The Supreme Court’s new term will be dominated by dangerous and incoherent lawsuits

The Supreme Court’s new term will be dominated by dangerous and incoherent lawsuits

Justice Clarence Thomas sits with his wife and conservative activist Virginia Thomas while he waits to speak at the Heritage Foundation on October 21, 2021, in Washington, DC.  | Drew Angerer/Getty Images

Believe it or not, there are worse judges than Brett Kavanaugh. And now Brett needs to clean up their mess.

No matter how bad the Supreme Court gets, it can always get worse.

This reality will be on full display in a few weeks, when the justices return for the Court’s new term at the beginning of October. Indeed, on October 3, the second day of that term, the Court will hear a case where the far-right United States Court of Appeals for the Fifth Circuit declared an entire federal agency, the Consumer Financial Protection Bureau, unconstitutional.

In the unlikely event that the justices uphold this decision, a brief filed by the banking industry explains to the Supreme Court, the entire US mortgage market could seize up, as banks will have no idea what rules they need to comply with in order to issue loans. Worse, because home-building, home-resale, and related industries make an estimated 17 percent of the US gross domestic product, such a decision risks economic devastation unheard of since the Great Depression.

And this case, known as CFPB v. Community Financial Services Association, is one of at least six cases the Court will most likely decide this term where Fifth Circuit judges issued legally indefensible decisions that will have calamitous results if they are not reversed. That court, which is dominated by the most reactionary Trump appointees and similarly minded judges, has become the forum of choice for litigants pushing preposterous legal arguments that are unlikely to fly elsewhere, even in a very conservative judiciary.

By next June, the Supreme Court is likely to toss out a Fifth Circuit decision nuking the federal government’s power to prevent companies from defrauding investors. It is also likely to reverse a Fifth Circuit decision holding that people who are subject to domestic violence restraining orders — meaning that a court has determined that they are a violent threat to their romantic partner or their partner’s child — have a constitutional right to possess a gun.

And, on top of these three cases, which the Court has already agreed to hear in its upcoming term, it will also likely take up three other cases where the Fifth Circuit took leave of its senses. These include Alliance for Hippocratic Medicine v. FDA, which attempts to ban the abortion medication mifepristone; Doe v. Mckesson, which effectively strips political organizers of their First Amendment right to organize a protest; and NetChoice v. Paxton, which allows Texas’s GOP-controlled legislature to seize control of content moderation at social media sites like Twitter or YouTube.

At least for now, in other words, the Court’s upcoming term could potentially be very different from the two that proceeded it, where the Court’s GOP-appointed majority seemed to be on a mission to seek out longstanding precedents that are out of favor within the Republican Party, and destroy them. Those decisions appear to have emboldened the most reactionary voices within the judiciary, leaving the justices with a whole lot of messes to clean up.

Which is not to say that Democrats will have much to celebrate when the justices leave town again next June. Many of the Fifth Circuit’s decisions are so poorly reasoned, and so destructive of the interests of the United States, that it would be genuinely shocking if a majority of the justices sign onto them. The Supreme Court will deserve no credit for moderation simply for reversing these decisions.

That is, if it does reverse them. The Supreme Court is still dominated by conservative Republicans, three of whom were appointed by Donald Trump. So there’s always some risk that a majority of the justices will accept even the most outlandish arguments by their fellow Republican appointees on the Fifth Circuit.

Meanwhile, the Court will hear at least one case, Loper Bright Enterprises v. Raimondo, involving a legal doctrine reviled by the conservative Federalist Society. Loper Bright asks the justices to overrule something known as the “Chevron doctrine,” which limits the power of the federal judiciary (which is currently controlled by the Republican Party) to overrule decisions made by the executive branch (which is currently led by a Democrat).

Additionally, the Court will hear cases that could weaken many civil rights laws, and that could invigorate racial gerrymandering. And it’s likely that the Court will take up one or more cases involving state laws that target transgender youth before the upcoming term is complete.

Even so, it’s hard to miss just how much the Fifth Circuit looms over the justices’ upcoming term. And, while the Court is unlikely to show much moderation, it is likely to remind the Fifth Circuit that the judiciary does not exist to sow chaos for its own sake.

The Fifth Circuit’s CFPB decision could trigger a global economic depression if it is upheld by the justices

Congress created the CFPB two years after a toxic mix of unwise mortgages and unsafe financial assets threw both the US housing market and US lending markets into turmoil.

