Pursuant to the Congressional Review Act (“the CRA”), Congress can adopt, with the President’s concurrence, a resolution disapproving an agency rule within 60 days of notification that the rule has been adopted.  Section 801(b)(2) of the CRA provides that disapproval resolutions preclude the agency from adopting “a new rule that is substantially the same as” the disapproved one.  But do such disapproval resolutions have any effect on state authority? 

In Part I of this series I discussed the factual background of a case raising this question America’s Communications Association v. Frey, Dkt No. 1:20-cv-00055, Complaint (Feb. 20, 2020) (“ACA v. Frey”).  In its Complaint, plaintiffs assert that a disapproval resolution invalidating the FCC’s broadband privacy rules also limits Maine’s regulatory authority.  In this post, I discuss the effect of disapproval resolutions on state authority and the broader implications of disapproval resolutions for federalism.

The Effect of Disapproval Resolutions on State Authority

Even if section 801(b)(2)’s prohibition on adopting substantially rules substantially similar to disapproved rules is interpreted broadly, as largely removing the subject matter of the regulation from an agency’s agenda, a resolution of disapproval should not have any similar effect on state legislative initiatives.

Considering the Congressional Review Act Itself

The CRA fits into a long-tradition of statutorily-created legislative vetoes, granted every form of the legislative veto that did not satisfy the Constitution’s bicameralism and presentment requirements were invalidated in Immigration & Naturalization Service v. Chadha, 462 U.S. 919 (1983).[1]  It has been Congress’ chosen means of “secur[ing] the accountability of executive and independent agencies,” id. at 968 (White, J., dissenting), and “preserves Congress’ control over lawmaking,” id. at 968-69 (White, J., dissenting).  It relieves Congress of a “Hobson’s choice: either to refrain from delegating the necessary authority, leaving itself with a hopeless task of writing laws with the requisite specificity to cover endless special circumstances across the entire policy landscape, or, in the alternative, to abdicate its lawmaking function to the Executive Branch and independent agencies.”  Id. at 968 (White, J., dissenting).  These concerns are matters of separation of powers, having little relationship to the scope of state regulatory authority.

Indeed, as the CRA is constructed, the collateral effects of disapproval resolutions are directed solely at the promulgating agency itself (rather than the entire Executive Branch).  In their joint statement for the legislative record, [2]  the CRA’s sponsors explained:

“Subsection 801(b)(2) is necessary to prevent circumvention of a resolution disapproval. Nevertheless, it may have a different impact on the issuing agencies depending on the nature of the underlying law that authorized the rule.” 

142 CONG. REC. S3686 (1996)(Statement for the Record by Senators Nickles, Reid, and Stevens)(emphasis added).  Thus, a disapproval resolution’s collateral effect may well not even extend to another agency within the Executive Branch.  Indeed, one of the expressed congressional objections to the FCC’s broadband privacy rules was the Commission’s encroachment on another agency’s jurisdiction, namely the FTC’s.[3]  

Or theoretically, Congress might disapprove a rule because it wishes to address the issue itself by legislation, perhaps taking an approach different from the agency’s.  Representative Flores, a co-sponsor of the House version of the Broadband Privacy Rules Disapproval Resolution suggested that the rule should be disapproved “so the new administration can create a comprehensive, consistent set of privacy protections.” 163 CONG. REC. H2493 (March 28, 2017).[4]

Moreover, nothing in the CRA’s text, nor the Joint Statement of the Senate Sponsors, appears to suggest that CRA disapproval resolutions have any preemptive effect on state law.  And nothing in the context of Congress’ disapproval of the FCC’s broadband privacy rules suggests any intent to preempt state regulatory authority.

Indeed, the FCC had long embraced a policy of recognizing states’ significant role in protecting consumer privacy.  It had taken a position that FCC regulations provided only a regulatory floor, permitting more stringent state regulation.[5]  As the Commission explained in Report and Order, Protecting the Privacy of Customers of Broadband and Other Telecommunications Services, FCC 16-148, 31 FCC Rcd. 13911, ¶¶324-31 (October 27, 2016) (“ISP Privacy Order”), “[b]y allowing states to craft and enforce their own laws which are not inconsistent with our rules with respect to [broadband internet access service] providers and other telecommunications carrier’s collection, use, and sharing of data, we recognize and honor the important role the states play in protecting the privacy of their customer information.”  Id. at ¶325. 

