As I mentioned at the beginning of the week, it was pretty clear that another blog entry was warranted before Monday in light of the Supreme Court ending its term and my travel schedule. So here goes. There are three cases to discuss that are relevant to the ADA universe. They are: Loper Bright Enterprises v. Raimondo; Security and Exchange Commission v. Jarkesy; and City of Grants Pass, Oregon v. Johnson. All three cases have implications for the ADA universe. As usual, the blog entry is divided into categories and they are: Loper Bright; Grants Pass, and Jarkesy. My thoughts/takeaways will appear in each section rather than at the end of the blog entry.



Loper Bright


When this case was argued, it looks like, as we discussed here, what would happen would be that Chevron would become very much like Kisor. It didn’t work out that way. In a 6-3 decision along ideological lines, the majority got rid of Chevron entirely and replaced it with Skidmore deference, which means final regulations are just persuasive authority. How persuasive is up to the court considering the context of the case.


There are several thought takeaways regarding this:


  1. This seems to create a bit of a strange situation where agency interpretation of their own regulations per Kisor, which we discussed here, potentially gets a higher level of judicial deference than final regulations. That is a bit of a strange result considering once a rule goes through the Administrative Procedure Act processes, the rule is considered to have the force of law.
  2. Under some circumstances a regulation can become its own cause of action. How that happens is a bit complicated. The result of this case makes you wonder whether a regulation could ever become its own cause of action since every regulation is now just persuasive authority to varying degrees (but see below discussion about how legislative intent is going to matter more than ever).
  3. Businesses, at least according to the Atlanta Journal-Constitution this morning, were hailing this ruling, but I am not sure that kind of thinking is best for business. If Chevron did anything, it brought certainty to legal advising. This decision puts just about everything up in the air. Businesses like certainty and this decision creates a lot of uncertainty.
  4. Final regulations can only be thrown out if they are arbitrary and capricious. Does this case mean that courts essentially will have to start operating similar to the Illinois Joint Commission on Administrative Rules, which has as one of its critical roles determining whether a rule goes beyond legislative intent. It would seem to me that whether a final regulation becomes incredibly persuasive to a court after this decision will vary depending upon how close to legislative intent the regulation actually is. Since everyone is a textualist now, that analysis would have to start with the plain meaning of the statute.
  5. It isn’t surprising that this particular court threw out Chevron. Several of the justices, including but not limited to those appointed by Pres. Trump, had expressed severe misgivings with the doctrine in the past. Justice Scalia who actually authored Chevron became a fierce advocate against it. A few months back, I actually read an opinion piece by his son talking about how some agencies would take advantage of that doctrine to give themselves extreme flexibility when it came to issuing final regulations. He claimed that he never did that while heading a federal agency but knew of discussions that talked about the extreme flexibility agencies had with coming up with the regulations in light of Chevron.
  6. Look for administrative law to be a growth industry for lawyers going forward. You can expect a lot more regulatory challenges to final regulations and, as noted above, those regulatory challenges may be easier. On the other hand, if legislative intent becomes the marker, you may see a lot more litigation over whether certain regulations create their own cause of action. It is entirely possible after this case, that more regulations than ever will create their own causes of action. Finally, as a practical matter, arbitrary and capricious may no longer be the standard for whether a final regulation survives.



Grants Pass


In this case, the Supreme Court allowed cities to come up with ordinances, including making camping outside a misdemeanor among other things, in order to combat the homelessness crisis. The majority said that the cruel and unusual punishment clause is about punishment and not the criminal statute in the first place. So, the cruel and unusual punishment clause was not activated. Even if it was activated, the approaches of the various cities to deal with homelessness did not rise to the level of cruel and unusual punishment.


Thought takeaways on this case include:


  1. Cities now have far more tools to deal with the homeless crisis. Hopefully, the tools used and the approaches will be respectful of the homeless community. All of that remains to be seen. Clearly, cities and communities were very frustrated by previously being limited, especially in the Ninth Circuit, as to what they could do to deal with homelessness.
  2. The ADA still applies, so when developing further tools, cities will want to keep in mind Title II of the ADA.





In this case, the Supreme Court said that whenever a civil penalty is contained in a statute and the appropriate agency seeks a civil penalty, that case must be heard in an Article III court. Further, a party to such a case has a right to a jury trial under the seventh amendment because a civil penalty is in the nature of a common law suit. The case turned upon whether a “public right,” was involved. The majority said it wasn’t while the dissent said it was. I am not a scholar in the constitutional doctrine of “public rights,” so I can’t offer an opinion on whether the majority or the dissent got it right.


Thought takeaways on this case include:


  1. Title III of the ADA, 42 U.S.C. §12188(b)(2) allows the DOJ to seek civil penalties for violations of Title III. Under the ADA system, such cases would be heard in Article III courts anyway. However, now there is a right to a jury trial. Recall, Title III only allows for injunctive relief and attorney fees. DOJ can seek civil penalties and advocate for damages for a party. So, you might see defendants request a jury trial now when DOJ takes on a case against them that includes a civil penalty. Certainly, the right to a jury trial changes the calculus of the litigation.
  2. A question remains as to how this affects the securities industry more widely, if at all, such as in the area of broker-dealer regulation (while I do arbitrate on FINRA matters from time to time, I am not by any means a securities law practitioner).


A final note, while it has nothing to do with the ADA, the Supreme Court did say you can expect the Trump immunity decision on Monday.


Have a great week everybody and stay cool.