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When One Federal Agency Sues Another:

The U.S. Court of Appeals for the D.C. Circuit issued an interesting opinion today in Securities Exchange Commission v. Fair Labor Standards Authority, a case in which one agency sued another. In ruling for the government against the government, the opinion for the court by Judge Brown begins:

This is the sort of dispute that could only arise between public employees and a governmental agency. The Securities and Exchange Commission (SEC or Agency) was eager to pay its employees more money. The National Treasury Employees Union (NTEU or Union) complains the SEC implemented the raises too quickly. The Federal Labor Relations Authority (FLRA or Authority) agrees with the Union and has ordered the SEC to provide back pay to atone for the affront. Counterintuitive though it may be, we agree the FLRA has properly resolved this odd controversy so we deny the petition for review and grant the Authority's crossapplication for enforcement.

The case features an interesting concurring opinion by Judge Kavanaugh on which he wrote separately to "to point out the constitutional oddity of a case pitting two agencies in the Executive Branch against one another, and to explain why the Court can hear this dispute." He explains:

The caption of this case -- Securities and Exchange Commission v. Federal Labor Relations Authority -- illustrates an anomaly. Both the SEC and the FLRA are agencies in the Executive Branch, yet one is suing the other in an Article III court. This state of affairs is in tension with the constitutional structure designed by the Framers and set forth in the text of the Constitution. The Constitution vests the "executive Power" in one President. And the Constitution assigns the President the responsibility to "take Care that the Laws be faithfully executed." Because Article II provides that a single President controls the Executive Branch, legal or policy disputes between two Executive Branch agencies are typically resolved by the President or his designee -- without judicial intervention. Moreover, because agencies involved in intra-Executive Branch disputes are not adverse to one another (rather, they are both subordinate parts of a single organization headed by one CEO), such disputes do not appear to constitute a case or controversy for purposes of Article III. In short, judicial resolution of intra-Executive disputes is questionable under both Article II and Article III.

This analysis is uncontroversial as applied to disputes between two traditional Executive Branch agencies. No one plausibly thinks, for example, that a federal court would resolve a dispute between the Department of Justice and, say, the Department of Defense or the Department of State. But the wrinkle is that this case involves a so-called independent agency. Independent agencies are those agencies whose heads cannot be removed by the President except for cause and that therefore typically operate with some (undefined) degree of substantive autonomy from the President in a kind of extra-constitutional Fourth Branch. In Humphrey's Executor v. United States, the Supreme Court approved of independent agencies, at least in certain circumstances. Consistent with the post-Humphrey's Executor understanding that Presidents cannot (or at least do not) fully control independent agencies, and that an independent agency therefore can be sufficiently adverse to a traditional executive agency to create a justiciable case, the Supreme Court and this Court have entertained suits between an independent agency and a traditional executive agency, or as here between two independent agencies.

Our ability to decide this case thus follows from Humphrey's Executor and accords with courts' previous handling of disputes between an independent agency and a traditional executive agency (or another independent agency). Because this case is justiciable under the governing precedents and because the Court's analysis of the merits is persuasive, I join the opinion of the Court.

[citations omitted]

Per Son:
Lets face it - Kavanaugh has an Agenda regarding Humphrey's Executer. How often due Judges write a concurrence "just to point out" an issue that was neither briefed, argued, or raised by any party at any stage of this or any related proceeding.

He has a beef, and it is apparent from his concurrence as well as the dissent in the Sabannes Oxley case. The big difference between the cases is that Kavanaugh did not create an issue out of whole cloth like he did here.
6.12.2009 3:35pm
Can't find a good name:
The union complained that the SEC implemented pay raises too quickly?

What was that about?
6.12.2009 3:36pm
Per Son:
Read the entire case. The agency cancelled the within grade increases for many by implementing the new pay system without bargaining.

The new pay system was going to happen and was wanted by all, but it was implemented in a way that screwed lots of folks out of their within grades, which would not have occurred but for the various labor law violations.
6.12.2009 3:40pm
Steve:
Pretty weak appeal by the SEC on the merits, but at least it gives us process junkies something interesting to talk about.
6.12.2009 3:42pm
Jay:
I had the same thought as Per Son; there's not much of a reason for Kavanaugh to have done this generic cut-and-paste from an admin law textbook. It's not like these cases are new. Is he trying to send some sort of message regarding the SarbOx case up on cert?
6.12.2009 3:45pm
zooba:
Judiciability goes to the court's jurisdiction. The judges have the obligation to review their own jurisdiction sua sponte in every case. And yes he has an agenda.
6.12.2009 4:15pm
Dilan Esper (mail) (www):
Lets face it - Kavanaugh has an Agenda regarding Humphrey's Executer. How often due Judges write a concurrence "just to point out" an issue that was neither briefed, argued, or raised by any party at any stage of this or any related proceeding.