As the Supreme Court has explained, the CFPB “has the sole responsibility to administer 19 separate consumer-protection statutes that cover everything from credit cards and car payments to mortgages and student loans.” Many of these statutes are longstanding banking regulations and consumer protections that were previously overseen by other agencies — that authority was transferred to the CFPB by the 2010 law creating the agency.

Though the primary purpose of the CFPB is to protect consumers from potentially abusive behavior by banks and other lenders, it also provides an important service to the banking industry itself. In the last dozen or so years, the agency has promulgated various rules telling lenders how to comply with their obligations under federal law — laying out which disclosures lenders must make to borrowers, and providing a “safe harbor” to banks that issue loans below a certain rate.

Without these rules in place, the mortgage industry warns in a brief to the justices, lenders and other players in this industry simply would not know how to comply with the law. “This would leave market participants unable to certify compliance and invite challenges relating to past certifications, representations, and warranties,” the brief explains. “As a result, the mortgage market could grind to a halt.” And if it did, it could very well bring the rest of the global economy down with it.

Nevertheless, the Fifth Circuit’s decision in Community Financial Services v. CFPB, a case the Supreme Court will hear in October, invites all of these catastrophic consequences and more. The Fifth Circuit’s decision claims that the mechanism Congress used to fund the CFPB is unconstitutional, a decision that would potentially invalidate everything the agency has ever done because it would mean that the CFPB was not allowed to spend a single dollar on anything, including hiring regulators to write lending rules.

Nor is it entirely clear that the government could unravel this mess over time, at least without passing a new law that would have to clear the Republican-controlled House. When Congress created the CFPB, it transferred administration of 18 preexisting federal banking and lending laws from other agencies to the CFPB. And the Fifth Circuit’s decision doesn’t restore this authority to those other agencies, it merely forbids the CFPB from doing — well, anything at all that requires funding or paid staff.

The Fifth Circuit claimed that the CFPB’s funding stream violates a clause of the Constitution that provides that “no money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law.” There are two important things to know about this provision of the Constitution. One is that, according to the Justice Department, before the Fifth Circuit struck down the CFPB, “no court has ever held that an Act of Congress violated” this clause.

The other important thing to know about the Constitution’s Appropriations Clause is that the Supreme Court said in a 1937 opinion that it “means simply that no money can be paid out of the Treasury unless it has been appropriated by an act of Congress.” Congress passed a law in 2010 creating a funding stream for the CFPB. Therefore the CFPB is constitutional.

Additionally, the justices will review — and hopefully reverse in its entirety — the Fifth Circuit’s decision in Jarkesy v. SEC. That decision attempted to neutralize much of the Securities and Exchange Commission’s authority to protect investors from fraud, but it also reaches much further than that.

Among other things, the Fifth Circuit’s Jarkesy decision questions the constitutionality of administrative law judges, officials employed by about 30 different federal agencies to resolve disputes ranging from whether an investment fund defrauded its investors to whether an impoverished American is entitled to federal benefits. There are about 2,000 of these ALJs in the federal government, more than twice the number of Article III judges (judges who are appointed by the president and confirmed by the Senate).

If AFJs are not allowed to do their jobs, in other words, the federal government would lose about two-thirds of its capacity to adjudicate legal disputes, hindering enforcement while simultaneously forcing vulnerable Americans to wait years to learn if they will receive Social Security and other benefits.

The Supreme Court needs to clean up a giant mess it created with an irresponsible Second Amendment decision

The Supreme Court’s decision in New York State Rifle & Pistol Association v. Bruen (2022) is a grand experiment in originalism, the idea that the only legitimate way to read the Constitution is to determine how it was understood around the time when it was drafted or ratified.

Bruen scrapped a framework the courts had used for more than a decade to decide Second Amendment cases, and replaced it with a novel new framework that required judges to ask whether gun laws are “consistent with this Nation’s historical tradition of firearm regulation.” Among other things, Bruen ruled that, when a challenged gun law “addresses a general societal problem that has persisted since the 18th century, the lack of a distinctly similar historical regulation addressing that problem is relevant evidence that the challenged regulation is inconsistent with the Second Amendment.”

