On June 28, 2024, the U.S. Supreme Court (SCOTUS) made history in issuing a landmark 6-to-3 ruling overturning a 40-year-old administrative law standard known as Chevron deference. The ruling opens the door for a tsunami of legal challenges to federal rulemaking.
Federal regulations affect nearly every facet of daily life, from the cars we drive to the water we drink, the food we consume, the houses we live in, and even the very air we breathe.
Chevron deference history
Decided in 1984, Chevron v. National Resources Defense Council (NRDC) is a foundational administrative law case in which SCOTUS held, in cases when the federal statute is ambiguous or silent, courts should defer to an agency’s interpretation of that law so long as it’s reasonable. Basically, this means the courts are to accept agencies’ reasonable interpretation of the law the agencies are administering, even if the courts would have interpreted the law differently.
In 1981, the EPA’s interpretation of a portion of the Clean Air Act (CAA) requiring the definition of certain sources of air pollution was called into question. SCOTUS “was tasked with determining whether ambiguity or silence in a statute means that the reviewing court can impose its own interpretation or if the expert agency’s interpretation should suffice,” according to nonpartisan policy institute the Center for American Progress.
“The unanimous decision by the court in Chevron v. NRDC upheld the EPA’s regulation, introducing a two-step analysis, known as Chevron deference, for future courts to follow:
- First, courts look to whether Congress has ‘directly spoken to the precise question at issue.’
- If congressional intent is not explicitly clear, the court turns to whether the agency’s interpretation is ‘a permissible construction of the statute,’ deferring to agency experts as long as their interpretation is reasonable.”
In its decision, SCOTUS held that Congress’s purpose in delegating authority to federal agencies should include the ability to reasonably interpret the laws they’re tasked with administering.
The decision “reasoned that administrative agencies have superior subject matter expertise and are therefore better equipped than courts to interpret these at times technical and complex regulatory schemes,” the Center for American Progress continues. “Further, the court noted that because agencies are overseen by the president and hence more democratically accountable to Americans through elections, they are better suited to interpret the ‘competing interests which Congress itself either inadvertently did not resolve, or intentionally left to be resolved by the agency.’”
Chevron deference, one of the most cited administrative law cases in history, is a polarizing topic. Opponents believe the law gives federal agencies too much power, while proponents “argue that without Chevron deference the everyday decisioning and rulemaking essential to operation of modern, complex statutory constructs could grind to a halt and the courts could be overwhelmed by a tidal wave of lawsuits,” Reuters says.
However, the application of Chevron deference has meant that federal agencies are usually successful in court challenges against regulations. “One study found that administrative agencies prevailed nearly 25% more often when Chevron deference was applied, and the SEC has prevailed in roughly 81% of its cases at the district and circuit court levels when Chevron deference was used,” Womble Bond Dickinson (US) Inc. notes in a Lexology article.
“But the current high court, with a 6-3 conservative majority has been increasingly skeptical of the powers of federal agencies. Justices Brett Kavanaugh, Clarence Thomas, Samuel Alito and Neil Gorsuch have questioned the Chevron decision,” The Associated Press says. “Ironically, it was Gorsuch’s mother, former EPA Administrator Anne Gorsuch, who made the decision that the Supreme Court upheld in 1984.”
Recent case history
Two related cases brought by Atlantic herring fishermen challenged a rule promulgated by the National Marine Fisheries Service (NMFS) that would require commercial fishing industry organizations to pay for compliance monitors at an estimated cost of $710 per day:
- Loper Bright Enterprises v. Raimondo
- Relentless, Inc. v. Department of Commerce
According to multimedia archive Oyez, the questions before SCOTUS in both cases were:
- “Does the Magnuson-Stevens Act authorize the (NMFS) to promulgate a rule that would require industry to pay for at-sea monitoring programs?
- Should the Court overrule Chevron v. Natural Resources Defense Council or at least clarify whether statutory silence on controversial powers creates an ambiguity requiring deference to the agency?”
Current Chevron decision
SCOTUS limited its part in the cases to answering the question of whether Chevron should be overruled or clarified.
“Under the Chevron doctrine, courts have sometimes been required to defer to ‘permissible’ agency interpretations of the statutes those agencies administer—even when a reviewing court reads the statute differently,” the SCOTUS opinion states.
“The Administrative Procedure Act (APA) requires courts to exercise their independent judgment in deciding whether an agency has acted within its statutory authority, and courts may not defer to an agency interpretation of the law simply because a statute is ambiguous; Chevron is overruled,” the Court ruled.
The current decision cites Chief Justice Thurgood Marshall’s words in his Marbury v. Madison decision: “It is emphatically the province and duty of the judicial department to say what the law is.”
