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U.S. Supreme Court Overturns Chevron Doctrine

U.S. Supreme Court Overturns Chevron Doctrine

On June 28, the United States Supreme Court overturned the longstanding Chevron doctrine, creating a new era in federal administrative law. The Supreme Court in Loper Bright Enterprises v. Raimondo determined that the federal Administrative Procedure Act requires courts to exercise independent judgment in reviewing whether an agency acted within its statutory authority in its interpretation of federal law. This independent judgment means a court cannot defer to an agency’s interpretation of the law simply because the law is ambiguous. Loper Bright therefore marks a retreat from Supreme Court precedent that has existed since its landmark 1984 decision in Chevron U.S.A. v. Natural Resources Defense Council. The principle established in Chevron has become so pervasive in federal administrative law that it is widely known in shorthand as the Chevron doctrine, or Chevron deference.

Chevron has been cited in thousands of subsequent court cases. It also is the subject of countless scholarly articles and has been a cornerstone of academic teaching on federal administrative law. This undoubtedly will be the case with Loper Bright as well. The following is a (relatively) short and simple summary of a decision that is likely to have impacts that play out over years and even decades:

What was the Issue in Loper Bright?

Loper Bright involved a dispute between a New England fishing company and the National Marine Fisheries Service (NMFS). Federal law establishes catch limits to prevent overfishing and requires fishing companies to have a government-appointed observer on their boats to monitor compliance. The costs of these observers are borne by the fishing companies. The fishing company argued NMFS lacked authority to impose observers’ costs on them. A district court disagreed, deferring to NMFS’ interpretation of the federal catch-limit law. A federal appeals court affirmed the district court’s decision, and the fishing company appealed to the United States Supreme Court.

What Does the Chevron Doctrine Mean?

The Chevron doctrine means that in cases involving judgment, federal courts have deferred to federal administrative agencies’ interpretations of statutes they administer.  More specifically, under the Chevron doctrine, a court would engage in a two-step analysis when reviewing agency regulations:

  • As a first step, the court would review the underlying statute to determine whether the provision at issue was clear (i.e., whether Congress had spoken to the issue). If the court found the statute to be clear, the statute would dictate the outcome of the case.
  • If the court instead found the statute to be ambiguous or silent on an issue, the court would evaluate whether the agency’s interpretation of the statute was reasonable. If the court found the interpretation to be reasonable, it would uphold the interpretation even if another, better interpretation existed. In sum, the agency would prevail as long as it could show its interpretation of the law was reasonable.

Why did Supporters of Chevron Deference Believe it is Appropriate?

Supporters of the Chevron doctrine generally believe federal agencies are best-positioned to set guidelines because they are subject matter experts in the areas they regulate. Eliminating Chevron deference will leave key questions of interpretation to the courts, and courts rather than agencies will become the de facto policymakers. In Loper Bright, Justice Kogan wrote in dissent, “In one fell swoop, the majority today gives itself exclusive power over every open issue—no matter how expertise-driven or policy-laden—involving the meaning of regulatory law.” She continued, “As if it did not have enough on its plate, the majority turns itself into the country’s administrative czar.”

Why did Detractors of Chevron Deference Oppose It?

Those who support eliminating Chevron deference believe doing so restores balance between federal agencies and those they regulate. They believe courts, and not federal agencies, should be tasked with resolving statutory ambiguities. This is succinctly summarized in the following statement in the majority opinion, “Perhaps most fundamentally, Chevron’s presumption is misguided because agencies have no special competence in resolving statutory ambiguities. Courts do.” In a concurring opinion, Justice Gorsuch added that overturning Chevron simply means courts “will do exactly as this Court has since 2016, exactly as it did before the mid-1980s, and exactly as it had done since the founding: resolve cases and controversies without any systemic bias in the government’s favor.”

With Chevron Deference Gone, How will Courts Evaluate Federal Agency Interpretations?

Going forward, courts will make their own determinations as to the appropriateness of agency rules. Courts are no longer bound to accept a federal agency’s interpretation of a statute merely because that interpretation is “reasonable,” particularly when other, potentially better interpretations exist. As noted by Chief Justice Roberts in Loper Bright, the federal Administrative Procedure Act requires courts to “decide legal questions by applying their own judgment,” and “it thus remains the responsibility of the court to decide whether the law means what the agency says.” The majority points out that an agency’s “body of experience and informed judgment,” among other information, might inform its exercise of independent judgment but will not be dispositive solely because the agency’s judgment is reasonable.

Isn’t the Supreme Court Supposed to Follow its Prior Rulings?

The legal doctrine stare decisis (meaning to stand by things decided) dictates that courts generally will adhere to precedent in making their decisions. Although this principle means the Supreme Court often is reluctant to overturn precedent, there are situations when it will do so. The majority opinion in Loper Bright goes into detail as to why it overturned Chevron.

According to the majority, the Chevron doctrine is unworkable. It is predicated on a court’s first finding that a statutory ambiguity exists, but the concept of ambiguity itself is difficult to define. The unworkable nature of Chevron is evidenced by the number of subsequent cases that have returned to the Court, requiring further analysis and constant tinkering. This, in turn, has precluded Chevron from fostering meaningful reliance. In other words, despite its longstanding existence as a doctrine, it remains difficult today to use prior Chevron cases to project how future cases will be decided. To the contrary, the majority found that Chevron actually allows agencies to “change course even when Congress has given them no power to do so.” For these reasons, the Supreme Court determined stare decisis did not compel continued adherence to Chevron.

Is this a Political Issue?

It’s easy in today’s environment to see decisions–  especially U.S. Supreme Court decisions, through a political lens. However, the Loper Bright/Chevron issue is better viewed as a philosophical issue than a political one. The prevailing question is whether one sees federal agencies as having expertise and experience that entitles them to deference when they apply rules to regulated parties, or whether one believes the court system is more conducive to resolving questions of interpretation.

From a political perspective, it is worth noting that the 1984 Chevron decision involved Reagan-era Environmental Protection Agency rules that were perceived as more industry-friendly than environmental groups believed were appropriate under the Clean Air Act. Over the last 40 years, Chevron deference has supported federal agencies’ interpretations in eras of increased regulation as well as in periods of decreased regulation. For that reason, Loper Bright should be considered for its broad impact on the regulatory process rather than as inherently good or bad for specific administrations or specific regulations.

Is Florida Administrative Rulemaking Subject to Similar Standards and Interpretations?

The Florida Constitution prohibits agency deference in the courts and in administrative processes. Article V, §21, of the Florida Constitution provides:

In interpreting a state statute or rule, a state court or an officer hearing an administrative action pursuant to general law may not defer to an administrative agency’s interpretation of such statute or rule, and must instead interpret such statute or rule de novo.

Florida also has long-required a tighter connection between statutes and state administrative rules than under federal law. In Florida, an agency cannot adopt rules unless it is given specific legislative authority to do so. A Florida agency is specifically precluded from adopting a rule merely because the rule is reasonably related to the purpose of the underlying statute or is within the agency’s overall class of powers and duties.

Travis Miller is board certified by The Florida Bar in State and Federal Government and Administrative Practice.