Administrative law is almost certain to undergo monumental change during the Supreme Court’s current Term.  On May 16, 2024, the Court issued its first in a series of blockbuster administrative law decisions: Consumer Financial Protection Bureau v. Community Financial Services Ass’n. The Court’s 7-2 decision declaring the Bureau’s funding structure constitutional brings good news for the administrative state — Justice Thomas’s majority opinion validated the ongoing regulatory activities of not just the Bureau but also similarly funded financial regulators such as the Federal Reserve.  The decision also brings good news for originalism. Justice Thomas’s analysis centered on original public meaning and drew a strong majority of Justices, albeit in a case that may have been relatively easy once the Justices had the benefit of additional briefing on historical issues.  His opinion focused on the “narrow question whether” the Bureau’s standing and self-directed “funding mechanism complies with the Appropriations Clause.” Slip op. at 1. At the same time, concurring opinions by Justices Kagan and Jackson and a dissenting opinion by Justice Alito suggested that the Justices might adopt differing analyses of text and history when faced with more challenging issues in the future.

In the decision on appeal, the United States Court of Appeals for the Fifth Circuit found that the Bureau’s funding structure was an unconstitutional “abomination” of which the “Framers warned.” Its decision was a classic case of originalism gone awry — selective law office history which did not withstand the comprehensive the historical record presented in further briefing to the Supreme Court and scholarship such as my forthcoming Virginia Law Review Article, The Founders’ Purse.  Had the Fifth Circuit invited further historical briefing on Appropriations Clause challenges (issues that the parties likely regarded as throwaway arguments for much of the litigation), one wonders if the Court of Appeals would have corrected its own mistakes without a trip to the Supreme Court. Even well-intentioned judges can go very far astray if they pluck select evidence from the historical record and forego a more comprehensive analysis. The time-intensive historical inquiries demanded by originalism pose challenges for district and court of appeals judges with many cases to decide.  It seems, however, that lawyers and historians could step up to offer enhanced historical analyses in these cases. In Community Financial Services, such enhanced historical analysis did not occur until the case reached the Supreme Court.

At the Supreme Court, additional historical briefing and a brilliant oral argument by Solicitor General Elizabeth Prelogar clarified the inherent constitutionality of the Bureau’s funding structure. Seven Justices found that the text and history of the Appropriations Clause favored the Bureau. Justice Thomas’s majority opinion focused on the original public meaning of the Appropriations Clause. Concurring opinions by Justices Kagan and Jackson aligned with this result while offering important qualifications on the use of text and history. Justice Alito’s dissent (which was joined by Justice Gorsuch) reached the exact opposite result and would have affirmed the Fifth Circuit’s decision. His conclusion rested on an exceptionally narrow analysis of history and tradition.     

Text. The language of the Article I, Section 9, clause 7 is simple: “No money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law.”  Justice Thomas’s majority opinion focused on the original public meaning of the term “appropriation” and drew from Founding-era dictionary definitions of this term. Slip op. at 7.  He concluded that, in “ordinary usage,” an appropriation imposed fairly simple requirements: it demanded only “a law authorizing the expenditure of particular funds for specified ends.” Id. Justice Thomas’s approach emphasized public meaning and did not incorporate additional, corroborating evidence such as Alexander Hamilton’s observation that appropriations laws must ascertain the “purpose” and the “fund” for an expenditure. See The Founders’ Purse at 18.

In his dissent, Justice Alito also focused on the term “appropriation.”  He chided the majority for “consulting a few old dictionaries” to determine the meaning of “a term of art” whose meaning ought to be “interpreted in light of legal tradition and . . . centuries of practice.” Slip op. at 6-7 (Alito, J. dissenting) (cleaned up). According to Justice Alito, collapsing text into a legal and traditional understanding of appropriations “demand[ed]” heightened “legislative control over the source and disposition of the money used to finance” the Bureau’s operations.  Id. at 17.  As the majority noted, however, Justice Alito did not translate this understanding into a competing definition of the word “appropriation.”  Slip op. at 19.

