The Boot of the State—Mark Chenoweth on Suing Federal Agencies and Ensuring the Separation of Powers
“Congress has to be the one that appropriates any funds from the treasury. That’s the power of the purse that Congress has. And if we lose that, then we’ll lose the country, because it has to be the elected representatives. If the executive is self-funding, then there’s just no ability to rein that in.”
At the Conservative Political Action Conference, we sat down with Mark Chenoweth, President and General Counsel for the New Civil Liberties Alliance, which brings cases against the government when it violates constitutional freedoms. Today, we discuss three major lawsuits he is currently prosecuting. The first is The Cato Institute versus the Department of Education, which argues against Biden’s loan forgiveness plan on the basis of lacking statutory authority.
“There just isn’t explicit language giving the Secretary of Education the ability to cancel the debt of 43 million people and at a cost of over half a trillion dollars,” says Chenoweth.
The second case is Missouri versus Biden, which alleges that the Biden administration violated the First Amendment by directing social media companies to censor viewpoints that were in conflict with the government’s narrative on COVID-19.
“There definitely seems to be a level of communication within the government about how to achieve this goal of censoring people that I think Americans are going to find disturbing,” says Chenoweth.
And the third case is Hoeg versus Newsom, which claims that California Assembly Bill 2098 violates the First Amendment rights of medical professionals by intimidating and punishing doctors who dissent from mainstream views, thus interfering in the doctor-patient relationship.
“I think of it as the Sovietization of science and medicine because this is the kind of thing you would expect in the Soviet Union under Lysenko, or something like that,” says Chenoweth. “This isn’t what you would expect in the United States of America, where we have freedom.”
Jan Jekielek: Mark Chenoweth, such a pleasure to have you on American Thought Leaders.
Mark Chenoweth: Good to be with you.
Mr. Jekielek: You are involved, or your organization is involved in a number of incredibly high-profile cases, some of which are at the Supreme Court, as we speak. We’re looking at this case on the Biden student loan forgiveness program. This is a huge one that you’re doing.
Another one, which I’ve talked about extensively on this show, is Missouri v. Biden. Looking into the discovery materials has shown us unbelievable cooperation between the government and Big Tech.
Finally, you’ve got Hoeg v. Newsom. I didn’t even know the name of it until today. This is the case challenging the law that I call, “Prevent doctors from doctoring in California.” We’re going to talk about all of this today.
Mr. Chenoweth: Fantastic. They’re all important topics.
Mr. Jekielek: Absolutely. Let’s start with the loan forgiveness. The bottom line is I keep hearing from people that this rule, this approach, is just simply illegal. I think you’re the one who can actually tell me is that true and how true is it?
Mr. Chenoweth: Right. It’s very true, and it’s illegal six ways from Sunday, or maybe even 12. This is such an illegal act by the administration that we could take as much time as you have to really detail all the various ways in which this is illegal. But maybe the clearest reason why it’s illegal is there’s just no statutory authority for the Secretary of Education to do what he has done.
Federal departments and federal agencies don’t have any power to act unless Congress gives them that power. Here, Congress has not given the Secretary of Education the power to forgive or cancel student loan debt anywhere like this. In fact, Congress has only done minor debt cancellations in the past with very specific recipients in mind, and you have to qualify for that cancellation based on criteria that have limited it pretty significantly.
What Congress has done more broadly, and they did this in the CARES Act right at the beginning of the pandemic in March of 2020, is they put into place a six-month moratorium, essentially a forbearance, where they said that students with federal student loan debt did not have to pay principle or interest payments on that for six months. That wasn’t a cancellation of debt; it was just a forbearance. The idea that you could take from that any ability to cancel debt is really just wrong from a legal standpoint.
Mr. Jekielek: One of the big questions in people’s minds is that it feels like it’s just shifting the burden, because someone has to pay. One of the big complaints is this idea; it shifts the burden from the people that took the loans out to some other people, the taxpayers, broadly speaking. What is the legality around this?
Mr. Chenoweth: It’s interesting you mentioned that fairness question because it came up in oral argument at the Supreme Court just this past week from Chief Justice Roberts, who I don’t necessarily think of as the person most likely to bring up a fairness argument, but he did. He said, “What about the kid who took out a loan for a lawn care company and then was devastated by the pandemic?” Or it might be other kinds of small business type situations that you could imagine.
