Biden v. Nebraska

[Chief Justice Roberts delivered the opinion of the Court, joined by Thomas, Alito, Gorsuch, Kavanaugh and Barrett, JJ. Barrett, J., filed a concurring opinion. Kagan, J., filed a dissenting opinion, joined by Sotomayor and Jackson, JJ. Reversed and remanded. Omitted here are the Court’s account of the Title IV loan programs, much of its answer to the Secretary’s subsidiary arguments, and portions of the dissent. Barrett’s concurrence is given entire, less her footnotes.]

[A note on citation. The case citation is settled — 600 U.S. 477 — confirmed against the Court’s own preliminary print, which carries final pagination. But this reading carries no page citation of any kind, not to this case and not to any authority the opinions cite, because the text below was taken from the slip opinion. The slip is separately paginated from page 1 in each of its four documents and prints the reporter page as a blank: “Cite as: 600 U. S. ____ (2023).” No slip-to-reporter mapping exists in that source, and none has been guessed, because a plausible-looking pin cite would be a false one. Rather than carry some pin cites and not others, this reading carries none, naming the opinion and part instead; cases are identified by name and year. The Sheetz note in Module 2A uses the same convention. If you are citing a specific page of this case in written work, go to the reporter or to Westlaw or Lexis and pin it there.]

[The statute. Title IV of the Higher Education Act of 1965 governs federal student aid and authorizes the Secretary of Education to cancel or reduce loans in narrow circumstances — for some public servants; for borrowers who have died or become permanently and totally disabled; for bankrupt borrowers; and for borrowers whose schools falsely certify them, close down, or fail to pay lenders. After the September 11 attacks Congress gave the Secretary a temporary waiver authority, and in 2003 made it permanent and general in the Higher Education Relief Opportunities for Students Act. Under the HEROES Act the Secretary “may waive or modify any statutory or regulatory provision applicable to the student financial assistance programs under title IV of the [Education Act] as the Secretary deems necessary in connection with a war or other military operation or national emergency,” and only “as may be necessary to ensure” that affected individuals “are not placed in a worse position financially in relation to that financial assistance.” The Act passed 421 to 1 in the House and by unanimous voice vote in the Senate.]

[The plan and the posture. In March 2020 the President declared the COVID–19 pandemic a national emergency, and the Secretary suspended loan repayments and interest accrual. In January 2021 the Department’s Office of General Counsel concluded that “the Secretary does not have statutory authority to provide blanket or mass cancellation, compromise, discharge, or forgiveness of student loan principal balances.” After a change of administrations that memorandum was rescinded and replaced with one reaching the opposite conclusion. In August 2022, a few weeks before the President stated that “the pandemic is over,” the Department announced “waivers and modifications” discharging up to $10,000 of loan balance for borrowers with adjusted gross income below $125,000, and up to $20,000 for those who had received Pell Grants — about 43 million borrowers and, by the Congressional Budget Office’s estimate, about $430 billion in principal. Six States sued. The District Court held that none had standing; the Eighth Circuit enjoined the plan nationwide, concluding that Missouri likely had standing through the Missouri Higher Education Loan Authority.]

II

Before addressing the legality of the Secretary’s program, we must first ensure that the States have standing to challenge it. Under Article III, a plaintiff needs a “personal stake” in the case — an injury in fact, a concrete and imminent harm to a legally protected interest, like property or money, that is fairly traceable to the challenged conduct and likely to be redressed by the lawsuit. Lujan v. Defenders of Wildlife (1992). Because we conclude that the Secretary’s plan harms MOHELA and thereby directly injures Missouri, we need not consider the other theories of standing raised by the States.

Missouri created MOHELA as a nonprofit government corporation to participate in the student loan market. It services nearly $150 billion worth of federal loans for the Department of Education and receives an administrative fee for each of the five million accounts it services, totaling $88.9 million in revenue last year alone. Under the Secretary’s plan, roughly half of all federal borrowers would have their loans completely discharged. MOHELA could no longer service those closed accounts, costing it, by Missouri’s estimate, $44 million a year in fees. This financial harm is an injury in fact directly traceable to the Secretary’s plan, as both the Government and the dissent concede.

The plan’s harm to MOHELA is also a harm to Missouri. MOHELA is a “public instrumentality” of the State, established to perform the “essential public function” of helping Missourians access student loans needed to pay for college. Its profits help fund education in Missouri: MOHELA has provided $230 million for development projects at Missouri colleges and universities and almost $300 million in grants and scholarships for Missouri students.

The Authority is subject to the State’s supervision and control. Its board consists of two state officials and five members appointed by the Governor and approved by the Senate, and the Governor can remove any board member for cause. MOHELA must provide annual financial reports to the Missouri Department of Education. The Authority is therefore “directly answerable” to the State, which “set[s] the terms of its existence” and alone “can abolish [MOHELA] and set the terms of its dissolution.”

By law and function, MOHELA is an instrumentality of Missouri: created by the State to further a public purpose, governed by state officials and state appointees, reporting to the State, and dissolvable by the State. The Secretary’s plan will cut MOHELA’s revenues, impairing its efforts to aid Missouri college students. This acknowledged harm to MOHELA in the performance of its public function is necessarily a direct injury to Missouri itself.

We came to a similar conclusion 70 years ago in Arkansas v. Texas (1953). Arkansas sought to invoke our original jurisdiction in a suit against Texas for wrongfully interfering with a contract between the University of Arkansas and a Texas charity. Texas argued that the suit could not proceed because the University did “not stand in the shoes of the State.” We disagreed, concluding that Arkansas was in fact seeking to protect its own interests because the University was “an official state instrumentality” — “created by the Arkansas legislature,” “governed by a Board of Trustees appointed by the Governor with consent of the Senate,” and reporting “all of its expenditures to the legislature.” Thus “any injury under the contract to the University [was] an injury to Arkansas.” So too here. Because the Authority is part of Missouri, the State does not seek to “rely on injuries suffered by others.” It aims to remedy its own.

