On February 20, the Supreme Court ruled 6-3 that the International Emergency Economic Powers Act does not authorize the President to impose tariffs. In Part 1 of our emergency coverage, we break down the textual holding that all six majority justices agreed on — why "regulate" has never meant "tax" anywhere in the U.S. Code, why IEEPA's fifty-year history cuts against the government, and why the greater-includes-the-lesser argument doesn't work when you're comparing regulation to taxation. We also explain why we split this into two episodes: the distinction between the binding holding and the plurality's major questions doctrine analysis matters enormously a distinction a lot of the commentary is missing.
00:00:14 --> 00:00:17 Hello, and welcome to Administrative Remedies,
00:00:17 --> 00:00:19 because you can't fix what you don't understand.
00:00:19 --> 00:00:21 Brought to you in part by the University of Tulsa
00:00:21 --> 00:00:24 College of Law. I'm Gwendolyn Savitz, an associate
00:00:24 --> 00:00:26 professor here at TU and the associate dean of
00:00:26 --> 00:00:28 research and intellectual life. And I'm Mark
00:00:28 --> 00:00:31 Rourke. I'm the dean of the College of Law. We'll
00:00:31 --> 00:00:33 be breaking down complex doctrines with real
00:00:33 --> 00:00:35 -life analogies and examples to demystify the
00:00:35 --> 00:00:37 world of administrative law for everyone trying
00:00:37 --> 00:00:39 to understand how government actually works.
00:00:40 --> 00:00:41 Agencies are the main way the federal government
00:00:41 --> 00:00:44 gets things done. It's not through Congress for
00:00:44 --> 00:00:46 reasons we'll be addressing over the course of
00:00:46 --> 00:00:50 this series. Welcome back to Administrative Remedies.
00:00:51 --> 00:00:52 We're going to do things a little differently
00:00:52 --> 00:00:55 this week. The tariff decision came down on Friday,
00:00:55 --> 00:00:58 and it's too important for us to not cover it
00:00:58 --> 00:01:00 immediately. So we're going to do it as a bonus
00:01:00 --> 00:01:03 episode and tack it with Season 1 since that's
00:01:03 --> 00:01:06 the material it really goes with. We're splitting
00:01:06 --> 00:01:08 it into two episodes today because a lot of the
00:01:08 --> 00:01:11 coverage is muddying to really... important in
00:01:11 --> 00:01:13 different parts of the Roberts opinion, the part
00:01:13 --> 00:01:16 where six justices agree on the result, and the
00:01:16 --> 00:01:18 part where only three sign on to the major questions
00:01:18 --> 00:01:21 doctrine analysis. Those are not the same thing,
00:01:21 --> 00:01:23 and the distinction matters enormously. This
00:01:23 --> 00:01:26 first episode is the holding, what all six majority
00:01:26 --> 00:01:29 justices agree on. The second episode will be
00:01:29 --> 00:01:32 the fracture, where we talk about the seven separate
00:01:32 --> 00:01:35 opinions and what they're fighting about. Next
00:01:35 --> 00:01:38 week, we will be back to regular season two content.
00:01:39 --> 00:01:43 So, Mark, you hire a babysitter. And before you
00:01:43 --> 00:01:46 leave, you tell them that if the kids start going
00:01:46 --> 00:01:48 crazy with snacks, they can regulate their access
00:01:48 --> 00:01:51 to the pantry. If they're grabbing junk food
00:01:51 --> 00:01:52 every five minutes, they can limit what they
00:01:52 --> 00:01:55 take. They can cut them off after a certain point.
00:01:55 --> 00:01:57 If it's really getting out of hand, they can
00:01:57 --> 00:02:00 lock the pantry entirely. You want the babysitter
00:02:00 --> 00:02:02 to use their judgment. Yeah, okay, that sounds
00:02:02 --> 00:02:05 reasonable. You're giving them options to handle
00:02:05 --> 00:02:07 things if they become a problem. All right. So
00:02:07 --> 00:02:10 now imagine that you come home and the kids tell
00:02:10 --> 00:02:12 you that the babysitter decided to start charging
00:02:12 --> 00:02:14 them a dollar every time they wanted a snack.
