Make a Payment Register Now
Facebook Twitter Linkedin

Your Leading Experts on Congress

Delegation and Deference in the Administrative State: The Fate of Chevron Deference

GAI | June 24, 2024

By Professor Mark Richardson, Georgetown University

The Supreme Court is expected to hand down rulings on a number of major cases during the last week in June. The past few years have brought major decisions reshaping jurisprudence and law – including those that overturn long standing precedents – and this year is expected to be no different.  While questions of presidential immunity rightly garner public attention, the more far-reaching ruling for the executive branch will be on the Chevron Doctrine – a 1984 Supreme Court ruling that resulted in courts largely deferring to agencies’ interpretation of statutes under their purview over the past 40 years.  Understanding the importance of the forthcoming Chevron ruling means understanding four things: (1) why Congress needs to delegate some authority to write regulations to federal agencies, (2) the Chevron test for when courts should defer to agencies’ statutory interpretations, (3) what the recent court challenge to Chevron is, and (4) the range of rulings (and consequences) we are likely to see. What hangs in the balance is agencies’ ability to apply their expertise to interpret their own statutory authority and choose how best to pursue their mandates from Congress. In short, who should decide what Congress intended for an agency to do: the agency or the courts?

Why Congress Delegates

Congress often delegates authority to federal agencies to implement laws to accomplish public goals from issuing Social Security checks to maintaining national security to protecting the environment. Ask most any political scientist why Congress delegates and among the reasons offered will be the expertise possessed by civil servants working in federal agencies. Members of Congress and their staff cannot become experts in every policy area and, even if they could, lawmaking is time consuming and laws are static. Therefore, Congress can delegate authority for, say, regulating an industry to a federal agency. The agency will then develop expertise and issue regulations governing the industry per its authorizing statute. The agency can react more quickly than Congress and adjust regulations more easily than Congress can rewrite laws. According to this argument, it’s more efficient and effective for Congress to empower an agency like the Environmental Protection Agency to regulate pollutants in the air and water than try to write a law that identifies all pollutants and sets safe levels of these pollutants in our environment.

Inherent in this story is Congress’s inability to account for every eventuality in law. It follows that as an agency works to implement the statutes under its purview the agency will encounter ambiguous language or situations on which the statute is silent. In such cases, who is to interpret the law? The answer, according to the Supreme Court in Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., is the agency, so long as the agency’s interpretation is reasonable. In Chevron, the Court stated, “Judges are not experts in the field, and are not part of either political branch of the Government.” Congress expressly delegated authority to an agency and that agency is accountable to the public via the President; therefore, “it is entirely appropriate for this political branch of the Government to make such policy choices – resolving the competing interests which Congress itself either inadvertently did not resolve, or intentionally left to be resolved by the agency charged with the administration of the statute in light of everyday realities.” Chevron established a two-step test for determining whether a court should defer to an agency’s interpretation of statute, which has resulted in courts granting agencies broad deference when interpreting statutes over the past 40 years.

Chevron’s Two-Step Test

As agencies and disputes over their use of their statutory authority proliferated after the Great Depression, Congress passed the Administrative Procedure Act (APA) in 1946 to govern agency rulemaking. Section 706 of the APA establishes the scope of judicial review of agency use of statutory authority, stating:

So far as necessary to decision and where presented the reviewing court shall decide all relevant questions of law, interpret constitutional and statutory provisions, and determine meaning or applicability of the terms of agency action. It shall … hold unlawful and set aside agency action, findings, and conclusions found to be (1) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law; … (3) in excess of statutory jurisdiction, authority, or limitations, or short of statutory right; …

Item 3 in this clause requires courts to strike down agency actions that exceed their statutory authority and, nearly 40 years after the APA became law, Chevron established a two-step test for judicial review of agency interpretations of statue.1 In Step 1, the court determines whether Congressional intent is clear. If yes, the agency should follow the unambiguous intent of Congress. If Congressional intent is not clear (or the statute is silent), the court should proceed to then asking: Is the agency’s interpretation reasonable? This is Step 2. If yes, the court should uphold the agency’s interpretation. If not, the court should overturn it.

