Chamber of Commerce of the United States v. Reich

The Court first grappled with the issue of judicial authority to review executive orders. The judiciary has always been extremely cautious in reviewing the actions of the other branches of the government because the Constitution created separation of powers for the executive, legislative, and judicial branches. In addition, the United States inherited from English law the principle of sovereign immunity, which protects the chief executive from lawsuits. The landmark Marbury v. Madison (1803) case, however--which Jethro K. Keiberman called "the most celebrated case in American history"--established that sovereign immunity is not absolute, and that the Supreme Court may review the executive branch to determine whether its actions are constitutional.

The Administrative Procedures Act was formulated to help define the circumstances under which executive actions could be subject to judicial review. The appellee in Chamber of Commerce, (in this case, the government) argued that the appellants did not have the statutory cause of action necessary under the Administrative Procedures Act (APA) to waive sovereign immunity. Sovereign immunity had been upheld in Dalton v. Specter (1994), when the Supreme Court refused to review a claim challenging an Executive Order by President Bush, and the government claimed that this precedent should be applied to its case here. But the court of appeals rejected the government's sovereign immunity claim, ruling that the action was being brought against the secretary of labor, not the president. Since the secretary's powers were limited by the terms of the NLRA, his regulations for the enforcement of the Executive Order--which conflicted with the statute--were considered individual rather than sovereign actions. Furthermore, the court of appeals noted that while the Dalton case upheld sovereign immunity, it did raise some doubt on non-statutory judicial review of presidential action, because that decision stated "we may assume for the sake of argument that some claims that the President has violated a statutory mandate are judicially reviewable outside the framework of the APA."

Finding no apparent available statutory cause of action on which to base judicial review in this case, the appeals court considered whether appellants were entitled to bring a non-statutory cause of action challenging the legality of the Executive Order. The Court noted that until the beginning of the 1900s, it was unclear whether the courts could consider non-statutory review of executive action, but in a 1902 case, American School of Magnetic Healing v. McAnnulty, the Supreme Court ruled that "acts of all [a government department's] officers must be justified by some law, and in case an official violates the law to the injury of an individual the courts generally have jurisdiction to grant relief . . . " This reasoning was affirmed in several subsequent cases, establishing that courts have the authority to review executive orders when their legality is in question.