By: Will Long
Volume IX – Issue II – Spring 2024
I. Introduction and Background
For nearly 40 years, federal agencies and courts have operated under “Chevron deference.” This is a precedent established by Chevron v. Natural Resources Defense Council (1984), which maintains that courts must defer to an agency’s reasonable interpretation of an ambiguous statute. [1] This January, the Supreme Court heard oral arguments from petitioners who claimed to have suffered harm from a federal agency’s interpretation of a federal regulation, thus calling into question the precedent set by Chevron. The petitioners in this case, Loper Bright Enterprises and Relentless, Inc. challenge the National Marine Fisheries Service’s (“NFMS”) interpretation of 16 U.S.C. § 1853(b)(8), a regulation issued under the Magnuson-Stevens Act (“MSA”), which permits federal observers to accompany fishermen on their boats to prevent overfishing. [2] The NFMS interpretation, issued in 2020, required private corporations—not the government—to finance these federal observers.
Petitioners do not simply argue that the NFMS’s interpretation was unreasonable; rather, the private corporations are also asking the Court to overturn Chevron deference. This would have wide-ranging implications across the federal government, directly impacting administrative rulemaking and legislative drafting. After exploring arguments by both parties, this article offers a solution that keeps Chevron but limits its scope.
II. Precedent
The amicus brief filed by the CATO Institute claims that the Chevron doctrine “originated from ostensibly innocent beginnings.” [3] This type of judicial deference arose from the growth of administrative power during the New Deal Era. In 1944, a precedent called “Skidmore deference” came out of a dispute regarding a regulation under the Fair Labor Standards Act. [4] In this case, the Court established a multi-factor balancing test that required courts to “respect” (or defer) to the interpretation of an agency if it was reasonable. This was meant to account for agency expertise and the lack thereof in the Courts. However, this type of deference was not binding since courts were not beholden to this precedent and could make their own independent decisions.
This changed with Chevron in 1984. The original case dealt with an Environmental Protection Agency (EPA) modification to a regulation that favored manufacturing companies. By changing the definition of the phrase “sources of pollution” to cover entire manufacturing facilities, companies could, without a permit, add new equipment to their facility if it did not alter their total emission output. This provision invited environmental groups, including the Natural Resources Defense Council, to challenge this modification as contrary to the Act. The Court ruled that the EPA’s understanding of the word “source” was a reasonable interpretation, as Congress did not have a pre-established definition of the term and it was a justifiable policy decision. This led to the creation of the two-part Chevron test. It follows that if the statute’s meaning is clear, the court must defer to that meaning, but if the statute is ambiguous, it must defer to the agency if its interpretation of the statute is reasonable. This test, unlike Skidmore deference, required the Court to defer to the agency’s interpretation if the test was met. Under Chevron, judgment is constrained.
However, past litigants have attempted to limit the amount of deference that the Court gives to administrative agencies. In 2001, the Supreme Court heard United States v. Mead Corp., which concerned the Mead Corporation’s challenge to a U.S. Customs Service rule that expanded the number of manufactured items that were covered by a tariff. [5] In finding for the government, the Court ruled that Chevron deference can only apply in cases where Congress actively delegated rule-making authority to the agency, and the agency promulgated the rule in the exercise of that authority. Though Courts were still required to defer to a reasonable agency regulation, Mead limited the number of cases where Chevron deference applied.
The Court also limited the scope of a “reasonable” regulation. In 2015, the Court heard Michigan v. EPA, a case involving the Environmental Protection Agency’s (EPA) ability to regulate emissions of hazardous air pollutants from refineries and factories. [6] Though the EPA acted within the Clean Air Act’s direction to regulate stationary sources of pollution if deemed necessary and appropriate, its proposed regulation would have cost $9.6 billion a year, compared to the $4 million it would have saved. In issuing the decision for the Court, Justice Scalia argued that such a costly regulation is not only inappropriate but plainly irrational. Though one could claim the EPA’s attempt to regulate stationary sources of pollution was reasonable, it was not sensible public policy, according to Scalia, and therefore not a “reasonable” interpretation that Chevron should protect. Michigan extended judicial consideration beyond the pure statutory scheme.
These cases indicate a trend towards limiting Chevron and act as a favorable backdrop for conservatives on the Court who indicate doubts about the doctrine. Justices including Neil Gorsuch and Clarence Thomas have both recently appeared interested in overturning the doctrine, arguing that it appears to contradict the separation of powers doctrine in the Constitution. Though conservative criticisms of Chevron have increased under Democratic presidencies, if the Court overrules Chevron in Loper Bright, this change will significantly limit the administrative state’s power, regardless of which party is in charge.