The Secretary and the dissent assert that MOHELA’s injuries should not count as Missouri’s because MOHELA, as a public corporation, has a legal personality separate from the State, and that because MOHELA can sue on its own behalf, it — not Missouri — must be the one to sue. Every government corporation has a distinct personality; it is a corporation, after all, “with the powers to hold and sell property and to sue and be sued.” Yet such an instrumentality — created and operated to fulfill a public function — nonetheless remains “(for many purposes at least) part of the Government itself.” Lebron v. National Railroad Passenger Corporation (1995); see Department of Transportation v. Association of American Railroads (2015). And in Arkansas, the University could have asserted its rights on its own; we permitted the State to bring an original suit all the same. Where a State has been harmed in carrying out its responsibilities, the fact that it chose to exercise its authority through a public corporation it created and controls does not bar the State from suing to remedy that harm itself.

The Secretary’s plan harms MOHELA in the performance of its public function and so directly harms the State that created and controls MOHELA. Missouri thus has suffered an injury in fact sufficient to give it standing to challenge the Secretary’s plan. With Article III satisfied, we turn to the merits.

III

The Secretary asserts that the HEROES Act grants him the authority to cancel $430 billion of student loan principal. It does not. We hold today that the Act allows the Secretary to “waive or modify” existing statutory or regulatory provisions applicable to financial assistance programs under the Education Act, not to rewrite that statute from the ground up.

A

That power has limits. Statutory permission to “modify” does not authorize “basic and fundamental changes in the scheme” designed by Congress. MCI Telecommunications Corp. v. American Telephone & Telegraph Co. (1994). That term carries “a connotation of increment or limitation,” and must be read to mean “to change moderately or in minor fashion.” The authority to “modify” statutes and regulations allows the Secretary to make modest adjustments and additions to existing provisions, not transform them. Prior to the pandemic, “modifications” issued under the Act implemented only minor changes, most of them procedural — reducing the number of tax forms borrowers must file, extending time periods for borrower action, allowing oral rather than written authorizations.

Here, the Secretary purported to “modif[y] the provisions of” two statutory sections and three related regulations governing student loans. Those provisions granted him power to “discharge [a] borrower’s liability” under narrowly prescribed circumstances — death, disability, or bankruptcy; a school’s false certification or failure to refund loan proceeds; and a borrower’s inability to complete a program due to closure of the school. The Secretary’s new “modifications” of these provisions were not “moderate” or “minor.” Instead, they created a novel and fundamentally different loan forgiveness program. No prior limitation on loan forgiveness is left standing; every borrower within the specified income cap automatically qualifies, no matter their circumstances, and the Department estimates that the program will cover 98.5% of all borrowers. The plan has “modified” the cited provisions only in the same sense that “the French Revolution ‘modified’ the status of the French nobility” — it has abolished them and supplanted them with a new regime entirely. It is “highly unlikely that Congress” authorized such a sweeping program “through such a subtle device as permission to ‘modify.’”

The Secretary responds that the Act authorizes him to “waive” legal provisions as well as modify them, and that this additional term “grant[s] broader authority” than would “modify” alone. But his invocation of the waiver power here does not remotely resemble how it has been used before. Previously, waiver under the HEROES Act was straightforward: the Secretary identified a particular legal requirement and waived it. Here, he does not identify any provision that he is actually waiving. No provision of the Education Act establishes an obligation on the part of student borrowers to pay back the Government, and so as the Government concedes, “waiver” cannot refer to “waiv[ing] loan balances” or “waiving the obligation to repay.”

The Secretary’s plan cannot fairly be called a waiver — it not only nullifies existing provisions, but augments and expands them dramatically. It cannot be mere modification, because it constitutes “effectively the introduction of a whole new regime.” However broad the meaning of “waive or modify,” that language cannot authorize the kind of exhaustive rewriting of the statute that has taken place here.

B

In a final bid to elide the statutory text, the Secretary appeals to congressional purpose. “The whole point of” the HEROES Act, the Government contends, “is to ensure that in the face of a national emergency that is causing financial harm to borrowers, the Secretary can do something.” The dissent agrees. But that interpretation would grant unlimited power to the Secretary, not only to modify or waive certain provisions but to “fill the holes that action creates with new terms” — no matter how drastic — up to and including “the most substantial kind of change” imaginable. That is inconsistent with the statutory language and past practice under the statute.

The question here is not whether something should be done; it is who has the authority to do it. Our recent decision in West Virginia v. EPA involved similar concerns over the exercise of administrative power — the EPA’s claim that the Clean Air Act authorized it to impose a nationwide cap on carbon dioxide emissions. Given “the ‘history and the breadth of the authority that [the agency] ha[d] asserted,’ and the ‘economic and political significance’ of that assertion,” we found “‘reason to hesitate before concluding that Congress’ meant to confer such authority.” So too here, where the Secretary claims the authority, on his own, to release 43 million borrowers from their obligations to repay $430 billion. He has never previously claimed powers of this magnitude under the HEROES Act; past waivers and modifications have been extremely modest, and “[n]o regulation premised on” the Act “has even begun to approach the size or scope” of this program.

The “‘economic and political significance’” of the Secretary’s action is staggering by any measure. Practically every student borrower benefits, regardless of circumstances. A Wharton School budget model estimates that the program will cost taxpayers “between $469 billion and $519 billion” — ten times the “economic impact” we found significant in concluding that the Centers for Disease Control and Prevention’s eviction moratorium triggered analysis under the major questions doctrine, and nearly one-third of the Government’s $1.7 trillion in annual discretionary spending. There is no serious dispute that the Secretary claims the authority to exercise control over “a significant portion of the American economy.”

