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Evan J. Ward is Chief of the Industrial Base Division in the Office of the Deputy Assistant Secretary of Defense for Acquisition Integration and Interoperability at the Pentagon.
It is early 2027, and Chinese provocations in the South China Sea and the Taiwan Strait continue to escalate, as they have since 2018. Newly discovered Chinese capabilities have dramatically complicated plans to defend U.S. vital interests in the region, driving an acute need to accelerate the procurement advanced weapons systems. Beijing’s not at war, but we are on the razor’s edge. The President, conscious of the need to mobilize before we are in a full- blown crisis, directs the Department of Defense (DOD) to use authority under rhetoric continues to escalate, and allusions to Taiwanese reunification by force are occurring weekly and covered with only the thinnest of veils. We are to order the major defense primes to prioritize the production of critical next-generation systems at the expense of delivering legacy systems and certain foreign military sales orders.1 The DPA, passed in 1950 and intended to give the President tools to mobilize American industry in times of national crisis, has been used before—but not like this.
Shocking many in the national security world, the primes uniformly resist these DPA actions and institute a full-court press against the President. They insist publicly that they can deliver on all their contracts simultaneously. The United States is not actually at war, after all. The chief executives argue that the United States needs vibrant and profitable defense contractors, and they assess that this DPA might threaten their ability to return value to their shareholders.With approximately 40 percent of their revenue coming from foreign customers, the potential reputational damage, delays, and loss of future programs from these customers are serious risks.2 Understanding the stakes of the potential impending conflict, the President persists, and the primes conclude that they have no choice but to challenge the action in the courts. Under the Supreme Court’s newly minted major questions doctrine (MQD), the primes have a strong case, and all the lawsuits survive initial motions to dismiss. The litigation that will play out over months and years has now begun. Mobilization will have to wait.
Understanding how this scenario might unfold requires understanding the DPA as well as the significant developments in administrative law brought about by recent Supreme Court decisions. In particular, the Supreme Court’s MQD and the overturning of the longstanding ruling in Chevron U.S.A. v. NRDC have significant implications for a mobilization under the DPA.3
Defense Production Act
The DPA was first passed in 1950 and was meant to consolidate and update the War Powers Acts that Franklin D. Roosevelt relied on to mobilize American industry during World War II.4 Numerous Presidents have invoked the DPA for a variety of reasons, most notably President Harry Truman during the Korean War and most recently Presidents Donald Trump and Joseph Biden in response to the COVID-19 pandemic.5 The DPA is a delegation of regulatory power from Congress to the executive branch, and it uses precisely the type of broad language that the Supreme Court has recently found to lack clarity under the MQD.
The DPA’s most famous use, by President Truman during the Korean War, is famous because of the Supreme Court decision that significantly limited the power the President claimed under the act. That case, Youngstown Sheet & Tube Co. v. Sawyer, remains an important legal precedent on the separation of powers to this day.6 From Youngstown we know something about the outer limits of DPA authority. We know that the President cannot use the DPA to break a strike by seizing and nationalizing steel mills, but short of that dramatic scenario, real questions remain. For instance, is a company liable for the orders it does not fulfill while responding to a DPA priority? That question and many like it remain unanswered, and untested legal questions with significant financial implications are a recipe for litigation.7
One of the reasons that the limits of the DPA remain unclear is that the act has not been extensively litigated. In fact, “case law on the DPA is near non-existent” because, with Truman’s use as a notable exception, the DPA has not been exercised on the scale of wartime mobilization and so has not been sufficiently disruptive to justify extensive litigation.8 The uses of the DPA during the COVID-19 pandemic consisted primarily of actions supporting Operation Warp Speed, which were voluntary and thus did not produce significant litigation.9
Major Questions Doctrine
The Supreme Court decided four cases in late 2021 and early 2022 that, taken together, “altered the doctrine of judicial review of agency action in its method and content, in ways that will have momentous consequences.”10 In the case West Virginia vs. EPA, Chief Justice John Roberts, writing for the majority, named this new approach the major questions doctrine.11
Congress frequently delegates authority to executive branch agencies (as it has done with the DPA), and those agencies in turn must interpret congressional delegations to act on them. The judiciary is often asked to review these interpretations to ensure agencies are not exceeding the authority delegated to them by statute. Stated most simply, the new MQD requires that if an agency action raises a question of major national significance, then that agency action must be backed by clear congressional authorization.