III. Government Arguments
Despite the numerous attempts to limit Chevron in the past two decades, the government offers three central reasons why Chevron should stay. It argues that the doctrine is one, a bedrock principle of administrative law, two, that stare decisis principles protect it, and three, that it is constitutional. This argument, at its core, is premised on the benefits of legal consistency. As expanded below, the government defends Chevron by advancing a very standard case for respecting established precedent.
This first argument claims Chevron is vital to smooth governance and is therefore a bedrock principle of administrative law. In advancing this argument, the government paints a clear picture of governance under Chevron: Congress passes legislation and the Executive branch applies industry expertise. At large, this view is consistent with each branch’s Constitutional authority. For the government, this vision is disrupted when Courts intervene and inject policy judgments into statutory interpretation—a charge the Court is accustomed to. Rather, Congress should be able to legislate with the assurance that industry expertise, rather than judicial interpretation, will fill in ambiguity. According to the government, this prevents the Court, which is intended to be a politically neutral body, from being accountable for policy judgments.
To expound their second argument, the government leans on Chevron’s lengthy tenure as the most prominent doctrine controlling administrative law. Overturning such a doctrine requires an “extraordinary justification,” which according to the government, is not present in this case. There are three reasons for a bar this high. First, for 40 years, Chevron has practically defined administrative rulemaking. Over time, Congress has become accustomed to legislating against its backdrop, often using the deference as a strategic method for achieving policy goals or political victories. According to the government, Congressional reluctance to overturn the doctrine indicates its value to policymakers. Under this argument, altering Chevron significantly impacts democratic function. Second, policymakers are not the only parties who operate within the framework of Chevron—private citizens and corporations have also organized their individual affairs with Chevron in mind. Removing this doctrine, according to the government, would disrupt predictability within the legal system. Third, although Chevron operates with its multiple additions and involves a multi-step test, the government argues it is still workable and sound. The alternative, according to the government, would be a judiciary writing its political preferences into law, threatening the perceived integrity of the Court.
In advancing its third argument, the government refutes the petitioner's claims that Chevron violates the separation of powers. As covered in the next section, petitioners argue that the Court, not executive agencies, should decide relevant questions of law. In requiring Courts to defer to the agency’s interpretation, the petitioner’s argument follows, Chevron violates Article III. However, the government refutes this charge by mobilizing an expansive definition of interpretation. It argues that the second step of Chevron, identifying statutory ambiguity, involves enough judicial interpretation to guard against an unconstitutional delegation of decision-making authority.
IV. Petitioner Arguments
Building on the trend towards weakening Chevron, petitioners advance two primary arguments in support of overruling the doctrine—that Chevron deference should be entitled to a weak form of stare decisis and the relevant factors outweigh the benefit of protecting precedent. Put simply, Chevron does not deserve strong decisis protection, and even if it did, it would be inconsistent with Constitutional principles and poor public policy. This article expands the petitioners’ argument structure below.
Though Chevron supporters advocate for statutory stare decisis, the strongest form of stare decisis, petitioners argue these claims rest on weak grounds. According to the petitioners, the Chevron court ignored the relevant law. When the Court handed the decision down, it did not cite nor interpret § 706 of the Administrative Procedure Act (APA), which already provided a framework for judicial review of an agency’s interpretation. § 706 of the APA specifies “that the reviewing court shall decide all relevant questions of law,” “constitutional and statutory” alike. Instead, the Court issued a new framework for judicial interpretation, entirely divorced from the statute, and thus, statutory stare decisis cannot reasonably apply.
According to the petitioners, the only remaining reason for heightened statutory stare decisis is that Congress can redress the interpretative methodology via statute. In other words, since Congress has declined to countermand Chevron, the precedent should become stronger. But, as the petitioners argue, the Court can consider the Chevron doctrine in a vacuum: If the Court granted heightened stare decisis to any decision that Congress could nullify by passing a law, it would require overruling decisions that give weak stare decisis effect to cases like Chevron, which involve interpretative methodology. For this inefficiency, and the Chevron court’s ignorance of the relevant law, the petitioners argue that Chevron should not deserve heightened statutory stare decisis.
