On April 19, the U.S. Court of Appeals for the Ninth Circuit reversed a permanent injunction that had enjoined President Biden’s “Contractor Vaccine Mandate,” taking an expansive view of presidential authority under the Federal Property and Administrative Services Act (FPASA).
In a 2021 Executive Order, President Biden required federal contractors working on or in connection with federal government projects to follow certain COVID-19 protocols, including a requirement to be vaccinated. The opinion, authored by Trump-appointed Judge Mark Bennett, broke with the Eleventh, Fifth, and Sixth circuits in finding the major questions doctrine is inapplicable, and the mandate falls squarely within the president’s authority under the FPASA.
Major Questions Doctrine
According to the Supreme Court’s interpretation in Utility Air Regulatory Group v. EPA, the major questions doctrine requires “Congress to speak clearly if it wishes to assign an agency decisions of vast ‘economic and political significance.’” Courts have used the doctrine as a tool of statutory interpretation to invalidate agency actions where the underlying claim of authority is of “vast ‘economic and political significance’” and Congress has not expressly authorized the agency to carry out such an action.
Splitting from the other circuit courts, the Ninth Circuit held that while the major questions doctrine permits review of agency decisions, it is inapplicable to executive actions. The Utility Air Regulatory Group interpretation of the doctrine appears to be based on skepticism around agency interpretations of statutes that “would bring about an enormous and transformative expansion in . . . regulatory authority without clear congressional authorization.” According to Judge Bennett’s decision, those accountability issues are not present since the president, unlike agencies, is accountable through regular elections and the “solitary nature of the Executive Branch.”
The court added that even if the major questions doctrine applied to the president, it would still not preclude the president’s actions because mandating that almost one-third of the nation’s workers be vaccinated does not “represent a ‘transformative expansion in [its] regulatory authority.’” Rather than regulatory authority, the court believes the power the president is wielding amounts to proprietary authority used to implement a procurement policy. Further still, the mandate was found not to be a “transformative expansion” of any authority – neither regulatory nor proprietary. The court reasoned that historical uses of the FPASA, endorsed by judicial rulings, show presidents have leveraged the FPASA to require that contractors implement affirmative action programs, comply with immigration laws, and follow wage guidelines to fight inflation – requiring federal contractors in the midst of “an unprecedented global pandemic . . . to take vaccination-related steps that promote efficiency and economy by reducing absenteeism, project delays, and cost overruns” falls within the broad scope of historical use. “The non-use of power doesn’t disprove its existence,” Judge Bennett reasoned. In addition, the court noted that Congress has recodified the FPASA three separate times, therefore adopting judicial interpretation.
The Ninth Circuit Found the Contractor Vaccine Mandate Falls within the President’s Authority under FPASA
The court also concluded that the mandate fell within the authority delegated to the president by the FPASA. The FPASA explicitly authorizes the president to “prescribe policies and directives that the President considers necessary” to “provide the federal government with an economical and efficient system . . . [p]rocuring property and nonpersonal services, and performing related functions including contracting.” For the mandate to fall within the scope of authority prescribed by the FPASA, the Ninth Circuit explained that the government must “establish a nexus between the [mandate] and some delegation of the requisite legislative authority by the findings underlying the OMB [Office of Management and Budget] Determination.” The OMB Determination’s findings, which appear to have been based on inaccurate information regarding the COVID-19 vaccine’s effectiveness at preventing infection and slowing the spread of the disease, provided that the mandate would “decrease the spread of COVID-19, which will in turn decrease worker absence, save labor costs on net, and thereby improve efficiency in federal contracting.”
The court found there to be a “sufficiently close nexus” between the reasoning presented by the OMB determination, the mandate, and the FPASA’s goals of economy and efficiency. The court reasoned that “[t]he President faced a pandemic the likes of which the world has not seen in more than a century” and “the President was justified in finding that prescribing vaccination-related steps contractors must take in order to work on government contracts would directly promote an economical and efficient ‘system’ for both procuring services and performing contracts.”
Going Forward
The decision will most likely have no practical effect as the Biden administration has not moved to implement the mandate after the Eleventh Circuit in August of 2022 narrowed the scope of the initial nationwide injunction. However, the Ninth Circuit’s interpretation of the president’s authority under the FPASA could have major consequences moving forward, as the president has come to use the authority delegated under the FPASA to implement other sweeping social policy changes.
For example, both the April 2021 executive order requiring covered contractors to pay a $15 minimum wage and the November 14, 2022, proposed rule requiring covered federal contractors to disclose their climate emissions rely on authority delegated to the president under the FPASA.
The opinion, authored by two Republican- and one Democrat-appointed judges, gave few tells as to how they would apply the ruling to other factual situations. The plaintiffs expressly argued that this decision would give the executive branch broad discretion to enact any policy regulating the behavior of employees working on federal projects, including “requiring all federal contractor employees to refrain from consuming soda or eating fast food,” however the Ninth Circuit dismissed the “invitation[] to adjudicate slipper-slope hypotheticals.” Jude Bennett wrote, “[w]hile a future president might try to analogize soda consumption to a worldwide pandemic in issuing an executive order under the [FPASA], we will leave the consideration of that hypothetical executive order to a future court.” Quoting a 2004 opinion, he wrote, “[i]n our system of government, courts base decisions not on dramatic Hollywood fantasies, . . . but on concretely particularized facts developed in the cauldron of the adversary process and reduced to an assessable record.”
The judge did note, however, that the court’s analysis might be different depending on the scope and severity of the situation the president is attempting to remedy. “Would our analysis be different if the COVID-19 pandemic were far less serious? . . . Perhaps, but unfortunately the president did not face that hypothetical. The President faced a pandemic the likes of which the world has not seen in more than a century.”
The Ninth Circuit’s break with other courts, which have narrowed the scope of the FPASA striking down the vaccine mandate, breathes new life into the administration’s attempts to implement policies on government contracts that have little or no chance of passing in Congress. Regardless of whether the vaccine mandate, minimum wage, or emissions reporting requirements are good or bad policy, for decades presidents have used the contracting community as a guinea pig to test social policies. The Ninth Circuit’s decision is an invitation for the president to continue using 20% of the U.S. economy as a test bed for unpopular legislative agendas, all under the guise of “procurement.”
With other cases seeking to define the FPASA scope pending and a newly created circuit split, we will watch for a potential challenge at the Supreme Court. An authoritative interpretation of the scope of FPASA authority would provide much-needed clarity to the contracting community.
If you have any questions about how this latest Ninth Circuit vaccine mandate ruling may impact your business, please contact Richard Arnholt at rarnholt@bassberry.com or 202-827-2971.
This content was republished by Law360 in the article, “9th Circ. Contractor Vax Ruling Widens Presidential Authority” on April 28 and is available online.