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What’s Next After Supreme Court Curbs Regulatory Powers • New Hampshire Bulletin

Posted on by darion

ConversationFederal deference to Chevron is dead. On June 28, 2024, in a 6-3 vote, the Supreme Court struck down the 40-year-old legal principle that when a federal statute is silent or ambiguous with respect to a particular regulatory issue, courts should defer to the implementing agency’s reasonable interpretation of the law.

This change occurred in a judgment issued in two cases concerning fisheries regulation, Loper Bright Enterprises v. Raimondo AND Relentless, Inc. v. Department of Commerce.

The decision means federal courts will have the final say on what an ambiguous federal statute means. It’s unclear whether most courts will continue to listen to federal agency experts to determine which interpretations make the most sense.

Although courts and judges will differ, as an environmental law expert, I expect that the demise of the Chevron deference rule will make it easier for federal judges to focus on the precise meaning of individual words of Congress rather than on Congress’s purposes or the practical enforceability of federal regulations.

Who decides what the law means?

Chevron’s deference came in 1984 in a case involving the Environmental Protection Agency’s interpretation of the term “stationary source” in the Clean Air Act. The agency said a “source” could be a facility that contained multiple individual sources of air pollution emissions. That meant, for example, that a factory with several smokestacks could be treated as a single source for regulatory purposes, as if it were enclosed in an imaginary bubble.

In upholding the EPA’s decision, the Supreme Court created a two-step test for deciding whether to follow the interpretation of a statute administered by a federal agency.

In Step 1, the court asks whether Congress has directly addressed the issue in statute. If so, both the court and the agency must do what Congress directs.

In Step 2, however, if Congress is silent or unclear, the court should defer to the agency’s interpretation if it is reasonable to do so, since agency staff are considered experts on the subject. Justice John Paul Stevens reportedly told his colleagues, “When I’m that confused, I go with the agency.”

The central question in both cases is Loper Light AND Unyielding cases concerned whether the U.S. secretary of Commerce could require commercial fishermen to pay for the on-board observers they were required to bring on some fishing trips to collect catch data. The lower courts in those cases cited the agency’s interpretation that it could require fishermen to pay under the Magnuson-Stevens Fishery Conservation and Management Act.

However, in an opinion by Chief Justice John Roberts, the Supreme Court majority found that Chevron’s deference violated the Administrative Procedure Act. That broad law governs both the procedures federal agencies must follow and, more importantly, the standards federal courts must use to review agency actions.

As the majority pointed out, under the Administrative Procedure Act, “courts must decide all relevant legal issues” – including clearly interpreting legal provisions.

Limitation of the administrative state

Since 1984, Chevron compliance has become ubiquitous in federal administrative law. By the Supreme Court’s count, 70 of its own decisions during that time have relied on Chevron compliance.

More importantly, thousands of lower federal court decisions — an average of more than 400 per year — have relied on Chevron principles on issues ranging from Social Security benefits, workplace safety standards, immigration eligibility and environmental protection requirements.

Chevron deference gave many federal agencies broad latitude to apply the rules to address new and emerging problems that Congress did not anticipate. But some members of the current Supreme Court—as well as some federal appellate judges—have criticized the doctrine for two key reasons.

First, it authorized executive branch agencies to interpret federal law and forced courts to accept reasonable agency interpretations. However, since the 1803 Supreme Court decision in Marbury v. MadisonIt is the responsibility of the courts – not federal agencies – to decide what the law is.

Second, Chevron’s compliance likely allowed federal agencies to assume greater regulatory authority than Congress intended to grant them, thereby usurping the legislature’s responsibility for making laws and delegating authority.

Environmental Protection Agency infographic outlining the regulatory process.
Regulatory agencies adopt general guidelines contained in acts of Congress and develop specific rules to achieve the goals set by Congress. (EPA)

How much does Loper Bright reverse?

