Loper Bright Enterprises v. Raimondo, an upcoming case that will be heard by the U.S. Supreme Court (SCOTUS) this fall, is being closely watched because its decision is expected to determine whether the Chevron defense will reach its 40th birthday in 2024 or whether the precedent will fade away.

The Chevron defense sets a legal framework for courts to defer to reasonable agency interpretations of ambiguous statutes. While the defense may be on the ropes, it won’t go quietly. More than 15 amicus curiae, “friend of the court,” briefs have been filed in the case as environmentalists, scientists, a labor federation, small businesses, and health groups urge SCOTUS not to strike down the Chevron defense.

Chevron defense background

In 1984, in Chevron U.S.A. Inc. v. Natural Resources Defense Council Inc., SCOTUS developed a two-step analysis that became known as the Chevron defense. The first step requires courts to decide if Congress clearly expressed its intent in the related statute. If Congress’s intent is clear, agencies must follow Congressional expressed intent. If the statute is ambiguous, “then the court must determine whether the agency interpretation is based on a permissible statutory construction that is not arbitrary, capricious, or clearly contrary to the statute,” according to a Bloomberg Law article by Jason S. Lichtstein and Michael J. Larson of Akerman LLP.

Chevron’s second analysis step requires courts to determine if the Congressional decision to leave the statute as ambiguous was done with explicit or implicit intent.

“If the decision to leave ambiguity was explicit, then the agency’s regulations are binding unless they are arbitrary, capricious, or manifestly contrary to the statute.  If the decision was implicit, the court cannot substitute [its] own statutory construction so long as the agency’s interpretation is reasonable,” the Akerman article adds. “‘In addition to [Justice Neil] Gorsuch, [Justice Brett] Kavanaugh has expressed skepticism toward Chevron as well. In a 2016 Harvard Law Review article, he noted Chevron ‘has no basis in the [APA]’ and ‘[i]n many ways, Chevron is nothing more than a judicially orchestrated shift of power from Congress to the Executive Branch.’ Justice Clarence Thomas also cast doubt on Chevron in his Michigan v. EPA concurrence.”

Auer doctrine

A 1997 SCOTUS ruling in Auer v. Robbins held that federal agencies are entitled to deference in interpreting their own rules when those rules are ambiguous.  Known as the Auer doctrine, this case also set legal precedent for dealing with ambiguity.

“Most recently, in 2019, the court in Kisor v. Wilkie reaffirmed Auer, explaining that ‘Auer deference retains an important role in construing agency regulations,’ while noting its limits,”  the Ackerman article continues. “The court explained that there must be genuine ambiguity; the court must have exhausted all of its traditional tools of construction before providing deference; and the agency rule must be reasonable.

“[At that time], [f]our justices indicated that they would have overturned Auer, including [Justice] Kavanaugh. In a concurring opinion, Justice Neil Gorsuch argued at length why Auer should be rejected. As a preview for Chevron challenges, Gorsuch also noted that there are ‘serious questions’ whether Chevron is constitutional and comports with the federal Administrative Procedure Act (APA).”

Major questions doctrine

In both West Virgina v. EPA and, more recently, in Sackett v. EPA, SCOTUS has relied on the “major questions” doctrine, which requires agencies to point to “clear congressional authority” for any authority they claim. In those cases, the Court basically told the EPA that where there’s ambiguity in statutes’ wording, courts should strike down Agency interpretations until Congress passes statutes that are clear.

The current SCOTUS temperament appears to be focused on relying on the major questions doctrine rather than a willingness to apply the Chevron test.

Loper Bright Enterprises v. Raimondo background

“The case, Loper Bright Enterprises v. Raimondo, involves a rulemaking by the National Marine Fisheries Service (NMFS) that requires commercial fishing boats to carry enforcement agents from the NMFS whose job is to police and prevent over-fishing, forcing the fishermen to pay the costs of the agents, including their travel expenses and salaries,” Forbes reported.

“The plaintiff in the case is asking the Court to rule against the NMFS’s ability to regulate in such an apparently abusive manner, effectively rejecting the Chevron deference. This is a matter of great concern to advocates of the Green New Deal and the Biden regulatory agenda that seeks to incorporate many of its elements, given that so many aspects of that agenda require aggressive interpretations of environmental statutes like the Clean Water Act (CWA), Clean Air Act (CAA) and National Environmental Policy Act by the EPA and other federal regulatory agencies.”

However, Chevron is a two-part test. The second part says the Agency action must not be “arbitrary” or “capricious,” which is certainly the case with the NMFS’s action.

Direct challenge to Chevron

“In granting certiorari in Loper, [SCOTUS] made clear that it intends to use the case to consider the viability of Chevron,” Brownstein Hyatt Farber Schreck, LLP, says. “The statute does not require the fishing boat operators to pay the costs for the observer, so this is a case where the agency is passing the cost of regulation onto the regulated entity in the absence of explicit statutory authority. The court granted certiorari to decide ‘Whether the Court should overrule Chevron or at least clarify that statutory silence concerning controversial powers expressly but narrowly granted elsewhere in the statute does not constitute an ambiguity requiring deference to the agency.’”

Justices’ previous Chevron positions

Several current SCOTUS justices have written negative opinions about the Chevron defense:

• Thomas wrote that Chevron rests on the “fiction that ambiguity in a statutory term is best construed as an implicit delegation of power to an administrative agency to determine the bounds of the law” (Cuozzo Speed Techs., LLC v. Lee, 579 U.S. 261, 286 (2016) (Thomas, J., concurring)).
• Kavanaugh critically wrote that Chevron encourages administrative agencies to aggressively pursue policy goals unless “clearly forbidden” by statute (Brett Kavanaugh, Fixing Statutory Interpretation, 129 Harv. L. Rev. 2118, 2150 (2016)).
• In a dissenting opinion in Buffington v. McDonough, 143 S. Ct. 14, 18–19 (2022), Gorsuch opined that pursuant to the framework imposed by Chevron, “[r]ather than provide individuals with the best understanding of their rights and duties under law a neutral magistrate can muster, we outsource our interpretive responsibilities. Rather than say what the law is, we tell those who come before us to go ask a bureaucrat.”

