff’s gender.[24] The defendant-school argued it did not derive financial assistance from the United States government and thus was not subject to Title IX.[25] The District Court noted that the Ninth Circuit had not addressed whether tax-exempt status confers “federal financial assistance” under Title IX.[26]

The District Court compared two district court cases that had come to opposite conclusions regarding whether tax-exempt status could subject an organization to the requirements of Title IX or Title VI.[27] In a somewhat more conclusory manner than the Buettner-Hartsoe court, the District Court found the “plain purpose of [Title IX] controlling” absent any controlling precedent or legislative history to the contrary.[28] The court noted that because Title IX’s purpose was to eliminate discrimination in programs benefiting from federal financial assistance, the school’s tax-exempt status qualified as “federal financial assistance” and obligated compliance with Title IX.[29]

II. Putting the Pieces Together: Analyzing Appellate and District Level Cases Dealing with Title IX and § 501(c)(3)

While no appellate court has directly addressed whether an educational organization maintaining a § 501(c)(3) tax-exemption must comply with Title IX requirements, there are a number of appellate decisions that address peripheral issues that may be melded together to answer this question. There are also several district level cases prior to Buettner-Hartsoe and E.H. ex rel. Herrera that have addressed the issue head-on.

A. Appellate Cases That Bring Clarity to Title IX and § 501(c)(3)

Grove City College v. Bell[30] is arguably the most vital Supreme Court case to the argument that an independent school maintaining a § 501(c)(3) tax exemption should be obligated to comply with Title IX.[31] In Grove City, the Supreme Court outlined its interpretation of federal financial assistance for civil rights statutory purposes, doing so in the context of defining what an “educational program or activity” is under Title IX.[32] The defendant, Grove City College, argued that neither it nor any education program affiliated with it received federal financial assistance within the meaning of Title IX.[33] Grove City College stated that just because some of its students received Basic Educational Opportunity Grants and used these funds to pay for their education did not alter the fact that it did not receive “federal financial assistance” per Title IX.[34] In Grove City, the Court stated there was no basis in Title IX for the view that only institutions that themselves apply for federal aid or receive checks directly from the federal government are subject to Title IX regulations.[35] The Court confirmed that an institution still qualifies as a recipient of “federal financial assistance” under Title IX even if the institution did not apply for the aid directly.[36] That the government granted the federal funds to Grove City College students rather than directly to one of the college’s educational programs did not preclude Title IX coverage.[37]

National Collegiate Athletic Ass’n v. Smith[38] is the next Supreme Court case that helps define key terms to identify whether a § 501(c)(3) tax-exemption qualifies as federal financial assistance for purposes of Title IX.[39] In this case, the Court defined “recipient” under 34 C.F.R. § 106.2.[40] The Court’s definition of “recipient” makes clear that an entity does not trigger Title IX coverage merely when it benefits from federal funding.[41] The Court stated that this definition is in accordance with Grove City Coll., noting that entities receiving federal financial assistance, whether directly or through an intermediary, are recipients within the meaning of Title IX, but entities that only benefit economically from federal assistance are not.[42]

Meanwhile, in Regan v. Taxation With Representation of Washington,[43] the Supreme Court addressed caveats to the exclusions provided for in 26 U.S.C. § 501(c)(3).[44] The Court ruled the provision in § 501(c)(3) that prohibits tax-exempt status for organizations that seek to influence legislation does not violate the First Amendment.[45] Notable for the argument that a tax-exemption constitutes federal financial assistance for purposes of Title IX, the Court concluded that tax exemptions are a form of subsidy that is administered through the tax system and “has much the same effect as a cash grant to the organization of the amount of tax it would have to pay on its income.”[46]

B. Modeled After Title VI: Title IX, § 504 of the Rehabilitation Act, and the Age Discrimination Act

Understanding “federal financial assistance” as defined in Title IX requires looking beyond the statute and identifying the connection between how the term is used in Title VI, § 504 of the Rehabilitation Act, and the Age Discrimination Act. In Cannon v. University of Chicago[47], the Supreme Court said the principal aim of Title IX was to “avoid the use of federal resources to support discriminatory practices” and “to provide individual citizens effective protection against those practices.”[48] Cannon also noted that Title VI served as a model for Title IX.[49] In coming to this determination, the Court looked to the legislative history and compared the comments of Congress when initially passing Title VI and Title IX.[50] When discussing Title VI, Senator Pastore noted the “purpose of [T]itle VI is to make sure that funds of the United States are not used to support racial discrimination.”[51] When pivoting to the discussion of Title IX, Representative Mink stated that “[a]ny college or university which has [a] … policy which discriminates against women applicants … is free to do so under [Title IX] but such institutions should not be asking the taxpayers of this country to pay for this kind of discrimination.”[52]

The Ninth Circuit noted in Schmitt v. Kaiser Foundation Health Plan of Washington[53] that not only did Title VI serve as a model for Title IX, but it also served as a model for the Age Discrimination Act and the Rehabilitation Act.[54] Accordingly, the court chose to interpret the four statutes similarly.[55] This is crucial, as any argument that states “federal financial assistance” should be defined a certain way regarding Title IX, likely must be able to support “federal financial assistance” being defined in the same manner when interpreting Title VI, § 504 of the Rehabilitation Act, and the Age Discrimination Act. The argument thus becomes significantly more expansive, and there are more potential pitfalls for a court or legislature seeking to define “federal financial assistance” in an overly broad manner.

When considering the importance of the connection between Title VI and Title IX, it becomes necessary to consider the public policy doctrine created by the Supreme Court in Bob Jones University v. United States.[56] Bob Jones was a significant case where the Supreme Court expanded the requirements that must be met to obtain tax-exempt charitable status by holding that a charitable organization may not violate “established public policy.”[57] In Bob Jones, the university was denied tax-exempt status because of its racially discriminatory admissions policy, and the university argued the practice was legal because it was based on religious doctrine.[58] The Court created the public policy doctrine, which supported the IRS’ argument that § 501(c)(3) implied that tax-exempt institutions had to meet common law definitions for charitable trusts, meaning they had to provide a public benefit and not be opposed to fundamental public policy.[59]

However, despite the creation of the public policy doctrine, the doctrine has not provided a significant amount of bite since the Court enacted it. Seventeen years later, in FDA v. Brown & Williamson Tobacco Corp.,[60] the Court noted that no matter how important an issue is, “an administrative agency’s power to regulate in the public interest must always be grounded in a valid grant of authority from Congress.”[61] This points to why the courts have not already used the public policy doctrine to incorporate Title IX. The Court noted that though it sought to effectuate the congressional purpose of protecting citizens as Title IX called for, it wanted to be cautious so as not to extend the scope of the statute beyond the intended parameters originally determined by Congress.[62]

Taking all the curated appellate court cases into consideration, no federal appellate court has directly considered whether an organization maintaining a tax-exempt status constitutes “federal financial assistance” for purposes of Title IX. However, the Eleventh Circuit has considered the issue most closely, as it provided in dicta in M.H.D. v. Westminster School[63] that allegations regarding an organization maintaining a tax-exempt status qualifies as “federal financial assistance” under Title IX provisions were “neither immaterial nor wholly frivolous.”[64] This is the most notable statement in support of the assertion that tax-exempt status under § 501(c)(3) qualifies as “federal financial assistance” under Title IX provisions from a United States federal appellate court. And though no appellate court has directly considered whether an organization maintaining a tax-exempt status constitutes “federal financial assistance” for purposes of Title IX, several district courts, besides the two most recent decisions, have either directly or peripherally considered the issue over the last forty years.

C. District Courts Addressing the Combined Issues of Title IX and § 501(c)(3)

In Fulani v. League of Women Voters Education Fund,[65] the Southern District of New York considered a suit brought by minor-party candidates alleging that, among other issues, they were excluded from debates sponsored by a nonprofit organization based on race and sex discrimination.[66] The court noted the entity was subject to Title VI and Title IX enforcement because it “receive[d] federal assistance indirectly through its tax exemption and directly through grants” from federal agencies.[67] In McGlotten v. Connally,[68] the District Court for the District of Columbia heard a suit brought by a black-American to enjoin the Secretary of Treasury from granting tax benefits to organizations that exclude non-whites from membership.[69] The D.C. Circuit considered whether tax benefits meet the definition of “federal financial assistance” within the terms of Title VI of the Civil Rights Act and whether Congress had clearly indicated that beneficiaries of tax-exemptions should not discriminate.[70] The court looked to how 42 U.S.C. § 2000d-1 defines “federal financial assistance” and ultimately held that tax-exemptions constitute “federal financial assistance” in the context of Title VI litigation.[71] Though the court noted nothing in the “massive legislative history” of the 1964 Civil Rights Act that indicated whether assistance provided through the tax system was intended to be treated differently than assistance provided directly, it deemed the plain purpose of Title VI controlling.[72] It stated that the statute’s plain purpose was to eliminate discrimination in programs benefitting from federal financial assistance.[73]

Meanwhile, Johnny’s Icehouse, Inc. v. Amateur Hockey Ass’n Illinois, Inc.[74] is the most recent district court case where the court concluded that an organization maintaining a § 501(c)(3) tax-exemption did not constitute a form of “federal financial assistance” and thus did not obligate the organization to comply with Title IX regulations.[75] The court’s reasoning centered on observations that income tax exemptions are “conspicuously absent” from the “laundry list” of Title IX regulations that define federal financial assistance.[76] However, this case is over twenty years old, and both the Buettner-Hartsoe and E.H. ex rel. Herrera courts found the court’s reasoning in Johnny’s Icehouse, Inc. unconvincing.[77] Bachman v. American Society of Clinical Pathologists[78] is an even earlier district court case where the court also found that tax benefits do not constitute “federal financial assistance” as defined in Title IX.[79] The court stated that only direct grants could qualify as federal financial assistance.[80] However, the Supreme Court rebuffed this line of reasoning a year later in Grove City College, which is notable because of the potential similarity between Title IX and § 504 of the Rehabilitation Act. Martin v. Delaware Law School of Widener University[81] is another district court case that goes against the proposition that a tax-exemption under § 501(c)(3) can constitute “federal financial assistance” in the context of the Rehabilitation Act.[82]

When viewing the aggregated appellate decisions that serve as building blocks for answering this question, as well as the inconsistent decisions that district courts have come to, it appears the issue is ripe for consideration by the courts. However, as indicated by courts noting the similarities between Title IX, Title VI, § 504 of the Rehabilitation Act, and the Age Discrimination Act, whatever decision a court comes to has broad implications beyond simply how “federal financial assistance” is defined in relation to Title IX.

III. Inadequate and Unlikely Remedies: The Public Policy Doctrine and Tax-Expenditure Theory

Up to this point, courts and scholars have sought to better hold organizations accountable for anti-discrimination regarding race and sex when the organization maintains tax-exemption but does not otherwise receive federal funding. The most successful example has been the ruling by the Supreme Court in Bob Jones with the creation of the public policy doctrine.[83] Other notable attempts by scholars have included using tax-expenditure theory to support the reasoning for why tax-exempt charities receive “federal financial assistance” based on their favored tax status and thus should comply with civil rights laws.[84] However, concerns exist that these remedies are either inadequate or unlikely.

A. Critique of the Public Policy Doctrine as an Effective Tool

In Bob Jones, the Supreme Court expanded requirements for tax-exempt charitable status under § 501(c)(3) by holding that a charitable organization cannot violate “established public policy,” despite the fact that this limitation was not set out in the Internal Revenue Code.[85] Though the Court stated that violation of public policy, like discriminatory admission policies based on race, must be “established,” it did not provide clear boundaries for how to determine when a policy other than discrimination based on race is sufficiently established.[86] A number of arguments can be made by different parties, all of them equally advocating that public policy is offended by a certain issue. The reality is that the lack of parameters means it is unlikely a court will enforce any of them. The substantial gridlock in Washington, D.C. that comes from an increasingly polarizing political atmosphere makes it incredibly unlikely that the Supreme Court would use the public policy doctrine to issue blanket statements that certain actions and policies violate public policy.

The public policy limitation on charities did not initially come from the judiciary or legislature but instead came from the Treasury in a 1970 News Release.[87] This release indicated that the IRS could not legally justify providing a tax-exempt status based on the charitable exception in § 501(c)(3) to organizations that practice racially discriminatory practices.[88] The IRS justified its position by relying on what it found were clearly established federal policies against racial discrimination in education as outlined in Brown v. Board of Education[89] and further expanded on in the Civil Rights Act of 1964.[90] It was this policy that the Supreme Court later approved by creating the public policy doctrine in Bob Jones.[91] However, soon after, the Supreme Court indicated that the lack of set boundaries is an issue when considering whether an action falls under the public policy doctrine in FDA v. Brown & Williamson Tobacco Corp.[92] The Brown & Williamson Tobacco Corp. decision supports the argument that the Court is not going to expand the public policy doctrine further because no matter how important and controversial an issue is, the Court likely believes the Legislative branch should be creating legislation instead of the judiciary.

Since the public policy doctrine came from a Treasury News Release, later adopted by the Supreme Court, and did not come directly from the Legislature, using the public policy doctrine to incorporate an organization’s tax-exempt status to constitute “federal financial assistance” for the purposes of Title IX would likely be seen as extending the scope of the statute beyond the point where Congress indicated it should reach. Though the statement that sex discrimination is against public policy seems rational enough, the nuances of Title IX and how it applies to educational entities, including parochial schools in certain situations, means it is unlikely the Supreme Court today would find the public policy doctrine an appropriate avenue to enforce independent schools to maintain a § 501(c)(3) tax-exemption to comply with Title IX requirements. Especially as divisive as society is today, arguing for the expansion of the public policy doctrine to serve as a remedy for this issue is inadequate and unlikely to gain traction in Congress or with the public.

B. Critique of Tax-Expenditure Theory as an Effective Tool

Another remedy that has been proposed, this time primarily by academics as opposed to by courts or agencies, is for courts to apply tax-expenditure theory to determine whether tax-exempt organizations should be obligated to comply with anti-discrimination laws due to being recipients of government financial assistance.[93] Tax-expenditures are alternative policy means by which governments deliver financial support to individuals and companies.[94] The primary question addressed by tax-expenditure theory is whether the receipt of a tax benefit should be legally regarded as equivalent to a direct government grant of money.[95] It is possible to interpret tax-expenditure theory to posture that an organization’s § 501(c)(3) tax-exemption is the equivalent of a cash subsidy from the government. Though this notably only applies when an organization seeks to advocate for or implement social policy by using tax benefits and not when an organization uses a tax-exemption simply as a “further delineation of the appropriate tax base.”[96]

Ultimately, while this certainly is a viable option, it is unlikely to be successful. The primary concern is that while tax expenditure theory relies on current civil rights laws to address discrimination in charitable organizations in a broad manner, doing so based on the current legislation will only address some forms of discrimination but not others.[97] Of course, such legislation would protect individuals against discrimination on the basis of race, sex, gender, national origin, religion, and disability. But there are certain forms of discrimination in charitable organizations that use a § 501(c)(3) tax-exemption status that would not be protected, such as sexual orientation.[98] The use of tax expenditure theory becomes too broad of a tool and, in doing so, becomes a less effective tool in addressing discriminatory practices by organizations that maintain a § 501(c)(3) tax-exemption.

IV. Amendment of 20 U.S.C. § 1681 to Define Federal Financial Assistance

Due to the limitations of the proposed remedies listed above, it seems the most effective solution to addressing whether independent schools that maintain a § 501(c)(3) tax-exemption should be obligated to comply with Title IX is to amend Title IX to include a provision that defines “federal financial assistance” and specifies inclusion of educational entities that maintain a tax-exemption in the definition. This would further help differentiate how “federal financial assistance” is defined under Title VI, § 504 of the Rehabilitation Act, and the Age Discrimination Act and why that definition should not have a direct bearing on how “federal financial assistance” is defined under Title IX. In doing so, this would eliminate concerns of the judiciary essentially creating legislation by applying “federal financial assistance” differently within the context of Title IX compared to Title VI, § 504 of the Rehabilitation Act, and the Age Discrimination Act. Most importantly, it would ensure that Congress and the courts honor Title IX’s purpose.

As stated above, in several cases the Supreme Court has attempted to clarify vagueness brought upon by the use of the phrase “federal financial assistance” in the first sentence of Title IX, § 1681(a), which says “[n]o person in the United States shall, on the basis of sex . . . be subjected to discrimination under any education program or activity receiving federal financial assistance . . . .” However, a murky understanding of the term remains. To amplify the problem, when attempting to define the term “federal financial assistance” specific to Title IX, one must look at how Congressional records show that Title IX was modeled after Title VI and is comparable to how the term is also used in § 504 of the Rehabilitation Act and the Age Discrimination Act.

In light of these problems, the most comprehensive solution is for Congress to amend Title IX to include a definition of “federal financial assistance.” This definition should be based on an understanding of the currently existing definition of “federal financial assistance” as provided for by the Supreme Court in Grove City, National Collegiate Athletic Ass’n v. Smith, and Cannon v. University of Chicago.[99] In addition, the definition should effectively mirror the plain purpose of Title IX, which is to ensure the removal of barriers that prevent people on the basis of sex from participating in educational opportunities of their choice. Congress could accomplish this via an amendment that adds a paragraph to Title IX following 20 U.S.C. § 1681(c), which defines “educational institution.” Said paragraph should be similar to the following:

For purposes of this chapter, federal financial assistance may include:

(1) A grant or loan of federal financial assistance, including funds made available for:

    1. The acquisition, construction, renovation, restoration, or repair of a building or facility or any portion thereof; and
    2. Scholarships, loans, grants, wages, or other funds extended to any entity for payment to or on behalf of students admitted to that entity, or extended directly to such students for payment to that entity.

(2) A grant of Federal real or personal property or any interest therein, including surplus property, and the proceeds of the sale or transfer of such property, if the Federal share of the fair market value of the property is not, upon such sale or transfer, properly accounted for to the Federal Government.

(3) Any other contract agreement or arrangement that has as one of its purposes the provision of assistance to any education program or activity, except a contract of insurance or guaranty.

(4) A grant or loan that is received directly or indirectly, even if an entity does not show a financial gain, in the sense of a net increment in its assets.

(5) A tax-exemption maintained by educational organizations under 26 U.S.C. § 501(c)(3).

(6) However, federal financial assistance does not include:

    1. A simple assertion that an entity receives something of value in nonmonetary form from the federal government’s presence or operations;
    2. Statutory programs or regulations that directly or indirectly support, or establish guidelines for, an entity’s operations;
    3. Programs owned and operated by the federal government; or
    4. Direct, unconditional assistance to ultimate beneficiaries, the intended class of private citizens receiving federal aid, such as social security payments and veterans pensions.[100]

A statutory amendment to define “federal financial assistance” will further Congressional intent regarding Title IX. As it stands now, independent schools may have the prerogative, as evidenced by the schools in Buettner-Hartsoe and E.H. ex rel. Herrera, to attempt to disregard what Title IX seeks to prevent: discrimination on the basis of sex.[101] This proposed amendment closes a loophole that independent schools may seek to exploit. It prevents schools that receive significant and tangible benefits by maintaining tax-exempt status under § 501(c)(3) from supporting discriminatory practices in education and also provides a broader base of individual citizens’ protection against those practices.

Notably, such an amendment does not impact parochial schools the same way it would impact independent schools that maintain a tax-exemption under § 501(c)(3). Educational institutions controlled by a religious organization are exempt from Title IX to the extent that the application of Title IX would be inconsistent with the organization’s religious tenets.[102] Thus, when categorizing independent schools, it is important to understand that an amendment would only impact independent schools, such as charter schools which may not receive public funds but that maintain a § 501(c)(3) tax-exemption; it would not impact parochial schools that already have certain exemptions provided for in 20 U.S.C. § 1681(a)(3).

Additionally, a benefit to amending Title IX as opposed to 26 U.S.C. § 501(c)(3) is that the charitable exemption exception contained in that statute includes a wide variety of organizations beyond just those organized for educational purposes. These include organizations operated for religious, charitable, scientific, testing for public safety, or literary purposes, as well as those that seek to foster national or international amateur sports competitions or that are designed to prevent cruelty to children or animals.[103] Amending § 501(c)(3) to remedy the issue of tax-exempt independent schools discriminating on the basis of sex would lead to questions of Title IX’s applicability outside of the educational context. Furthermore, even if Congress were to amend § 501(c)(3), there would still be ambiguity when it comes to how to define “federal financial assistance.” It would also not answer the question of if and how to differentiate how “federal financial assistance” is defined in Title IX compared to Title VI, § 504 of the Rehabilitation Act, and the Age Discrimination Act.

Some district courts have not quite comprehended the magnitude of a decision to determine that an organization maintaining a tax-exemption constitutes “federal financial assistance” for purposes of Title IX. Doing so not only requires organizations to abide by Title IX requirements, but also would likely lead to an expansion of such organizations having to abide by Title VI, § 504 of the Rehabilitation Act, and the Age Discrimination Act.[104] Title VI of the Civil Rights Act of 1964 and Title IX of the Education Amendments Act of 1972 are the principal laws that forbid discrimination based on race and sex, respectively, by private actors that receive federal financial assistance.  Both statutes condition federal funding on the promise that the recipient of the funds will not discriminate. Title VI, which the other statutes were modeled after, states that “[e]ach Federal department and agency which is empowered to extend Federal financial assistance . . . is authorized and directed to effectuate . . . this title . . . by issuing rules, regulations, or orders . . . which shall be consistent with achievement of the objectives of the statute authorizing the financial assistance in connection with which the action is taken.”[105] Section 1682 of Title IX almost repeats this definition word-for-word.

The Rehabilitation Act of 1973 and the Age Discrimination Act also impose civil rights restrictions based on a private actor’s receipt of federal financial assistance.[106] § 504 of the Rehabilitation Act was also modeled specifically after Title VI and may also provide guidance when analyzing Title IX.[107] However, Title IX, unlike Title VI, § 504 of the Rehabilitation Act, and the Age Discrimination Act, only applies to educational entities such as colleges, universities, elementary and secondary schools, as well as any educational or training program operated by a recipient of federal financial assistance.[108] Each of the other statutes applies in a significantly broader manner.

Thus, the parallel nature of each of the statutes lends to a similar, if not the exact same, analytical framework being used when applied to cases under all four statutes. However, this limits each of the statutes because how “federal financial assistance” is defined in one statute then must be used in a similar manner in the other three statutes. This lack of flexibility can cut against each of the statutes in different ways. For instance, while Title VI covers employment only in limited circumstances, employment discrimination is clearly covered in Title IX.[109] Meanwhile, holding that “federal financial assistance” applies to all institutions maintaining a § 501(c)(3) tax-exemption, while appropriately applicable to educational organizations, cuts in an overly broad manner when applied to the Title VI, § 504 of the Rehabilitation Act, and the Age Discrimination Act. Defining the term in such a way could be especially harmful to employers that must comply with § 504 of the Rehabilitation Act and the Age Discrimination Act. This would subject employers to additional regulations that they have arguably sought to avoid by not accepting federal financial assistance, notwithstanding maintaining a tax-exemption. It also would be less likely to receive support in Congress as such an expansive definition would have considerable detractors that prefer less governmental interference in the free market.

The legislative history behind Title IX is also significant in showing that it is reasonable to believe Congress intended for there to be a distinction in how “federal financial assistance” applies in the context of Title IX compared to Title VI, § 504 of the Rehabilitation Act, and the Age Discrimination Act. Congress designed Title IX specifically with schools and educational programs in mind. The statute initially came to life in Congress when Senator Bayh of Indiana introduced an amendment with the purpose of combating the “continuation of corrosive and unjustified discrimination against women in the American educational system.”[110] This distinction is nowhere to be found in the other three statutes, as Title IX is the only statute of the four that is siloed off and applies specifically to discriminatory practices within education programs. Since the purpose of Title IX, as supported by the legislative history, is to eliminate discrimination on the basis of sex in education programs, specifying how “federal financial assistance” is defined in Title IX in contrast to how it is defined in Title VI, § 504 of the Rehabilitation Act, and the Age Discrimination Act is appropriate in working towards achieving this goal.


Independent schools that choose to enjoy the benefits of a § 501(c)(3) tax-exemption should be obligated to comply with Title IX. However, a current gap exists in how “federal financial assistance” is defined under Title IX and if that same phrase should be defined similarly or differently when comparing Title IX with Title VI, § 504 of the Rehabilitation Act, and the Age Discrimination Act. This gap makes it unclear whether Title IX applies to § 501(c)(3) organizations. Whether Title IX applies to those organizations has been considered peripherally by several appellate courts and directly by a number of district courts over the past forty years. To clarify that independent schools that maintain a tax-exemption should be obligated to comply with Title IX, the courts or legislature must clarify: (1) when an entity qualifies as a recipient of “federal financial assistance;” (2) whether the definition of “federal financial assistance” applies differently across Title IX, Title VI, § 504 of the Rehabilitation Act, and the Age Discrimination Act; (3) what the purpose and scope of tax-exemptions under § 501(c)(3) are; and (4) whether Title IX, as it exists now, is fully accomplishing the purpose Congress set out for it to accomplish.

The most effective and comprehensive way to address this issue is for the Legislature to amend 20 U.S.C. §§ 1681–89 to include a provision that defines “federal financial assistance” and specifies including educational entities that maintain a tax-exemption. Such an amendment would faithfully fulfill Title IX’s purpose to ensure avoidance of the use of federal funds in aiding educational programs that support discriminatory practices based on sex and protect individuals against those discriminatory practices. Doing so would also provide clarity to both the courts and organizations on how to distinguish “federal financial assistance” as it is defined in Title IX as opposed to how it is defined in Title VI, § 504 of the Rehabilitation Act, and the Age Discrimination Act.

Furthermore, an amendment to Title IX by Congress would also save the judiciary from being put in a place where it is essentially being asked to legislate by finding a judicial answer to the question of whether maintaining a tax-exemption qualifies an educational organization as receiving “federal financial assistance” per Title IX. Up to this point, the Supreme Court has already had to interpret what Congress meant regarding the definition of “federal financial assistance” for civil rights statutory purposes in Grove City College, and the definition of “recipient” for purposes of 34 C.F.R. § 106.2 in National Collegiate Athletic Ass’n. The fact that a number of district courts in the time since the Supreme Court decided Grove City College and National Collegiate Athletic Ass’n have had to attempt to address whether an independent educational program that maintains a § 501(c)(3) tax-exemption is obligated to comply with Title IX means this is an issue still needing clarification. If Congress does not address the issue, it is that much more likely that courts will again be put into the position of having to determine what Congress’s intent was when drafting Title IX and whether it should apply to independent schools that maintain a § 501(c)(3) tax-exemption but receive no other form of federal financial assistance.

When first advocating for the adoption of Title IX, Senator Bayh sought to fight against the “sex discrimination that reaches into all facets of education,” and it was for this reason that Congress enacted Title IX.[111] The amendment of Title IX to define “federal financial assistance” to include independent educational entities that maintain a § 501(c)(3) tax-exemption and to obligate compliance with the statute furthers the goal of eliminating discrimination on the basis of sex in the field of education while providing continued protections for individuals in education.

