The Supreme Court handed down three big opinions today, each of which was closely divided. Here is a quick run down, with more to follow on these cases in later posts by various VC contributors.
First, the Court decided Agency for International Development v. Alliance for Open Society International, upholding a limitation on USAID grant funding to organizations with “a
policy explicitly opposing prostitution and sex trafficking” because foreign corporations operating abroad “possess no rights under the First Amendment,” even if those corporations are affiliates of domestic entities. Justice Kavanaugh wrote for the majority, joined by the conservative justices. Justice Thomas concurred. Justice Breyer dissented, joined by Justies Ginsburg and Sotomayor. Justice Kagan was recused.
Second, in June Medical Services v. Russo, the Court struck down a Louisiana law regulating abortion providers, largely on the grounds that the law closely resembles an equivalent Texas law struck down in 20 in Whole Women’s Health v. Hellerstedt. Justice Breyer wrote for the liberal justices. Chief Justice Roberts concurred in the judgment that abortion providers have “third-party standing” to challenge the law’s restrictions, and that the law should be invalidated under Whole Women’s Health, even though Roberts dissented in that case, and still maintains that it applied the wrong standard. The four remaining conservative justices all dissented on various grounds. Here’s how they broke down:
THOMAS, J., filed a dissenting opinion. ALITO, J., filed a dissenting opinion, in which GORSUCH, J., joined, in which THOMAS, J., joined except as to Parts III–C and IV–F, and in which KAVANAUGH, J., joined as to Parts I, II, and III. GORSUCH, J., and KAVANAUGH, J., filed dissenting opinions.
Third, and finally, the Supreme Court held in Seila Law v. Consumer Financial Protection Bureau that the structure of the Consumer Financial Protection Bureau is unconstitutional. Writing for the Court, Chief Justice Roberts holds that the for-cause removal provision, which is the source of the CFPB’s status as an independent agency is unconstitutional. Justice Kagan dissents.
As Chief Justice Roberts explains the decision:
While we need not and do not revisit our prior decisions allowing certain limitations on the President’s removal power [i.e. Humphrey’s Executor and Morrison v. Olson], 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.
We therefore hold that the structure of the CFPB violates the separation of powers. We go on to hold that the CFPB Director’s removal protection is severable from the other
statutory provisions bearing on the CFPB’s authority. The agency may therefore continue to operate, but its Director, in light of our decision, must be removable by the President at will.
The Court is 5-4, along traditional ideological lines, on whether the for-cause removal provision, as applied to a single-director agency, is constitutional. Two of the five (Justice Thomas, joined by Justice Gorsuch) would hold that all for-cause removal provisions are unconstitutional (i.e. that Humphreys’s Executor was wrong and should be overruled.
On the question of remedy, the Court is 7-2. Chief Justice Roberts, joined by Justices Kavanaugh and Alito hold that the removal provision is severable from the rest of the statute creating the CFPB. Justice Kagan and the other liberals join this holding. Justice Thomas, joined by Justice Gorsuch, would not reach the severability question at all, and “would resolve this case by simply denying the CFPB’s petition to enforce the civil investigative demand.” In other words, there was not a single vote to strike down other portions of the statute on inseverability grounds.
Two quick thoughts on Seila Law. First, it’s the only major opinion (thus far) in which the Chief Justice has stuck with the other conservative justices. He broke ranks in June Medical Services, Bostock and the DACA case, but not here. Why? Perhaps because he cares more about this issue. After all, this opinion follows from his opinion in Free Enterprise Fund v. Public Company Accounting Oversight Board, in which the Court invalidated the PCAOB’s “double for-cause” removal provision.
Second, the Chief’s opinions in FEF and Seila Law seem to be the separation-of-powers versions of the Lopez and Morrison commerce clause decisions in that they declare “this far but not farther.” In Lopez and Morrison, Chief Justice Rehnquist (for whom Roberts clerked) cast doubt on the logic of the New Deal era commerce opinions, but would only hold that they could not be extended. Likewise, in FEF and Seila Law, Chief Justice Roberts casts doubt on the logic of Humphrey’s Executor, but simply declares that it will not be extended to agencies with novel structures. In both cases, Congress is free to do what it has done before, but it cannot extend the boundaries of what is constitutional. In this respect, the Chief’s Seila Law opinion is consistent with his minimalist, status-quo orientation—what I have called a doctrine of “anti-disruption”—that we also see in other opinions of his this term.
There will be more opinions tomorrow. There is one opinion left from those cases argued prior to the Covid-19 shutdown (Espinoza, concerning government aid to religious schools), and nine cases argued via teleconference in May. I would think the former is likely to be handed down tomorrow, but the Court will not finish all of its work in June.
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