It is no secret that federal agencies incrementally expand their regulatory power by adopting statutory interpretations that go beyond the underlying legislation’s plain meaning and purpose. Unfortunately, courts — the branch of government charged with checking such overreach, even in the age of the modern administrative state — increasingly defer to agencies’ own “discretion” in exercising their authority. One case that recently made it to the U.S. Supreme Court’s doorstep, National Corn Growers Association v. EPA, is a case study of this alarming trend.

Under the Federal Food, Drug, and Cosmetic Act, the Environmental Protection Agency establishes limits, or “tolerances,” for pesticide residues on food. If a pesticide residue exceeds an established tolerance, it is deemed “unsafe” and the product is removed from interstate commerce, effectively banning it from use. Under the requirements of the act, the EPA must modify or revoke a tolerance it deems unsafe, and the agency would do this through the “notice and comment” process. Then, once the EPA issues a final rule, any party may file an objection. Moreover, both the act and its implementing regulations require the EPA to hold a public evidentiary hearing if any objections raise a “material issue of fact.” These requirements are an essential tool for preventing the EPA from unlawfully depriving the public of useful products and entrepreneurs of the value of their innovations without access to independent judicial review.

In 2008–2009, the EPA determined that a pesticide called carbofuran — first registered in 1969 and safely used for pest control on a variety of crops for more than 40 years — posed an unacceptable risk to human health due to aggregate exposure in drinking water. To make this determination, the EPA relied on a new worst-case groundwater model and assumed the admittedly unlikely event “that 100 percent of crops that could be treated with carbofuran would be so treated.”

The National Corn Growers Association fiercely disputed this conclusion, submitted extensive comments and evidence on the proposed revocation, and raised four issues in objection to the final revocation. But the EPA ruled that the information submitted by the Corn Growers was incomplete, ignored the serious concerns raised by the group, and revoked all tolerances for carbofuran without a public hearing.

Unfortunately, such a result is not uncommon. In the nearly 40 years that the EPA has been required to hold public hearings under the Federal Food, Drug, and Cosmetic Act, no such hearing has ever been held. The agency has refused time and again to comply with regulations that were designed to prevent the type of abuse exemplified in this case.

And yet again this year, in a decision giving the EPA unbridled discretion in its regulatory domain, the U.S. Court of Appeals for the D.C. Circuit — the federal appellate court that reviews executive agency action — held that courts must defer to the agency in this matter. Although the D.C. Circuit acknowledged that a legitimate dispute existed as to the extent carbofuran is applied to soils vulnerable to leaching into groundwater, it found that such a “dispute between experts” was “fatal” to the Corn Growers’ request for a hearing because “we will not overturn an agency’s finding [that] there is no material issue of fact upon ‘[m]ere differences in the weight or credence given to particular scientific studies.’ ”

The court gave no explanation or review of the factors listed in the EPA’s implementing regulations to determine if the material submitted requires an evidentiary hearing. Instead, the court reiterated the EPA’s findings and upheld the hearing denial. Furthermore, by declaring that differences in scientific studies are insufficient to trigger judicial review, the court essentially wrote the “material issue of fact” consideration out of the law.

Sole authority | The effects of the D.C. Circuit ruling are not limited to carbofuran or pesticides alone. It also sets a precedent for other products regulated under the Federal Food, Drug, and Cosmetic Act, including “prescription drugs, medical devices, agriculture, food products and additives, and many other consumer products.” That precedent is that EPA determinations are effectively not subject to judicial review. The court essentially gave the EPA carte blanche to determine the fate of thousands of products already on the market.

The D.C. Circuit is then supposed to determine whether the EPA properly denied the objectors a hearing, using a summary judgment–type standard of review (evidence considered in a light most favorable to the objecting party and inferences drawn against the EPA). But the court has not applied such a heightened level of review, refusing to question EPA findings in these cases.

The upshot is that under longstanding EPA practice and the court’s deferential review, no one has the opportunity to obtain a public hearing.

Indeed, to make the relevant determination regarding carbofuran, the D.C. Circuit analyzed whether “the agency has given adequate consideration to all relevant evidence in the record.” But such a standard ignores the clear and unambiguous language of the Federal Food, Drug, and Cosmetic Act, which expressly states that the purpose of a hearing is to “receive factual evidence.” In other words, the court that is the principal arbiter of administrative procedure failed to execute the level of judicial review required by law, effectively depriving the Corn Growers of due process.

The Corn Growers thus filed a petition requesting that the Supreme Court review the lower court’s ruling, arguing in large part that the D.C. Circuit undermined the act’s legal requirements. The Cato Institute joined the Pacific Legal Foundation in filing an amicus brief supporting that petition because the case sets a precedent for other regulated products and allows government agencies to unlawfully deprive citizens of their property without adequate access to judicial review.

The act’s hearing requirement was promulgated for the specific purpose of protecting the public from agency abuse of the kind revealed here. While district court hearings involve a neutral arbiter (a federal judge), that is not the case in an agency setting, where administrative proceedings have inherent biases toward the agencies that convene them. And the EPA has openly expressed its disfavor of the hearing requirement, calling them “time-consuming” and “unnecessary.”

Unfortunately, the day before this article went to press, the Supreme Court denied the Corn Growers’ petition. The Court thus declined the opportunity to curtail abuse of the administrative process and establish that complete deference is incompatible with proper judicial review. But greater checks on administrative procedures are essential to ensuring that decisions to destroy valuable innovations and deprive the public of useful products are not taken without full independent review.

Indeed, the right not to be deprived of one’s property without fair process is a bedrock principle of American jurisprudence. The Court should in some future suitable case reinforce this principle and ensure that agencies and lower courts enforce the statutory safeguards intended to protect this right.