1

2020 SUPPLEMENT TO

ADMINISTRATIVE PROCEDURE AND PRACTICE

A Contemporary Approach

Revised Sixth Edition

By

William Funk Lewis & Clark Distinguished Professor of Law Emeritus

Lewis & Clark Law School

Sidney A. Shapiro University Distinguished Chair in Law

Wake Forest University School of Law

Russell L. Weaver Professor of Law & Distinguished University Scholar

University of Louisville

Louis D. Brandeis School of Law

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CHAPTER 2

RULEMAKING

B, APA Rulemaking Procedures

Page 88, insert after the second paragraph in d. Interim Final Rules the following:

The Supreme Court in Little Sisters of the Poor v. Pennsylvania, 140 S.Ct. 2367 (2020),

essentially adopted the ACUS recommendation. In Little Sisters, several departments involved in

implementing the Affordable Care Act issued rules requiring employers to include coverage for

contraceptives in their employees’ health insurance plans. However, to account for certain

religious employers’ religious objections to contraception, the rules provided for them to opt out

of coverage by self-certifying that they met certain criteria to their health insurance issuer, which

would then exclude contraceptive coverage from the employer’s plan and provide participants

with separate payments for contraceptive services without imposing any cost-sharing

requirements. Some religious employers still objected to the need to take affirmative action to

opt out of providing the coverage. In response, the departments issued interim final rules that

simply exempted religious employers from the need to provide contraception coverage. The

departments invited public comment on the interim final rules, and a year later the departments

adopted the interim rules as final rules. The departments responded to the public comments but

did not change rules in any way. These final rules were then challenged as not having gone

through notice-and-comment rulemaking. The Third Circuit found the rules invalid, saying that,

because the IFRs and final rules were “virtually identical,” “[t]he notice and comment exercise

surrounding the Final Rules [did] not reflect any real open-mindedness.” The Supreme Court

reversed. First, the Court said that the fact that the departments did not use the term “notice of

proposed rulemaking” was not determinative. The department’s “Interim Final Rules with

Request for Comments” contained all the requirements for a notice of proposed rulemaking as

specified in 5 U.S.C. § 553. Moreover, the departments responded to the comments filed.

Consequently, the department’s action did not violate the rulemaking requirements of that

section, and even if there was a violation, it would be harmless error, as none of the plaintiffs

could show how they were disadvantaged through the procedure used. Second, the Court said

that there is nothing in the APA that requires an agency to have an open mind when it requests

comments on a proposed rule. Such a requirement would violate the tenets of Vermont Yankee

Nuclear Power Corp. v. NRDC, 435 U.S. 519 (1978), which held that courts could not impose

more procedures on agency rulemakings than contained in the APA.

C. Judicial Review

2. Substantive Decisions

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Page 185, insert before e. Hard Look Review the following:

If anything, agency decisions that appear to be based primarily on political considerations

may be subject to an even harder look. Take State Farm itself. In addition, in Department of

Commerce v. New York, 139 S.Ct. 2551 (2019), the Department of Commerce decided that it

would include in the census questions whether someone was a citizen of the United States. Its

stated reason for doing so was that the Department of Justice had requested such a question in

order to assist Justice in enforcing the Voting Rights Act. The Supreme Court held that, while

Commerce could lawfully ask such a question, its stated reason was pretextual and consequently

the decision needed to be set aside and remanded to the department. The “evidence showed that

the Secretary was determined to reinstate a citizenship question from the time he entered office;

instructed his staff to make it happen; waited while Commerce officials explored whether

another agency would request census-based citizenship data; subsequently contacted the

Attorney General himself to ask if DOJ would make the request; and adopted the Voting Rights

Act rationale late in the process.” The Court concluded, “[t]he reasoned explanation requirement

of administrative law, after all, is meant to ensure that agencies offer genuine justifications for

important decisions, reasons that can be scrutinized by courts and the interested public.

Accepting contrived reasons would defeat the purpose of the enterprise. If judicial review is to be

more than an empty ritual, it must demand something better than the explanation offered for the

action taken in this case.” Another example is Dept of Homeland Security v. Regents of the

University of California, 140 S.Ct. 1891 (2020), more commonly known as the DACA case.

Here, the Department of Homeland Security rescinded the Deferred Action for Childhood

Arrivals (DACA) program adopted by President Obama upon receipt of a legal opinion from the

Attorney General that the program was unlawful. However, the basis for the conclusion that

DACA was unlawful was the fact that it had the effect of granting benefits to the DACA

recipients, not the fact that DACA recipients would be protected from deportation. Accordingly,

the Court said, relying on State Farm, the Secretary of Homeland Security’s decision to rescind

DACA was arbitrary and capricious because she had “entirely failed to consider an important

aspect of the problem,” rescinding the benefits portion of DACA while retaining the protection

from deportation. The Court said the rescission was also arbitrary and capricious because it

failed to consider reliance interests of those who had been enjoying the benefits of the DACA

program.

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CHAPTER 4

CHOICE OF PROCEDURES AND NONLEGISLATIVE RULES

D. Judicial Deference

2. Interpretations of Agency Regulations

Page 398, delete the Food for Thought Box and insert the following:

In recent years several Justices had indicated concern with the Auer doctrine. It finally

reached a head in 2020 in the following case.

Kisor v. Wilkie

______________________________________________________________________________ 139 S.Ct. 2400 (2019)

Justice KAGAN announced the judgment of the Court and delivered the opinion of the Court

with respect to Parts I, IIBB, IIIBB, and IV, and an opinion with respect to Parts IIBA and IIIBA,

in which Justice GINSBURG, Justice BREYER, and Justice SOTOMAYOR join.

This Court has often deferred to agencies= reasonable readings of genuinely ambiguous

regulations. We call that practice Auer deference, or sometimes Seminole Rock deference, after

two cases in which we employed it. See Auer v. Robbins, 519 U.S. 452 (1997); Bowles v.

Seminole Rock & Sand Co., 325 U.S. 410 (1945). The only question presented here is whether

we should overrule those decisions, discarding the deference they give to agencies. We answer

that question no. Auer deference retains an important role in construing agency regulations. But

even as we uphold it, we reinforce its limits. Auer deference is sometimes appropriate and

sometimes not. Whether to apply it depends on a range of considerations that we have noted now

and again, but compile and further develop today. The deference doctrine we describe is potent

in its place, but cabined in its scope. On remand, the Court of Appeals should decide whether it

applies to the agency interpretation at issue.

I

We begin by summarizing how petitioner James Kisor=s case made its way to this Court.

Truth be told, nothing recounted in this Part has much bearing on the rest of our decision. [So we

shall omit it]

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II

A

[B]egin with a familiar problem in administrative law: For various reasons, regulations

may be genuinely ambiguous. They may not directly or clearly address every issue; when

applied to some fact patterns, they may prove susceptible to more than one reasonable reading.

Sometimes, this sort of ambiguity arises from careless draftingCthe use of a dangling modifier,

an awkward word, an opaque construction. But often, ambiguity reflects the well-known limits

of expression or knowledge. . . . Or a Aproblem[ ] may arise@ that the agency, when drafting the

rule, Acould not [have] reasonably foresee[n].@ Whichever the case, the result is to create real

uncertainties about a regulation=s meaning.

Consider these examples:

$ In a rule issued to implement the Americans with Disabilities Act (ADA), the

Department of Justice requires theaters and stadiums to provide people with disabilities Alines of

sight comparable to those for members of the general public.@ Must the Washington Wizards

construct wheelchair seating to offer lines of sight over spectators when they rise to their feet? Or

is it enough that the facility offers comparable views so long as everyone remains seated? See

Paralyzed Veterans of Am. v. D. C. Arena L. P., 117 F.3d 579, 581B582 (CADC 1997).

$ The Transportation Security Administration (TSA) requires that liquids, gels, and

aerosols in carry-on baggage be packed in containers smaller than 3.4 ounces and carried in a

clear plastic bag. Does a traveler have to pack his jar of truffle pâté in that way? See Laba v.

Copeland, 2016 WL 5958241, *1 (WDNC, Oct. 13, 2016).

$ The Mine Safety and Health Administration issues a rule requiring employers to report

occupational diseases within two weeks after they are Adiagnosed.@ Do chest X-ray results that

Ascor[e]@ above some level of opacity count as a Adiagnosis@? What level, exactly? See American

Min. Congress v. Mine Safety and Health Admin., 995 F.2d 1106, 1107B1108 (CADC 1993).

$ An FDA regulation gives pharmaceutical companies exclusive rights to drug products

if they contain Ano active moiety that has been approved by FDA in any other@ new drug

application. Has a company created a new Aactive moiety@ by joining a previously approved

moiety to lysine through a non-ester covalent bond? See Actavis Elizabeth LLC v. FDA, 625 F.3d

760, 762B763 (CADC 2010).

$ Or take the facts of Auer itself. An agency must decide whether police captains are

eligible for overtime under the Fair Labor Standards Act. According to the agency=s regulations,

employees cannot receive overtime if they are paid on a Asalary basis.@ And in deciding whether

an employee is salaried, one question is whether his pay is Asubject to reduction@ based on

performance. A police department=s manual informs its officers that their pay might be docked if

they commit a disciplinary infraction. Does that fact alone make them Asubject to@ pay

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deductions? Or must the department have a practice of docking officer pay, so that the possibility

of that happening is more than theoretical? 519 U.S. at 459B462.

In each case, interpreting the regulation involves a choice between (or among) more than

one reasonable reading. To apply the rule to some unanticipated or unresolved situation, the

court must make a judgment call. How should it do so?

In answering that question, we have often thought that a court should defer to the

agency=s construction of its own regulation. For the last 20 or so years, we have referred to that

doctrine as Auer deference, and applied it often. But the name is something of a misnomer.

Before the doctrine was called Auer deference, it was called Seminole Rock deferenceCfor the

1945 decision in which we declared that when Athe meaning of [a regulation] is in doubt,@ the

agency=s interpretation Abecomes of controlling weight unless it is plainly erroneous or

inconsistent with the regulation.@ 325 U.S. at 414. And Seminole Rock itself was not built on

sand. Deference to administrative agencies traces back to the late nineteenth century, and

perhaps beyond. See United States v. Eaton, 169 U.S. 331, 343 (1898) (AThe interpretation given

to the regulations by the department charged with their execution ... is entitled to the greatest

weight@); see Brief for Administrative Law Scholars as Amici Curiae 5, n. 3 (collecting early

cases); Brief for AFLBCIO as Amicus Curiae 8 (same).

We have explained Auer deference (as we now call it) as rooted in a presumption about

congressional intentCa presumption that Congress would generally want the agency to play the

primary role in resolving regulatory ambiguities. Congress, we have pointed out, routinely

delegates to agencies the power to implement statutes by issuing rules. In doing so, Congress

knows (how could it not?) that regulations will sometimes contain ambiguities. But Congress

almost never explicitly assigns responsibility to deal with that problem, either to agencies or to

courts. Hence the need to presume, one way or the other, what Congress would want. And as

between those two choices, agencies have gotten the nod. We have adopted the

presumptionCthough it is always rebuttableCthat Athe power authoritatively to interpret its own

regulations is a component of the agency=s delegated lawmaking powers.@ Or otherwise said, we

have thought that when granting rulemaking power to agencies, Congress usually intends to give

them, too, considerable latitude to interpret the ambiguous rules they issue.

In part, that is because the agency that promulgated a rule is in the Abetter position [to]

reconstruct@ its original meaning. Consider that if you don=t know what some text (say, a memo

or an e-mail) means, you would probably want to ask the person who wrote it. And for the same

reasons, we have thought, Congress would too (though the person is here a collective actor). The

agency that Awrote the regulation@ will often have direct insight into what that rule was intended

to mean. . . . To be sure, this justification has its limits. It does not work so well, for example,

when the agency failed to anticipate an issue in crafting a rule. . . . Then, the agency will not be

uncovering a specific intention; at most (though this is not nothing), it will be offering insight

into the analogous issues the drafters considered and the purposes they designed the regulation to

serve. And the defense works yet less well when lots of time has passed between the rule=s

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issuance and its interpretationCespecially if the interpretation differs from one that has come

before. All that said, the point holds good for a significant category of Acontemporaneous@ readings. Want to know what a rule means? Ask its author.

