Chevron is out of fuel. Will it power changes at FCC?

In 1984, the U.S. Supreme Court issued a landmark ruling in Chevron v. National Resources Defense Council. According to Chevronwhen Congress has ambiguously defined a term, the Court may defer to the agency’s reasonable interpretation of the statute. This has granted agencies broad rulemaking authority, expanding the limits of their statutory authority and authorizing the executive branch to create laws as well as enforce them.

The Federal Communications Commission (FCC) passed the Safeguarding and Securing the Open Internet Order earlier this year, reclassifying broadband service as a communications service under Title II of the Communications Act. Immediately challenged, this heavy-handed regulatory stunt is now pending in the Sixth Circuit.

On June 28, the Supreme Court issued a landmark ruling in Loper Bright Enterprises v. Raimondo, overturning a forty-year-old ruling Chevron respect. This new Supreme Court legal precedent could undermine the FCC’s arguments, potentially bringing long-awaited certainty to the issue of net neutrality. In 2016, the D.C. District Court cited Chevron uphold the FCC Title II order and the subsequent Restoring Internet Freedom Order. But the Court’s latest ruling could signal a paradigm shift for agency rulemaking.

In ending this precedent, the Court required agencies to enact narrower rules and required Congress to more clearly define agency terms and authorities in statutes. Chevron respect overruled, Court reverts to Skidmore respect. Skidmore v. Swift and Company is a 1944 case that gave the Court greater latitude to interpret the intent of agency regulations. As Justice Elena Kagan said during oral argument, “Skidmore means that if we think you’re right, we’ll tell you you’re right.” Justice Brett Kavanaugh went a step further, arguing that Skidmore was more of a “respect” than a “polite deference”: “If the interpretation was contemporary and consistent, it was more likely to be correct.”

In practice, Skidmore deference makes it harder for agencies to win legal battles over defining ambiguous terms. That could open the floodgates to litigation, with new hurdles for dozens of regulatory actions that will reverberate through lower courts.

However, as R Street noted earlier, “The Court cited Chevron only a few times since 2016 … (i)nverse, the Court has interpreted the text of the statute for itself.” The unwinding has already begun — so will administrative jurisprudence face a serious reckoning? Now that Skidmore is a precedent, it will be valid in a different way Chevron be overturned? If so, what could that mean for future lawmaking? R Street also stated that at the end of the day, “(T)he fall Chevron will delight many law geeks, (but) we should not overestimate its practical effects, at least in the short term.”

As the majority opinion stated: “At best, our complicated Chevron doctrine was little more than a distraction from the question that matters: Does the statute authorize the agency action at issue? And at worst, it required courts to violate (the Administrative Procedure Act) by giving the agency explicit responsibility, vested in a “reviewing court,” to “decide all relevant questions of law” and “interpret . . . statutory provisions.” The question of whether the FCC has the authority to impose net neutrality rules without a directive from Congress becomes clearer with this framing, but it is still not a guarantee.

While free marketeers might have hoped for an overthrow Chevron would be a sure thing, it’s always hard to predict how the Court will rule in a particular case. This debate has been going on for decades, and while new Court precedents could help tip the scales against the FCC’s new net neutrality rules, the Court could still uphold the rule, setting off a future wave of regulatory and legal battles. A Republican FCC could overturn it, but the wrangling would continue unless Congress intervened.

On the other hand, Congress has several options at its disposal. In the short term, Congress could use the Congressional Review Act to block the rule and prevent the agency from implementing the same or a substantially similar rule in the future. Given the divided Congress and the limited legislative calendar, this seems unlikely. Alternatively, Congress could finally express its intentions regarding broadband services and significantly update the Communications Act to reflect 21st century technology. Since this also seems unlikely, stakeholders will look to the Court to bring long-overdue certainty to this endless debate.

If the Supreme Court were to strike down the rule, the FCC would either revert to the Restoring Internet Freedom Order or push for new regulations that properly classify broadband Internet access as an information service. That would restore the framework that has existed for decades since the Internet first appeared.

Ultimately, this issue remains far from resolved. While one can hope that recent court precedent will bring much-needed certainty and finality to this issue, it is difficult to predict how the Court will rule. Really, the best solution is to avoid this legal game altogether and call on Congress to modernize and update the Communications Act to reflect the current and future needs of the broadband ecosystem.