Kavanaugh and Home Building: What the Record Shows

Filed in Environmental, Housing Finance, Leadership, Legal by on July 11, 2018 18 Comments

Supreme Court Building in Washington DCAs legal pundits and news outlets pore over Judge Brett Kavanaugh’s extensive judicial record to learn more about President Trump’s new Supreme Court nominee, members need only turn to the multiple NAHB court cases over which Kavanaugh has presided at the U.S. Court of Appeals for the D.C. Circuit to get a fuller picture.

In his 12 years on the D.C. Circuit, Kavanaugh has been involved in eight cases in which NAHB was a petitioner, appellant or amicus. While not always siding with NAHB’s position, Kavanaugh has consistently viewed agency rulemakings with a healthy dose of skepticism.

For example, NAHB was a petitioner in Coalition for Responsible Regulation et al v. EPA, challenging EPA’s attempt to apply an onerous Clean Air Act permitting program to millions of new sources, including some multifamily buildings.

A three-judge panel at the D.C. Circuit upheld EPA’s regulation, and the full D.C. Circuit did as well – except for Judge Kavanaugh. Ultimately, NAHB and its industry coalition took this case to the Supreme Court, which overturned EPA’s regulation for exceeding its statutory authority, just as Kavanaugh had forecast when he declined to go along with the D.C. Circuit’s full court ruling.

Kavanaugh also carefully examines Congress’ actions to ensure they pass constitutional muster. NAHB participated as an amicus in PHH v. Consumer Financial Protection Bureau, a case in which Kavanaugh held that a provision of the Dodd-Frank Act was unconstitutional because it vested too much power in the sole director of the Consumer Financial Protection Bureau (CFPB).

NAHB’s main concern in this case was the CFPB’s re-interpretation of RESPA provisions that affected the use of marketing services agreements, commonly used by builders, real estate agents, lenders and others in the settlement process.

Kavanaugh held that the CFPB could not change its position on RESPA without going through the rulemaking process and making sure the public had a chance to make comments. While the full D.C. Circuit ultimately overturned Kavanaugh’s constitutional holding, it upheld his RESPA holding, which benefits NAHB members significantly.

Judge Kavanaugh’s record of curbing regulatory overreach, as evidenced by these two cases, is one of the key reasons NAHB supports his nomination to the Supreme Court.

For additional information about NAHB legal affairs action, contact Amy Chai.

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  1. Joe Honick says:

    NAHB has every right to applaud a decision that favors our areas of interest. On the other hand, NAHB has no business at all getting into the political morass that can impact a Supreme Court appointment or any other political appointment lest the association endanger its 501c3 status and depart from its industry related function.
    When I was a Staff Vice President , I bought into what turned out to be one of the worst campaign ever: the idea that Fannie Mae should just buy up all those substandard loans to get more money into the mortgage market via mortgage backed securities. Now, and for many years, a Life Director, I can only urge those in association leadership to avoid one more lousy decision and stay out of tis SCOTUS idea unless it wants also to be blamed if Kavanaugh helps to over turn Roe v Wade as well.

    • David Koster says:

      I completely understand Joe’s point. There is certainly some political risk. But not taking risks, or controversial opinions has not served us well over time. Our industry has been under an aggressive assault under both Republican and Democrat administrations. the Obama administration ramped up that regulatory assault to unprecedented levels. Federal judges often legislated from the bench in order to get their desired outcome rather than following the law.

      I don’t know how the current nominee will rule in the future on issues related to our industry, but I’m willing to take the chance on coming out in public support of someone who has a history of pushing back on the administrative state in order to put pressure where needed. Maybe it helps and maybe it doesn’t, but I know my livelihood depends on someone putting the brakes on regulatory overreach and I suspect many NAHB members feel similarly.

      The risk is worth it.

      If not now, when? If not us, who?

      • Susan Monde-roeckle says:

        I agree with Joe. This is a political field NAHB should stay out of. But if David’s thought prevails, surely there is a qualified candidate with a supportive record who does not represent trampling of women’s rights. As a female professional in the building industry for over 40 years I cannot support a candidate who will send us back to 1950.