In still greater measure, the presumption that Congress intended Auer deference stems

from the awareness that resolving genuine regulatory ambiguities often Aentail[s] the exercise of

judgment grounded in policy concerns.@ Return to our TSA example. In most of their

applications, terms like Aliquids@ and Agels@ are clear enough. . . . But resolving the uncertain

issuesCthe truffle pâtés or olive tapenades of the worldCrequires getting in the weeds of the

rule=s policy: Why does TSA ban liquids and gels in the first instance? What makes them

dangerous? Can a potential hijacker use pâté jars in the same way as soda cans? Or take the less

specialized-seeming ADA example. It is easy enough to know what Acomparable lines of sight@ means in a movie theaterCbut more complicated when, as in sports arenas, spectators sometimes

stand up. How costly is it to insist that the stadium owner take that sporadic behavior into

account, and is the viewing value received worth the added expense? That cost-benefit

calculation, too, sounds more in policy than in law. Or finally, take the more technical Amoiety@ example. Or maybe, don=t. If you are a judge, you probably have no idea of what the FDA=s rule

means, or whether its policy is implicated when a previously approved moiety is connected to

lysine through a non-ester covalent bond.

And Congress, we have thought, knows just that: It is attuned to the comparative

advantages of agencies over courts in making such policy judgments. Agencies (unlike courts)

have Aunique expertise,@ often of a scientific or technical nature, relevant to applying a regulation

Ato complex or changing circumstances.@ Agencies (unlike courts) can conduct factual

investigations, can consult with affected parties, can consider how their experts have handled

similar issues over the long course of administering a regulatory program. And agencies (again

unlike courts) have political accountability, because they are subject to the supervision of the

President, who in turn answers to the public. . . .

Finally, the presumption we use reflects the well-known benefits of uniformity in

interpreting genuinely ambiguous rules. We have noted Congress=s frequent Apreference for

resolving interpretive issues by uniform administrative decision, rather than piecemeal by

litigation.@ That preference may be strongest when the interpretive issue arises in the context of a

Acomplex and highly technical regulatory program.@ After all, judges are most likely to come to

divergent conclusions when they are least likely to know what they are doing. (Is there anything

to be said for courts all over the country trying to figure out what makes for a new active

moiety?) But the uniformity justification retains some weight even for more accessible rules,

because their language too may give rise to more than one eminently reasonable reading.

Consider Auer itself. There, four Circuits held that police captains were Asubject to@ pay

deductions for disciplinary infractions if a police manual said they were, even if the department

had never docked anyone. Two other Circuits held that captains were Asubject to@ pay deductions

only if the department=s actual practice made that punishment a realistic possibility. Had the

agency issued an interpretation before all those rulings (rather than, as actually happened, in a

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brief in this Court), a deference rule would have averted most of that conflict and uncertainty.

Auer deference thus serves to ensure consistency in federal regulatory law, for everyone who

needs to know what it requires.

B

But all that said, Auer deference is not the answer to every question of interpreting an

agency=s rules. Far from it. As we explain in this section, the possibility of deference can arise

only if a regulation is genuinely ambiguous. And when we use that term, we mean itCgenuinely

ambiguous, even after a court has resorted to all the standard tools of interpretation. Still more,

not all reasonable agency constructions of those truly ambiguous rules are entitled to deference.

As just explained, we presume that Congress intended for courts to defer to agencies when they

interpret their own ambiguous rules. But when the reasons for that presumption do not apply, or

countervailing reasons outweigh them, courts should not give deference to an agency=s reading,

except to the extent it has the Apower to persuade.@ We have thus cautioned that Auer deference

is just a Ageneral rule@; it Adoes not apply in all cases.@ And although the limits of Auer deference

are not susceptible to any rigid test, we have noted various circumstances in which such

deference is Aunwarranted.@ In particular, that will be so when a court concludes that an

interpretation does not reflect an agency=s authoritative, expertise-based, Afair[, or] considered

judgment.@ Cf. United States v. Mead Corp., 533 U.S. 218, 229B231, 121 S.Ct. 2164, 150

L.Ed.2d 292 (2001) (adopting a similar approach to Chevron deference).

We take the opportunity to restate, and somewhat expand on, those principles here to

clear up some mixed messages we have sent. At times, this Court has applied Auer deference

without significant analysis of the underlying regulation. At other times, the Court has given

Auer deference without careful attention to the nature and context of the interpretation. And in a

vacuum, our most classic formulation of the testCwhether an agency=s construction is Aplainly

erroneous or inconsistent with the regulation,@ Seminole RockCmay suggest a caricature of the

doctrine, in which deference is Areflexive. So we cannot deny that Kisor has a bit of grist for his

claim that Auer Abestows on agencies expansive, unreviewable@ authority. But in fact Auer does

no such thing: It gives agencies their due, while also allowingCindeed, obligatingCcourts to

perform their reviewing and restraining functions. So before we turn to Kisor=s specific

grievances, we think it worth reinforcing some of the limits inherent in the Auer doctrine.

First and foremost, a court should not afford Auer deference unless the regulation is

genuinely ambiguous. If uncertainty does not exist, there is no plausible reason for deference.

The regulation then just means what it meansCand the court must give it effect, as the court

would any law. Otherwise said, the core theory of Auer deference is that sometimes the law runs

out, and policy-laden choice is what is left over. But if the law gives an answerCif there is only

one reasonable construction of a regulationCthen a court has no business deferring to any other

reading, no matter how much the agency insists it would make more sense. Deference in that

circumstance would Apermit the agency, under the guise of interpreting a regulation, to create de

facto a new regulation.@ Auer does not, and indeed could not, go that far.

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And before concluding that a rule is genuinely ambiguous, a court must exhaust all the

Atraditional tools@ of construction. Chevron U. S. A. Inc. v. Natural Resources Defense Council,

Inc., 467 U.S. 837, 843, n. 9 (1984) (adopting the same approach for ambiguous statutes). For

again, only when that legal toolkit is empty and the interpretive question still has no single right

answer can a judge conclude that it is Amore [one] of policy than of law.@ That means a court

cannot wave the ambiguity flag just because it found the regulation impenetrable on first read.

Agency regulations can sometimes make the eyes glaze over. But hard interpretive conundrums,

even relating to complex rules, can often be solved. To make that effort, a court must Acarefully

consider[ ]@ the text, structure, history, and purpose of a regulation, in all the ways it would if it

had no agency to fall back on. Doing so will resolve many seeming ambiguities out of the box,

without resort to Auer deference.

If genuine ambiguity remains, moreover, the agency=s reading must still be Areasonable.@ In other words, it must come within the zone of ambiguity the court has identified after

employing all its interpretive tools. . . . Some courts have thought (perhaps because of Seminole

Rock=s Aplainly erroneous@ formulation) that at this stage of the analysis, agency constructions of

rules receive greater deference than agency constructions of statutes. But that is not so. Under

Auer, as under Chevron, the agency=s reading must fall Awithin the bounds of reasonable

interpretation.@ And let there be no mistake: That is a requirement an agency can fail.

Still, we are not doneCfor not every reasonable agency reading of a genuinely ambiguous

rule should receive Auer deference. We have recognized in applying Auer that a court must make

an independent inquiry into whether the character and context of the agency interpretation

entitles it to controlling weight. See Mead, 533 U.S. at 229B231, 236B237 (requiring an

analogous though not identical inquiry for Chevron deference). As explained above, we give

Auer deference because we presume, for a set of reasons relating to the comparative attributes of

courts and agencies, that Congress would have wanted us to. But the administrative realm is vast

and varied, and we have understood that such a presumption cannot always hold. The inquiry on

this dimension does not reduce to any exhaustive test. But we have laid out some especially

important markers for identifying when Auer deference is and is not appropriate.

To begin with, the regulatory interpretation must be one actually made by the agency. In

other words, it must be the agency=s Aauthoritative@ or Aofficial position,@ rather than any more ad

hoc statement not reflecting the agency=s views. That constraint follows from the logic of Auer

deferenceCbecause Congress has delegated rulemaking power, and all that typically goes with it,

to the agency alone. Of course, the requirement of Aauthoritative@ action must recognize a reality

of bureaucratic life: Not everything the agency does comes from, or is even in the name of, the

Secretary or his chief advisers. So, for example, we have deferred to Aofficial staff memoranda@ that were Apublished in the Federal Register,@ even though never approved by the agency head.

But there are limits. The interpretation must at the least emanate from those actors, using those

vehicles, understood to make authoritative policy in the relevant context.. If the interpretation

does not do so, a court may not defer.

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Next, the agency=s interpretation must in some way implicate its substantive expertise.

Administrative knowledge and experience largely Aaccount [for] the presumption that Congress

delegates interpretive lawmaking power to the agency.@ So the basis for deference ebbs when

A[t]he subject matter of the [dispute is] distan[t] from the agency=s ordinary@ duties or Afall[s]

within the scope of another agency=s authority.@ . . . This Court indicated as much when it

analyzed a Asplit enforcement@ scheme, in which Congress divided regulatory power between

two entities. To decide Awhose reasonable interpretation@ of a rule controlled, we Apresum[ed]

Congress intended to invest interpretive power@ in whichever actor was Abest position[ed] to

develop@ expertise about the given problem. The same idea holds good as between agencies and

courts. AGenerally, agencies have a nuanced understanding of the regulations they administer.@ That point is most obvious when a rule is technical; think back to our Amoiety@ or Adiagnosis@ examples. But more prosaic-seeming questions also commonly implicate policy expertise;

consider the TSA assessing the security risks of pâté or a disabilities office weighing the costs

and benefits of an accommodation. Once again, though, there are limits. Some interpretive issues

may fall more naturally into a judge=s bailiwick. Take one requiring the elucidation of a simple

common-law property term, or one concerning the award of an attorney=s fee. When the agency

has no comparative expertise in resolving a regulatory ambiguity, Congress presumably would

not grant it that authority.5

5 For a similar reason, this Court has denied Auer deference when an agency interprets a rule that

parrots the statutory text. An agency, we explained, gets no Aspecial authority to interpret its own

words when, instead of using its expertise and experience to formulate a regulation, it has elected

merely to paraphrase the statutory language.@

Finally, an agency=s reading of a rule must reflect Afair and considered judgment@ to

receive Auer deference. That means, we have stated, that a court should decline to defer to a

merely Aconvenient litigating position@ or Apost hoc rationalizatio[n] advanced@ to Adefend past

agency action against attack.@ And a court may not defer to a new interpretation, whether or not

introduced in litigation, that creates Aunfair surprise@ to regulated parties. That disruption of

expectations may occur when an agency substitutes one view of a rule for another. We have

therefore only rarely given Auer deference to an agency construction Aconflict[ing] with a prior@ one. Or the upending of reliance may happen without such an explicit interpretive change. This

Court, for example, recently refused to defer to an interpretation that would have imposed

retroactive liability on parties for longstanding conduct that the agency had never before

addressed. Here too the lack of Afair warning@ outweighed the reasons to apply Auer. . . .

III

That brings us to the lone question presented hereCwhether we should abandon the

longstanding doctrine just described. In contending that we should, Kisor raises statutory, policy,

and constitutional claims (in that order). But he faces an uphill climb. He must first convince us

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that Auer deference is wrong. And even then, he must overcome stare decisisCthe special care

we take to preserve our precedents. In the event, Kisor fails at the first step: None of his

arguments provide good reason to doubt Auer deference. And even if that were not so, Kisor

does not offer the kind of special justification needed to overrule Auer, and Seminole Rock, and

all our many other decisions deferring to reasonable agency constructions of ambiguous rules.