00:02:14 --> 00:02:17 So the babysitter was running a side hustle on
00:02:17 --> 00:02:20 top of the babysitting gig. Yes. So you confront
00:02:20 --> 00:02:22 the babysitter and say, what on earth are you
00:02:22 --> 00:02:25 doing? And the babysitter says, you told me to
00:02:25 --> 00:02:28 regulate their snack access. That's what I'm
00:02:28 --> 00:02:31 doing. I could have banned snacks entirely. You
00:02:31 --> 00:02:33 said I could lock the pantry. Charging a dollar
00:02:33 --> 00:02:35 per snack is less restrictive than that. I'm
00:02:35 --> 00:02:38 not banning anything. I'm just putting a price
00:02:38 --> 00:02:41 on it. That's regulation. Okay. There's a logic
00:02:41 --> 00:02:46 to that, right? That the market access does create
00:02:46 --> 00:02:49 some controls. So I guess on the surface, that
00:02:49 --> 00:02:54 seems reasonable? Yeah. I mean, it can. The babysitter's
00:02:54 --> 00:02:56 right. You said regulate. Babysitter's right
00:02:56 --> 00:03:00 that... Charging a fee is at least in some senses
00:03:00 --> 00:03:03 less severe than a total ban, but it still feels
00:03:03 --> 00:03:06 wrong. And when you think about why it feels
00:03:06 --> 00:03:09 wrong, you realize it's because you told the
00:03:09 --> 00:03:12 babysitter to manage the snack situation, to
00:03:12 --> 00:03:14 set rules, to control access. You never told
00:03:14 --> 00:03:16 them they could collect money from the kids.
00:03:16 --> 00:03:19 Those are different things. OK, so the question
00:03:19 --> 00:03:22 isn't really whether the babysitter has the authority
00:03:22 --> 00:03:26 or has this kind of authority. It's whether this
00:03:26 --> 00:03:29 particular authority, the power to charge the
00:03:29 --> 00:03:31 kids money for snacks, was part of the original
00:03:31 --> 00:03:34 deal. Yes. And so really whether when you said
00:03:34 --> 00:03:37 they could regulate stuff, that's enough to get
00:03:37 --> 00:03:39 them to charging snacks. And in the real world,
00:03:40 --> 00:03:43 that distinction between regulating and taxing.
00:03:43 --> 00:03:45 determined whether the president of the United
00:03:45 --> 00:03:47 States could impose tariffs under a law that
00:03:47 --> 00:03:50 never mentioned tariffs at all. Okay, so on February
00:03:50 --> 00:03:53 20th, the Supreme Court answered that question.
00:03:53 --> 00:03:56 The case is Learning Resources Inc v. Trump,
00:03:56 --> 00:04:00 and the vote was 6 -3, and the answer was no.
00:04:01 --> 00:04:04 Correct. So AIPA, the International Emergency
00:04:04 --> 00:04:07 Economic Powers Act, gives the president broad
00:04:07 --> 00:04:10 authority to deal with emergencies. It authorizes
00:04:10 --> 00:04:13 the president to regulate importation. But six
00:04:13 --> 00:04:16 justices concluded that the power to regulate
00:04:16 --> 00:04:19 importation does not include the power to impose
00:04:19 --> 00:04:21 tariffs. The power to tax is a different power,
00:04:21 --> 00:04:24 a power that belongs to Congress, and Congress
00:04:24 --> 00:04:27 never gave it away in that statute. OK, so let's
00:04:27 --> 00:04:30 start with the statute. What is it and what does
00:04:30 --> 00:04:33 it actually say? AIPA was passed in 1977, and
00:04:33 --> 00:04:36 the basic idea is pretty straightforward. It
00:04:36 --> 00:04:38 gives the president a set of economic tools to
00:04:38 --> 00:04:41 respond to foreign threats. It's like. an emergency
00:04:41 --> 00:04:44 toolkit for international crises. Okay. What
00:04:44 --> 00:04:46 kind of threats was Congress thinking about?
00:04:46 --> 00:04:49 Well, the statute says that the president has
00:04:49 --> 00:04:51 to identify an unusual and extraordinary threat
00:04:51 --> 00:04:55 to national security, foreign policy, the economy.
00:04:55 --> 00:04:58 This has to come from primarily outside the United
00:04:58 --> 00:05:01 States. If the president declares a national
00:05:01 --> 00:05:03 emergency under the National Emergencies Act,
00:05:04 --> 00:05:07 once that happens, AIPA unlocks a set of specific
00:05:07 --> 00:05:10 powers. And those powers are what maps onto the
00:05:10 --> 00:05:13 babysitter analogy. Exactly. So here's the key
00:05:13 --> 00:05:15 provision. And the entire case turns on these
00:05:15 --> 00:05:19 words. Under IEPA, the president may investigate,
00:05:19 --> 00:05:21 block, during the pendency of an investigation,
00:05:21 --> 00:05:25 regulate, direct, and compel, nullify, void,
00:05:25 --> 00:05:28 prevent, or prohibit any acquisition, holding,
00:05:28 --> 00:05:31 withholding, use, transfer, withdrawal, transportation,
00:05:32 --> 00:05:46 importation, or exportation. And if you're wondering,
00:05:46 --> 00:05:48 it looks about as confusing on the paper as it
00:05:48 --> 00:05:52 does online. It's a mouthful. It really is. The
00:05:52 --> 00:05:55 important part is what's in there and what isn't.
