CASE PREVIEW

Supreme Court to hear major case on power of federal agencies

The Supreme Court will hear oral argument on Wednesday in a case involving the deference that courts should give to federal agencies’ interpretations of the laws that they administer. From health care to finance to environmental pollutants, administrative agencies use highly trained experts to interpret and carry out federal laws. Although the case may sound technical, it is one of the most closely watched cases of the court’s current term, which is filled with blockbuster cases involving abortion, gun rights, and whether a former president is eligible to appear on the ballot. The stakes in the case are high: The challengers argue that the current deferential standard is unconstitutional, while the Biden administration contends that overturning the existing doctrine would be a “convulsive shock to the legal system.” 

The doctrine at the center of the case is known as the Chevron doctrine. It is named after the Supreme Court’s 1984 opinion in Chevron v. Natural Resources Defense Council, upholding a regulation issued by the Environmental Protection Agency. Justice John Paul Stevens set out a two-part test for courts to review an agency’s interpretation of a statute it administers. The court must first determine whether Congress has directly addressed the question at the center of the case. If it has not, the court must uphold the agency’s interpretation of the statute as long as it is reasonable.

In an article published in 2014, law professor Thomas Merrill suggested that the Chevron decision was not regarded as a particularly consequential one when it was issued. But in the decades since then, it became one of the most significant rulings on federal administrative law, cited by federal courts more than 18,000 times.

At the same time, Chevron has been a target for conservatives, who contend that courts – rather than federal agencies – should say what the law means. In recent years, some justices have urged their colleagues to revisit the doctrine, and the court itself has not cited Chevron since 2016. But the Supreme Court had repeatedly turned down petitions asking them to reconsider the Chevron doctrine – until last year, when it agreed to take up a case brought by a group of family-owned companies that fish for Atlantic herring.

The federal law at the center of the fishing companies’ challenge, the Magnuson-Stevens Act, gives the Secretary of Commerce and the National Marine Fisheries Service the power to “implement a comprehensive fishery management program.” The law also requires that fishery-management plans “may require that one or more observers be carried on board a vessel … , for the purpose of collecting data necessary for the conservation and management of the fishery.” Pursuant to this law, the NMFS issued a rule that requires the fishing industry to pay for the costs, estimated at $710 per day, associated with these observers.

The agency halted the monitoring last year due to a lack of funding and reimbursed fishermen for the costs of observers while the program was in effect.

The fishing companies, led by Loper Bright Enterprises, went to federal court in Washington in 2020 to challenge the NMFS rule, arguing that it was not authorized by the Magnuson-Stevens Act. Relying on Chevron, the district court rejected that argument, holding that the act clearly authorized industry-funded observers in the herring industry.

The U.S. Court of Appeals for the District of Columbia Circuit upheld that result, but on a different rationale. It too applied Chevron, but it concluded that the statute was silent on the question whether the law allows NMFS to require fishermen to pay for the costs of observers. But the NMFS’s interpretation of the law as obligating the industry, rather than the government, to bear the costs is a reasonable interpretation under the second step of Chevron, the court of appeals ruled.   

Loper-Bright came to the Supreme Court in November 2022, asking justices to review the D.C. Circuit’s decision and overrule Chevron. The justices agreed to take up the fishing companies’ case in early May 2023, but with a caveat: Justice Ketanji Brown Jackson recused herself from the case, presumably because she heard oral argument in the case while she was still a judge on the D.C. Circuit. Apparently because of Jackson’s recusal, the court added Relentless, Inc. v. Department of Commerce, a second challenge to the NMFS rule, to its docket in October 2023 and fast-tracked the case so that it could be argued on the same day as Loper Bright.

In the Supreme Court, the fisheries are represented by former U.S. Solicitor General Paul Clement, as well as lawyers from the New Jersey public-interest firm Cause of Action. The New York Times reported on Tuesday that the lawyers from Cause of Action, who are representing the fishing companies at no cost to them, in fact work for Americans for Prosperity, a group funded by longtime anti-regulation advocate and billionaire Charles Koch.  

Arguing that the D.C. Circuit’s decision upholding the NMFS rule “exemplifies all that is wrong with Chevron,” Loper Bright urges the court to “either abandon Chevron for good or at least substantially cabin its scope.”

Relentless also attacks the doctrine, arguing that it rests on a “fictional presumption that Congress deliberately delegated the power to interpret ambiguous statutes.” But one of the primary justifications for that presumption – the idea that federal agencies have unique scientific and technical expertise – does not justify deference to an agency’s interpretation of an ambiguous law, Relentless maintains. The Chevron doctrine does not limit deference to situations in which agency actually has expertise, and in any event courts can still consider an agency’s expert views even if they are not required to defer to them. 