  1. *. Third-year law student at the Wake Forest University School of Law. B.S. in Social Studies Education from the University of Oklahoma and will begin practicing with Conner & Winters, LLP in their Tulsa office following graduation. Many thanks to Dylan, Keegan, and the team at the Wake Forest Law Review Online for their partnership on this article. I am also forever grateful to my parents for encouraging my love of learning at my own pace, to Rob and Carilyn for fostering my connection with the law, and, most importantly, to Dr. Robin Rainey Kiehl for being the ultimate teammate, wife, and soon-to-be mother.
  2. . 20 U.S.C.A. § 1681(a) (West).
  3. . See Buettner-Hartsoe v. Balt. Lutheran High Sch. Ass’n, No. CV RDB-20-3132, 2022 WL 2869041 at *5 (D. Md. July 21, 2022), motion to certify appeal granted, No. CV RDB-20-3132, 2022 WL 4080294 (D. Md. Sept. 6, 2022); E.H. ex rel. Herrera v. Valley Christian Acad., 616 F. Supp. 3d 1040, 1049–50 (C.D. Cal. 2022).
  4. . See Buettner-Hartsoe, 2022 WL 2869041, at *3; E.H. ex rel. Herrera, 616 F. Supp. 3d at 1049–50.
  5. . Buettner-Hartsoe, 2022 WL 2869041.
  6. . E.H. ex rel. Herrera, 616 F. Supp. 3d 1040.
  7. . See id.; Buettner-Hartsoe, 2022 WL 2869041.
  8. . 20 U.S.C.A. § 1681(a) (West).
  9. . 26 U.S.C.A. § 501(c)(3) (West).
  10. . Buettner-Hartsoe, 2022 WL 2869041, at *1.
  11. . Id.
  12. . Id.
  13. . Id.
  14. . Id. at *3 (referencing 34 C.F.R. § 106.2(i) (2023)).
  15. . Id.
  16. . Grove City Coll. v. Bell, 465 U.S. 555, 569–70 (1984).
  17. . Nat’l Collegiate Athletic Ass’n v. Smith, 525 U.S. 459, 468–69 (1999).
  18. . Regan v. Tax’n With Representation, 461 U.S. 540, 550–51 (1983).
  19. . Bob Jones Univ. v. United States, 461 U.S. 574, 591–92 (1983).
  20. . Cannon v. Univ. of Chi., 441 U.S. 667, 694–96 (1979).
  21. . M.H.D. v. Westminster Schs., 172 F.3d 797, 802 n.12 (11th Cir. 1999).
  22. . Buettner-Hartsoe v. Balt. Lutheran High Sch. Ass’n, No. RDB-20-3132, 2022 WL 2869041, at *5 (D. Md. July 21, 2022) (quoting Cannon, 441 U.S. at 704).
  23. . Id. at *3. The court subsequently granted the school district’s motion for interlocutory appeal to the United States Court of Appeals for the Fourth Circuit to consider the issue of whether § 501(c)(3) tax-exempt status constitutes federal financial assistance under Title IX. See Buettner-Hartsoe, 2022 WL 4080294, at *1. The parties are currently in the pretrial stage of litigation regarding this interlocutory appeal.
  24. . E.H. ex rel. Herrera v. Valley Christian Acad., 616 F. Supp. 3d 1040, 1044 (C.D. Cal. 2022).
  25. . Id. at 1048–49.
  26. . Id. at 1050.
  27. . Id. (comparing Johnny’s Icehouse, Inc. v. Amateur Hockey Ass’n, 134 F. Supp. 2d 965, 972 (N.D. Ill. 2001) and McGlotten v. Connally, 338 F. Supp. 448, 461 (D.D.C. 1972)).
  28. . Id.
  29. . Id.
  30. . Grove City Coll. v. Bell, 465 U.S. 555 (1984).
  31. . Id. at 574–75.
  32. . Id. at 557.
  33. . Id. at 563.
  34. . Id.
  35. . Id. at 564.
  36. . Id. at 569–70.
  37. . Id.
  38. . Nat’l Collegiate Athletic Ass’n v. Smith, 525 U.S. 459 (1999).
  39. . Id. at 462.
  40. . Id. at 460. Part 106 of Title 34 of the Code of Federal Regulations contains regulations promulgated by the Office of Civil Rights within the Department of Education that concern nondiscrimination on the basis of sex in education programs or activities receiving federal financial assistance.
  41. . Id.
  42. . Id. at 460–61. The Court attempted to clarify where this line was drawn by noting that an entity does not open itself to Title IX obligations on the grounds it receives dues from its members, which receive federal financial assistance if the members do not earmark federal funds for the purpose of paying dues.
  43. . 461 U.S. 540 (1983).
  44. . Id. at 540.
  45. . Id.
  46. . Id. at 544.
  47. . 441 U.S. 677 (1979).
  48. . Id. at 704.
  49. . Id.
  50. . Id. at 704 n.6.
  51. . Id. (referencing 110 Cong. Rec. 7062 (1964)).
  52. . Id. (referencing 117 Cong. Rec. 39252 (1971)).
  53. . 965 F.3d 945 (9th Cir. 2020).
  54. . Id. at 953.
  55. . Id.
  56. . 461 U.S. 574, 603–04 (1983).
  57. . Id. at 591.
  58. . Id. at 577.
  59. . Id. at 579.
  60. . 529 U.S. 120 (2000).
  61. . Id. at 161.
  62. . Id.
  63. . 172 F.3d 797 (11th Cir. 1999).
  64. . Id. at 802 n.12.
  65. . 684 F. Supp. 1185 (S.D.N.Y. 1988).
  66. . Id. at 1186–87.
  67. . Id. at 1192.
  68. . 338 F. Supp. 448 (D.D.C. 1972).
  69. . Id. at 450.
  70. . Id. at 460.
  71. . Id. at 461.
  72. . Id.
  73. . Id.
  74. . 134 F. Supp. 2d 965 (N.D. Ill. 2001).
  75. . Id. at 972.
  76. . Id. at 971.
  77. . Buettner-Hartsoe v. Balt. Lutheran High Sch. Ass’n, No. CV RDB-20-3132, 2022 WL 2869041 at *5 (D. Md. July 21, 2022); E.H. ex rel. Herrera v. Valley Christian Acad., 616 F. Supp. 3d 1040, 1049–50 (C.D. Cal. 2022).
  78. . 577 F. Supp. 1257 (D.N.J. 1983).
  79. . Id. at 1264–65.
  80. . Id.
  81. . 625 F. Supp. 1288 (D. Del. 1985).
  82. . Id. at 1298.
  83. . Bob Jones Univ. v. United States, 461 U.S. 574, 586 (1983).
  84. . David A. Brennen, Tax Expenditures, Social Justice, and Civil Rights: Expanding the Scope of Civil Rights Laws to Apply to Tax-Exempt Charities, 2001 B.Y.U. L. Rev. 167, 206–07 (2001).
  85. . Bob Jones Univ., 461 U.S. at 601–02.
  86. . Id.
  87. . Brennen, supra note 83, at 183 (citing I.R.S. News Release (July 10 1970), reprinted in 7 Stand. Fed. Tax Rep. (CCH) ¶ 6,790).
  88. . Id.
  89. . 347 U.S. 483, 495 (1954).
  90. . 2000 EO CPE Text, Private School Update, at 187.
  91. . Bob Jones Univ., 461 U.S. at 605.
  92. . 529 U.S. 120, 161 (2000).
  93. . Brennen, supra note 83, at 191–92.
  94. . IMF, Tax Expenditure Reporting and Its Use in Fiscal Management: A Guide for Developing Economies, Fiscal Affairs Department (Mar. 2019).
  95. . Nicholas A. Mirkay, Is It “Charitable” to Discriminate?: The Necessary Transformation of Section 501(c)(3) into the Gold Standard for Charities, 2007 Wis. L. Rev. 45, 80 (2007).
  96. . Id. at 80–81.
  97. . Id. at 66, 68.
  98. . Id. at 68.
  99. . Grove City Coll. v. Bell, 465 U.S. 555, 569 (1984); Nat’l Collegiate Athletic Ass’n v. Smith, 525 U.S. 459, 466–67 (1999); Cannon v. Univ. of Chi., 441 U.S. 677, 704 (1979).
  100. . 20 U.S.C. §§ 1681(c); U.S. Dep’t of Just., Title IX Legal Manual § III(A)(1) (2021) (modeled off of discussion of the scope of coverage in the Title IX manual regarding federal financial assistance).
  101. . Buettner-Hartsoe v. Balt. Lutheran High Sch. Ass’n, No. CV RDB-20-3132, 2022 WL 2869041 at *5 (D. Md. July 21, 2022), motion to certify appeal granted, No. CV RDB-20-3132, 2022 WL 4080294 (D. Md. Sept. 6, 2022); E.H. ex rel. v. Valley Christian Acad., 616 F. Supp. 3d 1040, 1049–50 (C.D. Cal. 2022).
  102. . 20 U.S.C. §§ 1681(a)(3); 34 C.F.R. § 106.12(a) (2020).
  103. . 26 U.S.C.A. § 501(c)(3) (West).
  104. . Mirkay, supra note 94, at 75 n.176.
  105. . 42 U.S.C. § 2000d-1.
  106. . Brennen, supra note 83, at 192.
  107. . Alexander v. Choate, 469 U.S. 287, 294 (1985).
  108. . 20 U.S.C.A. § 1681 (West).
  109. . See 20 U.S.C. §§ 1681–89; U.S. Dep’t of Just., Title IX Legal Manual § I (2021).
  110. . 118 Cong. Rec. 5803 (1972) (statement of Sen. Bayh).
  111. . Id.

Madelyn Strohm 

On December 20, 2023, the Federal Trade Commission (“FTC”) announced proposed changes to its Children’s Online Privacy Protection Act Rule (“Rule” or “COPPA Rule”).[1] The proposed changes aim to keep up with changes in technology and how businesses are using children’s information collected online.[2] The updated Rule aims to further enhance children’s privacy online by (1) expanding the definition of “personal information” under the Rule to include biometric identifiers, (2) preventing companies from abusing exceptions to consent policies, and (3) requiring companies to establish an express policy for retention and deletion of children’s personal information.[3]

History of the Act and Previous Changes to the Rule

The Children’s Online Privacy Protection Act was enacted in 1998.[4] The Act was passed in direct response to FTC research finding that websites for children were collecting their personal information without requesting permission from their parents, with the information ranging from their names to their parents’ income, or even Social Security Numbers.[5] The goal of the Act was to enhance children’s safety by ensuring their parents had knowledge and control of the collection of information from their children.[6]

Congress gave the FTC the power to issue and enforce regulations under the Act, and the FTC issued the COPPA Rule.[7] The Rule applies to operators of websites directed at children or any online service operators who have actual knowledge that they are collecting personal information from a child.[8] The Rule requires that these websites provide notice about their collection of personal information from children, how they use the information, and their practices for disclosure, and requires parental consent before they collect, use or disclose the information.[9] Personal information includes various types of information, like a child’s name, address, contact information, or Social Security Number.[10]

In its latest amendments to the Rule in 2013, the FTC expanded personal information to include “persistent identifiers,” like IP addresses, device serial numbers, or precise geolocations.[11] In 2019, the FTC issued a Rule Review Invitation and received more than 175,000 comments that helped them identify several areas for improvement, which are reflected in the proposed changes.[12]

Key Aspects of the Proposed Changes to the Rule

  1. Expanding the definition of personal information to include biometric data.

The first proposed expansion of the Rule would modify the Rule’s definition of “personal information” to include biometric identifiers that companies can use for automated recognition of individuals, including fingerprints, handprints, retina and iris patterns, genetic data, or data derived from voice data, gait data, or facial data.[13] Many of the comments by the public addressing biometric data supported its inclusion in the definition of personal information, noting that biometric data is uniquely susceptible because of its “permanent and unalterable nature.”[14] Additionally, some states have expanded their definition of personal information to include biometric data, as have other federal laws, like the Department of Education’s Family Educational Rights and Privacy Act (“FERPA”) regulations.[15] In his remarks on the proposed updates to the Rule, FTC Commissioner Bedoya cited “the beginning of an era of biometric fraud” and concern for how companies are protecting children’s biometric data against breaches, fraud and abuse.[16]

  1. Narrowing current exceptions to parental consent policies to prevent websites from encouraging to engage with online platforms without parental consent.

The FTC also proposed expanding its list of use restrictions for persistent identifiers.[17] The 2013 amendments allowed for an exception to the prohibition on the use of persistent identifiers, like IP address, if they were used for the “sole purpose of providing support for the internal operations of the website or online service.”[18] In the most recent round of comments, organizations expressed concern that this exception is overly broad and allows companies to shirk their COPPA obligations.[19] Commenters argued, and the FTC agreed, that this exception should not be allowed to promote increased site usage by children without verifiable parental consent.[20] This change would prevent companies from using or disclosing persistent identifiers to increase children’s attention and engagement, including using the information to send push notifications to the child reminding or encouraging them to engage with the company’s website or service without consent from parents.[21]

  1. Prohibiting companies from retaining children’s personal information indefinitely and requiring a written policy on data retention.

Finally, the proposed updates clarify the portion of the 2013 amendment that prohibits indefinite retention of children’s personal information.[22] Commenters from consumer groups argued that allowing companies to use the permissive “only as long as is reasonably necessary” standard for retention of children’s information allowed operators to both retain data unnecessarily and use it for purposes other than those understood by parents in their initial consent.[23] As such, the FTC intends to clarify that operators can only retain children’s personal information for the specific purpose for which it was collected, and not for any secondary uses.[24] The FTC will also require operators to establish a written data retention policy addressing businesses’ need for retention of children’s personal information, as well as a timeframe for deletion to prevent indefinite retention and further use.[25]


Though the proposed changes do not incorporate every request from commenters, they reflect the most prominent concerns raised by commenters across a variety of industries and platforms.[26] At the end of the notice of the proposed changes, the FTC highlighted questions it was still considering and asked for additional comments, indicating that additional changes are still possible.[27] The public has sixty days from the proposal’s publication in the Federal Register to submit additional comments.[28]


[1] Fed. Trade Comm’n, Statement of Commissioner Bedoya on the Issuance of Notice of Proposed Rulemaking to Update the Children’s Online Privacy Protection Rule (Dec. 20, 2023), https://www.ftc.gov/system/files/ftc_gov/pdf/BedoyaStatementonCOPPARuleNPRMFINAL12.20.23.pdf.

[2] Children’s Online Privacy Protection Rule, 89 Fed. Reg. 2034, 2034 (Jan. 11, 2024) (to be codified at 16 C.F.R. pt. 312).

[3] Fed. Trade Comm’n, supra note 1.

[4] 15 U.S.C. §§ 6501 et. seq.

[5] Fed. Trade Comm’n, Privacy Online: A Report to Congress 31-42 (1998).

[6] Id. at iii-iv; Fed. Trade Comm’n, supra note 1.

[7] 15 U.S.C. § 6502(b); 16 C.F.R. § 312 (2013).

[8] 16 C.F.R. § 312.3.

[9] Id.

[10] Id. § 312.2.

[11] Id.

[12] Children’s Online Privacy Protection Rule, 89 Fed. Reg. 8 at 2035.

[13] Id. at 2041.

[14] Id.

[15] Id.; 34 C.F.R. § 99.3 (1988).

[16] Fed. Trade Comm’n, supra note 1.

[17] Children’s Online Privacy Protection Rule, 89 Fed. Reg. at 2042-43.

[18] Id. at 2044.

[19] Id.

[20] Id. at 2045.

[21] Id.

[22] Id. at 2062.

[23] Id.

[24] Id.

[25] Id.

[26] Id. at 2044, 2062.

[27] Id. at 2069; Allison Grande, FTC Targets Data Profits with Kids’ Privacy Rule Changes, Law360 (Dec. 20, 2023 7:56 PM), https://www.law360.com/articles/1779564/ftc-targets-data-profits-with-kids-privacy-rule-changes.

[28] Children’s Online Privacy Protection Rule, 89 Fed. Reg. at 2034.

13 Wake Forest L. Rev. Online 59

Clare Magee


Russia’s 2022 invasion of Ukraine catalyzed a waterfall of political and economic upheaval across a world already reeling from the continuing COVID-19 pandemic. According to the World Bank, global trade in oil and natural gas from Russia and agricultural products from Ukraine suffered immense setbacks.[1] The Russian invasion and subsequent response from Western nations, in particular, disrupted numerous commercial agreements, many of which were directly impacted by the imposition of economic sanctions by the United States government.[2] A 2022 congressional report suggests that these economic sanctions resulted in hundreds of billions of dollars lost for the Russian economy, as well as a mass exodus of foreign companies from the Russian market, resulting in political and economic instability.[3]

Russia’s military offensive will likely result in a host of contractual legal issues coming to the fore over the next several decades. Russia-Ukraine sanctions-related commercial litigation governed by United States law is already slowly trickling into United States courts.[4] However, given that many commercial contracts customarily include mandatory arbitration provisions, courts will not have occasion to fully evaluate these claims for several years.[5] Instead, arbitrators will be met with the foreseeability problem that accompanies invocation of force majeure clauses and other common law defenses to breach of contract.

Part I of this Comment briefly discusses the legal foundation for economic sanctions both under United States and international law. Next, Part II explains how force majeure clauses operate in the background of contract disputes. Part III introduces the “foreseeability problem” generally, and details different analyses courts employ to evaluate force majeure depending on whether the jurisdiction has adopted a requirement that the force majeure event be foreseeable. Then, Part IV explores common law defenses to nonperformance of a contract complicated by economic sanctions that could be workable altneratives to force majeure clauses. Finally, Part V analyzes the contours of the “foreseeability problem” in the specific context of cases involving economic sanctions.

Ultimately, this Comment argues that while courts tasked with evaluating breach of contract cases arising out of economic sanctions may choose to adopt a straightforward approach to force majeure interpretation, the complications of a foreseeability approach could have costly implications for global commercial contracts. This Comment thus argues that until courts have occasion to reach the issues discussed below, litigants should focus their breach of contract defenses on the common law defenses of illegality and public policy.

I. Overview of Economic Sanctions

At the outset, it is important to explore how international economic sanctions operate at both a domestic and international level. Sanctions in the international context are a proverbial stick used to penalize states, individuals, or other actors that “endanger [the issuing entity’s] interests or violate international norms of behavior.”[6] International sanctions most often take the form of economic sanctions, which “are defined as the withdrawal of customary trade and financial relations for foreign- and security-policy purposes.”[7] Economic sanctions vary in type and scope, but may include travel bans, asset freezes, arms embargoes, capital restraints, foreign aid reductions, and other restrictions on trade and economic activity.[8]

The scope of this Comment is limited to economic sanctions issued by the United States government. While a brief overview of the broad international and domestic legal authorities for economic sanctions follows, it should be noted that the legitimacy, enforceability, and mass use of economic sanctions are expansive topics of legal and political scholarship that are well beyond the scope of this Comment.

A. Sanctions Under International Law

To begin, there is no general prohibition against economic sanctions in international law.[9] In fact, examples of economic sanctions have existed in international relations since 432 B.C. “when Athens imposed a trade embargo on its neighbor Megara.”[10] The modern international legal order is often considered to have begun after World War I with the formation of the League of Nations, which continued to promulgate sanctions as a tool of international relations.[11] For example, the League imposed a sweeping economic sanctions package against Benito Mussolini’s Italy after his invasion of Ethiopia in 1935.[12] The sanctions included an arms embargo, freeze on financial transactions, and significant export and import restrictions.[13] Various sanctions regimes have continuously been promulgated since 1935, and the recent trend has been towards issuing sanctions known as “smart sanctions” designed to “minimize the suffering of innocent civilians.”[14]

Today, the international legal authority for sanctions is largely grounded in the United Nations Charter, which contemplates the imposition of sanctions as collective security mechanisms available both to member states and to the UN as an international body.[15] Article 2 of the Charter lays out the expectations and rights of UN member states.[16] A majority of scholars do not believe that economic coercion through sanctions fall under Article 2(4)’s prohibition against “the threat or use of force” that is “inconsistent with the purposes of the United Nations.”[17] This is a logical interpretation given that any other reading would render later articles of the Charter inconsistent.[18] Article 41 of the Charter explicitly illustrates permissible uses of unarmed force, including “complete or partial interruption of economic relations and of rail, sea, air, postal, telegraphic, radio, and other means of communication.”[19]

However, the evolution of customary international law does impose some guardrails on sanctions. Generally, lawful sanctions imposed against an actor should include five components: (1) the actor must have violated or continues to violate a primary rule of international law, (2) good faith efforts have been attempted to deter or induce the actor to cease its violation, (3) the sanctions are proportional to the violation, (4) the sanctions are appropriately tailored or limited, and (5) the sanctions are terminable upon the actor’s cessation of its violation.[20]

The general acceptance of proportional and appropriately applied sanctions does not mean that actors view all sanctions as legal, however. For example, Iran–which has recently been the target of expansive economic sanctions regimes–has attempted to challenge the legality of sanctions under treaty law and other international legal principles.[21] Iran has a lawsuit before the International Court of Justice (“ICJ”) which suggests that in addition to the general customary rules of sanctions, there may also be treaties, UN General Assembly resolutions, and general principles of international law that inform the legality of sanctions.[22] For the purposes of this Comment, however, international economic sanctions as a general economic concept are assumed to be valid under international law and capable of interrupting contractual relationships.

B. Economic Sanctions Under United States Law

Within the United States, international economic sanctions are governed by a patchwork of legal authorities including acts of Congress, executive orders, decisions of agencies, and the Constitution itself. As a nation-state under international law, the United States’ jurisdiction to prescribe law includes “certain conduct outside its territory by persons not its nationals that is directed against the security of the state or against a limited class of other state interests.”[23] This constraint of international law on the United States, paired with the Constitution’s provisions on prescriptive jurisdiction, form the legal basis of the United States’ authority to promulgate economic sanctions.[24] Article 1 of the Constitution vests legislative powers in the Congress of the United States and authorizes Congress to make laws related to economic sanctions, while Article 2 outlines the authority of the Executive to do the same.[25]

One foundational authority governing sanctions promulgated by the United States is the International Emergency Economic Powers Act (“IEEPA”). IEEPA was enacted in 1977 “to govern the President’s authority to regulate international economic transactions during wars or national emergencies.”[26] IEEPA forms the basis of most–if not all–Executive action related to sanctions.[27] On average, 1.5 IEEPA emergencies are declared every year, which may result in sanctions targeting thousands of persons or entities.[28] IEEPA also includes the power to impose “secondary sanctions” on individuals and entities who are outside U.S. jurisdiction and cannot be legally required to adhere to sanctions.[29] These secondary sanctions are broadly applicable to those “suspected of transacting with sanctioned or sanctionable entities.”[30] Further, IEEPA sanctions often last for decades, which means that once sanctions regimes are imposed, they are not quickly undone.[31] Congress can also crystallize executive orders imposing sanctions by codifying them to ensure they are not revoked later on.[32]

In addition to legal authorities governing imposition of sanctions, there are also authorities governing execution and monitoring of sanctions. Once sanctions are imposed, the Office of Foreign Assets Control (“OFAC”) in the Department of the Treasury “administers and enforces economic and trade sanctions based on U.S. foreign policy and national security goals.”[33] OFAC maintains and publishes lists of “individuals and companies owned or controlled by, or acting for or on behalf of, targeted countries,” as well as groups that are “designated under programs that are not country-specific.”[34] Sanctions that are country-based may be (1) comprehensive, which means they cover “all transactions with the country and its nationals,” or (2) limited, which means they prohibit “only certain types of transitions with the target country or with certain persons in the government of that country.”[35] Activity-based sanctions “address particular actions, and the targets can be anywhere in the world.”[36]

While United States companies and individuals are expected to immediately abide by sanctions, foreign entities may also be prohibited from engaging in transactions with sanctioned countries, individuals, or groups if they have sufficient “contacts” with the United States or “conduct their transactions in U.S. dollars.”[37] OFAC exercises its discretion to claim jurisdiction over foreign companies and individuals broadly, increasing the power of United States sanctions regimes.[38] Thus, the impact of economic sanctions is far-reaching and can create challenges in a number of legal relationships, including in contractual obligations.

II. Force Majeure in Operation

With the aforementioned principles of sanctions in place, the remainder of this Comment turns to the interplay between contracts and economic sanctions – specifically, the role of force majeure clauses. Force majeure clauses are standard provisions that can be found in almost any contractual agreement.[39] These clauses typically cover “an event or effect that can be neither anticipated nor controlled,” including “both acts of nature (e.g., floods and hurricanes) and acts of people (e.g., riots, strikes, and wars).”[40]

Typically, what constitutes a force majeure “event” is determined by the language in the clause itself, which will delineate events the parties have included or excluded.[41] Parties might choose to negotiate specific events for inclusion or exclusion in order to dictate the application, effect, and scope of the force majeure clause.[42] For example, in Sage Realty Corp. v. Jugobanka, D.D.,[43] which involved a contractual dispute arising from the imposition of United States sanctions on Yugoslavian entities after the end of the Bosnian War, the relevant agreement’s force majeure clause contained the following exclusion:

[t]he obligation of Tenant to pay rent hereunder…shall in no way be affected, impaired or excused because Landlord is unable to fulfill any of its obligations under this Lease…by reason of any rule, order or regulation of any department of subdivision thereof of any government agency.[44]

More commonly, parties may opt for boilerplate or “catch-all” language that typically consists of: “acts of God, war, government regulation, terrorism, disaster, strikes (except those involving [a party’s] employees or agents), civil disorder…,” etcetera.[45]

As creatures of common law, force majeure provisions are governed by state law in the United States.[46] A court’s analysis of a force majeure clause thus can vary significantly by jurisdiction. Still, there are some foundational principles that courts tend to follow. For example, in breach of contract cases, the party invoking force majeure as an affirmative defense bears the burden to prove that the event causing the breach: (1) qualifies as a force majeure event, and (2) was not caused by the party’s own fault or negligence.[47]

Courts typically construe force majeure clauses narrowly and will “only excuse a party’s nonperformance if the event that caused the party’s nonperformance is specifically identified.”[48] Importantly, force majeure clauses do not excuse a party’s nonperformance “dictated by economic hardship” or because of a “mere increase in expense.”[49] Rather, the party asserting the force majeure clause as a defense must prove that an event within the clause “was beyond its control and without its fault or negligence.”[50] However, one aspect of force majeure interpretation that remains unclear is whether and to what extent courts include a “foreseeability” component.

