A prose, is a prose, is a prose
Parsing SCOTUS textualists, the Chevron Deference… and Gertrude Stein
On June 28, the US Supreme Court scrapped a 40-year legal principle that had allowed federal judges to “defer” to federal agency expertise when interpreting the meaning of ambiguous statutes. The conservative majority ruled in Loper Bright v. Raimondo that, nope, the original text and its intent at the time of its writing suffices… constitutionally... regardless of any expert opinion.
Basically, the ruling is a Cat 6 hurricane. It puts agency experts back in their boxes to write amicus briefs like the rest of us. It puts Congress on the spot to improve the language of law, clarify intent and generally do their jobs as policy makers. It's an opportunity for climate activists.
In her minority dissent, Justice Gertrude Stein sided with the agencies. She wrote that the essence of the ousted Chevron Deference was understanding that words and laws, like our perceptions, are not static in time but fluid and evolving with context and experience:
“A statute is not a statue but a spatula. Fixed in form, flexible in function: To stir the pot. The judge must decide, the cook must taste. The law is served, the meal is plated. Both are consumed, both are debated. Agencies, specialized experts, breathe life into the words of statutes, providing clarity and meaning. There is no “there” there in a fixed, unchanging interpretation that denies the living nature of law, reducing it to rigidity and chaos. Word!”
Her decision would not have been easy. Justice Stein, given her respect for language and meaning, might have ruled with the majority if not for the legitimate fear that, post-Chevron, judicial bias contrary to material fact might run amok without the moderating influence of agency experts. It is too risky to rely on a judge’s capacity to assess new facts that have emerged since the language was struck. Then again, under Chevron, federal agencies didn’t exactly excel when called into service to explain old laws as newly relevant — especially with the climate crisis.
So, on balance, textualism is a problem but also an opportunity: To revisit the words of law against the facts changed over time to convince a textualist to rethink intention. In particular, Justice Stein might agree that fiduciary duty is prose in law that speaks to the care of the future in ways that climate activism has yet to recognize or test.
“The duty stretches, the duty grows, the duty sees beyond today.”
It’s sad, but prudent — given the prevalence of disinformation and general confusion — to clarify that poet Gertrude Stein is not actually a US Supreme Court Justice. Nor was she ever. And, no, she didn’t write that dissent, though it is written in the modernists’ spirit of Stein.
Poetry is not law and vice versa… alas… although both are prose.
Evoking Stein's sensibilities out of context is a literary anachronism or a 'thought experiment' to contrast the triumph of stark “textualism” in the June Supreme Court decision Loper Bright. That ruling reverses the Chevron Deference that was the outcome of a 1984 SCOTUS decision in Chevron v. NRDC, a case notably about how to read the Clean Air Act. Deference had bound courts to agency interpretations under certain conditions. Now, that’s toast post-Chevron. Now, judges must read law for its fixed, original meaning rather than “defer” to agency experts who might interpret ambiguity in the law with the inflections of all that has evolved since it was drafted.
Settled law is now unsettled law, is law most upset-tled
Stein loved a bon mot for what it meant and what it means. She might have complained about the state of the judiciary to Picasso or Joyce during her regular salon of avant-garde modernists she hosted in her Paris home before she died in 1946.
“Not modern, un-modern. I’m art-broken. Tsk.”
Stein frequently challenged conventional thinking. Her poems explore the deeper meanings of words through repetition, defamiliarization and paradox. And, when she writes, famously, that "a rose is a rose is a rose" (in her 1913 modernist poem Sacred Emily called a “timeless masterpiece, a testament to the boundless possibilities of language”), Stein suggests that words retain their spark while accumulating layers of meaning over time.
“According to who [sic]?” asks this SCOTUS majority.
“The word is a word concurrently the same and different,” responds not-Stein asserting her poetic license. “The law is fixed, but the world changes. According to whom? According to all of us, according to the time in which we live."