At least two states, Nevada and Minnesota, had adopted statutes regulating ISPs with regard to online privacy long before the FCC promulgated its broadband privacy rule.[6] While federalism issues went largely unmentioned in the House and Senate debates regarding the Broadband Privacy Rules Disapproval Resolution, Representative Collins and Senator Thune, proponents of the Disapproval Resolution, did note that even after the Resolution’s adoption broadband providers would continue to be subject to “the many other existing Federal and State privacy rules.”  163 CONG. REC. H2497 (Rep. Collins)(March 28, 2017); 163 CONG. REC. S1926 (Sen. Thune)(March 22, 2017).[7]

The Rice v. Santa Fe Elevator “Clear Statement” Rule and Unlegislation

The Supreme Court has repeated reaffirmed the existence of a “clear statement” rule establishing a presumption against preemption of state law: federal statutes do not preempt state law without clear expression by Congress.  Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230 (1947); see, Medtronic, Inc. v. Lohr, 518 U.S. 470, 485 (1996).  This “clear statement” rule id unrealistic and often honored in the breach.[8]  But aspects of CRA disapproval resolutions and the process for adopting them make giving such congressional actions preemptive effect especially problematic.

Most notably, CRA disapproval resolutions might best be described as “unlegislation.”[9]  The text of such resolutions is specified in the CRA,[10] and the specified text does little more than disapprove a particular agency regulation.[11]  This makes such disapproval resolutions intolerably vague as a form of affirmative law or affirmative specification of rights and obligations.  Indeed, the point of the provisions specifying the collateral effect of such resolution was merely to prevent agency circumvention of the relevant disapproval resolution; not to specify rights and responsibilities.     

Thus, while affirmative legislation can often be vague, and thus somewhat ambiguous, resolutions of disapproval are by their very nature particularly ambiguous.  They merely assert that Congress and the President disapprove of a particular regulatory initiative, and do not state what if any direction the agency should take.  This is one oft-stated criticism of the CRA, and some have recommended that Congress specify particular provisions of a regulation that are being disapproved or set forth a “bill of particulars” enumerating a set of agreed objections to the regulation.[12]  

Congressional debate might provide a rationale for the disapproval resolution, but at least the debate regarding disapproval of the broadband privacy rules does not adequately do so.  Moreover, it is more appropriate to use legislative debates for clarification when Congress enacts statutory text specifying legal rights and responsibilities, than when Congress merely undoes a specification of rights and responsibilities promulgated by agencies. 

Indeed, Puerto Rico Dep’t of Consumer Affairs v. Isla Petroleum Corp., 485 U.S. 495, 501-04 (1988) (Scalia, J.) is quite apt in this regard.  Isla Petroleum involved federal regulation of oil prices. In 1973, Congress had enacted the Emergency Petroleum Allocation Act (EPAA), which required the President to promulgate regulations governing oil prices, and preempted conflicting state regulations. Two years later, Congress enacted Energy Policy and Conservation Act (EPCA), which continued the President’s regulatory authority until September 30, 1981.  On that date, the President’s EPAA authority ceased. In enacting EPCA, members of Congress expressed an interest in reestablishing an unregulated market for oil products.  Plaintiffs’ read such legislative history as continuing the preemption of state control over oil prices even after the President’s authority to regulate prices expired.  Id. at 497-499.

The Court acknowledged its frequent admonition that pre-emption analysis turns on congressional intent, but explained that it had “never meant . . . to signify congressional intent in a vacuum, unrelated to the giving of meaning to an enacted statutory text.” Id. at 501.  Such untethered expressions of intent had no preemptive effect. In the case before it, “[t]here [was] no text . . . to which expressions of pre-emptive intent in legislative history might attach.”  Id.  Without a text that could plausibly be interpreted as prescribing federal pre-emption, any congressional statements that reflected  general congressional approval of a free market in petroleum products, a general congressional belief that such a market would result from the terminations of the President’s regulatory authority, or even a general congressional desire for such a result, were of no moment.  Id.  “There is no federal pre-emption in vacuo, without a constitutional text or a federal statute to assert it.”  Id. at 503.[13] Or, in the words of the Solicitor General, “repeal of EPAA regulation did not leave behind a pre-emptive grin without a statutory cat.” Id. at 504.[14]

Other Aspects of Congressional Review Act Resolutions and the Processes

Two other aspects of CRA resolutions and the CRA process counsel against interpreting disapproval resolutions as confining state regulatory authority.

