Kavanaugh's Crusade Against Agency Abuse
Stephen Vukovits
July 17, 2018
Regulation
Critics are rushing to discredit Judge Brett Kavanaugh in hopes of derailing his confirmation to the Supreme Court. Despite their feigned outrage and hysteria over past baseball ticket purchases and college drinking habits, what actually matters is his judicial record and philosophy.
Judge Kavanaugh served in the D.C. Circuit since 2006. He has written roughly 300 opinions for the Court. It is clear that Judge Kavanaugh is a staunch defender of the Constitution’s checks and balances. He has consistently ruled against executive agency overreach and criticized arbitrary regulations. Judge Kavanaugh’s opinions in the following three cases reveal his strong commitment to following statutory law and restraining the regulatory state.
PHH Corporation v. CFPB (D.C. Cir. 2018)
This case centered around the constitutional status of the Consumer Financial Protection Bureau (CFPB), an independent agency created in the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. The CFPB vests sole power in a single unelected director who is not removable by the president. In 2016, Judge Kavanaugh wrote a panel opinion holding that this structure violated the constitutional separation of powers. In January, the full (en banc) D.C. Circuit reversed, 7-3, determining that the CFPB structure passed constitutional muster. Notably, a majority of judges on the D.C. Circuit are Democrat appointees, since Harry Reid eliminated the filibuster on judicial nominees to put three Obama appointees on the court.
Judge Kavanaugh dissented. Kavanaugh noted that pointedly that the Constitution's framers conceived of the separation of powers to “prevent tyranny and protect individual liberty.” He observed that “other than the President, the Director of the CFPB is the single most powerful official in the entire U.S. Government, at least when measured in terms of unilateral power.” The CFPB’s structure thus differed from the ordinary “independent” administrative agencies governed by bipartisan panels of commissioners—which the Supreme Court has, for better or worse, long permitted (see Humphrey’s Executor v. U.S. (1935)).
Saint Francis Medical Center v. Azar (D.C. Cir. 2018)
In a case just decided at the end of June, a panel of the D.C. Circuit including Judge Kavanaugh struck down a regulation from the Department of Health and Human Services (HHS). The Centers for Medicare & Medicaid Services (CMS), the agency within HHS that administers the federal entitlement programs, had been under-reimbursing hospitals for decades, based on a 1983 counting error that treated transfer patients as discharges. When a group of hospitals led by Saint Francis Medical Center challenged the discrepancy, HHS rejected its claim. A 2013 D.C. Circuit decision had determined that even though health-care providers could not seek reimbursements for past years based on earlier factual errors made by HHS, the agency would have to correct “predicate facts” in prior years going forward. In response, in 2013, the Obama administration’s HHS issued a regulation essentially trying to override the D.C. Circuit decision if the factual error fell outside a three-year window.
Although the panel ruled that the 2013 regulation did not apply in this case, Judge Kavanaugh wrote separately, spelling out his view that the regulation itself should be voided as “arbitrary and capricious.” He took HHS to task for “knowingly [using] false facts when calculating hospital reimbursements that… cost hospitals hundreds of millions of dollars.”
White Stallion Energy Center v. EPA (D.C. Cir. 2014)
In many cases, Judge Kavanaugh’s dissents from his colleagues’ permissive interpretations of laws governing administrative agencies have found favor with the Supreme Court. Consider White Stallion, which involved a decision by the Environmental Protection Agency (EPA) implementing a provision of the Clean Air Act to require power plants to reduce hazardous emissions such as mercury. The EPA had calculated that the regulation would result in up to $90 billion in benefits from reducing negative externalities but declined to calculate the costs of the regulation. Dissenting from the majority’s determination that the agency did not need to perform a formal cost-benefit analysis, Judge Kavanaugh insisted that calculating regulatory costs was essential to determining whether the regulation was “appropriate,” as Congress had required by statute. In a parallel case in 2015, the Supreme Court took Judge Kavanaugh’s position, and favorably cited his opinion, in a decision written by Justice Scalia.
Kavanaugh has hardly been reflexively against the EPA, however, when the agency has properly followed statutory guidelines. For example, in National Mining Association v. McCarthy (D.C. Cir. 2014), Judge Kavanaugh wrote a majority decision upholding enhanced EPA rules regulating the effect of coal mining on waterways as within the agency’s statutory authority.
Overall, Judge Kavanaugh’s record is marked by upholding constitutional checks and balances and relying on statutory text to make decisions. By adhering to these sound principles, Kavanaugh has applied the law fairly and universally across a wide spectrum of cases. If confirmed, he will help restrain agency overreach and ensure that mechanisms remain in place to curb potential abuse of regulatory power. Requiring agencies to adhere to the letter of the law will stabilize the regulatory environment and reduce the uncertainty that comes with enforcement of arbitrary regulations. More certainty and enhanced rule of law will benefit businesses and individuals.
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