The D.C. Circuit’s “Trump Card” for Executive Orders

by Adam White — Monday, Mar. 13, 2017

President Trump signs the Keystone/Dakota executive orders.As countless commentators have observed, President Trump’s first months in office have been marked by the issuance of significant executive orders and other executive actions aimed at undoing or reforming the work of his predecessor, and charting a new policy course forward. In that respect, Trump was not a break from recent experience, but a continuation of it: President Bush signed 8 executive orders in his first two months in office; President Obama signed 18 of them.

So far, President Trump has signed 15 executive orders, and aspects of his approach call to mind a similar situation eight years ago. Two days after the 2009 inauguration, President Obama signed executive orders on counterterrorism interrogation practices, on counterterrorism detentions, and on the review and disposition of Gitmo detainees. Obama followed those initial efforts with a steady stream of executive orders, including E.O. 13505: “Removing Barriers to Responsible Scientific Research Involving Human Stem Cells.”

By this order, President Obama was decisively rejecting the approach of his own predecessor. In 2001, President Bush had attempted to chart a middle course on federal funding for embryonic stem cell research, allowing fundingfor research on existing lines of embryonic stem cells but not allowing funding for research on new lines of stem cells. Six years later, Bush signed E.O. 13435, directing the Secretary of Health and Human Services to support research on “pluripotent” stem cells, while leaving in place the 2001 limits on funding for embryonic stem cell research.

President Obama’s aforementioned 2009 order, E.O. 13505, expressly revoked Bush’s 2007 order and Bush’s underlying 2001 policy, and it further directed the Department of Health and Human Services and the National Institutes of Health to significantly expand federal funding for embryonic stem cell research: “The purpose of this order is to remove these limitations on scientific inquiry, to expand NIH support for the exploration of human stem cell research, and in so doing to enhance the contribution of America’s scientists to important new discoveries and new therapies for the benefit of humankind.”

President Obama’s decision to not merely roll back Bush’s policy, but also to affirmatively direct his agencies in another direction, proved crucial. After NIH published new guidelines for the funding of embryonic stem cell research, various parties filed lawsuits in federal district court, arguing that the guidance exceeded limits that Congress had placed upon the agencies, and that the agencies had violated the Administrative Procedure Act by failing to respond meaningfully to public comments criticizing the expansion of federal funding. President Obama’s directive to the agencies played a decisive role in the court’s decision, in Sherley v. Sebelius (2012).

Quoting HBO v. FCC (D.C. Cir. 1977), the D.C. Circuit began its analysis in Sherley by conceding that the APA normally requires agencies to respond meaningfully to relevant public comments, because “the opportunity to comment is meaningless unless the agency responds to significant points raised by the public.” But in this case, the court held, the agencies were excused from that requirement, precisely because President Obama had ordered them to pursue the very policy that the commenters were criticizing:

Crucially . . . [the commenters’] recommended course of action is diametrically opposed to the direction of Executive Order 13,505, which NIH sought to “implement” by issuing the Guidelines . . . That Order makes it quite plain that its dominant purpose was to “remove” President Bush’s 2001 “limitations” on funding human ESC research and to “expand” NIH support for human stem-cell research, “including human embryonic stem cell research.” . . . Yet the comments at issue advocate ending all ESC research funding—even for research that has been eligible for funding for a decade under the 2001 restrictions. Following these commenters’ lead would directly oppose the clear import of the Executive Order, which sought to remove limitations on ESC research and to expand NIH support for stem-cell research.

The agencies were constitutionally bound to follow the policy set forth in President Obama’s Executive Order, regardless of public comments to the contrary, precisely because President Order had ordered it:

NIH may not simply disregard an Executive Order. To the contrary, as an agency under the direction of the executive branch, it must implement the President’s policy directives to the extent permitted by law . . . Bound as it is to carry out the President’s directives, NIH thus reasonably limited the scope of its Guidelines to implement the Executive Order. And because the Executive Order’s entire thrust was aimed at expanding support of stem-cell research, it was not arbitrary or capricious for NIH to disregard comments that instead called for termination of all ESC research (including research that the executive branch has permitted since 2001).