A

Kisor first attacks Auer as inconsistent with the judicial review provision of the

Administrative Procedure Act (APA). See 5 U.S.C. ' 706. [S]ection 706 of the Act, governing

judicial review of agency action, states (among other things) that reviewing courts shall

Adetermine the meaning or applicability of the terms of an agency action@ (including a

regulation). According to Kisor, Auer violates that edict by thwarting Ameaningful judicial

review@ of agency rules. Courts under Auer, he asserts (now in the language of Section 706),

Aabdicate their office of determining the meaning@ of a regulation.

To begin with, that argument ignores the many ways, discussed above, that courts

exercise independent review over the meaning of agency rules. . . .

And even when a court defers to a regulatory reading, it acts consistently with Section

706. That provision does not specify the standard of review a court should use in Adetermin[ing]

the meaning@ of an ambiguous rule. One possibility, as Kisor says, is to review the issue de novo.

But another is to review the agency=s reading for reasonableness. To see the point, assume that a

regulatory (say, an employment) statute expressly instructed courts to apply Auer deference

when reviewing an agency=s interpretations of its ambiguous rules. Nothing in that statute would

conflict with Section 706. Instead, the employment law would simply make clear how a court is

to Adetermine the meaning@ of such a ruleCby deferring to an agency=s reasonable reading. Of

course, that is not the world we know: Most substantive statutes do not say anything about Auer

deference, one way or the other. But for all the reasons spelled out above, we have long

presumed (subject always to rebuttal) that the Congress delegating regulatory authority to an

agency intends as well to give that agency considerable latitude to construe its ambiguous rules.

And that presumption operates just like the hypothesized statute above. Because of it, once

again, courts do not violate Section 706 by applying Auer. To the contrary, they fulfill their duty

to Adetermine the meaning@ of a rule precisely by deferring to the agency=s reasonable reading.

Cf. Arlington, 569 U.S. at 317, 133 S.Ct. 1863 (ROBERTS, C. J., dissenting) (similarly

addressing why Chevron deference comports with Section 706). Section 706 and Auer thus go

hand in hand.

That is especially so given the practice of judicial review at the time of the APA=s

enactment. Section 706 was understood when enacted to Arestate[ ] the present law as to the

scope of judicial review.@ See Dept. of Justice, Attorney General=s Manual on the Administrative

Procedure Act 108 (1947). We have thus interpreted the APA not to Asignificantly alter the

common law of judicial review of agency action.@ That pre-APA common law included Seminole

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Rock itself (decided the year before) along with prior decisions foretelling that ruling. [I]f

Section 706 did not change the law of judicial review (as we have long recognized), then it did

not proscribe a deferential standard then known and in use.

Kisor next claims that Auer circumvents the APA=s rulemaking requirements. Section

553, as Kisor notes, mandates that an agency use notice-and-comment procedures before issuing

legislative rules. But the section allows agencies to issue Ainterpret[ive]@ rules without notice and

comment. A key feature of those rules is that (unlike legislative rules) they are not supposed to

Ahave the force and effect of law@Cor, otherwise said, to bind private parties. Perez v. Mortgage

Bankers Assn., 575 U. S. 92 (2015). Instead, interpretive rules are meant only to Aadvise the

public@ of how the agency understands, and is likely to apply, its binding statutes and legislative

rules. But consider, Kisor argues, what happens when a court gives Auer deference to an

interpretive rule. The result, he asserts, is to make a rule that has never gone through notice and

comment binding on the public. Or put another way, the interpretive rule ends up having the

Aforce and effect of law@ without ever paying the procedural cost.

But this Court rejected the identical argument just a few years ago, and for good reason.

In Mortgage Bankers, we held that interpretive rules, even when given Auer deference, do not

have the force of law. An interpretive rule itself never forms Athe basis for an enforcement

action@Cbecause, as just noted, such a rule does not impose any Alegally binding requirements@ on private parties. An enforcement action must instead rely on a legislative rule, which (to be

valid) must go through notice and comment. And in all the ways discussed above, the meaning of

a legislative rule remains in the hands of courts, even if they sometimes divine that meaning by

looking to the agency=s interpretation. Courts first decide whether the rule is clear; if it is not,

whether the agency=s reading falls within its zone of ambiguity; and even if the reading does so,

whether it should receive deference. In short, courts retain the final authority to approveCor

notCthe agency=s reading of a notice-and-comment rule. No binding of anyone occurs merely by

the agency=s say-so.

And indeed, a court deciding whether to give Auer deference must heed the same

procedural values as Section 553 reflects. Remember that a court may defer to only an agency=s

authoritative and considered judgments. No ad hoc statements or post hoc rationalizations need

apply. And recall too that deference turns on whether an agency=s interpretation creates unfair

surprise or upsets reliance interests. So an agency has a strong incentive to circulate its

interpretations early and widely. In such ways, the doctrine of Auer deference reinforces, rather

than undermines, the ideas of fairness and informed decisionmaking at the core of the APA.

To supplement his two APA arguments, Kisor turns to policy, leaning on a familiar claim

about the incentives Auer creates. According to Kisor, Auer encourages agencies to issue vague

and open-ended regulations, confident that they can later impose whatever interpretation of those

rules they prefer. . . .

But the claim has notable weaknesses, empirical and theoretical alike. First, it does not

13

survive an encounter with experience. No real evidenceCindeed, scarcely an anecdoteCbacks up

the assertion. As two noted scholars (one of whom reviewed thousands of rules during four years

of government service) have written: A[W]e are unaware of, and no one has pointed to, any

regulation in American history that, because of Auer, was designed vaguely.@ Sunstein &

Vermeule, 84 U. Chi. L. Rev., at 308. And even the argument=s theoretical allure dissipates upon

reflection. For strong (almost surely stronger) incentives and pressures cut in the opposite

direction. A[R]egulators want their regulations to be effective, and clarity promotes compliance.@ Brief for Administrative Law Scholars as Amici Curiae 18B19. Too, regulated parties often push

for precision from an agency, so that they know what they can and cannot do. And ambiguities in

rules pose risks to the long-run survival of agency policy. Vagueness increases the chance of

adverse judicial rulings. And it enables future administrations, with different views, to reinterpret

the rules to their own liking. Add all of that up and Kisor=s ungrounded theory of incentives

contributes nothing to the case against Auer.

Finally, Kisor goes big, asserting (though fleetingly) that Auer deference violates Aseparation-of-

powers principles.@ In his view, those principles prohibit Avest[ing] in a single branch the law-making

and law-interpreting functions.@ If that objection is to agencies= usurping the interpretive role of courts,

this opinion has already met it head-on. Properly understood and applied, Auer does no such thing. In all

the ways we have described, courts retain a firm grip on the interpretive function. If Kisor=s objection is

instead to the supposed commingling of functions (that is, the legislative and judicial) within an agency,

this Court has answered it often before. See, e.g., Withrow v. Larkin, 421 U.S. 35, 54 (1975) (permitting

such a combination of functions); FTC v. Cement Institute, 333 U.S. 683, 702 (1948) (same). That sort

of mixing is endemic in agencies, and has been Asince the beginning of the Republic.@ It does not violate

the separation of powers, we have explained, because even when agency Aactivities take >legislative= and

>judicial= forms,@ they continue to be Aexercises of[ ] the >executive Power= @Cor otherwise said, ways of

executing a statutory plan. So Kisor=s last argument to dispatch Auer deference fails as roundly as the

rest.

B

If all that were not enough, stare decisis cuts strongly against Kisor=s position. . . .

IV

With that, we can finally return to Kisor=s own case. . . .

Applying the principles outlined in this opinion, we hold that a redo is necessary for two reasons.

First, the Federal Circuit jumped the gun in declaring the regulation ambiguous. . . .

And second, the Federal Circuit assumed too fast that Auer deference should apply in the event

of genuine ambiguity. As we have explained, that is not always true. A court must assess whether the

interpretation is of the sort that Congress would want to receive deference.

We accordingly vacate the judgment below and remand the case for further proceedings.

It is so ordered.

Chief Justice ROBERTS, concurring in part.

I join Parts I, IIBB, IIIBB, and IV of the Court=s opinion. We took this case to consider whether to

overrule Auer v. Robbins and Bowles v. Seminole Rock & Sand Co. For the reasons the Court discusses

in Part IIIBB, I agree that overruling those precedents is not warranted. I also agree with the Court=s

treatment in Part IIBB of the bounds of Auer deference.

I write separately to suggest that the distance between the majority and Justice GORSUCH is not

as great as it may initially appear. The majority catalogs the prerequisites for, and limitations on, Auer

deference. . . .

[C]ases in which Auer deference is warranted largely overlap with the cases in which it would be

unreasonable for a court not to be persuaded by an agency=s interpretation of its own regulation.

One further point: Issues surrounding judicial deference to agency interpretations of their own

regulations are distinct from those raised in connection with judicial deference to agency interpretations

of statutes enacted by Congress. See Chevron U. S. A. Inc. v. Natural Resources Defense Council, Inc.,

467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). I do not regard the Court=s decision today to

touch upon the latter question.

Justice GORSUCH, with whom Justice THOMAS joins, with whom Justice KAVANAUGH joins as to

Parts I, II, III, IV, and V, and with whom Justice ALITO joins as to Parts I, II, and III, concurring in the

judgment.

CHAPTER 6

AGENCY STRUCTURE

E. Appointment and Removal

2. Executive Appointment and Removal

Page 581, in Hypo 6-8 delete the text in (b) and (c) and substitute the following:

(b) Can Congress recreate the Environmental Protection Agency as the Environmental

Protection Commission with five commissioners, appointed by the President and confirmed by the

Senate, each of whom can be removed only for “inefficiency, neglect of duty, or malfeasance”? The new

commission would have all the authorities of the former agency, including adoption of regulations and

the adjudication of various types of permitting and enforcement cases.

(c) Can Congress recreate the Department of State into the Foreign Affairs Commission with

five commissioners, appointed by the President and confirmed by the Senate, each of whom can be

removed only for “inefficiency, neglect of duty, or malfeasance”?

Page 582, delete Hypo 6-9 Administrative Law Judges

Page 604, insert the following:

SEILA LAW LLC V. CONSUMER FINANCIAL PROTECTION BUREAU

____________________________________________________________________________________

140 S.Ct. 2183 (2020)

CHIEF JUSTICE ROBERTS delivered the opinion of the Court with respect to Parts I, II, and III.

In the wake of the 2008 financial crisis, Congress established the Consumer Financial Protection

Bureau (CFPB), an independent regulatory agency tasked with ensuring that consumer debt products are

safe and transparent. In organizing the CFPB, Congress deviated from the structure of nearly every other

independent administrative agency in our history. Instead of placing the agency under the leadership of a

board with multiple members, Congress provided that the CFPB would be led by a single Director, who

serves for a longer term than the President and cannot be removed by the President except for

inefficiency, neglect, or malfeasance. The CFPB Director has no boss, peers, or voters to report to. Yet

the Director wields vast rulemaking, enforcement, and adjudicatory authority over a significant portion

of the U. S. economy. The question before us is whether this arrangement violates the Constitution’s

separation of powers.

Under our Constitution, the “executive Power”—all of it—is “vested in a President,” who must

“take Care that the Laws be faithfully executed.” Art. II, § 1, cl. 1; id., § 3. Because no single person

could fulfill that responsibility alone, the Framers expected that the President would rely on subordinate

officers for assistance. Ten years ago, in Free Enterprise Fund v. Public Company Accounting

Oversight Bd. (2010), we reiterated that, “as a general matter,” the Constitution gives the President “the

authority to remove those who assist him in carrying out his duties.” “Without such power, the President

could not be held fully accountable for discharging his own responsibilities; the buck would stop

somewhere else.”

The President’s power to remove—and thus supervise—those who wield executive power on his

behalf follows from the text of Article II, was settled by the First Congress, and was confirmed in the

landmark decision Myers v. United States (1926). Our precedents have recognized only two exceptions

to the President’s unrestricted removal power. In Humphrey’s Executor v. United States (1935), we held

that Congress could create expert agencies led by a group of principal officers removable by the

President only for good cause. And in United States v. Perkins (1886), and Morrison v. Olson (1988),

we held that Congress could provide tenure protections to certain inferior officers with narrowly defined

duties.