The Secretary acknowledges that West Virginia is the law, but objects that its principles apply only to “agency action[s] involv[ing] the power to regulate, not the provision of government benefits.” This Court has never drawn that line — and for good reason. Among Congress’s most important authorities is its control of the purse. U. S. Const., Art. I, § 9, cl. 7. It would be odd to think that separation of powers concerns evaporate simply because the Government is providing monetary benefits rather than imposing obligations. As we observed in West Virginia, major questions cases “have arisen from all corners of the administrative state.” In King v. Burwell (2015), we declined to defer to the Internal Revenue Service’s interpretation of a healthcare statute affecting “billions of dollars of spending each year.” That the statute involved government benefits made no difference there, and it makes no difference here.

All this leads us to conclude that “[t]he basic and consequential tradeoffs” inherent in a mass debt cancellation program “are ones that Congress would likely have intended for itself.” In such circumstances, we have required the Secretary to “point to ‘clear congressional authorization.’” And as we have shown, the HEROES Act provides no authorization for the Secretary’s plan even under the ordinary tools of statutory interpretation — let alone “clear congressional authorization.”

* * *

The judgment of the District Court for the Eastern District of Missouri is reversed, and the case is remanded for further proceedings consistent with this opinion.

It is so ordered.

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[Justice Barrett, concurring. Reproduced entire; her footnotes are omitted except for one summarized in a bracket below, and the page elements of her citations are dropped under the citation rule stated above. This is the most careful judicial statement we have of what the major questions doctrine is. Read it against the majority’s own framing — they are not obviously saying the same thing.]

I join the Court’s opinion in full. I write separately to address the States’ argument that, under the “major questions doctrine,” we can uphold the Secretary of Education’s loan cancellation program only if he points to “‘clear congressional authorization’” for it. West Virginia v. EPA. In this case, the Court applies the ordinary tools of statutory interpretation to conclude that the HEROES Act does not authorize the Secretary’s plan. The major questions doctrine reinforces that conclusion but is not necessary to it.

Still, the parties have devoted significant attention to the major questions doctrine, and there is an ongoing debate about its source and status. I take seriously the charge that the doctrine is inconsistent with textualism. West Virginia (Kagan, J., dissenting) (“When [textualism] would frustrate broader goals, special canons like the ‘major questions doctrine’ magically appear as get-out-of-text-free cards”). And I grant that some articulations of the major questions doctrine on offer — most notably, that the doctrine is a substantive canon — should give a textualist pause.

Yet for the reasons that follow, I do not see the major questions doctrine that way. Rather, I understand it to emphasize the importance of context when a court interprets a delegation to an administrative agency. Seen in this light, the major questions doctrine is a tool for discerning — not departing from — the text’s most natural interpretation.

I

A

Substantive canons are rules of construction that advance values external to a statute. Some substantive canons, like the rule of lenity, play the modest role of breaking a tie between equally plausible interpretations of a statute. Others are more aggressive — think of them as strong-form substantive canons. Unlike a tie-breaking rule, a strong-form canon counsels a court to strain statutory text to advance a particular value. There are many such canons on the books, including constitutional avoidance, the clear-statement federalism rules, and the presumption against retroactivity. Such rules effectively impose a “clarity tax” on Congress by demanding that it speak unequivocally if it wants to accomplish certain ends. This “clear statement” requirement means that the better interpretation of a statute will not necessarily prevail. E.g., Boechler v. Commissioner (“[I]n this context, better is not enough”). Instead, if the better reading leads to a disfavored result (like provoking a serious constitutional question), the court will adopt an inferior-but-tenable reading to avoid it. So to achieve an end protected by a strong-form canon, Congress must close all plausible off ramps.

While many strong-form canons have a long historical pedigree, they are “in significant tension with textualism” insofar as they instruct a court to adopt something other than the statute’s most natural meaning. The usual textualist enterprise involves “hear[ing] the words as they would sound in the mind of a skilled, objectively reasonable user of words.” But a strong-form canon “load[s] the dice for or against a particular result” in order to serve a value that the judiciary has chosen to specially protect. Even if the judiciary’s adoption of such canons can be reconciled with the Constitution, it is undeniable that they pose “a lot of trouble” for “the honest textualist.”

[In a footnote Justice Barrett adds that whether the creation or application of strong-form canons exceeds the “judicial Power” conferred by Article III “is a difficult question,” and that while she is “wary of adopting new ones — and if the major questions doctrine were a newly minted strong-form canon, I would not embrace it,” in her view “the major questions doctrine is neither new nor a strong-form canon.”]

B

Some have characterized the major questions doctrine as a strong-form substantive canon designed to enforce Article I’s Vesting Clause. On this view, the Court overprotects the nondelegation principle by increasing the cost of delegating authority to agencies — namely, by requiring Congress to speak unequivocally in order to grant them significant rulemaking power. This “clarity tax” might prevent Congress from getting too close to the nondelegation line, especially since the “intelligible principle” test largely leaves Congress to self-police. (So the doctrine would function like constitutional avoidance.) In addition or instead, the doctrine might reflect the judgment that it is so important for Congress to exercise “[a]ll legislative Powers,” Art. I, § 1, that it should be forced to think twice before delegating substantial discretion to agencies — even if the delegation is well within Congress’s power to make. (So the doctrine would function like the rule that Congress must speak clearly to abrogate state sovereign immunity.) No matter which rationale justifies it, this “clear statement” version of the major questions doctrine “loads the dice” so that a plausible antidelegation interpretation wins even if the agency’s interpretation is better.

While one could walk away from our major questions cases with this impression, I do not read them this way. No doubt, many of our cases express an expectation of “clear congressional authorization” to support sweeping agency action. But none requires “an ‘unequivocal declaration’” from Congress authorizing the precise agency action under review, as our clear-statement cases do in their respective domains. And none purports to depart from the best interpretation of the text — the hallmark of a true clear-statement rule.