III. The Foreseeability Problem

Because force majeure interpretation has evolved through common law, courts’ analyses reveal different approaches to whether a force majeure event must have been foreseeable or unforeseeable for the clause to adhere.[51] For example, Alabama and Maine have limited case law on force majeure clauses, with the primary analysis in reported decisions centering on the definition of force majeure with no evaluation of foreseeability.[52]

Conversely, consider the variance in states that have directly addressed foreseeability. Alaskan courts tend to require unforeseeability for force majeure events in certain types of contracts like oil and gas leases.[53] California and Florida have robust force majeure case law reflecting the most common practice where foreseeability is typically only an issue for catch-all or boilerplate language, and the rule is that “unless a contract explicitly identifies an event as force majeure, the event must be unforeseeable at the time of contracting to excuse performance.”[54] In Idaho, even if a force majeure clause does not expressly use the word “foreseeability,” courts are expected to engage in a foreseeability analysis.[55] By contrast, in New York and Ohio, courts do not read foreseeability issues into contracts that are otherwise silent on foreseeability.[56]

As illustrated by case law, courts may not have robust or consistent jurisprudence on the issue of foreseeability if it has not been frequently litigated.[57] But as one author notes, “Courts who have addressed this question can be placed into two categories.”[58] On one side are courts who import a force majeure clause’s “common-law significance” and “tend to impose an unforeseeability requirement upon the force majeure event.”[59] This means that in order for the court to allow the force majeure clause to excuse a party’s nonperformance, the event contemplated by the clause must have been truly unforeseeable. On the other side are courts who “regard the words of a self-defined force majeure clause as controlling and permit common-law notions to fill in the gaps.”[60] These courts are more likely to “not impose an unforeseeability requirement on enumerated force majeure events.”[61]

This variance in approach is mirrored not only from state to state, but system to system. Federal courts “have expressly advocated for an interpretive presumption that parties intend common-law components of force majeure, such as unforeseeability, to be read into a contract.”[62] But various state courts “allow the terms of an enumerated force majeure clause to control the scope and application of a force majeure analysis.”[63]

Yet another differentiating factor dividing courts’ analyses is whether the force majeure event that a nonperforming party bases its defense upon is explicitly listed in the clause or not. Given the potential implications of this difference for litigation arising out of economic sanctions, and because there is an apparent circuit split on enumerated force majeure clauses, this Part focuses on different courts’ analyses on force majeure events depending on whether they are explicit or not explicitly identified.

A. When Force Majeure Event is Explicit

At least two circuits have come to different conclusions about whether, and under what circumstances, a force majeure event that is explicitly included in the clause must be unforeseeable for the clause to adhere.[64] The Third Circuit and the Fifth Circuit have each had occasion to address whether “specifically listed” events require a showing of unforeseeability, coming to opposite conclusions.[65]

In Eastern Air Lines v. McDonnell Douglas Corp.,[66] the Fifth Circuit addressed an appeal for damages for breach of contract in favor of an airline against a jet plane manufacturer.[67] The lower court was unconvinced by the manufacturer’s argument that the delays leading to its breach of contract were the result of “escalation of the war in Vietnam,” finding in part that “any excusing event must have been unforeseeable.”[68] The Fifth Circuit disagreed and explained that underlying general contract principles is an understanding that “a promisor can protect himself against foreseeable events by means of an express provision in the agreement.”[69] Thus, argued the court, “when the promisor has anticipated a particular event by specifically providing for it in a contract, he should be relieved of liability for the occurrence of such event regardless of whether it was foreseeable.”[70] The Fifth Circuit concluded that the lower court erred in finding that “specifically listed” events “must have been unforeseeable at the time the contracts were entered into.”[71] This holding set up a foreseeability clash with the Third Circuit several years later.

In Gulf Oil Corp. v. FERC,[72] the Third Circuit adopted a “showing of unforeseeability” requirement.[73] Gulf Oil breached its obligations to deliver daily oil supplies to a Texas gas corporation under a contract which included among its enumerated list of twenty-seven force majeure events mechanical breakdowns, equipment downtimes, and maintenance repairs.[74] The Third Circuit held that Gulf Oil could not invoke the use of force majeure absent a showing that “the events which delayed its performance were unforeseeable and infrequent.”[75] Explaining its reasoning, the Third Circuit noted that “it is possible to accurately describe an event at its initial occurrence as unforeseeable and later because of the regularity with which it occurs, to find that such a description is no longer applicable.”[76] The court determined that the mechanical repairs which interrupted Gulf Oil’s delivery of gas had become so frequent and predictable that they could no longer be considered an excuse to nonperformance, even if they were specifically enumerated within the force majeure clause.[77] Importantly, the court articulated the insufficiency of arguing that “because the mechanical repairs were listed in the contract, they were force majeure events.”[78]

B. When Force Majeure Event is Not Explicitly Identified

The majority of states appear to read a foreseeability requirement into force majeure clauses only when the force majeure event is not explicitly enumerated or a catch-all provision is used.[79] One recent appellate case from Texas provides an illustrative discussion.[80] TEC Olmos, LLC v. ConocoPhillips[81] involved breach of an oil and gas drilling contract as the result of changes in global supply and demand for oil.[82] The contract included a force majeure clause that explicitly listed several events as well as a “catch-all” provision.[83] Drawing on common law principles, the court imported an “unforeseeability” requirement to ‘fill the gaps’ in the [catch-all] force majeure clause.”[84] The court explained:

To dispense with the unforeseeability requirement in the context of a general “catch-all” provision would, in our opinion, render the clause meaningless because any event outside the control of the nonperforming party could excuse performance, even if it were an event that the parties were aware of and took into consideration in drafting the contract.[85]

Key to the court’s reasoning was its concern for avoiding an “overly broad definition of force majeure” in accordance with traditional common law principles.[86]

Courts in California follow the same rules of construction and also read a foreseeability requirement into boilerplate or catch-all force majeure clauses.[87] In granting a motion to dismiss a breach of contract claim based on a force majeure defense, a United States District Court applied California law and held that “unless a contract explicitly identifies an event as a force majeure, the event must be unforeseeable at the time of contracting to qualify as such.”[88]

However, there are some state courts who have reached different conclusions as to the relevance of foreseeability when force majeure events are not explicitly listed.[89] For example, in a case involving a breach of contract arising out of an alleged “trade war” between the United States and China, a Michigan appellate court suggested that the court could find no Michigan cases to “support a conclusion that the foreseeability of a force-majeure event is relevant to the interpretation of a force-majeure clause.”[90] There, the litigant invoking force majeure argued that the case should have been allowed to proceed to discovery so “the issue of the foreseeability of China’s alleged illegal actions in the solar market and the parties’ intent with regard to allocation of risk [could] be explored.”[91] The court disagreed and construed the force majeure clause narrowly, rejecting any foreseeability arguments where the force majeure event was not explicitly listed.[92]

These cases illustrate the uncertainty awaiting litigants who have already included or might consider including sanctions-related force majeure clauses in their contracts. Basic contract principles favor giving meaning to the parties’ intentions as explicitly expressed in their written agreement, so conventional wisdom suggests that litigants who fear their contracts may be disrupted by sanctions in the future should negotiate force majeure clauses with explicit coverage for sanctions. However, if litigants do so and are met with a breach of contract action in a court that shares the Third Circuit’s attitude towards foreseeability in explicit force majeure clauses, they may be subject to an unwelcome holding.

On the other hand, litigants may not contemplate the possibility of sanctions and thus may rely on catch-all force majeure language to defend against breach of contract arising out of sanctions. The trouble with this approach, however, is that courts are more likely to include a foreseeability requirement in their analyses.[93] This opens litigants up to judges acting as political and foreign policy analysts who opine as to whether the parties should have foreseen a deterioration in relations between states leading to the imposition of sanctions. And while Supreme Court Justices have historically been asked to wade into the depths of foreign policy as a consequence of their rulings on multi-dimensional economic and political questions, there should be a measure of wariness towards granting such consequential authority to district and state court judges who may lack the expertise and time to carefully engage in such an analysis.[94]

Faced with these options, or perhaps by sheer mistake, litigants may end up without a sanctions-related force majeure provision entirely. Without such a provision, there are still some common law defenses available to litigants, such as impracticability/impossibility, illegality, or public policy. However, these defenses do not entirely dispense with—and in some cases actually enhance—the problem of the foreseeability requirement.

IV. Other Defenses
A. Impracticability and Impossibility

The shared common law origins of force majeure and impracticability (sometimes called impossibility) plays a key role in understanding how foreseeability can complicate a court’s analysis of alternative common law defenses. Impracticability and force majeure are similar but separate defenses to nonperformance. Impracticability excuses either “contracting party from performance in the fact of an act of God” such as “natural planetary elements or unforeseen, dramatic events.”[95] Even though it often covers “acts of God,” a force majeure clause is intended to relieve liability where “nonperformance is due to causes beyond the control of a person who is performing under a contract.”[96]

The clearest distinction between the two defenses is most easily understood temporally—when and how they are raised. As a contractual provision, a force majeure clause can only be invoked if the contract actually includes the clause.[97] Conversely, impracticability is a common law defense available to litigants even when a contract contains no force majeure clause.[98]

Foreseeability is the key aspect of the impracticability defense to breach of contract, which has three general requirements:

(1) the occurrence, or nonoccurrence, of the event causing the impracticability was unexpected; (2) performance of the duty by the promisor would be extremely difficult and burdensome, if not impossible; and (3) the promisor did not assume the risk of the event’s occurrence or nonoccurrence.[99]

Thus, in cases where litigants raise an impracticability defense, the court will almost always investigate the foreseeability of the event alleged to have caused the breach. One interesting example comes from the Fifth Circuit opinion in National Iranian Oil Co. v. Ashland Oil.[100] While National Iranian Oil Co. occurred in the context of an arbitration dispute, it revealed the court’s foreseeability analysis when determining whether a party can assert impossibility or impracticability.[101]

Beginning in 1973, Ashland Oil contracted with the state-owned National Iranian Oil Company (“NIOC”) to supply Ashland with crude oil.[102] Following the takeover of the United States Embassy in Tehran in 1979, then-President Carter issued several executive orders imposing sanctions against Iran, including banning imports of Iranian crude oil.[103] When Ashland refused to pay NIOC under the agreement, NIOC attempted to compel arbitration proceedings, which resulted in the Fifth Circuit’s opinion quoted in part at the outset of this comment.[104] Among the court’s evaluation of the arbitration claims is a helpful discussion of foreseeability as it relates to the defense of impossibility or impracticability.

As to the first element of the defense as articulated at the time—that the asserting party must not have been able to foresee the event—the Fifth Circuit held that it was “unimaginable” that the “NIOC–an instrumentality of the Republic of Iran–could not reasonably have foreseen” at the time of renewing their contract with Ashland that the agreement might be made impracticable by the deterioration of relations between Iran and the United States.[105] On the second element of the defense—that the event cannot have been the fault of the party asserting impracticability—the Fifth Circuit held that “as part of the revolutionary Government, NIOC certainly bears responsibility for creating the chain of events” that led to Ashland’s breach.[106]

Ashland Oil offers two principles that litigants should be aware of in choosing to invoke the impracticability defense, and potentially force majeure in jurisdictions where foreseeability is imported. First, depending on the political history and recency of conflict-ridden relations between the United States and foreign nations, a court may be willing to find that the imposition of sanctions was foreseeable, even if the parties did not contemplate them at the time of contracting. Second, litigants should be on notice that contracts with state- or quasi-state-owned entities may receive higher scrutiny on the foreseeability component since sanctions typically first target governments and government-owned enterprises.

B. Illegality and Public Policy

Illegality and public policy, which do not typically implicate foreseeability, provide a meaningful defense for nonperformance of a contract complicated by economic sanctions. As a general rule, illegality may be available to litigants as a defense against a breach of contract claim “whenever the performance of an act would be either a crime or a tort.”[107] Because parties cannot preemptively contract for something that would be illegal, the defense of illegality is available if, at the time the parties entered into the contract, the promise or obligation was not illegal but later became illegal.[108]

Public policy is an inherently ambiguous term, but courts are routinely asked to articulate what constitutes “public policy.”[109] They may define public policy as “that rule of law which declares that no one can lawfully do that which tends to injure the public, or is detrimental to the public good,”[110] “laws enacted for the common good,”[111] or policy and statutes that are established in the interests of the public or society.”[112] The Restatement (Second) of Contracts explains why courts may determine that a contractual promise is void as against public policy:

First, a refusal to enforce the promise may be an appropriate sanction to discourage undesirable conduct, either by the parties themselves or by others. Second, enforcement of the promise may be an inappropriate use of the judicial process in carrying out an unsavory transaction.[113]

In evaluating both illegality and public policy defenses, courts must often rely on the facts before them and the common law evolution of a court’s specific notions of what constitutes public policy, fairness, and illegality, meaning the success of either of these defenses is not automatic.

Unlike the impracticability or impossibility defense, courts do not typically import a foreseeability requirement into the illegality or public policy defenses. For example, Kashani v. Tsann Kuen China Enter. Co.[114] involved an American computer manufacturer entering an agreement with a Taiwanese corporation to establish a parts manufacturing plant in Iran.[115] Soon after the manufacturer began arranging financing, the Taiwanese corporation withdrew from the computer industry and refused to proceed with the agreement, arguing it had become illegal and against public policy because it violated executive orders issued by then-President Clinton to sanction Iran by restricting various business and financial transactions.[116] The California Court of Appeals held that the agreement was plainly illegal and violated public policy because the content of the agreement expressly violated the executive orders and other regulations imposing sanctions on Iran, so the corporation’s “actual and anticipated performance under the agreement were…prohibited.”[117]

Interestingly, the court distinguished between contracts that would be violative of domestic public policy versus international public policy in situations involving arbitration enforcement, indicating that the public policy defense might be evaluated differently in arbitration proceedings as opposed to court proceedings.[118] Ultimately, while the Kashani court acknowledged the public policy arguments, its decision was predicated on the more straightforward recognition that the agreement at issue violated an executive order and thus was illegal.[119]

Another example is a case from the United States Court of Federal Claims involving a motion to dismiss a breach of a government contract between the United States Agency for International Development (“USAID”) and Transfair International, Inc. to deliver humanitarian relief supplies to Eritrea.[120] In fulfilling its obligations under the agreement, Transfair subcontracted with a British company which ultimately hired Iranian aircraft to deliver the supplies.[121] USAID refused to pay the contract amount based on a defense that Transfair was in violation of OFAC sanctions. In response, Transfair filed a claim with the contract officer who found that “public policy considerations counseled against payment, which would be the equivalent of a transfer of government funds directly to an Iranian organization.”[122] The Court of Federal Claims reversed this decision at the motion to dismiss stage for two primary reasons: first, the court held that it must be determined whether a primary subcontractor should be held responsible for the illegal conduct of its subcontractor, and second, the court held that the illegality defense was not absolute, but rather subject to a fact intensive balancing test.[123] The court suggested that such a balancing test might weigh: (1) the promisee’s culpability, including what it knew about the alleged illegality, (2) the promisor’s corresponding culpability and knowledge of the illegality, (3) whether forfeiture would serve the public purposes at issue or serve as a deterrent against future violations, and (4) whether forfeiture resulting from nonenforcement of the agreement would be proportional to the illegality.[124]

These cases teach that when choosing among the available common law defenses to breach of contract, litigants can avoid the foreseeability problem by relying on illegality or public policy defenses. Impossibility or impracticability almost always require a court to inquire into the foreseeability of the event giving rise to the defense. Thus, if litigants are concerned about whether a court will read foreseeability into their force majeure clause, they should not expect to find a safe haven in the impossibility or impracticability defense. Thus, litigants should carefully consider whether the balancing approaches to illegality and public policy discussed above may instead be more advantageous to their position. Still, because of the canons of construction for contracts, if the litigants do have a force majeure provision that includes either explicit sanctions-related events or more general catch-all language, courts may begin and end their analyses with the force majeure clause, bringing litigants back to the foreseeability problem.

V. The Foreseeability Problem Redux: Sanctions Cases

The remainder of this Comment turns to cases which directly implicate force majeure or common law defenses in breach of contract cases arising directly out of sanctions. These cases do not appear to be often litigated to their full extent because of contractual arbitration provisions and the numerous other grounds on which a case may be decided or dismissed. Still, the cases that have been reported, combined with the general principles discussed above, provide a framework by which pending sanctions-related cases may be understood. As qualified previously, the discussion in this Part does not address the causation or culpability requirements of force majeure, or other elements of common law defenses. Instead, the focus is on the most unclear hurdle of them all: foreseeability.

A. A Straightforward Approach

Most likely, courts will adopt a straightforward approach to foreseeability in adjudicating sanctions-related litigation. In 1985, the Eighth Circuit reviewed an appeal from Iran after it lost a summary judgment motion to McDonnell, an American aircraft parts manufacturer over a breach of contract dispute.[125] Ten years earlier, the parties had entered into an agreement which included a force majeure clause explicitly excusing the manufacturer from nonperformance caused by “acts of the United States Government and embargoes.”[126] After the Iranian Revolution in 1979, when the U.S. Treasury Department and State Department imposed limitations on commercial dealings with Iran, McDonnell stopped shipping parts to the Iranian government.[127] The Iranian government sued for breach of contract, and the Eighth Circuit held that the economic restrictions imposed by the United States fell within the force majeure clause and excused McDonnell’s nonperformance.[128] Similarly, the Southern District of New York concluded in a 1998 case that the language of a force majeure clause which said the parties’ obligations would not be excused by “any rule, order or regulation…of any government” included executive orders and OFAC sanctions imposed against Yugoslavian entities in the wake of armed conflict in the Baltics.[129]

The ease with which these courts came to a decision regarding force majeure clauses should not be lightly disregarded. These cases illustrate the straightforward approach available to courts evaluating contractual provisions under traditional canons of construction. If, as is the case when analyzing any disputed contractual provision, the court’s aim is to give meaning and effect to the parties’ intentions when interpreting a force majeure clause, the court can rely on the terms of the agreement and end its analysis.[130] This is just what the Eighth Circuit did in McDonnell and the Southern District of New York did in Sage Realty.

If courts uniformly adopted this approach, litigants who contract with states or entities that eventually become targets of economic sanctions could negotiate specific force majeure provisions with this in mind at the beginning of the contractual relationship.Litigants would then have at least some measure of confidence that if all other force majeure elements were proven, they would be successful in their affirmative defense. Yet, the foreseeability problem lurks as a still-unknown potential disruptor to this straightforward approach.

B. The Unknowns of a Foreseeability Approach

Alternatively, courts might import foreseeability into their analyses of sanctions-related litigation, resulting in unknown but potentially far-reaching ramifications. This author could not find a single reported case in the last three decades where a court had occasion to directly address whether they would read a foreseeability requirement into a force majeure clause related to breach of contract arising out of sanctions. However, recent COVID-19 litigation seemingly indicates that such a question on sanctions cases may be forthcoming.[131] Over the past two years, courts have become increasingly skeptical of parties attempting to invoke force majeure clauses to cover pandemic-related breach of contract, finding that the pandemic and its impact on contracts are now foreseeable.[132] Notably, this skepticism seems most common in cases involving catch-all provisions where litigants attempt to stretch the meaning of the force majeure clause to cover the non-explicitly listed pandemic event.[133]

Economic sanctions as a tool of international relations are becoming more prevalent and widespread, with the Russia-Ukraine sanctions among the latest to garner public attention.[134] If “what’s past is prologue,”[135] there is a sound argument to be made that, when faced with questions about force majeure applicability to breach of contract arising out of sanctions, courts will look to cases like McDonnell and Sage Realty to interpret how litigants’ force majeure clauses apply to their claims. But in a world where courts have imported foreseeability requirements into force majeure cases like TEC Olmos and Gulf Oil, and where the recent COVID-19 litigation indicates that courts may consider the relative foreseeability of the force majeure event giving rise to contractual breach, it is possible that courts will turn to state common law and the foreseeability requirements of other common law defenses to read a foreseeability requirement into future force majeure litigation.

This approach could have costly implications for a range of contracts in a variety of industries given the nature of fully globalized trade. Imagine, for example, what would happen if a party today entered into a contract with a Chinese-owned entity that later became the target of United States sanctions. Could a court rationalize its opinion in state common law importation of foreseeability requirements that a force majeure clause and the common law defense of impracticability were unavailable because the sanctions were foreseeable given the slow devolution of relations between the United States and China since the end of the Cold War? While such a hypothetical might seem far-fetched and does not consider the potential relevance of common law defenses, there is certainly case law discussed in previous Parts that could support this reasoning if the facts and arguments were analogous enough.


The question of whether and to what extent foreseeability will impact sanctions-related litigation involving breach of contract claims is uncertain. Though courts will most likely rely on traditional canons of interpretation in evaluating force majeure events that litigants invoke as a shield against sanctions-involved breaches, the divide across state common law over importing a foreseeability requirement into force majeure interpretations lurks as a threat that raises more questions than it answers. Until courts are given an opportunity to develop a coherent body of case law on this question, litigants in cases involving breach of contract arising out of sanctions may be best served by adopting one of the following approaches. First, litigants could deliberately include sanctions in the force majeure clause and negotiate a favorable choice of law provision to ensure the force majeure clause is interpreted under the straightfoward approach adopted by the Eighth Circuit and Southern District of New York. Second, if their dispute reached a court, litigants could emphasize their public policy and illegality common law defenses in an attempt to avoid the question of foreseeability altogether.

  1. . See Russian Invasion of Ukraine Impedes Post-Pandemic Economic Recovery in Emerging Europe and Central Asia, The World Bank (Oct. 4, 2022), https://www.worldbank.org/en/news/press-release/2022/10/04/russian-invasion-of-ukraine-impedes-post-pandemic-economic-recovery-in-emerging-europe-and-central-asia.

  2. . Peter Neger & Bryan Woll, Applying U.S. Contract Law Amid Ukraine-Related Sanctions, Law360 (Mar. 24, 2022, 5:44 PM), https://www.law360.com/articles/1476924/applying-us-contract-law-amid-ukraine-related-sanctions.

  3. . Cong. Rsch. Serv., IFI2092, The Economic Impact of Russian Sanctions, https://crsreports.congress.gov/product/pdf/IF/IF12092 (last updated Dec. 13, 2022).

  4. . See, e.g., Joe Schneider, Carlyle Aviation Sues Insurers Over Seized Planes Leased to Russian Airlines, Ins. J. (Nov. 1, 2022), https://www.insurancejournal.com/news/international/2022/11/01/692558.htm.

  5. . Marco P. Falco, Business Contract Arbitration Clauses: Why the Words Matter, Law360 Canada (May 18, 2023 2:07 PM), https://www.law360.ca/articles/46864/business-contract-arbitration-clauses-why-the-words-matter?category=analysis.

  6. . Jonathan Masters, What Are Economic Sanctions, Council on Foreign Rel., https://www.cfr.org/backgrounder/what-are-economic-sanctions (last updated Aug. 12, 2019, 8:00 AM).

  7. . Id.

  8. . Id.

  9. . Syed Ali Akhtar, Do Sanctions Violate International Law?, Econ. & Pol. Wkly. (Apr. 27, 2019), https://www.epw.in/engage/article/do-sanctions-violate-international-law.

  10. . Uri Friedman, Smart Sanctions: A Short History, Foreign Pol’y (Apr. 23, 2012, 2:33 AM), https://foreignpolicy.com/2012/04/23/smart-sanctions-a-short-history/.

  11. . IMF, The Sanctions Weapon, Finance & Development (June 2022), https://www.imf.org/en/Publications/fandd/issues/2022/06/the-sanctions-weapon-mulder.

  12. . Id.

  13. . Id.

  14. . Masters, supra note 6.

  15. . See U.N. Charter art. 2, ¶ 5–6; see also U.N. Charter arts. 39–51.

  16. . U.N. Charter, art. 2.

  17. . J. Curtis Henderson, Legality of Economic Sanctions Under International Law: The Case of Nicaragua, 43 Wash. & Lee L. Rev. 167, 180 (1986).

  18. . Id. at 181.

  19. . U.N. Charter, art. 41.

  20. . Anthony D’Amato, Groundwork for International Law, 108 Am. J. Int’l. L. 650, 670 (2014).

  21. . See Certain Iranian Assets (Iran v. U.S.), Application Instituting Proceedings, 2016 I.C.J. (June 14) (arguing that U.S. sanctions violate the Treaty of Amity and international law).

  22. . See id. See generally Henderson, supra note 17, at 187–93.

  23. . Restatement (Third) of Foreign Rel. L. of the U.S. § 402 (1987).

  24. . Id., cmt. j.

  25. . U.S. Const. art. I §§ 1, 8; id. art. II.

  26. . Barbara J. Van Arsdale, Annotation, Validity, Construction, and Operation of International Emergency Economic Powers Act, 50 U.S.C.A. §§ 1701 to 1707, 183 A.L.R. Fed. 57 (2003).

  27. . Andrew Boyle, Checking the President’s Sanctions Powers, Brennan Center for Justice 3 (June 10, 2021), https://www.brennancenter.org/sites/default/files/2021-06/BCJ-128%20IEEPA%20report.pdf.

  28. . Id.

  29. . Id. at 8.

  30. . Id.

  31. . Id. at 3.

  32. . Abigail A. Graber, Cong. Rsch. Serv., R46738, Executive Orders: An Introduction, at 19 (Mar. 29, 2021).

  33. . Office of Foreign Assets Control, U.S. Department of the Treasury, https://home.treasury.gov/policy-issues/office-of-foreign-assets-control-sanctions-programs-and-information (last visited Nov. 20, 2023).

  34. . Id.; Office of Foreign Assets Control, Specially Designated Nationals List – Data Formats & Data Schemas, U.S. Department of the Treasury, https://ofac.treasury.gov/specially-designated-nationals-list-data-formats-data-schemas (last updated Nov. 17, 2023).

  35. . Boyle, supra note 27, at 7.

  36. . Id.

  37. . Id. at 8.

  38. . Id. at 8 (discussing OFAC’s claim of jurisdiction “over a Taiwanese company that transferred oil to an Iranian company, simply because that Taiwanese company had previously filed for bankruptcy in U.S. court”).

  39. . See J. Hunter Robinson et. al., Use the Force? Understanding Force Majeure Clauses, 44 Am. J. Trial Advoc. 1, 8 (2020) (explaining that “[f]orce majeure clauses may be found in any contract,” particularly construction and real estate contracts.

  40. . Force Majeure, Black’s Law Dictionary (11th ed. 2019).

  41. . 30 Williston on Contracts § 77:31 (4th ed.).

  42. . Id.

  43. . No. 95 CIV. 0323, 1998 WL 702272 (S.D.N.Y. Oct. 8, 1998).

  44. . Id. at *4.

  45. . Williston, supra note 41.

  46. . Robinson et. al., supra note 39, at 4 (“the application of force majeure principles can vary from jurisdiction to jurisdiction and case to case.”).

  47. . Williston, supra note 41.

  48. . Id.

  49. . Id.

  50. . Id.

  51. . TEC Olmos, LLC v. ConocoPhillips Co., 555 S.W.3d 176, 181 (Tex. App. 2018) (explaining that “foreseeability of force majeure events is rooted in the common law of the force majeure doctrine”). See generally Robyn S. Lessans, Comment, Force Majeure and the Coronavirus: Exposing the “Foreseeable” Clash Between Force Majeure’s Common Law and Contractual Significance, 80 Md. L. Rev. 799, 809–10 (2021).

  52. . See Practical Law Commercial Transactions, Key Issues When Invoking a Force Majeure Clause: State Law Chart, https://1.next.westlaw.com/Document/I1e7ec4ae774e11ea80afece799150095/View/FullText.html?transitionType=SearchItem&contextData=(sc.Search) (last visited Nov. 20, 2023).

  53. . Alaskan Crude Corp. v. State Dep’t of Nat. Res., Div. of Oil & Gas, 261 P.3d 412, 420 (Alaska 2011) (stating the rule that “Force majeure clauses extend [mineral] leases only when the nonperformance is ‘caused by circumstances beyond the reasonable control of the lessee or by an event which is unforeseeable at the time the parties entered into the contract’”).

