🏭 SCOTUS Takes a Seat at the Regulatory Table

At the end of a momentous two weeks for the United States Supreme Court, the conservative justices, in a 6-3 decision, ruled that the EPA has no authority to create new regulations on carbon emissions as that is only a power Congress can exercise. If this ruling seems limited to pollution, think again: this decision opens the door to a host of challenges against federal agencies and their regulations, including on health, safety, consumer protections — and even crypto.

• Chief Justice Roberts writes in the majority opinion that the EPA violated the so-called “major-questions” doctrine, because “if Congress wants to give an administrative agency the power to make 'decisions of vast economic and political significance,' it must say so clearly,” notes SCOTUSblog.

• In her dissenting opinion, Justice Kagan (alongside Justices Sotomayor and Breyer) raised an urgent warning that “stakes here are high” in fighting climate change, and that the majority's ruling “prevents congressionally authorized agency action to curb power plants’ carbon dioxide emissions. The Court appoints itself — instead of Congress or the expert agency — the decision-maker on climate policy. I cannot think of many things more frightening.” 

The Crypto Application

With its broad ruling that a federal agency needs express authority from Congress to make “decisions of vast economic and political significance,” the FDA, SEC, and other agencies may have to begin acting with more caution before issuing new rules. “If the SEC is thinking about taking steps to regulate how cryptocurrency works, or how it’s exchanged, SEC attorneys are going to look at this opinion and say, let’s make certain that this court, as well as district courts and appellate courts across the country, aren’t going to think, 'Oh, this looks like a really big exercise of authority,” Blake Emerson, a professor at the UCLA School of Law, told Marketplace. “The problem with this ruling and rulings like it is that the court is taking away that policymaking power. And that is something to worry about, because the court does not have the same expertise as the agencies. And it does not have the same political accountability. You can’t fire federal judges.”

The Verdict

Removing the teeth of regulatory agencies in favor of a paralyzed Congress is a major win for proponents of deregulation. It'll be interesting to see what new lawsuits (against the FDA, CFPB, SEC, and more) will amass in the wake of this ruling.