The rationale of the MQD is, as one expects from the Supreme Court, reasonable and grounded in constitutional principles. Few people advocate for a world in which executive branch agencies wield power that neither Congress nor the Constitution gave them. Critics of the MQD, however, have been quick to point out that the Court has not articulated clear definitions of how it will decide which questions are major or what type of congressional authorizations are sufficiently clear.12
In the short time since its announcement, the Court has applied the MQD to strike down a wide range of executive branch agency actions, ranging from an eviction moratorium, Occupational Safety and Health Administration requirements for COVID-19 vaccination or testing in the workplace, the regulation of greenhouse gasses by the Environmental Protection Agency, and the cancelation of student debt by the Secretary of Education.13 In all these cases, Congress had delegated broad authority to pass regulations to the executive branch agency in question, but the Court found that these particular actions raised “major questions” and that the broad language of the statutory delegations were not sufficiently clear to authorize them.
The Court’s decision in the student loan case, Biden v. Nebraska, provided perhaps some of the most concrete definitions so far. Noting that the student loan cancelation program was estimated to cost between $469 and $519 billion, Chief Justice Roberts noted that that amount was 10 times larger than the Court had found sufficient to invoke the MQD in Alabama Assn. of Realtors v. HHS and wrote that the “‘economic and political significance’ of the Secretary’s action is staggering by any measure.”14 Taking this at face value, we might conclude that programs’ projected cost of $50 billion would invoke the MQD, and those costing $500 billion might be fairly characterized as staggering.
Reducing the Court’s application of the MQD to dollar thresholds is of course a major oversimplification. But when comparing the scope and scale of the industrial base gaps currently faced by the United States to the scope and scale of questions that the Court has already determined are major, it becomes quite easy to imagine programs or projects that would invite scrutiny, and thus litigation, under the MQD. Indeed, it is difficult to think of programs that meaningfully address the industrial challenges we face that would not cross the MQD threshold of having vast “economic and political significance,” as people typically understand those terms and as the Court has so far applied them.15 Programs to reinvigorate or rebuild U.S. shipyards; programs to reshore or secure the capability to beneficiate critical minerals; and programs to incentivize and or subsidize science, technology, engineering, and mathematics education are all the types of things that U.S. industrial policy urgently needs to address, and their economic and political significance are likely to be major, perhaps even staggering.16
The End of Chevron
In June 2024, the Supreme Court delivered its decision in Loper Bright Enterprises v. Raimondo, in which it overturned the doctrine of Chevron deference, a major facet of administrative law since the early 1980s. For decades “Chevron” had stood for the proposition that, if an executive agency’s interpretation of a statute is reasonable, courts would defer to that interpretation. While this seems only a technicality at first blush, the number and potential scope of the implications are anything but minor.17 For example, today the prioritization of orders under the DPA is managed via the Defense Priorities and Allocations System (DPAS).18 This system is administered by the Department of Commerce and regulated by 15 CFR Part 700.19 Has the Commerce Department correctly interpreted the statutory language of the DPA in these regulations? Is DPAS being administered according to congressional intent? After Chevron, waiting for litigation is likely the only way to answer this question.
Professor Kristen Eichensehr of the University of Virgina School of Law recently argued that the foreign relations implications of the end of Chevron “are more likely to be ripples than waves.”20 Professor Eichensehr points to several functionalist reasons that courts might choose to rely on post-Chevron to give weight to executive branch views on foreign relations and national security–related issues. Professor Eichensehr’s analysis is sound, but it does little to calm fears regarding the potential for challenges to actions under DPA authority. Would a court find it simple to fit a multibillion-dollar compulsory action against a major American company neatly into the bucket of foreign relations or national security? Is the fact that a court might choose to apply a functionalist approach sufficient to deter an enterprising corporate counsel from suing in the first place?
