The case could overturn or narrow a long-time standard for agencies to interpret statutes when enforcing rules and could have implications for challenges to agencies and future regulatory programs.
10/11/2023 1:45 P.M.
3 minute read
The U.S. Supreme Court is slated to consider a case on government agency interpretation of statutes, known as the Chevron doctrine, to enact regulations.
“Chevron has been in place for almost 40 years and has been a linchpin of administrative law—governing how agencies promulgate rules and how courts review agency actions,” according to an article from Brownstein Hyatt Farber Schreck LLP including shareholder Leah Dempsey, who is ACA International’s lobbyist. “Repudiating such a landmark precedent would encourage more challenges to agency interpretations of statutes even in situations where courts have previously upheld agency positions.”
The case, Loper Bright Enterprises Inc. v. Raimondo, involves an appeal of a D.C. circuit court decision that upheld, under the Chevron doctrine, a National Marine Fisheries Service regulation mandating herring fishing boats to allow a federal observer to oversee their work on board and for the fishing company to compensate the observer for their time, according to the Brownstein article.
Compensation is not required by statute; therefore, the fisheries service agency interpreted it that way to require the fishing company to pay.
Of importance to the accounts receivable management industry, in agreeing to consider the Loper case, the court could overturn the Chevron doctrine, or narrow its scope.
“Under Chevron, a court defers to agency interpretations of ambiguous statutes, as long as the judge finds the interpretation to be reasonable. If the court limits or upends the Chevron doctrine, the ruling would pull back the leeway that agencies have had in interpreting statutes,” according to the article from Brownstein.
The standard has been in place since 1984, when the Supreme Court upheld the Environmental Protection Agency’s interpretation of the Clean Air Act in Chevron, U.S.A., Inc. v. NRDC.
Under the Chevron doctrine, courts are instructed to conduct a two-part analysis, according to Brownstein:
- “First, a court must determine whether Congress has directly spoken to the precise question at issue. Chevrondeference is only at play if Congress has granted the agency authority to act, and there is ambiguity in the relevant statute.
- Second, if the court finds ambiguity in the applicable statute, the agency interpretation receives deference as long as the actions are based on a ‘permissible construction’ of the statute.”
An article from NPR notes the Chevron doctrine applies more broadly than in the Loper case.
“Judges are busy people, especially federal judges, who are hearing these challenges. They are busy, busy people, and the doctrine allows them to focus on one aspect of the rulemaking, whether it’s reasonable,” Andrew Mergen, who directs the Emmett Environmental Law and Policy Clinic at Harvard Law School, said in the article. “And if you get rid of the doctrine, then you’re asking them to sort of start from first principles in terms of, like, mastering the expertise. And I think the result of losing the Chevron doctrine will be to bog courts down and create instability.”
If the doctrine is reversed, Dempsey told Marketplace the “consequences could be far reaching.”
“There will probably be a lot more legal challenges to agency actions, knowing that they don’t necessarily have the Chevron doctrine to fall back on,” she said in the article, adding that “Congress would have to be more intentional in the way it writes laws.”
ACA will continue to follow this case, which is important for any entity subject to federal regulation, according to Brownstein. Oral arguments have not been set.
“The extent to which the court uses this case to eliminate or cabin Chevron deference will undoubtedly affect future challenges to agency statutory interpretation and the development and implementation of future regulatory programs,” Brownstein reports.
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