Deference allows a legal Stein-ist to be nimble(r) in evolving regulation. The textualist parallel says laws retain their essence and can be adapted to new contexts only through judicial interpretation and legislative updates. A textualist is brittle(r) and probably slow(r).
The reversal of Chevron has inflamed liberals who worry about pinched interpretations of regulatory statutes undermining progress in areas such as environmental protection, public health, consumer rights, and labor regulations — while it hands conservatives who want less regulation a win. Nixing Chevron is called one of history’s greatest attacks on federal agency authority, to which not-Stein concurs.
"It looms large, foolish perhaps, but still, still, a deal of great import, without wisdom but with weight, it stands where it stands in its own boredom.”
Privacy, par exemple, is primacy, or sheer like privet
Privacy in the US — the right to be free from unwarranted intrusion into one's personal life — has its original text in the 1791 Fourth Amendment.
Our governance of privacy has evolved since through subsequent tests like Griswold v. Connecticut (1965) that ruled that birth control choices are your business and the Privacy Act of 1974 that says how federal agencies can use your private information.
For the Electronic Communications Privacy Act (ECPA, 1986), the DOJ played a crucial role in interpreting and guiding its application to balance law enforcement with the protection of individual privacy rights. For the Health Insurance Portability and Accountability Act (HIPAA, 1996), HHS was pivotal in developing detailed regulations and ensuring compliance with privacy and security standards for medical information.
A textualist Supreme Court is unlikely to overturn ECPA or HIPAA wholesale. However, the bench could significantly squeeze the applications of these laws, particularly where agencies have interpreted ambiguity to extend their own regulatory authority.
Common practice is not fiduciary, fiduciary practice is not common
Dear Litigious Climate Activists,
Feel the lift, but feel the weight. Textualism is not your enemy; it is your ally. It holds the words steady while you bring the meaning forward. A duty is a duty, and now that duty is to the future, to all.
Yours in the fight,
not-Gertrude Stein
Clearly, US law, like pension law, is in for a spate of chaos.
However, through Bank of Nature and our initiative to use fiduciary duty as a hero of climate finance, I have argued for explicit language in law to ensure that fiduciary duties comply with a textualist reading of the statute and its intentions. The difference transforms anti-climate pension sector routine into dynamic pro-climate heroism evolving with the times. “Common fiduciary practice is non fiduciary!” is an argument that a textualist judge might hear that decades of agency influence has not yet brought forward.
The unchanged purpose of a pension — to deliver a dignified future for current and eventual retirees — is a question of law outlined in “trust document” instructions.
The power that a fiduciary wields to execute that purpose is a question of fact. That power is utterly changed with tax rules, financial technology, social change and a climate crisis — brought to you by noncompliant fiduciary practice misspending $20T for just 1% of all Earthlings.
In particular, pensions have growing powers to negotiate better fiduciary deals — a kind of Walmart-style supply chain demand to make the future on fiduciary terms. The enormous scale of modern pensions is a new fact material in our evolving understanding of loyalty, care and impartiality.
Prudence is, not as prudence did, but what prudence will be
The Employee Retirement Income Security Act (ERISA) is the federal agency, through the Department of Labor, that regulates the US private pension sector. It’s text, enacted in 1974, defines prudence:
"The prudent person standard requires that a fiduciary act with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent person acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims."
The text does not specify financial excellence nor does it exclude non-financial factors that might also qualify as prudent.
Historical precedents and common law principles — the go-tos for judges pondering new fiduciary duty cases in a larger context — were weaned during the craven 20th Century. The 20th Century mindset and how it rolled out is why we have a climate crisis today. The 20th Century is when the modern pension/institutional investor was invented and the intention was over-simplified to protect participants — but only their money.
So, common fiduciary practice has evolved into financial excellence at the expense of future environmental and social stability when that’s not precisely outlined in law nor reflective of a modern assessment of the facts.
What now do we mean by “prudence” in light of the scale of pension money and its role in the climate crisis?