First, agreement that a multifaceted regulation as a whole should be nullified may often be much easier to attain than agreement on affirmative legislation.  For example, a majority may consist of two groups that object to the legislation on completely different grounds.  Each may believe in their own grounds for disapproval but reject that of the other group.  By requiring only that a resolution disapprove the regulation without further specification, those groups can act to negate what the agency has done.  But to give broader significance to that action would be perilous, because the resolution’s supporters have really formed no common position on anything beyond reversing the agency’s regulation.  Granted, the debates over the broadband privacy rules does not exhibit such a split among the disapproval resolution’s advocates.

Second, resolutions of disapproval are subject to expedited procedures that preclude the usual consideration of congressional bills setting forth rights and responsibilities.  For example, there were no committee reports regarding the resolution disapproving the broadband privacy rules,[15] and the period from the introduction of the Resolution to its adoption was approximately two weeks.[16]  The CRA process limits deliberation and precludes the use of tools that ensure that legislation is supported by a broader consensus than a mere majority. 

It may well be that the current legislative process is gridlocked and provides legislative minorities with excessive power to block legislation.  For example, the Senate filibuster has long had its critics.  See, e.g., Catherine Fisk & Erwin Chemerinsky, The Fillibuster, 49 STAN. L. REV. 181, 182-85 (1997).  Nevertheless, when constitutional principles such as the scope of states plenary powers are at stake, Congress should certainly act with deliberation.  Indeed, the Court has enshrined “clear statement” rules precisely to ensure that members of Congress are alerted to the federalism implications of bills under consideration, and thereby energize the “political protections of federalism.”   See, e.g., Gregory v. Ashcroft, 501 U.S. 452, 460-61, 464 (1991).

In short, disapproval resolutions should not be viewed as having any collateral effects on state regulatory powers and should be insufficient to provide a basis for “conflict” or “field” preemption.

Broader Federalism Implications

If the above analysis is correct, a disapproval resolution may nevertheless have significant federalism implications.  Such a resolution may reign in a federal agency pursuing a course that meets with congressional disapproval, but at the expense of permitting states, whose powers are not subject to constraint by disapproval resolutions, to pursue those same initiatives.  And it can result in conflicting regulatory obligations, rather than uniform ones, if states act to fill the regulatory gap. 

And state legislation, at least outside the context of free speech and other areas subject to heightened scrutiny, receives less rigorous review, at least in federal courts, than regulations promulgated by federal agencies.  Agency regulation may be somewhat closely scrutinized under the Administrative Procedure Act’s “arbitrary and capricious” standard of review .  State legislation would be subject only to “rational basis” review under the standards applicable to due process or equal protection challenges.  See, Motor Vehicle Mfers Assn v. State Farm,  463 U.S. 29, 43 n.9 (1983).

Moreover, a disapproval resolution might limit agencies’ ability to reconcile state and federal policies.  For example, the FCC recognized that permitting states to enact and enforce more stringent privacy protections might lead to conflicts with federal law.  ISP Privacy Order at ¶326.  It advised regulated entities to raise such inconsistent and duplicative state regulation with the FCC for resolution.  Id. at ¶326 & n.949.   But having removed the FCC rule, and thus arguably precluding the FCC from adopting any rule, Congress removed the FCC’s and the Executive Branch’s ability to reconcile state ISP privacy rules with the federal approach of requiring ISP to live up to their promises.  This leaves reconciliation of such policies to Congress, whose agenda includes many more urgent matters .[17] 

All this suggests that disapproval resolutions, at least theoretically, can have negative consequences for regulated entities — subjecting them to conflicting state statutes that are more immune to challenge than federal regulations.  This would seem an undesirable result, at least from the perspective of regulated entities.

So why would regulated entities encourage or support disapproval resolutions given these possible consequences?[18]  The rules they seek to invalidate may be so adverse to their interests that regulated entities view possible conflicting state regulation as the lesser of two evils.  Or perhaps regulated entities have reasons to be less apprehensive of state regulation.  Perhaps regulated entities are somewhat unconcerned about the prospect  of inconsistent state statutes that are more immune from attack because of a belief that they will have more success in defeating legislative initiatives in state legislatures than before federal agencies.  After all, federal agencies can generally bring to bear far more expertise than state legislatures.  Or perhaps regulated entities believe that over-worked, generalist attorney’s generals offices will pursue less robust enforcement strategies than federal agencies focused on a particular subject matter.