      • Jerry Stuckle says:

        I have to agree with Mr. Koster. Yes, there is some risk. But there is risk in getting out of bed in the morning. So should we all just stay in bed for the rest of our lives?
        Regulations are good – to an extent. The Empire State Building was built in 14 months. Could we do that today? Not a chance. But do we want to go back to the 1930’s and the safety issues of the time? I sure wouldn’t, and I don’t think anyone working on buildings would. Sure, OSHA can be a PITA at times. But they are doing their best to provide safe working environments. And that is true of much of Government.
        However, regulatory overreach is not just a buzz word. It is a real threat as some people in government, for many different reasons, try to enact rules that go beyond their regulatory powers. And when some judges uphold those regulations, it can increase the cost of building and increase the amount of money NAHB has to spend to fight the overreach. Our Constitution was written to minimize Federal Government’s powers and maximize the States’ powers, but that idea seems to have been lost somewhere along the way.
        If you don’t think NAHB should take a position on a Supreme Court nomination, why do you think NAHB should be involved in ANY court case? Why do you think NAHB should be involved in working with EPA, DoL and other departments and agencies crafting these rules? A Supreme Court nomination is much more important than any one regulation.
        People claim the Constitution is a living document – and it is because it can be changed as needed. However, the way to change it is through Congress and the states, not the whims of one judge. Whether you like Trump or not, Judge Kavanaugh has shown through his rulings that he supports the Constitution as written and amended, and that is important. If judges are going to change the rules and laws according to their personal whims instead of following the Constitution, we might as well through the Constitution out the window.

  2. Mark Marcoplos says:

    I agree that we should be taking a more comprehensive view of the issues that a candidate represents. What good does it do us if a judge makes a few rulings that we agree with while undermining major rights and freedoms?

  3. Kathleen Lowyns says:

    I read with great interest the NAHB article about Judge Kavanaugh, along with the three comments posted to date. I can fully appreciate both Mr. Honick and Mr. Koster’s positions as, while they differ, they clearly address the facts presented in the article. However, there was nothing substantial to support the opinion of Ms. Monde-roeckle so I must interpret her comments as just that – opinion – and I might add a frequently expressed opinion for which I’ve yet to hear or read any factual support. Thanks to the NAHB for their research into Judge Kavanaugh.

  4. Tom Pahl says:

    David Koster predictably hit a set of talking points that mean nothing in the real world. “Regulatory Overreach” is a dog whistle that makes Conservative ears perk up and motivates voters, but it is a much more complex issue than he represents. Perhaph Koster’s comment, “Maybe it helps and maybe it doesn’t…..” is more to the point.

    My experience in the building industry is that, for those who play by the rules, most regulation is adapted by the industry and ultimately adds to net profit. Sure, every added cost incrementally decreases demand, but for every regulation, there are a host of other factors affecting the market. When the economy collapsed in 2007-8 – the worst recession since the Great Depression – it wasn’t regulation that caused it, but UNregulated speculation, indeed outright gambling, with money that was supposed to be safely stored in the mortgage economy. Speculators, with none of their own assets at risk, created a financial house of cards, then took out insurance on that same house of cards. And that’s OK? But it’s not OK for a new consumer protection regulation to be implemented?

    And NAHB wants to play that kind of politics. Bad move.

    • What happened in the Recession could have been softened. But Greed and politics would not listen to sound advice given as early as 2006 from the Executive Office that warned that there was a potentially runaway train and we need oversight and possible if not actual restructuring of the GSE’s. This in fact proved to be correct. I like many individuals in the U.S. like some regulations and do not like others. Some of it is directly related to time , money and over all profit. The one thing the Court desperately needs is a true Constitutionalist. I would have liked to have seen the Judge from Indiana as another woman on the SCOTUS would have been I think a good idea, however I believe that Cavanaugh certainly has the credentials necessary for the position. Based on that the President’s nominee should be honored and confirmed. Sometimes it is difficult for people to see past the me in a statement or situation and think of the us.