Further, both Justice Thomas’s and Justice Alito’s initial focus on the meaning of the term “appropriation” detracted from other significant textual evidence of temporal limits on spending.  When the Framers wanted to impose a time limit on spending they did so expressly, such as the two-year time limit for army appropriations in Article I, Section 8, clause 12. The lack of similar language in Article I, Section 9, Clause 7’s Appropriations Clause strongly suggests that there was no time limit for general appropriations.  Justice Thomas emphasized this point only in rebuttal, and Justice Alito did not address it.

Perhaps because of these divergent analyses of a relatively simple clause, Justice Jackson’s concurrence emphasized the proper role of judges in constitutional interpretation. As she noted, “[w]hen the Constitution’s text does not provide a limit to a coordinate branch’s power, we should not lightly assume that Article III implicitly directs the Judiciary to find one.” Slip op. at 1 (Jackson, J., concurring).  While Justice Jackson’s concerns about courts finding “unstated limits in the Constitution’s text” and “undercut[ing] considered judgements of a coordinate branch” (id. at 3) were easy for the majority to avoid here, they will be important in future cases.  In the Court’s upcoming decisions in SEC v. Jarkesy and Trump v. United States, litigants have also asked the Court to find presidential removal powers and immunities that lack an explicit basis in the Constitution’s text.  Justice Jackson’s concurrence reiterates the importance of judicial modesty when deciding these separation-of-powers issues.  The removal issues in Jarkesy may tee up an additional set of related interpretive concerns – whether judges who emphasize unrepresentative statements from Framers like James Madison have erroneously read removal powers into Article II. See Jed Handelsman Shugerman, The Indecisions of 1789: Inconstant Originalism and Strategic Ambiguity, 171 U. PA. L. REV. 753 (2023); Lorianne Updike Toler, Un-fathering Executive Removal, 57 CONN. L. REV. (forthcoming 2025); Brief Amicus Curiae of Jed H. Shugerman, SEC v. Jarkesy (2023) (No. 22-859). (For additional historical perspectives on Jarkesy see Brief Amicus Curiae of Professor Ilan Wurman, SEC v. Jarkesy (2023) (No. 22-859); Brief Amici Curiae of Constitutional Originalists Edwin Meese III, Steven G. Calabresi, and Gary S. Lawson.)

History. Justice Thomas’s majority opinion set forth a lengthy Founding-era history that the Fifth Circuit missed. He began with pre-constitutional history in England, the colonies, and the states and concluded that “early legislative bodies exercised a wide range of discretion” whether or not to impose temporal limits or specific parameters on spending. Slip op. at 8-12; see generally Josh Chafetz, Congress’s Constitution: Legislative Authority and the Separation of Powers (2017). Another important body of evidence missed by the Fifth Circuit involved post-ratification spending laws that operated outside of annual appropriations.  As I note in The Founders’ Purse (pp. 31-36), one of the most generous early spending laws granted the Sinking Fund Commission indefinite authorization to self-direct spending from an initial sum that in today’s terms would exceed $400 billion.  Many other laws afforded field officers standing, self-directed funding based on fees for their services.  Id. at 36-44. Justice Thomas relied on some of these post-ratification practices including statutes in which early congresses authorized expenditures of “sums not exceeding” capped amounts and extended pre-constitutional practices of funding customs and postal officers through indefinite and independently determined fees. Slip op. at 12-15; see generally Nicholas Parrillo, Against the Profit Motive: The Salary Revolution in American Government 1780–1940 (2013).   He found that “early appropriations displayed significant variety in their structure,” and that the “Bureau’s funding mechanism fits comfortably within the First Congress’s appropriations practice.” Slip op. at 15.

Justice Alito’s dissent relied on largely the same history to reach the opposite conclusion.  He found that key historical funding practices, such as fee-based funding for customs officers, were not sufficiently analogous to the Bureau’s funding structure.  For example, Justice Alito noted that customs officers had to return excess funding while the Bureau could retain unspent funds. Slip op. at 20 (Alito, J., dissenting). But he did not explain why this distinction crossed a constitutional line. His description of more recent precedent suffered from the same flaw.  When describing the Federal Reserve Board as “a unique institution with a unique historical background” (id. at n. 16), Justice Alito never clarified a constitutional sense in which the Bureau’s funding differed from the near-identical funding structure for the Fed.  

