Counting to Five for the Government In The Tariffs Case

I was in the Court, and I have a different take on the case.

This morning, I attended oral argument in the tariff case. I was seated shortly after 9:00 a.m. and did not leave until nearly 12:45 p.m. As a result, for nearly four hours, I was completely immune to everything that was said on social media, on prediction marks, and in the press. It seems that shortly after Solicitor General John Sauer sat down, headlines started popping up with a consistent description: the Justices asked "skeptical" questions of the government. Indeed, I suspect these headlines were written formed before Neal Katyal finished his argument for the Respondents.

The live-streaming of oral arguments has been a welcome development. But perhaps one drawback is that people make their assessments of big cases before they are over. And once a narrative takes old, everyone seems to glom onto it. As usual, I have an unorthodox take.

Without question the justices had skeptical questions for the Solicitor General. But several Justices seemed skeptical, and even frustrated by Neal Katyal's presentation. He was polished, but wooden. Far too often, it seemed like he was giving rehearsed answers, which were not entirely responsive to the questions that were asked. Katyal may have also misread the room, and came in far too overconfident after the Solicitor General sat down. This case is close, but I think that ultimately the tariffs are upheld. I say this as someone who has not formed a solid opinion on the matter. I really haven't blogged about the issue, and came into the argument with an open mind.

How do we count to five?

Justice Kavanaugh

Let's start with Justice Kavanaugh. Throughout the argument, he consistently brought up two points.

First, he contended that President Nixon imposed a global 10% tariff under the Trading With the Enemy Act (TWEA), the predecessor statute to IEEPA. Respondent argued that Congress made some important changes to the TWEA regime with IEEPA, but Justice Kavanaugh did not think these distinctions mattered. Neal Katyal repeatedly said that the Trump tariffs were unprecedented. Kavanaugh cited the Nixon tariffs and said "I just think that's a fact." Here Katyal should have picked up on how Kavanaugh was locked in on the Nixon tariffs.

Second, Justice Kavanaugh repeatedly cited FEA v. Algonquin SNG (1976), which involved a statute that used the phrase "adjust imports." Justice Jackson tried to argue that Algonquin was not a textualist decision, but Justice Kavanaugh disagreed. Justice Kavanaugh said that under Algonquin, Congress does need to use the word "tariff." He then concluded, somewhat sharply, "Your answer." Katyal began his answer and said "There's a lot there, Justice Kavanaugh, so please bear with me." Kavanaugh said he would, but he interrupted Katyal mid-sentence and said, "Algonquin didn't have anything like that but keep going." Kavanaugh actually seemed annoyed with Katyal's argument, which, as I noted above, did not seem responsive to his concerns.

Justice Gorsuch

The second key vote belongs to Justice Gorsuch. Here, I will just focus on Justice Gorsuch's questions concerning the statute. Later, I'll return to Gorsuch's views on delegation. During the seriatim round, Katyal purported to summarize Justice Gorsuch's position. When the Chief gave Gorsuch his turn, be began, "Well, I don't know if I agree with what you say I say, but, at any rate." Like Justice Kavanaugh, Justice Gorsuch looked annoyed. Gorsuch wanted to go back to the "plain language." Through several questions, he suggested that the verb "regulate" is "capacious" and other language may in fact delegate the appropriate power. He then asked a pivotal question:

And just on the plain language, forget about the backdrop of major, do you need major questions to win? I kind of --I kind of think you might.

What exactly was Gorsuch saying here? One reading is that Gorsuch was prepared to find that Congress failed to adequately delegate authority here, and therefore in the absence of a clear delegation, the Court, under the major questions doctrine, should find that the statutory authority is lacking. But I don't think that is the best reading. Rather, Gorsuch seemed to be saying that the plain language of the statute in fact did clearly delegate this authority, and the only way then for Katyal to win would be through some sort of non-delegation argument. In other words, even if Congress did purport to grant this sweeping power of imposing tariffs to the President, that delegation was unconstitutional. Thus, if I'm reading Gorsuch correctly, the government wins on the statutory argument, but loses on the constitutional argument.

Justice Gorsuch then asked Katyal for what turned out to be a key concession. Gorsuch asked Katyal if licenses were "economically the same thing as tariffs." Katyal replied, "Sometimes they can be revenue-raising in the same way." Gorsuch then said that licenses are "economically identical to a tariff [which is] authorized by this statute." Katyal did not push back on the premise of the question. Instead, he talked about "regulate" again. Gorsuch seemed annoyed Katyal wasn't talking about "license." Gorsuch said, "Yeah. I do follow that argument." But he was not persuaded. Katyal tried again, and Gorsuch expressed more frustration:

JUSTICE GORSUCH: Well, you're not answering my question, though, Mr. Katyal. I'm talking about just the plain text here. And you're moving to a major questions or a nondelegation. That's the move you're making, which I think, you know, fine, we can consider that. I'm just talking about on the text, okay? It says by means of licenses or otherwise. You've conceded that licenses are economically equivalent to tariffs. And the statute says by means of licenses or otherwise regulate.