The answers that both the Solicitor General of the U.S. had and that other justices had was, “We don’t judge law by how it affects other people; we judge it by how it affects the people who are covered by it.” Because Congress has made that determination to give certain people relief and maybe not other people, is not an argument against that particular law.
That would be fine if Congress had passed this, but Congress didn’t pass this. This is something that really has been created out of whole cloth by the Secretary of Education, and that creates a few different problems from a legal standpoint. One of them that got a lot of play in the oral argument was whether or not the lines that were drawn by the secretary in crafting this were arbitrary and capricious lines.
That’s a bit of jargon under what’s called the Administrative Procedure Act. Pretty much any regulation that is passed by a federal department or agency has to satisfy the test of not being arbitrary or capricious. What it means is that when you’re drawing the lines of who qualifies and who doesn’t, the secretary has to provide sufficient justification for why he drew the lines where he did.
He can’t just say, “We’re going to forgive all the debt of women, but not men, or all the debt of people of a certain race, but not another race, or Catholics, but not anybody else. Those would all be arbitrary distinctions.
One of the concerns with the lines that were drawn is he said, “We’re going to give $10,000 of debt relief to certain folks, and 20,000 to other folks, and nothing to other folks.” Where did he come up with those lines? Congress would be allowed to draw lines like that, but it’s not clear that the secretary has the power to just arbitrarily decide who does and doesn’t get debt relief. In fact, I would say it’s clear that he does not have the authority to do that.
Those who support what the secretary has done would say, “What about the Heroes Act of 2003 that was passed in the wake of 9/11 to give soldiers some debt relief?” The idea was you may be going off to war and you may be getting paid less as a soldier than you were getting paid in the private sector. If you’re getting called up for reserve duty, maybe you won’t be able to make your student loan payments. The idea was to give the Secretary of Education at that point some ability to help soldiers out in that situation.
Even then, that was never used to forgive a single debt. It was used to postpone debt, to give some forbearance, but it was never used to cancel any student loan debt. But now, it has. Now, the Secretary of Education has used that law because there’s a provision in it that gives the secretary the ability to “waive or modify any provision of Title IV of the act,” which is the one that has to do with student loan debt. What the Solicitor General has essentially said is that waive or modify language that Congress used gave the secretary the keys to the kingdom, and he can do whatever he wants.
Mr. Jekielek: He can modify this act to basically forgive anything. Is that what you’re saying?
Mr. Chenoweth: Right. That’s basically what he has done.
Mr. Jekielek: That sounds unbelievable.
Mr. Chenoweth: It is unbelievable. He’s taken the provisions that had limitations on any sort of forgiveness or cancellation, and he’s just waived those provisions, and then he’s modified it by adding in people to qualify for debt who Congress didn’t have in there. This really bothered the Chief Justice, and he said, “Wait a minute. Waive or modify doesn’t mean anything.”
There was a case with MCI [MCI Telecommunications Corp. v. American Telephone & Telegraph Co.] several years ago where Justice Scalia said, “Usually when we talk about modify, we mean that it has to be close to what was there originally.” I mean, you could say that the French Revolution modified the status of the nobility in France.
Mr. Jekielek: That’s stretching the word a little bit.
Mr. Chenoweth: Yes. And I think he said, “Only because the English language allows for understatement and sarcasm.” That’s not exactly what we mean when we use the word modify. The Solicitor General’s response to that was, “This is broader than that. It’s waive or modify.” The Chief Justice didn’t seem to be buying that. He seemed to think that it didn’t say you could waive debt; it said you could waive certain provisions.
The other thing that individual states said, which I thought was a very good point, the secretary didn’t even waive these provisions because they still apply. People who have student loan debt can still treat the law as though those provisions are still there. It’s not as though he was really waiving provisions.
Justice Amy Coney Barrett said, “He just red-penciled the whole thing. He just took out what he didn’t like and added in other things,” and the government admits that’s what the secretary did. It is not at all clear that you can do that.
Mr. Jekielek: What does the term statutory authority actually mean, for the benefit of our audience?