  54. . Free Range Content, Inc. v. Google Inc., No. 14-CV-02329, 2016 WL 2902332, at *6 (N.D. Cal. May 13, 2016); see also In re. Flying Cow Ranch HC, LLC, No. 18-12681, 2018 WL 7500475, at *3 (Bankr. S.D. Fla. June 22, 2018)(finding that a force majeure event that was not explicitly listed in the clause was subject to a foreseeability analysis).

  55. . Roost Project, LLC v. Andersen Constr. Co., 437 F. Supp. 3d 808, 821 (D. Idaho 2020).

  56. . See Drummond Coal Sales Inc. v. Kinder Morgan Operating LP “C”, 836 F. App’x 857, 867 (11th Cir. 2021) (applying New York law); see also Sabine Corp. v. ONG W., Inc., 725 F. Supp. 1157, 1170 (W.D. Okla. 1989).

  57. . See, e.g., Kyocera Corp. v. Hemlock Semiconductor, LLC, 886 N.W.2d 445, 451 (Mich. Ct. App. 2015) (explaining “[t]his Court has previously observed that there is a paucity of Michigan cases interpreting force-majeure clauses…and that remains the case today”).

  58. . Lessans, supra note 51, at 810.

  59. . Id.

  60. . Id.

  61. . Id.

  62. . Id.

  63. . Id. at 812.

  64. . TEC Olmos, LLC v. ConocoPhillips Co., 555 S.W.3d 176, 182 (Tex. Ct. App. 2018).

  65. . Id.

  66. . 532 F.2d 957 (5th Cir. 1976).

  67. . Id. at 961.

  68. . Id. at 980.

  69. . Id. at 992.

  70. . Id.

  71. . Id.

  72. . 706 F.2d 444 (3d Cir. 1983).

  73. . Id.

  74. . Id. at 448–49 n.8, 453.

  75. . Id. at 454.

  76. . Id. at 453.

  77. . Id. at 453–54 (explaining that “[t]he element of uncertainty that defines unforeseeability is negated by the regularity with which the events occurred.”).

  78. . Id. at 454.

  79. . Compare Roost Project, LLC v. Anderson Constr. Co., 437 F. Supp. 3d 808, 821 (D. Idaho 2020) (explaining that courts should engage in a foreseeability analysis for events that are not expressly listed in the force majeure provision), with Kyocera Corp. v. Hemlock Semiconductor, LLC, 886 N.W.2d 445 (Mich. App. 2015) (finding that courts need not engage in a foreseeablity analysis to interpret a force majeure provision).

  80. . See TEC Olmos, 555 S.W. 3d at 182–85.

  81. . Id.

  82. . Id. at 179–180.

  83. . Id. at 179.

  84. . Id. at 184 (quoting Sun Operating LTD. P’ship v. Holt, 984 S.W.2d 277, 283 (Tex. App. 1998)).

  85. . Id.

  86. . TEC Olmos, LLC v. ConocoPhillips Co., 555 S.W.3d 176, 185 (Tex. App. 2018).

  87. . Free Range Content, Inc. v. Google, Inc., No. 14-CV-02329, 2016 WL 2902332, at *6 (N.D. Cal. May 13, 2016).

  88. . Id.

  89. . See, e.g., Morgan St. Partners, LLC v. Chicago Climbing Gym Co., No. 20-CV-4468, 2022 WL 602893, at *5 (N.D. Ill. Mar. 1, 2022) (rejecting a plaintiff’s argument that “foreseeability is paramount” for evaluating a force majeure clause that did not explicitly mention the COVID-19 pandemic).

  90. . Kyocera Corp. v. Hemlock Semiconductor, LLC, 886 N.W.2d 445, 454–55 (Mich. App. 2015).

  91. . Id. at 455.

  92. . Id. at 456.

  93. . Lessans, supra note 51, at 810.

  94. . See Noah Feldman, When Judges Make Foreign Policy, The New York Times Magazine (Sept. 25, 2008), https://www.nytimes.com/2008/09/28/magazine/28law-t.html.

  95. . 30 Williston on Contracts § 77:31 (4th ed.), Westlaw (database updated May 2023).

  96. . Id.

  97. . Id.

  98. . See 30 Williston on Contracts § 77:1 (4th ed.), Westlaw (database updated May 2023).

  99. . Id.

  100. . 817 F.2d 326 (5th Cir. 1987).

  101. . Nat’l Iranian Oil Co., 817 F.2d 326.

  102. . Id. at 328.

  103. . Id.

  104. . Id.

  105. . Id. at 333.

  106. . Id.

  107. . 5 Williston on Contracts § 12:1 (4th ed.), Westlaw (database updated May 2023).

  108. . See id.

  109. . Id.

  110. . Calvert v. Mayberry, 440 P.3d 424, 430 (Colo. 2019).

  111. . In re Santiago G., 121 A.3d 708, 722 n.17 (Conn. 2015).

  112. . See In re Estate of Feinberg, 919 N.E.2d 888, 894 (Ill. 2009).

  113. . Restatement (Second) of Contracts ch. 8, intro. note (Am. L. Inst. 1981).

  114. . 118 Cal. App. 4th 531 (2004).

  115. . Id. at 536.

  116. . Id. at 536–37.

  117. . Id. at 548.

  118. . See id. at 555 (explaining that “[t]here is an ‘important distinction between domestic and international public policy…According to this distinction what is considered to pertain to public policy in domestic relations does not necessarily pertain to public policy in international relations…’”) (internal citations omitted).

  119. . Id. at 548.

  120. . Transfair Int’l, Inc. v. United States, 54 Fed. Cl. 78, 78 (2002).

  121. . Id.

  122. . Id. at 80.

  123. . Id. at 87.

  124. . Id. at 85.

  125. . McDonnell Douglas Corp. v. Islamic Republic of Iran, 758 F.2d 341, 343 (8th Cir. 1985).

  126. . Id.

  127. . Id. at 344.

  128. . Id. at 347–48.

  129. . See Sage Realty Corp. v. Jugobanka, D.D., No. 95 CIV 0323, 1998 WL 702272, at*1, *4–*5 (S.D.N.Y. Oct. 8, 1998) (discussing the reasonable foreseeability of sanctions for a related frustration of purpose defense).

  130. . Rocky Mountain Helium, LLC v. United States, 145 Fed. Cl. 92, 97 (2019).

  131. . Erin Webb, Analysis: No Longer Unforeseeable? Force Majeure and COVID-19?, BL (Nov. 1, 2021, 3:03 AM), https://news.bloomberglaw.com/bloomberg-law-analysis/analysis-no-longer-unforeseeable-force-majeure-and-covid-19 (stating that “[s]ome courts have found that the parties’ ability to name a risk—like a pandemic or a government shutdown risk—in a force majeure clause means that the risk was not only foreseeable at the time of contracting, but actually foreseen, defeating other defenses to nonperformance, such as impossibility of performance or frustration of purpose.”).

  132. . Id.

  133. . Ryan Franklin & Nicholas Wind, Force Majeure Clauses in the Aftermath of the COVID-19 Pandemic and the Implications for Government Entities, A.B.A. Blog (March 14, 2022), https://www.americanbar.org/groups/government_public/publications/pass-it-on/spring-2022/spring22-franklin-wind-forcemajeure/.

  134. . Nicholas Mulder, The Sanctions Weapon, Fin. & Dev., June 2022, at 20, 20–21. Conflict between Israel and Hamas began in October 2023, just as this Comment was published. While OFAC’s sanctions carefully target Hamas affiliates in an effort to avoid direct state-to-state sanctions against Iran, sanctions penalizing money transfers between “Iran-aligned” entities and Gaza provide yet another contemporary example of the increasing prevalance of economic sanctions as an international stick that businesses should not ignore in contract drafting. See Press Release, U.S. Dept. of the Treasury, Following Terrorist Attack on Israel, Treasury Sanctions Hamas Operatives and Financial Facilitators (Oct. 18, 2023) https://home.treasury.gov/news/press-releases/jy1816.

  135. . William Shakespeare, The Tempest 131 (Barbara A. Mowat & Paul Werstine, eds., Simon & Schuster Paperbacks 2015) (1623).

Noah McDuff

          I.      An Introduction to Chevron Deference

The Supreme Court’s landmark decision in Chevron v. National Resources Defense Council[1] has served as a pillar in the administrative law community for almost forty years[2] and remains one of the most cited high court decisions in history.[3] In Chevron, the Court established the Chevron doctrine, a two-step analysis for judicial “revie[w] [of] an agency’s construction of the statute which it administers.”[4]

First, the court must identify whether Congress has directly addressed the issue in question (i.e., whether the statute is ambiguous).[5] If the statute specifically addresses the issue, such that congressional intent is evident, the Chevron analysis ends there, and both the court and the administrative agency must give effect to Congress’ intent.[6] However, if the statute is silent on the issue, the court will proceed to step two of the analysis to determine whether the agency’s interpretation is reasonable.[7] If the court finds that the agency’s interpretation is reasonable, the court will not impose its own reading of the statute, but will defer to the agency’s interpretation.[8] Thus, the Chevron doctrine grants federal administrative agencies substantial judicial deference if (1) a statutory provision is ambiguous, and (2) the federal agency’s interpretation of the ambiguity is reasonable.[9]  

However, in recent years, the Chevron doctrine has been the target of attacks.[10] Critics, including prominent judges and scholars, fear that the doctrine places legislative and judicial power in the hands of unelected bureaucrats, whose motivation stems from economic gain, as opposed to sovereign representation.[11] Chevron supporters argue that administrative agencies are better positioned to address the technical aspects of federal law,[12] and revoking such administrative power would negatively impact important federal policies and programs.[13]

          II.      Chevron Lite: Deference In Its Modern Form

While intense debate swirls regarding its future, the modern Doctrine is more bark than bite.[14] In recent years, when faced with the task of applying Chevron, the Supreme Court has diminished[15] or outright ignored the Chevron doctrine.[16] For lower courts, Chevron is still binding precedent, and the courts continue to apply it as intended.[17] Regardless of its perceived importance in the world of administrative law, the fact that lower courts’ application of the Doctrine varies considerably from the Supreme Court’s reflects the Court’s struggle to identify the Doctrine’s foundations and to specify its reach.[18] Thus, Supreme Court review of Chevron will prove vital to the continued efficient operation of courts on administrative law matters.

           III.      Loper Bright Enterprises

Loper Bright Enterprises v. Raimondo[19] presents the Court with a much-needed opportunity to resolve uncertainty surrounding Chevron. The case is scheduled to be addressed during the Supreme Court’s October 2023 term,[20] and a decision is expected during the first half of 2024.[21]

In 2020, New Jersey-based fishing company, Loper Bright Enterprises, and other Atlantic herring fishermen (collectively, “Loper Plaintiffs”) filed suit in the U.S. District Court for the District of Columbia.[22] The Loper Plaintiffs challenged a final rule and implementing regulations promulgated by the National Marine Fisheries Service (“NMFS”)  that established processes for industry-funded monitoring in Atlantic herring fisheries.[23] The final rule was promulgated under the Magnuson-Stevens Fishery Conservation and Management Act of 1976 (“MSA”), which was enacted to conserve domestic fisheries and other “aquatic resources.”[24] Under the MSA, NMFS was tasked with promulgating policies consistent with the MSA.[25]

The Loper Plaintiffs alleged that the rule promulgated by the NMFS violated both statutory and constitutional protections.[26] Specifically, the Loper Plaintiffs expressed concern for the economic costs such monitoring would place on the herring fleet.[27] Applying the Chevron doctrine, the district court ruled against the Loper Plaintiffs,[28] reasoning that “[e]ven if Plaintiffs’ arguments were enough to raise an ambiguity in the statutory text, the Court . . . would conclude that [NMFS’s] interpretation is a reasonable reading of the MSA.”[29]

The Loper Plaintiffs then appealed to the United States Court of Appeals for the D.C. Circuit.[30] In a divided panel, the appellate court deferred to the administrative agency’s interpretation of the MSA under the Chevron doctrine.[31] The Circuit’s opinion, authored by Judge Rogers, reasoned that the MSA does not provide a “wholly unambiguous answer . . . as to whether the [NMFS] may require industry-funded monitoring” and that the NMFS’s interpretation of the MSA to allow such monitoring was reasonable.[32] In doing so, the Court of Appeals set the stage for the Supreme Court’s Chevron showdown.

In its petition for writ of certiorari to the United States Supreme Court, the Loper Plaintiffs asked the Court to answer two questions: “(1) [w]hether, under a proper application of Chevron, the MSA implicitly grants NMFS the power to force domestic vessels to pay the salaries of the monitors they must carry,” and “(2) [w]hether the Court should overrule Chevron or at least clarify the statutory silence concerning controversial powers expressly but narrowly granted elsewhere in the statute does not constitute an ambiguity requiring deference to the agency.”[33] In May 2023, the Supreme Court granted certiorari to the Loper Plaintiffs as to only the latter question.[34] The Court’s grant of certiorari resulted in a plethora of amicus curiae briefs filed in support of both the petitioners and respondents.[35] Interested parties include the American Cancer Society, Muscular Dystrophy Association, American Federation of Labor and Congress of Industrial Organizations, American Association for the Advancement of Science, Main Street Alliance, American Sustainable Business Council, National Resources Defense Council, and many others.[36]

          IV.      Deference Moving Forward

In a year filled with attacks on administrative law powers,[37] as the current Court seeks to narrow the scope of federal administrative authority,[38] Chevron’s future appears bleak.[39]

Regardless of the clamor associated with the Court’s upcoming decision, overturning Chevron will likely not spell the downfall of  administrative law.[40] To echo the sentiments of many scholars, judges, and other legal professionals, Chevron, in its original form, has been defunct for a number of years.[41] Further, an aggressive reading and application of Chevron runs afoul of the separation of powers doctrine in the Constitution.[42] That being said, courts can very likely still comply with the Constitution and resolve statutory ambiguities in situations that would give rise to Chevron deference by utilizing traditional means of interpretation. In the words of Justice Scalia, “Chevron is . . . not a declaration that, when statutory construction becomes difficult, we will throw up our hands and let regulatory agencies do it for us.”[43] After all, “Chevron only applies when, after exhausting all of the tools of statutory construction, the statute remains ambiguous.”[44] Further, it has long been understood that “[t]hose who ratified the Constitution knew that legal texts [including federal statutes] would often contain ambiguities,” and federal “judicial power was understood to include the power to resolve these ambiguities over time.”[45]

Therefore, courts have long been understood to have both the constitutional power and the proper tools and resources to address statutory ambiguities through traditional statutory interpretation. Thus, in Loper Bright Enterprises v. Raimondo, the Court should strike down Chevron, thereby preserving principles of federal separation of powers, and proceed with traditional means of statutory interpretation.

[1] 467 U.S. 837 (1984).

[2] See Cass R. Sunstein, Chevron as Law, 107 Geo. L. J. 1613, 1615 (2019) (stating that Chevron “has a strong claim to being the most important case in all of administrative law.”); Thomas W. Merrill, The Story of Chevron: The Making of an Accidental Landmark, 66 Admin. L. Rev. 253, 254 (2014) (explaining how Chevron “is the Supreme Court’s leading statement about the division of authority between agencies and courts in interpreting statutes.”).

[3] Kent Barnett & Christopher Walker, Chevron in the Circuit Courts, 116 Mich. L. Rev. 1 (2017) (explaining that “the decision itself is one of the most cited Supreme Court decisions of all time” and that as of 2017, it “has been cited in more than 80,000 sources“).

[4] 467 U.S. at 842.

[5] Id.

[6] Id. at 842–43.

[7] Id. at 843.

[8] Id. at 843-44.

[9] Christopher J. Walker, Attacking Auer and Chevron Deference: A Literature Review, 16  Geo. J. L. & Pub. Pol’y 103, 110 (2018) (citing Chevron, 467 U.S. at 842–43) (summarizing the holding of Chevron).

[10] See Sunstein, supra note 2, at 1615 (noting that Chevron is “under siege” and “it may not live to see the age of forty”); Nathan D. Richardson, Deference is Dead, Long Live Chevron, 73 Rutgers Univ. L. Rev. 441, 443–44 (2021) (“Moreover, Chevron appears under threat. Prominent judges and academics . . . have called for its reconsideration and possible rejection.”).

[11] See Brett M. Kavanaugh, Fixing Statutory Interpretation, 129 Harv L. Rev. 2118, 2150 (2016) (“In many ways, Chevron is nothing more than a judicially orchestrated shift of power from Congress to the Executive Branch.”); Michael W. McConnell, Kavanaugh and The “Chevron Doctrine, Stan. L. Sch. Blogs (Aug. 2, 2018), https://law.stanford.edu/2018/08/02/kavanaugh-and-the-chevron-doctrine/ (Chevron “raises the deep question of constitutional governance: whether fundamental political questions will be debated and resolved by representatives of the people, or by agencies whose loyalties almost always are ideological or economic interests.”). For a discussion of judicial criticism of Chevron, see Perez v. Mortg. Bankers Ass’n, 575 U.S. 92, 119 (2015) (Thomas, J., concurring) (“[T]he judicial power, as originally understood, requires a court to exercise its independent judgment in interpreting and expounding upon the laws.”); Michigan v. EPA, 576 U.S. 743, 762 (2015) (Thomas, J., concurring) (“Such a transfer [in authority] is in tension with Article III’s Vesting Clause, which vests the judicial power exclusively in Article III courts, not administrative agencies.”). For an overview of legislative attacks against Chevron, see Jonathan R. Siegel, The Constitutional Case for Chevron Deference, 71 Vand. L. Rev. 937, 951–52 (2018).

[12] See Jeffrey. Pojanowski, Without Deference, 81 Mo. L. Rev. 1075, 1075 (2016) (“Many jurists and scholars see it [Chevron] as a salutary and natural outgrowth of administrative legal doctrine that recognizes the necessity of agencies’ technical expertise.”); Brief for American Cancer Society et al. as Amici Curiae Supporting Respondents at 4, Loper Bright Enters. v. Raimondo, 143 S. Ct. 2429 (2023) (No. 22-451) (“The competent and stable administration of these [federal] programs depends on the deep expertise of the agencies to which Congress has assigned the responsibility.”);  Brief for Scholars of Administrative Law and the Administrative Procedure Act as Amici Curiae Supporting Respondents at 3, Loper Bright Enters., 143 S. Ct. 2429 (No. 22-451) (“Just as a court might ‘decide’ a question of law starting from a blank slate, a court equally fulfills that duty by looking to an agency’s interpretation of law and adopting it if it deems it reasonable.”).

[13] See Brief for Lawyers’ Committee for Civil Rights Under Law as Amici Curiae Supporting Respondents at 3, Loper Bright Enters., 143 S. Ct. 2429 (No. 22-451) (“In the absence of agency rulemaking that addresses points on which underlying statutes are silent or purposely broad, our society’s ability to realize the benefits of the protections in this nation’s landmark civil rights statutes would be significantly impeded.”); Brief for National Resources Defense Council as Amici Curiae Supporting Respondents at 17, Loper Bright Enters., 143 S. Ct. 2429 (No. 22-451) (“By restraining judges from imposing their policy preferences on an agency, deference also promotes legal uniformity . . . .”).

[14] See Michael Herz, Chevron is Dead; Long Live Chevron, 115 Colum. L. Rev. 1867, 1870 (2015) (“For all the clamor, attention, and citations, Chevron has had less of an impact than this attention implies.”); Richardson, supra note 10, at 443 (“But at the Supreme Court level, Chevron now lacks the power and predictability it claims to have—and may once have had—though it probably never had the influence its reputation suggests.”).

[15] See Buffington v. McDonough, 7 F.4th 1361 (Fed. Cir. 2021), cert. denied, 143 S. Ct. 14, 21 (2022) (Gorsuch, J., dissenting) (stating that an “aggressive reading of Chevron has more or less fallen into desuetude—the government rarely invokes it, and courts even more rarely rely on it”); Kavanaugh, supra note 11, at 2151 (stating that “the Supreme Court itself has been reining in Chevron in the last few years”).

[16] See Richard J. Pierce, Jr., Is Chevron Deference Still Alive?, The Regul. Rev. (Jul. 14, 2022), https://www.theregreview.org/2022/07/14/pierce-chevron-deference/ (identifying recent decisions where the Supreme Court has “simply ignored Chevron”); Am. Hosp. Ass’n v. Becerra, 142 S. Ct. 1896 (2022) (utilizing “traditional tools of statutory interpretation” without citing Chevron); Becerra v. Empire Health Found., 142 S. Ct. 2354 (2022) (agreeing with HHS’s interpretation of a statute without citing Chevron); Barnett & Walker, supra note 2, at 4 (“Scholars and commenters . . . have noticed the Court’s treatment of Chevron as a doctrine to ignore, disparage, or distinguish.”).

[17] See Barnett & Walker, supra note 2, at 32 (explaining how circuit courts applied the Chevron framework 74.80% of cases in which it could apply).

[18] Sunstein, supra note 2, at 1657 (“Since Chevron, the Court has struggled both to specify the foundations of the decision and to limit its reach.”).

[19] 45 F.4th 359 (D.C. Cir. 2022), cert. granted, 143 S. Ct. 2429 (2023) (No. 22-451).

[20] Amy Howe, Supreme Court Will Consider Major Case on Power of Federal Regulatory Agencies, SCOTUSblog (May 1, 2023, 11:54 AM), https://www.scotusblog.com/2023/05/supreme-court-will-consider-major-case-on-power-of-federal-regulatory-agencies/.

[21] Id.

[22] Complaint, Loper Bright Enters. v. Raimondo, 544 F. Supp. 3d. 82 (D.D.C. 2021) (No. 20-466).

[23]  Loper Bright Enters., 544 F. Supp. 3d at 93.

[24] Id. at 94.

[25] Id.

[26] Id. at 93–94.

[27] Id. at 96–97.

[28] Id. at 127.

[29] Id. at 107.

[30] Brief for Appellant, Loper Bright Enters., 45 F.4th 359 (D.C. Cir. 2022) (No. 20-466), 2021 WL 5357459.

[31] Loper Bright Enters., 45 F.4th at 369.

[32] Id.

[33] Petition for Writ of Certiorari at i-ii, Loper Bright Enters., 143 S. Ct. 2429 (No. 22-451).

[34] Loper Bright Enters., 143 S. Ct. 2429.

[35] See Juan-Carlos Rodriguez, Chevron Doctrine Supporters Flock to High Court in Key Case, Law360 (Sep. 22, 2023, 5:52 PM), https://www.law360.com/tax-authority/articles/1724839/chevron-doctrine-supporters-flock-to-high-court-in-key-case (detailing amicus briefs filed by various interested parties).

[36] Id.

[37] See Andrew Chung & John Kruzel, Federal Agency Powers in the Crosshairs at the US Supreme Court, Reuters (Jul. 5, 2023, 2:08 PM), https://www.reuters.com/legal/federal-agency-powers-crosshairs-us-supreme-court-2023-07-04/.

[38] Chung & Kruzel, supra note 37.

[39] See Pojanowski, supra note 12, at 1078 (“Skepticism about Chevron deference is not new, but hostile rumblings from the Supreme Court have grown in the past few Terms.”).

[40] See Pojanowski, supra note 12, at 1080 (“Abandoning Chevron may not, in fact, change the frequency and extent of judicial deference as much as Chevron’s critics hope or its supporters fear.”).

[41] See Herz, supra note 14, at 1870; Richardson, supra note 10, at 443;  Pierce, supra note 16.

[42] See City of Arlington v. FCC, 569 U.S. 290, 312–13 (2013) (Roberts, C.J., dissenting) (“Although modern administrative agencies fit most comfortably within the Executive Branch, as a practical matter, they exercise legislative power, by promulgating regulations with the force of law; executive power, by policing compliance with those regulations; and judicial power, by adjudicating enforcement actions and imposing sanctions on those found to have violated their rules.”); Michigan v. EPA, 576 U.S. 743, 762 (2015) (Thomas, J., concurring) (asserting that Chevron infringes on the Constitution’s separation of powers because it “is in tension with Article III’s Vesting Clause, which vests the judicial power exclusively in Article III courts, not administrative agencies”); Gutierrez-Brizuela v. Lynch, 834 F.3d 1142, 1149 (10th Cir. 2016) (Gorsuch, J., concurring) (stating that “Chevron . . . permit[s] executive bureaucracies to swallow huge amounts of core judicial and legislative power and concentrate federal power in a way that seems more than a little difficult to square with the Constitution of the framers’ design”); Pereira v. Sessions, 138 S. Ct. 2105, 2121 (2018) (Kennedy, J., concurring) (discussing how “[t]he proper rules for interpreting statutes and determining agency jurisdiction and substantive agency powers should accord with constitutional separation-of-powers principles and the function and province of the Judiciary”).

[43] Pauley v. Bethenergy Mines, Inc., 501 U.S. 680, 707 (1991) (Scalia, J., dissenting).

[44] Anthony Caso, Attacking Chevron: A Guide for Practitioners, 24 Chap. L. Rev. 633, 656 (2021).

[45] Perez v. Mortg. Bankers Ass’n, 575 U.S. 92, 119 (2015) (Thomas, J., concurring).


13 Wake Forest L. Rev. Online 42

Brandon J. Johnson[1]


The North Carolina Supreme Court’s recent decision to reverse course on partisan gerrymandering has garnered national attention.[2] In the court’s third opinion issued in Harper v. Hall,[3] (“Harper III”) a newly elected 5-2 conservative majority of the state supreme court overruled the first opinion[4] authored by the previous 4-3 liberal majority and declared partisan gerrymandering to be a nonjusticiable political question.[5] Election law and constitutional law scholars have produced reams of content questioning how the ruling would impact the U.S. Supreme Court’s pending consideration of the state court’s prior decision in the case.[6] Many questioned whether the state court’s decision would cause the Court to dismiss the initial appeal.[7]

As it turned out, the U.S. Supreme Court’s ruling in what would be known as Moore v. Harper[8] was a significant election law case that expanded the federal judiciary’s role in regulating federal and even state elections. The Supreme Court’s opinion in the case received significant national attention and was largely greeted with a sigh of relief by many scholars and commentators who worried that the Court would adopt an extreme version of a fringe theory known as the Independent State Legislature Theory.[9] Indeed, the importance of the U.S. Supreme Court’s decision regarding the Independent State Legislature Theory has been the primary focus of the commentary surrounding Harper v. Hall and Moore v. Harper, and rightly so.[10] If the Court had adopted the most extreme version of the theory, state legislatures—including (and perhaps especially) significantly gerrymandered legislatures—would have free rein to craft election regulations that entrenched partisan advantages with no constitutional guardrails. Though the Court rejected this approach, the Moore majority left the door open for the U.S. Supreme Court to act as the final arbiter of state election practices, which by itself has caused significant consternation among election law scholars.[11]

Given the national consequences of Moore v. Harper, however, the state court decision Harper III has been largely ignored. While this oversight is understandable, an examination of the North Carolina Supreme Court’s opinion in the case yields vital insight into the ways in which state courts can hide behind a veneer of judicial independence while actually using state politics and polarization to reshape state law. This insight may yield immediate practical consequences given that partisan gerrymandering litigation is currently ongoing in approximately one-third of the states.[12]

The dissent in Harper III provides a searing indictment of the majority’s reasoning and sets forth a cogent argument explaining why the opinion is an incorrect interpretation of the North Carolina constitution. The analysis that follows in this Essay will not rehearse the persuasive criticisms leveled by the dissent. Rather, it will focus on two ways in which the majority opinion may provide insight into how state courts can use the traditional tools of judicial review to reshape a state’s political culture. After providing a brief sketch of the procedural history of Harper I, II, and III in Part I, Part II of this Essay then explores the ways in which the opinion attempts to enshrine an exceptionally narrow vision of originalism as the only acceptable method of interpreting North Carolina’s constitution. Part III criticizes the way in which the Harper III majority further entrenches an incorrect understanding of political accountability.

