Three Supreme Court Cases that Could Impact Government Operations and Consumer Protections

Introduction

Three major Supreme Court cases currently being heard have the potential to significantly disrupt the way the government operates and put at risk the federal benefits and consumer protections that Americans rely on. These cases challenge the authority of federal agencies, the funding structure of a consumer watchdog, and the power of federal agencies to make regulations. The outcomes of these cases could have far-reaching implications for individuals and businesses alike.

SEC v. Jarkesy: Challenging Agency Regulation

On November 29, the Supreme Court is hearing oral arguments in SEC v. Jarkesy. This case questions the extent to which federal agencies can regulate the industries they oversee. In this particular case, the Securities and Exchange Commission (SEC) found that two hedge funds managed by conservative commentator George Jarkesy committed securities fraud. As a result, Jarkesy was barred from participating in the securities industry.

However, the 5th Circuit Court of Appeals reversed the SEC's decision, ruling that the SEC's administrative law judges are unconstitutional. The court argued that Congress does not have the authority to allow the SEC to adjudicate securities fraud cases and that these cases should instead go through traditional courts. This decision challenges the existing system of administrative law judges that various federal agencies, including the SEC, have used for years.

If administrative law judges were eliminated, it would make it significantly more difficult for agencies to effectively regulate industries, potentially putting consumer protections at risk.

Implications for Social Security Recipients

A ruling in favor of Jarkesy could have profound effects on Social Security recipients. The Center for American Progress warns that such a ruling would make it harder for Social Security recipients to have their benefits claims adjudicated by administrative law judges in the Social Security Administration.

The Center for American Progress states that overturning administrative law judges' independent decision-making within agencies could flood federal courts with cases, causing both agencies and courts to grind to a halt. This would create significant delays and potential bias in rulings, negatively impacting individuals relying on Social Security benefits.

CFPB v. Community Financial Services Association of America Ltd.: Funding Structure Challenge

In October, the Supreme Court heard oral arguments in CFPB v. Community Financial Services Association of America Ltd. This case questions the constitutionality of the funding structure of the Consumer Financial Protection Bureau (CFPB). Since its establishment in 2011, the CFPB has received funding from the Federal Reserve, bypassing the need for annual funding approval from Congress.

The Fifth Circuit Court of Appeals ruled that the CFPB's funding structure is unconstitutional and that the agency should not receive funding without explicit annual congressional approval. If the Supreme Court rules against the CFPB's funding scheme, it could jeopardize the agency's ability to perform its oversight actions effectively.

The CFPB has played a crucial role in protecting consumers from predatory lending practices and returning money to student-loan borrowers. Changing the funding structure could limit the agency's ability to continue these actions, putting consumers at risk. Moreover, other independently funded government programs, such as Social Security and Medicare, could also face challenges to their funding sources.

Loper Bright Enterprises v. Raimondo: Authority of Federal Agencies

Loper Bright Enterprises v. Raimondo challenges the authority of federal agencies to establish rules when Congress does not provide specific language on the regulations in question. The case revolves around a group of fisheries challenging the National Marine Fisheries Service's interpretation of a law.

The National Marine Fisheries Service requires commercial fishing boats to allow federal agents on fishing expeditions for data collection purposes. Additionally, the NMFS stated that some of the fisheries would be required to pay or subsidize the salary of these agents. The fisheries are challenging this interpretation of the statute.

The key issue in this case is the Chevron doctrine, which grants federal agencies the power to interpret relevant laws as long as it aligns with Congress's language. This doctrine has allowed federal agencies to establish regulations across various industries, even if the original laws did not provide specific details.

If the Supreme Court rules in favor of the fisheries, it would mean that agencies with expertise on a particular law would lose the authority to make decisions on it. Instead, this authority would be given to courts without the same level of knowledge and expertise.

Conclusion

These three Supreme Court cases have the potential to reshape the way the government operates and impact consumer protections. The outcomes could limit agencies' ability to regulate industries, create delays and bias in benefit claims adjudication, jeopardize the funding of consumer protection agencies, and diminish the power of federal agencies to establish regulations.

The Supreme Court's final decisions on these cases, expected by June, will have far-reaching consequences for individuals, businesses, and the overall functioning of the government.

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By: asheffey@businessinsider.com (Ayelet Sheffey)
Title: Three Supreme Court Cases that Could Impact Government Operations and Consumer Protections
Sourced From: www.businessinsider.com/social-security-supreme-court-what-are-major-cases-administrative-state-2023-11
Published Date: Wed, 29 Nov 2023 11:06:01 +0000