Standing for Gravediggers? A Comment on the SG's Concession in the Student Debt Forgiveness Case and a Coda on the Major Questions Doctrine and Fairness
by Michael C. Dorf
Over the course of two oral arguments and more than three and a half hours yesterday, the Supreme Court considered challenges to the Biden administration's student debt forgiveness program. I have written about these cases before, both on the blog--here and more recently here--and in an essay in The Nation. In today's essay, I'll make a point regarding the oral argument that builds on my previously articulated view that the plaintiffs lack standing. I'll also offer brief observations about two other aspects of the arguments, one involving the major questions doctrine and the other concerning a fairness issue that was raised by Chief Justice Roberts and then pushed by Justice Alito.
The case involving the state plaintiffs was argued first. As just about everybody who has considered the case acknowledges, the state with the strongest claim to have standing is Missouri, where a state-chartered corporation known by the acronym MOHELA earns fees for processing federal student loan payments. Most of the discussion of MOHELA during yesterday's first argument was oriented around US Solicitor General Prelogar's view that MOHELA itself would have standing to challenge the debt forgiveness program because it will suffer an economic injury in the form of lost revenue but that, given its separate status from the state of Missouri, its injuries cannot be attributed to the state, even if the state derives some financial benefit from MOHELA. In light of the fact that MOHELA has the power to sue but chose not to, the SG argued and some Justices seemed to agree, Missouri should not be permitted to stand in MOHELA's shoes.
As I've noted before, that's not a bad argument but I think that it could and should be supplemented by a claim that even MOHELA's own standing, if it chose to sue, would be dubious. I previously gave the example of "a manufacturer of electric chairs suing a state governor who signed legislation abolishing the death penalty on the grounds that abolition deprived the manufacturer of a lucrative revenue stream." My new variation on that example is cleaner because it involves the COVID-19 emergency that the Biden administration invoked as authority for the debt forgiveness program (pursuant to the HEROES Act) and only federal law.
So consider this: Suppose that congressional funding for free COVID-19 vaccines was less clear-cut than it actually was. Imagine, say, that there was ambiguity in the funding provision about whether appropriations could be spent on vaccines that had been approved only for emergency use. Then suppose that just as the government is about to roll out the vaccines to the general public, a gravedigger brings a lawsuit against the federal Department of Health and Human Services and administrators complaining that the expenditure of funds to provide free vaccines exceeds the scope of congressional authorizations. The gravedigger explains that such vaccines will prevent hundreds of thousands or even millions of deaths, including a great many in his city, thus depriving him of the earnings he would otherwise receive from digging graves for all the people who would have died of COVID if not for the vaccines. Does the gravedigger have standing?
SG Prelogar's concession with respect to MOHELA could be taken to imply that the answer is yes, that's an economic injury to the gravedigger. My contention in my prior writing on these cases--which I renew now--is that regardless of how certain the economic harm to the gravedigger or MOHELA, they should lack standing because the loss of loan processing fees (in the actual case) or gravedigging fees (in the hypothetical case) simply doesn't stand in the right kind of relation to the alleged unlawfulness. My further point was and is that the need for the right kind of relation between the alleged unlawfulness and the alleged injury is not simply a matter of prudential third-party standing but best understood as an Article III limit. (Justice Thomas has also urged that the limits on third-party standing should be conceptualized as part of Article III, but my argument doesn't go quite as far as his.)
At one point in the oral argument, SG Prelogar gestured in the direction of an objection along these lines, when she distinguished between "direct" and "indirect" injuries, but that was in the context of arguing why an injury to MOHELA isn't an injury to Missouri. Even so, the admittedly fuzzy distinction between direct and indirect injuries gets at the limitation I'm describing, which might also be analogized to proximate cause.
Some version of that idea--either the direct/indirect distinction or the notion of proximate cause--helps explain why rejecting standing for Missouri even if it stands in the shoes of MOHELA is consistent with the standing analysis in Dep't of Commerce v. New York, where SCOTUS held that New York and other blue states had standing to challenge the Trump administration's addition of a citizenship question to the census. Here's the key language from that case:
Respondents assert a number of injuries—diminishment of political representation, loss of federal funds, degradation of census data, and diversion of resources—all of which turn on their expectation that reinstating a citizenship question will depress the census response rate and lead to an inaccurate population count. Several States with a disproportionate share of noncitizens, for example, anticipate losing a seat in Congress or qualifying for less federal funding if their populations are undercounted. [A]t least some states have Article III standing. Several state respondents here have shown that if noncitizen households are undercounted by as little as 2%—lower than the District Court’s 5.8% prediction—they will lose out on federal funds that are distributed on the basis of state population. That is a sufficiently concrete and imminent injury to satisfy Article III, and there is no dispute that a ruling in favor of respondents would redress that harm.