While the examination below is limited to the rhetoric and reasoning employed by the North Carolina Supreme Court, it should serve as a case study for how easy it can be for state courts to affect a state’s political and policy landscape without attracting much notice.

I. The Procedural Path

A quick (and by no means exhaustive) recap of the procedural history of the Harper opinions will illuminate the unusual issues created by the state court’s recent ruling and facilitate the discussion that follows. The litigation began after the North Carolina General Assembly issued a new districting map after the 2020 census.[13] Multiple parties filed suit alleging inter alia that the map employed unconstitutional partisan gerrymanders in violation of the North Carolina Constitution’s guarantee of free elections and the state’s equal protection clause.[14] In January 2022, a three-judge panel of the Wake County Superior Court ruled that partisan gerrymandering claims “presen[t] nonjusticiable, political questions” under the state constitution.[15]

Less than a month later, the state supreme court heard the case directly and reversed the lower court’s ruling.[16] The 4-3 majority in what would become known as Harper I held that partisan gerrymandering claims are justiciable and the “extreme” gerrymanders in the challenged districting map violated the state constitution’s free elections clause, equal protection clause, free speech clause, and freedom of assembly clause.[17]

While the state legislature proceeded to draft new districting maps to comply with Harper I, the litigation continued, and the U.S. Supreme Court agreed to hear a challenge to this ruling under the name Moore v. Harper.[18] The Supreme Court case garnered national attention, in part, because the petitioners advanced arguments under the Independent State Legislature Theory. The Independent State Legislature Theory posits that only the state legislature has any say in federal elections[19] because the Elections Clause of the U.S. Constitution instructs that “The Times, Places and Manner of holding Elections for Senators and Representatives shall be prescribed in each State by the Legislature thereof.”[20] Put another way, the state constitution itself places no limits on the legislature’s ability to regulate federal elections leaving state courts with no authority to interpret state constitutional provisions in order to second guess election related legislation.

But while the U.S. Supreme Court litigation proceeded, various parties challenged the second districting map that the legislature drafted in response to Harper I and the case made its way back to the state supreme court.[21] In a December 2022 opinion, now known as Harper II[22], the same 4-3 majority that issued the Harper I opinion ruled that the map for the state house was constitutionally adequate but the maps for the state senate and the federal congressional districts still contained unconstitutional partisan gerrymanders.[23]

In between oral arguments in Harper II and the issuance of the opinion, the North Carlina midterm elections occurred.[24] North Carolina’s supreme court justices are elected in partisan contests, and two of the Democratic justices who had signed on to the Harper II majority were replaced by conservative challengers.[25] As a result of this change in personnel, the new 5-2 conservative majority expressed concern that the Harper II majority had “overlooked or misapprehended” a point “of fact or law,”[26] and granted a petition for rehearing.[27]

On April 28, 2023 this newly minted majority “withdrew” Harper II and “overruled” Harper I, finding that partisan gerrymandering claims presented a nonjusticiable political question.[28] The U.S. Supreme Court then issued its opinion in Moore v. Harper on June 27, 2023.[29] The majority opinion determined that the Court still had standing to decide the initial case but affirmed the Harper I decision.[30] In doing so, the Court rejected the state defendants’ primary legal argument regarding the Elections Clause and reaffirmed that “[t]he Elections Clause does not insulate state legislatures from the ordinary exercise of state judicial review.”[31] The Court did, however, reserve for itself the right to pass judgment on whether state courts correctly interpreted questions of state election law under state constitutions,[32] a significant increase in the Court’s review of state election laws.[33]

With this procedural sketch in place, this Essay now returns to its primary focus: an examination of the warning signs advocates, policymakers, and public law scholars should glean from the North Carolina Supreme Court’s opinion in Harper III. As discussed in the introduction, the focus of this examination will not be on the merits of the majority opinion as the dissent has already done an admirable job dissecting that on its own terms.[34] Instead, the remainder of this Essay delves into the more far-reaching consequences of the opinion. Though the ramifications of the majority’s opinion are limited to North Carolina, they provide a cautionary tale for the ways in which state courts—particularly those with elected judges—can involve the judiciary in the political fortunes of the state.

II. Regressive Originalism

Perhaps the most sweeping consequence of the opinion may be the majority’s efforts to enshrine originalism (and a crabbed version of originalism, at that) as the only acceptable methodology of constitutional interpretation.[35] From the first few pages, Harper III makes this view of constitutional interpretation clear. For example, on the second page of the opinion, the majority writes: “As the courts apply the constitutional text, judicial interpretations of that text should consistently reflect what the people agreed the text meant when they adopted it.”[36] This appeal to the original public meaning[37] of the state’s constitution returns time and again throughout the opinion, including the following concluding admonition: “Recently, this Court has strayed from this historic method of interpretation to one where the majority of justices insert their own opinions and effectively rewrite the constitution.”[38] This language makes clear that the current majority of the North Carolina Supreme Court views originalism as the only legitimate method of constitutional interpretation.

The current state court majority is not alone in its application of originalist methodology, nor unique in its attempts to privilege this school of constitutional interpretation above all others.[39] Nor is an originalist approach to interpreting the North Carolina constitution without precedent.[40] The version of originalist methodology operationalized in the Harper III opinion, however, is surprisingly (almost shockingly) pernicious.

As an initial matter, the majority seems to advocate for both original public meaning originalism and original intent originalism, despite the latter theory having been all but (though not entirely)[41] abandoned by originalism’s defenders.[42] In its introduction, for example, the majority insists that “judicial interpretations of [constitutional] text should consistently reflect what the people agreed the text meant when they adopted it”—a classic formulation of original public meaning originalism.[43] But when returning to a discussion of constitutional interpretation, the majority seems to urge an “original intent” approach, asserting that “courts determine the meaning of a constitutional provision by discerning the intent of its drafters when they adopted it.”[44]

The reliance on this largely abandoned[45] version of originalism is only one example of how the Harper III majority is attempting to mandate not just originalism, but a regressive vision of originalism. By focusing on the actual intent of the drafters of the document, a court limits the potential interpretations of a constitution to the world view of individuals at a fixed point in time—a world view that is in many ways incompatible with the present day. Additionally, by employing both original intent originalism and original public meaning originalism, the Harper III majority can switch back and forth between whichever methodology best supports its desired result, eliminating originalism’s supposed virtue of constraining judicial discretion.[46]

Nor does the majority escape the “law office historian” pitfalls that plague many originalist opinions.[47] For example, the court devotes several pages to recounting the history of the Glorious Revolution in a befuddling attempt to show that the state constitutional clauses cited by the plaintiffs in the underlying cases were directed at protecting North Carolinians from voting regulations designed to benefit the king.[48] As an initial matter, this history says nothing about the clauses’ relationship to gerrymandering—again, a phenomenon that was not even in the lexicon for more than a century.[49] But even taking the majority’s argument on its own terms, the historical narrative provided arguably supports applying the free elections clause to partisan gerrymandering rather than undermining such an interpretation.[50] The majority declares, for example, that one reason for the prohibition on dividing counties to make new districts comes in part from King James II’s practices of “adjusting a county’s or borough’s charter to embed the king’s agents and ensure a favorable outcome for the king in the 1685 election.”[51] The majority reiterates that “[i]n some instances these adjustments altered who could vote in order to limit the franchise to those most likely to support the king’s preferred candidates.”[52] But this type of result-oriented intervention is exactly the reason parties challenge partisan gerrymanders.

But beyond succumbing to these more common problems with originalist methodology, the majority also employs a particularly rigid approach to originalism that would severely inhibit applications of the state constitution to modern developments. The most plausible reading of the majority’s analysis of whether the constitution applies to partisan gerrymandering, for example, is that the state constitution is essentially irrelevant to any subject not explicitly discussed.[53] Because the constitution does not mention gerrymandering, the majority says, that document is irrelevant to evaluating any gerrymandering challenges.[54] But even staunch originalists like Ilan Wurman accept that applying the original meaning of the text does not mean that a constitution must anticipate and discuss every eventuality in order to apply to the subject at hand.[55] The fact that the U.S. Constitution makes no mention of the internet, for example, does not prevent originalists from agreeing that the protections of the First Amendment apply to this 21st century medium.[56]

In support of this tightly cabined interpretation of the state constitution, the majority highlights a case from the 1780s striking down a statute that directly conflicted with the then governing constitution by eliminating the right to a jury trial in cases where the state confiscated loyalist property.[57] The constitution at the time promised a jury trial “in all Controversies at Law respecting property.”[58] But simply because the first statute, which was deemed unconstitutional in the state, directly conflicted with express language in the constitution does not impose a lasting and immovable requirement that judicial review of a legislative act is permissible only if the constitution speaks directly to the subject at hand.[59]

The majority even attempts to graft on some version of this explicit language requirement to its discussion of the U.S. Constitution, asserting that the lack of any specific mention of partisan gerrymandering in that document demonstrates the framers’ intent to exclude the federal courts from any such oversight. The majority further claims that “[t]he framers could have limited partisan gerrymandering in the [U.S.] Constitution or assigned federal courts a role in policing it, but they did not.”[60] To take this statement at face value shows the absurdity that this explicit acknowledgement requirement would impose.[61] The term “gerrymander” did not even exist until more than two decades after the U.S. Constitution was ratified.[62] Nor did the U.S. Constitution make any mention of “partisanship” (or “factionalism” as this concept was more commonly called at the time) because one of the goals of the famers was to avoid factional divisions.[63]

The end result of this interpretative approach is that the majority seems far too comfortable with an interpretation of the North Carolina constitution that reflects a polity of exclusion. The opinion at one point even asserts that because the original understanding of the state constitution’s “free elections” clause still limited the franchise to land-holding “freemen,” the clause cannot be construed to prohibit limitations on voting rights beyond coercion and intimidation.[64] An application of such a regressive version of originalism is especially misplaced in deciding questions relating to elections based on a constitutional text ratified when the franchise was extremely limited. The majority, for example, argues that because the original North Carolina Constitution adopted in 1776 contained free elections and freedom of assembly clauses while still allowing the legislature to draw malapportioned districting maps, these same clauses should not be used to restrict legislative map drawing today.[65] But this rationale would also allow election regulations that discriminated on the basis of race, gender, sexual orientation, and even status as a property owner, as long as subsequent amendments did not address the specific types of discriminatory regulations employed. Indeed, the Harper III majority simply ignores fundamental developments in both federal and state constitutional law that took place after the ratification of the state’s first constitution—ignoring the fact that North Carolina adopted a new constitution in 1868 and again in 1971 and has significantly amended the document in the last two centuries.[66]

Even when the majority makes general assertions of law, it relies on authority that further illustrates the regressive results of the justices’ chosen interpretive methodology. The majority, for example, cites to a 1944 case, State v. Emery,[67] to support its assertion that “[constitutions] should receive a consistent and uniform construction . . . even though circumstances may have so changed as to render a different construction desirable.”[68] But the “consistent and uniform construction” urged by the court in Emery enshrined the barring of women from serving as jurors in the state based on language in the then governing constitution stating that “[n]o person shall be convicted of any crime but by the unanimous verdict of a jury of good and lawful men in open court.”[69] To be clear, the majority does not endorse (or even mention) the holding of Emery, but it is telling that the vision of originalism espoused by the Harper III opinion is the exact same reading of the state constitution that prohibited women from serving on juries as late as 1944.[70] The fact that this case would be used to support the majority’s preferred methodology when other options are readily available seems questionable.

In a similarly telling choice, the majority issues another generic statement regarding the nature of the state constitution, asserting that the document “‘is in no matter a grant of power.’”[71] This benign quote comes from McIntyre v. Clarkson,[72] but the opinion then traces the origins of this quote to Lassiter v. Northampton County Board of Elections,[73] a 1958 case that upheld North Carolina’s reading requirement at the polls, despite clear evidence that the requirement was used to impede the ability of black North Carolinians to vote.[74] Again, the choice to trace this general point of law to a case upholding racially discriminatory voting laws indicates that the majority is either unaware of, or indifferent to, the regressive results of its methodological approach.[75]

In fact, the majority opinion makes clear that the North Carolina constitution would not ban racial gerrymanders, or any other type of racially motivated voting restrictions, leaving such practices banned only by the U.S. Constitution.[76] The court’s emphasis on requiring an explicit, specific textual restriction in the Constitution leads to a listing of what the majority appears to consider the only permissible avenues for judicial review of legislative districting acts.[77] Notably absent from this list is any prohibition on district maps that discriminate based on race.[78] The opinion also quotes heavily from a prior state supreme court decision, Dickson v. Rucho,[79] to emphasize the difficulty in identifying a judicially manageable standard for evaluating partisan gerrymanders.[80] What goes unmentioned in this discussion, however, is that the U.S. Supreme Court vacated Dickson I because the districting map employed racial gerrymanders as well.[81]

Taken together, the majority’s vision for constitutional interpretation inescapably leads to a regressive application of the state’s constitution. Because the rhetoric here sounds in a traditional application of judicial review, however, the Harper III majority has laid out a blueprint for similarly inclined state court majorities to manipulate theories of constitutional interpretation to essentially control state electoral politics while shielding themselves from political accountability. With this concern in mind, the Essay now turns to an examination of the majority’s misleading invocation of political accountability as justification for its holding.

III. Manipulation of Political Accountability

The other rhetorical move made by the Harper III majority that is likely to have long reaching impact is the weaponization of political accountability. The majority relies on the time honored trope that the state legislature is the true “people’s branch” in state government, asserting from the beginning of the opinion that “[t]he people exercise [the political] power [granted to them by the state constitution] through the legislative branch, which is closest to the people and most accountable through the most frequent elections.”[82] The majority then implicitly ties this version of “accountability” to the state legislature’s ability to implement “the will of the people.”[83]

This lionization of state legislatures as the branch “closest to the people” has been effectively rebutted by legal scholars like Miriam Seifter.[84] As Seifter demonstrates, officials elected in statewide elections are often more representative of the whole people of a state than are state legislators.[85] In North Carolina, the very same justices who disclaim sufficient accountability are all elected statewide.[86] Indeed, it is because of the elected (and partisan) nature of these judicial offices that Harper II was granted a rehearing.[87] So, even from a threshold perspective, the democratic legitimacy foundation for the Harper III opinion is on shaky ground.

But this unsupported trope of American democracy has even less to recommend it in the context of a gerrymandering challenge. The essence of a claim of gerrymandering is that the body elected by the gerrymandered map is unrepresentative of the people.[88] Even a majority of voters cannot effectively hold a gerrymandered legislature “accountable” if the gerrymander is extreme enough to consistently transform minority preference into majority representation.[89] But the Harper III majority ignores this reality, blithely asserting that “those whose power or influence is stripped away by shifting political winds cannot seek a remedy from courts of law, but they must find relief from courts of public opinion in future elections.”[90] Indeed, the majority’s assurances then that “opponents of a redistricting plan are free to vote their opposition,”[91] ring hollow when addressing claims that the redistricting process has effectively undermined the ability of even a majority of voters to hold their legislature “accountable” in the traditional sense.

The Harper III majority also recounts language from Rucho v. Common Cause[92] that reiterates a “long-standing … myth[] about the rational, policy-oriented voter.”[93] The majority faults the Harper I opinion for focusing too much on the role of partisan affiliation in elections.[94] The opinion confidently asserts, for example, that “voters elect individual candidates in individual districts, and their selections depend on the issues that matter to them, the quality of the candidates, the tone of the candidates’ campaigns, the performance of an incumbent, national events or local issues that drive voter turnout, and other considerations.”[95] But, as I have written previously, much of modern political science literature documenting voter behavior indicates that voters are not nearly this nuanced, and instead partisan affiliation is a far better predictor of voter behavior than any of the factors identified in Rucho and parroted in Harper III.[96]

The majority quotes freely from Rucho and incorporates much of that decision’s language cautioning against involving the “unaccountable” federal judiciary against involving itself in the inherently political redistricting process.[97] Regardless of one’s views on the correctness of Rucho, it is clear that the accountability concerns discussed in the case stem from the federal judiciary’s position as an unelected branch of government.[98] Indeed, the connection between political accountability and the unelected nature of the federal judiciary is quoted in full by the Harper III majority: “Consideration of the impact of today’s ruling on democratic principles cannot ignore the effect of the unelected and politically unaccountable branch of the Federal Government assuming such an extraordinary and unprecedented role.”[99]

But recall that almost the entire North Carolina judiciary, including the justices of the state supreme court, are elected.[100] The Justices in particular, are elected statewide and are not subject to the gerrymandered districting maps.[101] As noted above, this makes them, arguably, more accountable to the people of North Carolina because the statewide election better reflects the full electorate than does a manipulated state legislature district.[102] Nor are these elected judges above the political fray because they are chosen in partisan elections appearing on the ballot with their party affiliation clearly identified.[103] The Harper III majority cautions against involving the judiciary in “[c]hoosing political winners and losers” because doing so “creates a perception that the courts are another political branch.”[104] But in North Carolina, the judiciary is, arguably, a political branch. The state’s justices owe their offices to a political election that is influenced, in part at least, by the partisan, political preferences of the voters.[105] This is not to say that there is no difference between a justice and a legislator. Rather, this criticism demonstrates why the Harper III majority’s reliance on the accountability justifications in Rucho are so misplaced.

The majority leans into this accountability narrative, despite eventually acknowledging the elected nature of the state’s judiciary.[106] Indeed, though still pushing its assertion that the state legislature is the “most accountable” branch of the state government, the majority does recognize that with the implementation of an elected judiciary “judges in North Carolina become directly accountable to the people through elections.”[107] And the Harper III majority itself seems to acknowledge that the judicial elections play (or should play) a role in shaping North Carolina law.[108] One of the criticisms levelled against the Harper II opinion is that the “four-justice majority issued its Harper II opinion on 16 December 2022 [after the most recent judicial election] when it knew that two members of its majority would complete their terms on this Court just fifteen days later.”[109] It is hard to read this statement as anything other than a concession that a change in the partisan makeup on the court would (and should) change the outcome of cases.

Yet the majority consistently focuses on the supposed dangers posed to the separation of powers by involving the judiciary in “policymaking.”[110] The majority insists, for example, that the lack of an explicit reference to gerrymandering means that any court exercising judicial review of a gerrymandered map is engaged in policymaking.[111] Such judicial policymaking, we are told, “usurps the role of the legislature by deferring to [the court’s] own preferences instead of the discretion of the people’s chosen representative.”[112]

But, in addition to the unsound political accountability foundation for this view of the role of an elected judiciary, the majority’s vision of “policymaking” ignores the reality that the decision to close the courthouse doors to partisan gerrymandering claims is also a policy choice.

In refusing to apply the state constitution’s equal protection clause to partisan gerrymandering claims, for example, the majority asserts that “the fundamental right to vote on equal terms simply means that each voter must have the same weight.”[113] The court dismisses any independent application of the clause to elections by claiming that any equal protection concerns raised by election procedures are fully addressed by the requirements in Article II that each state legislator “represent, as nearly as may be, an equal number of inhabitants.”[114] But, by insisting that the state constitution’s equal protection clause only addresses the “weight” of each individual vote, and by taking a step further and confining “weight” to only the number of voters represented by each representative, the majority is engaging in exactly the same type of policymaking it claims made the Harper I and Harper II decisions illegitimate.

The inconsistent, almost incoherent ways in which the Harper III majority has employed discredited myths about political accountability and the role of an elected judiciary will impact election law and constitutional interpretation in North Carolina far beyond the holding of the case. With more than three quarters of states employing at least some form of elections as part of their judicial selection process,[115] a failure to confront the realities of an elected judiciary will continue to leave open opportunities for state courts to employ fantasies of political accountability to reshape their state’s political processes. While acknowledging the political nature of an elected judiciary may not stop state courts from reaching their desired results, it will at least require state judiciaries to honestly assess their own political role in deciding separation of powers disputes.


While the U.S. Supreme Court’s opinion in Moore v. Harper captured national attention, the Harper III majority also rejected the broadest version of the Independent State Legislature Theory advanced in the Moore briefing. In doing so, the majority recognizes that the courts—and by implication the state constitution—do have some role to play in the districting process: “Under the North Carolina Constitution, redistricting is explicitly and exclusively committed to the General Assembly by the text of the constitution. The Executive branch has no role in the redistricting process, and the role of the judicial branch is limited by the principles of judicial review.”[116] But, as with the opinion in Moore, the majority opinion in Harper III will have a longer reach beyond a specific holding on partisan gerrymandering.

This Essay has specifically focused on the adoption of a regressive form of originalism, which ultimately results in a polity of exclusion and inhibits the court’s potential to employ the state constitution in addressing contemporary challenges. The Harper III majority’s reliance on a rigid and outdated version of originalism is deeply troubling. By adhering to a carefully crafted quasihistorical context that fails to account for societal evolution and progress, the state court disregards the dynamic nature of constitutional principles. And the majority’s willingness to interpret the state constitution in an intentionally exclusionary way will continue to echo through the court’s jurisprudence.

The Essay has also demonstrated the danger of relying on “mythical” notions of political accountability. The majority’s use of these largely unrealistic tropes to decry judicial policymaking, while conveniently overlooking the fact that the North Carolina judiciary is elected and therefore accountable to the public, highlights the ways in which state courts can weaponize accountability not just in North Carolina, but nationwide. As of July of this year, litigation around partisan gerrymandering is ongoing in at least seventeen states.[117] Because the Supreme Court has closed the door on such claims under federal law, state courts remain the only viable venue to address partisan gerrymanders.[118] Left unchecked, the Harper III opinion provides a dangerous blueprint—regressive originalism and unsubstantiated notions of political accountability—that state courts may apply to these claims in ways that will significantly influence state election processes (and likely results) for the foreseeable future.

Election law, constitutional law, and federalism scholars should take note of the jurisprudential tactics employed in the Harper III majority as they continue to work to protect American democracy.

  1. *. Assistant Professor of Law at University of Nebraska College of Law. Many thanks to Anna Arons, Eric Berger, Kristen Blankley, Tyler Rose Clemons, Haiyun Damon-Feng, Dorien Ediger-Soto, Danielle C. Jefferis, Kyle Langvardt, Elise Maizel, Matthew Schaefer, and the members of the University of Nebraska College of Law Faculty Workshop for their thoughts and comments.

  2. . See, e.g., Derek Muller, What happens to Moore v. Harper after the latest North Carolina Supreme Court decision in the partisan gerrymandering case?, Election Law Blog (Apr. 28, 2023, 10:04 AM), https://electionlawblog.org/?p=135865.

  3. . Harper v. Hall, 886 S.E.2d 393 (N.C. 2023) (hereinafter “Harper III”).

  4. . Harper v. Hall, 868 S.E.2d 499 (N.C. 2022) (hereinafter “Harper I”) (overruled by Harper III, 886 S.E.2d 393).

  5. . Harper III, 886 S.E.2d 393.

  6. . See, e.g., Muller, supra note 1.

  7. . See, e.g., Hansi Lo Wang, A North Carolina court overrules itself in a case tied to a disputed election theory, NPR (Apr. 28, 2023, 12:25 PM), https://www.npr.org/2023/04/28/1164942998/moore-v-harper-north-carolina-supreme-court.

  8. . 143 S. Ct. 2065 (2023).

  9. . See, e.g., Rick Hasen, Separating Spin from Reality in the Supreme Court’s Moore v. Harper Case: What Does It Really Mean for American Democracy and What Does It Say About the Supreme Court?, Election Law Blog (June 27, 2023, 3:29 PM), https://electionlawblog.org/?p=137129.

  10. . See e.g., id.

  11. . See e.g., id.

  12. . Redistricting Litigation Roundup, Brennan Center for Justice (updated July 7, 2023), https://www.brennancenter.org/our-work/research-reports/redistricting-litigation-roundup-0.

  13. . Harper III, 886 S.E.2d at 401.

  14. . Id.

  15. . Id. at 402.

  16. . Id. at 403.

  17. . Harper I, 868 S.E.2d at 559.

  18. . 142 S. Ct. 2901 (2022) (mem.).

  19. . See Brandon J. Johnson, The Accountability-Accessibility Disconnect, 58 Wake Forest L. Rev. 65, 90 (2023).

  20. . U.S. Const. art. I, § 4, cl. 1.

  21. . Harper III, 886 S.E.2d at 408.

  22. . 881 S.E.2d 156 (2022) (hereinafter “Harper II”).

  23. . Id. at 181.

  24. . See Ethan E. Horton & Eliza Benbow, Two Republicans Win Seats On The NC Supreme Court, Flipping Majority, The Daily Tar Heel (Nov. 9, 2022), https://www.dailytarheel.com/article/2022/11/city-nc-supreme-court-2022-election-results.

  25. . Id.

  26. . Harper III, 886 S.E.2d at 399–400 (quoting N.C. R. App. P. 31(a)).

  27. . Id. at 409.

  28. . Id. at 401.

  29. . 143 S.Ct. 2065 (2023).

  30. . Id. at 2079, 2081.

  31. . Id. at 2081.

  32. . Id. at 2088.

  33. . See Hasen, supra, note 8.

  34. . Harper III, 886 S.E.2d at 449–78 (Earls, J., dissenting).

  35. . Keith E. Whittington, Originalism: A Critical Introduction, 82 Fordham L. Rev. 375, 377 (2013) (“At its most basic, originalism argues that the discoverable public meaning of the Constitution at the time of its initial adoption should be regarded as authoritative for purposes of later constitutional interpretation.”).

  36. . Harper III, 886 S.E.2d at 399.

  37. . Whittington, supra note 34, at 380 (“Originalist theory has now largely coalesced around original public meaning as the proper object of interpretive inquiry.”).

  38. . Harper III, 886 S.E.2d at 448.

  39. . See, e.g., New York State Rifle & Pistol Ass’n, Inc. v. Bruen, 142 S. Ct. 2111, 2130 (2022) (“[R]eliance on history to inform the meaning of constitutional text—especially text meant to codify a pre-existing right—is, in our view, more legitimate, and more administrable, than asking judges to ‘make difficult empirical judgments’ about ‘the costs and benefits of firearms restrictions,’ especially given their ‘lack [of] expertise’ in the field.” (quoting McDonald v. Chicago, 561 U.S. 742, 790–91 (2010))).

  40. . See Harper III, 886 S.E.2d at 412–14 (collecting cases).

  41. . See, e.g., Scott A. Boykin, Original-Intent Originalism: A Reformulation and Defense, 60 Washburn L.J. 245 (2021).

  42. . Id. at 246.

  43. . Harper III, 886 S.E.2d at 399.

  44. . Id. at 431.

  45. . See Whittington, supra note 34, at 382.

  46. . See, e.g., Lawrence B. Solum, The Constraint Principle: Original Meaning and Constitutional Practice (2019) (asserting that “constraint” is a virtue agreed upon by most strands of originalist scholarship); but see William Baude, Originalism as a Constraint on Judges, 84 U. Chi. L. Rev. 2213, 2214 (2018) (claiming that “originalist scholars today are much more equivocal about the importance and nature of constraining judges”).

