In the News

As we all await the next administrative law earthquake from the Supreme Court, it may be worth taking stock of just how much the ground has already shifted. In our new article, Major Rules in the Courts: An Empirical Study of Challenges to Federal Agencies’ Major Rules, we provide this analysis. Using a novel dataset of all 1,870 major rules (as defined by the Congressional Review Act) issued from 1996 through the end of the Trump Administration, we analyze whether a major rule issued today is as likely to be challenged and withstand the challenge as a rule issued over 20 years ago. In addition to answering those overarching questions, we break down win rates by presidential administration and agency, as well as by party of the deciding judges’ appointing President. Along the way, we examine trends in forum shopping and the use of Chevron deference, among other variables.

Agencies have limited capacity to conduct rigorous cost-benefit analysis — they often cite resource limitations as a reason that they cannot monetize certain benefits. But they also have at least one strategy for mitigating this challenge: They can look to their past valuation practices for models and build on their existing methodologies. Where benefits like increased dignity and public health are at stake, every bit of valuation counts.

Many banks continue to profit from overdraft fees paid by consumers who can least afford it, often because consumers are not fully informed about the true cost of relying on overdraft credit. Federal regulation could help. As part of President Biden’s war on junk fees, the Consumer Financial Protection Bureau (CFPB) has proposed a rule that could go a long way towards reducing the amount that consumers pay in overdraft fees (we submitted comments in support). Under the proposed rule, banks can choose to charge a much lower fee (either a default fee level set by CFPB or a fee that recoups only banks’ actual costs), thereby reducing the burden on consumers who mistakenly overdraft. Alternatively, if banks want to continue charging high fees, they must follow the same regulations that apply to other types of credit, which require more transparency and consumer protections.

The major questions doctrine is a non-issue for Order 1920. This is simply not one of the “extraordinary cases” that the West Virginia Court cautioned might warrant skepticism under the doctrine. Without Order 1920 remedying existing planning and cost allocation practices, FERC would be playing whack-a-mole in adjudicating individual tariffs when it must eradicate systemic failures. And we would all pay the price: unjust rates and a less reliable grid.

To be clear, we don’t dispute that eliminating or curtailing Chevron deference would have serious consequences... But equally clear—yet sometimes overlooked—is that agencies often have other avenues to adopt ambitious rules without Chevron deference. This piece highlights several of the legal principles that will endure regardless of Chevron’s fate (or the fate of other legal-deference regimes). In so doing, we highlight where regulators, advocates, and commentators can enforce the boundaries of any decision limiting or eliminating Chevron deference and so thwart efforts to leverage the decision to cripple agency actions that do not rest on Chevron deference. Applying these principles faithfully upholds legislative grants of regulatory authority.

A recent peer-reviewed academic paper on transmission planning modeling (two Policy Integrity members are among the authors) has important implications for ongoing policy conversations around grid expansion. The authors’ study method exploits the idea of coordinated planning of several interrelated parts. In their model, the moving parts are transmission (onshore and offshore) as well as generation and storage capacity, and the whole system is co-planned. The paper’s focus is on holistic transmission planning (with case studies for the ISO-NE and PJM grids) that includes accounting for negative environmental externalities. The key takeaways from this paper can help inform ongoing transmission planning policy conversations.

To help achieve the state’s ambitious GHG emission reduction targets, New York is preparing to propose its own version of a cap-and-trade program called New York Cap and Invest. But if New York is to successfully comply with the CLCPA, it cannot rely on New York Cap and Invest alone. New York will need a well-designed scheme of programs and regulatory mechanisms to not only reduce GHG emissions but to also ensure that disadvantaged communities see real air quality improvements. 

If NYCI’s price on GHG emissions will not unlock the necessary emissions reductions for the CLCPA’s first compliance deadline (2030), DEC, NYSERDA, and other state agencies must act immediately to deploy complementary programs that make up the difference. But the state has provided little evidence of such action — and 2030 is nearly upon us. New York must change tack now.

Voluntary carbon markets remain largely unregulated despite these serious integrity issues. The U.S. Commodity Futures Trading Commission (CFTC) and the U.S. Securities and Exchange Commission (SEC) have recently taken small steps in the right direction. But as long as voluntary carbon markets continue to exist, the U.S. government should explore ways to more proactively regulate them.

In a forthcoming law review article, Richard Revesz and I contend that agencies should preemptively rebut challenges under the major questions doctrine by drawing parallels to past agency actions. A recent federal regulation offers a template for this analysis. In its pollution standards for new vehicles issued last week, the Environmental Protection Agency extensively responded to claims that the rule triggers the major questions doctrine. EPA’s analysis is comprehensive and well-researched.