00:05:55 --> 00:05:58 There are nine different verbs. Investigate,
00:05:58 --> 00:06:02 block, regulate, direct, compel, nullify, void,
00:06:02 --> 00:06:05 prevent, prohibit. Those are nine specific things
00:06:05 --> 00:06:08 that the president can do. And a list of the
00:06:08 --> 00:06:10 things he can do them to, things like transfers,
00:06:10 --> 00:06:13 imports and exports. It's broad, but it's also
00:06:13 --> 00:06:17 specific in a way that matters. Because tariff
00:06:17 --> 00:06:20 isn't one of those verbs, right? So a duty isn't
00:06:20 --> 00:06:24 in there. Tax isn't in there. It seems like Congress
00:06:24 --> 00:06:27 was not giving this authority to the president
00:06:27 --> 00:06:30 to say this special thing we call tariffs and
00:06:30 --> 00:06:32 taxes. You don't have the power to do this under
00:06:32 --> 00:06:34 this act. Right. Exactly. So none of those words
00:06:34 --> 00:06:37 appear. And that's like at the beginning with
00:06:37 --> 00:06:39 the babysitter analogy, when the parents said
00:06:39 --> 00:06:43 regulate, limit, restrict, cut off or lock. They
00:06:43 --> 00:06:46 never said charge. OK, so how has AIPA actually
00:06:46 --> 00:06:49 been used? If it's been around since 1977, it
00:06:49 --> 00:06:51 has to have a history. Yeah. Presidents have
00:06:51 --> 00:06:54 used it continuously, at least dozens of times.
00:06:54 --> 00:06:56 But they always did it for what would look more
00:06:56 --> 00:07:00 like sanctions. So blocking the assets of a foreign
00:07:00 --> 00:07:02 regime, prohibiting transactions with weapon
00:07:02 --> 00:07:05 proliferators, freezing property connected to
00:07:05 --> 00:07:08 terrorism. Those are the things everybody agrees
00:07:08 --> 00:07:11 IEPA was designed for. Ah, but no tariffs. Yes.
00:07:11 --> 00:07:14 In the 50 years, almost, across eight presidents
00:07:14 --> 00:07:17 from both parties, no one had ever used IEPA
00:07:17 --> 00:07:20 to impose any sort of tariff. And when presidents
00:07:20 --> 00:07:22 wanted to impose tariffs, and they definitely
00:07:22 --> 00:07:24 did, there have been tariffs, they had completely
00:07:24 --> 00:07:27 different statutes they used to do that, statutes
00:07:27 --> 00:07:29 that were specifically about customs and trade.
00:07:29 --> 00:07:31 And those statutes look really different from
00:07:31 --> 00:07:34 IEPA. So show us some of those differences. How
00:07:34 --> 00:07:36 exactly did they look different? Each one of
00:07:36 --> 00:07:38 them uses the word duty. They also cap the rate.
00:07:39 --> 00:07:42 One caps it at 50%, another at 15%. They impose
00:07:42 --> 00:07:45 time limits. One requires a phase down after
00:07:45 --> 00:07:47 a year. Another limits the tariff to 150 days.
00:07:48 --> 00:07:51 And they also require procedural steps before
00:07:51 --> 00:07:53 it can actually happen, like investigations by
00:07:53 --> 00:07:55 the International Trade Commission, public hearings,
00:07:56 --> 00:07:59 published findings. So limits on the rate, limits
00:07:59 --> 00:08:01 on the time, requirements for process before
00:08:01 --> 00:08:04 it happens. AIPA has none of that. OK, so that's
00:08:04 --> 00:08:08 the statute. But what actually happened? How
00:08:08 --> 00:08:10 did this controversy actually kick off? All right.
00:08:10 --> 00:08:13 Shortly after he took office, Trump officially
00:08:13 --> 00:08:17 determined that two foreign threats existed that
00:08:17 --> 00:08:20 he said justified action under AIPA. So the first
00:08:20 --> 00:08:23 was what he said was an influx of illegal drugs
00:08:23 --> 00:08:26 from Canada, Mexico and China. And the second
00:08:26 --> 00:08:28 was large and persistent trade deficits. This
00:08:28 --> 00:08:31 idea that the United States was importing far
00:08:31 --> 00:08:33 more than it was exporting and that this was
00:08:33 --> 00:08:36 hollowing out American manufacturing and undermining
00:08:36 --> 00:08:38 critical supply chains. And he then declared
00:08:38 --> 00:08:41 national emergencies for both of those. Yeah.
00:08:41 --> 00:08:43 So he said each one was an unusual and extraordinary
00:08:43 --> 00:08:46 threat, which is the language that IEPA requires.