We are now asked to extend these precedents to a new configuration: an independent agency that

wields significant executive power and is run by a single individual who cannot be removed by the

President unless certain statutory criteria are met. We decline to take that step. While we need not and

do not revisit our prior decisions allowing certain limitations on the President’s removal power, there are

compelling reasons not to extend those precedents to the novel context of an independent agency led by

a single Director. Such an agency lacks a foundation in historical practice and clashes with constitutional

structure by concentrating power in a unilateral actor insulated from Presidential control. . . .

I

In the summer of 2007, then-Professor Elizabeth Warren called for the creation of a new,

independent federal agency focused on regulating consumer financial products. . . . To remedy the lack

of “coherent, consumer-oriented” financial regulation, she proposed “concentrat[ing] the review of

financial products in a single location”—an independent agency modeled after the multimember

Consumer Product Safety Commission. . . . Through the Treasury Department, the administration

encouraged Congress to establish an agency with a mandate to ensure that “consumer protection

regulations” in the financial sector “are written fairly and enforced vigorously.” Like Professor Warren,

the administration envisioned a traditional independent agency, run by a multimember board with a

“diverse set of viewpoints and experiences.”

In 2010, Congress … created the Consumer Financial Protection Bureau (CFPB) as an

independent financial regulator within the Federal Reserve System. Congress tasked the CFPB with

“implement[ing]” and “enforc[ing]” a large body of financial consumer protection laws to “ensur[e] that

all consumers have access to markets for consumer financial products and services and that markets for

consumer financial products and services are fair, transparent, and competitive.” . . .

Congress also vested the CFPB with potent enforcement powers. The agency has the authority to

conduct investigations, issue subpoenas and civil investigative demands, initiate administrative

adjudications, and prosecute civil actions in federal court. . . .

The CFPB’s rulemaking and enforcement powers are coupled with extensive adjudicatory

authority. The agency may conduct administrative proceedings to “ensure or enforce compliance with”

the statutes and regulations it administers. . . .

Congress’s design for the CFPB differed from the proposals of Professor Warren and the Obama

administration in one critical respect. Rather than create a traditional independent agency headed by a

multimember board or commission, Congress elected to place the CFPB under the leadership of a single

Director. The CFPB Director is appointed by the President with the advice and consent of the Senate.

The Director serves for a term of five years, during which the President may remove the Director from

office only for “inefficiency, neglect of duty, or malfeasance in office.”

Unlike most other agencies, the CFPB does not rely on the annual appropriations process for

funding. Instead, the CFPB receives funding directly from the Federal Reserve, which is itself funded

outside the appropriations process through bank assessments. . . .

Seila Law LLC is a California-based law firm that provides debt-related legal services to clients.

In 2017, the CFPB issued a civil investigative demand to Seila Law to determine whether the firm had

“engag[ed] in unlawful acts or practices in the advertising, marketing, or sale of debt relief services.” . . .

Seila Law asked the CFPB to set aside the demand, objecting that the agency’s leadership by a

single Director removable only for cause violated the separation of powers. [The CFPB refused. When

the CFPB sued to enforce the demand, Seila Law renewed its constitutional objection, which was

refused by the District Court and by the Court of Appeals. The Supreme Court granted certiorari.]

III

We hold that the CFPB’s leadership by a single individual removable only for inefficiency,

neglect, or malfeasance violates the separation of powers.

Article II provides that “[t]he executive Power shall be vested in a President,” who must “take

Care that the Laws be faithfully executed.” Art. II, § 1, cl. 1; id., § 3. The entire “executive Power”

belongs to the President alone. But because it would be “impossib[le]” for “one man” to “perform all the

great business of the State,” the Constitution assumes that lesser executive officers will “assist the

supreme Magistrate in discharging the duties of his trust.” Writings of George Washington (1939).

These lesser officers must remain accountable to the President, whose authority they wield. As

Madison explained, “[I]f any power whatsoever is in its nature Executive, it is the power of appointing,

overseeing, and controlling those who execute the laws.” That power, in turn, generally includes the

ability to remove executive officials, for it is “only the authority that can remove” such officials that

they “must fear and, in the performance of [their] functions, obey.” Bowsher v Synar, 478 U.S. 714

(1986).

The President’s removal power has long been confirmed by history and precedent. It “was

discussed extensively in Congress when the first executive departments were created” in 1789. Free

Enterprise Fund. “The view that ‘prevailed, as most consonant to the text of the Constitution’ and ‘to

the requisite responsibility and harmony in the Executive Department,’ was that the executive power

included a power to oversee executive officers through removal.” Ibid. The First Congress’s recognition

of the President’s removal power in 1789 “provides contemporaneous and weighty evidence of the

Constitution’s meaning,” Bowsher, and has long been the “settled and well understood construction of

the Constitution,” Ex parte Hennen (1839).

The Court recognized the President’s prerogative to remove executive officials in Myers v.

United States. Chief Justice Taft, writing for the Court, conducted an exhaustive examination of the First

Congress’s determination in 1789, the views of the Framers and their contemporaries, historical practice,

and our precedents up until that point. He concluded that Article II “grants to the President” the “general

administrative control of those executing the laws, including the power of appointment and removal of

executive officers.” Just as the President’s “selection of administrative officers is essential to the

execution of the laws by him, so must be his power of removing those for whom he cannot continue to

be responsible.” “[T]o hold otherwise,” the Court reasoned, “would make it impossible for the President

... to take care that the laws be faithfully executed.”

We recently reiterated the President’s general removal power in Free Enterprise Fund. “Since

1789,” we recapped, “the Constitution has been understood to empower the President to keep these

officers accountable—by removing them from office, if necessary.” Although we had previously

sustained congressional limits on that power in certain circumstances, we declined to extend those limits

to “a new situation not yet encountered by the Court”—an official insulated by two layers of for-cause

removal protection. In the face of that novel impediment to the President’s oversight of the Executive

Branch, we adhered to the general rule that the President possesses “the authority to remove those who

assist him in carrying out his duties.”

Free Enterprise Fund left in place two exceptions to the President’s unrestricted removal power.

First, in Humphrey’s Executor, decided less than a decade after Myers, the Court upheld a statute that

protected the Commissioners of the FTC from removal except for “inefficiency, neglect of duty, or

malfeasance in office.” In reaching that conclusion, the Court stressed that Congress’s ability to impose

such removal restrictions “will depend upon the character of the office.”

Because the Court limited its holding “to officers of the kind here under consideration,” the

contours of the Humphrey’s Executor exception depend upon the characteristics of the agency before the

Court. Rightly or wrongly, the Court viewed the FTC (as it existed in 1935) as exercising “no part of the

executive power.” Instead, it was “an administrative body” that performed “specified duties as a

legislative or as a judicial aid.” It acted “as a legislative agency” in “making investigations and reports”

to Congress and “as an agency of the judiciary” in making recommendations to courts as a master in

chancery. “To the extent that [the FTC] exercise[d] any executive function[,] as distinguished from

executive power in the constitutional sense,” it did so only in the discharge of its “quasi-legislative or

quasi-judicial powers.” Ibid. (emphasis added).2

The Court identified several organizational features that helped explain its characterization of the

FTC as non-executive. Composed of five members—no more than three from the same political party—

2 The Court’s conclusion that the FTC did not exercise executive power has not withstood the test of time. As we observed

in Morrison v. Olson (1988), “[I]t is hard to dispute that the powers of the FTC at the time of Humphrey’s Executor would

at the present time be considered ‘executive,’ at least to some degree.”

the Board was designed to be “non-partisan” and to “act with entire impartiality.” The FTC’s duties

were “neither political nor executive,” but instead called for “the trained judgment of a body of experts”

“informed by experience.” And the Commissioners’ staggered, seven-year terms enabled the agency to

accumulate technical expertise and avoid a “complete change” in leadership “at any one time.”

In short, Humphrey’s Executor permitted Congress to give for-cause removal protections to a

multimember body of experts, balanced along partisan lines, that performed legislative and judicial

functions and was said not to exercise any executive power. . . .

While recognizing an exception for multimember bodies with “quasi-judicial” or “quasi-

legislative” functions, Humphrey’s Executor reaffirmed the core holding of Myers that the President has

“unrestrictable power ... to remove purely executive officers.” The Court acknowledged that between

purely executive officers on the one hand, and officers that closely resembled the FTC Commissioners

on the other, there existed “a field of doubt” that the Court left “for future consideration.”

We have recognized a second exception for inferior officers in two cases, United States v.

Perkins and Morrison v. Olson. . . . Backing away from the reliance in Humphrey’s Executor on the

concepts of “quasi-legislative” and “quasi-judicial” power, [in Morrison] we viewed the ultimate

question as whether a removal restriction is of “such a nature that [it] impede[s] the President’s ability to

perform his constitutional duty.” Although the independent counsel was a single person and performed

“law enforcement functions that typically have been undertaken by officials within the Executive

Branch,” we concluded that the removal protections did not unduly interfere with the functioning of the

Executive Branch because “the independent counsel [was] an inferior officer under the Appointments

Clause, with limited jurisdiction and tenure and lacking policymaking or significant administrative

authority.”

These two exceptions—one for multimember expert agencies that do not wield substantial

executive power, and one for inferior officers with limited duties and no policymaking or administrative

authority— “represent what up to now have been the outermost constitutional limits of permissible

congressional restrictions on the President’s removal power.” PHH Corp. v. CFPB, 881 F.3d 75, 196

(D.C. Cir. 2018) (Kavanaugh, J., dissenting).

Neither Humphrey’s Executor nor Morrison resolves whether the CFPB Director’s insulation

from removal is constitutional. Start with Humphrey’s Executor. Unlike the New Deal-era FTC upheld

there, the CFPB is led by a single Director who cannot be described as a “body of experts” and cannot

be considered “non-partisan” in the same sense as a group of officials drawn from both sides of the aisle.

Moreover, while the staggered terms of the FTC Commissioners prevented complete turnovers in

agency leadership and guaranteed that there would always be some Commissioners who had accrued

significant expertise, the CFPB’s single-Director structure and five-year term guarantee abrupt shifts in

agency leadership and with it the loss of accumulated expertise.

In addition, the CFPB Director is hardly a mere legislative or judicial aid. Instead of making

reports and recommendations to Congress, as the 1935 FTC did, the Director possesses the authority to

promulgate binding rules fleshing out 19 federal statutes, including a broad prohibition on unfair and

deceptive practices in a major segment of the U. S. economy. And instead of submitting recommended

dispositions to an Article III court, the Director may unilaterally issue final decisions awarding legal and

equitable relief in administrative adjudications. Finally, the Director’s enforcement authority includes

the power to seek daunting monetary penalties against private parties on behalf of the United States in

federal court— a quintessentially executive power not considered in Humphrey’s Executor.4

The logic of Morrison also does not apply. Everyone agrees the CFPB Director is not an inferior

officer, and her duties are far from limited. . . .

In light of these differences, the constitutionality of the CFPB Director’s insulation from removal

cannot be settled by Humphrey’s Executor or Morrison alone.

The question instead is whether to extend those precedents to the “new situation” before us,

namely an independent agency led by a single Director and vested with significant executive power.

Free Enterprise Fund. We decline to do so. Such an agency has no basis in history and no place in our

constitutional structure.

“Perhaps the most telling indication of [a] severe constitutional problem” with an executive

entity “is [a] lack of historical precedent” to support it. An agency with a structure like that of the CFPB

is almost wholly unprecedented.

After years of litigating the agency’s constitutionality, the Courts of Appeals, parties, and amici

have identified “only a handful of isolated” incidents in which Congress has provided good-cause tenure

to principal officers who wield power alone rather than as members of a board or commission. “[T]hese

few scattered examples”—four to be exact—shed little light.