Chevron doctrine

The American government was designed with separation of powers, whereby Congress writes the laws, the executive branch enforces them, and SCOTUS interprets the meaning of the laws as written and decides if they’re being correctly enforced.

“Because Congress is not equipped to micromanage the day-to-day administration of the legislation that it passes, it must rely on federal agencies—under the supervision of the president—to carry out laws and policies according to their best good-faith interpretations. Likewise, federal judges have a role in determining the meaning of Congress’s laws [to] settle disputes. But the act of policymaking has always belonged to the two elected branches,” according to a National Resources Defense Council (NRDC) article. “In its next term, however, [SCOTUS] could seize for itself and lower court judges a policymaking role the Constitution did not intend for them to have. If it does, the court could strip many federal agencies tasked with protecting public health, public safety, and the environment—including the [EPA] and the U.S. Food & Drug Administration, to name just two—of their power to interpret the laws they carry out.  Instead, federal judges would now call the shots.”

“What it comes down to is this: If Congress has left an agency with a policy choice, the agency should get to make it, not the courts,” said David Doniger, senior strategic director for the NRDC's Climate & Clean Energy Program and the person who argued the Chevron case on the NRDC’s behalf.

In the time when Chevron was decided, there was a widely held perception that lower federal court justices were using interpretation of laws to effectively determine policy.

“So, [SCOTUS] was basically saying to the lower courts: Stop inserting your own policy preferences under the guise of interpreting the law,” Doniger added.

“That order, in and of itself, is apolitical,” the NRDC says. “The Chevron sword cuts both ways. In administrations that are seeking to relax protections (such as Reagan’s EPA in the Chevron case itself), agency heads won’t like having their decisions overruled by judges with a different way of seeing things. For presidential administrations that prioritize climate action, curbing pollution, and promoting environmental justice, Chevron deference has helped allow environmental progress. John Walke, director of NRDC’s Climate & Clean Energy program, has argued many cases in federal court where Chevron deference has come into play, and he thinks combatants on both sides of the political divide should bemoan the possibility of its erasure. ‘Regulatory agencies can be harmed, but deregulatory agencies can be harmed as well,’ Walke says.”

The Environmental Defense Fund (EDF) amicus curiae brief filed in support of retaining the Chevron defense notes the “irony that a neutral rule of judicial restraint … has morphed into the ultimate quarry of a campaign to effect a judicially driven downgrading of the role of administrative agencies.

“Like any shrewd campaigners, petitioners and their supporters seek to ‘drive up the negatives’ by misstating what Chevron instructs. For instance, this Court’s decision in no way established that ‘[i]f the statute is silent, the government wins.’ In fact, Chevron only authorizes agencies to interpret statutes in a manner consistent with how a court, applying all the ‘traditional tools of statutory construction,’ would construe it, and even then, conditions acceptance on the court’s determination that the agency’s reading is reasonable.”

“The Court should avoid being drawn in by shrill attacks on regulatory programs that members of petitioners’ coalition have long opposed for their own reasons,” the EDF brief continues. “It should avoid debates imported from arguments conducted, along nakedly partisan lines, in the political arena over whether there is ‘too much’ federal regulation. The Court should instead reaffirm that, however one regards the wisdom of administrative agencies’ actions, choices about how to implement federal legislative policy—including the identity of the implementing body; the constraints under which that body must operate; and standards for judicial review, if any, of its decisions—are matters for Congress. … Congress has, in fact, proven fully capable of enacting deregulatory laws when it so chooses.”

What happens if SCOTUS axes Chevron?

Chevron is a landmark case that set the standard for administrative law.  Narrowing or eliminating this precedent would result in even more challenges to Agency interpretations of statutes.

As summarized in the Brownstein article, additional implications in narrowing or eliminating the Chevron defense include:

• Agencies will likely encounter more difficulty in creating and defending regulations that go beyond explicit statutory authority.
• It’s unlikely that new administrations will alter interpretations of governing statutes, except to the extent they can argue that previous interpretations based on the Chevron defense should be altered in favor of interpretations that align more closely with statutory text.
• Agencies are predicted to increase in the influence of the general counsel’s office over policy offices when it comes to developing regulatory programs, as agencies anticipate judicial review of their interpretations based on legal rules of statutory interpretation that will be most convincing to judges.
• Congress will face more pressure to clearly articulate agency authority and delegate fewer details to administrative agencies.
• Courts may see an increase in their dockets, as potential parties anticipate a greater chance of success from litigation challenging agency statutory interpretations.
• Judges may face increased scrutiny of their decisions and pressure to justify their construction of statutes as impartial interpretations of legislation rather than based on their own policy preferences.

As a result of uncertainty over the future of Chevron, agencies are focusing on formulating and defending their interpretations of statutory language rather than counting on future judicial deference, according to the Brownstein article.

“In a post-Chevron world, agencies will have to defend interpretations as a persuasive interpretation of a statute, rather than just a permissible construction of ambiguous language or appropriate agency action in the face of congressional silence,” the Bronstein article adds. “We expect the decision in Loper to constrain agencies and place more pressure on Congress and the courts.”

SCOTUS will hear the case this fall and deliver its decision in 2024.