A little more than one year after Bruen, it is now clear that this experiment with originalism is a failure. Judges simply have no idea how to conduct the sort of historical inquiry that Bruen demands. Headlines evaluating the decision warn that “Clarence Thomas Created a Confusing New Rule That’s Gutting Gun Laws” or that judges are “Confused by Supreme Court’s Historical Test for Gun Laws” or that Bruencreates confusion over which firearm restrictions are constitutional.”

Even some lower court judges, a cohort that is typically reluctant to criticize the justices because the Supreme Court has more or less limitless power to sabotage a lower court’s decisions, have warned that Bruen is riddled with “methodological flaws” and that Bruen invites judges to cherry-pick historical sources to “fit the needs of people looking for ammunition in their causes.”

One consequence of Bruen is the Fifth Circuit’s decision in United States v. Rahimi, which struck down a federal law prohibiting individuals from “possessing a firearm while under a domestic violence restraining order.” That is, the Fifth Circuit held that people who have been determined, by a court, to be a violent threat to their romantic partner or their partner’s child have a constitutional right to own a gun.

The most alarming thing about this decision is that it is far from clear that the Fifth Circuit was wrong in Rahimi, at least if you accept Bruen as legitimate. Domestic violence certainly existed before the 19th century, but no state made assaulting one’s spouse a crime until 1871, when the Alabama Supreme Court ruled that a husband and wife “may be indicted for assault and battery upon each other.”

A responsible Supreme Court would recognize that Bruen is unworkable, and seize upon the Rahimi case as an opportunity to overrule it. Realistically, however, that outcome is unlikely.

That said, several of the Court’s Republican appointees have endorsed creating categorical carveouts to the Second Amendment for individuals who are potentially a threat to others. Justice Brett Kavanaugh, for example, supports “longstanding prohibitions on the possession of firearms by felons and the mentally ill.” Justice Amy Coney Barrett wrote, when she was still a lower court judge, that “legislatures have the power to prohibit dangerous people from possessing guns.”

It is fairly likely, in other words, that the Court will hold that people subject to domestic violence restraining orders are outside the scope of the Second Amendment — even if the justices insist on maintaining the folly that is Bruen.

We may find out what the justices actually think about voting rights

One year ago, if the Supreme Court were planning to hear Alexander v. South Carolina State Conference of the NAACP, an appeal of a lower court’s decision striking down a racially gerrymandered congressional district in South Carolina, that would have been a cause of considerable alarm for anyone who supports liberal democracy in the United States.

Until recently, the Court’s Republican-appointed majority appeared quite hostile toward the right to vote, and especially toward the right to be protected from race discrimination at the polls. In Shelby County v. Holder (2013), for example, the Court’s Republicans ruled that a key provision of the Voting Rights Act violates “‘fundamental principle of equal sovereignty’ among the States,” a principle that appears nowhere in the Constitution, and that seems to have been made up solely to attack this one provision of law.

Similarly, in Brnovich v. DNC (2021), the Court’s Republicans simply invented a bunch of new limits on the Voting Rights Act, such as a strong presumption that voting restrictions that were commonplace in 1982 are lawful, that appear nowhere in any law or in the Constitution. As Justice Elena Kagan wrote in dissent, Brnovich “mostly inhabits a law-free zone.”

But then, last June, the Court surprised pretty much everyone who pays close attention to voting rights litigation by affirming a lower court decision that struck down a racial gerrymander in Alabama, in a case called Allen v. Milligan (2023). That decision not only reaffirmed longstanding voting rights protections that Chief Justice John Roberts has opposed for most of his career, but it is also expected to garner the Democratic Party an additional seat in the US House.

Alexander will offer another test of whether the Court has changed course from its decisions in Shelby County and Brnovich, or if Milligan was just a one-off that won’t lead to any meaningful shift in the Court’s posture toward democracy.

The Supreme Court has said that federal courts may not undo partisan gerrymanders, maps that are drawn to benefit a particular political party, but they may sometimes intervene to block racial gerrymanders — that is, maps that are drawn to diminish the voting power of voters of a particular race. In Alexander, the lower court determined that South Carolina Republicans essentially used race as a proxy to determine which voters are Democrats. They then limited the number of Black voters who would be placed within the state’s First Congressional District, in order to increase the chance that this district would elect a Republican — the First District is currently represented by Rep. Nancy Mace (R-SC).

This map, in other words, was both a racial gerrymander and a political gerrymander.