On those points, the court cited Building and Construction Trades Dep’t v. Allbaugh, a 2002 case in which the court, held that executive officers “are duty bound to give effect to the policies embodied in the President’s direction, to the extent allowed by the law.” The judges rooted this rule in the Constitution’s vesting of the executive power in the President and his constitutional duty to take care that the laws are faithfully executed, as elaborated by Alexander Hamilton in Federalist 72: “The persons, therefore, to whose immediate management these different matters are committed, ought to be considered as the assistants or deputies of the chief magistrate, and on this account, they . . . ought to be subject to his superintendence.”

In the Allbaugh case, the newly inaugurated President Bush had ordered federal agencies to neither require nor forbid contractors from entering into certain labor-union agreements—though his order, by its own terms, applied only “to the extent permitted by law.” And the court, rejecting the plaintiffs’ challenge to that order, stressed that “if any executive agency, such as the FEMA, may lawfully implement the Executive Order, then it must do so.” (Emphasis added.)

At that was the key point in Sherley v. Sebelius, the stem-cell research case: if, as the court held, President Obama’s policy did not exceed limits set by Congress or the Constitution, then the HHS Secretary and the NIH were requiredto follow it, and thus they could categorically ignore comments criticizing that policy. The President’s executive order was, one might say, an administrative-law “trump card.”

And it is a trump card that might prove very important in coming years. While much attention has been paid to President Trump’s orders regarding entry into the United States, or imposing numerical limits on agencies’ issuance of new rules, or requiring agencies to set up regulatory-reform task forces, President Trump’s orders on substantive regulatory policy issues are poised to benefit greatly from the aforementioned precedents established by President Obama and President Bush.

In Executive Order 13765, for example, President Trump ordered all relevant agencies to “exercise all authority and discretion available to them to waive, defer, grant exemptions from, or delay the implementation of any provision or requirement of the Act that would impose a fiscal burden on any State or a cost, fee, tax, penalty, or regulatory burden on individuals, families, healthcare providers, health insurers, patients, recipients of healthcare services, purchasers of health insurance, or makers of medical devices, products, or medications.” He further ordered the agencies to “exercise all authority and discretion available to them to provide greater flexibility to States and cooperate with them in implementing healthcare programs,” and to “encourage the development of a free and open market in interstate commerce for the offering of healthcare services and health insurance, with the goal of achieving and preserving maximum options for patients and consumers.” For each of these commands, the agencies are required to exercise discretion in specific ways, “to the maximum extent allowed by law.” And thus, so long as Sherley holds, the agencies can safely disregard criticism of those underlying policy directives in future rulemakings or adjudications.

Similarly, where Trump’s Executive Order 13766 orders agencies, to the extent “consistent with law,” to “streamline and expedite . . . environmental reviews and approvals for all infrastructure projects, especially projects that are a high priority for the Nation,” that order will now give agencies great leeway to minimize environmental reviews—again, so long as President Obama’s Sherley precedent holds firm.

President Trump did not take this approach in all his orders, of course. In his order requiring the EPA and Army Corps of Engineers to reconsider the “Waters of the United States” Rule, the president ordered the agencies simply to “consider interpreting the term ‘navigable waters,’ as defined in 33 U.S.C. 1362(7), in a manner consistent with the opinion of Justice Antonin Scalia in Rapanos v. United States, 547 U.S. 715 (2006).” (Emphasis added.) If the President had gone further and ordered the agencies to adopt the Scalia approach, and if Scalia’s approach is a reasonable interpretation of a Clean Water Act provision, then President Trump could have successfully dictated the outcome of the regulatory process.

As President Trump signs more executive orders—especially if he issues orders on the Clean Power Plan, “net neutrality,” or other regulatory policies undertaken at President Obama’s behest—it will be interesting to see the extent to which he phrases his commands in words that leverage the D.C. Circuit’s rule in Sherley. In that respect, Trump stands to benefit not just from Obama’s famous “pen and phone,” but also from Obama’s precedent.

Adam J. White is a research fellow at the Hoover Institution, and an adjunct professor at George Mason University’s Antonin Scalia Law School. Follow him on Twitter: @adamjwhitedc.

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