00:08:46 --> 00:08:49 And then he invoked his powers under IEPA to
00:08:49 --> 00:08:53 regulate importation, which he did by imposing
00:08:53 --> 00:08:57 tariffs. Big ones. How big? For the drug trafficking
00:08:57 --> 00:09:00 emergency, it was 25 percent on most imports
00:09:00 --> 00:09:02 from Canada and Mexico and 10 percent on most
00:09:02 --> 00:09:05 imports from China. For the trade deficit emergency,
00:09:06 --> 00:09:08 it was at least 10 % on all imports from all
00:09:08 --> 00:09:11 trading partners. And plenty of countries had
00:09:11 --> 00:09:13 rates that were much higher than that. And these
00:09:13 --> 00:09:16 rates kept changing. Eventually, at one point,
00:09:16 --> 00:09:18 the total effective tariff rate on most Chinese
00:09:18 --> 00:09:22 goods was about 145%. OK, so what does that actually
00:09:22 --> 00:09:24 mean for someone buying things? It means that
00:09:24 --> 00:09:26 a $200 piece of equipment manufactured in China
00:09:26 --> 00:09:30 could have $290 in tariffs added on top before
00:09:30 --> 00:09:33 it even reached a store shelf. A small business
00:09:33 --> 00:09:35 that was importing parts for manufacturing could
00:09:35 --> 00:09:37 see those input costs more than double overnight.
00:09:38 --> 00:09:40 And because the rates kept changing, and they
00:09:40 --> 00:09:43 were changing sometimes day to day, importers
00:09:43 --> 00:09:46 couldn't plan anything. The Chief Justice's opinion
00:09:46 --> 00:09:48 described a dizzying array of modifications.
00:09:48 --> 00:09:51 It can also take like two to three weeks for
00:09:51 --> 00:09:53 something to just physically move from China
00:09:53 --> 00:09:55 to the United States. So people trying to place
00:09:55 --> 00:09:58 orders had no idea what the rate was going to
00:09:58 --> 00:10:01 be when the goods arrived. And this wasn't targeted
00:10:01 --> 00:10:03 at a single product or a country. It was just
00:10:03 --> 00:10:06 universally applicable. Right. This was a comprehensive,
00:10:07 --> 00:10:09 constantly shifting tariff regime covering essentially
00:10:09 --> 00:10:12 all American trade imposed and modified at the
00:10:12 --> 00:10:15 president's sole discretion with no procedural
00:10:15 --> 00:10:18 prerequisites, no caps and no time limits. All
00:10:18 --> 00:10:21 based on two words in a 1977 statute. Yes. Two
00:10:21 --> 00:10:24 words separated by 16 other words, regulate and
00:10:24 --> 00:10:28 importation. OK. So let's get to what the court
00:10:28 --> 00:10:30 actually said here. Before we start, I want to
00:10:30 --> 00:10:33 be really clear about something. The whole reason
00:10:33 --> 00:10:35 we broke these into different episodes, because
00:10:35 --> 00:10:38 it matters a lot. The Roberts opinion, that's
00:10:38 --> 00:10:40 the majority opinion. It has multiple parts,
00:10:40 --> 00:10:43 but not all of them have the same legal force.
00:10:43 --> 00:10:49 So parts 1, 2A1, and 2B are the official opinion
00:10:49 --> 00:10:52 of the court. Those are the ones that six justices
00:10:52 --> 00:10:55 signed onto, and those parts are binding law.
00:10:56 --> 00:11:01 But parts 2A2 and 3 are only plurality opinions.
00:11:02 --> 00:11:04 There are only three justices for those. That's
00:11:04 --> 00:11:06 where the major questions doctrine analysis happens.
00:11:07 --> 00:11:09 And that one we are saving for the next episode.
00:11:10 --> 00:11:12 This time we're just focusing on what all the
00:11:12 --> 00:11:15 justices agreed on. Okay. So the holding we're
00:11:15 --> 00:11:17 about to discuss doesn't depend on major questions
00:11:17 --> 00:11:20 doctrine at all. It does not. Six justices agreed
00:11:20 --> 00:11:23 that ordinary statutory interpretation, just
00:11:23 --> 00:11:25 reading the words of the statute in their proper
00:11:25 --> 00:11:29 context, is enough to resolve the case. And the
00:11:29 --> 00:11:32 opinion begins not with AIPA, but with the Constitution,
00:11:32 --> 00:11:34 because the power issue here is one the framers
00:11:34 --> 00:11:37 cared about potentially more than almost any
00:11:37 --> 00:11:41 other. The taxing power. It's... Article 1, Section
00:11:41 --> 00:11:43 8, Clause 1, the very first enumerated power
00:11:43 --> 00:11:47 given to Congress. Yes. And Roberts frames it
00:11:47 --> 00:11:49 that way. So he sets up everything that follows.