The majority of the justices emphasized that prior court decisions upholding the agency’s interpretations based on Chevron’s deference cannot be challenged solely on that ground. As Roberts wrote, those decisions “are still subject to statutory stare decisis.”

Stare decisis, or “the thing is decided,” is legal mumbo jumbo that explains why courts will defer to earlier decisions. In other words, no challenger can go back to the court that relied on Chevron deference and ask the court to reverse its original decision that the agency’s interpretation was correct.

That’s good, so far. But many agency interpretations of statutes can be challenged multiple times.

For example, the Clean Water Act protects “waters of the United States.” In 2023, the Biden administration issued new regulations interpreting which bodies of water the act covers. Those who disagree with this interpretation can attack the regulations directly and argue that the agencies’ interpretation of the act is flawed, as fishing companies did in Loper Light Affairs.

However, under many laws, businesses and individuals can also challenge the agency’s interpretation when the agency decides that the general regulation applies specifically to them. These are known as “applied” complaints. After Loper LightAny time an agency that has used the Chevron relief starts applying its interpretation to a new regulated entity, that regulated entity can challenge the agency’s interpretation – and this time, the agency will not get the Chevron relief.

Will federal courts continue to listen to regulators?

Eliminating Chevron deference is likely to worsen the existing divide among judges and justices over how to interpret statutes. It focuses on how much the purpose and context of a statute should matter — or, instead, how much a judge should focus on the “plain meaning” of the specific words Congress used.

For example, suppose a federal court faced the problem of defining a vegetable for purposes of determining whether import taxes apply to imported tomato sauce. The plain meaning approach would emphasize that Congress chose to tax vegetables and that tomatoes are fruits; therefore, tomato sauce is not subject to the import tax.

The congressional purpose approach, by contrast, would emphasize that Congress intended to tax all imports of savory foods that the public generally considers vegetables. Using this approach, the Supreme Court in 1893 effectively ruled that tomatoes are vegetables subject to import taxes.

Federal agencies typically consider congressional intent and the context in which regulators operate when deciding what the laws mean. For example, when the Food and Drug Administration had to distinguish between proteins, which qualify as biologics for regulatory purposes, and chains of amino acids, which qualify as drugs, it focused on the reasons Congress created the two categories. Ultimately, the agency decided that a molecule composed of amino acids must have a certain level of complexity to qualify as a protein and therefore as a biologic.

By contrast, since the late Justice Antonin Scalia joined the Supreme Court in 1986, federal judges—and especially Supreme Court justices—have increasingly adopted a “plain meaning,” or textual, approach to statutory interpretation. The current Supreme Court, for example, would almost certainly never allow a tomato to be a vegetable.

Justices Elena Kagan, Sonia Sotomayor, and Ketanji Brown-Jackson, as well as many other legal experts, foresee serious problems in future cases that involve highly technical issues. What happens when the nonexpert, plain meaning of a statute makes no practical sense in a highly technical or scientifically nuanced regulatory system, such as the FDA’s classification of biologics and drugs?

How long will the APA be in effect?

The ruling may also signal that the court plans to pay more attention to the primacy of the Administrative Procedure Act of 1946 in federal administrative law. The statute had been in effect for nearly 40 years when the Supreme Court ruled Chevron in 1984 and Chevron most didn’t see a problem at the time.

Now, however, it has become grounds for overturning Chevron’s deference. Other court-created glosses on administrative law may also be dead doctrines.

Congress can and has established different inspection standards in other laws, including the Clean Air Act, which led to Chevron decision. What if a future Congress expressly directs an implementing agency to take the lead in interpreting a particular statute?

I expect the Supreme Court to reach for the Constitution and declare such delegation unconstitutional. In other words, it is probably only a matter of time before Loper LightHis repeal of the Chevron supremacy rule becomes a matter of federal constitutional law.

This article is reprinted from The Conversation under a Creative Commons license. Read the original article.