So what work is the major questions doctrine doing in these cases? I will give you the long answer, but here is the short one: The doctrine serves as an interpretive tool reflecting “common sense as to the manner in which Congress is likely to delegate a policy decision of such economic and political magnitude to an administrative agency.” FDA v. Brown & Williamson Tobacco Corp.

II

The major questions doctrine situates text in context, which is how textualists, like all interpreters, approach the task at hand. C. Nelson, What Is Textualism? (“[N]o ‘textualist’ favors isolating statutory language from its surrounding context”); Scalia (“In textual interpretation, context is everything”). After all, the meaning of a word depends on the circumstances in which it is used. To strip a word from its context is to strip that word of its meaning.

Context is not found exclusively “‘within the four corners’” of a statute. Background legal conventions, for instance, are part of the statute’s context. F. Easterbrook, The Case of the Speluncean Explorers: Revisited (“Language takes meaning from its linguistic context,” as well as “historical and governmental contexts”). Thus, courts apply a presumption of mens rea to criminal statutes, and a presumption of equitable tolling to statutes of limitations. It is also well established that “[w]here Congress employs a term of art obviously transplanted from another legal source, it brings the old soil with it.” I could go on. As it happens, “[t]he notion that some things ‘go without saying’ applies to legislation just as it does to everyday life.” Bond v. United States.

Context also includes common sense, which is another thing that “goes without saying.” Case reporters and casebooks brim with illustrations of why literalism — the antithesis of context-driven interpretation — falls short. Consider the classic example of a statute imposing criminal penalties on “‘whoever drew blood in the streets.’” United States v. Kirby. Read literally, the statute would cover a surgeon accessing a vein of a person in the street. But “common sense” counsels otherwise, because in the context of the criminal code, a reasonable observer would “expect the term ‘drew blood’ to describe a violent act.” Common sense similarly bears on judgments like whether a floating home is a “vessel,” whether tomatoes are “vegetables,” and whether a skin irritant is a “chemical weapon.”

Why is any of this relevant to the major questions doctrine? Because context is also relevant to interpreting the scope of a delegation. Think about agency law, which is all about delegations. When an agent acts on behalf of a principal, she “has actual authority to take action designated or implied in the principal’s manifestations to the agent … as the agent reasonably understands [those] manifestations.” Restatement (Third) of Agency (2005). Whether an agent’s understanding is reasonable depends on “[t]he context in which the principal and agent interact,” including their “[p]rior dealings,” industry “customs and usages,” and “the nature of the principal’s business or the principal’s personal situation.”

With that in mind, imagine that a grocer instructs a clerk to “go to the orchard and buy apples for the store.” Though this grant of apple-purchasing authority sounds unqualified, a reasonable clerk would know that there are limits. For example, if the grocer usually keeps 200 apples on hand, the clerk does not have actual authority to buy 1,000 — the grocer would have spoken more directly if she meant to authorize such an out-of-the-ordinary purchase. A clerk who disregards context and stretches the words to their fullest will not have a job for long.

This is consistent with how we communicate conversationally. Consider a parent who hires a babysitter to watch her young children over the weekend. As she walks out the door, the parent hands the babysitter her credit card and says: “Make sure the kids have fun.” Emboldened, the babysitter takes the kids on a road trip to an amusement park, where they spend two days on rollercoasters and one night in a hotel. Was the babysitter’s trip consistent with the parent’s instruction? Maybe in a literal sense, because the instruction was open-ended. But was the trip consistent with a reasonable understanding of the parent’s instruction? Highly doubtful. In the normal course, permission to spend money on fun authorizes a babysitter to take children to the local ice cream parlor or movie theater, not on a multiday excursion to an out-of-town amusement park. If a parent were willing to greenlight a trip that big, we would expect much more clarity than a general instruction to “make sure the kids have fun.”

But what if there is more to the story? Perhaps there is obvious contextual evidence that the babysitter’s jaunt was permissible — for example, maybe the parent left tickets to the amusement park on the counter. Other clues, though less obvious, can also demonstrate that the babysitter took a reasonable view of the parent’s instruction. Perhaps the parent showed the babysitter where the suitcases are, in the event that she took the children somewhere overnight. Or maybe the parent mentioned that she had budgeted $2,000 for weekend entertainment. Indeed, some relevant points of context may not have been communicated by the parent at all. For instance, we might view the parent’s statement differently if this babysitter had taken the children on such trips before or if the babysitter were a grandparent.

In my view, the major questions doctrine grows out of these same commonsense principles of communication. Just as we would expect a parent to give more than a general instruction if she intended to authorize a babysitter-led getaway, we also “expect Congress to speak clearly if it wishes to assign to an agency decisions of vast ‘economic and political significance.’” Utility Air Regulatory Group v. EPA. That clarity may come from specific words in the statute, but context can also do the trick. Surrounding circumstances, whether contained within the statutory scheme or external to it, can narrow or broaden the scope of a delegation to an agency.

This expectation of clarity is rooted in the basic premise that Congress normally “intends to make major policy decisions itself, not leave those decisions to agencies.” Or, as Justice Breyer once observed, “Congress is more likely to have focused upon, and answered, major questions, while leaving interstitial matters [for agencies] to answer themselves in the course of a statute’s daily administration.” That makes eminent sense in light of our constitutional structure, which is itself part of the legal context framing any delegation. Because the Constitution vests Congress with “[a]ll legislative Powers,” Art. I, § 1, a reasonable interpreter would expect it to make the big-time policy calls itself, rather than pawning them off to another branch. See West Virginia (explaining that the major questions doctrine rests on “both separation of powers principles and a practical understanding of legislative intent”).

