Caught between respecting doctor-patient relationships and several overly broad interpretations of the Controlled Substances Act by the Justice Department and Drug Enforcement Administration, Walmart sought a declaratory judgment to clarify what its legal obligations were when filling opioid prescriptions. Rather than continuing to engage in practices that might violate federal law, the company wanted to concretely determine what the law actually required.

The district court refused to allow Walmart’s suit to move forward, however, ruling that the agencies had sovereign immunity, due to a lack of discretionary agency action. Despite detailed threats by the DOJ toward Walmart, the court did not think they rose to the level of agency action. This left Walmart forced to choose between coerced compliance and abandoning its rights.

Ultimately, the lower-court ruling allows government agencies to insulate their legal interpretations and enforcement threats from judicial review so long as they (inappropriately) claim “sovereign immunity.” And while Walmart has the financial resources to go head-to-head against the federal government to vindicate its rights, very few have the means to bring these challenges and so most people are inevitably left with no recourse but to give in to such official threats. Thus, the executive branch—not the courts—decides what the law is, contrary to our deeply rooted system of separation of powers.

Cato has joined the Due Process Institute on a brief urging the U.S. Court of Appeals for the Fifth Circuit to reject the government’s contention that regulated entities should be barred from having a meaningful way to push back on unlawful agency positions. Far from being exclusive to the Controlled Substances Act, similar coercive government actions are prevalent in many other areas of criminal and civil enforcement, including antitrust, anti-corruption laws, export controls, and sanctions laws, with few signs of abating.

Agencies should not have free reign to bully entities into compliance without any check on the legality of their actions. If the district court’s decision isn’t overturned, all businesses risk being put in a position where they must intentionally violate the law to get their day in court.

The Fifth Circuit will hear Walmart v. U.S. Department of Justice this summer.