THE “MAJOR QUESTIONS” SHACKLES: PREDICTING THE OUTCOME OF DEPARTMENT OF EDUCATION v. BROWN AND A WARNING ON THE POTENTIAL CONSEQUENCES OF A CONSTRAINED ADMINISTRATIVE STATE 

By: James Carlton, Volume 107 Staff Member

On February 28th, the Supreme Court will hear arguments in two cases that will decide the constitutionality of President Biden’s student loan forgiveness program: Department of Education v. Brown and Biden v. Nebraska.[1] While the immediate ramifications of the Court’s decisions will be felt most directly by middle- and working-class borrowers,[2] the outcome of the Brown case has wider implications beyond the student loan context.

Specifically, Brown reviews the Northern District of Texas’s decision to axe the loan forgiveness program after applying the “major questions doctrine.”[3] This substantive canon of construction[4] requires an agency to cite “clear congressional authorization”[5] for “decisions of vast economic and political significance.”[6] Based on the doctrine it concluded that student loan forgiveness is both of vast economic and political significance due to its fiscal implications and evidence of past congressional debate on the matter.[7] As such, the court concluded that the HEROES Act—the statutory basis for the loan forgiveness program—did not provide clear congressional authorization to forgive student loans.[8]

Proponents of the major questions doctrine seek to uphold the Constitution’s separation of powers—where Congress creates laws and executive agencies implement them.[9] In the past, courts have invoked the canon to strike down agency rules and regulations addressing “major questions” that—under the Constitution—should be addressed by Congress, not agencies.[10] Brown’s application of the major questions doctrine to the debt relief plan provides an early glimpse at how courts will apply the canon after the Supreme Court’s landmark decision in West Virginia v. EPA.[11] There, the Court invoked the major questions doctrine to undo the EPA’s Clean Power Plan.[12] The West Virginia holding is widely considered to be the “crystallization” of the major questions doctrine into a bedrock interpretive rule.[13] And if the Supreme Court follows the district court in wielding the major questions doctrine to axe the debt relief program—as I suspect it will—the major questions doctrine will become more established as a guiding beacon for statutory interpretation of agency action. This trend will lead to less flexibility for future agency action, which could spur major changes to how the federal government functions.

I. PRESIDENT BIDEN’S DEBT RELIEF PROGRAM

Last August, President Biden announced that he would address the worsening student loan crisis affecting “more than 45 million borrowers” who hold $1.6 trillion in debt.[14] The Department of Education would provide “targeted relief” by forgiving “$20,000 in debt cancellation to Pell Grant recipients” and “up to $10,000 in debt cancellation to non-Pell Grant recipients.”[15] High earners would be excluded from relief, with individuals making less than $125,000 and married couples less than $250,000 eligible for debt forgiveness.[16] The program would be administered through the Department of Education, deriving statutory authority from the HEROES Act.[17] Judicial challenges quickly followed.

II. JUDICIAL CHALLENGES: THE BROWN CASE

Two plaintiffs brought one such challenge in Brown v. U.S. Department of Education. Among other claims, the plaintiffs alleged that the Department of Education “lacks the authority to implement the [debt relief] program under the HEROES Act.”[18]

The HEROES Act vests in the Secretary of Education the power to “waive or modify any statutory or regulatory provision applicable to the student financial assistance program . . . as the Secretary deems necessary in connection with a war or other military operation of national emergency.”[19] “National emergency” is defined as “a national emergency declared by the President of the United States.”[20] Because President Trump declared COVID-19 a national emergency in 2020, the Secretary argued that its loan forgiveness program “would address the financial harms of the COVID-19 pandemic.”[21]

Against the backdrop of this statutory scheme, the central question was whether the HEROES Act enabled the Secretary to waive student loans. The court turned to the major questions doctrine to resolve this question, with the goal of assessing “whether Congress . . . meant to confer the power the agency has asserted.”[22]  Under this approach, the court first considered whether the debt relief program is “of vast economic and political significance.” Starting with economic significance, the court noted that the debt relief program “will cost more than $400 billion” in spending.[23] This dwarfs previous spending deemed to have economic significance which was set between $3 billion[24] and $50 billion.[25] Thus, it concluded the debt relief program “has vast economic significance.”

Turning to political significance, which the court defined as if “Congress has been engaged in robust debates over bills authorizing something like the agency’s action.”[26] Given that Congress had repeatedly tried and failed to forgive student loans through legislation, the court concluded that the debt forgiveness program “is of vast political significance.”

