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March 24, 2017

What Judge Gorsuch Could Mean for Energy Policy and the Regulatory State

March 24, 2017
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Tenth Circuit Judge Neil Gorsuch’s confirmation hearing for a seat on the Supreme Court began Monday. Let’s take a look at what a Gorsuch confirmation could mean for the energy and regulatory spheres.

As readers of this blog are well-aware, over the course of the 20th and now 21st centuries the administrative apparatus of the Executive branch has grown more powerful. A seminal moment in this expansion was the 1984 Supreme Court case Chevron v. Natural Resources Defense Council. The Court’s holding in that case established what is now known as Chevron deference, a principle by which courts should defer to regulatory agencies’ interpretations of ambiguous statutes.

Gorsuch has questioned this principle. In fact, just seven months ago in a concurring opinion on an immigration case he approached it head on. This excerpt captures the heart of his argument and is worth reading:

There’s an elephant in the room with us today. We have studiously attempted to work our way around it and even left it unremarked. But the fact is Chevron and Brand X permit executive bureaucracies to swallow huge amounts of core judicial and legislative power and concentrate federal power in a way that seems more than a little difficult to square with the Constitution of the framers’ design. Maybe the time has come to face the behemoth.

In enlightenment theory and hard won experience under a tyrannical king the founders found proof of the wisdom of a government of separated powers. In the avowedly political legislature, the framers endowed the people’s representatives with the authority to prescribe new rules of general applicability prospectively. In the executive, they placed the task of ensuring the legislature’s rules are faithfully executed in the hands of a single person also responsive to the people. And in the judiciary, they charged individuals insulated from political pressures with the job of interpreting the law and applying it retroactively to resolve past disputes. This allocation of different sorts of power to different sorts of decision-makers was no accident. To adapt the law to changing circumstances, the founders thought, the collective wisdom of the people’s representatives is needed. To faithfully execute the laws often demands the sort of vigor hard to find in management-by-committee. And to resolve cases and controversies over past events calls for neutral decision-makers who will apply the law as it is, not as they wish it to be.

Even more importantly, the founders considered the separation of powers a vital guard against governmental encroachment on the people’s liberties, including all those later enumerated in the Bill of Rights. What would happen, for example, if the political majorities who run the legislative and executive branches could decide cases and controversies over past facts? They might be tempted to bend existing laws, to reinterpret and apply them retroactively in novel ways and without advance notice.

Adding a man to the bench who so highly values the separation of powers is a positive step toward a restoration of economic freedom.

Since Gorsuch emerged as a leading candidate in January, prognosticators have speculated on the impact he might have on their respective fields. The online publication Heavy wrote that Gorsuch’s history with renewable energy laws “may bode well for environmentalists” based on a decision in a case brought against a Colorado law mandating the state use 20 percent renewable energy. I don’t think such speculation is appropriate.

In its write-up Heavy pulls a single quotation from Gorsuch’s opinion. Out of context, the quotation would indeed give the impression that environmentalists have found an ally. The line reads as follows:

To be sure, fossil fuel producers like EELI’s members will be hurt. But as far as we know, all fossil fuel producers in the area served by the grid will be hurt equally and all renewable energy producers in the area will be helped equally.

What Heavy omits is that the case wasn’t fundamentally about renewable energy—it was about whether the Colorado mandate could survive an encounter with the Baldwin doctrine of commerce clause jurisprudence, which deals with price affirmation laws. By simply looking to the text of the opinion, we can see that Gorsuch offered no view on fossil fuels or renewables, but instead properly focused on the question at hand—could the Colorado mandate survive a Baldwin test? Here’s what Gorsuch had to say:

(W)hatever doctrinal pigeonhole you choose to place them in, we don’t see how Baldwin, Healy, and Brown-Forman require us to strike down Colorado’s mandate. For that mandate just doesn’t share any of the three essential characteristics that mark those cases: it isn’t a price control statute, it doesn’t link prices paid in Colorado with those paid out of state, and it does not discriminate against out-of-staters. EELI doesn’t even seriously attempt to suggest otherwise. While Colorado’s mandate surely regulates the quality of a good sold to in-state residents, it doesn’t directly regulate price in-state or anywhere for that matter. And state laws setting non-price standards for products sold in-state (standards concerning, for example, quality, labeling, health, or safety) may be amenable to scrutiny under the generally applicable Pike balancing test, or scrutinized for traces of discrimination under Philadelphia, but the Court has never suggested they trigger near-automatic condemnation under Baldwin.

The 10th Circuit ruled that the mandate survived that test—not that it was good policy.

We can’t say with certainty what Gorsuch personally thinks about energy issues, but his political views are less relevant than how he will apply the law. As he himself recently said at the White House, “It is the role of judges to apply, not alter, the work of the people’s representatives. A judge who likes every outcome he reaches is very likely a bad judge stretching for results he prefers rather than those the law demands.”

All indicators suggest that Gorsuch’s applications of the law in the energy and regulatory realm will favor the rights of the people and the separation of powers. In eulogizing Antonin Scalia, Gorsuch wrote on the principles we expect he’ll live up to:

(L)egislators may appeal to their own moral convictions and to claims about social utility to reshape the law as they think it should be in the future. But that judges should do none of these things in a democratic society. That judges should instead strive (if humanly and so imperfectly) to apply the law as it is, focusing backward, not forward, and looking to text, structure, and history to decide what a reasonable reader at the time of the events in question would have understood the law to be— not to decide cases based on their own moral convictions or the policy consequences they believe might serve society best.

A judge who focuses on applying the law by looking to the text may be just the remedy we need to halt the expansion of executive overreach and restore the balance of power in Washington.

 

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