Shadow overruling: it’s not just for Humphrey’s Executor

Cases and Controversies is a recurring series by Carolyn Shapiro, primarily focusing on the effects of the Supreme Court’s rulings, opinions, and procedures on the law, on other institutions, and on our constitutional democracy more generally.

A lot of attention has (appropriately) focused on the Supreme Court’s virtual reversal of Humphrey’s Executor on the shadow docket. But that is not the only case that the court is also effectively overruling (or, if you prefer, undermining). It is doing the same to Clinton v. City of New York, the 1998 case that struck down the Line Item Veto Act, which allowed the president to eliminate the legal effect of parts of newly enacted laws.

Specifically, the court in Clinton held that once a law is enacted, the president has no power to deprive any part of that law of “legal force or effect.” Nor can Congress give him that power. Yet in a two-paragraph order virtually devoid of reasoning, on an apparent 6-3 vote, the court has handed the president such authority over foreign aid appropriations.

The Trump administration’s refusal to spend foreign aid appropriations

On the first day of his second term, President Donald Trump issued an executive order pausing all foreign assistance spending for 90 days. In the following weeks, the administration canceled billions of dollars in foreign aid contracts with and grants to NGOs. Two groups of NGOs sued the administration. The cases, which are being litigated together, are AIDS Vaccine Advocacy Coalition v. U.S. Department of State and Global Health Council v. Trump, but I’ll refer to them collectively as AVAC. (Disclosure: I represent an association of USAID employees in a different case challenging the administration’s foreign aid cut-offs and related actions.)  

By September, the issues in AVAC narrowed to the question of whether the administration could refuse to spend approximately $4 billion of foreign aid appropriations. Those funds came with an expiration date. Congress provided that the government must spend or obligate (make a legal commitment to spend) the money by Sept. 30, 2025. If that did not happen, the appropriations would expire.

On Sept. 3, a federal district court issued an injunction requiring the administration to obligate the $4 billion before Sept. 30. The U.S. Court of Appeals for the D.C Circuit denied the government’s request for a stay without discussion and with one noted dissent. (The AVAC litigation has been complicated. I recommend Chris Geidner’s reporting if you want more background.)

On Sept. 8, the Trump administration filed an emergency application with the Supreme Court, asking it to stay the district court’s injunction. The next day, Chief Justice John Roberts issued an administrative stay, putting the injunction on hold while the court considered the request.

In the Trump administration’s application, it argued that a 1974 law, the Impoundment Control Act, barred the plaintiffs’ lawsuit. The ICA, it claimed, authorizes the president to effectively eliminate appropriations under certain circumstances. As relevant here, the ICA allows the president to send a “special message” asking Congress to rescind (or repeal) particular appropriations, and it provides for Congress to consider that request through a streamlined (and filibuster-proof) 45-day process. The Trump administration sent such a special message requesting rescission of the disputed foreign aid on Aug. 29. But by that time, of course, there were fewer than 45 days left until the funds expired. Thus, the administration argues, the special message functions as a “pocket rescission.” In other words, the administration claims, having sent the special message, it no longer has to spend or obligate the money.

On Sept. 26, the Supreme Court issued its emergency stay of the district court’s  injunction. The entire substance of its discussion of the likelihood that the government would ultimately prevail – one of the required factors for granting the stay – was that “[t]he Government, at this early stage, has made a sufficient showing that the Impoundment Control Act precludes respondents’ suit.”

In my view, the government’s reading of the ICA is utterly implausible, as Justice Elena Kagan explained in detail in her dissent, joined by the other two liberal justices. Others, including the General Accounting Office, agree. But for purposes of this column, I’m going to focus on how the court’s order in AVAC cannot be squared with Clinton v. City of New York.

Clinton v. City of New York and the Line Item Veto Act

The Constitution establishes that no money can be spent from the Treasury unless Congress has, by law, appropriated it. So any federal government spending requires a law authorizing it and setting out its terms. Federal budget bills are generally enormous and complex, with numerous spending and other provisions – and as the current government shutdown illustrates, they are often highly contentious. (You can read more about federal budgeting here.)

In 1996, Congress passed the Line Item Veto Act, a law relating to government spending. LIVA was promoted as a budget-control measure, empowering the president to impose discipline on spending. Specifically, LIVA gave the president the power to “cancel” certain items of spending and tax benefits after signing a bill into law, eliminating those items’ “legal force or effect.” To do so, the president had to determine that the cancellation of the particular items met some very general criteria, and he had to notify Congress of the cancellations within five days of signing the bill into law.

In Clinton v. City of New York, the Supreme Court struck down LIVA in a 6-3 decision. The majority, which included both the most liberal and the most conservative members of the court (Justice John Paul Stevens and Justice Clarence Thomas), held that although Congress can of course give the president discretion about when or even whether to spend particular appropriations, LIVA did something else. It allowed the president to eliminate entirely the legal authority of an appropriation or tax benefit item. That, the court held, was equivalent to giving the president the unilateral power to change the law. But to change the law requires a statute, which must be enacted through the Constitution’s “finely wrought” lawmaking procedures: both houses of Congress must pass a bill and present it to the president. The president can sign it into law or, alternatively, if the president vetoes the bill, Congress can override the veto by a two-thirds vote. LIVA, the court held in Clinton, circumvented that entire process and so was unconstitutional.

Undermining Clinton on the shadow docket

Clinton was explicit that once a law is enacted, the president has no power (and can be given no power by Congress) to deprive any part of it of “legal force or effect.” Yet in AVAC, the court has empowered the president to do exactly that if he uses the right combination of delay and manipulation. Just freeze funding long enough, as with the foreign aid executive order, stall in the courts, and then issue a pocket rescission. Put another way, the Supreme Court’s AVAC order suggests that Congress can give the president precisely the cancellation authority that Clinton held impermissible – and in fact has done so through the ICA. And although the court qualified its order with the (correct) caveat that it was not issuing a ruling on the merits, the disputed appropriations expired on Sept. 30, so the pocket rescission may well have succeeded. (The question whether a court can later order the money to be spent presents a whole new set of complicated legal questions.)

The AVAC order thus, at a minimum, undermines Clinton’s legal force and provides a road map for this administration to engage in unilateral action inconsistent with duly enacted law. In this way, AVAC is similar to the series of orders the court has issued allowing the president to fire officials at will despite express statutory restrictions. Those orders are in tension with, and in one case in contradiction of, Humphrey’s Executor, a century-old precedent allowing Congress to prohibit the at-will firing of commissioners and board members in independent agencies. But at least jettisoning Humphrey’s Executor is not a surprise, given that the court’s conservative majority strongly signaled its disdain for that precedent in Seila Law LLC v. Consumer Finance Protection Bureau, a fully briefed and argued case from 2020. The court has laid no such legal groundwork with respect to Clinton.

Like many of the court’s shadow docket rulings since Trump took office in January, AVAC undermines established law without warning, without acknowledging that fact, and without explaining itself. I’ve written about that pattern in the context of the court’s apparent willingness to grant emergency relief to the Trump administration without evaluating the longstanding factors required to grant a stay. That disturbing pattern continues here.

Another thing that all of these rulings have in common is the shift of power from Congress to the executive. With the government shutdown, even more questions about presidential power in the absence of congressional authorization are emerging. The president and other officials are openly discussing using the shutdown to gut agencies, lay off thousands of federal workers, and punish blue states and others that Trump sees as enemies. Any robust understanding of separation of powers would preclude these actions. But I would have thought the same about canceling spending that Congress, by law, required.