In any event, CRA disapproval resolutions may have federalism consequences that Congress typically does not fully appreciate when considering such resolutions.

Conclusion

Scholars have devoted little if any attention to the Congressional Review Act’s federalism implications.  CRA disapproval resolutions should have no impact on state regulatory authority.  However, in using such resolutions to discipline wayward agencies, Congress may unwittingly allow states to promulgate similar statutes.  Thus, Congress’ exercise of its CRA powers may enhance the role of state legislatures.

---

[1] 142 CONG. REC. 3683-84 (1996) (Statement for the Record by Senators Nickles, Reid, and Stevens)(tying the CRA with prior legislative vetoes and the efforts in the years following Chadha to re-institute the legislative veto in some form).

[2] 142 CONG. REC. 3683-87 (1996) (Statement for the Record by Senators Nickles, Reid, and Stevens). 

[3] 163 CONG. REC. H2489 (Rep. Blackburn)(“the FCC unilaterally swiped jurisdiction from the Federal Trade Commission”); Id. at H2493 (Rep. Flores)(criticizing the FCC’s “flawed political move” to “expand its regulatory footprint” by “stripping the FTC of its authority”); id. at H2493-94 (Rep. Flores)(“once Congress rejects these rules, the FCC can turn back to cooperating with the FTC to ensure that . . . consumer privacy across all aspects of the internet is provided through vigorous enforcement”); 163 CONG. REC. S1928 (Sen. Thune) (“The FCC is simply the wrong venue for th[e] effort [to establish balanced privacy rules]. Its statutory scope is too narrow, and it lacks institutional expertise on privacy.”).

[4] Granted, Rep. Flores may have contemplated that the Administration would “create a comprehensive, consistent set of privacy protections” by rulemaking, rather than by proposing legislation.

[5] Report and Order, Protecting the Privacy of Customers of Broadband and Other Telecommunications Services, FCC 16-148, 31 FCC Rcd. 13911, ¶¶324-31 (October 27, 2016) (“ISP Privacy Order”).

[6] Nev. Rev. Stat. § 205.498 (2019)(added by 1999 Nevada Laws Ch. 530 (June 8, 1999)); Minn. Stat. §§ 325M.01–09 (2019)( added by 2002 Minn. Sess. Law Serv. Ch. 395 (May 22, 2002).  The FCC recognized a number of other state privacy laws in its ISP Privacy Order, listing California, Connecticut, New York, Louisiana and Florida statutes.  ISP Privacy Order, at ¶327 n.950.  The Commission observed that “it is important that we not undermine or override state law providing greater privacy protections than federal law, or impede the critical privacy protections states continue to implement.” Id. at ¶327.  Nothing in the debate over the disapproval resolution disputed that aspect of the Commission’s ISP Privacy Order.

[7] Representative Blackburn also noted that the Disapproval Resolution would not prevent state attorneys generals from continuing to bring enforcement proceedings against ISP’s for unfair and deceptive trade practices. 163 CONG. REC. H2489 (Rep. Blackburn).

[8] On the Supreme Court Docket — Guido v. Mt. Lemmon School District: Numerosity Requirements in the ADEA and Other Employment Discrimination Statutes, YALE J. ON REG.: NOTICE & COMMENT (May 10, 2018); U.S. v. California: The District Court’s Preliminary Injunction Ruling, YALE J. ON REG.: NOTICE & COMMENT (July 27, 2018).

[9] As Representative Eshoo asserted during the debate on the Disapproval Resolution, the Resolution is a “repeal without replace.” 163 CONG. REC. H2493 (March 28, 2017).  See, id. at 2494 (Rep. Degette)(“Even if people believe that the FCC’s rule went too far and should be modified, it is unclear how the FCC could move forward with such a plan given the constraints of the Congressional Review Act.”); id. at H2493 (Rep. Matsui) (“this resolution effectively eliminates the FCC from ever acting to protect consumer privacy in the future”).

