Chevron deference has long given federal agencies significant discretion to pass rules based on their reasonable interpretations of arguably ambiguous federal statutes.
On January 17, 2024, the Supreme Court of the United States heard oral arguments in two cases brought by fishing companies challenging a rule issued by the National Marine Fisheries Service that requires herring vessels to pay the salaries of federal monitors aboard those ships. The companies’ challenges, however, affect much more than fishing for herring. These cases—Loper Bright Enterprises, Inc. v. Raimondo and Relentless, Inc. v. Department of Commerce—implore the Court to limit or entirely overturn the “Chevron doctrine,” a 40-year-old precedent and bedrock principle of American administrative law. The Court’s decisions in these cases will have ripple effects that extend far beyond the fishing industry, and may usher in a potential sea change in the law that would drastically curtail federal agencies’ discretion to interpret ambiguous laws across every federally regulated industry.
The Chevron Doctrine
In 1984, the Supreme Court decided Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc. In that case, the Court held that where a “statute is silent or ambiguous with respect to the specific issue” before an agency, courts “may not substitute [their] own construction of a statutory provision for a reasonable interpretation made by” the agency. In so holding, the principle of “Chevron deference” was born. Chevron deference requires courts to analyze an agency’s construction of a statute using a two-step test. In step one, courts determine whether the statutory language at issue is “clear” or “ambiguous.” If it is clear, that language controls, and an agency may not deviate from it. But if it is ambiguous, in step two, courts must defer to an agency’s interpretation of the statutory scheme that Congress “entrusted [it] to administer,” as long as that interpretation is “reasonable.”
Chevron deference has long given federal agencies significant discretion to pass rules based on their reasonable interpretations of arguably ambiguous federal statutes. However, the two cases currently before the Supreme Court have the potential to change all of that, cutting back on the wide latitude that courts have given agencies to say what the law is where the underlying statute is unclear.
Oral Arguments in Loper and Relentless
In both Loper and Relentless, the advocates for the fisheries argued for discarding Chevron because it forces courts to punt on their constitutionally enshrined duty to interpret federal statutes and (as Chief Justice Marshall wrote in 1803) “to say what the law is.” Counsel for the petitioners in Relentless stressed that Chevron “reallocates interpretive authority from courts to agencies” and that “in any other context,” courts typically think that it is their “own job” to interpret the law. Counsel for the petitioners in Loper echoed this point, calling Chevron’s framework “fundamentally misguided” because “[t]he whole point of statutory construction is to bring clarity, not to identify ambiguity,” and the question of whether a statute is ambiguous “is hopelessly ambiguous” to begin with. For these reasons, both petitioners criticized Chevron for enabling “agency overreach” and “agency flip-flopping.”
In response, U.S. Solicitor General Elizabeth Prelogar defended the Chevron doctrine, calling it “a bedrock principle of administrative law” with a weighty precedential pedigree that Congress could have chosen (but did not choose) to overrule over its 40-year history. She emphasized the reliance interests at stake, remarking that “Congress, agencies, states, regulated parties, and the American public have all relied on Chevron and the regulations upheld under it to make important decisions that could be upended by overruling that framework.” Prelogar also argued that overruling Chevron would open the floodgates to litigation against federal agencies, with litigants “com[ing] out of the woodwork seeking to open” past cases where courts ruled that an agency’s action was reasonable and entitled to deference.
The conservative majority of the Court seems poised to overturn Chevron or at least significantly rein it in, potentially replacing it with a standard that would give federal agencies less interpretive discretion. Justice Clarence Thomas suggested at the start of the argument that he might be receptive to a lesser standard of deference toward agencies’ interpretations of statutes. Justice Neil M. Gorsuch, who has long been a vocal critic of Chevron, unsurprisingly reiterated his concerns about the doctrine: “Is the judge persuaded at the end of the day, with proper deference given to a coequal branch of government, or does the judge abdicate that responsibility and say automatically whatever the agency says wins?” In Justice Gorsuch’s view, the latter is what happens under Chevron, often to the detriment of underprivileged individuals (e.g., immigrants, veterans seeking benefits) who are left unable to challenge the agency’s action. Justice Gorsuch also labeled the doctrine “a recipe for instability… because each new administration can come in and undo the work of a prior one.” Justice Brett M. Kavanaugh seized on this point:
[Y]ou say don’t overrule Chevron because it would be a shock to the system, but the reality of how this works is Chevron itself ushers in shocks to the system every four or eight years when a new administration comes in, whether it’s communications law or securities law or competition law or environmental law, and goes from pillar to post.
Many of the conservative justices also appeared to question the workability of Chevron’s requirement that courts first determine whether a statute is ambiguous. “Some judges say they’ve never found an ambiguity and others say they find them all the time,” remarked Justice Gorsuch. Justice Samuel A. Alito similarly focused on the difficulty of defining “ambiguity,” noting further that “in cases that don’t involve an agency, we never say we have exhausted all of our tools of interpretation and we just can’t figure out what this means.”
Chief Justice John G. Roberts and Justice Amy Coney Barrett asked difficult questions of both sides. Chief Justice Roberts focused on whether Chevron had already, in effect, been overruled in practice because the Supreme Court has not relied on the doctrine in statutory interpretation cases involving agencies for a number of years. And Justice Barrett questioned not only whether overruling Chevron would “invite[] a flood of litigation,” but also the extent to which every ambiguity or gap in a statute can correctly be viewed as an intentional delegation to agencies.
The Court’s liberal justices indicated that they would vote to keep the Chevron doctrine in place. Justice Elena Kagan suggested that Chevron deference is appropriate because federal agencies have expertise in highly technical areas that courts lack. To illustrate the point, Justice Kagan gave a hypothetical about Congress passing an artificial intelligence statute and creating an artificial intelligence agency to administer it. In such a circumstance, Justice Kagan indicated that it would be proper to presume that Congress would want “people who actually know about AI”—not courts—to fill in any gaps and interpret any ambiguities in the statute. Justice Sonia Sotomayor similarly suggested that deferring to agencies’ judgments makes sense given their expertise and “knowledge of consequences,” and she also expressed concern about the effect that overruling Chevron would have on past cases that relied upon it. Finally, Justice Ketanji Brown Jackson stated that she “see[s] Chevron as doing the very important work of helping courts stay away from policymaking,” that is, making policy judgments on technical issues that agencies are arguably better suited to make.
Implications
The oral arguments in Loper and Relentless suggest that there is a majority of the Supreme Court that will likely vote to limit if not overrule Chevron deference. Such a decision would bring about a significant change in the law, curtailing agencies’ discretion to say what the law is where it is unclear. This change would affect every federally regulated industry, including education, healthcare, tax, automotive, farming and securities, to name a few. Businesses within these industries may benefit from new grounds for challenging regulations that affect their profitability or viability. A decision is expected by the end of June.
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