The Supreme Court held in Cooper v. Harris (2017) that “if legislators use race as their predominant districting criterion with the end goal of advancing their partisan interests,” then that use of race is presumptively unconstitutional, even if the lawmakers were motivated by partisan goals and not by overt racism. As Cooper explained, “the sorting of voters on the grounds of their race remains suspect even if race is meant to function as a proxy for other (including political) characteristics.”

But only five justices joined the majority opinion in Cooper, and one of them was the late Justice Ruth Bader Ginsburg, who Trump replaced with the conservative Barrett. So it is unclear whether this Court will still honor the rule it announced in Cooper.

In any event, after the Court’s surprising decision in the Alabama gerrymandering case, it’s difficult to predict how the Court will approach Alexander. And it is entirely possible that there will be five justices who agree that South Carolina’s racial gerrymander must be struck down.

The Court could concentrate even more power within the Republican-controlled judiciary

Myriad federal laws delegate some amount of policy discretion to an agency within the executive branch of government. A 2003 federal law known as the Heroes Act, for example, gives the Secretary of Education broad authority to “waive or modify any statutory or regulatory provision applicable to the student financial assistance programs … as the Secretary deems necessary in connection with a war or other military operation or national emergency.”

This statute is the reason why the Biden administration‘s now-defunct plan to cancel many borrowers’ student loans was legal. It was explicitly authorized by an act of Congress.

But, of course, if you are waiting for the loan cancelation that you are legally entitled to, you’re going to have to wait a really long time. That’s because, in Biden v. Nebraska (2023), the Court’s Republican majority effectively eliminated most of the power that Congress gave to the education secretary when it passed the Heroes Act.

Nebraska relied on something known as the “major questions doctrine,” a new legal rule that was recently invented by the Supreme Court and that effectively allows the courts to veto any action by a federal agency that they deem to be too big.

By its own terms, however, this major questions doctrine only allows judges to veto agency actions involving matters of “vast ‘economic and political significance.’” Most policies handed down by federal agencies deal with much smaller issues than Biden’s loan forgiveness program — issues like how much nitrogen may be discharged by a wastewater treatment plant, or how to conduct hearings that determine which coal mine workers are entitled to certain disability benefits.

In Loper Bright Enterprises v. Raimondo, the Supreme Court will decide whether to overrule its seminal decision in Chevron v. National Resources Defense Council (1984), which held that courts should defer to an agency’s reading of federal law if it is unclear whether the agency had the legal authority to promulgate a particular regulation. Chevron typically required judges to defer to policymaking decisions by agencies, regardless of whether those decisions involved major or minor questions. So decisions like Nebraska have already overruled Chevron with respect to the most consequential actions by agencies.

Loper Bright, in other words, tees up the question of whether the courts will have the final word on pretty much every policy question that Congress intended a federal agency to resolve. If Chevron is overruled, the GOP-controlled federal judiciary will gain the power to micromanage virtually any policy decision made by officials within the Biden administration, including small-bore decisions that do not fit within the so-called major questions doctrine.

As a practical matter, that would make the United States government both less democratic and less competent. The Chevron decision was grounded in two insights. One is that “judges are not experts” in the kind of specialized and technical questions that often come before federal agencies. So, if we give too much regulatory authority to judges, we’re going to wind up with a very poorly governed nation.

The other insight is that requiring unelected federal judges to defer to policy decisions made by the executive branch is more democratic than the alternative. “While agencies are not directly accountable to the people,” the Court said in Chevron, agencies answer to a president who is accountable to the voters. And so “it is entirely appropriate for this political branch of the Government to make such policy choices.”

The Court could preemptively shut down wealth taxes

Ordinarily, a taxpayer’s profits on an investment are not taxed until they are “realized,” meaning that the investor has sold the investment or otherwise received the value of those profits. This rule, the Supreme Court explained in Helvering v. Horst (1940), is “founded on administrative convenience.” It is often difficult to determine how much an investment is actually worth — especially if that investment is in something other than a publicly traded company — until the investment is sold.

Delaying taxation until the taxpayer’s profits are realized eliminates the problem where neither the taxpayer nor the government can determine how much the taxpayer actually owes on an unsold investment.

That said, the tax code does currently tax some unrealized investments. Securities dealers, for example, are taxed on the unrealized gains from those securities. Certain foreign investments are also taxed prior to realization.