Moving to the second prong of the argument, petitioners argue that even if Chevron enjoyed a strong stare decisis effect, a few relevant factors support its overruling. First, petitioners claim Chevron violates the separation of powers doctrine. Though the government argues that the Court secures its interpretive role by deciding whether to defer to an agency’s interpretation, petitioners argue this decision does not satisfy its Article III responsibilities. As laid out in Plaut v. Spendthrift Farm, Inc. (1995), judicial power is the power to definitively interpret the meaning of applicable statutes while determining a citizen’s entitlement to judicial relief. [7] Under this definition, which the petitioners use in their argument, Courts defer part of their interpretive power to executive agencies under Chevron, representing an abdication of their Article III duty
However, the government can rectify this charge by claiming that judicial deference to agencies respects Congress’s Article I powers, as Congress intentionally leaves gaps in statutes for executive agencies to fill in. In response, the petitioners argue that while Congress enables agencies to fill in statutory gaps, federal regulation often includes a plethora of opportunities for agencies to “poke[e] into every nook and cranny of daily life.” [8] Since agencies can take advantage of these gaps, and courts must defer to their interpretation under Chevron, petitioners argue this represents too large of a shift of power from Congress to the Executive Branch. Therefore, by tolerating Chevron, the Court actually undermines Congress’s Article I powers.
Aside from Constitutional concerns, the petitioners also argue that Chevron has become unworkable. There are two main reasons for this. First, judges often disagree on what constitutes statutory ambiguity, making it difficult for a Court to collectively decide when to initiate Chevron. Also, though the government claims that keeping Chevron avoids splits in lower Courts, the difficulty associated with identifying ambiguity fractures judicial uniformity even further. According to the petitioners, this is why the Court hasn’t used Chevron in several years. Second, as outlined in the prior section, there have been numerous complications to the doctrine. These modifications make it difficult to apply Chevron, as it has transformed into a multi-step procedure.
Building on the “real-world consequences'' of Chevron, petitioners claim the doctrine damages the legislative process. By empowering executive agencies, Congress is disincentivized from passing legislation, and party leaders instead rely on the administrative state to accomplish what Congress could not via unilateral action. This shift in policymaking, according to petitioners, harms citizens. Though many might support granting agencies more deference for partisan reasons, these supporters will quickly change positions when the opposition party controls the executive. Also, strengthening agencies incentivizes the administration to engage in agency capture (i.e., using administrative rulemaking to favor special interests and achieve policy aims). This encourages agencies to view rulemaking through a strategic partisan lens, instead of passing genuinely effective legislation. In sum, the petitioners argue that citizens benefit the most through legislation, not an administrative state with heightened rule-making power.
V. Proposed Solution
With a conservative supermajority, the Supreme Court appears likely to discard Chevron. As touched on in the first section, most conservative justices have taken public stances against the doctrine, arguing that Chevron runs against Article III and hurts private citizens. This article, however, disagrees with abandoning the doctrine entirely. This is not to state that Chevron, as it exists in its current form, is a workable and sound doctrine, but rather an effort to preserve its practical value.
Part of this effort, consistent with the petitioner’s critique of Chevron’s complexity, requires altering Chevron without adding a new procedural step, as the Court did in Michigan when it narrowed how the Court defined a “reasonable” interpretation. Adding another step to Chevron increases the likelihood of lower court splits, as there are more potential stages of disagreement. Rather, the Court should hand down a ruling that builds on Mead’s holding that Chevron only applies if Congress in fact delegated authority to an agency. For this reason, Mead has been referred to as “Chevron Step zero”.
Mead left open the question of how courts should analyze implicit delegations of authority. The more than 20 years of litigation since Mead was decided has clearly demonstrated that it is too challenging for courts to assess whether Congress has implicitly delegated authority to an agency. Limiting Chevron to express delegations of authority would force more explicit legislative drafting and ensure that Congress is fully performing its obligations under Article I. The Court now has an opportunity to provide that clarity and should take it.
Endnotes
[1] Chevron v. Natural Resources Defense Council (1984).
[2] Relentless, Inc. v. Department of Commerce, (2024); Loper Bright Enterprises v. Raimondo (2024); 16 U.S.C. § 1853(b)(8).
[3] Brief for CATO Institute and Liberty Justice Center Amicus Curiae, Loper Bright Enterprises v. Raimondo, (2024).
[4] Skidmore v. Swift & Co., 323 U.S. 134 (1944)
[5] United States v. Mead Corp., 533 U.S. 218 (2001).
[6] Michigan v. Environmental Protection Agency, 576 U.S. 743 (2015).
[7] Plaut v. Spendthrift Farm, Inc., 514 U.S. 211 (1995).
[8] Reply Brief for Petitioners Loper Bright Enterprises, et al., Loper Bright Enterprises v. Raimondo (2024).