The “reasonableness” of an agency’s interpretation is usually understood to be conducted under caselaw developed to determine whether an agency’s decision was “arbitrary and capricious”2 per item 3 in the APA excerpt above. Because Step 2 tends to defer to the agency, most challenges to agencies’ interpretations of statue are won or lost at Step 1. In Chevron, the Court stated that “[t]he court need not conclude that the agency construction was the only one it permissibly could have adopted to uphold the construction, or even the reading the court would have reached if the question initially had arisen in a judicial proceeding.” According to Chevron’s critics, herein lies the crux of its error. Chevron claims the job of statutory interpretation for agencies when it rightfully belongs to courts.3 The Supreme Court heard oral arguments on January 17th, 2024, in a case – Loper Bright Enterprises v. Raimondo – that offers Justices a chance to affirm or overturn Chevron.

Loper Bright Enterprises v. Raimondo

The case in question involves the additional cost imposed on fishing companies by a federal agency’s regulation.  The National Marine Fisheries Service, a component of the National Oceanic and Atmospheric Administration in the Department of Commerce, manages fisheries to prevent overfishing.4 The Magnuson-Stevens Fishery Conservation and Management Act of 1976 gives the Secretary of Commerce and the NMS the authority to “implement a comprehensive fishery management program” and that the program “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.” The Service promulgated a rule under the Act that required commercial fishing companies to pay the costs of having a federal monitor on board, which were estimated to be about $710 per day. Loper Bright Enterprises led commercial fishers in challenging the rule in court claiming the Act did not give the NMFS the authority to promulgate the rule. The district court, applying Chevron, ruled in favor of the NMFS finding that the Act clearly authorized observers. The D.C. Court of Appeals, also applied Chevron and ruled in favor of the NMFS, but with different reasoning. Whereas the district court found that Congressional intent was clear, the appeals court found that the law was silent on who should pay for the observers. The appeals court then applied the second step and found that the NMFS interpretation was reasonable. The plaintiffs have asked the Supreme Court to not only strike down the rule but to overrule Chevron or clarify its application.

Three Possible Outcomes

The oral arguments for the Loper case identify three possible fates of Chevron: (1) Chevron is upheld, (2) Chevron is overruled, or (3) Chevron is limited, although only two and three seem likely given the makeup of the Court.5 U.S. Solicitor General Elizabeth Prelogar urged the Court to retain Chevron pointing to its importance in administrative law and the principle of stare decisis – a Latin phrase meaning “to stand by things decided” – under which existing prior decisions should be upheld unless they are “unworkable or are badly reasoned”.6 Justices Kagan, Sotomayor, and Brown argued for upholding Chevron. Justice Kagan noted that agencies’ scientific and technical expertise make them better arbiters of ambiguity in statutes than courts. Justice Sotomayor noted that the justices often disagree about a law’s meaning, suggesting there is no one correct interpretation. Therefore, the question is who should decide what an ambiguous statue means and, in such cases, why not defer to expert agencies? Lastly, Justice Jackson noted that Congress delegates the power to make policy to agencies, including the authority to fill in gaps and interpret terms. If Chevron is overturned and agencies no longer have this authority, then courts must make these policy decisions.

The fishing companies argued that Chevron should be overruled. Roman Martinez, arguing for one of the groups of fishing companies and like the critics referenced above, argued that Chevron undermines a court’s duty to interpret statutes and, moreover, it violates the Administrative Procedure Act also cited above. Justice Alito seemed to agree, noting that courts interpret law in cases that do not involve agencies, suggesting that a court doing its duty would never get to Step 2 requiring deference to the agency.