Crucially, treating the Constitution’s structure as part of the context in which a delegation occurs is not the same as using a clear-statement rule to overenforce Article I’s nondelegation principle (which, again, is the rationale behind the substantive-canon view of the major questions doctrine). My point is simply that in a system of separated powers, a reasonably informed interpreter would expect Congress to legislate on “important subjects” while delegating away only “the details.” Wayman v. Southard. That is different from a normative rule that discourages Congress from empowering agencies. To see what I mean, return to the ambitious babysitter. Our expectation of clearer authorization for the amusement-park trip is not about discouraging the parent from giving significant leeway to the babysitter or forcing the parent to think hard before doing so. Instead, it reflects the intuition that the parent is in charge and sets the terms for the babysitter — so if a judgment is significant, we expect the parent to make it. If, by contrast, one parent left the children with the other parent for the weekend, we would view the same trip differently because the parents share authority over the children. In short, the balance of power between those in a relationship inevitably frames our understanding of their communications. And when it comes to the Nation’s policy, the Constitution gives Congress the reins — a point of context that no reasonable interpreter could ignore.

Given these baseline assumptions, an interpreter should “typically greet” an agency’s claim to “extravagant statutory power” with at least some “measure of skepticism.” That skepticism is neither “made-up” nor “new.” On the contrary, it appears in a line of decisions spanning at least 40 years. E.g., King v. Burwell; Gonzales v. Oregon; Brown & Williamson; Industrial Union Dept., AFL–CIO v. American Petroleum Institute (plurality opinion).

Still, this skepticism does not mean that courts have an obligation (or even permission) to choose an inferior-but-tenable alternative that curbs the agency’s authority — and that marks a key difference between my view and the “clear statement” view of the major questions doctrine. In some cases, the court’s initial skepticism might be overcome by text directly authorizing the agency action or context demonstrating that the agency’s interpretation is convincing. (And because context can suffice, I disagree with JUSTICE KAGAN’s critique that “[t]he doctrine forces Congress to delegate in highly specific terms.”) If so, the court must adopt the agency’s reading despite the “majorness” of the question. In other cases, however, the court might conclude that the agency’s expansive reading, even if “plausible,” is not the best. In that event, the major questions doctrine plays a role, because it helps explain the court’s conclusion that the agency overreached.

Consider Brown & Williamson, in which we rejected the Food and Drug Administration’s determination that tobacco products were within its regulatory purview. The agency’s assertion of authority — which depended on the argument that nicotine is a “‘drug’” and that cigarettes and smokeless tobacco are “‘drug delivery devices’” — would have been plausible if the relevant statutory text were read in a vacuum. But a vacuum is no home for a textualist. Instead, we stressed that the “meaning” of a word or phrase “may only become evident when placed in context.” And the critical context in Brown & Williamson was tobacco’s “unique political history”: the FDA’s longstanding disavowal of authority to regulate it, Congress’s creation of “a distinct regulatory scheme for tobacco products,” and the tobacco industry’s “significant” role in “the American economy.” In light of those considerations, we concluded that “Congress could not have intended to delegate a decision of such economic and political significance to an agency in so cryptic a fashion.”

We have also been “[s]keptical of mismatches” between broad “invocations of power by agencies” and relatively narrow “statutes that purport to delegate that power.” Just as an instruction to “pick up dessert” is not permission to buy a four-tier wedding cake, Congress’s use of a “subtle device” is not authorization for agency action of “enormous importance”; cf. Whitman v. American Trucking Assns., Inc. (Congress does not “hide elephants in mouseholes”). This principle explains why the Centers for Disease Control and Prevention’s general authority to “‘prevent the … spread of communicable diseases’” did not authorize a nationwide eviction moratorium. The statute, we observed, was a “wafer-thin reed” that could not support the assertion of “such sweeping power.” Likewise, in West Virginia, we held that a “little-used backwater” provision in the Clean Air Act could not justify an Environmental Protection Agency rule that would “restructur[e] the Nation’s overall mix of electricity generation.”

Another telltale sign that an agency may have transgressed its statutory authority is when it regulates outside its wheelhouse. For instance, in Gonzales v. Oregon, we rebuffed an interpretive rule from the Attorney General that restricted the use of controlled substances in physician-assisted suicide. This judgment, we explained, was a medical one that lay beyond the Attorney General’s expertise, and so a sturdier source of statutory authority than “an implicit delegation” was required. Likewise, in King v. Burwell, we blocked the Internal Revenue Service’s attempt to decide whether the Affordable Care Act’s tax credits could be available on federally established exchanges. Among other things, the IRS’s lack of “expertise in crafting health insurance policy” made us think that “had Congress wished to assign that question to an agency, it surely would have done so expressly.” Echoing the theme, our reasoning in Alabama Association of Realtors rested partly on the fact that the CDC’s eviction moratorium “intrude[d] into … the landlord-tenant relationship” — hardly the day-in, day-out work of a public-health agency. National Federation of Independent Business v. OSHA is of a piece. There, we held that the Occupational Safety and Health Administration’s authority to ensure “‘safe and healthful working conditions’” did not encompass the power to mandate the vaccination of employees; as we explained, the statute empowered the agency “to set workplace safety standards, not broad public health measures.” The shared intuition behind these cases is that a reasonable speaker would not understand Congress to confer an unusual form of authority without saying more.

We have also pumped the brakes when “an agency claims to discover in a long-extant statute an unheralded power to regulate ‘a significant portion of the American economy.’” Of course, an agency’s post-enactment conduct does not control the meaning of a statute, but “this Court has long said that courts may consider the consistency of an agency’s views when we weigh the persuasiveness of any interpretation it proffers in court.” The agency’s track record can be particularly probative in this context: A longstanding “want of assertion of power by those who presumably would be alert to exercise it” may provide some clue that the power was never conferred. Once again, Brown & Williamson is a good example. There, we balked at the FDA’s novel attempt to regulate tobacco in part because this move was “[c]ontrary to its representations to Congress since 1914.” And in Utility Air, we were dubious when the EPA discovered “newfound authority” in the Clean Air Act that would have allowed it to require greenhouse-gas permits for “millions of small sources — including retail stores, offices, apartment buildings, shopping centers, schools, and churches.”

