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Which is Better: The Constitution or Brand X?

October 28, 2019

October 28, 2019
By Timothy Sandefur

Regulatory agencies wield extraordinary powers, deciding everything from what land you can build on to whether you can cut someone’s hair. Yet they’re typically unaccountable to voters—staffed by hired bureaucrats, not elected officials. They violate the constitutional principle of separation-of-powers because they essentially write law, prosecute alleged infractions, and impose penalties on those they find guilty. And, amazingly enough, courts have given them power, in many instances, to basically decide for themselves what their own powers are.

That’s due to a theory called “deference”—which means that judges won’t exercise their own judgment, but will defer to the decisions of the agency instead. There are different kinds of deference. Most famous is Chevron deference, which lets agencies interpret law as they choose, so long as their interpretations are “reasonable”—which is lawyerspeak for “not totally beyond the pale.” Agencies will virtually always interpret laws in ways that increase their own powers, and Chevron deference allows them to do just that in most cases.

But there’s another kind of deference called “the Brand X Doctrine” (named, like Chevron, after a famous lawsuit). Brand X allows agencies to effectively overrule the decisions of courts when interpreting laws. In other words, if a court interprets a law one way, and the agency later interprets it a different way, courts will follow the agency, rather than the other way around. This astonishing theory means that unelected executive branch officials can override the decisions of federal judges who exercise constitutional power. True, there are limits to the Brand X Doctrine, but at bottom it means courts will let agencies rewrite legal precedents.

That’s problematic not only as a matter of federal law, but also with regard to the principles of federalism. In a brief we’ve just filed in the United States Supreme Court, we point out that Brand X also allows federal agencies to basically decide for themselves when to override state law, and even state court decisions. (Read more about the case here.) The most remarkable example comes from a 2013 Arizona case, when courts held that a federal insurance law did not override Arizona’s own state insurance law—only to have a federal agency issue a regulation saying otherwise, whereupon the U.S. Supreme Court ordered the Arizona courts to reconsider. Even though the regulation postdated the Arizona Supreme Court’s decision, the state courts were forced to reverse themselves.

Usually, the courts have said that they’re reluctant to infer that federal law overrides state law, and won’t make that ruling unless federal lawmakers are really clear about it. But thanks to Brand X, unelected federal bureaucrats can now make that call, instead of elected members of Congress—and, still more remarkably, those bureaucrats have more power to make that decision when Congress is not clear. The vaguer the federal law is, the more power Brand X gives to federal regulators to override state law.

That shouldn’t be. We’ve asked the Court to reconsider the Brand X doctrine and withdraw the excessive deference given to federal agencies. Our federalist structure, as Justice Kennedy once said, “den[ies] any one government complete jurisdiction over all the concerns of public life” in order to “protect[] the liberty of the individual from arbitrary power.” It’s time to give that proposition real meaning by eliminating the Brand X Doctrine and making clear that courts, not unelected regulators, have the responsibility for interpreting the law.

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



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