Supreme Court strips federal agencies of widely used power, kicks it to courts

The Supreme Court overturned 40 years of legal precedent, nullifying the most cited Supreme Court administrative law decision of all time. The Chevron doctrine has been in place since 1984, and this week's ruling confirms critics' view that Chevron gave government agencies too much power in interpreting laws passed by Congress.

The Chevron doctrine said that when a law is open to interpretation; when the intent of Congress in passing that law is unclear; when the statute is ambiguous; courts should defer to the agency's interpretation of that law, as long as it's sensible.

"Chevron's presumption is misguided because agencies have no special competence in resolving statutory ambiguities," Chief Justice John Roberts wrote on overruling Chevron. "Courts do."

The case that led the Supreme Court to overturn Chevron is Loper Bright Enterprises v. Raimondo — as in Commerce Department Secretary Gina Raimondo. Loper Bright Enterprises is a commercial fishing company.

The Magnuson-Stevens Act of 1976 says the National Marine Fisheries Service can require fishing companies to allow federal agents on board as observers. But the agency also interpreted that statute to mean it could require the fishing companies to pay for the salaries of those federal observers. Loper fought that assumption all the way to the Supreme Court.

In a concurring opinion, Justice Neil Gorsuch wrote, "Today, the Court places a tombstone on Chevron no one can miss."

In her dissent, Justice Elena Kagan wrote, "Given Chevron's pervasiveness, the decision to do so is likely to produce large-scale disruption. All that backs today’s decision is the majority’s belief that Chevron was wrong — that it gave agencies too much power and courts not enough."

Chief Justice Roberts said the decision does not affect any previous rulings decided under the Chevron deference. However, it will have significant impact on future statutory interpretations.

Immediately following the ruling, Straight Arrow News Business Correspondent Simone Del Rosario interviewed Caroline Cecot, an associate professor of law at Antonin Scalia Law School at George Mason University.

The following has been edited for clarity. You can watch the interview in the video at the top of this page.

Simone Del Rosario: What is your initial reaction to the impact of this decision?

Caroline Cecot: My first reaction was, 'Wow, they actually did this.' This could turn out to be a big deal, especially in its practical implementation. Another small reaction I had is how little the majority opinion, authored by Chief Justice Roberts, really thought about the practical implications of this or seemed to downplay them.

Simone Del Rosario: What do you mean by that?

Caroline Cecot: One thing that I do a lot of research in is in the environmental space and in the energy space. And a lot of those statutes are very complex. They deal with a lot of issues of expertise, issues of trade-offs between competing interests.

When we look in those cases, you look at these statutory interpretation questions, they're really fraught with intersecting expertise and political policy preferences that can change in different administrations, et cetera.

The Chevron case is a perfect example of this, actually. In the Chevron case, this was the EPA under President Reagan adopting a more flexible interpretation of when a source would trigger more stringent standards. And the court had to sort out whether this interpretation was authorized by the statute.

But the statute just wasn't clear about how to answer that question. It talked broadly, obviously, about the importance of environmental protection, pollution reduction, but then it also talked about economic growth and how it's important to think about those issues.

So how should the court figure this out? Its options basically were: Make some decision on the question despite not having any expertise on the subject matter, the statute, or the appropriate balancing of these competing interests or any political accountability for its decision; or allow the agency to make this choice as long as it's within these reasonable bounds. And the court went with option two, and that's essentially the Chevron decision on what to do in these kinds of cases.

Meanwhile, in the Loper Bright case, Chief Justice Roberts talked about statutory interpretation much more abstractly or simplistically and didn't really grapple with these kinds of issues. The dissent, which was authored by Justice Kagan, offers numerous examples about how statutes implicate these kinds of expertise and policy choices.

Simone Del Rosario: The majority explicitly stated that any interpretations made to this point under Chevron stand. So we're not going to see this huge 40-year unraveling of law. But what do you envision happens next when agencies and businesses are navigating through largely vague statutes that they operate under?

Caroline Cecot: So the majority's answer, essentially, is that without Chevron, we go back to a time where the background rule on how a court deals with this is something referred to as Skidmore, the Skidmore deference or Skidmore respect. The Skidmore deference basically says that you kind of give the agency's interpretation the respect it deserves based on how thoroughly reasoned it was.

This is a very difficult concept to wrap one's mind around. I teach administrative law and this is something we talk a lot about, our students and I. What are the differences? How would this be decided under Skidmore?

Just a few years ago, when the court was deciding a case, Kisor v. Wilkie, which was about a related concept about whether to defer to an agency's interpretation of its own regulation, so different, not a statute.

At oral argument, the Chief Justice had this funny remark that I actually play for students, which is, 'Counsel, to get back to the stare decisis questions. I think the issue depends, at least in part, on how much of a change you're asking. And one of the things I have trouble getting my arms around is if you start with Auer and recognizing the limitations on Auer that have accumulated over the years and you're changing that to Skidmore, which I find hard to get my hands around too. I think I know more about what a moiety is than I know what Skidmore deference is.'