Again, Gorsuch was separating the "plain text" of the statute and the MQD/non-delegation doctrine. Finally, Gorsuch asked what should have been a predictable question about the Indian Commerce Clause. Katyal was stumped.

MR. KATYAL: I don't know that I have a position on that. It maybe is a little too afield for me to…

Who played Justice Gorsuch in Katyal's moots? Did no one bring up the Indian Commerce Clause? General Sauer addressed this point directly during his rebuttal, so the government was ready.

Justice Barrett

The third key vote was Justice Barrett.

Justice Barrett wrote in her new book that for many cases, she comes into arguments leaning in one direction or the other. But for some difficult cases, she is undecided. Here, I got the sense that she was truly trying to grapple with a complex statute. She asked probing questions of the Solicitor General, but I didn't get the sense that she landed on a clear answer. But Justice Barrett seemed to get animated during Justice Gorsuch's seriatim round. She was not getting Katyal's answers.

During her seriatim round, she picked up immediately on the word "license" in the statute.

JUSTICE BARRETT: So this license thing is important to me. And do you agree that pursuant to IEEPA, the President could impose --could regulate commerce by imposing a license fee?

Again, the very thing that Katyal did not want to talk about with Gorsuch, Barrett found important. How did Katyal respond?

MR. KATYAL: Sorry. Could you say that again?

The question was loud and clear. I'm not sure what Katyal missed. Justice Barrett repeated the question again, nearly verbatim:

JUSTICE BARRETT: Could the President regulate commerce under IEEPA by using a licensing fee?

Katyal then tries to backtrack of what he should have told Justice Gorsuch earlier:

MR. KATYAL: Not a fee. So I should have said this earlier. But license is different from a licensing fee. IEEPA and TWEA authorize licenses, not license fees. And no President has ever charged, to my knowledge, fees under those two statutes for the licenses. So fee is impermissible. License is okay.

Then Barrett nailed him for doubling back:

JUSTICE BARRETT: But I thought you conceded to Justice Gorsuch there was no difference between a tariff and a licensing fee functionally.

MR. KATYAL: Well, if the --if the licensing fee is just to --I didn't concede that.

JUSTICE BARRETT: Okay.

I sensed a tinge of sarcasm in Barrett's "Okay." Barrett asked if the government can "license exportation." Katyal replied it could not. Barrett said, "I actually looked into this." She gave as an example a ban on exporting products that have national security implications. Barrett asked if "licensing could be used in that sense, not as a revenue-raising measure" Katyal said "Exactly." A moment earlier he said the government could not do so. During rebuttal, SG Sauer mentioned rare-earth metals as an example of such products.

The arguments continued in a similar fashion. Barrett said "I don't understand that" and "maybe I'm just not tracking." She just seemed frustrated with the arguments.

Barrett's final question considered the remedy. She said it would be a "mess" to process reimbursements. Katyal tried to describe an orderly process. Barrett interjected mid-sentence, "So a mess."

On balance, Justice Barrett did not seem convinced that the government lost under the statute, and she was not even prepared to think about what the remedy should be if the Court were to reach that ruling. I think she is a likely vote for the government here.

Chief Justice Roberts

The Chief Justice began his day with an unusual interjection. During bar admissions, one of the movants listed many names, and then forgot to reference the qualifications. The Chief interrupted and asked for the qualifications. The movant said he was satisfied with their qualifications, and the proceeding moved on.

During the oral argument, Chief Justice Robert was paying close attention. He counted how many times that the Solicitor General cited Dames & Moore, and then insisted the decision was narrow.

CHIEF JUSTICE ROBERTS: Counsel, you --you've already mentioned Dames & Moore three --three times, which surprises me a little because the Court in Dames & Moore went out of its way to say that it was issuing a very narrow decision it pretty much expected to apply only in this case.

Roberts then proceeded to read several excerpts from Dames & Moore, a case decided during his term (though I question how much input he actually had). Roberts stressed that the decision was good for one ride.

Indeed, he made this same point in Bank Markazi:

The majority suggests that Dames & Moore supports the validity of §8772. But Dames & Moore was self- consciously "a restricted railroad ticket, good for this day and train only." Smith v. Allwright, 321 U. S. 649, 669 (1944) (Roberts, J., dissenting). The Court stressed in Dames & Moore that it "attempt[ed] to lay down no gen- eral 'guidelines' covering other situations not involved here, and attempt[ed] to confine the opinion only to the very questions necessary to [the] decision of the case." 453 U. S., at 661; see also American Ins. Assn. v. Garamendi, 539 U. S. 396, 438 (2003) (GINSBURG, J., dissenting) ("Notably, the Court in Dames & Moore was emphatic about the 'narrowness' of its decision.").