Loper Bright insists that the justices can overrule the Chevron doctrine without having to consider principles of stare decisis – the idea that a court should not overrule its earlier decisions unless there is a very good reason to do so. In Chevron, Loper Bright explained, the Supreme Court weighed in on the definition of a specific term in the Clean Air Act. Although stare decisis analysis may apply to that holding, it does not apply to the interpretative methodology outlined in Chevron.

But even if the court were bound by stare decisis, both Loper Bright and Relentless contend, Chevron should still be overturned. The decision is “egregiously wrong” – one of the factors that courts consider in determining whether stare decisis applies – because it gives the power delegated by the Constitution to the courts and to Congress to federal agencies, they say.

By instructing courts to defer to agency interpretations of ambiguous statutes as long as those interpretations are reasonable, Relentless tells the justices, the Chevron doctrine conflicts with the duty of judges under the Constitution to “apply their own independent judgment” – based on factors such as the text, history, and purpose of the law at issue, as well as the prior cases applying it – to determine what the best interpretation of the law is.

Chevron is also inconsistent with the plain text of the federal law governing administrative agencies, the fishing companies observe, “which makes clear that courts, not agencies, are supposed to interpret statutes.” 

Turning to another factor in determining whether stare decisis applies, Loper Bright contends that the Chevron doctrine is “unworkable” – as shown by the fact that even the Supreme Court no longer applies it. This case, Loper Bright asserts, shows how difficult it is for courts to apply the test and reach consistent results: The district court believed that the statute was clear in the government’s favor, the majority on the court of appeals believed that it was ambiguous and interpreted it in the government’s favor, and the dissenting judge on the court of appeals believed that it was clear in the fishermen’s favor.

There has been no reliance on Chevron that would justify keeping the doctrine in place. To the contrary, Loper Bright writes, Chevron makes it harder for anyone subject to federal regulations to rely on an agency’s interpretation of those rules, because Chevron allows agencies to change their interpretations when there is a new administration.

Indeed, Relentless adds, because the Chevron doctrine is intended to promote the predictable and stable development of the law, it is inconsistent with the purpose of stare decisis, because it “lets agencies change their minds about what statutes mean and requires courts to flip-flop along with them.”

But at the very least, both Loper Bright and Relentless argue, even if the court does not overrule Chevron, it should hold that a federal law cannot be ambiguous (and Chevron deference would not apply) when it doesn’t address the topic at the center of the rule at all. That is particularly true, the fishing companies say, in a case like this one, when the law is silent about the specific power that the agency claims but Congress expressly conferred that power elsewhere in the statute.

Here, the fishing companies explain, Congress did give the NMFS the power to require the fishing industry to bear the costs of observers in “three narrow circumstances” that do not apply here, and it limited the amount that fishing companies could be required to pay in those circumstances. Those specific grants of power, the fishing companies posit, mean that those are the only situations in which industry-funded observers can be required.

Both Loper Bright and Relentless urge the justices to go ahead and strike down the NMFS rule. When Congress wanted the fishing industry to bear the costs of observers, it made that clear elsewhere in the rule, they say, but nothing in the law provides a basis for the rule. What’s more, Relentless adds, the observers are effectively federal officials, serving as the government’s “eyes and ears on the water” – and the government should pay for them.

The Biden administration urges the court to leave the Chevron doctrine in place, calling it a “bedrock principle of administrative law” that “only comes into play when a court determines that Congress has not itself clearly answered an interpretive question.” When that is the case, the Biden administration says, “it is entirely sensible to presume that Congress intended” courts to give effect to its delegation of power to the agency charged with administering the federal law at issue, as long as the agency’s interpretation of the law is reasonable.

Defending the doctrine, the Biden administration extols its benefits. Not only does the Chevron doctrine acknowledge the subject-matter expertise of federal agencies, it writes, but deferring to an agency’s reasonable interpretation of the law allows the agency’s interpretation to apply throughout the country, avoiding the inconsistent interpretations that might result from “piecemeal litigation of the issue.” Moreover, the administration continues, if an agency’s interpretation is politically unpopular, that agency is part of the executive branch and therefore – unlike federal judges with lifetime tenure – is “politically accountable to the American people through the President.”