  47. . See, e.g., Saul Cornell, Heller, New Originalism, and Law Office History: Meet the New Boss, Same as the Old Boss, 56 UCLA L. Rev. 1095 (2009).

  48. . Harper III, 886 S.E.2d.at 434–38.

  49. . See Erick Trickey, Where Did the Term “Gerrymander” Come From?, Smithsonian Mag. (July 20, 2017), https://www.smithsonianmag.com/history/where-did-term-gerrymander-come-180964118/.

  50. . Harper III, 886 S.E. 2d at 434–38.

  51. . Id. at 435 (emphasis added).

  52. . Id. (emphasis added).

  53. . See Harper III, 886 S.E.2d at 415 (“When we cannot locate an express, textual limitation on the legislature, the issue at hand may involve a political question that is better suited for resolution by the policymaking branch.”).

  54. . See, e.g., Harper III, 886 S.E.2d at 400 (emphasis added) (“Our constitution expressly assigns the redistricting authority to the General Assembly subject to explicit limitations in the text. Those limitations do not address partisan gerrymandering. It is not within the authority of this Court to amend the constitution to create such limitations on a responsibility that is textually assigned to another branch.”).

  55. . Ilan Wurman, What is originalism? Debunking the myths, The Conversation (Oct. 24, 2020, 12:03 PM), https://theconversation.com/what-is-originalism-debunking-the-myths-148488.

  56. . Neil M. Gorsuch, Justice Neil Gorsuch: Why Originalism Is the Best Approach to the Constitution, Time (Sept. 6, 2019, 8:00 AM), https://time.com/5670400/justice-neil-gorsuch-why-originalism-is-the-best-approach-to-the-constitution/.

  57. . Harper III, 886 S.E.2d. at 415 (citing Bayard v. Singleton, 1 N.C. (Mart.) 5 (1787)).

  58. . Id. (quoting N.C. Const. of 1776, Declaration of Rights § XIV).

  59. . As the majority acknowledges, Bayard was the first exercise of judicial review of a statute in North Carolina, and may have been the first instance of a state court striking down a legislative act as contrary to the jurisdiction’s constitution. Id.

  60. . Id. at 410.

  61. . Id. at 415 (emphasis added) (“[T]he standard of review asks whether the redistricting plans drawn by the General Assembly, which are presumed constitutional, violate an express provision of the constitution beyond a reasonable doubt.”).

  62. . Trickey, supra note 48.

  63. . See, e.g., The Federalist No. 10 (James Madison).

  64. . See Harper III, 886 S.E.2d at 432–33.

  65. . Id. at 416–17.

  66. . Dr. Troy L. Kickler, North Carolina Constitution Is an Important Governing Document, N.C. Hist. Project, https://northcarolinahistory.org/encyclopedia/1573/ (last visited Sept. 17, 2023).

  67. . 31 S.E.2d 858 (N.C. 1944).

  68. . Harper III, 886 S.E.2d at 413 (alterations and omissions in Harper III) (quoting State v. Emery, 31 S.E.2d 858, 861 (N.C. 1944)). Notably, the omitted language from the quote would seem to caution against the majority’s decision to reverse a previous pronouncement of constitutional law. The full quote reads: “[Constitutions] should receive a consistent and uniform construction so as not to be given one meaning at one time and another meaning at another time even though circumstances may have so changed as to render a different construction desirable.” Emery, 31 S.E.2d at 861 (emphasized language was omitted from the quote in Harper III).

  69. . N.C. Const. art. I, § 13 (1868) (emphasis added).

  70. . Harper III, 886 S.E.2d at 413; Emery, 31 S.E.2d at 866.

  71. . Harper III, 886 S.E.2d at 414 (quoting McIntyre v. Clarkson, 119 S.E.2d 888, 891 (1961)).

  72. . 119 S.E.2d at 891.

  73. . 102 S.E.2d 853, 861 (N.C. 1958).

  74. . Paul Woolverton, Democrats in 1900 made the NC Constitution racist: Will voters today undo that?, Fayetteville Observer (Mar. 24, 2023, 5:06 AM), https://www.fayobserver.com/story/news/2023/03/24/ncs-constitution-has-a-racist-rule-will-voters-repeal-literacy-tests/70035467007/.

  75. . For further discussion of the morality of case citations—specifically in the context of citing to slave cases—see Alexander Walker III, On Taboos, Morality, and Bluebook Citations, Harv. L. Rev. Blog (June 10, 2023).

  76. . Compare Harper III, 886 S.E.2d at 449 (holding that “claims of partisan gerrymandering present nonjusticiable, political questions”), with Miller v. Johnson, 515 U.S. 900, 927–28 (holding that redistricting plans aiming to racially segregate voters are federally unconstitutional).

  77. . Harper III, 886 S.E.2d at 418 (quoting N.C. Const. art. II, § 3). The only restrictions on apportionment acknowledged by the majority are: (1) state senators must represent a (roughly) equal number of residents; (2) districts must be contiguous; (3); a prohibition on dividing counties to form a new district; and (4) a requirement that districts “remain unaltered” between censuses. Id.

  78. . See id.

  79. . 766 S.E.2d 238 (N.C. 2014).

  80. . See, e.g., Harper III, 886 S.E.2d at 402 (quoting Dickson, 766 S.E.2d at 260).

  81. . See Dickson v. Rucho, 137 S. Ct. 2186 (2017) (mem.). The Harper III opinion notes that the state court decision was vacated, but only using the euphemistic language “vacated on federal grounds.” See Harper III, 886 S.E.2d at 402.

  82. . Harper III, 886 S.E.2d at 398.

  83. . Id. at 398–99. The opinion returns to this theme of identifying the General Assembly as “the people’s branch” of state government. See, e.g., id. at 413 (“The legislative power is vested in the General Assembly, so called because all the people are present there in the persons of their representatives.” (quoting John V. Orth & Paul Martin Newby, The North Carolina State Constitution 95 (2d ed. 2013))); id. at 414 (citations omitted) (“Most accountable to the people, through the most frequent elections, “[t]he legislative branch of government is without question ‘the policy-making agency of our government[.]’” (quoting N.C. Const. art II)).

  84. . Miriam Seifter, Countermajoritarian Legislatures, 121 Colum. L. Rev. 1733, 1755–77 (2021); see also Johnson, supra note 18, at 101–02.

  85. . Seifter, supra note 83, at 1762–77.

  86. . N.C. Const. art IV, § 16.

  87. . See supra Part I.

  88. . See Kevin Wender, The “Whip Hand”: Congress’s Elections Clause Power as the Last Hope for Redistricting Reform After Rucho, 88 Fordham L. Rev. 2085, 2090 (2020).

  89. . For a discussion of the difficulty voters face in using the political process to change election laws, see Johnson, supra note 18, at 109.

  90. . Harper III, 886 S.E.2d 393, 423 (N.C. 2023) (quoting Dickson v. Rucho, Nos. 11-CVS-16896, 11-CVS-16940, 2013 WL 3376658, at *1–2 (N.C. Super. Ct. Wake Cnty. July 8, 2013)).

  91. . Id. at 443.

  92. . 139 S. Ct. 2484 (2019).

  93. . Johnson, supra note 18, at 103.

  94. . See Harper III, 886 S.E.2d at 428.

  95. . Harper III, 886 S.E.2d at 412 (quoting Rucho v. Common Cause, 139 S. Ct. 2484, 2503–04 (2019)). The majority repeats these assertions, again without providing any empirical support for this view of voter behavior. Id. at 428–29.

  96. . Johnson, supra note 18, at 104–05.

  97. . See, e.g., Harper III, 886 S.E.2d at 413 (quoting Rucho, 139 S. Ct. at 2507).

  98. . See Rucho, 139 S. Ct. at 2507.

  99. . Harper III, 886 S.E.2d 393, 413 (N.C. 2023) (quoting Rucho, 139 S. Ct. at 2507); see also id. at 427 (alteration in original) (“A judicially discoverable and manageable standard is necessary for resolving a redistricting issue because such a standard ‘meaningfully constrain[s] the discretion of the courts[] and [] win[s] public acceptance for the court’s intrusion into a process that is the very foundation of democratic decision making.’” (quoting Rucho, 139 S. Ct. at 2500)).

  100. . N.C. Const. art IV, §16.

  101. . Id.

  102. . See Seifter, supra note 83, at 1734–41.

  103. . See, e.g., Judicial voter guide: 2022 primary election, North Carolina State Board of Elections, (last visited Sept. 17, 2023), https://www.ncsbe.gov/judicial-voter-guide-2022-primary-election.

  104. . Harper III, 886 S.E.2d at 399.

  105. . See Nat Stern, Don’t Answer That: Revisiting the Political Question Doctrine in State Court, 21 U. Pa. J. Const. L. 153, 177–78 (2018) (observing that elected state court judges do not enjoy the same presumption of judicial independence that attaches to the federal judiciary).

  106. . Harper III, 886 S.E.2d at 418.

  107. . Id. (citing N.C. Const. of 1868, art IV, § 26).

  108. . Id. at 413–14.

  109. . Id. at 407 n.5.

  110. . See, e.g., Harper III, 886 S.E.2d at 399, 415, 431. The majority also ignores the differences between the ways in which power is separated at the state level instead of the federal level. For further discussion of these differences, see Robert F. Williams, The Law of American State Constitutions 238 (2009) and Helen Hershkoff, State Courts and the “Passive Virtues”: Rethinking the Judicial Function, 114 Harv. L. Rev. 1833 (2001).

  111. . See Harper III, 886 S.E.2d at 428 (“[S]ince the state constitution does not mention partisan gerrymandering, the four justices in Harper I first had to make a policy decision that the state constitution prohibits a certain level of partisan gerrymandering.”).

  112. . Id. at 431.

  113. . Id. at 440.

  114. . Id. at 442 (quoting N.C. Const. art. II, §§ 3(1), 5(1)).

  115. . Significant Figures in Judicial Selection, Brennan Ctr. for Just. (Apr. 14, 2023), https://www.brennancenter.org/our-work/research-reports/significant-figures-judicial-selection.

  116. . Harper III, 886 S.E.2d at 416.

  117. . Redistricting Litigation Roundup, Brennan Ctr. for Just., https://www.brennancenter.org/our-work/research-reports/redistricting-litigation-roundup-0 (July 7, 2023).

  118. . See generally Rucho v. Common Cause, 139 S. Ct. 2484 (2019) (holding that challenges to partisan gerrymandering are to be made under state statutes and state constitutions—not the U.S. Constitution); see also Alicia Bannon, North Carolina Supreme Court Unleashes Partisan Gerrymandering, Brennan Ctr. For Just. (May 10, 2023), https://www.brennancenter.org/our-work/analysis-opinion/north-carolina-supreme-court-unleashes-partisan-gerrymandering.

By Alexander Van Zijl

The Origins of NOAA’s North Atlantic Right Whale Regulatory Scheme

On August 1, 2022, the National Oceanic and Atmospheric Administration (“NOAA”) sent shockwaves through the boating community when the agency decided to further protect the endangered North Atlantic right whale by proposing an amendment to 50 C.F.R. § 224.105.[1] In 2008, NOAA adopted 50 C.F.R. § 224.105 to “reduce the incidence and severity of ship collisions with North Atlantic right whales.”[2] NOAA wished to achieve its remedial goals by preventing vessels longer than sixty-five feet from going faster than ten knots in designated seasonal management areas along the East Coast.[3] The regulation would only apply during a specific range of months, generally between November and April, with some variation in specific zones.[4] The rule provided an exemption for Federal, State, and foreign vessels.[5]

Environmental Groups Pressure to Amend 50 C.F.R. § 224.105

However, since 2008 there has been a push by environmental groups to expand the protections of the 2008 rule for the remaining 400 North Atlantic right whales.[6] In 2020, Whale and Dolphin Conservation, and multiple other conversation groups filed a legal petition asking NOAA to expand the area and times of the current rule and reduce the size of the vessels to below sixty-five feet.[7] The groups argued that since 2017, thirty-one North Atlantic right whales had died, half of which occurred from fishing gear entanglement and vessel strikes.[8] NOAA failed to act on either of the petitions. In response, on January 13, 2021, the Conversation groups filed a Complaint for Declaratory and Injunctive Relief in the United States District Court for the District of Columbia.[9] The plaintiffs argued that the agency’s response to the 2012 and 2020 petitions had been unreasonably delayed and the court should compel NOAA to respond.[10] NOAA argued that they had provided an adequate response in a letter sent in March 2021, two months after the suit was filed.[11] The court denied the agency’s motion to dismiss the 2020 petition but granted the motion to dismiss the 2012 petition. [12]

NOAA’s Scientific Justification for its Proposed Amendment to 50 C.F.R. § 224.105

NOAA, either prompted by these environmental groups or from internal agency decisions, decided to amend the 2008 North Atlantic right whale regulation.[13] The agency put forth data from National Marine Fisheries Service, also known as NOAA Fisheries, that the 2008 regulation had reduced North Atlantic right whale strikes.[14] NOAA Fisheries in May 2022 released a technical memorandum that claimed speed reduction could reduce the lethality of whale strikes by 80-90%.[15] The 2008 regulation had reduced whale strikes from “12 during the 10 years prior to the rule’s implementation to 8 in the 10 years.”[16] However, it was impossible to establish “a direct causal link.”[17] Notwithstanding the lack of a causal link, the memo argued that boats below sixty-five feet were an additional cause of whale strikes and that expanding the U.S. speed zones would reduce the “risk of vessel strike mortality by an average of 27.5%.”[18]

On August 1, 2022, NOAA put forward the aforementioned proposed amendment to the 2008 regulation. The proposed amendment argued that the decline of North Atlantic right whale species has been caused by Unusual Mortality Events (“UME”), which included fifty-one mortalities and serious injuries.[19] The agency acknowledged that vessel strikes and entanglement in fishing gear were the two leading causes of whale mortality.[20] NOAA credited human actions as the primary reason for female whale death and the overall decline in population.[21] Mothers and calves were at the highest risk and disproportionally represented in the data because they rest and nurse near the shore close to the water surface.[22] NOAA claimed that five of twelve vessel strikes since 2008 had occurred from vessels under sixty-five feet and that only six of the lethal strikes since 1999 occurred from a vessel going under ten knots (NOAA acknowledge their lack of data on this issue).[23] However, the agency still parroted the same belief that it was “not possible to establish a direct causal link between speed reduction efforts and the relative decline in observed right whale mortality and serious injury events.”[24] But it was possible to establish by the preponderance of the evidence that the speed reductions have helped.[25]

Proposed Regulatory Expansions to 50 C.F.R. § 224.105

Applying the agency’s Vessel Strike Mortality Risk Model, NOAA determined that areas with high density of vessel traffic and North Atlantic right whale population were ripe for regulation.[26] NOAA believed the areas of highest risk ranged from “Mid-Atlantic between Cape Hatteras, North Carolina, and New York, and in relatively shallow waters over the continental shelf.”[27] These areas have more vessels below 65 feet and thus their speed should be limited to less than 10 knots.[28] The new speed restrictions will be applied to the newly defined Seasonal Speed Zones (“SSZs”), which will cover most of the East Coast and span generally from November to April depending on the geographic zone.[29] NOAA believes the expanded zones and reduced speed limits for vessels below sixty-five feet will protect boaters, often injured in collisions, and North Atlantic right whales.[30] The regulation would now apply to boats thirty-five feet or above, affecting 8,500–10,000 vessels, with 80% of these vessels being large recreational boats, 7% being commercial boats, and 6% being passenger boats.[31]

This proposed regulation will provide a speed restriction exception during severe weather events and threats to the health and safety of the passengers.[32] Boaters will have the burden of proving their need for the exception by describing and reporting their reasons for the speed deviations within forty-eight hours to NOAA Fisheries.[33] The same exception from the 2008 regulation applies to Federal, State, and foreign vessels, but reduce speed recommendation may still occur.[34] Enforcement of this regulation will occur under “2020 vessel speed rule assessment (NMFS 2020).”[35] NOAA will also use the Office of Law Enforcement to “track[] vessel speed at sea[,]” begin research on new “vessel tracking technologies,” and start “investigating land-based and aerial monitoring options.”[36] NOAA has “commenced staff level discussions with the U.S. Coast Guard regarding possible modification of current AIS carriage requirements to include additional vessel types and sizes.”[37] NOAA will enforce violations of the speed restrictions through “civil administrative enforcement cases[,]” which will levy “significant monetary penalties.” [38] NOAA may also take a less coercive approach that will achieve compliance via outreach letters sent to noncomplying boaters.[39]

Legal Basis for NOAA’s Proposed Amendment

The legal basis for this regulation is found under the Endangered Species Act and the Marine Mammal Protection Act.[40] Thus, there is a Congressional mandate to protect endangered species, specifically Marine Mammals. [41] NOAA relied upon both statutes’ “take” prohibitions.[42] The Endanger Species Act defined take as “to harass, harm, pursue, hunt, shoot, wound, kill, trap, capture, or collect, or to attempt to engage in any such conduct.”[43] The Marine Mammals Protection Act defined “take” as to “means to harass, hunt, capture, or kill, or attempt to harass, hunt, capture, or kill any marine mammal.”[44] When the Endangered Species Act was debated, a Senate Report determined that “‘Take’ is defined in section 3(12) in the broadest possible manner to include every conceivable way in which a person can ‘take’ or attempt to ‘take’ any fish or wildlife.”[45] The agency’s reliance on Endanger Species Act and Marine Mammal Protection Act are reasonable.

Boating Communities’ Negative Response to the Proposed Amendment

However, the boating communities’ backlash from this proposed amendment have been substantial. The boating community has cited the disparity in the number of boating trips to whale hits, increased travel time, and the economic hardship it places on boaters. John Chambers of the American Sportfishing Association claimed the expansion of the regulation will “have huge ramifications for our members and individuals who enjoy spending time on the water.”[46] Mr. Chambers called for a less restrictive measure because of the major economic impact the regulation could have on the boating community.[47] He cited that the heavy-handed regulation was unnecessary because of the disparity between the number of boating trips that occur is upwards of 5.1 million compared to the five whale strikes.[48]

Captain Rick Bellavance, the president of the Rhode Island Party and Charter Boat Association, cited similar arguments “[i]f we’re driving 10 miles an hour instead of 15, that’s 5 miles of travel every hour. It could be a half hour or an hour each day of less fishing and more driving.”[49] Ferry Companies, such as the Block Island ferry, agreed that “daily ferry ride could take upwards of 90 minutes per one-way trip, with a reduced number of trips per day.”[50] John DePersenaire, Viking’s director of government affairs and sustainability, said the regulation “as written, would be the most consequential maritime regulation that we have ever seen imposed on the recreational boating and fishing section.”[51] Mr. DePersenaire cited the economic effect the regulation will have on “boat owners” but especially “marinas, tackle shops, charter boat operators – basically all maritime-related businesses on the Atlantic Coast.”[52] Mr. DePersenaire believes the regulation “compromises [recreational boaters’] maneuverability and overall safety at sea.”[53]

Economic Impact

In 2020, NOAA performed an economic impact analysis on the effect of the 2008 regulation for boats that were longer sixty-five feet.[54] Under the old regulation, the study claimed that the effects on transit time would cost “approximately $28.3 million to $39.4 million annually with commercial shipping industry bears between 74 to 87.”[55] For fishing vessels longer than sixty-five feet, the increased cost from speed limits would be around $147 thousand to $1.3 million per year.[56] However, lowering the size to thirty-five feet will expand the effects on the boating industry. The proposed regulation argues that “a total of 2,524 small entities (individual vessels) would be affected by the proposed rule with an estimated annual cost, as a percentage of revenue, ranging from 0.06% to 2.09%, depending on the vessel type.”[57] To better understand the impact of this regulation the public comment period ran from August 1, 2022, till September 31, and was extended till October 31.[58]


NOAA has shown that it is highly probable that boating has adversely affected the North Atlantic right whale. However, the agency admits that only five of twelve vessel strikes since 2008 have been caused by boats under sixty-five feet, and NOAA has not proven causation connecting speed reduction and whale strikes.[59] Thus, increasing government oversight over boaters seems imprudent when the damage from boats under sixty-five feet is so minor. Mr. Chambers is correct to argue that the proposed amendment is overinclusive. However, it remains to be seen if NOAA will consider the boater’s concerns. NOAA should perform a new economic impact analysis because the proposed amendment will affect 8,500–10,000 thirty-five-plus foot boats making the 2020 economic impact study obsolete.[60] If adopted, this regulation will have a cascading effect on the industry and will touch the entire boating community. Thus, it raises the question: Should the environmental groups and the Federal Government determine how a broad swath of free and independent boaters should navigate?



  1. Amendments to the North Atlantic Right Whale Vessel Strike Reduction Rule, 87 Fed. Reg. 46923 (proposed Aug. 1 2022) (to be codified at 50 C.F.R. Part 224).

  2. Endangered Fish and Wildlife; Final Rule To Implement Speed Restrictions To Reduce the Threat of Ship Collisions With North Atlantic Right Whales, 73 Fed. Reg. 74003 (proposed December 5, 2008) ( to be codified at 15 C.F.R. Part 902).

  3. 50 C.F.R. § 224.105(a) (2011); DEP’T OF COM., NAT’L OCEANIC & ATMO. ADMIN., Assessing the risk of vessel strike mortality in North Atlantic right whales along the U.S East Coast I (May 2022), https://media.fisheries.noaa.gov/2022-07/Right_Whale_Vessel_Strike_Risk_Assessment_NMFS-SEFSC-757_508.pdf[hereinafter Risk Assessment]; NOAA Fisheries Comp. Guide for Right Whale Ship Strike Reduction Rule, https://www.dco.uscg.mil/Portals/9/DCO%20Documents/5p/CG-5PC/CG-CVC/CVC2/psc/policy/epolicy/nrwhale/Ship_Strike_Reduction_Compliance_Guide.pdf.

  4. 50 C.F.R. § 224.105(1-3) (2011).

  5. Id. at (a).

  6. Kristen Monsell et. al., Vessel Speed Limits Sought to Protect Endangered North Atlantic Right Whales, The Center for Biological Diversity (Aug. 6, 2020), https://biologicaldiversity.org/w/news/press-releases/vessel-speed-limits-sought-protect-endangered-north-atlantic-right-whales-2020-08-06/; Regina Asmutis-Silvia et. al., Federal Proposal Aims to Protect Endangered Right Whales From Ship Strikes, The Center for Biological Diversity (July 29, 2022), https://biologicaldiversity.org/w/news/press-releases/federal-proposal-aims-to-protect-endangered-right-whales-from-ship-strikes-2022-07-29/; Risk Assessment, supra note 3, at 1.

  7. Monsell, supra note 6; see generally Whale and Dolphin Conservation et. al., Petition for Rulemaking to Prevent Deaths and Injuries of Critically Endangered North Atlantic Right Whales from Vessel Strikes 3, 12–23 (Aug. 6, 2020), https://www.biologicaldiversity.org/species/mammals/North_Atlantic_right_whale/pdfs/NARW-Ship-Speed-Petition-08-06-2020.pdf [hereinafter petition].

  8. Monsell, supra note 6.

  9. Regina Asmutis-Silvia et. al., Feds Sued to Force Them to Protect Endangered North Atlantic Right Whales from Vessel Strikes, The Center for Biological Diversity (Jan. 13, 2021), https://biologicaldiversity.org/w/news/press-releases/feds-sued-force-them-protect-endangered-north-atlantic-right-whales-vessel-strikes-2021-01-13/; Whale & Dolphin Conservation v. Nat’l Marine Fisheries Serv., 573 F. Supp. 3d 175, 178 (D.D.C. 2021).

  10. Whale & Dolphin Conservation v. Nat’l Marine Fisheries Serv., 573 F. Supp. 3d 175, 179 (D.D.C. 2021)

  11. Id.

  12. Id. at 181.

  13. Amendments to the North Atlantic Right Whale Vessel Strike Reduction Rule, 87 Fed. Reg. 46922 (proposed Aug. 1 2022) (to be codified at 50 C.F.R. Part 224).

  14. Id. at 46923–24

  15. Risk Assessment, supra note 3, at 2.

  16. Id.

  17. Id.

  18. Id at 3, 15.

  19. Amendments to the North Atlantic Right Whale Vessel Strike Reduction Rule, 87 Fed. Reg. 46922 (proposed Aug. 1 2022) (to be codified at 50 C.F.R. Part 224).

  20. Id.

  21. Id.

  22. Id. at 46923‑4.

  23. Id. at 46924.

  24. Id.

  25. Amendments to the North Atlantic Right Whale Vessel Strike Reduction Rule, 87 Fed. Reg. 46924 (proposed Aug. 1 2022) (to be codified at 50 C.F.R. Part 224).

  26. Id. at 46926.

  27. Id.

  28. Id.

  29. Id.

  30. Id. at 46928.

  31. Amendments to the North Atlantic Right Whale Vessel Strike Reduction Rule, 87 Fed. Reg. 46928 (proposed Aug. 1 2022) (to be codified at 50 C.F.R. Part 224).

  32. Id. at 46930.

  33. Id. at 46930–31.

  34. Id. at 46931.

  35. Id. at 46932.

  36. Id.

  37. Amendments to the North Atlantic Right Whale Vessel Strike Reduction Rule, 87 Fed. Reg. 46932 (proposed Aug. 1 2022) (to be codified at 50 C.F.R. Part 224).

  38. Id.

  39. Id.

  40. See 16 U.S.C. §§ 1531, 1538 (a)(1)(B) (Supp. 2020) & 16 U.S.C. §§ 1361, 1372 (a)(1) (Supp. 2020).

  41. 16 U.S.C. § 1531 (b) (Supp. 2020) & 16 U.S.C. § 1361 (1)–(2) (Supp. 2020).

  42. Amendments to the North Atlantic Right Whale Vessel Strike Reduction Rule, 87 Fed. Reg. 46923 (proposed Aug. 1 2022) (to be codified at 50 C.F.R. Part 224).

  43. 16 U.S.C. § 1532 (19) (Supp. 2020).

  44. 16 U.S.C. § 1362 (13) (Supp. 2020).

  45. S. Rep. No. 93-307, at 7 (1973).

  46. Gareth McGrath, Should NC Recreational Boats Have to Slow Down for Endangered Whales? Feds Think So, Star News Online (Sept. 29, 2022, 6:02 AM), https://www.starnewsonline.com/story/news/local/2022/09/29/environmentalist-backed-proposal-force-boaters-slow-protect-endangered-north-atlantic-right-whales/69498327007/.

  47. Id.

  48. Id.

  49. Rob Smith, Vessel Speed Restrictions Proposed for New England Waters to Protect Endangered Right Whales, ecoRI News (Sept. 22, 2022), https://ecori.org/vessel-speed-restrictions-proposed-for-new-england-waters-to-protect-endangered-right-whales/.

  50. Id.

  51. Kirk Moore, Resistance Builds on New Speed Restrictions to Protect Whales, Nat’l Fisherman (Sept. 26, 2022), https://www.nationalfisherman.com/national-international/resistance-builds-on-new-speed-restrictions-to-protect-whales.