In Moore v. United States, the plaintiffs ask the justices to rule that the Constitution effectively forbids taxation of unrealized assets. The case was brought by investors who want a refund on taxes they paid on a foreign investment, but Moore is widely viewed as a stalking horse against the sort of wealth taxes supported by many Democrats.

Several leading Democrats, including President Joe Biden, support various proposals to tax extremely wealthy individuals on their accumulated wealth. If the Court decides to prohibit taxes on unrealized profits, however, these proposals are likely dead in the water.

A terrible civil rights lawsuit could lead to some terrible civil rights law

Four decades ago, in Havens Realty v. Coleman (1982), a unanimous Supreme Court held that civil rights organizations may use “testers” to challenge discrimination by private businesses.

In Havens Realty, a civil rights organization sent two individuals, a Black person and a white person, to “test” whether two apartment complexes would discriminate on the basis of race. Sure enough, the white tester was told that the complexes had vacant apartments available, while the Black tester was allegedly lied to and told that no apartments were available.

The Constitution does not permit anyone to file a federal lawsuit unless they have been injured in some way by the defendant — a requirement known as “standing.” Havens Reality held that the Black tester had standing to sue the apartment complexes because she was allegedly treated differently than white testers, a classic case of racial discrimination.

Testers are an important part of civil rights enforcement because they can smoke out discrimination that might otherwise go undetected. Ordinarily, if a family inquires about renting an apartment and is told that none are available, they are likely to simply walk away. And, even if they suspect discrimination, how are they to prove it unless they happen to know about a family of another race that received contradictory information from the same landlord?

But this term the Court will hear a case brought by a self-described “tester,” Acheson Hotels v. Laufer, which seriously tests the limits of constitutional standing.

The plaintiff in Acheson Hotels is a woman who, according to the defendant’s brief, has “sued over 600 hotels … claiming that they failed to post accessibility information on their websites,” in violation of a federal regulation that requires hotels to inform potential customers of whether their rooms are accessible to disabled people. (The regulation does not actually require the rooms to be accessible, but it is intended to prevent disabled patrons from booking a room and traveling to a distant town, only to learn that their room is inaccessible to them.)

Significantly, this plaintiff apparently has no intention of actually staying in any of these hotels.

As a constitutional matter, this plaintiff should not have standing to sue all of these hotels. The Supreme Court has long held that a party filing a federal lawsuit must allege a “particularized” injury, meaning that they must have been injured in some way that is specific to the plaintiff, and that is not shared in common by the general public. But the plaintiff in Acheson Hotels does not allege any kind of particularized injury. She merely alleges she is unable to find information online that is also unavailable to everyone else in the world.

That said, there is a risk that the current, very conservative Supreme Court will use Acheson Hotels not simply to hand down a narrow decision preventing this particular woman from suing any hotel in the country, but to attack the power of testers who actually experienced a legitimate injury — such as the Black tester in Havens Realty who was actually treated differently than a white tester — to file civil rights suits.

We are about to learn just how dangerous the Supreme Court’s current majority really is

Let’s bring this discussion back to where it started. While the Court will hear several important cases this term that were not previously heard by the most reactionary members of the Fifth Circuit, this term will require the justices to review an alarming volume of decisions handed down by judicial arsonists.

One completely normal thing that happens when the Supreme Court moves to the right is that the mix of cases heard by the justices also lurches sharply rightward. Liberal lawyers become cautious about bringing lawsuits they are likely to lose, while conservative lawyers try to shoot the moon — raising arguments that would have no chance of prevailing before a more moderate bench.

It is also inevitable that many of these conservative moonshots will overreach, making arguments that go too far even for the likes of Brett Kavanaugh and Amy Coney Barrett.

Thus far, at least, most of the current justices have shown little patience for legal arguments that seek to dismantle entrenched parts of the US welfare state. Or that fundamentally threaten democracy in the United States. Or that could trigger a second Great Depression. Thus, there is good reason to think that the justices will rein in the Fifth Circuit.

But, make no mistake. The Fifth Circuit has crossed a dangerous line. And the Supreme Court must step in and correct them. Harshly.

If it does not, that would mean that the Supreme Court of the United States has been captured by a reactionary political movement that seems to be engaged in a systemic campaign to dismantle US state capacity.

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