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Amicus Brief on Major Questions Doctrine in Loan Settlement Case

In 2022, the Department of Education (DOE) settled a class action brought by individuals who had applied to discharge their loans based on alleged misrepresentations or other misconduct by the schools they attended. Several of the schools identified in the settlement moved to intervene to object to the settlement and have since appealed the district court’s decision approving the settlement. We filed an amicus brief in the Ninth Circuit in support of neither party to address the proper application of the major questions doctrine, which the intervenors-appellants have invoked in support of their arguments that the DOE lacks statutory authority to enter into the settlement.

Our brief takes no position on whether the major questions doctrine ultimately applies to the case, nor does it take a position on how the Ninth Circuit should ultimately decide the case. It provides only the framework the Ninth Circuit should apply if it reaches the major questions doctrine, noting in particular that the court should not rest its analysis of the major questions doctrine solely on economic significance.

Our brief explains that, although the Supreme Court’s major questions precedents often reference the economic significance of an agency’s action, none of the Supreme Court’s precedents, including West Virginia, turns on this factor. Rather, West Virginia explains that, to be extraordinary enough to trigger the doctrine, the agency’s action must, at a minimum, also be “unheralded” and represent a “transformative” change in its authority. What is more, the economic significance of an agency’s action, including the dollar figures involved and number of persons affected, has never been the sole or even primary basis for triggering the major questions doctrine under the Supreme Court’s precedents. That fact is unsurprising given that many agency actions have arguably large economic effects, but the doctrine applies only in extraordinary cases.