SCOTUS could wield climate doctrine against debt relief

Supreme Court justices Tuesday appeared to think that the Biden administration’s plan to forgive federal student loan debt for tens of millions of borrowers is a violation of a newly articulated legal doctrine that ended the Obama-era Clean Power Plan.

During oral arguments in Biden v. Nebraska, many of the court’s conservative justices questioned the position that the Department of Education program — which would cost about $400 billion over 30 years — could not be considered a “major question” that Congress must clearly authorize the executive branch to regulate.

“I just wonder, given the posture of the case and given our historic concern about the separation of powers, that you would recognize at least that this is a case that presents extraordinarily serious, important issues about the role of Congress and about the role that we should exercise in scrutinizing that are significant enough that the major questions doctrine ought to be considered implicated,” Chief Justice John Roberts asked Solicitor General Elizabeth Prelogar.

Prelogar responded that Biden administration derived its authority from the Heroes Act, a law passed after the Sept. 11 terrorist attacks that allows the Department of Education to waive or modify parts of the federal student loan program to protect borrowers from falling into worse financial circumstances because of a national emergency.

The Biden administration cited the Covid-19 pandemic national emergency declaration — which began in March 2020 under former President Donald Trump and is due to expire May 11 — as the basis for its loan forgiveness program.

“If the court overrides that Heroes Act language here,” Prelogar said, “I think that it could only thwart Congress’ intent.”

Roberts, a member of the court’s conservative wing and one of its swing votes, in June 2022 authored the 6-3 opinion in West Virginia v. EPA that breathed new life into the major questions doctrine to stamp out the Clean Power Plan — a rule that took a wide-ranging approach to curbing carbon emissions from power plants but that had never technically gone into effect.

The doctrine existed before the court’s ruling in West Virginia but had never been explicitly wielded against a federal rule. In the student loan argument, the first major questions case to arrive at the court since West Virginia was decided, the justices will have an opportunity to more fully flesh out the newly contoured doctrine (Greenwire, Dec. 5, 2022).

Justices could also decide the case on narrower procedural grounds by speaking only to the question of whether Republican-led states had standing to sue over the Biden debt relief plan. A standing ruling could also affect the ability of environmentally conscious groups or states to raise their own challenges in court.

The court granted the Biden administration’s student loan case, Biden v. Nebraska, on an expedited basis after a lower court froze the program. The case will be heard alongside Department of Education v. Brown, which raises similar arguments from one borrower who does not qualify for loan relief and one who cannot reap the full benefits of the program.

Eligible borrowers can request that the government forgive between $10,000 and $20,000 of an individual’s federal loans, depending on the nature of their debts and income caps.

Arguments in the second case are scheduled to take place Tuesday afternoon.

Roberts also compared the student loan case to a 2020 Supreme Court battle over the Trump administration’s decision to roll back deportation safeguards for people who came to the United States as children, a group known as Dreamers (Greenwire, June 18, 2020).

“This case reminds me of the one we had a few years ago under a different administration where the administration tried acting on its own to cancel the Dreamers program,” said Roberts, who led the court’s then-four liberal members in the majority in the earlier case.

“And we blocked that effort,” he said.

Justice Brett Kavanaugh, another member of the conservative wing who frequently votes alongside Roberts, told Prelogar that it “seems problematic” that the Biden administration is seeking to differentiate the debt relief program from other cases where the executive branch has taken bold action in the absence of legislation from Congress.

“Why does this case not fit into that formula that we’ve seen before?” asked Kavanaugh, citing other major questions cases.

“This case is a far cry from those situations,” Prelogar responded, citing the authority granted to the Department of Education under the Heroes Act.

She also noted during arguments that while the Biden debt relief plan is “economically significant,” the cost of the program would cost the government more than the three-year forbearance on federal student loans during the Covid-19 pandemic — a policy first implemented by the Trump administration.

Members of the court’s three-justice liberal wing appeared swayed by the Biden administration’s position on the major questions issue.

Justice Sonia Sotomayor said to Nebraska Solicitor General James Campbell that the red state challengers appeared to want the courts to reach a decision on student loan relief, rather than rely on the expertise of the Education secretary.

And Justice Elena Kagan called back to the language of the Heroes Act.

“We worry about executive power when Congress hasn’t authorized the use of executive power,” she said. “Here, Congress has authorized the use of executive power in an emergency situation.”

The justices also attempted to sort out arguments from both parties about whether benefits programs like the debt relief plan should be treated differently from a regulatory action.

Campbell said both types of actions can be subject to a major questions challenge.

“If anything, I would say that there are more reasons to apply the major questions doctrine here because what the agency is effectively doing is exercising the power of the purse by going into the federal balance sheet and crossing off nearly a half-trillion dollars in loans payable to the government,” Campbell said in response to a line of questioning from Justice Neil Gorsuch.

He added: “That is a quintessentially legislative function.”