First, the CFPB’s defenders point to the Comptroller of the Currency, who enjoyed removal

protection for one year during the Civil War. That example has rightly been dismissed as an aberration.

It was “adopted without discussion” during the heat of the Civil War and abandoned before it could be

“tested by executive or judicial inquiry.”

Second, the supporters of the CFPB point to the Office of the Special Counsel (OSC), which has

been headed by a single officer since 1978. But this first enduring single-leader office, created nearly

200 years after the Constitution was ratified, drew a contemporaneous constitutional objection from the

Office of Legal Counsel under President Carter and a subsequent veto on constitutional grounds by

President Reagan. . . . In any event, the OSC exercises only limited jurisdiction to enforce certain rules

governing Federal Government employers and employees. It does not bind private parties at all or wield

regulatory authority comparable to the CFPB.

4 The dissent would have us ignore the reasoning of Humphrey’s Executor and instead apply the decision only as part of a

reimagined Humphrey’s-through-Morrison framework. But we take the decision on its own terms, not through gloss

added by a later Court in dicta. The dissent also criticizes us for suggesting that the 1935 FTC may have had lesser

responsibilities than the present FTC. Perhaps the FTC possessed broader rulemaking, enforcement, and adjudicatory

powers than the Humphrey’s Court appreciated. Perhaps not. Either way, what matters is the set of powers the Court

considered as the basis for its decision, not any latent powers that the agency may have had not alluded to by the Court.

Third, the CFPB’s defenders note that the Social Security Administration (SSA) has been run by

a single Administrator since 1994. . . . [T]he SSA lacks the authority to bring enforcement actions

against private parties. Its role is largely limited to adjudicating claims for Social Security benefits.

The only remaining example is the Federal Housing Finance Agency (FHFA), created in 2008 to

assume responsibility for Fannie Mae and Freddie Mac. That agency is essentially a companion of the

CFPB, established in response to the same financial crisis. It regulates primarily Government-sponsored

enterprises, not purely private actors. And its single-Director structure is a source of ongoing

controversy. Indeed, it was recently held unconstitutional by the Fifth Circuit, sitting en banc. See

Collins v. Mnuchin (2019).

With the exception of the one-year blip for the Comptroller of the Currency, these isolated

examples are modern and contested. And they do not involve regulatory or enforcement authority

remotely comparable to that exercised by the CFPB. The CFPB’s single-Director structure is an

innovation with no foothold in history or tradition.

In addition to being a historical anomaly, the CFPB’s single-Director configuration is

incompatible with our constitutional structure. Aside from the sole exception of the Presidency, that

structure scrupulously avoids concentrating power in the hands of any single individual.

“The Framers recognized that, in the long term, structural protections against abuse of power

were critical to preserving liberty.” Bowsher. Their solution to governmental power and its perils was

simple: divide it. . . . At the highest level, they “split the atom of sovereignty” itself into one Federal

Government and the States. They then divided the “powers of the new Federal Government into three

defined categories, Legislative, Executive, and Judicial.”

They did not stop there. Most prominently, the Framers bifurcated the federal legislative power

into two Chambers: the House of Representatives and the Senate, each composed of multiple Members

and Senators. The Executive Branch is a stark departure from all this division. The Framers viewed the

legislative power as a special threat to individual liberty, so they divided that power to ensure that

“differences of opinion” and the “jarrings of parties” would “promote deliberation and circumspection”

and “check excesses in the majority.” By contrast, the Framers thought it necessary to secure the

authority of the Executive so that he could carry out his unique responsibilities. . . .

To justify and check that authority—unique in our constitutional structure—the Framers made

the President the most democratic and politically accountable official in Government. Only the President

(along with the Vice President) is elected by the entire Nation. And the President’s political

accountability is enhanced by the solitary nature of the Executive Branch, which provides “a single

object for the jealousy and watchfulness of the people.” The President “cannot delegate ultimate

responsibility or the active obligation to supervise that goes with it,” because Article II “makes a single

President responsible for the actions of the Executive Branch.” The resulting constitutional strategy is

straightforward: divide power everywhere except for the Presidency, and render the President directly

accountable to the people through regular elections. In that scheme, individual executive officials will

still wield significant authority, but that authority remains subject to the ongoing supervision and control

of the elected President. Through the President’s oversight, “the chain of dependence [is] preserved,” so

that “the lowest officers, the middle grade, and the highest” all “depend, as they ought, on the President,

and the President on the community.” 1 Annals of Cong. (J. Madison).

The CFPB’s single-Director structure contravenes this carefully calibrated system by vesting

significant governmental power in the hands of a single individual accountable to no one. The Director

is neither elected by the people nor meaningfully controlled (through the threat of removal) by someone

who is. The Director does not even depend on Congress for annual appropriations. . . . Yet the Director

may unilaterally, without meaningful supervision, issue final regulations, oversee adjudications, set

enforcement priorities, initiate prosecutions, and determine what penalties to impose on private parties.

With no colleagues to persuade, and no boss or electorate looking over her shoulder, the Director may

dictate and enforce policy for a vital segment of the economy affecting millions of Americans.

The CFPB Director’s insulation from removal by an accountable President is enough to render

the agency’s structure unconstitutional. But several other features of the CFPB combine to make the

Director’s removal protection even more problematic. In addition to lacking the most direct method of

presidential control—removal at will—the agency’s unique structure also forecloses certain indirect

methods of Presidential control.

Because the CFPB is headed by a single Director with a five-year term, some Presidents may not

have any opportunity to shape its leadership and thereby influence its activities. . . . That means an

unlucky President might get elected on a consumer-protection platform and enter office only to find

herself saddled with a holdover Director from a competing political party who is dead set against that

agenda. . . .

The CFPB’s receipt of funds outside the appropriations process further aggravates the agency’s

threat to Presidential control. The President normally has the opportunity to recommend or veto

spending bills that affect the operation of administrative agencies. And, for the past century, the

President has annually submitted a proposed budget to Congress for approval. . . . But no similar

opportunity exists for the President to influence the CFPB Director. . . . This financial freedom makes it

even more likely that the agency will “slip from the Executive’s control, and thus from that of the

people.” . . .

[T]ext, first principles, the First Congress’s decision in 1789, Myers, and Free Enterprise Fund

all establish that the President’s removal power is the rule, not the exception. While we do not revisit

Humphrey’s Executor or any other precedent today, we decline to elevate it into a freestanding invitation

for Congress to impose additional restrictions on the President’s removal authority.11

11 [T]he dissent would endorse whatever “the times demand, so long as the President retains the ability to carry out his

constitutional functions.” But that amorphous test provides no real limiting principle. The “clearest” (and only) “example”

the dissent can muster for what may be prohibited is a for-cause removal restriction placed on the President’s “close

military or diplomatic advisers.” But that carveout makes no logical or constitutional sense. In the dissent’s view, for-

cause removal restrictions are permissible because they guarantee the President “meaningful control” over his

subordinates. If that is the theory, then what is the harm in giving the President the same “meaningful control” over his

close advisers? The dissent claims to see a constitutional distinction between the President’s “own constitutional duties in

foreign relations and war” and his duty to execute laws passed by Congress. But the same Article that establishes the

President’s foreign relations and war duties expressly entrusts him to take care that the laws be faithfully executed. And,

[A]micus contends that if we identify a constitutional problem with the CFPB’s structure, we

should avoid it by broadly construing the statutory grounds for removing the CFPB Director from office.

The Dodd-Frank Act provides that the Director may be removed for “inefficiency, neglect of duty, or

malfeasance in office. In amicus’ view, that language could be interpreted to reserve substantial

discretion to the President.

We are not persuaded. For one, Humphrey’s Executor implicitly rejected an interpretation that would

leave the President free to remove an officer based on disagreements about agency policy. In addition,

while both amicus and the House of Representatives invite us to adopt whatever construction would cure

the constitutional problem, they have not advanced any workable standard derived from the statutory

language. . . . We decline to embrace such an uncertain and elastic approach to the text. . . .

The dissent, for its part, largely reprises points that the Court has already considered and

rejected: It notes the lack of an express removal provision, invokes Congress’s general power to create

and define executive offices, highlights isolated statements from individual Framers, downplays the

decision of 1789, minimizes Myers, brainstorms methods of Presidential control short of removal, touts

the need for creative congressional responses to technological and economic change, and celebrates a

pragmatic, flexible approach to American governance. . . .

IV

Having concluded that the CFPB’s leadership by a single independent Director violates the

separation of powers, we now turn to the appropriate remedy. We directed the parties to brief and argue

whether the Director’s removal protection was severable from the other provisions of the Dodd-Frank

Act that establish the CFPB. If so, then the CFPB may continue to exist and operate notwithstanding

Congress’s unconstitutional attempt to insulate the agency’s Director from removal by the President. . . .

“Generally speaking, when confronting a constitutional flaw in a statute, we try to limit the

solution to the problem, severing any problematic portions while leaving the remainder intact.” Even in

the absence of a severability clause, the “traditional” rule is that “the unconstitutional provision must be

severed unless the statute created in its absence is legislation that Congress would not have enacted.”

When Congress has expressly provided a severability clause, our task is simplified. . . .

The only constitutional defect we have identified in the CFPB’s structure is the Director’s

insulation from removal. If the Director were removable at will by the President, the constitutional

violation would disappear. . . .

So too here. The provisions of the Dodd-Frank Act bearing on the CFPB’s structure and duties

remain fully operative without the offending tenure restriction. Those provisions are capable of

functioning independently, and there is nothing in the text or history of the Dodd-Frank Act that

demonstrates Congress would have preferred no CFPB to a CFPB supervised by the President. Quite the

from the perspective of the governed, it is far from clear that the President’s core and traditional powers present greater

cause for concern than peripheral and modern ones. If anything, “[t]he growth of the Executive Branch, which now wields

vast power and touches almost every aspect of daily life, heightens the concern that it may slip from the Executive’s

control, and thus from that of the people.”

opposite. [T]he Dodd-Frank Act contains an express severability clause. There is no need to wonder

what Congress would have wanted if “any provision of this Act” is “held to be unconstitutional” because

it has told us: “the remainder of this Act” should “not be affected.” . . .

A decade ago, we declined to extend Congress’s authority to limit the President’s removal power

to a new situation, never before confronted by the Court. We do the same today. In our constitutional

system, the executive power belongs to the President, and that power generally includes the ability to

supervise and remove the agents who wield executive power in his stead. While we have previously

upheld limits on the President’s removal authority in certain contexts, we decline to do so when it comes

to principal officers who, acting alone, wield significant executive power. The Constitution requires that

such officials remain dependent on the President, who in turn is accountable to the people.

JUSTICE THOMAS, WITH WHOM JUSTICE GORSUCH JOINS, CONCURRING IN PART AND DISSENTING IN PART.

[Opinion omitted. Justice Thomas concurred in the opinion that the removal protection provision was

unconstitutional, but he would go further and overrule Humphrey’s Executor. In addition, he would not

reach the severability question, because the case could be decided simply by dismissing the CFPB’s

enforcement action against Seila Law. Moreover, he questioned the Court’s historical treatment of

severability.]

JUSTICE KAGAN, JOINED BY JUSTICES GINSBURG, BREYER, AND SOTOMAYOR, CONCURRED IN THE

JUDGMENT ON SEVERABILITY AND DISSENTED FROM THE DECISION ON THE CONSTITUTIONALITY OF THE

REMOVAL PROTECTION PROVISION.

Throughout the Nation’s history, this Court has left most decisions about how to structure the

Executive Branch to Congress and the President, acting through legislation they both agree to. In

particular, the Court has commonly allowed those two branches to create zones of administrative

independence by limiting the President’s power to remove agency heads. The Federal Reserve Board.

The Federal Trade Commission (FTC). The National Labor Relations Board. Statute after statute

establishing such entities instructs the President that he may not discharge their directors except for

cause—most often phrased as inefficiency, neglect of duty, or malfeasance in office. Those statutes,

whose language the Court has repeatedly approved, provide the model for the removal restriction before

us today. If precedent were any guide, that provision would have survived its encounter with this

Court—and so would the intended independence of the Consumer Financial Protection Bureau (CFPB).