Litigation Is the Risk—Not the Outcome
The lack of DPA case law produces significant legal uncertainty regarding the limits of DPA authority. The MQD and the end of Chevron multiply these uncertainties profoundly. The MQD is new and its implications are hotly debated, but there is broad consensus that it is a big deal.21 Prognostications about the end of Chevron range from those calling it merely a “significant shift” to those proclaiming that it spells the end of the administrative state.22 The fact that the implications of these new legal developments are still uncertain does not reduce the risk they pose to effective mobilization under the DPA. Rather, the robust ongoing debate is strong evidence of the legal uncertainty that it has introduced and an indicator that DPA litigation is now more likely. Again, legal uncertainty with significant financial implications is a recipe for litigation.
The manufacturing heart of the U.S. industrial base, including the defense industrial base, is dominated by publicly traded multinational corporations.23 These corporations have an imperative and a legal obligation to return value to shareholders and to protect their profitability and access to global markets. This is a feature, not a bug. America’s interests are well-served by a vibrant and profitable industrial base with access to global markets, but like any feature, this one comes with tradeoffs.
The legal uncertainty introduced by the MQD and corporations’ fiduciary duty to shareholders make it likely that significant and compulsory DPA actions will be resisted with litigation. As law professors Timothy Meyer and Ganesh Sitaraman argue in a recent article on the national security implications of the MQD, “with the MQD, the Supreme Court is inviting dozens of Youngstowns.”24
Mobilizing American industry for Great Power conflict would be a monumental effort, particularly given the frightening challenges facing the U.S. industrial base today.25 To give ourselves a reasonable shot at success, it is critical that the President has access to the full range of DPA authorities and that the courts understand where that range begins and ends. Regardless of how the courts might ultimately come out on these questions, the litigation risk alone puts U.S. national security objectives at risk. A mobilization delayed by years of litigation is a failed one.
Recommendations
This risk warrants serious and urgent examination by the executive branch and Congress. Today, DOD planners assume that Congress used the DPA to delegate crucial authorities to implement industrial policy and to mobilize U.S. industry as “necessary or appropriate to promote the national defense.”26 Stated another way, planners assume that Congress granted them “the flexibility to address potentially complex and difficult-to-foresee policy issues that courts might consider to be of ‘vast’ economic and political significance.”27
Congress and the executive could choose to do nothing to address this risk, hoping instead that a national crisis would galvanize U.S. industry to cooperate and impel the courts to grant broad deference to the executive’s use of DPA authorities. History is full of examples of nations unified and galvanized by crisis, but hope is not a strategy and waiting for the crisis will be too late. This risk could be mitigated significantly with virtually zero financial cost and without significant policy tradeoffs. We are competing with China today. We should not wait until we are fighting China to maintain our mobilization tools.28
DOD should identify to Congress—with as much specificity as possible—the types of actions that it would take under the DPA to implement the National Defense Industrial Strategy and those it would need to take in the event of a general mobilization.29 Developing this information would be a small additional effort that could be accomplished in conjunction with contingency planning efforts that DOD regularly conducts and would serve the additional purpose of making these contingency plans more actionable.
Congress should review these plans and reassess DPA language to ensure that it has clearly specified its intentions in the statute considering DOD plans and the MQD. Congress could accomplish this review during the annual defense authorization and appropriation process. Congress should update portions of DPA language that are not sufficiently precise to support DOD plans when evaluated by a court applying the MQD. Congress should also issue a legislative report that identifies explicitly which DPA language supports and authorizes which DOD plans.
Clarifying executive plans and legislative intent would powerfully mitigate the risk of litigation. These actions would send a clear message to the courts. They would significantly reduce the likelihood of success of DPA litigation, reducing the likelihood that companies would bring such litigation in the first place. With such small effort required to mitigate this risk, to ignore it would not only be failing to take an integrated approach to deterrence, but it would also border on negligence. JFQ
Notes
1 The major defense primes, or top contractors with direct relationships to the Department of Defense, include Boeing, General Dynamics, Lockheed Martin, Northrop Grumman, and Raytheon Technologies.