Since Marbury, in situations when a statute is unclear, “the judicial role was to ‘interpret the act of Congress, in order to ascertain the rights of the parties,’” the SCOTUS opinion states. “The Court also gave ‘the most respectful consideration’ to Executive Branch interpretations simply because ‘[t]he officers concerned [were] usually able men, and masters of the subject,’ who may well have drafted the laws at issue. … ‘Respect,’ though, was just that. The views of the Executive Branch could inform the judgment of the Judiciary but did not supersede it. ‘[I]n cases where [a court’s] own judgment … differ[ed] from that of other high functionaries,’ the court was ‘not at liberty to surrender, or to waive it.’
“During the ‘rapid expansion of the administrative process’ that took place during the New Deal era, … the Court often treated agency determinations of fact as binding on the courts, provided that there was ‘evidence to support the findings,’ … But the Court did not extend similar deference to agency resolutions of questions of law. ‘The interpretation of the meaning of statutes, as applied to justiciable controversies,’ remained ‘exclusively a judicial function.’”
The APA, enacted by Congress in 1946, “specifies that courts, not agencies, will decide ‘all relevant questions of law’ arising on review of agency action … even those involving ambiguous law. … The deference that Chevron requires of courts reviewing agency action cannot be squared with the APA,” the SCOTUS opinion adds. “Experience has also shown that Chevron is unworkable. The defining feature of its framework is the identification of statutory ambiguity, but the concept of ambiguity has always evaded meaningful definition. … The Court has also been forced to clarify the doctrine again and again, only adding to Chevron’s unworkability, and the doctrine continues to spawn difficult threshold questions that promise to further complicate the inquiry should Chevron be retained.”
Chief Justice John Roberts delivered the Court’s opinion and was joined by justices Thomas, Alito, Gorsuch, Kavanaugh, and Amy Coney Barrett. Thomas and Gorsuch filed concurring opinions. Justice Elena Kagan filed a dissenting opinion and was joined by justices Sonia Sotomayor and Ketanji Brown Jackson.
What does the ruling mean for the future?
In his majority opinion, Roberts cautioned, “By overruling Chevron, though, the Court does not call into question prior cases that relied on the Chevron framework. The holdings of those cases that specific agency actions are lawful—including the [CAA] holding of Chevron itself—are still subject to statutory stare decisis (to stand by things decided) despite the Court’s change in interpretive methodology. … Mere reliance on Chevron cannot constitute a ‘special justification’ for overruling such a holding.”
However, as Kagan’s dissent states, previous agency interpretations are now at risk of being legally challenged because Chevron deference has been overturned.
“Courts motivated to overrule an old Chevron-based decision can always come up with something to label a ‘special justification.’ Maybe a court will say ‘the quality of [the precedent’s] reasoning’ was poor … Or maybe the court will discover something ‘unworkable’ in the decision—like some exception that has to be applied. … All a court need do is look to today’s opinion to see how it is done,” the dissent states.
Now that SCOTUS has overturned Chevron deference, “the Court’s ruling will invite a wave of federal challenges to the administrative state,” Womble Bond Dickinson notes. “The upshot of the Court’s opinion in Loper Bright and Relentless will be an increase in litigation challenging agency actions, particularly those concerning complex regulatory schemes where Congress has punted the details to agencies believed to have the expertise to fill in the gaps left by legislation.
“The Federal Government and supporting amici (briefs) warned that overruling Chevron would have ‘radical consequences,’ including shifting power from agencies to private businesses with the means to challenge regulations, potentially resulting in the erosion of environmental, consumer finance, and other protections implemented by agency experts for the public good. Similarly, proponents of Chevron have argued that its overruling would result in inconsistent interpretations at the District and Circuit Court levels, because judges would be able to impose their own individual policy preferences without the shackles of deference to agencies on the meaning of a disputed or ambiguous statute, potentially resulting in even more confusion and litigation.”
Overturning Chevron deference seems to be the continuation of SCOTUS’s trend of limiting administrative powers while promoting the power of the judiciary branch, according to Womble Bond Dickinson.
“Judges often claim to be agnostic on matters of public policy. Chief Justice Roberts famously said, ‘my job is to call balls and strikes, not pitch or bat.’ But public policy disputes are increasingly being decided by courts. Today’s ruling will only increase the frequency and importance of regulatory and constitutional litigation.”
However, the more obvious problem with giving judges interpretive authority is the diversity in ideological and philosophical viewpoints held by approximately 850 judges sitting on the lower court benches, says the NRDC.
“And as the judicial appointments process has become increasingly partisan, the range of these judges’ views has gotten even wider. Ending Chevron deference is tantamount to throwing a dart at a lower-court dartboard … and hoping for the best. ‘[There are] more than 10 different circuits, each with multiple judges,’” said John Walke, a senior advocate in the NRDC’s Environmental Health program who has argued many cases in federal court where Chevron deference has been applied. “Each with the ability to decide which reasonable interpretation is their preferred reasonable interpretation.”
Analysts predict the decision to overturn Chevron will do little to end the “regulatory state.” However, it will certainly impact the manner in which Congress writes laws, how courts review the statutes, and the process agencies use to make internal decisions.