You’ve Got You Major Questions Mixed Up with My Traditional Judicial Decisionmaking! Or How the Court Learned to Prevent Loan Forgiveness and Further Handcuff the Administrative State
Liam Pembroke
When the Supreme Court held that the Secretary of Education did not have congressionally delegated authority to forgive individuals up to $20,000 of student debt from federal loan programs, it did more than just guarantee a generation would continue to be saddled with debilitating debt.[i] The Court’s holding in Biden v. Nebraska exemplified a legal two-step that threatens the ability of agencies to exercise unambiguous authority delegated to them by Congress.
The HEROES Act, which the Court interpreted in Biden v. Nebraska, authorizes the Secretary of Education to “waive or modify any statutory or regulatory provision” relating to federal student loan programs during times of “national emergency” to ensure that “recipients … are not placed in a worse position financially” because of their student loans.[ii] Secretaries DeVos and Cardona both used this power throughout the COVID-19 pandemic to forbear interest accrual and payment requirements.[iii] Secretary Cardona attempted to use this same power to discharge between $10,000 and $20,000 worth of debt for eligible recipients.[iv] In response, Nebraska, Missouri, Arkansas, Iowa, Kansas and South Carolina sued the Secretary in the Eastern District of Missouri to challenge the policy.[v]
The fundamental interpretive issue in Biden v. Nebraska was the extent of the Secretary’s authority derived from the statutory language to “waive or modify”.[vi] In MCI Telecommunications Corp.,the Supreme Court held that, within a statute, the word “modify” must bear a “connotation of increment or limitation.”[vii]Justice Scalia’s majority opinion clarified that the word should naturally be understood to mean “moderate change” rather than more expansive “basic and fundamental changes” to the object of modification.[viii] This begs the question, what additional authority exists when congress adds “waive” to the mix in a statute?
In Biden v. Nebraska, the government argued that the phrase “waive or modify” grants the authority to waive and then modify the statutory and regulatory provisions relating to cancellation and discharge, and that this action was permissible because the phrase “waive or modify” should not be seen as two individual safe harbors (i.e., complete abandonment and non-substantial change), but two end points on a continuum of delegated authority.[ix] The Court disagreed, describing this argument as “sleight of hand” disguising the introduction of “radically new text” that equates to “exhaustive rewriting” of the text “from the ground up.”[x] The Court paid lip service to the fact that waive or modify is necessarily a broader power than modify. The Court’s holding, however, can be seen as considering Secretary Cardona’s action solely as an impermissible modification under its MCI precedent, excising waive and the additional power that it entailed from the statute.[xi]
While the Court explains its interpretive holding as if it were entirely natural, it runs into problems. Even though “we’re all textualists now,”[xii] the legislative history and unchallenged prior use of the HEROES Act by Secretaries DeVos and Cardona suggest that Congress did provide the Department of Education the power to substantively intervene in such a way that encompassed the challenged action. Former Representative George Miller, co-sponsor of the HEROES Act, filed an amicus brief identifying how the Act and its amendments were intended to provide the Secretary “broad discretion and ‘flexibility’ to protect student loan recipients from … national disasters” including “unforeseen issues” that they could not anticipate, like the COVID-19 pandemic.[xiii] Though the majority in Biden v. Nebraska distinguishes Secretary Cardona’s action from the “extremely modest and narrow” prior uses of the HEROES Act (“the Secretary has never previously claimed powers of this magnitude under the HEROES Act”), the dissent, petitioner’s reply brief, and former representative Miller’s amicus brief all point out that the waiver power exercised by Secretary Cardona is not fundamentally different from the previously uncontroversial power exercised by Secretary DeVos.[xiv]
So how does the Court make this distinction between the aforementioned “extremely modest and narrow” actions of Secretary DeVos, and those impermissibly violent edits to statutory and regulatory text that Secretary Cardona has visited upon us?[xv] Technically, it doesn’t. As Justice Barrett points out in her concurrence, the decision relies on “ordinary tools of statutory interpretation” alone, and while “the major questions doctrine reinforces that conclusion” it is “not necessary” for the Court to reach its holding.[xvi] Echoing an essay written by Justice Scalia, Justice Barrett argues that the extensive section of the majority opinion discussing the relevance of the major questions doctrine merely reflects the “familiar principle that we do not interpret a statute for all it is worth when a reasonable person would not read it that way.”[xvii] That argument fails under interrogation precisely because the exercise of the power available to Secretary Cardona was the reasonable and natural interpretation of the provision. If it were not so the Court would not have leaned so heavily on the major questions doctrine to reach its decision.