2 Market Line, “RTX Corporation—Financial and Strategic Analysis Review,” January 12, 2024.
3 See “Chevron U.S.A., Inc. v. NRDC, 467 U.S. 837 (1984),” Justia, https://supreme.justia.com/cases/federal/us/467/837/.
4 Anshu Siripurapu, “What Is the Defense Production Act?” Council on Foreign Relations, December 22, 2021, https://www.cfr.org/in-brief/what-defense-production-act.
5 Erica A. Lee and Heidi M. Peters, New Presidential Directives on the Defense Production Act (DPA) and the COVID-19 Pandemic, IN11593 (Washington, DC: Congressional Research Service, February 5, 2021), https://www.congress.gov/crs-product/IN11593.
6 See “Youngstown Sheet & Tube Co. v. Sawyer, 343 U.S. 579 (1952),” Justia, https://supreme.justia.com/cases/federal/us/343/579/. See also Samarth Desai, “The Youngstown Case: Three Approaches to Interpreting Presidential Power,” National Constitution Center, October 5, 2022, https://constitutioncenter.org/blog/the-youngstown-case-three-approaches-to-interpreting-presidential-power.
7 John Fuson et al., “Insight: Litigation Risks Related to the Defense Production Act,” Bloomberg Law, May 4, 2020, https://news.bloomberglaw.com/esg/insight-litigation-risks-related-to-the-defense-production-act.
8 Christopher E. Ondeck et al., “Pricing Controls Under the Defense Production Act,” National Law Review 14, no. 20 (July 16, 2020), https://www.natlawreview.com/article/pricing-controls-under-defense-production-act.
9 See David Adler, “Inside Operation Warp Speed: A New Model for Industrial Policy,” American Affairs Journal 5, no. 2 (Summer 2021), https://americanaffairsjournal.org/2021/05/inside-operation-warp-speed-a-new-model-for-industrial-policy/.
10 Mila Sohoni, “The Major Questions Quartet,” Harvard Law Review 136, no. 1 (November 2022), 262–318, https://harvardlawreview.org/print/vol-136/major-questions-quartet/.
11 West Virginia et al. v. Environmental Protection Agency et al., 597 U.S. 697 (2022), No. 20-1530 (Supreme Court of the United States, June 30, 2022). Opinion of the Court at 20, https://www.supremecourt.gov/opinions/21pdf/20-1530_n758.pdf.
12 The Congressional Research Service highlights for Congress the fact that the definitions of major and clear are not yet well understood for the MQD. See Kate R. Bowers, The Major Questions Doctrine, IF12077 (Washington, DC: Congressional Research Service, November 2, 2022), 1, https://www.congress.gov/crs-product/IF12077. For a critique of MQD ambiguity, see Sohoni, “The Major Questions Quartet.”
13 For a Congressional Research Service review of MQD applications, see Bowers, “The Major Questions Doctrine,” 2. See also the summary of Biden v. Nebraska, describing the Court’s reliance in part on the MQD; “Biden v. Nebraska,” Oyez, accessed October 15, 2023, https://www.oyez.org/cases/2022/22-506.
14 Biden v. Nebraska, 600 U.S. 477 (2023), No. 22-506 (Supreme Court of the United States, June 30, 2023). Opinion of the Court at 21, https://www.supremecourt.gov/opinions/22pdf/22-506_nmip.pdf.
15 See language from FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120 (2000) (Supreme Court of the United States, March 21, 2000), https://supreme.justia.com/cases/federal/us/529/120/case.pdf. As quoted subsequently in Utility Air Regulatory Group v. EPA, 573 U.S. 302, 324 (2014), https://supreme.justia.com/cases/federal/us/573/12-1146/case.pdf.
16 Assistant Secretary of Defense for Industrial Base Policy, 2023 National Defense Industrial Strategy (Washington, DC: Department of Defense, November 16, 2023).