Mr. Chenoweth: It means that Congress has passed an explicit law giving a particular department or agency the ability to do something. No one doubts that the Secretary of Education is the right person who would be responsible for the student loan question, but that doesn’t mean he gets to do whatever he wants in that territory. He only has the power that Congress gives him.
Mr. Jekielek: Okay, very simple. A big topic that has come up on this program is that Congress is essentially ceding its rights or basically its work to the bureaucracy or to the agency.
Mr. Chenoweth: For maybe 20 years or so now, you could say that there’s a slow drip, and we see this happening. Certainly, this is something that the New Civil Liberties Alliance [NCLA] was created to stop. We’re trying to turn off the spigot. What we’ve seen in this administration in particular is that it’s a fire hose now. Practically everything this administration has done has really been treating the administrative agencies as though they’re empowered to do things that they just aren’t empowered to do.
You can look at the nationwide eviction moratorium, which interestingly also started with the CARES Act. Congress had said, “For four months in federally subsidized housing, you can’t evict anyone.” That was what the CARES Act said. Originally, the Trump administration and then the Biden administration after many more months came in and said, “Okay, we’re going to extend this nationwide and we’re going to say that it’s for all housing, not just federally subsidized housing.”
Eventually, that made it to the Supreme Court. When it did, in a case called Alabama Realtors [Alabama Assoc. of Realtors v. Dept. of Health & Human Services], the Supreme Court said, “Wait a minute. Congress said four months of federally subsidized housing, you can’t just change that language. The CDC quarantine power doesn’t give it the ability to stop evictions nationwide and shut down all of the landlord/tenant courts across the entire country,” which is what had happened.
I think what the Supreme Court is going to do here is something similar. They’re going to say, “The CARES Act had this first four months, but it didn’t give the secretary the ability to do this indefinitely.”
Mr. Jekielek: The ramifications of that decision are so massive. On a national scale, how many millions of people are deeply affected in both directions, with some not needing to pay, and some suddenly not having revenue to pay for their buildings?
Mr. Chenoweth: Lots of people lost properties that they had lots of money invested in.
Mr. Jekielek: Absolutely. The idea that the CDC could make a rule like this, but basically ignoring that reality, to me and perhaps some viewers, it seems unbelievable that could happen.
Mr. Chenoweth: It was unbelievable. Folks had not planned for that possibility at all. They weren’t assuming that risk when they purchased these properties. It’s one of the reasons we need to have the rule of law in this country. The laws change slowly when Congress is involved. This was very deliberate on the part of our founders when they set up the Constitution.
It’s bicameralism and presentment. You have to get something through the House of Representatives and the Senate. That’s very difficult to do. And then, you have to get the President’s signature. That’s called presentment.
If something doesn’t go through all of those steps, then it’s not law. And yet, what we see from this administration time and time again is they want to use an executive order or some sort of shortcut or some sort of action where they have a secretary or a head of an agency go back, look at vague statutory language in some old law and pretend that old vague language gives them powers that no one had ever discovered before.
You look back at student loans. When Nancy Pelosi was the Speaker of the House, she said Congress had to be involved, and that this wasn’t something the Secretary of Education could do on his own.
Nancy Pelosi: People think that the President of the United States has the power for debt forgiveness. He does not. He can postpone, he can delay, but he does not have that power. That would have to be an act of Congress.
Mr. Chenoweth: And yet, they somehow forgot that, once this action had taken place. We need to get back to that constitutional regime where it’s our elected officials in the House and the Senate that make these sort of momentous decisions you’re talking about. But certainly, at least four or five of those six justices seem to be very aware of the administrative state problem and the fact that too much power has slipped the grasp of Congress, and that it’s their job as the judicial branch to ensure that the separation of powers in the constitutional design is sustained.
The particular way that they’re trying to go about that is a doctrine that they’ve come up with called the major questions doctrine. It has developed over about a 25-year period. If you go back to the late 90s, early 2000s, you can see antecedents of this idea going back to a case called Brown and Williamson [FDA v. Brown & Williamson Tobacco Corp.], where the FDA was trying to regulate tobacco. The Supreme Court said, “Congress has not given the FDA authority to do this. It has thought about it many times. It has always failed. You can’t just decide that you have this authority.”