If the major questions doctrine were a substantive canon, then the common thread in these cases would be that we “exchange[d] the most natural reading of a statute for a bearable one more protective of a judicially specified value.” But by my lights, the Court arrived at the most plausible reading of the statute in these cases. To be sure, “[a]ll of these regulatory assertions had a colorable textual basis.” In each case, we could have “[p]ut on blinders” and confined ourselves to the four corners of the statute, and we might have reached a different outcome. Instead, we took “off those blinders,” “view[ed] the statute as a whole,” and considered context that would be important to a reasonable observer. With the full picture in view, it became evident in each case that the agency’s assertion of “highly consequential power” went “beyond what Congress could reasonably be understood to have granted.”

III

As for today’s case: The Court surely could have “hi[t] the send button,” after the routine statutory analysis set out in Part III–A of the Chief Justice’s opinion. But it is nothing new for a court to punctuate its conclusion with an additional point, and the major questions doctrine is a good one here. It is obviously true that the Secretary’s loan cancellation program has “vast ‘economic and political significance.’” That matters not because agencies are incapable of making highly consequential decisions, but rather because an initiative of this scope, cost, and political salience is not the type that Congress lightly delegates to an agency. And for the reasons given by the Court, the HEROES Act provides no indication that Congress empowered the Secretary to do anything of the sort.

Granted, some context clues from past major questions cases are absent here — for example, this is not a case where the agency is operating entirely outside its usual domain. But the doctrine is not an on-off switch that flips when a critical mass of factors is present — again, it simply reflects “common sense as to the manner in which Congress is likely to delegate a policy decision of such economic and political magnitude.” Common sense tells us that as more indicators from our previous major questions cases are present, the less likely it is that Congress would have delegated the power to the agency without saying so more clearly.

Here, enough of those indicators are present to demonstrate that the Secretary has gone far “beyond what Congress could reasonably be understood to have granted” in the HEROES Act. Our decision today does not “trump” the statutory text, nor does it make this Court the “arbiter” of “national policy.” Instead, it gives Congress’s words their best reading.

* * *

The major questions doctrine has an important role to play when courts review agency action of “vast ‘economic and political significance.’” But the doctrine should not be taken for more than it is — the familiar principle that we do not interpret a statute for all it is worth when a reasonable person would not read it that way.

[Justice Kagan, with whom Justice Sotomayor and Justice Jackson join, dissenting. Substantially edited.]

In every respect, the Court today exceeds its proper, limited role in our Nation’s governance.

Some 20 years ago, Congress enacted the HEROES Act, authorizing the Secretary of Education to provide relief to student-loan borrowers when a national emergency struck. His authority was bounded: He could do only what was “necessary” to alleviate the emergency’s impact on affected borrowers’ ability to repay. But within that bounded area, Congress gave him discretion. He could “waive or modify any statutory or regulatory provision” applying to federal student-loan programs, and could replace the old provisions with new “terms and conditions.” In establishing the loan forgiveness plan, the Secretary scratched the pre-existing conditions for loan discharge and specified different ones. Either way, he did only what Congress had told him he could.

The Court’s first overreach in this case is deciding it at all. Under Article III, a plaintiff must have standing — a personal stake, an injury in fact. We do not allow plaintiffs to bring suit just because they oppose a policy. Neither do we allow plaintiffs to rely on injuries suffered by others. Those rules may sound technical, but they enforce “fundamental limits on federal judicial power.” They keep courts acting like courts. Or stated the other way around, they prevent courts from acting like this Court does today. The plaintiffs here are six States that have no personal stake in the Secretary’s loan forgiveness plan. They are classic ideological plaintiffs: They think the plan a very bad idea, but they are no worse off because the Secretary differs. In giving those States a forum, the Court acts as though it is an arbiter of political and policy disputes, rather than of cases and controversies.

I

[A plaintiff “cannot rest its claim on a third party’s rights and interests,” and needs “its own stake” in the outcome. The six States, Kagan writes, “have no straightforward way” of showing how they are harmed by a plan that reduces individual borrowers’ debt, so they “have thrown no fewer than four different theories of injury against the wall.” The most that can be said of the theory the majority selects is “that it is less risible than the others.”]

Up to the last step, the theory is unexceptionable — except that it points to MOHELA as the proper plaintiff. Financial harm is a classic injury in fact, and MOHELA plausibly alleges that it will suffer that harm. So MOHELA can sue the Secretary, as the Government readily concedes. But not even Missouri, and not even the majority, claims that MOHELA’s revenue loss gets passed through to the State. MOHELA is financially independent from Missouri — as corporations typically are, the better to insulate their creators from financial loss. The State’s treasury will not be out one penny because of the Secretary’s plan. The revenue loss allegedly grounding this case is MOHELA’s alone.

Which leads to an obvious question: Where’s MOHELA? The answer is: As far from this suit as it can manage. MOHELA could have brought this suit; it possesses the power under Missouri law to “sue and be sued” in its own name. But MOHELA is not a party here. Nor is it an amicus. Nor is it even a rooting bystander. MOHELA was “not involved with the decision of the Missouri Attorney General’s Office” to file this suit, and did not cooperate with his efforts. When the AG wanted documents relating to MOHELA’s loan-servicing contract, he had to file formal “sunshine law” demands on the entity. MOHELA had no interest in assisting voluntarily.

If all that makes you suspect that MOHELA is distinct from the State, you would be right — as a matter of law and financing alike. Yes, MOHELA is a creature of state statute, a public instrumentality established to serve a public function. But the law sets it up as a corporation — a “body corporate” — with a “[s]eparate legal personality.” MOHELA’s assets, including the fees gained from its servicing contract, are not “part of the revenue of the [S]tate” and cannot be “used for the payment of debt incurred by the [S]tate.” MOHELA’s debts are MOHELA’s alone; Missouri cannot be liable for them. Indeed, before this case, Missouri had never tried to appear in court on MOHELA’s behalf. In the statutory scheme, independence is everywhere: State law created MOHELA, but in so doing set it apart.