Missouri and the other state plaintiffs in the student debt relief case point to the multi-part causal chain leading to revenue loss in Dep't of Commerce to say that they too should have standing. But to my mind there's a crucial distinction. The Trump administration's claim that the citizenship question was added to the general census questionnaire in order to facilitate better enforcement of the Voting Rights Act was, to use a technical legal term, complete bullshit. Those harms to which the state plaintiffs pointed in Dep't of Commerce--"diminishment of political representation, loss of federal funds, degradation of census data, and diversion of resources" away from Democratic-leaning political units and towards Republican-leaning ones--were the reason for the citizenship question. These injuries stand in the right relation to the alleged unlawfulness because the whole point of the addition of the citizenship question was to inflict them. By contrast, the loss of loan-processing fees is at most a side effect of student debt forgiveness.
Unfortunately, given the SG's concession, I don't see much likelihood that the Court will consider the possibility that even MOHELA itself should lack standing. However, the Justices could and arguably should consider this issue (at least if they would otherwise be inclined to grant Missouri standing via MOHELA), given that Article III standing is part of subject matter jurisdiction, which the Court has a sue sponte obligation to examine.
That's all I have to say about standing--other than to add that the oral arguments suggested to me that the Court is more likely to find standing by the states in the first case than by the individual plaintiffs in the second case.
Now that the major questions doctrine (MQD) seems to be a thing that the conservative Justices trot out in every case involving an administrative agency, it looks like we will be in for a long line of cases delineating its scope and content. SG Prelogar argued that it doesn't/shouldn't apply to funding measures as opposed to regulatory ones because the latter can threaten individual rights in a way that funding measures cannot. This argument will certainly fail--and maybe even rightly so. If one concedes (at least arguendo) that the MQD is legitimate, presumably one thinks that's because it serves a non-delegation value: by requiring a clear statement authorizing agency action involving major questions, the Court ensures that Congress makes rather than punts on important policy questions or is at least clear that it intends to delegate to an agency the authority to decide such questions. How to allocate hundreds of billions of dollars is surely an important policy question.
A somewhat better pushback came from Justice Jackson, who tried a bit of jujitsu on the MQD. If the Court is worried about separation of powers (as its use of the MQD in the service of non-delegation indicates), then it should also be worried about the judiciary's own role. Other things being equal, courts will be more likely to invalidate agency action with than without the MQD. But a court invalidating actions by the executive branch itself raises separation of powers concerns. Thus, Justice Jackson implied, the courts should be careful not to deploy the MQD too readily.
That's a nice point but it will surely fail with Justice Jackson's conservative colleagues--who see the MQD as their favorite hammer and regard the administrative state as a giant box of nails.
All along, critics of student debt forgiveness have argued that the program is unfair. Chief Justice Roberts asked SG Prelogar to consider a college graduate with student debt and a non-college-educated person who took out commercial loans to start a lawn-care business right out of high school (believing himself unable to afford college). The Chief Justice hypothesized (reasonably enough) that the college graduate has a higher lifetime earning potential than the lawn-care business owner; yet the college graduate gets debt forgiveness while the needier lawn-care business owner does not. Is that fair? Both CJ Roberts and Justice Alito acknowledged that the first-order moral question is not by itself a legal question. However, each of them wanted to know whether the Secretary of Education considered this kind of fairness question in designing the program.
I think that overall SG Prelogar is an exceptionally good oral advocate but I didn't love her answer to this line of questioning. She quoted the statute a few times and gestured in the right direction. Ultimately, Justice Kagan helped her out by bluntly stating that the Secretary of Education has no power to forgive other kinds of loans, so fairness to other sorts of borrowers simply wasn't relevant. Justice Sotomayor later noted that there are all sorts of government programs for whom some but not others are eligible.
Those aren't bad answers, but a completely honest answer would have acknowledged that, insofar as people like the owner of the lawn-care business are burdened by debt as much as or more than people who are burdened by student debt, of course it's not fair to relieve the latter but not the former. However, the answer would have continued, that's on Congress for granting the Secretary of Education the power to forgive student debt but not granting to some other agency the power to forgive other kinds of debt or, where debt is commercially held, not funding government payoffs of those loans.
The primary difficulty with the foregoing fully honest answer is that it would likely have triggered the non-delegation/MQD concerns of the Justices who raised the fairness question: oh, if there are major fairness concerns that only Congress can address, they would have thought, then that's another reason to be very skeptical of the assertion of power by the Secretary of Education.
I think there are potentially sound answers to that concern but based on their priors and the questions they asked, I don't think it's very likely that any of the conservatives on the Court would find the answers persuasive.