There have been a series of other cases, but it’s really happened within the last few years, including the Alabama Realtors case about nationwide eviction moratoriums, including the OSHA vaccine mandate case, and then finally in a case called West Virginia v. EPA, which had to do with EPA regulation.
Now I’m suddenly blanking on whether it’s the Clean Air Act or Clean Water Act. But the particular outcome of that case was to say that essentially you can’t find elephants in mouseholes. You can’t take a particular vague or small piece of statutory language and blow out a huge new program from that small piece of statutory language.
You can think of it as a clear statement principle if you want to. But the Supreme Court is going to look at the statutory language, and if an agency or department is reading that to give them vast power, then the court is going to expect the language to be much more explicit.
What we see in all those cases that I mentioned, and then also in the student loan case, is there just isn’t explicit language giving the Secretary of Education the ability to cancel the debt of 43 million people, at a cost of over half-a-trillion dollars. There is just no explicit language to do that.
The Chief Justice brought it up three times at oral argument. “Isn’t this a major question? These look like major questions. Doesn’t this fit very closely with our previous major question cases?” The Chief Justice, at least, and I suspect because he’s often the swing justice on the current court, I suspect that if that’s where he is, then you’re going to see a majority of the justices on the court decide that this is a violation of the major questions doctrine, and they’re going to set aside this rule on that basis.
Mr. Jekielek: There is this attitude in government today where if you want to do something and the rules are an impediment, you get your best legal minds to go in and hunt for any excuse.
Mr. Chenoweth: Rummage.
Mr. Jekielek: Rummage is what it’s called.
Mr. Chenoweth: Yes, for sure. That’s absolutely correct, and that makes me think of two things, Jan. First, it reminds me of how I got involved in this in the first place. I was an attorney at the Consumer Product Safety Commission. I was legal counsel to Commissioner Anne Northup, who was one of the minority Republican commissioners under President Obama at the agency.
There had been a law passed in 2008, signed right at the tail end of the Bush administration, the Consumer Product Safety Improvement Act of 2008, trying to deal with lead on toys and things coming in from China. I joined about the time when the agency was implementing that law and putting rules into practice. I saw from the inside how the agency treated the statute that Congress had passed.
It wasn’t this faithful effort to read the statute and try to implement it as best as possible and figure out, “What did Congress really mean by this?” No, far from it. It was about how we can expand our authority as an agency as much as possible to cover as much territory as possible? How can we re-litigate these things that we lost in the debates on Capitol Hill and pretend that we have this power that was never given to us?
That wasn’t how I was taught administrative law in law school. I said, “Wait a minute. If this is how it’s really working in practice at this agency, we’ve got a major problem on our hands, because that means that Congress isn’t really in control anymore. Once it passes a law and turns things over to administrative agencies, Katie bar the door.” And I think that’s what we are.
The second thing that this reminds me of is that the Office of Legal Counsel at the Department of Justice looked at this action by the administration to cancel student loan debt, and it had a couple of things to say about the debt. It said, “Even under the broadest interpretation of the Heroes Act, it still says that you can’t put students in a better position than they were before the emergency went into effect.”
In this case, we would be talking about the pandemic. What the Secretary of Education has done has actually put people in a better position, because no one had $10,000 in debt canceled before the pandemic. That wasn’t the position they were in.
In fact, Jan, I would argue that because of the forbearance, and we’ll put to one side whether the forbearance was legal. Because as I said, Congress approved it for a limited time, and it went beyond that. But putting that to the side, students weren’t making principal or interest payments.
They’re still not, by the way, because it’s been extended until two months past the decision in this legal case, whenever that comes out. They’re not worse off. They haven’t had to make any payments. Their debt hasn’t been increasing.
How can you argue that they need this debt cancellation to put them in the same position that they were before the pandemic or that they would have been in, but for the pandemic? Also, there has been inflation during that whole period of time. Economists will tell you that inflation helps the debtor because you’re now paying back the same amount of debt with inflated dollars. That’s what these students will be doing when they start making the repayments.
The idea that they’re worse off than they would’ve been is very hard to justify. The Office of Legal Counsel looked at this. They didn’t say all the things I just said, but they did say that, “Look, you can only take people back to where they were. You can’t make them better off.” This regulation unquestionably makes students better off than they were, which is another reason why it’s illegal.