  5. Philip Herzegovitch says:

    As a holder of two NAHB certifications, I take issue with the NAHB getting itself mixed up in the politics of the SCOTUS appointment process by trying to influence the decision making mechanisms. Creating designations and then marketing them as representations of qualified professionals IS a form a regulation. Regulations are nothing more than The Rules of Play. Thanks to regulation imposed upon the building industry, with that said industry kicking and screaming the entire way like a petulant child refusing to eat its peas and carrots, our industry is safer and the consumers more empowered than ever. If the NAHB really wants to “help” our industry, and the country in general, it would be better for them to work towards getting contractors not playing by the rules REMOVED from our industry rather than trying to influence a SCOTUS approval. Also, NAHB needs to be acutely aware of attaching itself to any one person that has the potential to set back women’s rights 60+ years. At a time when we are trying to attract more women to the construction trades, it would not be a very smart move to alienate those very same women by hitching our wagon to this particular horse. Be careful what you wish for. 😉

  6. Jan Scott Rowland says:

    Perhaps Susan, Mark and Tom should re-set and attend a course in Constitutional Law 101. What we DON’T need are activist judges straying from their charter to interpret the constitutional viability of the slate before them. A person is hard-pressed to find instances where Judge Kavanaugh has allowed cause celeb to wrestle him from due diligence.
    I am offering that perhaps these three folks are more afraid of the Constitution than the candidate himself.

  7. Charles Ruma says:

    My guess is that we are hearing from the Builders who support the Democrats….and that is fine. Where were they when Obama appointed two of the worst choices in history, and certainly judges that would never support strict ruling on the Constitution? It is about time that the Supreme Court get back to interpretation of the law…..not making law through political leanings.
    Kavanaugh is a good solid choice for America and we should support him.

  8. Tom Pahl says:

    And….this is exactly why it is a bad move for NAHB to weigh in on this question. Chances are slim to none that the Supreme Court will play a significant role in the future of our industry anytime in the near future. However, chances are very good that NAHB is playing politics, with our membership as its bargaining chips, and I am not amused. These are volatile times and for now the housing industry is on the sideline and it aught to stay there. If you all NAHB Directors have political ambitions, take them elsewhere.

    • Jan Scott Rowland says:

      NAHB Leadership – Steady as she goes. Stay the course, and don’t let the tail wag the dog.
      Bravo Zulu.

    • Leo Watkins says:

      Agreed Mr. Pahl. I thought I was paying for membership in a organization dedicated to this industry. If it is supposed to be the REPUBLICAN AHB, maybe that ought to be the name. While remembering that the majority of Americans voted AGAINST this administration even before it did things like jack up the cost of a new home by thousands of dollars, etc. in trade wars with our allies and creditors. Maybe we’d be better off staying within our lane and focusing on what’s best for the industry on various issues rather than offending over half of our clientele before we even get started.

  9. Richard Goodman says:

    Unfortunately you’ll never make everyone happy.
    Damned if you do, damned if you don’t.
    I enjoyed the article and all the commentary.
    Carry on NAHB, damn the torpedoes, full speed ahead!

  10. Lane E says:

    Come on people, NAHB has every right to say they support a Nomination based on the way the fel about the nominee as related to the housing and lending industry as they have stated.. Just because some lefties are so concerned that the slide left will be slowed down or a certain ruling may be overturned that is your personal opinion, NAHB as i read it simply said based on his previous rulings as related to housing and lending issues said they support his nomination and that is totally fine. The Supreme Court is not just about leftist social issues and Roe V Wade period.

  11. Bill Kengel says:

    Most of the building industry is subject only to local “NIMBY” code. At the grass roots, professionals can invest in building according to (frequently) unfair and un-realistic code, or fighting same in the courts and political organizations. Fighting for the right to work against those who have guaranteed income from outside sources invariably leads to financial ruin – – – and so on it goes. The upper echelons of the NAHB are too far above us to make any difference.

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