Rather than overruling Chevron completely, U.S. Solicitor General Elizabeth Prelogar suggested the justices could clarify when it applied. The justices took this approach in Kisor v. Wilkie when they upheld a doctrine, commonly called Auer or Seminole Rock deference, that instructs courts to defer to agencies’ interpretation of ambiguous language in their regulations (whereas Chevron deference applies to agencies’ interpretation of law).7

What the Biggest Shift on Chevron Could Mean

If Chevron is upheld then things will proceed as they have in the 40 years since Chevron was handed down. However, if Chevron is overturned, Prelogar warned that litigants could “come out of the woodwork” to challenge prior rulings that relied on Chevron.8 If the courts must now substitute their own statutory interpretation rather than deferring to “reasonable” agency judgement, then how will they decide?

A shift in responsibilities from agencies to courts would be a fundamental change in the relationship between Congress and agencies that undergirds the modern administrative state. A survey of Congressional staffers found that a majority (58%) consider Chevron deference when drafting statutes.9 A similar survey of civil servants responsible for writing rules found that nearly all respondents (90%) reported that Chevron “play[s] a role in [their] rule drafting decisions.”10 These results illustrate the fundamental role of Chevron deference. Congress considers it when drafting statutes that delegate to agencies and civil servants consider it when interpreting those statutes to write regulations that implement laws.

A change to Chevron could require a change to how Congress writes statute – specifically, Congress would have to write clearer, more precise statutes to prevent plaintiffs from suing and courts from stepping in to determine what Congress intended. When discussing Chevron, Rep. Derek Kilmer (D-Wash.) recently said, “Congress would need to adopt a more precise approach to legislation, making sure that laws are written with enough specificity to guide implementation without relying on agency interpretation.” “Not doing that would potentially mean ceding an extraordinary amount of power to the judiciary.”11

Rep. Kilmer’s comment begs the question: Can Congress be more precise? There are at least two interrelated reasons to be skeptical. First, recall that Congress delegates, in part, because it cannot account for every eventuality in law. It is simply not possible for Congress to foresee all changes in society that may require a government response. For example, suppose it’s 1999 and the 106th Congress is drafting a law delegating authority to an executive branch agency to regulate financial markets. Is it reasonable to expect Congress to foresee the invention of crypto currencies? If the answer is no, a possible response to this concern is that Congress can simply write a new law delegating authority to regulate crypto currency rather than granting an agency broad discretion back in 1999.

This response raises the second reason for skepticism: Scholars have sounded the alarm about Congress’s capacity to legislate in recent years, describing an atrophied institution suffering from decades of neglect.12 In sum, the Supreme Court may demand more precision from Congress to avoid courts from playing a major role in shaping Congress’s grants of regulatory authority. More precise statutory language will likely result in narrow grants of agency discretion which require more legislation from Congress to respond as society evolves and new public problems arise. It’s not clear Congress is up to the job. Therefore, overturning (or narrowing) Chevron could mean courts, not agencies, will largely determine Congress’s intent when it comes to agency statutory authority.

A Possible Smallest Shift: Chevron Deference by Another Name

Another view suggests that overturning Chevron may not lead to a fundamental change in the administrative state.  Keven M. Stack and Lisa Schultz Bressman recently argued “[w]hether or not the Supreme Court overrules Chevron, judicial deference to administrative agencies will persist in roughly the same form.”13 Their argument is as follows: Judicial deference to administrative agencies is a foundational principle of administrative law. Chevron was a unanimous decision that was unremarkable at the time, largely because the doctrine that a reviewing court must leave interpretive judgement to the agency appeared even before the APA became law in 1946. They point to two cases – Skidmore v. Swift & Co. decided in 1944 and Federal Communications Commission v. Pottsville Broadcasting Co. decided in 1940 – that established the following allocation of lawmaking authority: “when the agency had been delegated authority either to conduct adjudications or make rules, its determinations, even those involving interpretive judgments, were entitled to controlling weight.”14 After the enactment of the APA, the court continued to adhere to the principle that, if Congress delegated an agency responsibility for administration of a statute, the reviewing court’s role is narrow.