Mr. Jekielek: As we finish up this topic of the student debt, it’s basically Congress that has appropriated the money. Congress is the funder here. Is that right?
Mr. Chenoweth: Yes, that’s absolutely right. The Solicitor General was trying to say that because this is a benefits program and not a liberty at stake program the way that maybe the landlord interests were in the nationwide eviction moratorium case, that the rule would somehow be different and that the major questions doctrine wouldn’t apply.
But the appropriations clause of Article 1 of the Constitution still applies. That says Congress has to be the one that appropriates any funds from the Treasury. That’s the power of the purse that Congress has. If we lose that, then we’ll lose the country, because it has to be the elected representatives. If the executive is self-funding, then there’s just no ability to reign that in.
Justice Thomas brought this up at the oral argument and the response was disappointing from the government. They said, “This isn’t an appropriation from the Treasury because this is debt that’s being canceled.” There’s a couple of problems with that. First of all, the money was going to be going to the Treasury, so it’s really the flip side of the same coin.
The other issue is that in the early days of the Republic, we only had debt. The idea that somehow debt doesn’t count as money being appropriated by Congress is just wrong historically as an understanding of what counts as an appropriation or what the founders had in mind in using that language.
Typically, when Congress cancels debt, they do appropriate funds. They’ll say, “We’re no longer going to charge this up to a hundred million dollars,” or whatever, and they allow for a certain cap on what the spending is. The government wants to treat this as a new entitlement.
They don’t even know how much it’s going to cost; $400 billion, $500 billion, $800 billion. They’re not sure. There’ve been estimates over a trillion dollars that this program might cost before it’s all said and done, with no appropriation from Congress whatsoever.
That’s another reason that the Supreme Court is having not just second thoughts, but I think that they’re going to put a stop to this. They understand that the separation of powers can’t be protected if you have the executive spending a trillion dollars unauthorized.
Mr. Jekielek: At the beginning of the Republic, it was all debt. That’s really interesting, isn’t it? Please explain that.
Mr. Chenoweth: It was just the way the money worked back in those days, there were private banks like the Bank of New York that would issue different kinds of debt instruments. Currency wasn’t used as much. It was more debt instruments that were exchanged. If debt instruments aren’t treated as appropriations, then that would really blow a giant loophole into the appropriations clause and the power of Congress.
At that point, I suppose the administration would say, “Any agency or any department of the government that issues debt would be able to cancel debt without the say so of Congress.” You can just think of what the cost of that would be.
Mr. Jekielek: Exactly, what the raw cost of that would be.
Mr. Chenoweth: Absolutely.
Mr. Jekielek: Absolutely fascinating. Let’s switch gears. Let’s jump to the case that most people are familiar with, Missouri v. Biden. Some of the discovery materials you guys were able to procure were…
Mr. Chenoweth: Eye-opening?
Mr. Jekielek: Eye-opening is a good word. It seems like everyone is excited about it too. Please summarize the case for me just in case anyone isn’t familiar, and just let me know where we’re at with it.
Mr. Chenoweth: Yes, sure. For those who aren’t familiar, it is a case where the Attorney General of Missouri and the Attorney General of Louisiana are representing those states in the lawsuit. The New Civil Liberties Alliance is representing four private plaintiffs in the same lawsuit.
We’re all suing the administration, including Anthony Fauci, the Surgeon General, Vivek Murthy, and several other administration officials saying that those officials ordered Twitter and Facebook and other social media companies to censor certain things and even take people off of those platforms entirely.
Because that was the action of the government and not just action of those private companies, the First Amendment is implicated and that conduct is illegal. That’s the claim in the case. We’re representing Jay Bhattacharya, Martin Kulldorff, Aaron Kheriaty, and also a small healthcare organization in Louisiana. Jill Hines is the head of that organization, so she’s the other plaintiff that we’re representing.
What the discovery has shown in that case, as you were alluding to, Jan, is that there were quite extensive communications between the White House and many others. Rob Flaherty at the White House is the one who has been most often appearing in a lot of these emails. Not only was there a lot of communication, but a lot of it was quite explicit.
Now that they’re under suit, the government wants to pretend that these were just suggestions. If you read these emails, and some of them are public and others will become public over the course of the lawsuit, this doesn’t read like a friendly suggestion from your neighborhood government.