Under our usual standing rules, that separation would decide this case. A plaintiff cannot rest its claim to judicial relief on the “legal rights and interests” of third parties. That MOHELA is publicly created makes not a whit of difference: When a “government instrumentalit[y]” is “established as [a] juridical entit[y] distinct and independent from [its] sovereign,” the law — including the law of standing — is supposed to treat it that way. So this case should have been open-and-shut.

II

A

The majority finds no firmer ground when it reaches the merits. The statute Congress enacted gives the Secretary broad authority to respond to national emergencies. That authority kicks in only under exceptional conditions: the President must have declared a national emergency; the Secretary may provide benefits only to “affected individuals,” meaning those who reside or work in a declared disaster area or who have “suffered direct economic hardship as a direct result of” the emergency; and he may do only what he determines to be “necessary” to ensure that those individuals “are not placed in a worse position financially in relation to” their loans “because of” the emergency.

But if those conditions are met, the Secretary’s delegated authority is capacious. He has the linked power to “waive or modify any statutory or regulatory provision” applying to the student-loan programs. To start with the phrase after the verbs, “the word ‘any’ has an expansive meaning” — and those provisions include several relating to student-loan cancellation. Now go back to the twin verbs. To “waive” means to “abandon, renounce, or surrender” — so here, to eliminate a regulatory requirement or condition. To “modify” means “[t]o make somewhat different” or “to reduce in degree or extent” — so here, to lessen rather than eliminate such a requirement. Then put the words together, as they appear in the statute: To “waive or modify” a requirement means to lessen its effect, from the slightest adjustment up to eliminating it altogether. Of course, making such changes may leave gaps to fill. So the statute says what is anyway obvious: that the power includes the ability to specify “the terms and conditions to be applied in lieu of such [modified or waived] statutory and regulatory provisions.” Finally, attach that power to all the provisions relating to loan cancellation: The Secretary may amend, all the way up to discarding, those provisions and fill the holes that action creates with new terms designed to counteract an emergency’s effects on borrowers.

Consider how that scheme might work for an emergency the enacting Congress had in the front of its mind. So imagine the horrific. A terrorist organization sets off a dirty bomb in Chicago, and millions of residents — many with student loans — flee the city to escape the radiation. They must find new housing, probably new jobs. And still their student-loan bills are coming due every month. To prevent widespread delinquencies and defaults, the Secretary wants to discharge $10,000 for the class of affected borrowers. Is that legal? Of course it is; it is exactly what Congress provided for.

B

The tell comes in the last part of the majority’s opinion. When a court is confident in its interpretation of a statute’s text, it spells out its reading and hits the send button. Not this Court, not today. This Court needs a whole other chapter to explain why it is striking down the Secretary’s plan. And that chapter is not about the statute Congress passed and the President signed. It instead expresses the Court’s own “concerns over the exercise of administrative power.” Congress may have wanted the Secretary to have wide discretion during emergencies, and in fact drafted a statute saying as much. And the Secretary acted under that statute in a way that subjects the President he serves to political accountability — the judgment of voters. But none of that is enough. This Court objects to Congress’s permitting the Secretary to answer so-called major questions — or at least it objects when the answers given are not to the Court’s satisfaction. So the Court puts its own heavyweight thumb on the scales. The question, the majority helpfully tells us, is “who has the authority” to make such significant calls. The answer, as is now becoming commonplace, is this Court.

The new major-questions doctrine works not to better understand — but instead to trump — the scope of a legislative delegation. Here is a fact of the matter: Congress delegates to agencies often and broadly, and it usually does so for sound reasons. Because agencies have expertise Congress lacks. Because times and circumstances change, and agencies are better able to keep up and respond. Because Congress knows that if it had to do everything, many desirable and even necessary things wouldn’t get done. In wielding the major-questions sword, last Term and this one, this Court overrules those legislative judgments. The doctrine forces Congress to delegate in highly specific terms — respecting, say, loan forgiveness of certain amounts for borrowers of certain incomes during pandemics of certain magnitudes. It is hard to identify and enumerate every possible application of a statute to every possible condition years in the future. So Congress delegates broadly. Except that this Court now won’t let it reap the benefits of that choice. And that is a major problem not just for governance, but for democracy too — because when the Court refuses to respect the full scope of the delegations Congress makes, it becomes the arbiter, indeed the maker, of national policy. That is no proper role for a court.

III

The opinion ends by applying the Court’s made-up major-questions doctrine to jettison the Secretary’s loan forgiveness plan. Small wonder the majority invokes the doctrine: its “normal” statutory interpretation cannot sustain its decision. The statute, read as written, gives the Secretary broad authority to relieve a national emergency’s effect on borrowers’ ability to repay, and the Secretary did no more than use that lawfully delegated authority. So the majority applies a rule specially crafted to kill significant regulatory action, by requiring Congress to delegate not just clearly but also micro-specifically. The question, the majority maintains, is “who has the authority.” The right answer is the political branches: Congress in broadly authorizing loan relief, the Secretary and the President in using that authority. The majority instead says that it is theirs to decide.

So in a case not a case, the majority overrides the combined judgment of the Legislative and Executive Branches, with the consequence of eliminating loan forgiveness for 43 million Americans. I respectfully dissent from that decision.