Justice Scalia doubted whether the Court could decree laws passed by Congress to “mean less than what they fairly say,” but that is exactly what this Court has done.[xviii] The Court considered first whether the challenged agency action is significant in order to subject unambiguous text to undeserved skepticism. While it might be fair to say that Congress does not intend to fit elephants in mouseholes, it certainly is not fair to say that Congress does not intend to fit them through elephant size holes.[xix] But why is this so severe a problem? Surely Congress can simply legislate when questionable interpretations arise (whether they come from an agency or court).[xx] Looking at Biden v. Nebraska we must ask ourselves how precise Congress must be when delegating an agency broad authority to administer agency programs—apparently it must be beyond unambiguous.[xxi]
The Court found the breadth of the challenged action questionable, but other legislation suggests that Congress knows how to limit the power of to “waive or modify.” 42 USC § 612 a(C)(ii) limits the Secretary of Labor’s power to waive or modify to only a limited set of provisions (rather than any provision) and ringfencesa particular clause against waiver or modification.[xxii] It naturally follows that Congress, by excluding such limitations within the HEROES Act, could just as reasonably have been deliberately giving the Secretary of Education an expansive power as they could have overlooked an unintended delegation. In fact, as Representative Miller highlighted, the legislative history suggested as much.[xxiii]
Though a lesser power than the federal student loan program, the 1995 version of general permitting provisions within the permitting section of the Marine Mammal Protection Act, which has since been modified, delegated the authority to “waive or otherwise modify” the general permit.[xxiv] As we know now, waiver is not modification, and current language within the modern Marine Mammal Protection Act provides the Commerce Secretary the power to “modify, suspend, or revoke in whole or in part any permit issued” where prescribed circumstances are met and opportunity for a hearing is available.[xxv] Would similar language, if included in the HEROES Act, have been sufficient to grant the type of power Secretary Cardona attempted to use? Considering that the power would still be expansive, rather than “extremely modest and narrow,” the Court could conceivably employ the same statutory considerations it did in regard to “waive or modify.”[xxvi] There would be a question whether “in whole or in part” applied to revoke alone, or to modify and suspend as well (series-qualifier or nearest reasonable referent).[xxvii] It is entirely possible that this Court would be predisposed to find that their prior holdings in MCI and Biden v. Nebraska would discourage them from even considering the concept of a “modification in whole.”[xxviii] This type of language clearly provides a broad power, but so did waive or modify.
While the Biden administration has continued its efforts to actualize loan forgiveness post Biden v. Nebraska, the Court’s decision may have lasting impacts.[xxix] This Court’s reticence to allow Congress to delegate a broad power conditioned by particular circumstances and procedural observances may, to the cynic, appear a deliberate attempt to stifle the exercise of unambiguous regulatory authority granted to a Federal agency by Congress. Almost more dangerously, Biden v. Nebraska highlights the indefinite nature of the major questions doctrine, and the offensive capacity it carries (even as technical dicta) to substantially alter the ability for agencies to exercise their legitimate authority.
Liam Pembroke is an Associate Editor with MJEAL. Liam can be reached at pembroke@umich.edu.
[i] Biden v. Nebraska, 143 S.Ct. 2355 (2023).
[ii] 20 U.S.C. §§ 1098bb(a)(1), (a)(2)(A).
[iii] 85 Fed. Reg. 79,856, 79,857 (Dec. 11, 2020) (to be codified at 34 CFR 682 and 685); 86 Fed. Reg. 5,008, 5,008 (Jan. 19, 2021) (to be codified at 34 CFR 682 and 685); 87 Fed. Reg. 61,512, 61,513-14 (Oct. 12, 2022).
[iv] 87 Fed. Reg. 61,512, 61,513 (Oct. 12, 2022).
[v] Complaint at 30-34, Nebraska v. Biden, 636 F. Supp. 3d 991 (E.D. Mo. 2022) (No. 22 Civ. 1040).
[vi] Biden, 143 S.Ct. at 2368-69.
[vii] MCI Telecomms. Corp. v. Am. Tel. & Tel. Co., 512 U.S. 218, 225 (1994).
[viii] Id. at 225, 228.
[ix] Transcript of Oral Argument at 6, 8, Biden v. Nebraska, 143 S. Ct. 2355 (2023) (No. 22-506); Reply Brief of Petitioner-Appellee at 17, Biden v. Nebraska, 143 S. Ct 2355 (2023) (No. 22-506) [hereinafter Petitioner Reply Brief] (where petitioners argue that “waive or modify” creates the authority “to reduce [legal obligations] to any extent short of waiver”).