  52. Id.

  53. Id.

  54. Indus. Econ., Inc. Econ. Analysis of the North Atlantic Right Whale Vessel Speed Restriction Rule 1-1 (March 2020), https://media.fisheries.noaa.gov/2021-01/FINAL_Appendix_B-Economic_Assessment_of_the_Vessel_Speed_Rule.pdf?null (Report prepared by Industrial Economics, Incorporated for the Office of Protected Resources National Marine Fisheries Service).

  55. Id. at ES-1.

  56. Id. at 3-17.

  57. Amendments to the North Atlantic Right Whale Vessel Strike Reduction Rule, 87 Fed. Reg. 46934 (proposed Aug. 1 2022) (to be codified at 50 C.F.R. Part 224).

  58. Amendments to the North Atlantic Right Whale Vessel Strike Reduction Rule, 87 Fed. Reg. 56925 (proposed Aug. 1 2022) (to be codified at 50 C.F.R. Part 224).

  59. Amendments to the North Atlantic Right Whale Vessel Strike Reduction Rule, 87 Fed. Reg. 46924 (proposed Aug. 1 2022) (to be codified at 50 C.F.R. Part 224).

  60. Id. at 46928.

By Dylan Ellis

The Consumer Financial Protection Bureau (CFPB) has been one of the most divisive government agencies since its inception in 2010. The CFPB was installed with far greater protections than most government agencies are afforded, including protections against both presidential[1] and congressional[2] influences on the agency’s decision making. As a result, the CFPB has faced multiple challenges against its constitutionality. Most notably in 2020 where the Supreme Court held that the requirement placed on the President which only allowed removal of the lone CFPB Director “for-cause” was an unconstitutional restraint on the separation of powers.[3] The CFPB suffered another judicial defeat on October 19th, 2022, where the Fifth Circuit held that the CFPB’s funding structure is unconstitutional under the Appropriations Clause of the Constitution.[4]

The Unique Funding Structure of the CFPB:

Appropriations allow Congress to exert control over agency action because the expenditure of federal agency monies that come from appropriations are conditioned upon compliance with prescribed policy.[5] Therefore, if Congress disagrees with an agencies activity, it can prohibit the use of appropriated funds for the given activity.[6] When the CFPB was established in the wake of the 2008 financial crisis, Congress believed that the agency could best carry out its mandate of protecting consumers if it were shielded from the political influences of future iterations of Congress.[7] Thus, while most agencies rely on annual appropriations from Congress for their funding, the CFPB does not.

Instead of relying on Congressional appropriations for funding, the CFPB requests from the Federal Reserve an amount determined by its lone Director to be “reasonably necessary to carry out the authorities of the Bureau.”[8] The Federal Reserve must grant the request, so long as the request does not exceed 12% of the total operating expenses of the Federal Reserve.[9] The funds transferred to the CFPB shall not be construed as Government funds or appropriated monies[10] and shall not be subject to review by the Committees on Appropriations of the House of Representatives and the Senate.[11] The Bureau’s ability to fund itself beyond Congress’s appropriation powers lies at the heart of the Fifth Circuit’s finding that the CFPB’s funding structure unconstitutional.[12]

The Fifth Circuit’s Reasoning:

The Court reached its conclusion by finding that the CFPB’s funding structure violates the separation of powers principles set forth in the Appropriations Clause of the Constitution.[13] The Appropriations Clause commands that, “No money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law.” [14] The Supreme Court has interpreted the clause as limiting the power of the executive branch by ensuring Congress’s exclusive control over the federal purse.[15] Accordingly, any exercise of a power granted by the Constitution to one of the other branches of Government shall be limited by a valid reservation of congressional control over funds in the Treasury.[16]

The Fifth Circuit determined that the CFPB’s ability to unilaterally fund itself with “unappropriated monies” directly from the Federal Reserve—which is itself outside the appropriations process—has yielded an unprecedented “double insulation” from the appropriation powers of Congress.[17] The Bureau is further insulated by the express exemption from Congressional review of its funding.[18] According to the court, the Bureau’s unchecked funding structure renders the agency “no longer dependent and, as a result, no longer accountable” to Congress and, ultimately, to the people.[19] Therefore, Congress’s cession of its power of the purse to the Bureau violates the Appropriations Clause and the Constitution’s underlying structural separation of powers.[20] Accordingly, the Fifth Circuit vacated the CFPB rule in question on the grounds that it had been promulgated using unconstitutional funds.[21]

Going Forward:

The ruling opens the door to challenges against the CFPB for both future and prior action as nearly all the agency’s actions can be connected to the unconstitutional funding structure. In fact, parties that have been adversely affected by the CFPB began challenging their lawsuits as void in light of the Fifth Circuit’s holding almost immediately after the decision.[22] For example, on October 20th, TransUnion–who had been sued by the CFPB for violating a consent order through the continued use of deceptive marketing–cited the Fifth Circuit’s holding in a court filing supporting a motion to dismiss the suit.[23]

There are a few ways in which this conflict can be resolved. The CFPB could seek review of the decision before the entire Fifth Circuit; however, the odds that the decision is reversed are slim as seven of the sixteen active judges have already expressed their view that the funding structure is unconstitutional.[24] The Bureau could also seek review from the Supreme Court, but the odds are not in their favor once again as five of the justices who ruled against the CFPB in 2020 remain on the bench.[25] Ironically, the funding structure was put into place to protect the CFPB from Congress, however it seems most likely that a legislative fix will be required if the CFPB and its previous regulatory actions are to survive the Fifth Circuit’s decision.

  1. 12 U.S.C. § 5491(c).

  2. § 549(a)(2).

  3. Seila L. LLC v. Consumer Fin. Prot. Bureau, 140 S. Ct. 2183, 2197 (2020).

  4. Cmty. Fin. Servs. Ass’n of Am., Ltd. v. Consumer Fin. Prot. Bureau, No. 21-50826, 2022 WL 11054082, at *12 (5th Cir. Oct. 19, 2022).

  5. Kate Stith, Congress’ Power of the Purse, 97 Yale L.J. 1343, 1363 (1988).

  6. Id.

  7. 156 Cong. Rec. 8931 (2010) (statement of Sen. Dodd) (“[T]he [CFPB’s] funding will be independent and reliable so that its mission cannot be compromised by political maneuvering.”).

  8. 12 U.S.C. § 5497(a)(1).

  9. § 5497(a)(1)-(2).

  10. § 5497(c)(2).

  11. § 5497(a)(2)(C).

  12. Cmty. Fin., 2022 WL 11054082, at *12.

  13. Id.

  14. U.S. Const. art. I, § 9, cl. 1.

  15. Cmty. Fin., 2022 WL 11054082, at *13.

  16. Id.

  17. Id. at *14.

  18. Id. at *15.

  19. Id.

  20. Id. at *19.

  21. Id. at *18.

  22. TransUnion Defendants’ Notice of Supplemental Authority, Consumer Fin. Prot. Bureau v. TransUnion et al., No. 1:22-cv-1880 (N.D. Ill. Oct. 20, 2022).

  23. Id.

  24. See Consumer Fin. Prot. Bureau v. All Am. Check Cashing, Inc., 33 F.4th 218, 220 (5th Cir. 2022) (Jones, J., Concurring) (four Fifth Circuit Justices find in concurrence that the CFPB has been unconstitutionally funded); See also Cmty. Fin., 2022 WL 11054082, at *12 (three other Fifth Circuit Justices find that the CFPB is unconstitutionally funded).

  25. See Seila, 140 S. Ct. 2183 (2020).

Taylor Jones

Overhauling United States environmental and labor policies has been a priority of the Biden Administration since the 2020 presidential election.[1]  In fact, the Biden-Harris campaign’s website still displays Biden’s promise to “sign a series of new executive orders with unprecedented reach that go well beyond the Obama-Biden Administration platform”[2] concerning environmental issues.  Likewise, during the campaign, Biden promised to be “the most pro-union president you’ve ever seen[.]”[3]  Biden started strong toward achieving these objectives on his first day in office.[4]  In the words of giddy CNN reporters on Inauguration Day, “[w]ith the stroke of a pen,” “Biden is signing a flurry of executive orders, memorandums and directives to agencies,” “moving faster and more aggressively to dismantle his predecessor’s legacy than any other modern president.”[5]  In one such executive order, Biden committed the US to rejoin the Paris Agreement.[6]  In another, Biden halted construction of the Keystone XL pipeline by revoking its permit.[7]  Further, in a move the CNN reporters failed to discuss, Biden unceremoniously fired Peter Robb, Trump-appointed General Counsel of the National Labor Relations Board, ten months prior to the expiration of his term.[8]

 After seemingly early success on environmental and labor issues, success on the legislative front stalled.  First, the Green New Deal legislation,[9] with its discussions of cow flatulence[10] and the morality of having children in a world facing climate change,[11] was left to compost in the Senate, with three Democrats voting against the resolution.[12]  Then, just as a majority of the American workforce has failed to support unionization,[13] a majority of Senators failed to support both the Protecting the Right to Organize Act of 2021 (“PRO Act”)[14] and the Build Back Better Act.[15]

 With the prospect of environmental and labor reform being achieved by Congress diminished, purportedly independent regulatory agencies have stepped in to fill the legislative void.[16]  Both the National Labor Relations Board (“NLRB”), responsible for administering the National Labor Relations Act (the “NLRA”),[17] and the Securities and Exchange Commission (the “SEC”), established to protect investors, maintain efficient markets, and facilitate capital formation,[18] are defined by statute as independent regulatory agencies.[19]  Distinguished from executive agencies, independent regulatory agencies are intended to operate with greater independence from the executive branch.[20]  In theory, the greater independence is intended to reduce politically motivated interference with the agencies and allow for congressionally-delegated rulemaking independent of executive branch control.[21]

Despite its intended independence from partisan politics, the Biden NLRB has been criticized as “beholden to the interests of organized labor,”[22] and policy oscillation has come to be seen as the natural result of changes in presidential administrations.[23]  Akin to Biden’s aggressiveness on his first day in office, the NLRB has openly attacked Trump-era precedents and attempted to institute changes that Congress was unable to pass legislatively in the PRO Act and Build Back Better Act.[24]

For instance, Jennifer Abruzzo, the Biden-appointed current General Counsel of the NLRB, issued a Mandatory Submissions to Advice memorandum in August of 2020 signaling cases she will bring before the pro-union NLRB in order to establish new precedent.[25]  Additionally, General Counsel Abruzzo made headlines in September 2021 when she issued a memorandum to NLRB field offices that she will consider student-athletes to be statutory employees entitled to the protections of the NLRA.[26]  Likewise, in April 2022, General Counsel Abruzzo issued a similar memorandum declaring she will consider captive audience meetings a violation of the NLRA.[27]  However, while the upheaval at the NLRB signaled the willingness of independent regulatory agencies to come to the rescue of proposed Biden labor policies, the impact of the changes at the NLRB will arguably be negligible.  With a national unionization rate of approximately ten percent,[28] aside from attention-grabbing headlines concerning college athletes during football season, most of the policy shifts at the NLRB have likely flown under the radar of most Americans and not substantially impacted employers.

Perhaps more importantly, the SEC has recently taken a decisive stand to advance the goals of the failed Green New Deal legislation.[29]  Under the SEC’s new proposed rule concerning climate-related disclosures, public companies will be required to include a laundry list of climate-related disclosures in SEC filings, including climate-related goals, board and management oversight of climate risks, and Scope 1 and 2 emissions for all publicly-traded companies, with full Scope 3 emissions data being required of some companies.[30]  As stated in a letter to SEC Chair Gary Gensler signed by nineteen Republican senators in opposition to the SEC’s recent proposed rule on emissions disclosures, “[a]fter failed attempts to enact radical climate policy via legislation, this rule is yet another example of the Biden Administration’s efforts to have unelected bureaucrats implement its preferred agenda through regulation.”[31]  

The public comment period for the proposed rule closes on May 20, 2022.[32]  If the rule adopted by the SEC is substantially similar to the proposed rule, litigation may ensue.[33]  Challenges will likely center around the SEC exceeding its statutory authority and goal of protecting investors,[34] as well as compelling corporate speech in violation of the First Amendment.[35]  In a scathing statement by SEC Commissioner Hester M. Peirce, entitled “We are Not the Securities and Environment Commission – At Least Not Yet,” Commissioner Peirce suggests additional legal hurdles for the rule, including non-delegation issues and vastly inaccurate compliance cost estimates.[36]  Should the rule be struck by the courts on any of the grounds above, or alternative legal theories, we will then be left to see what other avenues the Biden Administration and its allies will seek to exploit to advance its environmental policy agenda as the 2024 presidential election draws closer.


[1] See Emma Newburger, Joe Biden Calls Climate Change the ‘Number One Issue Facing Humanity,’ CNBC (Oct. 24, 2020, 1:45 PM), https://www.cnbc.com/2020/10/24/joe-biden-climate-change-is-number-one-issue-facing-humanity.html; see Noah Bierman & David Lauter, Biden May be the Most Pro-Union President Since Truman. But Can He Stop Labor’s Decline?, Los Angeles Times (June 2, 2021), https://www.latimes.com/politics/story/2021-06-02/biden-pro-union-can-he-reverse-labors-long-decline.

[2] The Biden Plan for a Clean Energy Revolution and Environmental Justice, Biden-Harris Democrats, https://joebiden.com/climate-plan/ (last visited Apr. 22, 2022).

[3] Abigail Johnson Hess, Biden Promises to be ‘the Most Pro-Union President’ – and Union Members in Congress are Optimistic, CNBC Work, https://www.cnbc.com/2020/12/01/biden-promises-to-be-the-most-pro-union-president-and-rep.html (Dec. 2, 2020, 10:05 PM).

[4] See Eric Bradner, Betsy Klein & Christopher Hickey, Biden Targets Trump’s Legacy with First-day Executive Actions, CNN Politics (Jan. 20, 2021, 8:48 PM), https://www.cnn.com/2021/01/20/politics/executive-actions-biden/index.html

[5] Id.

[6] Id.

[7] Rob Gillies, Keystone XL Pipeline Halted as Biden Revokes Permit, AP News, https://apnews.com/article/joe-biden-alberta-2fbcce48372f5c29c3ae6f6f93907a6d (Jan. 20, 2021).

[8] See Bradner, supra note 4; Ian Kullgren & Josh Eidelson, Biden Fires NLRB General Counsel After He Refuses to Resign, Bloomberg Law, https://news.bloomberglaw.com/daily-labor-report/biden-moves-to-oust-top-labor-board-attorney-robb (Jan. 20, 2021, 9:42 PM).

[9] Recognizing the Duty of the Federal Government to Create a Green New Deal, H.R. 109, 116th Cong. (2019-2020).

[10] Rep. Cortez Repeats Claim that Cow Flatulence Threatens Mankind, Metro Voice News (Apr. 2, 2019), https://metrovoicenews.com/rep-cortez-repeats-claim-that-cow-flatulence-threatens-mankind/.

[11] Isabel Vincent & Melissa Klein, Gas-guzzling Car Rides Expose AOC’s Hypocrisy Amid Green New Deal Pledge, New York Post (Mar. 2, 2019, 7:32 PM), https://nypost.com/2019/03/02/gas-guzzling-car-rides-expose-aocs-hypocrisy-amid-green-new-deal-pledge/ .

[12] Jacob Pramuk, Green New Deal Backed by Alexandria Ocasio-Cortez Fizzles Out in the Senate as Dems Accuse GOP of Putting on a ‘Stunt’ Vote, CNBC, https://www.cnbc.com/2019/03/26/aocs-green-new-deal-dies-in-mcconnell-led-senate-vote.html (Mar. 26, 2019, 4:51 PM).  

[13] News Release, Bureau of Labor Statistics, Union Members – 2021 (Jan. 20, 2022), https://www.bls.gov/news.release/pdf/union2.pdf (last visited Feb. 26, 2022).

[14] Diana Furchtgott-Roth, Democrats Can’t Pass the PRO Act, so It’s Buried in the Reconciliation Bill, The Hill (Oct. 09, 2021. 11:01 AM), https://thehill.com/opinion/white-house/575992-dems-cant-pass-the-pro-act-so-its-buried-in-the-reconciliation-bill/; see Protecting the Right to Organize Act of 2021, H.R. 842, 117th Cong. (2021).

[15] Burgess Everett, Dems Face Sobering Possibility: Build Back … Never, Politico (Feb. 2, 2022, 9:00 AM), https://www.politico.com/news/2022/02/10/democrats-social-spending-dreams-stuck-in-winter-purgatory-00007557; see Build Back Better Act of 2021, H.R. 5376, 117th Cong. (2021).

[16] Brody Mullins & Ryan Tracy, Biden’s Regulatory Drive Sparks Pushback From Business Lobbyists, Wall Street Journal (Feb. 7, 2022, 5:30 AM), https://www.wsj.com/articles/bidens-regulatory-drive-sparks-pushback-from-business-lobbyists-11644229802.

[17] National Labor Relations Act, 29 U.S.C. §§ 151–69 (1947).  

[18] What We Do, United States Securities and Exchange Commission, https://www.sec.gov/about/what-we-do (Nov. 22, 2021).    

[19] 44 U.S. Code § 3502 (2019).

[20] Robert Longley, Independent Executive Agencies of the US Government, ThoughtCo., https://www.thoughtco.com/independent-executive-agencies-of-us-government-4119935 (Aug. 2, 2021).  

[21] See generally Congressional Research Service, Congress’s Authority to Influence and Control Executive Branch Agencies (2021), https://sgp.fas.org/crs/misc/R45442.pdf.

[22] Tomiwa Aina, Full House: A Fully Constituted Biden NLRB is Here, Fisher Phillips (Aug. 10, 2021),  https://www.fisherphillips.com/news-insights/fully-constituted-biden-nlrb-is-here.html.

[23] Joan Flynn, A Quiet Revolution at the Labor Board: The Transformation of the NLRB 1935-2000, 61 Ohio St. L. J. 1361, 1413 (2000).

[24] See NLRB General Counsel Jennifer Abruzzo Issues Memorandum Presenting Issue Priorities, National Labor Relations Board (Aug. 12, 2021), https://www.nlrb.gov/news-outreach/news-story/general-counsel-jennifer-abruzzo-releases-memorandum-presenting-issue.

[25] Steven M. Swirsky & Donald S. Krueger, NLRB General Jennifer A. Abruzzo Issues “Mandatory Submissions to Advice” and “Utilization of Section 10(j) Proceedings” Memos, Outlining Her Priorities and Enforcement Agenda, The National Law Review (Aug. 23, 2021), https://www.natlawreview.com/article/nlrb-general-counsel-jennifer-abruzzo-issues-mandatory-submissions-to-advice-and.

[26] NLRB General Counsel Jennifer Abruzzo Issues Memo on Employee Status of Players at Academic Institutions, National Labor Relations Board Office of Public Affairs (Sept. 29, 2021), https://www.nlrb.gov/news-outreach/news-story/nlrb-general-counsel-jennifer-abruzzo-issues-memo-on-employee-status-of.

[27] NLRB General Counsel Jennifer Abruzzo Issues Memo on Captive Audience and Other Mandatory Meetings, National Labor Relations Board Office of Public Affairs (Apr. 7, 2022), https://www.nlrb.gov/news-outreach/news-story/nlrb-general-counsel-jennifer-abruzzo-issues-memo-on-captive-audience-and.

[28] Bureau of Labor Statistics, News Release: Union Members – 2021 (Jan. 20, 2022, 10:00 AM), https://www.bls.gov/news.release/pdf/union2.pdf (last visited Apr. 22, 2022).

[29]  See The Enhancement and Standardization of Climate-Related Disclosures for Investors, 87 Fed. Reg. 21334 (Apr. 11, 2022) (to be codified at 17 C.F.R. pts. 210, 229, 232, 239, 249).

[30] Id.

[31] Letter from Kevin Cramer, Senator of North Dakota, and 18 United States Senators, to Gary Gensler, Chair, SEC (Apr. 5, 2022), https://senatorkevincramer.app.box.com/s/tpo6hagvk3ynh0752g38aiwnnast7mjt (last visited Apr. 22, 2022).

[32] The Enhancement and Standardization, supra note 29.

[33] Letter from Patrick Morrisey, West Virginia Attorney General, and 15 state Attorneys General, to Gary Gensler, Chair, SEC (June 14, 2021), https://www.sec.gov/comments/climate-disclosure/cll12-8915606-244835.pdf (last visited Apr. 22, 2022).

[34] Id.

[35] Id.

[36] Hester M. Peirce, Commissioner of the SEC, We are Not the Securities and Environment Commission – At Least Not Yet, Statement U.S. Securities and Exchange Commission (Mar. 21, 2022), https://www.sec.gov/news/statement/peirce-climate-disclosure-20220321.

Photo by Aaron Kittredge via Pexels

By Jonathon Beatty

In National Federation of Independent Business v. OSHA,[1] the Supreme Court reversed the Sixth Circuit Court of Appeals and stayed the Occupational Health and Safety Administration’s (“OSHA”) rule imposing a vaccine-or-test mandate on essentially every employer with at least 100 employees.[2]  The rule and subsequent stay affected some eighty-four million private-sector workers across the United States,[3] but the opinion has far-reaching implications for our entire constitutional order.  It highlighted a growing debate over the deference courts afford agencies when they ostensibly act pursuant to a congressional delegation of authority—namely, the nondelegation and major questions doctrines.[4]  At the very least, a majority of the Court signaled a willingness to scale back Chevron deference,[5] while Justice Gorsuch, joined by Justices Thomas and Alito, appeared poised to strengthen a duo of related doctrines that could dramatically diminish the authority of administrative agencies moving forward.[6]  But what does all this mean?

Start with the text of the Constitution.  Article I, Section 1 grants “[a]ll legislative powers . . . in a Congress of the United States, which shall consist of a Senate and House of Representatives.”[7]  On its face, the Constitution is clear in its separation of powers: all legislation, or lawmaking, must originate in Congress.  As Justice Scalia put it, “This text permits no delegation of those powers . . . .”[8]  Since at least 1892, the Supreme Court has made this abundantly clear, “[t]hat Congress cannot delegate legislative power to the President is a principle universally recognized as vital to the integrity and maintenance of the system of government ordained by the Constitution.”[9]  Hence, the nondelegation doctrine has developed from and is a product of the Constitution’s text.  Few, if any, rules, however, are absolute.  The nondelegation doctrine is no exception.[10]

The Constitution demands that the President faithfully execute the laws.[11]  In doing so, the executive necessarily must have some decision-making authority to administer laws.[12]  Even James Madison, who championed “the division of authority among the various branches of government,”[13] recognized that absolute separation “can never in practice be duly maintained.”[14]  Accordingly, the Court has long sought to strike the balance between maintaining a clear separation of powers and allowing Congress to delegate limited rulemaking authority to administrative agencies for practical purposes.[15]  Effective governance, the argument goes, relies on it.[16]  In delegating such authority, however, Congress must “lay down by legislative act an intelligible principle to which the person or body authorized to [act] is directed to conform.”[17]  Otherwise, executive action may stray too far from legislative command and thus unconstitutionally blur the line between executive and legislative power.

The validity of an administrative rule, therefore, rests on essentially three questions: (1) whether Congress has the authority itself to do what the agency has done; (2) whether Congress may delegate that authority to an agency; and (3) whether Congress, in fact, delegated that authority.[18]  The first question is a threshold matter asking whether “the federal government properly invoke[d] a constitutionally enumerated source of authority to regulate in [the] area . . . .”[19]  If so, courts look to whether the attempted delegation of power provides an “intelligible principle” to direct the agency.[20]  Too broad a grant of authority without sufficient guidance would violate Article I, Section 1 by taking from Congress, the branch closest and most responsive to the democratic process, “important choices of social policy.”[21]  And finally, courts must determine whether Congress, in fact, made a constitutional grant of authority allowing the agency to do what it purports to have the power to do.[22]  Put differently, Congress may have the inherent constitutional authority and may be able to delegate that authority, but did it?[23]  This last question, on which OSHA’s mandate ultimately failed,[24] implicates Chevron deference and the major questions doctrine.

When a statute speaks clearly on an issue, a court’s assessment ceases: it “must give effect to the unambiguously expressed intent of Congress,” regardless of an agency’s interpretation or position.[25]  Where, however, the statute is vague and does not “address[] the precise question at issue,” the court need only decide whether the agency’s decision represents “a permissible construction of the statute.”[26]  In other words, when a statue is ambiguous, the agency’s interpretation of a statute allowing it to make rules need only be “reasonable.”[27]  The underlying justification for such great deference is basically twofold: (1) ambiguity amounts to “an implicit delegation” of power to an “agency to fill the statutory gaps” left by Congress;[28] and (2) administrative agencies that Congress has tasked with administering the law have “expertise,” especially relative to judges, that better positions them to make rules on the regulatory matter.[29]

This inclination to defer to an agency’s “reasonable” interpretation goes at least as far back as the 1940s,[30] for example, when Justice Murphy explained that courts may invalidate an agency’s rule “only if it lacks any rational and statutory foundation.”[31]  Just like the nondelegation doctrine, however, Chevron is not without exception.  An agency’s exercise of substantial authority, even where the enabling statute at issue is ambiguous, may appropriately give courts pause before deciding that Congress has made “such an implicit delegation.”[32]  This is especially true of “question[s] of deep ‘economic and political significance.’”[33]  And the major questions doctrine represents that pause, or “reason to hesitate,”[34] before essentially rubber-stamping agency action.[35]  The idea is that if Congress truly assigned an agency such considerable power, it would have done so unmistakably.

On this doctrine, the Court stayed OSHA’s mandate, finding that challengers of the rule were likely to succeed on the merits that OSHA “lacked authority to impose the mandate.”[36]  Pointing to the rule’s “significant encroachment into the lives—and health—of a vast number of employees,” the Court reasoned that such an intrusion would need a clear congressional delegation of authority that “plainly authorizes the . . . mandate.”[37]  It went on to hold that no such authorization existed, explaining that the enabling statute “empowers [OSHA] to set workplace standards, not broad public health measures.”[38]

Echoing the majority opinion, Justice Gorsuch summarized the issue before the Court as one of “who decides” the major question.[39]  He further posited that the nondelegation and major questions doctrines, which are “closely related,” shed light on that question.[40]  He explained that both serve to keep lawmaking power “where Article I of the Constitution says it belongs—with the people’s elected representatives.”[41]  And the power to decide how to address the pandemic, as the law exists today, he argued, “rests with the States and Congress, not OSHA.”[42]

Ultimately, much remains to be seen as to what extent the Court will cut back on Chevron deference.  But there is little doubt (1) that a majority of the Court is sympathetic to the nondelegation and major questions doctrines; and (2) that cases challenging agency action will continue to arise.  In fact, West Virginia v. EPA, a case from the current Term, presents yet another opportunity for the Court to weigh in on the major questions doctrine.[43]  There, the Court will answer “[w]hether . . . Congress constitutionally authorized the [EPA] to issue significant rules—including those capable of reshaping the nation’s electricity grids . . . .”[44]  Plaintiffs have good reason to believe that the merits of their challenges look increasingly promising.  Nevertheless, having already used it twice this term to invalidate agency action, court watchers anticipate “[a] major battle of the ‘major questions’ doctrine” in this case and beyond.[45]

[1] 142 S. Ct. 661 (2022).

[2] Id. at 662.