Our Constitution and history demand that result. The text of the Constitution allows these

common for-cause removal limits. Nothing in it speaks of removal. And it grants Congress authority to

organize all the institutions of American governance, provided only that those arrangements allow the

President to perform his own constitutionally assigned duties. Still more, the Framers’ choice to give the

political branches wide discretion over administrative offices has played out through American history

in ways that have settled the constitutional meaning. From the first, Congress debated and enacted

measures to create spheres of administration—especially of financial affairs—detached from direct

presidential control. As the years passed, and governance became ever more complicated, Congress

continued to adopt and adapt such measures—confident it had latitude to do so under a Constitution

meant to “endure for ages to come.” Not every innovation in governance—not every experiment in

administrative independence—has proved successful. And debates about the prudence of limiting the

President’s control over regulatory agencies, including through his removal power, have never abated.

But the Constitution—both as originally drafted and as practiced—mostly leaves disagreements about

administrative structure to Congress and the President, who have the knowledge and experience needed

to address them. Within broad bounds, it keeps the courts— who do not—out of the picture.

The Court today fails to respect its proper role. It recognizes that this Court has approved limits

on the President’s removal power over heads of agencies much like the CFPB. Agencies possessing

similar powers, agencies charged with similar missions, agencies created for similar reasons. The

majority’s explanation is that the heads of those agencies fall within an “exception”—one for

multimember bodies and another for inferior officers—to a “general rule” of unrestricted presidential

removal power. And the majority says the CFPB Director does not. That account, though, is wrong in

every respect. The majority’s general rule does not exist. Its exceptions, likewise, are made up for the

occasion—gerrymandered so the CFPB falls outside them. And the distinction doing most of the

majority’s work—between multimember bodies and single directors—does not respond to the

constitutional values at stake. If a removal provision violates the separation of powers, it is because the

measure so deprives the President of control over an official as to impede his own constitutional

functions. But with or without a for-cause removal provision, the President has at least as much control

over an individual as over a commission—and possibly more. That means the constitutional concern is,

if anything, ameliorated when the agency has a single head. Unwittingly, the majority shows why courts

should stay their hand in these matters. “Compared to Congress and the President, the Judiciary

possesses an inferior understanding of the realities of administration” and the way “political power[ ]

operates.”

In second-guessing the political branches, the majority second-guesses as well the wisdom of the

Framers and the judgment of history. It writes in rules to the Constitution that the drafters knew well

enough not to put there. It repudiates the lessons of American experience, from the 18th century to the

present day. And it commits the Nation to a static version of governance, incapable of responding to

new conditions and challenges. Congress and the President established the CFPB to address financial

practices that had brought on a devastating recession, and could do so again. Today’s decision wipes out

a feature of that agency its creators thought fundamental to its mission—a measure of independence

from political pressure. I respectfully dissent.

The text of the Constitution, the history of the country, the precedents of this Court, and the need

for sound and adaptable governance—all stand against the majority’s opinion. They point not to the

majority’s “general rule” of “unrestricted removal power” with two grudgingly applied “exceptions.”

Rather, they bestow discretion on the legislature to structure administrative institutions as the times

demand, so long as the President retains the ability to carry out his constitutional duties. And most

relevant here, they give Congress wide leeway to limit the President’s removal power in the interest of

enhancing independence from politics in regulatory bodies like the CFPB.

What does the Constitution say about the separation of powers—and particularly about the

President’s removal authority? (Spoiler alert: about the latter, nothing at all.)

The majority offers the civics class version of separation of powers—call it the Schoolhouse

Rock definition of the phrase. The Constitution’s first three articles, the majority recounts, “split the

atom of sovereignty” among Congress, the President, and the courts. And by that mechanism, the

Framers provided a “simple” fix “to governmental power and its perils.”

There is nothing wrong with that as a beginning (except the adjective “simple”). It is of course

true that the Framers lodged three different kinds of power in three different entities. . . .

The problem lies in treating the beginning as an ending too—in failing to recognize that the

separation of powers is, by design, neither rigid nor complete. Blackstone, whose work influenced the

Framers on this subject as on others, observed that “every branch” of government “supports and is

supported, regulates and is regulated, by the rest.” So as James Madison stated, the creation of distinct

branches “did not mean that these departments ought to have no partial agency in, or no controul over

the acts of each other.” To the contrary, Madison explained, the drafters of the Constitution—like those

of then-existing state constitutions—opted against keeping the branches of government “absolutely

separate and distinct.” Or as Justice Story reiterated a half-century later: “[W]hen we speak of a

separation of the three great departments of government,” it is “not meant to affirm, that they must be

kept wholly and entirely separate.” Instead, the branches have—as they must for the whole arrangement

to work—“common link[s] of connexion [and] dependence.”

One way the Constitution reflects that vision is by giving Congress broad authority to establish

and organize the Executive Branch. Article II presumes the existence of “Officer[s]” in “executive

Departments.” § 2, cl. 1. But it does not, as you might think from reading the majority opinion, give the

President authority to decide what kinds of officers—in what departments, with what responsibilities—

the Executive Branch requires. Instead, Article I’s Necessary and Proper Clause puts those decisions in

the legislature’s hands. Congress has the power “[t]o make all Laws which shall be necessary and proper

for carrying into Execution” not just its own enumerated powers but also “all other Powers vested by

this Constitution in the Government of the United States, or in any Department or Officer thereof.” § 8,

cl. 18. Similarly, the Appointments Clause reflects Congress’s central role in structuring the Executive

Branch. Yes, the President can appoint principal officers, but only as the legislature “shall ... establish[ ]

by Law” (and of course subject to the Senate’s advice and consent). Art. II, § 2, cl. 2. And Congress has

plenary power to decide not only what inferior officers will exist but also who (the President or a head

of department) will appoint them. So as Madison told the first Congress, the legislature gets to “create[ ]

the office, define[ ] the powers, [and] limit[ ] its duration.” The President, as to the construction of his

own branch of government, can only try to work his will through the legislative process.3

The majority relies for its contrary vision on Article II’s Vesting Clause, but the provision can’t

carry all that weight. Or as Chief Justice Rehnquist wrote of a similar claim in Morrison v. Olson

(1988), “extrapolat[ing]” an unrestricted removal power from such “general constitutional language”—

which says only that “[t]he executive Power shall be vested in a President”—is “more than the text will

bear.” . . . For now, note two points about practice before the Constitution’s drafting. First, in that era,

Parliament often restricted the King’s power to remove royal officers—and the President, needless to

say, wasn’t supposed to be a king. Second, many States at the time allowed limits on gubernatorial

3 Article II’s Opinions Clause also demonstrates the possibility of limits on the President’s control over the Executive

Branch. Under that Clause, the President “may require the Opinion, in writing, of the principal Officer in each of the

executive Departments, upon any Subject relating to the Duties of their respective Offices.” § 2, cl. 1. For those in the

majority’s camp, that Clause presents a puzzle: If the President must always have the direct supervisory control they posit,

including by threat of removal, why would he ever need a constitutional warrant to demand agency heads’ opinions? The

Clause becomes at least redundant—though really, inexplicable—under the majority’s idea of executive power.

removal power even though their constitutions had similar vesting clauses. Historical understandings

thus belie the majority’s “general rule.”

Nor can the Take Care Clause come to the majority’s rescue. That Clause cannot properly serve

as a “placeholder for broad judicial judgments” about presidential control. . . . [T]he text of the Take

Care Clause requires only enough authority to make sure “the laws [are] faithfully executed”—meaning

with fidelity to the law itself, not to every presidential policy preference. As this Court has held, a

President can ensure “‘faithful execution’ of the laws”—thereby satisfying his “take care” obligation—

with a removal provision like the one here. A for-cause standard gives him “ample authority to assure

that [an official] is competently performing [his] statutory responsibilities in a manner that comports

with the [relevant legislation’s] provisions.”

Finally, recall the Constitution’s telltale silence: Nowhere does the text say anything about the

President’s power to remove subordinate officials at will. The majority professes unconcern. After all, it

says, “neither is there a ‘separation of powers clause’ or a ‘federalism clause.’” But those concepts are

carved into the Constitution’s text—the former in its first three articles separating powers, the latter in

its enumeration of federal powers and its reservation of all else to the States. And anyway, at-will

removal is hardly such a “foundational doctrine[].” You won’t find it on a civics class syllabus. That’s

because removal is a tool— one means among many, even if sometimes an important one, for a

President to control executive officials. To find that authority hidden in the Constitution as a “general

rule” is to discover what is nowhere there.

History no better serves the majority’s cause. As Madison wrote, “a regular course of practice”

can “liquidate & settle the meaning of” disputed or indeterminate constitutional provisions. The majority

lays claim to that kind of record, asserting that its muscular view of “[t]he President’s removal power

has long been confirmed by history.” But that is not so. The early history—including the fabled Decision

of 1789—shows mostly debate and division about removal authority. And when a “settle[ment of]

meaning” at last occurred, it was not on the majority’s terms. Instead, it supports wide latitude for

Congress to create spheres of administrative independence.

Begin with evidence from the Constitution’s ratification. And note that this moment is indeed

the beginning: Delegates to the Constitutional Convention never discussed whether or to what extent

the President would have power to remove executive officials. As a result, the Framers advocating

ratification had no single view of the matter. In Federalist No. 77, Hamilton presumed that under the

new Constitution “[t]he consent of [the Senate] would be necessary to displace as well as to appoint”

officers of the United States. By contrast, Madison thought the Constitution allowed Congress to

decide how any executive official could be removed. . . . Neither view, of course, at all supports the

majority’s story.4

The second chapter is the Decision of 1789, when Congress addressed the removal power while

considering the bill creating the Department of Foreign Affairs. Speaking through Chief Justice

Taft—a judicial presidentialist if ever there was one—this Court in Myers v. United States (1926),

read that debate as expressing Congress’s judgment that the Constitution gave the President illimitable

4 The majority dismisses Federalist Nos. 77 and 39 as “reflect[ing] initial impressions later abandoned.” . . . In any event,

such changing minds and inconstant opinions don’t usually prove the existence of constitutional rules.

power to remove executive officials. The majority rests its own historical claim on that analysis

(though somehow also finding room for its two exceptions). But Taft’s historical research has held up

even worse than Myers’ holding (which was mostly reversed). As Dean Manning has concluded after

reviewing decades’ worth of scholarship on the issue, “the implications of the debate, properly

understood, [are] highly ambiguous and prone to overreading.”

The best view is that the First Congress was “deeply divided” on the President’s removal

power, and “never squarely addressed” the central issue here. The congressional debates revealed

three main positions. Some shared Hamilton’s Federalist No. 77 view: The Constitution required

Senate consent for removal. At the opposite extreme, others claimed that the Constitution gave

absolute removal power to the President. And a third faction maintained that the Constitution placed

Congress in the driver’s seat: The legislature could regulate, if it so chose, the President’s authority to

remove. In the end, Congress passed a bill saying nothing about removal, leaving the President free to

fire the Secretary of Foreign Affairs at will. But the only one of the three views definitively rejected

was Hamilton’s theory of necessary Senate consent. As even strong proponents of executive power

have shown, Congress never “endorse[d] the view that [it] lacked authority to modify” the President’s

removal authority when it wished to. The summer of 1789 thus ended without resolution of the critical

question: Was the removal power “beyond the reach of congressional regulation?” Contrary to the

majority’s view, then, the founding era closed without any agreement that Congress lacked the power

to curb the President’s removal authority. . . .

Confronting new economic, technological, and social conditions, Congress—and often the

President—saw new needs for pockets of independence within the federal bureaucracy. . . .