Notes & Questions

1. Big picture — the newest constraint on the administrative state, and it is not in the Constitution. Chadha took away Congress’s tool for controlling delegated power. The nondelegation doctrine, which might have limited the delegation in the first place, has not invalidated a statute since 1935 — you read Schechter and Panama Refining as notes in this module and Gundy as the modern attempt to revive it, which failed by a vote. What has emerged instead is the major questions doctrine: the rule that when an agency claims authority over a matter of vast economic and political significance, the Court will demand clear congressional authorization rather than accept an expansive reading of an old, general statute. West Virginia v. EPA, also a note in this module, named it. This case applies it to a program cancelling roughly $430 billion of principal for some 43 million borrowers, on the authority of a 2003 statute permitting the Secretary to “waive or modify” provisions applying to student financial assistance in connection with a national emergency. Two things make the case worth a full reading rather than a note. First, it is where the doctrine is stated most plainly and defended most directly. Second, and more important for you, it is where a Justice in the majority writes separately to say the doctrine is not what the majority’s framing suggests it is — which is a rare and useful thing to watch, and the reason note 4 exists.

2. Raw specific knowledge — standing first, because that is where the case is most vulnerable. (a) State the standing holding precisely: the injury is to MOHELA, a public corporation created by Missouri, and the Court holds that harm to MOHELA is harm to Missouri sufficient to support the State’s standing. Be able to say what MOHELA is, why it would lose servicing revenue under the plan, and — this is the part students miss — that MOHELA itself did not sue. (b) State the statutory holding: the Secretary did not modify the relevant provisions, he rewrote them; “modify” carries a connotation of moderate change, and the plan created a novel and fundamentally different loan-forgiveness program rather than adjusting an existing one. (c) State the major questions holding and the two features the Court relies on — economic significance and political significance — and note that the Court treats them as reasons to demand clear authorization rather than as a substantive limit on what Congress may delegate. (d) Finally, a citation convention specific to this reading: the case cite is 600 U.S. 477, but the body carries no page numbers, because the text comes from the slip opinion, which has its own pagination restarting in each opinion. Cite by opinion and part from this reading, and pin to the reporter itself if you need a page in written work. That is the same discipline the Sheetz note in Module 2A follows, and it is a habit worth having: do not manufacture a pin cite you cannot verify. Note the two distinct questions — whether a case has an official citation, and whether the text in front of you carries the pagination to pin a quotation to. They are not the same, and conflating them produces confident false cites.

3. Practical application — draft the delegation that would have worked. (a) You are drafting the HEROES Act in 2003 and you want the Secretary to be able to do in a future emergency exactly what was attempted in 2022. Write the operative sentence. Then ask what it would have cost politically to pass it in that form, and whether the difficulty of writing an authorization plainly is a feature of the doctrine or an objection to it. (b) Now the reverse. Take the 2022 plan and redesign it so that it fits comfortably inside “waive or modify” as the Court reads those words — smaller, targeted, tied to demonstrated pandemic harm, operating through existing categories. Would your redesigned program have survived? Would it have been worth doing? (c) Then apply the doctrine to three other exercises of agency power and see how much it constrains: an eviction moratorium issued under a public-health statute; a vaccinate-or-test rule for large employers issued under an occupational-safety statute; a tariff imposed under a national-security trade statute. Two of those three were before the Court in recent Terms. The third is a hard case for the doctrine, and you should be able to say why — it involves a power historically exercised by the President rather than an agency, and Youngstown, not the major questions doctrine, may be the right framework. Knowing which framework a problem calls for is half of the exam.

4. Attack the reasoning — Barrett’s concurrence is the most important thing in this reading. The standard criticism of the major questions doctrine is that it is a substantive canon: a thumb on the scale that has nothing to do with what Congress wrote, invented to reach outcomes the Court prefers, and inconsistent with the textualism its own authors profess. Justice Barrett, concurring, agrees that would be a serious objection and denies the premise. Her argument is that the doctrine is not a clear-statement rule at all but an application of ordinary interpretation: context, including common sense about how much authority a principal would be expected to hand an agent in a particular grant, is part of what the words mean. Her illustrations are domestic and deliberately un-lawyerly, and they are the best part of the reading. So: (a) State her position and the majority’s, and identify the cases in which they would diverge. If a doctrine is really just context-sensitive textualism, it should not need a name — so what work is the name doing? (b) Kagan’s dissent makes the opposite structural point: that Congress wrote a broad delegation on purpose, because emergencies cannot be legislated in advance, and that the Court has substituted its own judgment about how much power Congress should have given for the judgment Congress actually made. Note that this is White’s argument in Chadha, one module earlier, arriving from the other side. Is it stronger here or there? (c) Return to standing, and make Kagan’s argument at full strength: Missouri is litigating an injury to an entity that could have sued and chose not to, and if that suffices, a State can manufacture standing to challenge almost any federal program by pointing to some corporation it created. What is the majority’s answer, and does it contain a limiting principle?

5. Creative thinking — who decides how much power an agency has? (a) The design question. There are three candidate answers, and each has a serious constituency. Congress decides, by writing clearly — but Congress cannot foresee, and clarity is expensive to legislate. The agency decides, subject to reasonableness review — that was the Chevron settlement, and it is gone. The Court decides, by asking whether the question is too big for the words used — that is this case. Write one paragraph making the strongest case for each, then say which you would choose and what you are giving up. Be specific about the failure mode of your choice; every one of the three has produced a well-documented pathology. (b) The measurement question. The doctrine turns on “vast economic and political significance,” and the Court gives numbers: hundreds of billions of dollars, tens of millions of people. Propose a workable threshold — a dollar figure, a share of GDP, a count of persons affected, a test based on whether Congress has repeatedly considered and declined to enact the measure — and then apply it to the three programs in note 3(c) and to the Medicaid expansion in NFIB. If your threshold cannot separate the cases the Court has separated, say whether the problem is your threshold or the doctrine. (c) Finally, a question you should carry into the rest of the course: the major questions doctrine, the revival of nondelegation arguments, and the removal cases in the next module are all responses to the same underlying fact — that Congress has delegated enormously and cannot easily take it back. Are these three doctrines a coherent program or three unrelated instincts? Argue it either way, but commit.