[3] Id.

[4] Id. at 668 (Gorsuch, J., concurring) (“[T]he major questions doctrine is closely related to what is sometimes called the nondelegation doctrine.”).

[5] See generally Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842–43 (1984) (When deciding whether an agency’s interpretation of a statute is valid, courts look to (1) whether the statute at issue is ambiguous; and, if so, (2) whether the agency’s interpretation is reasonable.).  This standard of review is widely considered to be highly deferential to agencies in the rulemaking process.  See Michigan v. EPA, 576 U.S. 743, 761 (2015) (Thomas, J., concurring) (“Chevron deference . . . forc[es] [judges] to abandon what they believe is ‘the best reading of an ambiguous statute’ in favor of an agency’s construction.  It thus wrests from Courts the ultimate interpretative authority to ‘say what the law is,’ and hands it over to the Executive.”) (citations omitted).

[6] See Nat’l Fed’n of Indep. Bus., 142 S. Ct. at 668–69 (Gorsuch, J., concurring) (Justices Thomas and Alito joined Justice Gorsuch in emphasizing the important role the nondelegation and major questions doctrines play in “protect[ing] the separation of powers.”).

[7] U.S. Const. art. I, § 1.

[8] Whitman v. Am. Trucking Ass’ns, 531 U.S. 457, 472 (2001).

[9] Field v. Clark, 143 U.S. 649, 692 (1892).

[10] Indus. Union Dep’t v. Am. Petroleum Inst., 448 U.S. 607, 673 (1980) (Rehnquist, J., concurring) (“The rule against delegation of legislative power is not, however, so cardinal a principle as to allow for no exception.”).

[11] U.S. Const. art. II, § 3 (“[The President] shall take Care that the Laws be faithfully executed . . . .”).

[12] Morton v. Ruiz, 415 U.S. 199, 231 (1974) (“The power of an administrative agency to administer a congressionally created and funded program necessarily requires the formulation of policy and the making of rules to fill any gap left, implicitly or explicitly, by Congress.”).

[13] Indus. Union Dep’t, 448 U.S. at 673 (Rehnquist, J., concurring).

[14] The Federalist No. 48 (James Madison).

[15] Indus. Union Dep’t, 448 U.S. at 673–74 (Rehnquist, J., concurring) (“This Court . . . has recognized that a hermetic sealing-off of the three branches of government from one another could easily frustrate the establishment of a National Government capable of effectively exercising the substantive powers granted to the various branches by the Constitution.”).

[16] Id.

[17] Whitman v. Am. Trucking Ass’ns, 531 U.S. 457, 472 (2001).

[18] See cases cited infra notes 19–22 and accompanying text.

[19] Nat’l Fed’n of Indep. Bus. v. OSHA, 142 S. Ct. 661, 668 (2022) (Gorsuch, J., concurring).

[20] Whitman, 531 U.S. at 472.

[21] Indus. Union Dep’t, 448 U.S. at 685–86 (Rehnquist, J., concurring) (noting that “the nondelegation doctrine serves three important functions” in (1) upholding democracy, (2) requiring guidance from Congress to the agency, and (3) providing standards against which courts may assess agency action).

[22] Worth noting here is the Supreme Court’s longstanding doctrine to avoid constitutional questions when a case may be resolved on lesser, often statutory, grounds.  See Jennings v. Rodriguez, 138 S. Ct. 830, 843 (2018).  Accordingly, administrative law cases often turn on this third question to avoid the more substantial constitutional issue.  Taking the OSHA rule, for example, the Court held that Congress did not delegate the agency the authority to impose a vaccine-or-test requirement; it did not address whether Congress, and thus the federal government, has the inherent constitutional power to do so.  Nat’l Fed’n of Indep. Bus., 142 S. Ct. at 662.

[23] See generally Advisory Opinions, Supreme Court Blocks Vaccine Mandate, The Dispatch, at 22:58 (Jan. 14, 2022), https://advisoryopinions.thedispatch.com/p/supreme-court-blocks-vaccine-mandate?s=r (explaining that, with respect to OSHA’s rule, “nondelegation is that Congress can’t give OSHA the power,” while “major question doctrine is that Congress didn’t give OSHA the power”).

[24] Nat’l Fed’n of Indep. Bus., 142 S. Ct. at 662.

[25] Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842–43 (1984).

[26] Id.

[27] Id. at 844. 

[28] FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120, 159 (2000).

[29] Gonzalez v. Oregon, 545 U.S. 243, 266–67 (2006) (“Because . . . policymaking expertise account[s] in the first instance for the presumption that Congress delegates interpretive lawmaking power to the agency rather than to the reviewing court, we presume here that Congress intended to invest interpretive power in the administrative actor in the best position to develop these attributes.” (quoting Martin v. OSHRC, 499 U.S. 144, 153 (1991))).

[30] The congressional delegation of power, however, is an issue as old at the republic.  See generally Julian Davis Mortenson & Nicholas Bagley, Delegation at the Founding, 121 Colum. L. Rev. 277, 281 (2021), https://columbialawreview.org/content/delegation-at-the-founding/ (“The Founders would thus have said that agencies wield legislative power to the extent they adopt rules that Congress could have enacted as legislation.”). Cf Ilan Wurman, Nondelegation at the Foudning, 130 Yale L.J. 1490, 1503 (2021), https://www.yalelawjournal.org/pdf/Wurman_d4111w2k.pdf (“In the first dozen years after Ratification, members of the Founding generation involved in public life and government repeatedly argued that Congress could not delegate its legislative power to the Executive.”).

[31] SEC v. Chenery Corp., 322 U.S. 194, 207 (1947).  

[32] Brown & Williamson Tobacco Corp., 529 U.S. at 159.

[33] King v. Burwell, 576 U.S. 473, 485–486 (2015) (quoting Utility Air Regulatory Group v. EPA, 573 U.S. 302, 324 (2014).

[34] Brown & Williamson Tobacco Corp., 529 U.S. at 159.

[35] Nat’l Fed’n of Indep. Bus. v. OSHA, 142 S. Ct. 661, 667 (2022) (Gorsuch, J., concurring) (“We sometimes call this the major questions doctrine.”).

[36] Id. at 665–66.

[37] Id. at 665.

[38] Id. at 665.

[39] Id. at 667 (Gorsuch, J., concurring).

[40] Id. at 668 (Gorsuch, J., concurring).

[41] Id. at 668–69 (Gorsuch, J., concurring) (“The nondelegation doctrine ensures democratic accountability by preventing Congress from intentionally delegating its legislative powers to unelected officials” in an effort to deflect blame or shirk responsibility.).

[42] Id. at 670 (Gorsuch, J., concurring).

[43] Amy Howe, Greenhouse Gases and “Major Questions”: Justices to Hear Argument on EPA’s Power to Tackle Climate Change, SCOTUSblog (Feb. 27, 2022, 6:03 PM), https://www.scotusblog.com/2022/02/greenhouse-gases-and-major-questions-justices-to-hear-argument-on-epas-power-to-tackle-climate-change/.

[44] West Virginia v. Environmental Protection Agency, SCOTUSblog, https://www.scotusblog.com/case-files/cases/west-virginia-v-environmental-protection-agency/ (last visited April 12, 2022).

[45] Howe, supra note 43.

By Alexandra N. Meyer

A new American Bar Association program aims to better prepare immigrants navigating one of America’s most time-consuming and expensive government systems. Unlike most government agencies, the U.S. Citizenship and Immigration Services, (“USCIS”), is fee-funded and relies almost exclusively on fees to operate.[1] In fact, service fees account for approximately 97 percent of the USCIS’s budget.[2] Last summer, the USCIS announced that it aimed to increase a number of immigration and naturalization benefit request fees by a weighted average of 20 percent.[3] The agency reasoned that “current fees do not recover the full cost of providing adjudication and naturalization services”[4] and would leave the agency underfunded by approximately $1 billion per year.[5] Luckily, after two preliminary injunctions preventing the implementation of the fee increases, the government filed a motion for voluntary dismissal of its appeal[6] of Immigrant Legal Research Center v. Wolf.[7]

Although fees not increasing (for the time being) is certainly something to celebrate, issues with the current fee-based system persist. The current fees for many of the most popular forms remain high.[8] For example, an I-485 “Application to Register Permanent Residence or Adjust Status” retains its $1,140 fee; an N-400 “Application for Naturalization” costs $640; and an N-600 “Application for Certificate of Citizenship” will set an individual back $1,170.[9] In addition, both the I-485 and N-400 forms require applicants to shell out an extra $85 for a biometrics fee.[10] Clearly, the costs of sending in even a single application can be incredibly high. These costs quickly multiply for families sending multiple forms—one for each family member—to the USCIS for processing.

To the USCIS’s credit, a fee-waiver program exists. However, the program is arguably inadequate, as the agency has narrowed eligibility and declined hundreds of thousands of applications for fee waivers.[11] At one time, nearly any form could be accompanied by a fee-waiver application. Unfortunately in 2007, the USCIS created a “limited list that prohibited two-thirds of the application types from the possibility of a fee waiver.”[12] In 2016, the USCIS approved more than 627,000 fee-waiver applications.[13] A year later, in 2017, the agency only approved 285,000 applications.[14]

Even if an applicant can afford the filing fees, the complexity of the forms may force additional, unanticipated costs. Theoretically, the USCIS lists the steps of the application process with instructions on how to fill out each form on its website, but in practice the website is difficult to navigate and understand, particularly for applicants who speak English as a second language.[15] Once an individual finds the correct form, they must fill it out correctly according to the USCIS’s standards—a task that seems designed to promote failure. For example, in recent years, the I-485 form has grown from six pages with an accompanying eight pages of instructions to twenty pages with forty-five pages of instructions.[16]

Forms also expire with little to no notice, only to be replaced with almost identical new forms.[17] Applications already mailed with the now obsolete form variants are rejected.[18] Furthermore, forms can be rejected or denied if any field is left blank, regardless of its applicability. For example, applications have been rejected for listing three siblings when there is space on the application for four or not including an address for a deceased parent.[19] Perhaps the most ridiculous reason for form rejection are typographical absurdities, like an applicant stating “NA” instead of “N/A” when a field is not applicable.[20]

Rejected applications not only serve to frustrate applicants, but add to the costs of immigration and naturalization. Rejections may not be appealed.[21] The applicant must resubmit a corrected form.[22] Every time an applicant submits a new form for review, the “USCIS requires new fees with any new benefit request,” even if the applicant is submitting the same form type with only minimal corrections.[23] The USCIS may even keep the rejected application fee.[24]

Hiring an immigration lawyer certainly helps to prevent issues that may arise during the application process. In fact, the nitpickiness of the USCIS has arguably made counsel a necessity. An immigration lawyer knows exactly what forms are applicable to a case and can help ensure that forms are properly completed according to the USCIS’s standards.[25] Although the thought of paying legal fees in addition to the USCIS’s form fees may deter some from seeking legal advice, the cost of legal fees are often comparable to the USCIS’s form fees.[26] Hiring an immigration attorney may even save the applicant money in the long run if the alternative is to resubmit rejected applications numerous times.[27]

Despite the benefits of hiring an immigration attorney to help with the immigration and naturalization process, reality is many individuals cannot afford form filing fees, let alone additional legal fees.[28] The American Bar Association’s online program, ABA Free Legal Answers, seeks to narrow this “justice gap.”[29] The service, which expanded to include immigration law in January 2021, allows users to ask volunteer attorneys legal questions regarding deportation, green cards, Deferred Action for Childhood Arrivals, (“DACA”), and naturalization.[30] Unfortunately, individuals can only ask up to three questions per year, but for someone previously unable to ask any questions, this is an improvement to the situation.[31] At first glance, it’s also difficult to ascertain the parameters of asking questions, but it seems unlikely that an individual can submit an entire form for review. Still, the program provides attorneys with the opportunity to remind applicants not to leave blank fields in their forms, or to use “N/A” instead of “NA,” however ridiculous that necessary advice may seem.

[1] USCIS Adjusts Fees to Help Meet Operational Needs, U.S. Citizenship & Immigr. Servs., (Jul. 31, 2020), https://www.uscis.gov/news/news-releases/uscis-adjusts-fees-to-help-meet-operational-needs#:~:text=Unlike%20most%20government%20agencies%2C%20USCIS,97%25%20of%20USCIS’%20budget.

[2] Id.

[3] U.S. Citizenship and Immigration Services Fee Schedule and Changes to Certain Other Immigration Benefit Request Requirements, 85 Fed. Reg. 46,788, 46,788 (Aug. 3, 2020).

[4] Id.

[5] U.S. Citizenship & Immigr. Servs., supra note 1.

[6] Featured Issue: Changes to USCIS Fee Schedule, Am. Immigr. Laws. Ass’n (Jan. 29, 2021), https://www.aila.org/advo-media/issues/all/changes-to-uscis-fee-schedule.

[7] No. 20-CV-05883, 2020 WL 5798269 (N.D. Cal. Sept. 29, 2020).

[8] See Most Common USCIS Immigration Forms, Nat’l Notary Ass’n, https://www.nationalnotary.org/immigration/knowledge-center/uscis-immigration-forms (last visited Feb. 12, 2021).

[9] Dep’t of Homeland Sec., U.S. Citizenship & Immigr. Servs., Form G-1055: Fee Schedule 4, 11 (2020), https://www.uscis.gov/sites/default/files/document/forms/g-1055.pdf.

[10] Id.

[11] Juan Esteban Bedoya, Price Tags on Citizenship: The Constitutionality of the Form N-600 Fee, 96 N.Y.U.L. Rev. 1022, 1027 (2020).

[12] Peggy Gleason and Melissa Rodgers, Status of USCIS Fee Waiver Changes–October 2, 2020, Immigrant Legal Res. Ctr., https://www.ilrc.org/sites/default/files/resources/pa_fee_waiver_10.9.20.pdf.

[13] Manuel Madrid, Border Wall or No, Immigrants Will Soon Have to Scale a Paywall, Am. Prospect (Jan. 23, 2019), https://prospect.org/civil-rights/border-wall-no-immigrants-will-soon-scale-paywall/.

[14] Id.

[15] See Filing Guidance, U.S. Citizenship & Immigr. Servs. (Oct. 25, 2019), https://www.uscis.gov/forms/filing-guidance.

[16] Catherine Rampell, Trump Didn’t Build His Border Wall with Steel. He Built It Out of Paper, Wash. Post (Oct. 29. 2020), https://www.washingtonpost.com/opinions/2020/10/29/trump-immigration-daca-family-separation/?arc404=true.

[17] Id.

[18] Id.

[19] Id.

[20] Id.

[21] Chapter 6-Submitting Requests, U.S. Citizenship & Immigr. Servs. (Feb. 10, 2021), https://www.uscis.gov/policy-manual/volume-1-part-b-chapter-6.

[22] Id.

[23] Id.

[24] Filing Fees, U.S. Citizenship & Immigr. Servs. (Feb. 1, 2021), https://www.uscis.gov/forms/filing-fees (select “Refund Policy” at the bottom of the webpage).

[25] Liz Daneu, Is an Immigration Lawyer Worth the Cost?, Alllaw.com, https://www.alllaw.com/articles/nolo/us-immigration/lawyer-worth-cost.html (last visited Feb. 12, 2021).

[26] Id.

[27] Id.

[28] See Farida Jhabvala Romero, Immigrants Seek Stability of U.S. Citizenship But Cost Is Often a Barrier,  KQED (Apr. 12, 2018), https://www.kqed.org/news/11660853/immigrants-seek-stability-of-u-s-citizenship-but-cost-is-often-a-barrier.

[29] Tali K. Albukerk, “ABA Free Legal Answers” Connects Clients and Pro Bono Attorneys Online, Am. Bar Ass’n (Apr. 13, 2020), https://businesslawtoday.org/2020/04/aba-free-legal-answers-connects-clients-pro-bono-attorneys-online/.

[30] Free Legal Answers Expands to Help Immigrants, Veterans, Am. Bar Ass’n (Jan. 25., 2021), https://www.americanbar.org/news/abanews/aba-news-archives/2021/01/free-legal-answers/.

[31] Id.

By Steven P. Bradford

Following crashes of Lion Air Flight 610 and Ethiopian Airlines Flight 302, the Federal Aviation Administration (“FAA”) issued an Emergency Order grounding Boeing 737-8 and -9 (“Boeing MAX”) aircraft.[1]  The order was rescinded on November 18, 2020, allowing Boeing MAX aircraft to resume flight operations once airlines complete prescribed corrective actions to remedy the system identified as the common cause in the two accidents.[2]  While detecting and rectifying the faulty system will prevent future mishaps, it is incumbent upon rule-makers to identify processes that allowed a faulty system to be certified.

In developing a fuel-efficient replacement for the 737,[3] Boeing filed patent applications in 2009 for a new aircraft design with an elliptically-shaped fuselage.[4]  In 2010, Boeing’s primary competitor, Airbus, unveiled fuel-efficient engines for incorporation onto existing airframes.[5]  Anxious that Airbus would corner the market on fuel-efficient aircraft, Boeing pivoted to modify its 737 design rather than design a new aircraft.[6]  This strategy saved time in the design process, and shortened the certification timetable.[7]  Certification of new designs can take up to nine years,[8] but amended type certificates, granted to aircraft modified from already certified designs,[9] takes three to five years.[10]  Boeing did not have time to design and certify a new aircraft with an elliptically-shaped fuselage; rather, Boeing had to modify its existing 737 design and pursue an amended type certificate to remain competitive.[11]  To further expedite the certification process, Boeing made use of a program authorized by federal statute called Organization Designation Authorization (“ODA”), which aims to increase efficiency and decrease FAA workload[12] by delegating aspects of the certification process to external organizations, including the manufacturer.[13]  

As a result, the Boeing MAX received an amended type certificate in March 2017,[14] only a year after Airbus’s fuel-efficient aircraft entered service.[15]  However, this shortened process contributed to the crash of two aircraft in two years of flight operations. Investigations identified multiple factors contributing to the mishaps, including the amended type certification process.[16]  This incident raised the question: at what point do amendments to an existing design become so significant that the aircraft should be treated as a new design?[17]

New type certificates are required if “the FAA finds that the proposed change in design . . . is so extensive that a substantially complete investigation of compliance with the applicable regulations is required.”[18]  Conversely, the Changed Product Rule authorizes the granting of amended type certificates if the FAA determines changes are not significant.”[19]  Significant changes are those where the general aircraft configuration is not retained, or assumptions used in the previous certification are no longer valid.[20]  To clarify this nebulous standard, the FAA published a non-exhaustive list of significant versus non-significant changes.[21]  However, federal regulation still does not clearly distinguish significant from non-significant, or delineate between amendments and new designs.  In fact, representatives from the FAA, NASA, and civil aviation authorities from several countries found that “there are no criteria for determining when the core attributes of an existing design make it fundamentally incapable of supporting [] advancements . . . and therefore warrant consideration of a . . . certification under a new type certificate.”[22]

Determining whether a change is significant is further complicated by the ODA program, delegating aspects of certification to the manufacturer.  Here, the FAA delegated to Boeing testing of the Maneuvering Characteristics Augmentation System (MCAS) integrated into the flight controls, later found to be responsible for the Lion Air and Ethiopian Airlines accidents.[23]  As MCAS proceeded through certification at Boeing, it was tweaked, made more robust, and given greater authority to move flight control surfaces without pilot input.[24]  However, communication between Boeing working groups and with the FAA was so poor that the FAA did not fully understand the extent of changes made to MCAS since it was first disclosed, nor the authority it had over flight control surfaces.[25]  Had the FAA been aware of MCAS’s ultimate capabilities, it likely would have required additional evaluation.[26]  Simply put, poor communication left the FAA unaware of the MCAS capabilities and unable to accurately determine whether its inclusion in Boeing MAX aircraft constituted a significant change from previous 737s.  While ODA programs are not inherently flawed,[27] poor communication and institutional pressure impaired the decision making of ODA representatives tasked with certifying systems and components on behalf of the FAA.[28]

The proposed Aircraft Certification Reform and Accountability Act seeks to better define what constitutes a significant change.  The act asks the FAA to weigh whether modifications to flight control systems should preclude the issuance of an amended type certificate,[29] essentially asking if all flight controls modifications should be classified as “significant” changes.  The act directs the FAA to “improve the process of issuing amended type certificates,”[30] but does not mandate specific procedural changes.  While acknowledging clarification is necessary, the FAA stated that future research and coordination is required before making any changes to certification policy.[31]  Therefore, changes to 14 C.F.R Subpart B  governing certifications are still several years away, based on timelines set forth in the proposed act.[32] Much of the act discusses cultural changes to the FAA and aircraft manufacturers in an effort to foster greater collaboration between working groups, urging a holistic approach to aircraft design to understand how changes to one system will affect other systems.  In addition to cultural changes, the support the act has received thus far, as well as congressional and FAA finding detailed in reports written after the grounding of Boeing MAX aircraft, procedural changes to the certification process should be anticipated in the future.

[1] U.S. Dep’t of Transp., FAA Emergency Order of Prohibition 2 (Mar. 13, 2019), https://www.faa.gov/news/updates/media/Emergency_Order.pdf.

[2] U.S. Dep’t of Transp., FAA Recission of Emergency Order of Prohibition 1–2 (Nov. 18, 2020) https://www.faa.gov/foia/electronic_reading_room/boeing_reading_room/media/737_MAX_Rescission_of_Grounding_Order.pdf. See also Airworthiness Directives; The Boeing Company Airplanes, 85 Fed. Reg. 47698 (Aug. 6, 2020) (to be codified at 14 C.F.R. pt. 39); FAA Notice 8900.570, at 2 (Nov. 18, 2020), https://www.faa.gov/documentLibrary/media/Notice/N_8900.570_FAAWeb.pdf.

[3] Boeing Firms Up 737 Replacement Studies by Appointing Team, Flight Global (Mar. 3, 2006), https://www.flightglobal.com/boeing-firms-up-737-replacement-studies-by-appointing-team/66022.article.

[4] U.S. Patent Application No. 12/624,322 (filed Nov. 23, 2009).

[5] Press Release, Airbus, Airbus offers new fuel saving engine options for A320 Family (Dec. 1, 2010), https://www.airbus.com/newsroom/press-releases/en/2010/12/airbus-offers-new-fuel-saving-engine-options-for-a320-family.html.

[6] Darryl Campbell, Redline: The many human errors that brought down the Boeing 737 Max, The Verge (May 2, 2019), https://www.theverge.com/2019/5/2/18518176/boeing-737-max-crash-problems-human-error-mcas-faa.

[7] Id. See generally 49 U.S.C. § 44704(a) (outlining requirements for type certificates).

[8] Airworthiness Certification, FAA (Dec. 6, 2019), https://www.faa.gov/aircraft/air_cert/airworthiness_certification/.

[9] Amended Type Certificate, FAA (Aug. 10, 2011), https://www.faa.gov/aircraft/air_cert/design_approvals/amend_tc/; FAA Order No. 8110.4C ch. 6, at 87 (Oct. 12, 2005), https://www.faa.gov/documentLibrary/media/Order/FAA_Order_8110_4C_Chg_6.pdf.

[10] Airworthiness Certification, supra note 8.

[11]Campbell, supra note 6.

[12] FAA Order 8100.15A (June 10, 2011), https://www.faa.gov/documentLibrary/media/Order/8100.15A.pdf.

[13] See 49 U.S.C. § 44702(d).

[14] Press Release, Boeing, Boeing 737 MAX 8 Earns FAA Certification (Mar. 9, 2017), https://boeing.mediaroom.com/2017-03-09-Boeing-737-MAX-8-Earns-FAA-Certification; Firdaus Hashim, Malindo Operates World’s First 737 Max Flight, Flight Global (May 22, 2017), https://www.flightglobal.com/malindo-operates-worlds-first-737-max-flight/124109.article.

[15] Andreas Spaeth, Onboard Lufthansa’s First Airbus A320neo Flight, Airways Magazine (Jan. 25, 2016), https://airwaysmag.com/traveler/lufthansa-first-airbus-a320neo-flight/.

[16] Staff of H. Comm. on Trans. and Infrastructure, 116th Cong., The Design, Development, & Certification of the Boeing 737 MAX 12–14 (2020), https://transportation.house.gov/imo/media/doc/2020.09.15%20FINAL%20737%20MAX%20Report%20for%20Public%20Release.pdf.

[17] See id. at 43–45.

[18] 14 C.F.R. § 21.19 (2020).

[19] 14 C.F.R. § 21.101 (2020); see Joint Auths. Tech. Rev., Boeing 737 MAX Flight Control System Observations, Findings, and Recommendations 6–11 (2019) (referring to the applicable sections of the C.F.R. as the Changed Product Rule).

[20] 14 C.F.R. §21.101(b)(1); FAA Order 8110.48A, at 4-2 (July 21, 2017), https://www.faa.gov/documentLibrary/media/Order/FAA_Order_8110_48A.pdf.

[21] FAA Advisory Circular 21.101-1B appx. A. (Mar. 11, 2016) https://www.faa.gov/documentLibrary/media/Advisory_Circular/AC_21.101-1B.pdf.

[22] Joint Auths. Tech. Rev., supra note 19, at 7.

[23] Id. at 26. A description of the system implicated in the two mishaps exceeds the scope of this discussion.  However, for a brief, non-technical overview of the Maneuvering Characteristics Augmentation System (MCAS) identified by the FAA as the common cause of the Lion Air and Ethiopian Airlines accidents, its intended function, interaction with pilot inputs, and its effects on flight characteristics, see Campbell, supra note 6.

[24] Staff of H. Comm. on Trans. and Infrastructure, supra note 16, at 103; Jack Nicas et al., Boeing Built Deadly Assumptions in 737 Max, Blind to a Late Design Change, N.Y. Times (June 1, 2019), https://www.nytimes.com/2019/06/01/business/boeing-737-max-crash.html (noting that when initially designed, MCAS could only move the stabilizer approximately 0.6 degrees, but when certified, MCAS could move the stabilizer up to 2.5 degrees).

[25] Joint Auths. Tech. Rev., supra note 19, at 13–14.

[26] Id. at 13–14, 23–24.

[27] Joint Auths. Tech. Rev., supra note 19, at VII (noting that the act of delegating testing and evaluation to industry representatives is a well-established practice for the majority of civil aviation administrative bodies around the world).

[28] Id. at VII; Staff of H. Comm. on Trans. and Infrastructure, supra note 16, at 56–84 (discussing FAA oversight of the certification process and delegation of authority to Boeing).

[29] Aircraft Certification Reform and Accountability Act, H.R. 8408, 116th Cong. § 18(b)(3) (2020).

[30] H.R. 8408 § 18(b)(2) (2020).

[31] FAA, Summary of the FAA’s Review of the Boeing 737 MAX: Return to Service of the Boeing 737 MAX Aircraft 75 (2020), https://www.faa.gov/foia/electronic_reading_room/boeing_reading_room/media/737_RTS_Summary.pdf.

[32] H.R. 8408 § 18(b) (2020) (setting a deadline of 18 months after enactment for the FAA to submit a report to Congress regarding amended type certificates, and 24 months to improve the process of issuing amended type certificates).

Post Image: Undelivered Boeing 737 MAX aircraft that were grounded by aviation agencies, seen at parking lot at Boeing Field in Seattle, Washington, in April 2019. Via Wikimedia Commons.