The “Chevron deference” could be at risk after oral arguments in two cases on administrative law.
01/19/2024 10:30 A.M.
4 minute read
The U.S. Supreme Court heard oral arguments in two cases on Jan. 17 that could overturn a decision centered on federal agency use of statutes.
The decision in the cases could overturn Chevron, U.S.A., Inc. v. NRDC, 467 U.S. 837 (1984). 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.
The cases before the court are Loper Bright Enterprises., Inc. v. Raimondo and Relentless, Inc., v. Department of Commerce.
“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 partner Leah Dempsey. “Repudiating such a landmark precedent would encourage more challenges to agency interpretations of statutes even in situations where courts have previously upheld agency positions.”
Conservative justices on the Supreme Court shared indications they would favor overturning Chevron, although Chief Justice John Roberts and Justice Amy Coney Barret did have some reservations.
“Roberts argued that the effect of overturning Chevron would be minimal, noting that the Supreme Court has not relied on the doctrine for many years,” according to Brownstein Hyatt Farber Schreck’s summary of the oral arguments. “Justice Barrett wondered if overturning Chevron would invite a flood of litigation, a notion that the government and some of the liberal justices tried to press.”
On the other side, the court’s three liberal‐leaning justices agreed that Chevron should remain in place, “allowing federal agencies to fill in gaps and define statutory terms when Congress has given agencies the power to make policy decisions,” Brownstein reports.
Turning to arguments from the petitioners and the government, both sides signaled major consequences of overturning Chevron and keeping it intact.
Reversing Chevron would be “an unwarranted shock to the legal system,” said Solicitor General Elizabeth Prelogar.
The petitioners’ counsel, Paul Clement and Roman Martinez, said that “Chevron undermines the role of the judiciary and inappropriately delegates important policy decisions to unelected bureaucrats.”
They shared possible outcomes if Chevron went away.
Prelogar said reversing the precedent in Chevron would create a platform for lawsuits challenging other rules, adding that it provides certainty to federal agencies and regulated entities that their rulemakings are upheld so long as they are reasonable.
Clement and Martinez countered that the precedent under Chevron gives too much freedom to federal agencies to interpret statutes and does not align with federal law administrative agencies must follow.
A decision is not expected for several months, but Brownstein reports Justices Clarence Thomas, Samuel Alito, Neil Gorsuch and Brett Kavanaugh indicated they favor reversing Chevron.
In particular, Gorsuch said that the Chevron precedent allows government agencies to win.
“The cases I saw routinely on the courts of appeals—and I think this is what niggles at so many of the lower court judges—are the immigrant, the veteran seeking his benefits, the social security disability applicant, who have no power to influence agencies, who will never capture them, and whose interests are not the sorts of things on which people vote, generally speaking,” Gorsuch said. “And there Chevron is almost always, and in fact I didn’t see a case cited and perhaps I missed one, where Chevron wound up benefiting those kinds of peoples. And it seems to me that it’s arguable—and certainly the other side makes this argument powerfully—that Chevron has this disparate impact on different classes of persons.”
Justice Kavanaugh said Chevron “ushers in shocks to the system every four or eight years when a new administration comes in, whether it’s communications law or securities law or competition law or environmental law.”
The Supreme Court’s decision alone to hear the Relentless and Loper cases indicates an evolving landscape for agencies, Congress and the federal courts, according to Brownstein.
If Chevron is overturned, federal agencies may find it more challenging to enact and defend regulations that fall outside of their statutory authority.
“Agencies that press the limit of their statutory authority and invite frequent legal challenges, such as the Consumer Financial Protection Bureau (CFPB), are the agencies most likely to be acutely impacted by the decision,” Brownstein reports. “Rulemaking such as the CFPB’s recent overdraft fee proposal, credit card late fees proposal and small business lending rule among others, could face increased legal scrutiny.”
A decision is not expected for several months, but based on the justices’ statements, Chevron could face some challenges.
Remember, subscribe to ACA Daily and Member Alerts under your My ACA profile when logged in to acainternational.org to receive updates on the ACA Huddle.