All the President’s Legal Defeats

Biden’s agencies keep violating the law and losing in court: the list

WSJ editorial. 

"President Biden considers himself a law-abiding fellow. But when it comes to living within the law as established by Congress, his Administration is the most lawless in long memory. His regulators keep rewriting laws as they see fit, and the result is that they keep losing in court in humiliating fashion. 

As a public service, and to illustrate the breadth of the law-breaking, we’re providing a summary of the legal defeats across five of the most lawless agencies. Clip and save in case Donald Trump or Kamala Harris retain anyone running these agencies.

***

Federal Communications Commission

• Net neutrality rule. The FCC tried to classify broadband providers as common carriers under Title II of the Communications Act of 1934. The Sixth Circuit Court of Appealsblocked it in August, citing the Supreme Court’s major questions doctrine, which holds that regulators need express direction from Congress on consequential rules.

• National Association of Broadcasters v. FCC. In 2022 the D.C. Circuitvacated part of a 2021 FCC rule requiring broadcasters to verify the sponsors of programs by checking two federal sources

Department of Education

• Student loans. The Supreme Court ruled 6-3 in 2023 (Biden v. Nebraska) that Mr. Biden’s plan to forgive $400 billion in student loans usurped Congress’s power of the purse. Mr. Biden then boasted that the Court couldn’t stop him and came up with the SAVE plan, which caps payments at 5% of discretionary income and forgives balances after 10-20 years. The Eighth Circuit recently put that plan on hold with a nationwide injunction.

• Title IX. Six federal judges this year have blocked a new Title IX nondiscrimination rule from going into effect in 26 states. “The new rule contravenes the plain text of Title IX by redefining ‘sex’ to include gender identity, violates government employees’ First Amendment rights, and is the result of arbitrary and capricious rulemaking,” wrote Judge Danny Reeves.

***

Environmental Protection Agency

• Clean Power Plan. In 2022 the Supreme Court vacated an Obama-era rule regulating greenhouse gas emissions. “EPA ‘claim[ed] to discover in a long-extant statute an unheralded power’ representing a ‘transformative expansion in [its] regulatory authority’” in violation of the major questions doctrine, wrote Chief Justice John Roberts for a 6-3 majority in West Virginia v. EPA. The Biden Administration has issued a new rule that also uses indirect means to shut down coal plants and is being challenged in court.

• Waters of the U.S. In 2023 the Supreme Court ruled 5-4 in Sackett v. EPA that dry land on the Sacketts’ property doesn’t constitute “waters of the United States” under the Clean Water Act merely because it has a tangential connection to a navigable body of water.

• Good Neighbor Plan. In June the Supreme Court issued a stay on the EPA’s “good neighbor” rule that would have restricted ozone emissions in certain states because of their alleged downwind effect on other states. The EPA’s plan “likely runs afoul” of “long-settled standards,” Justice Neil Gorsuch wrote for a 5-4 majority.

***

Federal Trade Commission

• Noncompete ban. In August a federal judge struck down FTC Chair Lina Khan’s 2024 rule banning employee noncompete agreements. Judge Ada Brown concluded the FTC lacked legal authority under the FTC Act and that the rule was “unreasonably overbroad without a reasonable explanation.”

• Welsh Carson antitrust case. In May federal Judge Kenneth Hoyt dismissed an FTC lawsuit against Welsh Carson. The private equity firm had a minority stake in an anesthesiology company, and the judge ruled that even if the anesthesiology firm violated antitrust law, holding a minority stake couldn’t make Welsh Carson liable.

• Administrative law judges. In 2023 the Supreme Court ruled 9-0 in Axon Enterprise v. FTC and SEC v. Cochran that companies can take constitutional challenges to federal court rather than having to first go through administrative agency tribunals that invariably rule for the agencies.

• Meta acquisition. In January 2023, federal Judge Edward Davila ruled that the FTC did not meet standards of proof in its antitrust case against Meta’s acquisition of virtual reality app Within Unlimited.

• Microsoft purchase of Activision Blizzard. In 2023 federal Judge Jacqueline Scott Corley dismissed the FTC’s attempt to block a Microsoft-Activision merger. “The FTC has not shown it is likely to succeed on its assertion the combined firm will probably pull Call of Duty from Sony PlayStation, or that its ownership of Activision content will substantially lessen competition in the video game library subscription and cloud gaming markets,” the judge wrote.

***

Securities and Exchange Commission

• Proxy advisory rule. In June the Fifth Circuit ruled that the SEC’s rescission of a 2020 proxy advisory rule was arbitrary and capricious. SEC Chairman Gary Gensler had sought to preserve the duopoly of Glass Lewis and Institutional Shareholder Services.

• Private fund disclosure rule. In June the Fifth Circuit blocked the SEC’s rule that would have micromanaged contracts between private funds and their investors, saying the agency lacked statutory authority.

• Debt Box. In March a federal judge in Utah imposed sanctions on the SEC “for bad faith conduct” in its crypto case against Debt Box. In May the SEC was ordered to pay $1.8 million in fees and the case was dismissed.

• Stock buyback rule. In December 2023, the Fifth Circuit vacated the SEC’s rule that required extensive public disclosures when a company decides to buy back its own shares: “The SEC acted arbitrarily and capriciously, in violation of the APA, when it failed to respond to petitioners’ comments and failed to conduct a proper cost-benefit analysis.”

• Grayscale. In 2023 the D.C. Circuit ruled against the SEC’s denial of Grayscale’s bitcoin fund. “The denial of Grayscale’s proposal was arbitrary and capricious because the Commission failed to explain its different treatment of similar products,” Judge Neomi Rao wrote for the court.

• Ripple. In 2023 federal judge Analisa Torres rejected a significant part of the SEC’s case against Ripple’s sale of a digital token. Judge Torres ruled that about half of Ripple’s token sales did not constitute an illegal securities sale.

***

This is an extraordinary record of lawlessness, and note the variety of judges who have ruled in these cases. They illustrate the degree to which the progressive administrative state simply disregards the law as its avatars seek to impose their will on Americans without the consent of the governed.

It’s also worth noting that both FTC Chair Khan and SEC Chair Gensler were Sen. Elizabeth Warren’s hand-picked choices whom President Biden accepted when he subcontracted his Presidency to the left. They bull-rush their policies via regulation and dare the judiciary to stop them. Americans are fortunate the Founders created an independent judiciary to block this will to undemocratic power."