Finally, the court rejected the Secretary’s argument that the major questions doctrine is not triggered because the relief program “involves the disbursement of a federal benefit to individuals,” and not “expansive regulation of private parties.”[27] The court pointed to prior case law that rendered the statement “untrue.”[28] Further reasoning that even if the assertion was true, “the [court] must presume that Congress intends to make major policy decisions itself, not leave those decisions to agencies.”[29]

With the major questions doctrine’s relevance established, the court provided three reasons to conclude that the HEROES Act did not grant “clear congressional authorization.” First, “the HEROES Act does not mention loan forgiveness.”[30] Second, the court questioned the Secretary’s assertion that the relief program is “necessary in connection with” the COVID-19 pandemic, as required by the statute.[31] Finding it especially troubling that the Secretary announced the plan shortly after President Biden declared that the COVID-19 pandemic was “over.”[32] And even though the statute appears to grant the Secretary broad authority to act “as [it] deems necessary” in connection with COVID-19, the court labeled it as “broad or general language” that “does not supply a clear statement.”[33] Third, the court found it meaningful that the Department of Education previously stated that it never “relied on the HEROES Act” to enact mass-cancellation of student loans.[34] With these findings in place, the court granted summary judgment in favor of the plaintiffs and ordered vacatur of the debt relief program, which would undo the program entirely.[35]

III. PREDICTION AND IMPLICATIONS

This district court’s reasoning and analysis is a faithful application of the major questions doctrine, inviting a receptive Supreme Court to follow suit. Its reasoning in the case is a natural extension of the framework handed down in West Virginia v. EPA and shares key similarities with the case. Both the EPA and the Department of Education addressed an issue “that Congress had conspicuously and repeatedly declined to enact itself.”[36] Further, both agencies had never relied on the statute at issue for the asserted power.[37] And finally, the debt forgiveness program—like the EPA’s Clean Power Plan—involves billions of dollars in spending.[38] In Brown, the Court has an opportunity to reaffirm its commitment to the major questions doctrine.

With the major questions doctrine likely entrenched, agencies will have much less flexibility to address urgent crises. Statutes often fail to provide the clear statement that the major questions doctrine dictates, as it’s impossible for Congress to expressly account for every potential application. Indeed, it is the role of agencies to “fill up the details” not addressed by a statute.[39] Agencies cannot fill in details if courts interpret a statutory gap as lack of a clear statement.

But some would disagree. Justice Gorsuch sees the major questions doctrine as preserving the separation of powers envisioned in the Constitution, where “important subjects . . . must be entirely regulated by the legislature itself.”[40] Further reasoning that the power of the legislature to craft laws is “vital to the integrity and maintenance of the system of government ordained by the Constitution.”[41] Justice Gorsuch’s concern for preserving the separation of powers is well-founded, and he persuasively articulates why our Constitution took great lengths to ensure that a legislature elected by the people create laws.

This concern, however, is consistent with giving agencies the flexibility to address urgent crises. The EPA in West Virginia and the Department of Education in Brown relied on enactments from Congress as the basis for their asserted power. Further, it is unclear what counts as a major question. It is especially troubling that the Court has defined a major question, in part, as one that involves billions of dollars of spending—a questionable standard for a government that spends trillions of dollars each year. The recognized power of agencies to fill in details is increasingly vital as society becomes more complex, and the government, in turn, is called on to address issues that the Framers could never have contemplated. This complexity opens gaps in the legislative scheme that Congress does not have the capability to fill. And if agencies can’t fill them without a “clear statement,” neither will Congress. Instead of Congress paving roads and agencies filling in the potholes, we will be left with a lot more potholes and many angry drivers. The resulting total government gridlock is likely to undermine Americans’ faith in the democratic system, pushing working people desperate for relief into the arms of authoritarians who will be able to effectively exploit the resulting inaction to tout themselves as the only solution to America’s problems.

 

[1] Karen Harned, Supreme Court to Hear Two Challenges to President Biden’s Student Loan Forgiveness Program, Fed. Soc. (Jan. 18, 2023), https://fedsoc.org/commentary/fedsoc-blog/supreme-court-to-hear-two-challenges-to-president-biden-s-student-loan-forgiveness-program [https://perma.cc/2G33-K6H6].

[2] The debt forgiveness program only applies to individuals making $125,000 a year and married couples less than $250,000. FACT SHEET: President Biden Announces Student Loan Relief for Borrowers Who Need it Most, White House (Aug. 24, 2022), https://www.whitehouse.gov/briefing-room/statements-releases/2022/08/24/fact-sheet-president-biden-announces-student-loan-relief-for-borrowers-who-need-it-most [https://perma.cc/Q6PV-NME2].