17 Coral Davenport et al., “Here’s What the Court’s Chevron Ruling Could Mean in Everyday Terms,” New York Times, June 28, 2024, https://www.nytimes.com/2024/06/28/us/politics/chevron-deference-decision-meaning.html.
18 “Defense Priorities & Allocations System Program (DPAS),” Department of Commerce, Bureau of Industry and Security, n.d., https://www.bis.doc.gov/index.php/other-areas/strategic-industries-and-economic-security-sies/defense-priorities-a-allocations-system-program-dpas.
19 15 CFR Part 700—Defense Priorities and Allocations System, last updated April 17, 2025, https://www.ecfr.gov/current/title-15/part-700.
20 Kristen Eichensehr, “Foreign Affairs Deference After Chevron,” Just Security, June 28, 2024, https://www.justsecurity.org/97317/supreme-court-chevron-loper-bright/.
21 See generally, Will Yeatman and Frank Garrison, “FAQ: What Is the Major Questions Doctrine?” Yale Journal on Regulation, December 2, 2022, https://www.yalejreg.com/nc/faq-what-is-the-major-questions-doctrine-by-will-yeatman-and-frank-garrison/; Cass R. Sunstein, “There Are Two ‘Major Questions’ Doctrines,” Administrative Law Review 73, no. 3 (November 2021), 475–94, https://administrativelawreview.org/wp-content/uploads/sites/2/2021/11/73.3-Sunstein_Final.pdf; Rachel Reed, “What Critics Get Wrong—and Right—About the Supreme Court’s New ‘Major Questions Doctrine,’” Harvard Law Today, April 19, 2023, https://hls.harvard.edu/today/what-critics-get-wrong-and-right-about-the-supreme-courts-new-major-questions-doctrine/; Timothy Meyer and Ganesh Sitaraman, “The National Security Consequences of the Major Questions Doctrine,” Michigan Law Review 122, no. 1 (2023), 86, https://doi.org/10.36644/mlr.122.1.national; Sohoni, “The Major Questions Quartet.”
22 Adam Liptak, “Justices Limit Power of Federal Agencies, Imperiling an Array of Regulations,” New York Times, June 28, 2024, https://www.nytimes.com/2024/06/28/us/supreme-court-chevron-ruling.html. See also Natalie Musumeci and Katie Balevic, “‘A Robber Baron’s Dream’: SCOTUS Seems Determined to Dismantle an Administrative State,” Business Insider, June 1, 2024, https://www.businessinsider.com/supreme-court-decisions-chevron-sec-federal-government-regulations-2024-6.
23 Helen Sydney Adams, “Top 10 USA Manufacturing Giants,” Manufacturing Digital, August 31, 2023, https://manufacturingdigital.com/smart-manufacturing/top-10-usa-manufacturing-companies.
24 Regarding the likelihood of DPA litigation under the MQD, see Meyer and Sitaraman, “The National Security Consequences of the Major Questions Doctrine.”
25 Seth G. Jones, Empty Bins in a Wartime Environment (Washington, DC: Rowman & Littlefield, 2023).
26 50 U.S.C., War and National Defense, chapter 55, “Defense Production,” subchapter I, “Priorities and Allocations,” § 4511(a), Allocation of Materials, Services, and Facilities, 2018 edition, https://www.govinfo.gov/content/pkg/USCODE-2018-title50/html/USCODE-2018-title50-chap55-subchapI-sec4511.htm.
27 Daniel J. Sheffner, The Major Questions Doctrine, IF12077 (Washington, DC: Congressional Research Service, April 6, 2022), https://www.everycrsreport.com/files/2022-04-06_IF12077_4ca797bb0e622feff2b27847b8553a88b78423b5.pdf.
28 National Security Strategy (Washington, DC: The White House, October 2022), https://bidenwhitehouse.archives.gov/wp-content/uploads/2022/11/8-November-Combined-PDF-for-Upload.pdf.
29 National Defense Industrial Strategy (Washington, DC: Department of Defense, 2023), https://www.businessdefense.gov/docs/ndis/2023-NDIS.pdf.