00:11:49 --> 00:11:52 Read this part. Okay, Article I, Section 8 of
00:11:52 --> 00:11:55 the Constitution sets forth the powers of the
00:11:55 --> 00:11:57 legislative branch. The first clause of that
00:11:57 --> 00:12:00 provision specifies that the Congress shall have
00:12:00 --> 00:12:04 the power to lay and collect taxes, duties, imposts,
00:12:04 --> 00:12:07 and excises. It is no accident that this power
00:12:07 --> 00:12:10 appears first. The power to tax was, Alexander
00:12:10 --> 00:12:13 Hamilton explained, the most important of the
00:12:13 --> 00:12:15 authorities proposed to be conferred upon the
00:12:15 --> 00:12:19 Union. It is both a power to destroy and a power
00:12:19 --> 00:12:22 necessary to the existence and prosperity of
00:12:22 --> 00:12:25 a nation. The one great power upon which the
00:12:25 --> 00:12:27 whole national fabric is based. Here, Roberts
00:12:27 --> 00:12:29 is reminding everyone that the Constitution grants
00:12:29 --> 00:12:32 Congress the power to tax. And it does it before
00:12:32 --> 00:12:35 it grants Congress the power to regulate commerce
00:12:35 --> 00:12:37 or the power to declare war before everything
00:12:37 --> 00:12:39 else. And that the framers did this deliberately.
00:12:40 --> 00:12:43 Because they just fought a revolution that started
00:12:43 --> 00:12:47 with taxation. Exactly. So here they were giving
00:12:47 --> 00:12:49 Congress and more specifically the House, because
00:12:49 --> 00:12:51 that's where taxation legislation needs to start,
00:12:51 --> 00:12:54 sole authority over taxes. They did not vest
00:12:54 --> 00:12:56 any part of that taxing authority in the executive
00:12:56 --> 00:13:00 branch. And tariffs are taxes. Is that settled
00:13:00 --> 00:13:04 law? Yes. Roberts quotes other cases saying that
00:13:04 --> 00:13:06 tariffs are very clearly a branch of the taxing
00:13:06 --> 00:13:09 power. A tariff is a tax levied on imported goods.
00:13:09 --> 00:13:12 And the first Congress's first exercise of its
00:13:12 --> 00:13:15 taxing power, the second law enacted right after
00:13:15 --> 00:13:18 one about taking oaths, was a tariff. OK, so
00:13:18 --> 00:13:20 the government wasn't arguing the president has
00:13:20 --> 00:13:23 some inherent power to impose tariffs. No. So
00:13:23 --> 00:13:26 the government conceded that the president had
00:13:26 --> 00:13:28 no inherent peacetime authority to impose tariffs.
00:13:29 --> 00:13:31 Their entire case rests on AIPA, on the argument
00:13:31 --> 00:13:34 that Congress delegated the tariff power when
00:13:34 --> 00:13:36 it authorized the president to regulate importation.
00:13:36 --> 00:13:39 The question is whether that delegation actually
00:13:39 --> 00:13:41 happened. Now we're getting to the heart of the
00:13:41 --> 00:13:43 textual holding, and the court's making several
00:13:43 --> 00:13:46 moves. Each one builds up on the last one. So
00:13:46 --> 00:13:49 like we said before, AIPA lists nine specific
00:13:49 --> 00:13:53 verbs. It names multiple kinds of transactions.
00:13:53 --> 00:13:55 Congress went to the trouble of specifying all
00:13:55 --> 00:13:58 of these, but it never mentioned. tariffs. It
00:13:58 --> 00:14:00 never mentioned duties. If Congress had wanted
00:14:00 --> 00:14:03 to convey the extraordinary power to impose tariffs,
00:14:03 --> 00:14:05 the court says, it would have done so expressly,
00:14:05 --> 00:14:07 as it consistently has in every other tariff
00:14:07 --> 00:14:10 statute. But couldn't Congress just have thought
00:14:10 --> 00:14:13 regulate was broad enough to cover it? I mean,
00:14:13 --> 00:14:15 maybe they didn't think they needed a separate
00:14:15 --> 00:14:18 word. All right. Valid point. So the court looks
00:14:18 --> 00:14:21 at the definition of regulate, and here's where
00:14:21 --> 00:14:23 they quote from Black's Law Dictionary. And this
00:14:23 --> 00:14:25 is the version that was in effect when AHIPA
00:14:25 --> 00:14:28 was enacted. Okay, so Robert says, as a matter
00:14:28 --> 00:14:31 of ordinary meaning, the term regulate means
00:14:31 --> 00:14:34 to fix, establish, or control, adjust by rule,
00:14:34 --> 00:14:38 method, or established mode, direct by rule or
00:14:38 --> 00:14:40 restriction, or subject to governing principles
00:14:40 --> 00:14:43 or laws. All right, it's a pretty broad word.
00:14:44 --> 00:14:46 Yeah, so what's the problem? The problem is what
00:14:46 --> 00:14:49 it doesn't include, which is taxation. And this
00:14:49 --> 00:14:52 isn't a theoretical point. Here's how the court
00:14:52 --> 00:14:55 drives it home. The U .S. Code is replete with
00:14:55 --> 00:14:58 statutes granting the executive the authority
00:14:58 --> 00:15:01 to regulate someone or something. Yet the government
00:15:01 --> 00:15:04 cannot identify any statute in which the power
00:15:04 --> 00:15:08 to regulate includes the power to tax. The government
00:15:08 --> 00:15:10 concedes, for example, that the Securities and
00:15:10 --> 00:15:13 Exchange Commission cannot tax the trading of
00:15:13 --> 00:15:16 securities, even though it is expressly authorized
00:15:16 --> 00:15:19 to regulate the trading of securities. We are
00:15:19 --> 00:15:22 therefore skeptical that in IEPA and IEPA alone,
00:15:23 --> 00:15:25 Congress hit a delegation of its birthright power
00:15:25 --> 00:15:28 to tax within the quotidian power to regulate.