He's probably also upset that hell hasn't frozen over yet.
6.12.2009 4:18pm
wfjag:
And another interesting issue that wasn't (as far as I can tell) briefed, argued or raised by a party at any stage of this or any related proceeding -- the apparent ethical conflict of attorneys who work for different agencies of the Executive Branch appearing and arguing on opposing sides. Both sides ultimately have the same client -- the Executive Branch (or the US as a sovereign government). But, what's a little ethics among lawyers?
6.12.2009 4:26pm
Dilan Esper (mail) (www):
And another interesting issue that wasn't (as far as I can tell) briefed, argued or raised by a party at any stage of this or any related proceeding -- the apparent ethical conflict of attorneys who work for different agencies of the Executive Branch appearing and arguing on opposing sides. Both sides ultimately have the same client -- the Executive Branch (or the US as a sovereign government). But, what's a little ethics among lawyers?

I don't actually see how this is much different than, for instance, a shareholder's derivative suit where both sides claim to be representing the corporation. It may pose theoretical issues, but in practice, it's pretty easy to separate everyone's loyalties.
6.12.2009 4:32pm
Bob_R (mail):
Kavanaugh's restraint in not mentioning the Coke vs. Coke Zero commercial is admirable.
6.12.2009 4:33pm
RowerinVa (mail):
zooba --

Correct you are. A federal court is free to overlook some defects but not constitutional jurisdictional defects, and to a lawyer of ordinary understanding re. the Constitution and federal agency law (and who else would be expected to read this opinion?), the defect leaps off the page unless explained away via the HE case.

True, Kavanaugh could have made this shorter, perhaps in footnote-style treatment. But not raising it at all would be odd for a judge who cares about separation of powers.

Some of the commenters (and many judges, and a few Justices) apparently don't care about separation of powers, at least when they don't have an ox being gored at that particular time. Not caring, or caring only some of the time, isn't a good strategy if you ever plan to assert the doctrine when it matters. Bad precedent builds up, even when it's not on directly on point, and while "laches" isn't supposed to apply, the public seems to apply something similar when it comes to old con law decisions or non-decisions. Statements like Kavanaugh's provide the foundation for corrective decisions ... eventually.
6.12.2009 4:33pm
Seamus (mail):
One of my favorite case captions is United States v. United States, 239 F. 1023 (7th Cir. 1917).
6.12.2009 4:34pm
Dilan Esper (mail) (www):
Correct you are. A federal court is free to overlook some defects but not constitutional jurisdictional defects, and to a lawyer of ordinary understanding re. the Constitution and federal agency law (and who else would be expected to read this opinion?), the defect leaps off the page unless explained away via the HE case.

That's like saying the defect of a litigant asking for judicial review leaps off the page unless explained away via the Marbury v. Madison case.

In the real world, there is longstanding and established law that independent agencies are constitutional (and this is not based on some theory of a "fourth branch" of government as Kavanaugh facetiously claims), and this doesn't have to be repeated every time a case is brought that where that authority is an unstated premise.
6.12.2009 4:43pm
Steve:
Humphrey's Executor is a well-known precedent dating back nearly 75 years. It's silly to say that a judge must not care about separation of powers unless he spells it out every single time.

Far be it from me to suggest that anyone is thinking about the potential overruling of New Deal-era precedents, of course. Regular readers of the VC know what a myth it is that anyone thinks that way.
6.12.2009 4:54pm
Jay:
Yes, a federal judge has an obligation to satisfy himself of his own jurisdiction. No, a federal judge does not have an obligation to write a three-page concurrence in every case explaining why the court has jurisdiction, when no one has actually questioned it.

Also, the author of the majority opinion is not exactly known as a shirker on such issues, and she apparently didn't see any point in bringing it up.
6.12.2009 5:23pm
Prof. S. (mail):
I haven't seen the government sue the government since AIG sued to recover taxes.
6.12.2009 5:35pm
geokstr (mail):

"In ruling for the government against the government..."

What an outrage. Even as a non-lawyer I can without hesitation say it's obvious that the ruling should have been for the government against the government instead.
6.12.2009 7:03pm
Dave N (mail):
But who would decide whether to seek certiorari?
6.12.2009 8:16pm
Bob from Ohio (mail):
This ludicrous case illustrates why Humphrey's Executor should be overruled.

So Judge Kavanaugh is winking at the S/C to do so. Long shot but what the heck.
6.12.2009 9:01pm
Dilan Esper (mail) (www):
This ludicrous case illustrates why Humphrey's Executor should be overruled.

So because it looks a little weird to have 2 branches of the federal government in litigation against each other, that would justify forcing the disbandment of the independent administrative agencies that perform vital governmental functions that are best insulated from the vicissitudes of politics?

That's a very strange balance to strike.
6.12.2009 9:23pm
Christopher Cooke (mail):
Dilan

it is not "2 branches" of the federal government. It is an independent agency vs. an "executive" agency. In which branch goes the independent agency? No one knows. SEC Chairman Pitt said he served at the pleasure of the President. But, when I worked at the SEC, the head of our office wondered if we could take off, as a holiday, a day that President Clinton declared as an executive branch holiday (we did).

A strange conundrum.
6.12.2009 11:14pm
Malvolio:
What a fascinating case.

First of all, the employer wants to give raises and the union is trying to stop them? As a taxpayer, I'm outraged. If I were a member of that union, I'd be doubly outraged.

