Justice Thomas Says He Was Wrong to Trust the Administrative State

February 24, 2020
By Timothy Sandefur

The Supreme Court this morning announced it would not hear a case challenging a rule that allows unelected bureaucrats rewrite the decisions of federal courts. You read that right: Under a legal doctrine called “Brand X doctrine”—after a Supreme Court case of that name—officials in federal agencies are allowed to issue “interpretations” that have the effect of overriding existing legal precedents. This is despite the fact that these agencies are supposed to be “executive” in nature.

In this particular case, a taxpayer submitted paperwork to the Internal Revenue Service, and the IRS said it arrived too late. The taxpayer replied that he’d sent it before the deadline, according to existing legal precedent. So the IRS simply announced that it now was interpreting its deadline rule in a new way, and, thanks to the Brand X precedent, that new interpretation overrode the legal precedent the taxpayer had relied upon.

This Brand X theory is only one of the several “deference doctrines” courts use when it comes to the powers of administrative agencies. Probably the most famous—so-called Chevron deference—requires courts to accept the interpretations of statutes that administrative agencies create, in all but the most unusual cases. The result is that agencies are given broad power to determine the scope of their own authority. If Congress writes a law against, say, “pollutants,” agencies can decide what that word means, and courts must defer to their decision. Another kind of deference, called Auer deference, also allows agencies to write their own interpretations of interpretations, meaning that if the agency writes a rule interpreting “pollutants,” it can also come up with its own interpretation of that rule, and courts must defer to that, as well. (This theory was somewhat narrowed by a recent Supreme Court decision, but it remains in force.) The Brand X doctrine goes still another step and allows agencies to rewrite their interpretations after a court has weighed in, thus effectively overriding the court’s own opinion.

We filed a brief in the taxpayer’s case, pointing out that it’s not just federal law that gets overridden, but state law as well. In a recent Arizona case, the state’s court of appeals held that certain kinds of insurance contracts were illegal under state law. Then a federal agency issued a new interpretation of a federal law, which, thanks to Brand X, had the effect of overriding the state law—and, of course, overriding the state court’s decision, as well.

In today’s decision, the U.S. Supreme Court declined to reconsider Brand X. But Justice Clarence Thomas—who wrote the original Brand X decision 15 years ago—took the unusual step of writing a separate opinion in which he admitted he’d made a mistake. Brand X was a bad decision, which violates the separation of powers by giving executive agencies power to override judicial precedent, and giving bureaucrats power to change the law virtually at will. “Regrettably, Brand X has taken this Court to the precipice of administrative absolutism,” he wrote. “Under its rule of deference, agencies are free to invent new (purported) interpretations of statutes and then require courts to reject their own prior interpretations….  [This] poignantly lays bare the flaws of our entire executive-deference jurisprudence.”

The law is slow to change, but such strong words from one of the Court’s most respected justices is likely to have a powerful influence on the Court’s thinking in future cases involving the dangerous powers of the administrative state.

Timothy Sandefur is the Vice President for Litigation at the Goldwater Institute.