[3] Brown v. U.S. Dep’t of Educ., 4:22-cv-0908-P, 2022 WL 16858525 (N.D. Tex. Nov. 10, 2022).

[4] See Nathan Richardson, Antideference: COVID, Climate, and the Rise of the Major Questions Canon, 108 Va. L. Rev. Online 174 (2022), https://www.virginialawreview.org/articles/antideference-covid-climate-and-the-rise-of-the-major-questions-canon [https://perma.cc/KK65-W45V] (observing that the major questions doctrine has evolved into a substantive canon of construction).

[5] Brown, 2022 WL 16858525, at *1.

[6] Id. at *19 (internal quotation marks omitted) (quoting West Virginia v. EPA, 142 S. Ct. 2587 (2022)).

[7] Id. at *19–21.

[8] Id. at *21.

[9] See, e.g., West Virginia v. EPA, 142 S. Ct. 2587, 2617 (2022) (Gorsuch, J., concurring) (“The major questions doctrine works . . . to protect the Constitution’s separation of powers.”).

[10] E.g., West Virginia, 142 S. Ct. 2587 (striking down the EPA’s Clean Power Plan); MCI Telecomm. Corp. v. AT&T Co., 512 U.S. 218 (1994) (rejecting the FCC’s interpretation of the Communications Act of 1934); FDA v. Brown & Williamson Tobacco Corp, 529 U.S. 120 (2000) (holding that the FDA could not regulate tobacco).

[11] 142 S. Ct. 2587 (2022).

[12] For a discussion on the Clean Power Plan, see West Virginia, 142 S. Ct. at 2599–2604.

[13] See, e.g., Brown, 2022 WL 16858525, at *19 (“The most recent example of Chevron’s fall is the crystallization of the long-developing major-questions doctrine in West Virginia v. EPA.”); Jaclyn Lopez, The Major Questions Doctrine Post-West Virginia v. EPA, ABA (Jan. 3, 2023), https://www.americanbar.org/groups/environment_energy_resources/publications/trends/2022-2023/january-february-2023/the-major-questions-doctrine [https://perma.cc/N3MT-3RGU] (remarking that the West Virginia ruling “cemented” the major questions doctrine).

[14] FACT SHEET, supra note 2.

[15] Id.

[16] Id.

[17] Congressional Research Service, Statutory Basis for Biden Administration Student Loan Forgiveness (2022), https://crsreports.congress.gov/product/pdf/LSB/LSB10818 [https://perma.cc/PB5B-99JS].

[18] Brown, 2022 WL 16858525, at *6.

[19] Id. at *4 (citing 20 U.S.C. §1098bb(a)(1)) (emphasis added).

[20] Id. (citing 20 U.S.C. §1098ee(4)).

[21] Id. at *5.

[22] West Virginia, 142 S. Ct. 2587 at 2607–08.

[23] Brown, 2022 WL 16858525, at *20.

[24] Id. (citing BST Holdings, L.L.C. v. OSHA, 17 F.4th 604, 617 (5th Cir. 2021)).

[25] Id. (citing Alabama Ass’n Realtors v. Dep’t of Health Hum. Services, 141 S. Ct. 2485, 2489 (2021)).

[26] Id.

[27] Id.

[28] Id. at *21.

[29] Id. (citing West Virginia, 142 S. Ct. at 2609).

[30] Id.

[31] Id. at *22.

[32] Id. at *22.

[33] Id. at *23.

[34] Id.

[35] Id.

[36] West Virginia, 142 S. Ct. at 2610; see also Brown, 2022 WL 16858525, at *20 (noting that Congress had considered and rejected student loan forgiveness).

[37] West Virginia, 142 S. Ct. at 2610 (“EPA claimed to discover an unheralded power representing a transformative expansion in [its] regulatory authority.”) (alteration original) (internal quotation marks omitted); Brown, 2022 WL 16858525, at *23.

[38] Brown, 2022 WL 16858525, at *20; West Virginia, 142 S. Ct. at 2605 (internal quotation marks omitted) (“[The Clean Power Plan] was projected to have billions of dollars of impact.”).

[39] West Virginia, 142 S. Ct. 2587, 2617 (2022) (Gorsuch, J., concurring) (internal quotation marks omitted) (quoting Wayman v. Southland, 23 U.S. 1, at 42–43 (1825)).

[40] Id.

[41] Id. (internal quotation marks omitted) (quoting Marshall Field & Co v. Clark, 143 U.S. 649, 692 (1892)).