00:15:28 --> 00:15:31 Yeah, so that's the issue. The government's position
00:15:31 --> 00:15:33 would have required the court to accept that
00:15:33 --> 00:15:36 in one statute and one statute alone, the word
00:15:36 --> 00:15:38 regulate means something that has never meant
00:15:38 --> 00:15:41 anywhere else in the entire U .S. code. The SEC
00:15:41 --> 00:15:44 regulates security trading, but it can't tax
00:15:44 --> 00:15:47 it. The SEC regulates broadcasting, but it can't
00:15:47 --> 00:15:49 tax it. The FDA regulates drugs, but it can't
00:15:49 --> 00:15:52 tax them. Every agency in the federal government
00:15:52 --> 00:15:54 regulates something, and none of them reach that
00:15:54 --> 00:15:56 authority to automatically include the power
00:15:56 --> 00:15:59 to impose taxes. The birthright power to tax,
00:16:00 --> 00:16:02 hidden within the quotidian power to regulate,
00:16:03 --> 00:16:05 that's just a great line. Salute to you, John
00:16:05 --> 00:16:08 Roberts. All right. Quotidian means everyday
00:16:08 --> 00:16:11 or ordinary. This is... Essentially saying that
00:16:11 --> 00:16:12 Congress hands out the power to regulate like
00:16:12 --> 00:16:15 plastic cutlery, whereas it treats the power
00:16:15 --> 00:16:17 to tax like the family silver. The idea that
00:16:17 --> 00:16:19 one is hidden inside the other just isn't plausible.
00:16:20 --> 00:16:22 The court also addresses the government's export
00:16:22 --> 00:16:25 argument. Yeah, so this is pretty hard for the
00:16:25 --> 00:16:27 government to recover from. IEPA authorizes the
00:16:27 --> 00:16:30 president to regulate importation or exportation.
00:16:30 --> 00:16:33 Same verb, same sentence. It applies to both
00:16:33 --> 00:16:36 imports and exports. If regulate includes the
00:16:36 --> 00:16:39 power to tax, then the president could tax exports.
00:16:40 --> 00:16:43 But the Constitution expressly forbids export
00:16:43 --> 00:16:46 taxes. No tax or duty shall be laid on articles
00:16:46 --> 00:16:50 exported from any state. Yeah, so the government's
00:16:50 --> 00:16:53 reading would make IEPA at least partly unconstitutional.
00:16:53 --> 00:16:55 And courts generally try to read statutes in
00:16:55 --> 00:16:57 ways that don't make the statutes unconstitutional.
00:16:58 --> 00:17:00 So the fact that Regulate applies identically
00:17:00 --> 00:17:03 to imports and exports in the same provision,
00:17:03 --> 00:17:06 but taxation would be constitutionally permitted
00:17:06 --> 00:17:09 for one and forbidden for the other, is pretty
00:17:09 --> 00:17:11 strong evidence that Regulate wasn't meant to
00:17:11 --> 00:17:14 include taxation in the first place. And then
00:17:14 --> 00:17:17 there's also the other verbs. Those other verbs
00:17:17 --> 00:17:19 all describe things you might do in a sanctions
00:17:19 --> 00:17:22 contest, like blocking assets or prohibiting
00:17:22 --> 00:17:25 transactions or compelling disclosures, voiding
00:17:25 --> 00:17:27 unauthorized dealing. Each one of those is a
00:17:27 --> 00:17:31 regulatory action. None of them is the distinct
00:17:31 --> 00:17:33 power to raise revenue. And decades of presidential
00:17:33 --> 00:17:36 practice confirms this. Presidents have used
00:17:36 --> 00:17:38 these verbs to sanction foreign actors and to
00:17:38 --> 00:17:41 control transactions. Never to impose taxes.
00:17:41 --> 00:17:44 But the government didn't just roll over. They
00:17:44 --> 00:17:46 had some real arguments, like you generally can't
00:17:46 --> 00:17:48 separate tariffs from trade regulation historically.
00:17:49 --> 00:17:51 They've always been intertwined, so doesn't regulate
00:17:51 --> 00:17:55 importation naturally include tariffs? The court
00:17:55 --> 00:17:58 says here that this is answering the wrong question.