The Biden administration pushes back against the fishing companies’ suggestion that stare decisis does apply to the Chevron doctrine at all because it is simply an interpretative methodology, rather than the holding of a case. The court made clear just four years ago, when it rejected a challenge to the principle that courts should defer to an agency’s reasonable interpretation of its ambiguous regulations, that stare decisis does apply to cases like these. Indeed, the administration observes, if the Chevron doctrine were merely a “methodology,” then the lower courts would not have been required to follow the Chevron doctrine all these years. In fact, the Biden administration continues, the challengers have a “particularly high” burden to meet before the Chevron doctrine can be overruled, because Congress could change or overrule the Chevron framework but has not done so in nearly 40 years – despite several proposals to do so.

When applied to this dispute, the Biden administration argues, stare decisis principles weigh in favor of leaving the Chevron doctrine in place. The doctrine cannot be “egregiously wrong,” the administration contends, when the Supreme Court has invoked it to uphold an agency’s interpretation at least 70 times, in opinions by justices of all ideological stripes.

The doctrine is also workable, the administration maintains. Courts have applied it thousands of times, and it provides a “clear and administrable approach to resolving disputes about agency statutory interpretations.” Even if – as in this case – judges do not always agree on whether a law is clear, the administration concedes, that can be true “under any interpretative framework.” But if judges interpret federal laws without any presumption of agency deference, the administration tells the justices, the results will be even more inconsistent.

In the decades since the court’s decision in Chevron, the administration stresses, both the government and the public have relied heavily on the Chevron doctrine, operating on the assumption that Congress passes laws, agencies issue regulations, and courts will review disputes about those regulations with the doctrine in mind. Overruling Chevron now could upend not only an agency’s interpretation of a federal law, the administration writes, but also agency programs and regulations that flow from that interpretation.

And there is no reason to cause such a massive upheaval, the administration asserts, because there is no conflict between the Chevron doctrine and the Constitution’s allocation of power among the three branches of government. Even under the Chevron doctrine, the administration writes, courts are still interpreting the law: They must determine whether Congress has addressed the issue at the center of the dispute and, if not, whether the agency’s interpretation “falls within the zone that Congress has left open for the exercise of judgment and discretion.”

Chevron deference also gives effect to Congress’s decision to give the agency the power to implement a statute, the administration continues. Overruling the Chevron doctrine, the administration suggests, would give judges the power to make these kinds of policy decisions instead when the statute is not clear.

There is also no need to “clarify” Chevron as the fishing companies suggest, the government contends. The fishing companies have not offered any “workable line” for courts to use to determine whether a statute is silent or ambiguous on a particular question, such as the source of the inspectors’ salaries. In some cases, such as this one, the government notes, whether the statute is silent on the core question is very much a contested issue: The government contends that it is not, while the challengers counter that it is.

In the end, the government concludes, this case boils down to an “unremarkable application” of the Supreme Court’s “settled precedent.” But if the Supreme Court does adopt a new approach, the Biden administration says, the justices should send the case back for the court of appeals to apply that new approach, particularly when the court specifically declined to take up the fishing companies’ challenge to the regulation itself.

Reflecting the potential significance of the court’s ruling, the two cases drew over six dozen “friend of the court” briefs, several of which focused on the broader implications of the court’s decision. Two briefs supporting the fishing companies – one filed by the Goldwater Institute and another by a group of 27 states, led by West Virginia – pointed to the experience of the states, several of which have either abandoned their own versions of Chevron deference or declined to adopt one in the first place. There is no evidence that the absence of Chevron deference has caused any problems for the states, the Goldwater Institute writes.

On the other side of the dispute, briefs supporting the Biden administration warn that doing away with Chevron deference could have serious implications. Four Democratic senators caution that Congress doesn’t have the time or the ability to respond as quickly and nimbly as federal agencies and, if Chevron is overturned, the country will face particular difficulty in responding to “emerging environmental dangers and evolving remedial processes.” Indeed, they note, during the first nine months of 2023, Congress passed only 30 bills, “only thirteen of which have been signed into law.”  

A brief filed by a group of public health and medical associations led by the American Cancer Society tells the justices that overruling Chevron would have a significant impact on the administration of public health programs such as Medicare, Medicaid, and the Children’s Health Insurance Program. Echoing the senators’ brief, the group maintains that it would essentially be impossible for Congress to “draft (and continuously update) the Medicare and Medicaid statutes with the speed, technical granularity, and prescience needed to anticipate and plug every conceivable statutory hole that might be revealed as the programs are implemented.”

A decision in the case is expected by summer.

This article was originally published at Howe on the Court.