The Fall of the Chevron Doctrine: Implications for Ports and Maritime Customers | Schwabe, Williamson & Wyatt PC

For the last forty years Chevron doctrine established by the Supreme Court in Chevron USA, Inc. v. Natural Resources Defense Council, Inc.467 U.S. 837 (1984), is a pillar of administrative law in the United States. Under this doctrine, if a court determined that a statute enacted by Congress was ambiguous or uncluttered on a particular issue, the court was required to defer to the agency’s interpretation of the statute’s meaning, if that interpretation was “permissible.” In other words, agencies were authorized to “fill in the gaps” in the statutes they were required to enforce, and courts were required to defer to those gap-filling interpretations—even if that interpretation was not the interpretation the court would have reached independently. This deference tipped the balance in favor of agency interpretations of ambiguous statutes administered and helped ensure that regulated parties could rely on the agency’s analyses.

But that’s it. On June 28, the Supreme Court overturned Chevron doctrine in Loper Bright Enterprises v. Raimondo AND Relentless, Inc. v. Department of Commerce. The court held that courts must exercise their independent judgment in deciding whether an agency acted within its statutory authority and may not defer to an agency’s interpretation of the law. While courts may continue to consider an agency’s interpretation as a guide—the weight of which depends on the accuracy of the agency’s deliberations, the validity of its reasoning, and its consistency with prior and subsequent rulings—the strong deference to agency interpretations of applicable statutes has ended. This represents a significant shift of authority from the agency to the federal courts and likely reflects a desire to limit perceived agency overreach.

It also represents a significant change for regulated ports and maritime industry parties. Although the full implications ChevronWhile it will take some time to reveal the truth behind the collapse, there are a few things worth noting.

First, we can expect more volatility. Without Chevron respect, the agencies’ interpretations of regulatory statutes have become less authoritative and more prone to disputes. On the one hand, this gives ports and maritime companies the ability to challenge agency regulations that may exceed the agency’s authority. For example, in Loper Light The Supreme Court has addressed the issue of whether the National Marine Fisheries Service (NMFS) had the authority to charge fishermen for observer costs in the Atlantic herring fishery. The Supreme Court sent the case back to a lower court to answer for itself, rather than simply deferring to NMFS’s ruling that passing on costs to regulated fishermen is legal. On the other hand, less deference to the agency’s interpretation means that regulated entities will now be subject to federal judges’ rulings rather than notice and comment on the agency’s expert rulemaking.

Second, we may see fewer regulatory changes with each administration change. Up until this point, whichever political party has been in power in the White House has sought to pass (or repeal) regulations to advance its political agendas when they have not been passed by Congress. Often, these regulatory changes have been based on differing interpretations of the underlying statutes. Loper Light clearly states that statutes “have a single, best meaning,” which federal courts will now review without regard to agencies. Regulatory changes will certainly continue to accompany the turnover of administrations, but their scope may be limited by Loper Light.

Third, we can expect less uniformity. The Supreme Court has noted that “there is little value in imposing a uniform interpretation of a statute when that interpretation is incorrect.” In practice, this means that maritime entities will have greater difficulty complying with the law. Without deference to agency interpretations, different judges in different jurisdictions are likely to interpret the same statute differently. As a result, maritime entities may have to adjust their behavior to accommodate conflicting interpretations of the law in different zones.

In addition to such significant changes, we should also recognize what Loper Light doesn’t change. More laws will likely be repealed, however Loper Light is not a license for federal judges to strike down any rule they disagree with. The court made clear that the best interpretation of the statute may be that it delegates discretionary authority to the agency. When an agency acts within the bounds of reasonable decision-making, within those bounds, a federal court cannot substitute its own preferred policy.

Loper Light does not eliminate other forms of agency compliance — at least not yet. Courts rely on agency factual findings. This compliance is mandated by statute (as opposed to Chevron doctrine) and Loper Light decision positively discusses the courts’ history of deference to agency factual findings. We expect courts will continue to defer to agency factual findings in the future.

Courts also rely on an agency’s reasonable interpretation of the regulations under a doctrine known as Auer respect. This was accepted by the Supreme Court in Auer vs Robbins519 US 452 (1997) and recently confirmed in Kisor vs Wilkie139 S.C. 2400 (2019). Loper Light does not directly challenge this doctrine; however, its reasoning seriously undermines the justification for relying on an agency’s interpretation of its own regulations. Although Auer respect remains the law, we expect that the Supreme Court may overturn this doctrine in the future. Therefore, litigants may consider preserving arguments in the dispute that Auer was taken incorrectly.