Supreme Court to consider pro-bureaucrat legal doctrine, gun ban, and wealth tax in upcoming term

The Supreme Court is scheduled to take up several cases this fall that could lead to controversial rulings, panelists said at a Sept. 18 forum hosted by the libertarian Cato Institute.

One case questions the legality of a ban on people under domestic restraining orders from possessing guns. Another deals with a Trump-era wealth tax that hit a married couple with an unexpected tax bill. Another case takes on so-called Chevron deference, a legal doctrine that critics say gives bureaucrats too much power.

Still, another case, which the court has not yet decided to take up, deals with alleged racial discrimination in high school admissions.

The panel was moderated by attorney Anastasia Boden, director of the Robert A. Levy Center for Constitutional Studies at the Cato Institute in the nation’s capital.

The two other legal experts were attorney Wen Fa, who is the director of Legal Affairs at the Beacon Center of Tennessee in Nashville, and attorney Cate Stetson, a partner at the law firm of Hogan Lovells in Washington.

On Nov. 7, the court will hear United States v. Rahimi (court file 22-915), which concerns a federal law that bars people under domestic violence-related restraining orders from possessing firearms. The Biden administration supports the ban.

Zackey Rahimi, who previously entered a guilty plea to violating the statute, was involved in five shooting incidents after a restraining order was entered against him in February 2020.

Then, the Supreme Court handed down its landmark New York State Rifle and Pistol Association Inc. v. Bruen decision in June 2022, which said there was a constitutional right to bear arms in public places for self-defense. Mr. Rahimi asked the courts to review his conviction, given the change in Second Amendment jurisprudence.

The U.S. Court of Appeals for the 5th Circuit found that the law had ceased to be constitutional in light of the Bruen ruling. The ban on the possession of firearms by someone under a domestic restraining order “is an outlier that our ancestors would never have accepted,” the circuit court stated in its ruling.

Mr. Fa said Mr. Rahimi was prohibited from possessing firearms while under a domestic violence-related restraining order.

“And so many of you might think that part is unsympathetic as well, and I did initially, but some background—that these are usually granted as part of … civil proceedings. In divorce cases, lawyers routinely advocate for the pursuit of these orders, and sometimes, both parties file them against the other. Judges who deny them can face a lot of heat, so many judges in practice approve them as a matter of course.”

A lower court mentioned that firearm bans can be imposed in civil proceedings, Mr. Fa said.

“And if these people don’t have constitutional rights, what about people who speed? People who jaywalk? People who don’t recycle? That leads to absurd results.”

Unexpected Tax Bill

Ms. Boden said the court will take up the tax case of Moore v. United States (court file 22-800). The petition was granted on June 26, but oral arguments have not yet been scheduled.

“I know that libertarians are famous for saying taxation is theft, and everyone kind of laughs, but Congress has finally done something that I think most people can agree is pretty egregious, and that is, tax people for unrealized income that has not been and may never be put into people’s pockets,” Ms. Boden said.

Charles and Kathleen Moore, a married Washington state couple, are challenging a wealth tax that was levied on capital gains that they never received.

The mandatory repatriation tax, also known as the Section 965 transition tax, was part of the Tax Cuts and Jobs Act passed by the Republican-controlled Congress in 2017 and signed into law by President Donald Trump in December 2017.

The provision taxes U.S. citizens on certain accumulated foreign earnings of foreign corporations going back 30 years, even if the earnings haven’t been distributed. This means taxing people on income that they never received and never owned, according to the Competitive Enterprise Institute (CEI), a pro-free market think tank that is providing legal representation to the couple.

The Moores ended up in court after they made a modest investment in a company in India founded by a friend. The company supplies power tools to small-scale, individual Indian farmers. The Moores had owned shares for more than a decade but never received any income because the company plowed all its profits back into the business.

But after the 2017 tax law change was enacted, the Moores received an unexpected tax bill from the IRS for $14,729 for additional income tax they supposedly owed despite having never received any payments from the company.

Mr. Fa said this is “one of those rare 16th Amendment cases [about] whether this should be treated as income, whether the reinvestment should be treated as income.”

If the tax is upheld, “it’s going to discourage individuals who otherwise would save money from saving,” he said.

“It would hurt a lot of small businesses trying to start off and make a living for themselves because a lot of them are subject to—under the tax rules treated as wealthy individuals even though they put a lot of the revenues generated from the small business back into business activity.”

It’s a case with “a novel constitutional claim, but a lot of significant real-world consequences,” Mr. Fa said.

A potential blockbuster of a case challenges “Chevron deference,” a bureaucracy-empowering legal doctrine that critics say has distorted the U.S. system of government for decades at the expense of everyday citizens.

Federal At-Sea Monitors

The case, Loper Bright Enterprises v. Raimondo (court file 22-451), will be heard by the court in the new term that begins in October. On May 1, the court voted to grant the petition, but no hearing date has yet been scheduled.

The appeal concerns a federal rule that requires the owners of fishing vessels, which tend to be small, to pay for having federal observers onboard to oversee operations and ensure compliance with a host of federal regulations, the fishing companies said in their petition, which was brought with the assistance of the Cause of Action Institute.

The government mandate forces the fishermen, in this case, “to hand over 20 percent of their pay to third-party at-sea monitors they must bring on their boats—a mandate that Congress never approved by statute,” according to Cause of Action.

The petition stated that this “is an extraordinary imposition that few would tolerate on dry land.”

The court’s eventual ruling in the case could alter the current balance of power among Congress, executive agencies, and the nation’s judiciary by tearing away at the legal underpinnings of the modern administrative state, which critics deride as an illegitimate fourth branch of government.