Stack and Bressman argue that this long line of precedent that led to Chevron explains why it was a unanimous decision that its author, Justice Stevens, long insisted was a continuation of law on judicial review of agency interpretations. However, the Chevron opinion does not connect its framework to the APA and its justifications – “congressional delegation and the relative institutional competence of courts and agencies” – seem to place it on a “standalone foundation” which led to a common (albeit incorrect) view that Chevron was a new approach.15

Overall, Stack and Bressman conclude that without Chevron the corpus of U.S. regulatory statutes will remain the law of the land and reviewing courts – as Justice Jackson argued – will then face the task of determining the best interpretation of statutes used in agency decision-making. These courts will then encounter the limits of their expertise as generalists and lawyers and seek a way out by developing a new form of judicial deference. Of course, the shape of this new form of deference will depend on the content of the majority opinion in the Loper case. Given the natural limits on the courts’ expertise and the potential deluge of statutory interpretations a doctrine of no agency deference would release on the lower courts, the Supreme Court may attempt to reunite agency deference to the judicial review provisions in Section 706 of the APA. In short, the Court may use Loper to clarify the meaning of the APA regarding deference to agency interpretation of statute just as they used State Farm16 to elaborate the meaning of “arbitrary and capricious.”

What a “Middle Ground” Might Look Like: Major Questions About Chevron

In oral arguments for Loper, Chief Justice Roberts suggested that overturning Chevron would have limited consequences because the Supreme Court has not relied on it for many years – although Prelogar noted that the lower courts continue to apply it.17 The Supreme Court has recently endorsed the Major Questions Doctrine, ruling in West Virginia v. Environmental Protection Agency that agencies must have a clear grant of authority rather than relying on interpretation of broad language in statutes when agency decisions are of “vast economic and political significance.” The Major Questions Doctrine then limits agency authority in these cases requiring Congress to “speak clearly” when it intends to delegate broad power to an agency. Lower courts have continued to apply Chevron when decisions are not of “vast economic and political significance” despite remarks by conservative Justices in recent years that suggest Chevron is no longer good law in their view.18 In his dissent from denial of certiorari in Buffington v. McDonough, Gorsuch wrote that Chevron “deserves a tombstone no one can miss.” Justices Alito and Thomas have similarly expressed hostility toward Chevron while Chief Justice Roberts has suggested it should be significantly narrowed.19

It seems likely then that a 6-3 conservative majority of Roberts, Thomas, Alito, Gorsuch, Kavanaugh, and Barret – the majority that decided West Virgina v. EPA – will form to shift responsibility for statutory interpretation from agencies to the courts in questions that do not rise to the high stakes necessary to apply the Major Questions Doctrine. The key questions will be what guidance the majority offers in place of Chevron, whether lower courts have the capacity to apply it, and whether Congress will be able to provide the clarity the Supreme Court now expects of it when delegating to agencies.