Who possesses the “character” against which we measure “like capacity" and “like aims"?
Theoretically, even without an explicit amendment, a textualist judge could see the intention of a prudent person rule as “more than financial.” Regardless of the current political foofaraw about “sole fiduciary priorities” being only ROI, a textualist review means that fiduciary duty could be quantitative in ways that protect the value of the "corpus" and qualitative in ways that protect the future. Even if you read ERISA as solely about money, the language doesn’t say “Earn ROI at the expense of future habitat”. In this topsy turvy way, a textualist might rule in favor of divestment as consistent with fiduciary duty. The law protecting it does not specify loss to exclude environmental and social harm. It’s a fantasy, perhaps, but then again Gertrude Stein is pontificating from the grave in this writing.
The gloss of “loss” as a colossal gain
No one argues with the idea that fiduciaries are guided by law to manage for “risk”, “returns’ and “losses” but the text does not specify “financial risk”, “financial return” or “financial loss."
“Return” can also mean social and environmental returns not measured in dollars and cents
“Risk" can include factors like climate risk to both value and habitat.
“Loss” can be non-financial losses: Loss of life, loss of a livable habitat.
We'd have to prove it, but our Bank of Nature approach is consistent with a textualist’s need to maintain the fidelity of the law while adapting to new circumstances. It contrasts the whole fiduciary world (a vast, unheralded percentage of the real economy) that insists best-common-practice of fiduciary duty redounds to “financial excellence” regardless of long-term negative externalities.
A fact intact or stacked with a lack of tact?
Let’s assume our textualist judge is a rabid climate denier. How might we structure an argument to correct fiduciary practice that exacerbates a climate crisis?
1. Original Text and Intent:
Highlight that ERISA’s fiduciary duties of prudence, loyalty, and impartiality are timeless principles that do not change with evolving contexts. The duty to act solely in the interest of participants and beneficiaries inherently includes protecting the long-term interests of all beneficiaries, including young new hires.
Emphasize that the duty of prudence requires fiduciaries to consider all material risks that could impact the financial stability of a retirement plan. This includes new and emerging risks like climate change that were not explicitly considered in 1974 but are now undeniably material to the financial health of the plan.
2. Changed Facts and Modern Application:
Argue that failing to consider climate change risks violates the duty of prudence because it ignores significant factors that could affect the plan’s financial health.
Demonstrate how the investments have long-term economic impacts that affect all participants and reflect the economic and environmental realities essential to fulfilling fiduciary duties.
3. Legal Precedent and Regulatory Guidance:
Cite cases like Tibble v. Edison International (which thankfully did not rely on Chevron Deference and was based on judicial interpretation of ERISA’s fiduciary duties) that support the notion that fiduciaries must continuously monitor and adapt to new information.
Reference the Department of Labor’s guidance on ESG factors, which recognizes that considering such factors can be consistent with fiduciary duties if they impact the economic value of investments.
If climate activists want to find a viable way to pay for climate security, then demanding congressional action on this front is something new. A congressional amendment could, to a textualist’s satisfaction, codify fiduciary practice in terms of its “non-financial” importance:
As a Public Good: Explicitly stating that pension plans provide a general public good through their investment practices that affect the whole economy.
For Long-Term Impacts: Requiring fiduciaries to consider the long-term social, environmental, and economic impacts of their investment decisions (though we argue that already exists as an unmet Duty of Impartiality).
For Broader Public Interest: Mandating that fiduciaries align investment decisions with the broader public interest, including social, environmental, and economic factors compliant with modern fiduciary duties.
"Texts are not tombs,” quips not-Stein. “To be static is to be still, and to be still is to be not. The words, the care, the skill, the prudence, the diligence are plain and true, are they met?The question is the answer.”
Dear gawd I love the prose headers , if only I could conceive the legal and financial rhetoric (and I know this is my own repulsion that keeps me from it and makes me part of the problem).