Indeed, as Justice White noted regarding pre-Chadha legislative vetoes:

The power to exercise a legislative veto is not the power to write new law without bicameral approval or Presidential consideration. The veto . . . may only negative what an Executive department or independent agency has proposed. On its face, the legislative veto no more allows one House of Congress to make law than does the Presidential veto confer such power upon the President.

[10] 5 U.S.C. §802(a)(“the matter after the resolving clause of which is as follows: ‘That Congress disapproves the rule submitted by the __ relating to __, and such rule shall have no force or effect.’”)

[11] Unlike in Clinton v. New York, 524 U.S. 417, 447 (1998), disapproval resolutions do not change any statutory text (even though they satisfy bicameralism and presentment).  Of course, the CRA is distinguishable from the Line Item Veto Act of 1996 at issue in Clinton v. New York.

[12] E.g., Adam M. Finkel & Jason W. Sullivan, A Cost-Benefit Interpretation Of The “Substantially Similar” Hurdle In The Congressional Review Act: Can OSHA Ever Utter The E-Word (Ergonomics) Again?, 63 ADMIN. L. REV. 707, 761 (2011); see, Eric Dude, The Conflicting Mandate: Agency Paralysis Through the Congressional Review Act’s Resubmit Provision, 30 COLO. NAT. RESOURCES, ENERGY & ENVTL L. REV. 115, 137-140 (2019).

[13] The Supreme Court recently quoted such language with approval in Kansas v. Garcia, 2020 WL 1016170, *6 (U.S. Sup. Ct. March 3, 2020).

[14] Even in the context of reenactment legislation, the Court has taken a similar approach. Pierce v. Underwood, 487 U.S. 552 (1988).  Pierce v. Underwood involved Congress reenactment of the Equal Access to Justice Act (“EAJA”), which was initially adopted in 1980.  Underwood supported her interpretation of the EAJA with an excerpt from the 1985 House Committee Report pertaining to Congress’ reenactment of the EAJA in that year.  The Court refused to give the report authoritative weight.  In the Court’s view such legislative history could not be controlling, as an authoritative expression of the 1985 Congress’ intent, because it was not “an explanation of any language that the 1985 Committee drafted,” and “on its face it accept[ed] the 1980 meaning of the terms as subsisting.”  Moreover, “there is no indication whatever in the text or even the legislative history of the 1985 reenactment that Congress thought it was doing anything” insofar as the issue before the Court,” except reenacting and making permanent the 1980 legislation.  Id. at 566-57.

[15] House and Senate Rules and statutes require committees to include a variety of information in congressional reports to aid in legislative consideration of bills reported by the committee.  See, Judy Schneider, House Committee Reports: Required Contents (Feb. 9, 2015); Elizabeth Rybicki, Senate Committee Reports; Required Contents (Jan. 22, 2008).

[16] Accord, Thomas O. McGarity, Rena Steinzor, James Goodwin, and Katherine Tracy, The Congressional Review Act: The Case for Repeal 25 (May 2018).  None of the 16 resolutions of disapproval that received floor votes during the Trump administration were the subject of a single committee hearing or vote.

[17] Ernest J. Brown, The Open Economy: Mr. Justice Frankfurter and the Position of the Judiciary, 67 Yale L.J. 219, 220-22 (1957) (“[T]he very mechanisms of our government . . . . do not give to Congress any regularized opportunity or duty of reviewing, to test for compatibility with the federal system, state statutes even in their skeletal form as enacted, much less as fleshed by application, interpretation and administration. Nor has Congress been so idle that such matters could be assured a place on its agenda without competition from other business which might often be deemed more pressing; in Justice Jackson’s phrase, the inertia of government would be heavily on the side of the centrifugal forces of localism.”).

[18] In a May 2018 report, the Center for Progressive Reform asserts, based on a review of campaign contributions to the sponsors of disapproval resolutions, that most resolution are initiated at the behest of regulated entities:

The bulk of the CRA resolutions that Congress has adopted and that presidents have signed have the conspicuous effect of delivering significant economic benefits to a few politically well-connected industries, sparing them the costs that the repealed rules might otherwise have imposed . . . With these rules repealed, and any replacements seemingly blocked forever, these corporations can continue to profit off of cheating their customers, endangering our health by polluting our air and water, and cutting corners on worker health and safety. 

Thomas O. McGarity, et. al, supra note 16, at 17.