[x] Biden, 143 S. Ct. at 2368-71.
[xi] See Biden, 143 S. Ct. 2394 (Kagan, J., dissenting) (where J. Kagan suggests that the majority has “sealed in a vacuum-packed container” the Secretary’s congressionally delegated powers).
[xii] Harvard Law School, The Antonin Scalia Lecture Series: A Dialogue with Justice Elena Kagan on the Reading of Statutes, Youtube (Nov. 25, 2015) at 8:28, https://www.youtube.com/watch?app=desktop&v=dpEtszFT0Tg.
[xiii] Brief for Former Representative George Miller as Amici Curiae in Support of Petitioners at 8, Biden v. Nebraska, 143 S. Ct. 2355 (2023) (No. 22-506) [hereinafter George Miller Amicus Brief].
[xiv] Biden, 143 S. Ct. at 2372 (“past waivers and modifications issued under the Act have been extremely modest and narrow in scope.”); Petitioner Reply Brief, supra note 9 at 24; Biden, 143 S. Ct. at 2385 (Kagan, J., dissenting); George Miller Amicus Brief, supra note 13, at 7 (where it is noted that “the statute did not need to mention ‘loan forgiveness’ – just as there was no need for it to mention ‘payment pause’ or ‘suspension of interest accrual’.”)
[xv] Biden, 143 S. Ct. at 2372.
[xvi] Id. at 2376 (Barrett, J., concurring).
[xvii] Biden, 143 S.Ct. at 2384 (Barrett, J., concurring); See Antonin Scalia, Common-Law Courts in a Civil-Law System: The Role of United States Federal Courts in Interpreting the Constitution and Laws, in A Matter of Interpretation: Federal Courts and the Law (Amy Gutmann et. al., eds., 1997) (“a text should not be construed strictly, and it should not be construed leniently; it should be construed reasonably, to contain all that it fairly means.”)
[xviii] See Scalia, supra note 16, at 29.
[xix] Whitman v. Am. Trucking, 531 U.S. 457, 468 (2001) (“congress … does not … hide elephants in mouseholes.”); see George Miller Amicus Brief, supra note 13, at 17 (“here the statute places the elephant in plain sight.”)
[xx] Am. Hosp. Ass’n v. NLRB, 499 U.S. 606, 617 (1991) (where the Court suggests that Congress, if displeased with the Board’s decision to limit by rule appropriate bargaining units within acute care settings, could always craft a “legislative remedy.”); see John F. Manning & Matthew C. Stephenson,Legislation and Regulation: Case and Materials 22 (Saul Levmore et al., eds., 4th ed. 2021) (where the authors discuss the legislative remedies Congress employed in regards to TVA v. Hill, including the God Squad and Tellico Damn exemption, where Congress amended the Endangered Species Act to better reflect their intentions).
[xxi] See West Virginia v. EPA, 142 S. Ct. 2587, 2616-26 (2022) (Gorsuch, J., concurring) (where J. Gorsuch sharpens the majority analysis by highlighting how the major questions doctrine is akin to other clear statement demands in other areas of interpretative law, like modern constitutional avoidance).
[xxii] 42 U.S.C. § 612(a)(C)(ii) (noting that “the Secretary of Labor may waive or modify the application of a provision of section 603(a)(5)(C) (other than clause (viii) thereof) of this title . . .” in relation to a federal grant program for Tribal governments. Akin to the HEROES act national emergency condition, this delegated authority is only available where the waiver or modification would facilitate “a more efficient or effective program” than before).
[xxiii] See George Miller Amicus Brief, supra note 13.
[xxiv] 16 U.S.C. § 1374(h)(iv) (1995).
[xxv] 16 U.S.C. § 1374(e)(1)-(e)(3) (2023) (the particular provision of the Marine Mammal Protection Act relates to the Secretary of Commerce’s administrative powers over takings permits for protected species. While this statutory language impacts an agency issued permit, rather than the statute itself, as in 42 USC 612(a)(C)(ii) and the HEROES Act, Biden v. Nebraska was facially an interpretive holding rather than a major questions doctrine holding and may similarly impact less substantial delegations of authority).
[xxvi] Biden, 143 S.Ct. at 2372.
[xxvii] 16 U.S.C. § 1374(e)(1)-(e)(3) (2023).
[xxviii] Id.
[xxix] Press Release, U.S. Dep’t of Educ., Biden-Harris Administration Continues Efforts to Provide Debt Relief for More Student Loan Borrowers (Oct. 30, 2023) https://www.ed.gov/news/press-releases/biden-harris-administration-continues-efforts-provide-debt-relief-more-student-loan-borrowers.