00:17:58 --> 00:18:00 The question isn't whether tariffs could be a
00:18:00 --> 00:18:03 means of regulating commerce. Of course they
00:18:03 --> 00:18:05 could. The question is whether Congress, when
00:18:05 --> 00:18:08 it wrote the specific words, regulate importation,
00:18:08 --> 00:18:11 in this specific statute, intended to give the
00:18:11 --> 00:18:13 president the power to impose tariffs at his
00:18:13 --> 00:18:15 sole discretion. And Congress's pattern of usage
00:18:15 --> 00:18:18 is the most relevant evidence. When Congress
00:18:18 --> 00:18:20 grants the tariff power, it uses the word duty.
00:18:20 --> 00:18:24 It sets caps. It imposes time limits. It requires
00:18:24 --> 00:18:27 procedural steps. All things that it did not
00:18:27 --> 00:18:30 do in IEPA. And then there's the greater includes
00:18:30 --> 00:18:33 the lesser argument. IEPA lets the president
00:18:33 --> 00:18:37 ban imports entirely. A total embargo. Everyone
00:18:37 --> 00:18:39 agrees about that. So why can't the president
00:18:39 --> 00:18:43 do the less extreme thing and just impose a tariff?
00:18:43 --> 00:18:47 just condition imports on a payment. This is
00:18:47 --> 00:18:50 potentially the argument that will resonate most
00:18:50 --> 00:18:52 with non -lawyers, and it's one that the principal
00:18:52 --> 00:18:55 dissent really pushes. If you can do this bigger
00:18:55 --> 00:18:58 thing, why can't you do this smaller thing? Because
00:18:58 --> 00:19:00 they're not the same kind of thing. That's the
00:19:00 --> 00:19:03 court's answer, and that's the reason we started
00:19:03 --> 00:19:05 this with that hypo. Tariffs aren't a smaller
00:19:05 --> 00:19:07 version of an embargo. They're a different kind
00:19:07 --> 00:19:09 of thing entirely. An embargo is a regulatory
00:19:09 --> 00:19:12 action. It controls what crosses the border.
00:19:12 --> 00:19:15 A tariff is a tax. It's raising revenue for the
00:19:15 --> 00:19:18 Treasury. They're not on the same spectrum. The
00:19:18 --> 00:19:20 court says tariffs are different in kind, not
00:19:20 --> 00:19:22 degree, from other authority in IEPA. The authority
00:19:22 --> 00:19:25 to do one doesn't automatically include the authority
00:19:25 --> 00:19:27 to do the other. The babysitter can lock the
00:19:27 --> 00:19:29 pantry, but that doesn't mean the babysitter
00:19:29 --> 00:19:32 can charge admission to the pantry. Yeah, exactly.
00:19:32 --> 00:19:35 So locking is controlling access. Charging is
00:19:35 --> 00:19:37 collecting revenue. Even though locking the pantry
00:19:37 --> 00:19:40 is harsher in one sense, charging is a different
00:19:40 --> 00:19:42 power entirely. We need to share this with some
00:19:42 --> 00:19:45 property lawyers out there. But getting back
00:19:45 --> 00:19:47 to the case, what about the predecessor statute?
00:19:48 --> 00:19:50 Yes. Before IEPA, there was the Trading with
00:19:50 --> 00:19:54 the Enemy Act, TWEA, which was IEPA's predecessor.
00:19:54 --> 00:19:58 In 1971, Nixon imposed a 10 % surcharge on almost
00:19:58 --> 00:20:01 all foreign imports under that act, which had
00:20:01 --> 00:20:03 virtually identical language. It said regulate
00:20:03 --> 00:20:07 importation. And court upheld it. So the government's
00:20:07 --> 00:20:10 argument was Congress enacted AIPA six years
00:20:10 --> 00:20:12 later using the same words. So it must have incorporated
00:20:12 --> 00:20:15 that interpretation. Yeah. If a court says regulate
00:20:15 --> 00:20:19 importation includes tariffs and Congress uses
00:20:19 --> 00:20:21 those exact words again, aren't they adopting
00:20:21 --> 00:20:24 that meaning? The court says no for multiple
00:20:24 --> 00:20:27 reasons. First, the case that talked about it
00:20:27 --> 00:20:29 wasn't a Supreme Court case. So the court says
00:20:29 --> 00:20:32 that a single expressly limited opinion from
00:20:32 --> 00:20:35 a specialized intermediate appellate court isn't
00:20:35 --> 00:20:36 going to create the kind of well -settled meaning
00:20:36 --> 00:20:40 that the court could presume Congress had adopted.
00:20:40 --> 00:20:43 It also adds some important context. There's
00:20:43 --> 00:20:46 a House report that went with AIPA that explicitly
00:20:46 --> 00:20:48 complained that successive presidents had seized
00:20:48 --> 00:20:52 upon the open -endedness of that act to turn
00:20:52 --> 00:20:53 it into something quite different from what was
00:20:53 --> 00:20:56 envisioned in 1917. So that's Congress expressing
00:20:56 --> 00:20:59 concern about executive overreach under the predecessor
00:20:59 --> 00:21:03 statute, not endorsing it. And Nixon's tariffs
00:21:03 --> 00:21:06 were nothing like what we're dealing with here.