Second, Humphrey's Executor -- a huge case, and I've never heard of it before. The guy gets fired and doesn't stop coming to work. He dies and doesn't stop suing. And he wins! Very impressive. I'm surprised the dead guy wasn't reinstated in his job. (Seriously, why wasn't the case moot when he died? What relief could he have beyond reinstatement?)

Third, yes, the instant case does present an opportunity to demonstrate that Humphrey's Executor was wrongly decided -- the Constitution provides for a judicial branch, with judicial powers, and an executive branch, headed by the president, and these independent agencies are neither. The SEC should be an executive agency like the IRS -- possibly working in a specially court like the Tax Court. Good on Kavanaugh for pointing that out, even sua sponte.

Fourth, United States v. United States? What was that, a divorce action?
6.13.2009 8:05am
Porkchop:
Not being a federal employment law lawyer, I wonder how the FLSA enforces its decisions against other parts of the executive branch, that is, the "non-independent" departments. For example, say, DOD fails to bargain in good faith (or at all) with the union over performance standards/ratings for civilian employees. I assume that the dispute goes to the FLSA. Is an FLSA decision judicially enforceable in that context?
6.13.2009 8:11am
Steve:
First of all, the employer wants to give raises and the union is trying to stop them? As a taxpayer, I'm outraged. If I were a member of that union, I'd be doubly outraged.

I'm sure when the union won the case and you got a bigger raise, you'd be trebly outraged. Are you sure you read the case?
6.13.2009 9:04am
per son:
Porkchop:

The FLRA would petition the Court of Appeals for enforcement.

Steve:

Read the case. Because of the union everyone got more money - members and nonmembers alike.
6.13.2009 9:44am
Eric Rasmusen (mail) (www):
I'll second Porkchop's question and add a couple of others:

1. Can FLSA use the courts to make the Defence Dept. obey the law?

2. Why didn't somebody else act as plaintiff here-- say, one of the SEC employees?

3. Can one wholly-owned subsidiary of a private company sue another wholly-owned subsidiary?
6.13.2009 9:46am
Per Son:
1. It is the FLRA - and yes.

2. Individual plaintiff's would not have standing to bring a failure to bargain unfair labor practice charge - which is the basis for the suit.

3. Dunno
6.13.2009 10:24am
geokstr (mail):

per son:
Read the case. Because of the union everyone got more money - members and nonmembers alike.

Everyone except the taxpayers, that is.
6.13.2009 11:15am
Per Son:
geokstr:

Give me a freaking break. Are you saying that it is ok for an Agency to screw employees on pay, and that employees should just suck it up because taxes are used for their salaries?

So we have a new rule - screw public employees without restraint, because they are paid with tax dollars.
6.13.2009 11:33am
MLS:
This article is quite informative. Up until this time I never fully appreciated that Article II is in fact framed as Article IIA and IIB.
6.13.2009 11:39am
Dilan Esper (mail) (www):
This article is quite informative. Up until this time I never fully appreciated that Article II is in fact framed as Article IIA and IIB.

Since enough of you are making snarky comments, it is worth noting that there is actually nothing in the Constitution that prohibits the creation of independent administrative agencies.

Rather, conservatives IMPLY that requirement from the penumbras and emanations of the clause providing that the Executive Power vests in a President.

That's fine, and I'm not saying it isn't a defensible constitutional theory, but when you guys make snarky comments about Article IIA and IIB and the like, you are assuming that the Constitution is a lot clearer on the matter than it really is. If the framers had meant to clearly prohibit this sort of administrative agency, it would have been easy enough to put more specific language in the document to do it.
6.13.2009 2:43pm
geokstr (mail):

Per Son:
geokstr:

Give me a freaking break. Are you saying that it is ok for an Agency to screw employees on pay, and that employees should just suck it up because taxes are used for their salaries?

So we have a new rule - screw public employees without restraint, because they are paid with tax dollars.

Nope, I'm just anti-union.
6.13.2009 4:37pm
Stephen Houghton II (mail):
"That's fine, and I'm not saying it isn't a defensible constitutional theory, but when you guys make snarky comments about Article IIA and IIB and the like, you are assuming that the Constitution is a lot clearer on the matter than it really is. If the framers had meant to clearly prohibit this sort of administrative agency, it would have been easy enough to put more specific language in the document to do it."

Well that would be a good arguement except that if a power is not granted it is withheld by the tenth article of amendment.

Also most of those agencies have the power to issue regulations that are treated like laws but Art. clearly states that "all legislative authority hear in granted shall be vested in one congress of the united states"
6.13.2009 4:48pm
Stephen Houghton II (mail):
Art. I clearly states etc.
6.13.2009 4:48pm
Roger Sweeny (mail):
Dilan Esper has the right idea. If it's a good thing, it's constitutional. If it's a bad thing, it isn't. Agencies that are "insulated from politics" are a good thing so they must be constitutional.

That's my predictive theory for how the Justices rule. And it works very well. You just have to know what each Justice thinks is a good thing.
6.14.2009 7:15pm
q:

What relief could he have beyond reinstatement?

Backpay.
6.15.2009 3:35am

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