The majority criticized Justice Alito’s dissent for adopting a selective historical approach.  “The dissent [did] not meaningfully grapple with the many parliamentary appropriations laws that preserved a broad range of fiscal discretion for the King,” including “’sums not exceeding’ appropriations.”  Slip op. at 20 (cleaned up).  While the dissent “engage[d]” with post-ratification history, the majority found it “unclear why” the “differences” Justice Alito identified would “matter under the dissent’s theory.” Id. at 21.  One wonders whether Justice Alito’s objections to the Bureau’s “novel,” “unprecedented,” and “never before seen” funding structure (slip op. at 1, 3, 22 (Alito, J., dissenting)) are so strong that they exceed Bruen’s originalist requirement that the government supply “a well-established and representative historical analogue” but “not a historical twin.”  New York State Rifle & Pistol Ass’n v. Bruen, 142 S.  Ct. 2111, 2133 (2022).

As Professor Leah Litman has aptly explained, anti-novelty arguments of the sort made by Justice Alito can be quite problematic when assessing the constitutionality of legislatively established structures.  “[G]iven the sheer number of policies that [Congress] could conceivably pursue, Congress may not have tried out all forms of constitutionally permissible regulation.” Leah M. Litman, Debunking Antinovelty, 66 DUKE L.J. 1407, 1444 (2017). And yet Justice Alito seemed to expect this type of legislative precedent when he demanded that the Bureau show a precise historical analogue for its funding structure.  While Professor Litman did not offer an originalist analysis, her points align with prominent originalists’ related concerns about reducing constitutional meaning to a narrow and potentially unrepresentative or factual erroneous subset of original applications or “constitutional references.” See Lawrence B. Solum, Original Public Meaning, 2023 MICH. STATE L. REV. 807, 841-43; Christopher R. Green, Originalism and the Sense-Reference Distinction, 50 ST. LOUIS U. L. J. 555, 591 (2006). Justice Alito seemed to offer an even more fraught variant of an original applications problem — he suggested that a funding structure must have a preceding, original identical application (and perhaps one that is grounded in centuries of practice) before it can be considered constitutional.  Justice Alito’s apparent requirement is novel, narrow, and has so little to do with constitutional meaning that it should not be considered originalist.  

Justice Kagan’s concurrence offered a far more accommodative approach to history and was joined by Justices Sotomayor, Kavanaugh, and Barrett.  Justice Kagan agreed with the majority that the Bureau’s funding scheme “would have fit right in” during the late-18^th century. Slip. Op. at 1 (Kagan, J., concurring).  In addition, she endorsed the consideration of an extended historical timeline and an “unbroken congressional practice” showing significant variety in appropriations practices that continued “for more than  two centuries.”  Id. at 5.   She further emphasized the need to ease up on the level of specificity required of historical evidence. As Justice Kagan pointed out, “[w]hether or not the CFPB’s mechanism has an exact replica, its essentials are nothing new.”  Id.  In contrast to Justice Alito’s strict anti-novelty test, Justice Kagan’s more general approach makes it easier for judges to ground modern regulatory structures in history.  The Justices’ differing approaches to the use of history will likely loom large in upcoming decisions ranging from the Second Amendment issues presented by United States v. Rahimi to separation-of-powers concerns presented by SEC v. Jarkesy.

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Once the Court had the benefit of a more complete historical record, Consumer Financial Protection Bureau v. Community Financial Services Ass’n became a relatively easy decision for Justices across the ideological spectrum.  While seven Justices signed on to Justice Thomas’s analysis of original public meaning, a closer examination of the Justices’ opinions reveals methodological pluralism even within the relatively narrow originalist modalities of text and history.  Only time will tell how the Justices will sort out their underlying methodological concerns in future separation-of-powers cases.  Consumer Financial Protection Bureau v. Community Financial Services Ass’n has set the stage for the Court to decide what may well become some of the most important decisions ever in the areas of administrative law and separation of powers.

Christine Kexel Chabot is an Associate Professor at Marquette University Law School.