In West Virginia et al. v. Environmental Protection Agency et al., the U.S. Supreme Court ruled that the Environmental Protection Agency (EPA) exceeded its authority under the Clean Air Act by devising carbon emission limits for existing power plants based on an approach involving a shift in electricity generation to cleaner sources than coal.  To reach its decision, the Court invoked the “major questions doctrine,” a doctrine that requires an agency to point to “clear congressional authorization” for its action in “extraordinary cases” in which “the history and breadth of the authority that [the agency] has asserted and the economic and political significance of that assertion, provide a reason to hesitate before concluding that Congress meant to confer such authority.”  Because the EPA was unable to show a clear grant of authority from Congress, the Supreme Court ruled that the EPA did not have the authority devise the carbon emission limits at issue.  Beyond the decision’s implications for the EPA’s ability to address climate change, the decision could have significant potential implications for the ability of all federal agencies, including the CFPB, FTC, and federal banking agencies, to undertake significant actions without express Congressional authorization.

The majority opinion written by Chief Justice Roberts did not lay out a clear test for when the major questions doctrine should be invoked.  In his concurring opinion Justice Gorsuch attempted to outline the circumstances “when an agency action involved a major question for which clear congressional authority is needed.”  Those circumstances are:

• When an agency claims the power to resolve an issue of great political significance.  As examples, Justice Gorsuch cited Supreme Court cases involving a DOJ regulation dealing with assisted suicide drugs and an OSHA standard imposing COVID-19 vaccine and testing requirements on a large portion of the national workforce.
• When an agency seeks to regulate a significant portion of the American economy.  As examples, Justice Gorsuch cited Supreme Court cases involving regulating tobacco products, eliminating rate regulation in the telecommunications industry, subjecting private homes to Clean Air Act restrictions, and suspending local housing laws and regulations to impose a COVID-19-related eviction moratorium.
• When an agency seeks to regulate an area that is traditionally regulated by state law.

Judge Gorsuch noted that his “list of triggers may not be exclusive” (but that they were all present in the West Virginia case and thus made it “a relatively easy case for the doctrine’s application.”)

The doctrine that courts invoke most often when reviewing an agency’s interpretation of a statute is the Chevron doctrine.  Under that doctrine, a court will typically use a two-step analysis to determine if it must defer to an agency’s interpretation.  At step one, the court looks at whether the statute directly addresses the precise question before the court.  If the statute is ambiguous or silent, the court will proceed to step two and determine whether the agency’s interpretation is reasonable.  If it determines the interpretation is reasonable, the court will ordinarily defer to the agency’s interpretation.

In her dissent, Justice Kagan asserted that the cases relied on by the majority as precedent for applying the major questions doctrine were actually cases in which the Supreme Court followed its “ordinary method” of “normal statutory interpretation,” (i.e. Chevron).  Responding to Justice Kagan, the majority opinion stated that the requirement of “clear congressional authorization” in those cases “confirms that the approach under the major questions doctrine is distinct.”  The majority’s statement would also confirm—albeit indirectly–that the Chevron doctrine remains applicable in cases that do not trigger the major questions doctrine.

The absence of rigid parameters from the Supreme Court for what constitutes an “extraordinary case” or a case with sufficient economic or political significance in which lower courts should invoke the major questions doctrine creates the potential for the doctrine to be used to challenge many agency interpretations or other actions where clear statutory authority is lacking.  For example, it could be argued that the doctrine should be invoked to invalidate the CFPB’s interpretation that “unfair acts or practices” include non-credit discrimination because the issue of the use of federal authority to prevent discrimination is an issue of great political significance.  If the doctrine is applied, a court should not defer to the CFPB’s interpretation because there is no express Congressional authorization for such an interpretation and the interpretation would represent an expansion of the very specific anti-discrimination statutes Congress has enacted (i.e. the ECOA and the FHA )that proscribe certain types of credit discrimination.

It is also worth noting that even where a court is unwilling to invoke the major questions doctrine, the absence of agency authority to take a particular action could provide the basis for invalidating agency action under either step one or step two of Chevron.  For example, under step one, it could be argued that Congress has spoken to the precise issue (i.e. that unfairness is different from and not inclusive of discrimination) because it already created two specific statutory schemes that address discrimination, there is no evidence Congress intended the CFPB’s unfairness authority to be used to fill gaps in those schemes.  Moreover, in Dodd-Frank, Congress adopted the FTC Act’s standard of unfairness which has never been applied to discrimination.  Alternatively, a similar argument could be made under Chevron step two for why the CFPB’s interpretation is unreasonable.

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