I've noticed in the past that Roberts has not cited Dames & Moore. Now, we know why. He took Rehnquist at his words, and treated the decision as a ticket good for one ride. Roberts no doubt reads Bush v. Gore in the same fashion.

Roberts also insisted that customers pay tariffs. He used the example of customers paying higher costs for a car. Maybe the Chief bought a car recently?

During Katyal's time, Roberts asked some tough questions about presidential powers. I think the Chief is grappling with this issue.

Who will win?

Contrary to the hot takes, I think the government ekes this one out. The vote might be weird. What happens if Justice Gorsuch finds that the best reading of the statute is that the President has the authority to issue the tariffs, but then holds that such a delegation of authority violates the non-delegation doctrine. If four other Justices agree with Gorsuch's reading of the statute, there are five vote to uphold the statutory delegation. I don't think anyone other than Justice Thomas might join Gorsuch on the constitutional argument. In that case, the tariffs survive. This might be akin to Justice Powell's vote in Bakke. Or, if Chief Justice Roberts decides he wants to keep this case for himself, he will give the fifth vote to uphold the statutory authority, with many limiting principle.

Ultimately, I think I wind up where Justice Gorsuch did: the statute likely confers the authority on the President to impose regulatory tariffs, but that capacious delegation violates the non-delegation doctrine.

***

Prior to the argument, Jason Willick wrote that Michael McConnell should have taken the podium instead of Neal Katyal. He explained that the respondents should have selected the conservative McConnell over the "partisan liberal lawyer." With the benefit of hindsight, I think Willick was correct. Michael McConnell clerked with Chief Justice Roberts the term that Dames & Moore was decided. He served with Justice Gorsuch on the Tenth Circuit. He traveled in the same law professor circles as Justice Barrett. McConnell would have been uniquely situated to bring this argument forward. And it would have been so much more powerful for an actual proponent of the separation of powers to argue this case. Indeed, at one point, Justice Alito ridiculed Katyal for making a non-delegation doctrine argument that he likely would not raise in any other context. Alito said, "I found it interesting to hear you make the nondelegation argument, Mr. Katyal. I wonder if you ever thought that your legacy as a constitutional advocate would be the man who revived the nondelegation argument." An uncomfortable laughter followed. Even Justice Kagan, who was Katyal's former boss, suggested that one of his arguments "cuts against" him.

I don't think Katyal was the right advocate for this job. If the government prevails, I think eyes will turn to him.

 

Comments

[thesafesurfer]

I'm buying good cheese to enjoy with the vintage Democrat whines over an executive branch win.

[ReaderY]

I must confess I don’t understand the math. If 4 justices find the statute does not authorize these tariffs, and Justice Gorsuch finds they do but the statute is unconstitutional as Professor Blackman suggests, the Administration still loses.

[F.D. Wolf]

The majority’s contrary conclusion rests first on stilted textual analysis. The majority picks the statute apart piece by piece in an attempt to escape the meaning of the whole. But the whole—the expansive delegation—is so apparent that the majority has no choice but to justify its holding on extra-statutory grounds. So the majority resorts, as is becoming the norm, to its so-called major-questions doctrine. And the majority again reveals that doctrine for what it is—a way for this Court to negate broad delegations Congress has approved, because they will have significant regulatory impacts. Thus the Court once again substitutes itself for Congress and the Executive Branch—and the hundreds of millions of people they represent—in making this Nation’s most important, as well as most contested, policy decisions.

Biden v. Nebraska, 600 U.S. 477, 533-34 (2023) (Kagan, J., dissenting).

I saw one analyst predict a 5-4 decision in favor of the importers with the majority consisting of Roberts, Gorsuch, Kagan, Sotomayor, and Jackson, but, unless the three liberals are willing to sign on to any opinion that says, "Trump loses", then I find it difficult to imagine exactly what the one opinion those five could sign on to would look like.

Gorsuch seems intent on resuscitating the "nondelegation doctrine", a moribund relic of the Lochner days that the Court has not invoked since 1935. I find it very difficult to see the three liberals (or even Roberts) getting on board with that. Roberts, who I am fairly certain would assign the case to himself if he is in the majority, whichever side that is, who wrote the majority opinion in Biden v. Nebraska, likes "major questions". Would the three liberals readily embrace MQD, given their excoriating dissent in Biden? I guess we'll see.