And then, nearly a century and a half ago, the floodgates opened. In 1887, the growing power

of the railroads over the American economy led Congress to create the Interstate Commerce

Commission. Under that legislation, the President could remove the five Commissioners only “for

inefficiency, neglect of duty, or malfeasance in office”—the same standard Congress applied to the

CFPB Director. More—many more—for-cause removal provisions followed. In 1913, Congress gave

the Governors of the Federal Reserve Board for-cause protection to ensure the agency would resist

political pressure and promote economic stability. The next year, Congress provided similar

protection to the FTC in the interest of ensuring “a continuous policy” “free from the effect” of

“changing [White House] incumbency.” The Federal Deposit Insurance Corporation (FDIC), the

Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission. By one

count, across all subject matter areas, 48 agencies have heads (and below them hundreds more inferior

officials) removable only for cause. So year by year by year, the broad sweep of history has spoken to

the constitutional question before us: Independent agencies are everywhere.

What is more, the Court’s precedents before today have accepted the role of independent

agencies in our governmental system. To be sure, the line of our decisions has not run altogether

straight. But we have repeatedly upheld provisions that prevent the President from firing regulatory

officials except for such matters as neglect or malfeasance. In those decisions, we sounded a caution,

insisting that Congress could not impede through removal restrictions the President’s performance of

his own constitutional duties. (So, to take the clearest example, Congress could not curb the

President’s power to remove his close military or diplomatic advisers.) But within that broad limit,

this Court held, Congress could protect from at-will removal the officials it deemed to need some

independence from political pressures. Nowhere do those precedents suggest what the majority

announces today: that the President has an “unrestricted removal power” subject to two bounded

exceptions.

The majority grounds its new approach in Myers, ignoring the way this Court has cabined that

decision. Myers, the majority tells us, found an unrestrained removal power “essential to the

[President’s] execution of the laws.” What the majority does not say is that within a decade the Court

abandoned that view (much as later scholars rejected Taft’s one-sided history). In Humphrey’s

Executor v. United States, the Court unceremoniously—and unanimously—confined Myers to its

facts. “[T]he narrow point actually decided” there, Humphrey’s stated, was that the President could

“remove a postmaster of the first class, without the advice and consent of the Senate.” Nothing else in

Chief Justice Taft’s prolix opinion “c[a]me within the rule of stare decisis.” (Indeed, the Court went

on, everything in Myers “out of harmony” with Humphrey’s was expressly “disapproved.” . . .

And Humphrey’s found constitutional a statute identical to the one here, providing that the

President could remove FTC Commissioners for “inefficiency, neglect of duty, or malfeasance in

office.” The Humphrey’s Court, as the majority notes, relied in substantial part on what kind of work

the Commissioners performed. (By contrast, nothing in the decision turned—as the majority suggests

—on any of the agency’s organizational features. . . .

Another three decades on, Morrison both extended Humphrey’s domain and clarified the

standard for addressing removal issues. The Morrison Court, over a one-Justice dissent, upheld for-

cause protections afforded to an independent counsel with power to investigate and prosecute crimes

committed by high- ranking officials. . . . The key question in all the cases, Morrison saw, was

whether such a restriction would “impede the President’s ability to perform his constitutional duty.”

Only if it did so would it fall outside Congress’s power. And the protection for the independent

counsel, the Court found, did not. Even though the counsel’s functions were “purely executive,” the

President’s “need to control the exercise of [her] discretion” was not “so central to the functioning of

the Executive Branch as to require” unrestricted removal authority. True enough, the Court

acknowledged, that the for-cause standard prevented the President from firing the counsel for

discretionary decisions or judgment calls. But it preserved “ample authority” in the President “to

assure that the counsel is competently performing” her “responsibilities in a manner that comports

with” all legal requirements. That meant the President could meet his own constitutional obligation

“to ensure ‘the faithful execution’ of the laws.”

Even Free Enterprise Fund, in which the Court recently held a removal provision invalid,

operated within the framework of this precedent—and in so doing, left in place a removal provision

just like the one here. . . .

So caselaw joins text and history in establishing the general permissibility of for-cause

provisions giving some independence to agencies. Contrary to the majority’s view, those laws do not

represent a suspicious departure from illimitable presidential control over administration. For almost a

century, this Court has made clear that Congress has broad discretion to enact for-cause protections in

pursuit of good governance. . . .

Our Constitution, as shown earlier, entrusts decisions [about administrative structure] to more

accountable and knowledgeable actors. The document—with great good sense—sets out almost no

rules about the administrative sphere. As Chief Justice Marshall wrote when he upheld the first

independent financial agency: “To have prescribed the means by which government should, in all

future time, execute its powers, would have been to change, entirely, the character of the instrument.”

McCulloch. That would have been, he continued, “an unwise attempt to provide, by immutable rules,

for exigencies which, if foreseen at all, must have been seen dimly.” And if the Constitution, for those

reasons, does not lay out immutable rules, then neither should judges. This Court has usually

respected that injunction. . . .

The question here, which by now you’re well equipped to answer, is whether including that for-

cause standard in the statute creating the CFPB violates the Constitution.

Applying our longstanding precedent, the answer is clear: It does not. This Court, as the

majority acknowledges, has sustained the constitutionality of the FTC and similar independent

agencies. The for- cause protections for the heads of those agencies, the Court has found, do not

impede the President’s ability to perform his own constitutional duties, and so do not breach the

separation of powers. There is nothing different here. The CFPB wields the same kind of power as the

FTC and similar agencies. And all of their heads receive the same kind of removal protection. No less

than those other entities—by now part of the fabric of government—the CFPB is thus a permissible

exercise of Congress’s power under the Necessary and Proper Clause to structure administration.

First, the CFPB’s powers are nothing unusual in the universe of independent agencies. The

CFPB, as the majority notes, can issue regulations, conduct its own adjudications, and bring civil

enforcement actions in court—all backed by the threat of penalties. But then again, so too can (among

others) the FTC and SEC, two agencies whose regulatory missions parallel the CFPB’s. And if

influence on economic life is the measure, consider the Federal Reserve, whose every act has global

consequence. The CFPB, gauged by that comparison, is a piker. Second, the removal protection given

the CFPB’s Director is standard fare. . . .

The analysis is as simple as simple can be. The CFPB Director exercises the same powers, and

receives the same removal protections, as the heads of other, constitutionally permissible independent

agencies. How could it be that this opinion is a dissent?

The majority focuses on one (it says sufficient) reason: The CFPB Director is singular, not

plural.11 And a solo CFPB Director does not fit within either of the majority’s supposed exceptions.

He is not an inferior officer, so (the majority says) Morrison does not apply; and he is not a

11 The majority briefly mentions, but understandably does not rely on, two other features of Congress’s scheme. First, the

majority notes that the CFPB receives its funding outside the normal appropriations process. But so too do other financial

regulators, including the Federal Reserve Board and the FDIC. And budgetary independence comes mostly at the expense

of Congress’s control over the agency, not the President’s. (Because that is so, it actually works to the President’s

advantage.) Second, the majority complains that the Director’s five-year term may prevent a President from “shap[ing the

agency’s] leadership” through appointments. But again that is true, to one degree or another, of quite a few longstanding

independent agencies, including the Federal Reserve, the FTC, the Merit Systems Protection Board, and the Postal Service

Board of Governors. (If you think the last is unimportant, just ask the current President whether he agrees.)

multimember board, so (the majority says) neither does Humphrey’s. Further, the majority argues,

“[a]n agency with a [unitary] structure like that of the CFPB” is “novel”—or, if not quite that, “almost

wholly unprecedented.” Finally, the CFPB’s organizational form violates the “constitutional

structure” because it vests power in a “single individual” who is “insulated from Presidential control.”

. . .

First, as I’m afraid you’ve heard before, the majority’s “exceptions” (like its general rule) are

made up. To begin with, our precedents reject the very idea of such exceptions. “The analysis

contained in our removal cases,” Morrison stated, shuns any attempt “to define rigid categories” of

officials who may (or may not) have job protection. Still more, the contours of the majority’s

exceptions don’t connect to our decisions’ reasoning. The analysis in Morrison, as I’ve shown,

extended far beyond inferior officers. And of course that analysis had to apply to individual officers:

The independent counsel was very much a person, not a committee. So the idea that Morrison is in a

separate box from this case doesn’t hold up.

Similarly, Humphrey’s and later precedents give no support to the majority’s view that the

number of people at the apex of an agency matters to the constitutional issue. Those opinions mention

the “groupness” of the agency head only in their background sections. The majority picks out that

until-now-irrelevant fact to distinguish the CFPB, and constructs around it an until-now-unheard-of

exception. So if the majority really wants to see something “novel,” it need only look to its opinion.

By contrast, the CFPB’s single-director structure has a fair bit of precedent behind it. The

Comptroller of the Currency. The Office of the Special Counsel (OSC). The Social Security

Administration (SSA). The Federal Housing Finance Agency (FHFA). Maybe four prior agencies is in

the eye of the beholder, but it’s hardly nothing. . . . Almost all independent agencies are controversial,

no matter how many directors they have. Or at least controversial among Presidents and their lawyers.

That’s because whatever might be said in their favor, those agencies divest the President of some

removal power. If signing statements and veto threats made independent agencies unconstitutional,

quite a few wouldn’t pass muster. Maybe that’s what the majority really wants (I wouldn’t know)—

but it can’t pretend the disputes surrounding these agencies had anything to do with whether their

heads are singular or plural.

Still more important, novelty is not the test of constitutionality when it comes to structuring

agencies. See Mistretta v. United States (1989) (“[M]ere anomaly or innovation” does not violate the

separation of powers). Congress regulates in that sphere under the Necessary and Proper Clause, not

(as the majority seems to think) a Rinse and Repeat Clause. The Framers understood that new times

would often require new measures, and exigencies often demand innovation. See McCulloch. In line

with that belief, the history of the administrative sphere—its rules, its practices, its institutions—is

replete with experiment and change.. Indeed, each of the agencies the majority says now fits within its

“exceptions” was once new; there is, as the saying goes, “a first time for everything.” National

Federation of Independent Business v. Sebelius (2012). So even if the CFPB differs from its forebears

in having a single director, that departure is not itself “telling” of a “constitutional problem.”. . .

But if the demand is for generalization, then the majority’s distinction cuts the opposite way:

More powerful control mechanisms are needed (if anything) for commissions. Holding everything

else equal, those are the agencies more likely to “slip from the Executive’s control.” Just consider

your everyday experience: It’s easier to get one person to do what you want than a gaggle. So too, you

know exactly whom to blame when an individual—but not when a group—does a job badly. The

same is true in bureaucracies. A multimember structure reduces accountability to the President

because it’s harder for him to oversee, to influence—or to remove, if necessary—a group of five or

more commissioners than a single director. Indeed, that is why Congress so often resorts to hydra-

headed agencies. . . .

Because it has no answer on that score, the majority slides to a different question: Assuming

presidential control of any independent agency is vanishingly slim, is a single-head or a multi-head

agency more capable of exercising power, and so of endangering liberty? The majority says a single

head is the greater threat because he may wield power “unilaterally” and “[w]ith no colleagues to

persuade.” So the CFPB falls victim to what the majority sees as a constitutional anti-power-

concentration principle (with an exception for the President).

If you’ve never heard of a statute being struck down on that ground, you’re not alone. . . .

Page 605, after the Food for Thought box, insert the following into a Points for Discussion box:

What do you think the future is for the removal protection provisions in the three other agencies

with single-headed directors – the Office of the Special Counsel, the Social Security Administration,

and the Federal Home Finance Agency?

Justice Thomas, joined by Justice Gorsuch, in an opinion omitted here for length, makes the

case for overruling Humphrey’s Executor. Does the majority opinion provide a map for how that

might be done in a subsequent case? Or would overruling more than a century of law with countless

examples of multi-member agencies with removal protection for members be a bridge too far for some

of those in the majority?

Isn’t Justice Kagan right that it is harder for the President to control a multi-member agency

than to control an agency with a single head, where both have protections against removal at will? If

so, how is the CFPB unconstitutional but the FTC not?