00:21:06 --> 00:21:08 Yeah, they weren't even close. The Nixon surcharge
00:21:08 --> 00:21:11 was 10 percent. This lasted less than five months
00:21:11 --> 00:21:14 and only applied to goods that had been the subject
00:21:14 --> 00:21:16 of prior tariff concessions. Nixon himself said
00:21:16 --> 00:21:19 that this was a temporary measure. Compare that
00:21:19 --> 00:21:23 to the 145 percent tariff on Chinese goods and
00:21:23 --> 00:21:25 as well as tariffs on virtually all trade with
00:21:25 --> 00:21:28 no end date and no constraints. So the court
00:21:28 --> 00:21:29 doesn't need to decide whether Nixon's narrow
00:21:29 --> 00:21:31 temporary action was lawful to conclude that
00:21:31 --> 00:21:35 this one wasn't. OK, so let's step back and state
00:21:35 --> 00:21:37 clearly what the court has held in this case.
00:21:40 --> 00:21:42 All right. Six justices, Chief Justice Roberts,
00:21:43 --> 00:21:46 Sotomayor, Kagan, Gorsuch, Barrett and Jackson,
00:21:46 --> 00:21:49 all agree that IEPA does not authorize the president
00:21:49 --> 00:21:52 to impose tariffs. And the reasoning is textual.
00:21:52 --> 00:21:55 Yes, it's purely textual. AEPA contains no reference
00:21:55 --> 00:21:58 to tariffs or duties. The words regulate don't
00:21:58 --> 00:22:00 include the power to tax. It doesn't in AEPA.
00:22:00 --> 00:22:02 It doesn't in any other federal statute that
00:22:02 --> 00:22:04 the government could identify. When Congress
00:22:04 --> 00:22:07 delegates tariff authority, it does so with explicit
00:22:07 --> 00:22:10 language and using careful limits. It didn't
00:22:10 --> 00:22:12 do either of those here. And we've had nearly
00:22:12 --> 00:22:15 50 years of presidential practice that confirmed
00:22:15 --> 00:22:17 this reading. No president had ever used AEPA
00:22:17 --> 00:22:21 to impose tariffs. We also know this not just
00:22:21 --> 00:22:23 from the words themselves, but from the pattern.
00:22:23 --> 00:22:25 Every time Congress gave someone the power to
00:22:25 --> 00:22:27 collect money through tariffs, it's used different
00:22:27 --> 00:22:30 words, set different limits, and imposed different
00:22:30 --> 00:22:32 procedures. So the absence of those here isn't
00:22:32 --> 00:22:34 an accident. It's evidence that Congress didn't
00:22:34 --> 00:22:38 intend IEPA to include that power. So there's
00:22:38 --> 00:22:40 a lot more, though, to this case. Oh, there sure
00:22:40 --> 00:22:43 is. Six justices agreed on this result, but almost
00:22:43 --> 00:22:46 every justice on the court felt the need to write
00:22:46 --> 00:22:49 separately. The case itself is seven opinions
00:22:49 --> 00:22:52 spanning 170 pages. And the disagreements aren't
00:22:52 --> 00:22:54 about the answer. They're about the reasoning,
00:22:54 --> 00:22:57 about what tools courts should use to interpret
00:22:57 --> 00:22:59 statutes like this and what those tools mean
00:22:59 --> 00:23:01 for the next case. And that connects back to
00:23:01 --> 00:23:04 our major questions episodes. Yes. So the fight
00:23:04 --> 00:23:06 playing out across these is the fight we set
00:23:06 --> 00:23:09 up in season one. Is the major questions doctrine
00:23:09 --> 00:23:11 a freestanding constitutional principle or is
00:23:11 --> 00:23:14 it just textualism done right? And when should
00:23:14 --> 00:23:16 it apply? That is what we will be discussing
00:23:16 --> 00:23:20 in the other half of this long major episode.
00:23:20 --> 00:23:24 I really can't wait for that. I know. It is coming
00:23:24 --> 00:23:27 up momentarily. All right. Well, until then,
00:23:27 --> 00:23:29 I'm Mark Rourke. And I'm Gwen Savitz. See you
00:23:29 --> 00:23:32 next episode. So that does it for today's episode
00:23:32 --> 00:23:34 on administrative remedies. Thank you for joining
00:23:34 --> 00:23:37 us today. Please, if you enjoy this podcast and
00:23:37 --> 00:23:39 enjoy this episode, give us a like on Spotify,
00:23:40 --> 00:23:42 iTunes, or whatever platform you're listening
00:23:42 --> 00:23:45 on. And be sure to tune in next time where we'll
00:23:45 --> 00:23:47 continue to dive into the contours of administrative
00:23:47 --> 00:23:50 law. Because remember, you can't fix what you
00:23:50 --> 00:23:51 don't understand.