Footnotes

  1. The description of Chevron is adapted from Chapter 2 of Lubbers, Jeffrey S. 2012. A Guide to Federal Agency Rulemaking, Fifth Edition. American Bar Association https://www.amazon.com/Guide-Federal-Agency-Rulemaking/dp/1614385793   ↩︎
  2. The Supreme Court elaborated the meaning of “arbitrary and capricious” in Motor Vehicle Manufacturers Association of the United States, Inc. v. State Farm Mutual Automobile Insurance Company. https://www.oyez.org/cases/1982/82-354  ↩︎
  3. Bressman, Lisa Schultz and Kevin M. Stack. 2021. “Chevron is a Phoenix.” Vanderbilt Law Review. 74(2): 465-482. https://scholarship.law.vanderbilt.edu/cgi/viewcontent.cgi?article=2207&context=faculty-publications  ↩︎\
  4. The description of Loper Bright Enterprises v. Raimondo is adapted from Amy Howe, Supreme Court to hear major case on power of federal agencies, SCOTUSblog (Jan. 16, 2024, 3:30 PM), https://www.scotusblog.com/2024/01/supreme-court-to-hear-major-case-on-power-of-federal-agencies/↩︎
  5. The description of oral arguments is adapted from: Amy Howe, Supreme Court likely to discard Chevron, SCOTUSblog (Jan. 17, 2024, 6:58 PM), https://www.scotusblog.com/2024/01/supreme-court-likely-to-discard-chevron/
  6. See the entry for stare decisis in Wex, the Legal Information Institute’s legal encyclopedia and dictionary. The Court provided the “unworkable or badly reasoned” rationale of violating the principle is from Seminole Tribe of Florida v. Florida. URL: https://www.law.cornell.edu/wex/stare_decisis
  7. Sheffner, Daniel J. 2019. “Kisor v. Wilkie: Supreme Court Upholds the Auer Doctrine but Clarifies Its Limitations.” Congressional Research Service. URL: https://crsreports.congress.gov/product/pdf/LSB/LSB10322
  8. Amy Howe, Supreme Court likely to discard Chevron, SCOTUSblog (Jan. 17, 2024, 6:58 PM), https://www.scotusblog.com/2024/01/supreme-court-likely-to-discard-chevron/↩︎
  9. See Gluck, Abbe R. and Lisa Schultz Bressman. 2013. “Statutory Interpretation from the Inside – An Empirical Study of Congressional Drafting, Delegation, and the Canons, Part I.” Stanford Law Review. 65(1): 901-1026, p. 996. URL: https://www.stanfordlawreview.org/print/article/statutory-interpretation-from-the-inside-an-empirical-study-of-congressional-drafting-delegation-and-the-canons-part-i/ .The authors surveyed 137 staffers in 2011 and 2012 from across chambers and parties.
  10. Walker, Christopher J. “Inside Agency Statutory Interpretation.” Stanford Law Review. 67(5): 999-1079, p. 1061. URL: https://www.stanfordlawreview.org/print/article/inside-agency-statutory-interpretation/. Walker analyzed responses from 128 civil servants from seven executive departments (Agriculture, Commerce, Energy, Homeland Security, Health and Human Services, Housing and Urban Development, and Transportation) and two independent agencies (the Federal Communications Commission and the Federal Reserve).
  11. Saksa, Jim. June 5th, 2024. “What Would Congress do without Chevron deference?”. Roll Call. URL: https://rollcall.com/2024/06/05/what-would-congress-do-without-chevron-deference/
  12. LaPira, Timothy M., Lee Drutman, and Kevin R. Kosar, Eds. 2020. Congress Overwhelmed: The Decline of Congressional Capacity and Prospects for Reform. University of Chicago Press. URL: https://press.uchicago.edu/ucp/books/book/chicago/C/bo50700299.html
  13. Bressman, Lisa Schultz and Kevin M. Stack. 2021. “Chevron is a Phoenix.” Vanderbilt Law Review. 74(2): 465-482, p. 466.↩︎
  14. Ibid. p. 469.↩︎
  15. Ibid. p. 472.↩︎
  16. Motor Vehicle Manufacturers Association of the United States, Inc. v. State Farm Mutual Automobile Insurance Co. URL: https://www.oyez.org/cases/1982/82-354
  17. Amy Howe, Supreme Court likely to discard Chevron, SCOTUSblog (Jan. 17, 2024, 6:58 PM), https://www.scotusblog.com/2024/01/supreme-court-likely-to-discard-chevron /↩︎
  18. Barczewski, Benjamin M. 2023. “Chevron Deference: A Primer.” Congressional Research Service. URL: https://sgp.fas.org/crs/misc/R44954.pdf ↩︎
  19. Ibid.↩︎

 

Categories: Federal Workforce, Media Center, Revise & Extend, Updates