The majority places significant weight on the original understanding as reflected in the so-

called decision of 1789, but as the dissent points out, historians looking at that decision have

uniformly concluded that there was no decision that the President had a constitutional right to remove

executive officers. Chief Justice Taft’s contrary conclusion, which even at the time was contradicted

by the dissent written by Justice Brandeis, nevertheless, is held to be truth by the majority. Is incorrect

history protected by stare decisis?

In Humphrey’s, the Court rejected the reasoning of Myers, but did not overrule it. In Morrison,

the Court rejected the reasoning of Humphrey’s, but did not overrule it. In Seila Law, the Court rejects

the reasoning of Morrison, but does not overrule it. What does this bode for the reasoning of Seila

Law?

Page 605, delete the text of b. The Status of ALJs and substitute the following:

Hypo 6-9: ALJ Removals Administrative Law Judges (ALJs) can only be removed for cause, and the procedure for their

removal is somewhat convoluted. The appointing power (the head of the agency) files a complaint

with the Merit Systems Protection Board (MSPB), an independent, quasi-judicial agency headed by

three board members, whose function is to rule on removals of federal employees and ALJs. The

board members may only be removed for cause. The MSPB assigns an ALJ to hold a hearing and

make an initial decision regarding whether the accused ALJ should be removed for cause. That

decision may be appealed to the MSPB. Consequently, a decision to remove an ALJ for cause

depends on decisions by the MSPB’s ALJ (who may only be removed for cause) and approval by the

MSPB (whose members may only be removed for cause). Moreover, if the agency instituting the

proceedings is itself an independent agency, like the Federal Trade Commission, whose members may

only be removed for cause, there is another for-cause layer of protection between the accused ALJ and

the President. Recall the footnote in Free Enterprise Fund saying that decision did not address the

“subset of independent agency employees who serve as administrative law judges.” How should that

question be addressed and answered? Are ALJs officers or employees? If officers, is their protection

of removal except for cause unconstitutional? If so, how might a court remedy the situation?

Hypo Materials

Lucia v. Securities and Exchange Commission ____________________________________________________________________________________________

138 S.Ct. 2044 (2018)

Justice KAGAN delivered the opinion of the Court.

The Appointments Clause of the Constitution lays out the permissible methods of appointing

“Officers of the United States,” a class of government officials distinct from mere employees. This case

requires us to decide whether administrative law judges (ALJs) of the Securities and Exchange

Commission (SEC or Commission) qualify as such “Officers.” In keeping with Freytag v.

Commissioner, 501 U.S. 868 (1991), we hold that they do.

The SEC has statutory authority to enforce the nation's securities laws. One way it can do so is

by instituting an administrative proceeding against an alleged wrongdoer. By law, the Commission may

itself preside over such a proceeding. But the Commission also may, and typically does, delegate that

task to an ALJ. The SEC currently has five ALJs. Other staff members, rather than the Commission

proper, selected them all.

An ALJ assigned to hear an SEC enforcement action has extensive powers—the “authority to do

all things necessary and appropriate to discharge his or her duties” and ensure a “fair and orderly”

adversarial proceeding. Those powers “include, but are not limited to,” supervising discovery; issuing,

revoking, or modifying subpoenas; deciding motions; ruling on the admissibility of evidence;

administering oaths; hearing and examining witnesses; generally “[r]egulating the course of” the

proceeding and the “conduct of the parties and their counsel”; and imposing sanctions for

“[c]ontemptuous conduct” or violations of procedural requirements. As that list suggests, an SEC ALJ

exercises authority “comparable to” that of a federal district judge conducting a bench trial.

After a hearing ends, the ALJ issues an “initial decision.” That decision must set out “findings

and conclusions” about all “material issues of fact [and] law”; it also must include the “appropriate

order, sanction, relief, or denial thereof.” The Commission can then review the ALJ's decision, either

upon request or sua sponte. But if it opts against review, the Commission “issue[s] an order that the

[ALJ's] decision has become final.” At that point, the initial decision is “deemed the action of the

Commission.”

[T]he SEC instituted an administrative proceeding against petitioner Raymond Lucia and his

investment company. . . . In the SEC's view, Lucia used misleading slideshow presentations to deceive

prospective clients. The SEC . . . assigned ALJ Cameron Elliot to adjudicate the case. After nine days of

testimony and argument, Judge Elliot issued an initial decision concluding that Lucia had violated the

Act. . . .

On appeal to the SEC, Lucia argued that the administrative proceeding was invalid because

Judge Elliot had not been constitutionally appointed. According to Lucia, the Commission's ALJs are

“Officers of the United States” and thus subject to the Appointments Clause. Under that Clause, Lucia

noted, only the President, “Courts of Law,” or “Heads of Departments” can appoint “Officers.” See Art.

II, § 2, cl. 2. And none of those actors had made Judge Elliot an ALJ. . . . [T]he Commission had left the

task of appointing ALJs, including Judge Elliot, to SEC staff members. As a result, Lucia contended,

Judge Elliot lacked constitutional authority to do his job.

The Commission rejected Lucia's argument. It held that the SEC's ALJs are not “Officers of the

United States.” Instead, they are “mere employees”—officials with lesser responsibilities who fall

outside the Appointments Clause's ambit. The Commission reasoned that its ALJs do not “exercise

significant authority independent of [its own] supervision.” . . .

Lucia's claim fared no better in the Court of Appeals for the D.C. Circuit. . . . We now reverse.

The sole question here is whether the Commission's ALJs are “Officers of the United States” or

simply employees of the Federal Government. . . .

Two decisions set out this Court's basic framework for distinguishing between officers and

employees. Germaine held that “civil surgeons” (doctors hired to perform various physical exams) were

mere employees because their duties were “occasional or temporary” rather than “continuing and

permanent.” Stressing “ideas of tenure [and] duration,” the Court there made clear that an individual

must occupy a “continuing” position established by law to qualify as an officer. Buckley then set out

another requirement, central to this case. It determined that members of a federal commission were

officers only after finding that they “exercis[ed] significant authority pursuant to the laws of the United

States.” The inquiry thus focused on the extent of power an individual wields in carrying out his

assigned functions.

Both the amicus and the Government urge us to elaborate on Buckley 's “significant authority”

test, but another of our precedents makes that project unnecessary. . . . And maybe one day we will see a

need to refine or enhance the test Buckley set out so concisely. But that day is not this one, because in

Freytag v. Commissioner, 501 U.S. 868 (1991), we applied the unadorned “significant authority” test to

adjudicative officials who are near-carbon copies of the Commission's ALJs. As we now explain, our

analysis there (sans any more detailed legal criteria) necessarily decides this case.

The officials at issue in Freytag were the “special trial judges” (STJs) of the United States Tax

Court. The authority of those judges depended on the significance of the tax dispute before them. In

“comparatively narrow and minor matters,” they could both hear and definitively resolve a case for the

Tax Court. In more major matters, they could preside over the hearing, but could not issue the final

decision; instead, they were to “prepare proposed findings and an opinion” for a regular Tax Court judge

to consider. The proceeding challenged in Freytag was a major one, involving $1.5 billion in alleged tax

deficiencies. . . . The losing parties argued on appeal that the STJ was not constitutionally appointed.

This Court held that the Tax Court's STJs are officers, not mere employees. Citing Germaine, the

Court first found that STJs hold a continuing office established by law. The Court then considered, as

Buckley demands, the “significance” of the “authority” STJs wield. In addressing that issue, the

Government had argued that STJs are employees, rather than officers, in all cases (like the one at issue)

in which they could not “enter a final decision.” But the Court thought the Government's focus on

finality “ignore[d] the significance of the duties and discretion that [STJs] possess.” Describing the

responsibilities involved in presiding over adversarial hearings, the Court said: STJs “take testimony,

conduct trials, rule on the admissibility of evidence, and have the power to enforce compliance with

discovery orders.” And the Court observed that “[i]n the course of carrying out these important

functions, the [STJs] exercise significant discretion.” That fact meant they were officers, even when

their decisions were not final.6

Freytag says everything necessary to decide this case. To begin, the Commission's ALJs, like the

Tax Court's STJs, hold a continuing office established by law. . . . And that appointment is to a position

created by statute, down to its “duties, salary, and means of appointment.”

Still more, the Commission's ALJs exercise the same “significant discretion” when carrying out

the same “important functions” as STJs do. Both sets of officials have all the authority needed to ensure

fair and orderly adversarial hearings—indeed, nearly all the tools of federal trial judges. Consider in

order the four specific (if overlapping) powers Freytag mentioned. First, the Commission's ALJs (like

the Tax Court's STJs) “take testimony.” More precisely, they “[r]eceiv[e] evidence” and “[e]xamine

witnesses” at hearings, and may also take pre-hearing depositions. Second, the ALJs (like STJs)

“conduct trials.” As detailed earlier, they administer oaths, rule on motions, and generally “regulat[e] the

course of” a hearing, as well as the conduct of parties and counsel. Third, the ALJs (like STJs) “rule on

the admissibility of evidence.” They thus critically shape the administrative record (as they also do when

issuing document subpoenas). And fourth, the ALJs (like STJs) “have the power to enforce compliance

with discovery orders.” In particular, they may punish all “[c]ontemptuous conduct,” including

violations of those orders, by means as severe as excluding the offender from the hearing. So point for

point—straight from Freytag 's list—the Commission's ALJs have equivalent duties and powers as STJs

6 The Court also provided an alternative basis for viewing the STJs as officers. “Even if the duties of [STJs in major cases]

were not as significant as we ... have found them,” we stated, “our conclusion would be unchanged.” That was because the

Government had conceded that in minor matters, where STJs could enter final decisions, they had enough “independent

authority” to count as officers. And we thought it made no sense to classify the STJs as officers for some cases and

employees for others. [F]reytag has two parts, and its primary analysis explicitly rejects [the] theory that final

decisionmaking authority is a sine qua non of officer status. . . .

in conducting adversarial inquiries.

And at the close of those proceedings, ALJs issue decisions much like that in Freytag. . . . And

what happens next reveals that the ALJ can play the more autonomous role. In a major case like

Freytag, a regular Tax Court judge must always review an STJ's opinion. And that opinion counts for

nothing unless the regular judge adopts it as his own. By contrast, the SEC can decide against reviewing

an ALJ decision at all. And when the SEC declines review (and issues an order saying so), the ALJ's

decision itself “becomes final” and is “deemed the action of the Commission.” That last-word capacity

makes this an a fortiori case: If the Tax Court's STJs are officers, as Freytag held, then the

Commission's ALJs must be too. . . .

We accordingly reverse the judgment of the Court of Appeals and remand the case for further

proceedings consistent with this opinion.

Justice THOMAS, with whom Justice GORSUCH joins, concurring. [omitted]

Justice BREYER, with whom Justice GINSBURG and Justice SOTOMAYOR join as to Part III,

concurring in the judgment in part and dissenting in part.

I agree with the Court that the Securities and Exchange Commission did not properly appoint the

Administrative Law Judge who presided over petitioner Lucia's hearing. . . . [However,] I would rest our

conclusion upon statutory, not constitutional, grounds. I believe it important to do so because I cannot

answer the constitutional question that the majority answers without knowing the answer to a different,

embedded constitutional question, which the Solicitor General urged us to answer in this case: the

constitutionality of the statutory “for cause” removal protections that Congress provided for

administrative law judges.

The relevant statute here is the Administrative Procedure Act. . . . It provides (as it has, in

substance, since its enactment in 1946) that “[e]ach agency shall appoint as many administrative law

judges as are necessary for” hearings governed by the Administrative Procedure Act. In the case of the

Securities and Exchange Commission, the relevant “agency” is the Commission itself. But the

Commission did not appoint the Administrative Law Judge who presided over Lucia's hearing. Rather,

the Commission's staff appointed that Administrative Law Judge, without the approval of the

Commissioners themselves. . . .

Justice SOTOMAYOR, with whom Justice GINSBURG joins, dissenting. [Omitted. She would have

required an officer to have final decisionmaking authority for the agency, which the ALJ did not have.]