The U.S. Supreme Court’s decision in West Virginia v. EPA could affect upcoming rulemakings related to privacy and cybersecurity at the Federal Trade Commission (FTC) and Securities and Exchange Commission (SEC).
In the West Virginia decision, the Court invoked and formalized the “major questions doctrine,” which counsels that courts should be reluctant to conclude that agencies possess authority to resolve certain questions of significant economic or political significance absent clear congressional authorization. The West Virginia decision grounds the major questions doctrine in “an identifiable body of law that has developed over a series of significant cases a recurring problem: agencies asserting highly consequential power beyond what Congress could reasonably be understood to have granted.”1 Much like interpretive canons such as the presumption against retroactivity, the major questions doctrine reflects both “a practical understanding of legislative intent” and normative considerations — in this instance, “separation of powers principles.”2 Its underlying presumption is that “Congress intends to make major policy decisions itself, not leave those decisions to agencies.”3
In West Virginia, the Court applied the major questions doctrine to hold that the Environmental Protection Agency (EPA) had exceeded its statutory authority under the Clean Air Act to establish emissions standards with reference to a “best system of emission reduction” when it decided that the best system for reduction of carbon emissions from power plants was a sectorwide shift in electricity generation from coal to natural gas and renewables. The Court found that in adopting this generation-shifting approach, the EPA had impermissibly attempted to answer a “major question” without clear authorization to do so from Congress. Although the decision did not reference or expressly reject the longstanding Chevron doctrine of deference to reasonable agency interpretations of ambiguous statutory authorizations, it will effectively serve to curtail that doctrine for those “extraordinary cases” that are governed by the major questions doctrine. In “major questions” cases, “something more than a merely plausible textual basis for the agency action is necessary” to sustain the agency’s authority to act.
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