Issue of Unelected Regulators

In its landmark 1984 ruling in Chevron v. NRDC, the nation’s highest court held that courts “must give effect to the unambiguously expressed intent of Congress,” but where courts find that “Congress has not directly addressed the precise question at issue” and “the statute is silent or ambiguous with respect to the specific issue, the question for the court is whether the agency’s answer is based on a permissible construction of the statute.”

In other words, Chevron stands for the proposition that an executive agency’s interpretation of a statute is entitled to deference unless Congress has explicitly said otherwise.

Conservatives and Republican policymakers have long been critical of the doctrine, saying it gives unelected regulators far too much power to make policy by going beyond what Congress intended when it approved various laws. The authority of regulatory agencies has been increasingly questioned in recent years as the conservative majority on the Supreme Court has grown. Conservative Justices Clarence Thomas, Samuel Alito, and Neil Gorsuch have expressed skepticism of the Chevron doctrine.

Ms. Boden suggested that the Chevron doctrine is already in decline.

“It seems to me that the court has really backed away from applying Chevron in recent years, so in some ways, hasn’t the battle already been won?” she said.

Ms. Stetson pushed back, saying, “I don’t know that there are many that would say the battle has been won—or at least, maybe a battle has been won, but the war has not been won.”

Biden v Nebraska

In Biden v. Nebraska, a June 30 decision in which the court struck down President Joe Biden’s controversial plan to partially forgive student loans, the court used the major questions doctrine to limit Chevron “but arguably in really limited circumstances where the statute that the agency was utilizing had never been used that way before, [and] was used for an astonishingly broad purpose and cost an astonishing amount,” Ms. Stetson said.

The major questions doctrine is a principle of statutory interpretation in U.S. law that holds that courts should presume that Congress does not delegate issues of major political or economic importance to executive agencies.

Ms. Stetson said that the Chevron doctrine arose out of the work of the late Anne Gorsuch, who was Justice Gorsuch’s mother. She served as President Ronald Reagan’s Environmental Protection Agency administrator from May 1981 to March 1983. The case of Chevron v. NRDC, decided by the Supreme Court in June 1984, was known as NRDC v. Gorsuch when it was before the lower federal courts.

About 20 years later, Justice Gorsuch wrote a majority opinion when he was serving as a judge on the U.S. Court of Appeals for the 10th Circuit, in which he grudgingly acknowledged the Chevron doctrine.

“His own decision basically said, ‘I needed to write the majority opinion that I just wrote because Chevron is a doctrine that exists and I have to follow that doctrine, but it’s time to confront the elephant in the room. The elephant in the room is Marbury v. Madison,’” Ms. Stetson said.

Marbury v. Madison (1803) established the principle of judicial review, that is, the power of federal courts to declare legislative and executive acts unconstitutional, introducing an important means of checking governmental powers and forcing political leaders to adhere to the U.S. Constitution.

“‘It is emphatically the province and duty of the judiciary to say what the law is,’” she said, quoting Justice Gorsuch’s recitation of the wording in the 1803 ruling.

“That was the most visible vocal gauntlet thrown down in what then became a series of attempts to refine and ultimately, I think, in this case, perhaps to overthrow Chevron,” Ms. Stetson said.

Illegal Racial Discrimination

Mr. Fa said he expects the court will grant a pending petition in which parents and students are challenging the admissions policy of a top-rated high school in Virginia that they say engages in illegal racial discrimination against Asian American students.

The petition (pdf) in Coalition for TJ v. Fairfax County School Board (court file 23-170) was filed on Aug. 21 by Pacific Legal Foundation, a national public interest law firm that fights government overreach. The school is Thomas Jefferson High School for Science and Technology (TJ).

The court could use the case as an opportunity to expand on its landmark June 29 ruling, Students for Fair Admissions (SFFA) v. Harvard, that struck down the use of racially discriminatory admissions policies at U.S. colleges—a longtime goal of the conservative movement.

Chief Justice John Roberts wrote in the majority opinion that for too long, universities have “concluded, wrongly, that the touchstone of an individual’s identity is not challenges bested, skills built, or lessons learned but the color of their skin.”

“Our constitutional history does not tolerate that choice,” he wrote in the ruling, which does not cover military academies.

The coalition says in its petition that the board “overhauled its admissions” to TJ in 2020 “to racially balance the freshman class by excluding Asian Americans.” The new policy came around the time that George Floyd died in Minneapolis police custody, an event that sparked widespread, sometimes violent protests in the United States and abroad.

Mr. Fa said after TJ changed its enrollment criteria, the number of Asian American students “went down dramatically.”

The federal district court granted summary judgment in favor of the challengers but the U.S. Court of Appeals for the 4th Circuit stayed that judgment and ultimately ruled for the school board, he said.

After the district court ruling, a 4th Circuit panel voted 2-1 in March 2022 to grant the school board’s request for a stay pending appeal because changing admissions policies would inconvenience the school officials who were discriminating against Asian American students.

In April 2022, the Supreme Court denied the Coalition for TJ’s request to vacate the stay issued by the 4th Circuit, but three justices—Clarence Thomas, Samuel Alito, and Neil Gorsuch—dissented from the decision, saying they would have granted the application to vacate the stay.

Those challenging the school policy need only pick up one more vote on the Supreme Court in order for it to hear the case, Mr. Fa said.

Supreme Court policy dictates that only four of the nine justices have to vote for a petition for it to be granted and oral arguments scheduled.

“This surely will be an issue of nationwide importance going forward,” the attorney said.

Schools across the country are trying to find ways to go around the SFFA v. Harvard ruling, “so this will be a widespread problem, and I think the Supreme Court, given the nationwide importance, is likely to take this case,” Mr. Fa said.

The Supreme Court is currently in its summer recess. It will open its new term with oral arguments on Oct. 2.

This article by Matthew Vadum appeared Sept. 19, 2023, in The Epoch Times.