Who’s in Charge of Interpretation?
In a groundbreaking decision last summer, the Supreme Court voted six to two to repeal the Chevron Deference doctrine, a principle that allowed federal regulatory agencies to interpret their powers more broadly in the case of ambiguous statutes. This decision not only has a direct effect on the power of all federal administrative agencies to interpret their own regulatory powers but also sets a greater precedent for the Judicial Branch to decide on policy questions through their interpretation of statutes as opposed to agencies.
The largest transformation in the power granted to three letter government agencies happened during the New Deal, a historic time that expanded the power of the Executive Branch over the other two branches more than any other period in history. Franklin Delano Roosevelt (FDR) not only established new agencies during this time, such as the Securities and Exchange Commission but also fought extensively against the Supreme Court, which was a conservative majority.[1] At this time, the theoretical power governmental agencies were supposed to have was relatively inconsistent and undefined, as various rulings were rather noncommittal on setting a precedent. One example, Skidmore v. Swift & Co., 323 U.S. 134 (1944), created the “Skidmore Deference,” a ruling in a case about employee safety laws that allows federal courts to defer to governmental agencies if they deem the governmental agencies’ interpretations of a statute to be reasonable.[2] The Skidmore Deference was a step forward for broadening the power of governmental agencies in interpreting their own powers, but it still allowed courts to determine when and if they should defer; additionally, the Skidmore Deference applied more to informal opinions than binding policy, meaning the extent of expanded precedent was not great. Instead, the FDR administration’s greatest expansion of executive branch power was concentrated with the president, and it was mostly unsuccessful in taking power away from the judicial branch.
The Chevron Deference, a precedent set in the case of Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984), was a much larger expansion of federal administrative power than the Skidmore Deference was and became the bedrock for the legal justification for an expanded role of the federal bureaucracy for the last forty years. In this case, the Supreme Court ruled in favor of the Environmental Protection Agency in a matter concerning the agency’s interpretation of a provision of the Clean Air Act.[3] Justice John Paul Stevens's majority opinion outlined a two-step process for deference. First, if Congress has not expressed a clear stance on the issue, and second, if the matter reasonably falls under the agency's authority—whether explicitly or implicitly—then the Court should defer to the agency's interpretation.[4] Thus, from Congress directing an agency to accomplish some regulatory action, an agency would have broad power to not only accomplish that explicit goal but expand upon it. This marked a significant expansion of regulatory agencies' power. Although in 2001, United States v. Mead Corporation, 533 U.S. 218 (2001), added a new step to Chevron's deference by questioning whether Congress intended for the agency to have interpretive authority in a particular case, Chevron's deference remained a solid precedent until 2024.[5]
Interestingly, the Chevron deference was not always targeted by conservatives; during the Reagan administration, it was lauded as an accomplishment by Justices Antonin Scalia and Clarence Thomas. However, starting around the 2010s, criticism of Chevron's deference became more pronounced. The initial ruling in the Chevron case was actually a deregulatory action that was frowned upon by environmentalist groups, but due to the additional regulation, the deference allowed, opinions began to change. By 2014, Chevron was seen in many conservative legal circles as an expansion of federal power and a vast overreach.[6]
One of the strongest arguments for Chevron's deference was the expertise argument. As governmental agencies are staffed with people with expertise in the various specialties of the three letter agencies, whether that’s security, environmental protection, or financial regulation, they are more likely to pass better policies and know what interpretations make sense on a case-by-case basis. This is opposed to judges, who will be less knowledgeable about such matters. This argument, forwarded by Justice John Paul Stevens, has been extended to also argue that agencies operate more efficiently when they can rest safe knowing they have justification for various regulatory or deregulatory actions that may be necessary but not in the explicit purview of their stated objectives. This also has serious implications for how the Executive branch works, as agencies have expanded in the last forty years to cover a broad range of issues and have expertise in areas that Judges are unlikely to fully understand.
The argument that various groups have brought against the Chevron deference, and the one that ultimately resulted in its repeal last June in the case Loper Bright Enterprises v. Raimondo, 598 U.S. 451 (2024), was that the Chevron deference was an unlawful expansion of the Executive Branch’s powers in a way that violated the separation of powers, and specifically limited the interpreting purview of the Judicial Branch. Supreme Court Justice Neil Gorsuch had, for example, ruled during his term with the Tenth Circuit that the concentration of power in federal agencies had upset the balance of powers in a way that unlawfully favored the Executive Branch. Ultimately, in the case challenging the justification for regulatory action taken by the National Marine Fisheries Service, the Chevron deference precedent was overturned. In his opinion, Chief Justice John Roberts concluded that the Administrative Procedure Act, passed in 1946, required that all agencies be beholden to the court's judgment on what lay in and out of their statutory responsibilities.
Ultimately, the full consequences of the repeal of the Chevron Deference are unlikely to be fully known until at least a decade into the future. Thomas W. Merril, a Law professor at Columbia University and expert on the Chevron deference, comments that, at the very least, the repeal is unlikely to affect past statutes and rulings, meaning regulations and policies already on the books will not be actively rolled back.[7] Whether that stays true and whether future policies and actions by governmental agencies won’t be restricted are two different matters. The repeal of the Chevron deference will likely lead to greater judicial scrutiny of agency actions, impacting the efficiency of rulemaking and regulatory decisions across a wide range of sectors—the most prominent of which is environmental regulation. As courts now exercise independent judgment in reviewing agency interpretations, the speed at which emergency legislation can be signed will now also likely be affected by the political tilt of the presiding court, whatever that may be. What cannot be denied is that the repeal of this deference creates significant problems for the workings of many of the Executive Branch’s most important agencies, which will now have to operate under tighter judicial lines. How this is navigated and what effect it will have remains to be seen.
Edited by Sherman Criner
Endnotes:
[1] “FDR’s ‘Court-Packing’ Plan | Federal Judicial Center.” Federal Judicial Center. Accessed October 23, 2024. https://www.fjc.gov/history/timeline/fdrs-court-packing-plan.
[2] “Skidmore v. Swift & Co.” Ballotpedia. Accessed October 23, 2024. https://ballotpedia.org/Skidmore_v._Swift_%26_Co.
[3] David Kemp. “Chevron Deference: Your Guide to Understanding Two of Today’s SCOTUS Decisions.” Justia Law Blog. May 21, 2012. https://lawblog.justia.com/2012/05/21/chevron-deference-your-guide-to-understanding-two-of-todays-scotus-decisions/.
[4] Benjamin M. Barczewski. “Chevron Deference: A Primer (R44954).” Congressional Research Service, 2023.
[5] “Chevron Step Two's Domain.” Notre Dame Law Review, accessed October 1, 2024.
[6] Christina Pazzanese. “Scholar Explains Implications of SCOTUS Revisiting ‘Chevron Deference.’” Harvard Gazette. January 16, 2024. https://news.harvard.edu/gazette/story/2024/01/chevron-deference-faces-existential-test/.
[7] Philip Hamburger. “Professor Thomas W. Merrill on the Future of the Chevron Doctrine.” Columbia Law School News, January 11, 2024. Accessed October 23, 2024. https://www.law.columbia.edu/news/archive/professor-thomas-w-merrill-future-chevron-doctrine.