This Sheep Comes as a Wolf: Why the “Lawsuit Loophole” Takes the Bite Out of the Major Questions Doctrine and How to Fix It
“Because Title VII does not speak clearly on whether it covers discrimination because of sexual orientation and gender identity, and because this is a question of great economic and political significance, we cannot accept the agency’s asserted authority to regulate” is not a real quote. But it could have been. In reality, the agencies that enforce Title VII are free to interpret it as preventing not just discrimination on the basis of sex, but discrimination on the basis of sexual orientation and gender identity as well.
But why haven’t those agencies run into the buzzsaw of the Major Questions Doctrine (MQD)? MQD says that Congress must speak clearly to authorize agency actions that have “great economic and political importance.” And almost everyone has recognized that whether Title VII creates protections for gay and transgender employees across the whole country is a question of great importance.
The reason why agencies haven’t run into the MQD problem is because private plaintiffs cleared the way for them. In Bostock v. Clayton County, a group of private plaintiffs sued their employers, alleging that Title VII protected them from being fired because of their sexual orientation or gender identity. The Supreme Court agreed, and ruled for them with no mention of MQD limiting the reach of the statute.
But how can that be? While MQD’s relationship to statutory interpretation remains unsettled, both major views of the doctrine suggest it should apply in private suits like Bostock. Justice Barrett, along with some scholars, view MQD as part and parcel of a textualist approach. In their view, MQD only requires judges to use “common sense” when interpreting unclear statutory language. That’s something both judges and ordinary people already do all the time. If MQD is part and parcel of textualism, then applying it to lawsuits would just be part of interpreting the relevant statute. Another, more common view, is that MQD is a substantive method (canon) of interpretation. It demands clarity from Congress before the Court will read a law as authorizing broad agency action. This guards against reading statutes as giving so much power to agencies that the delegation itself becomes unconstitutional. But even as a canon of constitutional avoidance, there’s still good reason to think MQD should apply in lawsuits. As in Bostock, agencies can often enforce the “results” of lawsuits brought under the relevant statute. If MQD is a canon of constitutional avoidance, that suggests that the agency action itself is the problem. A prior lawsuit should not be able to save an agency action if the action is substantively unconstitutional.
This “lawsuit loophole” is a gap at the heart of MQD. The fact it does not apply in lawsuits suggests that both main interpretations of the doctrine are wrong. And more importantly, the current paradigm creates a strange “race to the courthouse.” One where agencies are incentivized to do “regulation by enforcement” — enforcement lawsuits that, if successful, authorize future rulemaking.
But this loophole has a simple solution — a change in how MQD is viewed. MQD is neither a textual nor substantive canon. Instead, MQD is a unique hybrid canon. MQD combines elements of textualism with a protection of constitutional values. In particular, it takes something that resembles the absurdity canon, and makes it easier to apply in an effort to promote certain normative values. Recognizing MQD as a hybrid canon would allow the Court to resolve the “lawsuit loophole.” Under this view, MQD doesn’t need to be applied to any kind of lawsuit. Neither private nor agency lawsuits present the same issues as agency enforcement actions. While both the textual and substantive views of MQD suggest that it must be an “all or nothing” doctrine, this hybrid view allows the Court to apply it to some cases but not others. While this might be uncomfortable for textualists, this actually aligns with other well-established canons used by the Court.
The Court should avoid solving the “lawsuit loophole” by extending MQD to lawsuits. Doing so would call into question a huge volume of precedent and make it impossible for Congress to enact broad grants of rights. In addition, it would be a judicial infringement on the Executive’s ability to carry out its executive, law enforcement function. Lastly, it would call into question the Court’s holdings about the fundamental nature of statutory interpretation.