And so if the Chief Justice made this joke during oral arguments about how difficult it would be to apply Skidmore, I'm glad we're not looking back, but looking at the future, I think this is going to lead to a lot of inconsistency and a lot of litigation.

And probably, and I hate to say this, but this is based on some research by Ken Barnett, Christopher Walker and Christina Boyd, we're going to see more decisions that are influenced by the makeup of the panel, whether it's a more liberal panel or more conservative panel.

Simone Del Rosario: How much of this is on Congress for writing these ambiguous laws to begin with? Do you think that Chevron has allowed them to put too much legislative authority on agencies?

Caroline Cecot: Some research has shown that Congress is aware of Chevron. So it is possible that in some ways they leave some ambiguities purposely because they want agencies to fill in these gaps using their expertise, which I would find perfectly appropriate within the bounds of constitutionally-correct delegations.

That said, now that there is no Chevron and Congress has to write statutes. I guess I'm in the camp where — and I don't say this to degrade Congress in any way — I think it's just impossible to write a perfect statute that includes everything at the outset. I think there's something that happens with experience under a statute where agencies realize that something's not working or the facts on the ground change. That's something I care a lot about. And the agency has to respond to these changing facts on the ground.

The whole scheme of administrative implementation of statutes is partly because we get some efficiency benefits from this. If we revert back to Congress having to do everything at the outset, we're gonna see a lot of increases in inefficient regulatory actions across the board.

Simone Del Rosario: But in the same vein, critics of Chevron have said that this precedent, to this point, has allowed these agencies far too much authority and deference to say, 'This is how they interpret it so that must be the way that it is.' It takes the issue away from courts and away from Congress when the majority opinion in Loper clearly believes that that subject does belong in the courts.

Caroline Cecot: It doesn't take the issue away from the people, though, because at least as compared to courts, agencies are more politically responsible and we see changing presidential administrations all the time.

I say this because the doctrine of Chevron itself to give deference to agency interpretations, it's neutral. And then the Chevron case itself, as I recounted, this was an agency that wanted to take a deregulatory action. But of course, Chevron could also allow an agency to take more aggressive agency action.

Over time, the doctrine became associated with judicial acquiescence to these ever-increasing grabs of power by the agency, or that's how it's sort of thought about, which started this anti-Chevron movement that even led to this question of whether to overrule it.

But I think at its core, Chevron is just saying, look, here we have a statute that the agency has that Congress wants the agency to implement given what's happening on the ground. And here's the way that the agency has decided to do this. Is it reasonable? If it's not, then no.

And obviously, I almost forgot the first step. If it goes against Congress's language, that's out. Congress is supreme. The agency has to do what Congress allows it to. But at the point that there's not a clear answer and it's a reasonable interpretation, I think it should go to the agency. And if the people disagree with this, you have an election, you have a new presidency, you have a new administration and then you have new ways of interpreting the statute.

I don't mean to also defend this process too much because I think it's important to have predictability. So I say this as someone who knows that there's another backstop, which is this other doctrine, State Farm, which ensures that agency decision-making is fact-based, that there's logical connections.

Even though there might be some policy reversals in the presidencies, it always requires some explanation. To me, to this point, this felt like a nice balance, making sure that courts aren't making decisions that are actually politically motivated but unaccountable, that leave Congress in an impossible position and leave us in an inefficiency spiral, but also cabined because of this reasonableness inquiry.

Simone Del Rosario: Do you think that the National Marine Fisheries Service overstepped its bounds by saying that fishing companies had to pay for these federal observers?

Caroline Cecot: You know, that's a tough one for me to answer because I think most folks that I've talked to seem to think that even if there were not a world of Chevron, that the answer is that the Marine Fisheries overstepped in some way.

When I looked at the history behind the statute itself, this is the Magnuson-Stevens Act, that amendment that created this situation where these councils are allowed to require observers on domestic vessels. But then also there's a separate provision for one of the Pacific fisheries to be able to spread some of these costs in specific ways with some limits.

That amendment happened because that council was the first pre-amendment to want to impose these costs. During the deliberations on this, the industry protested bearing the costs and wanted taxpayers to bear the costs. And the council had said, 'Go to Congress with that, beg them for it, but we're going to impose this on you because we need to save the fishery.'

So to me, the more clear answer here is that the default is that the industry pays and if they don't want to pay, they can lobby Congress and get their own provision, which is what happened with the Pacific fisheries where they got a provision that talked a little bit more about capping these fees.

Simone Del Rosario: As Gorsuch said, the court today placed a tombstone on Chevron. So regardless of how helpful you found it to be as far as keeping things more stable in this system between agencies and courts and businesses, it's effectively gone. Who's the big winner today?

Caroline Cecot: The big winner is definitely lawyers. What I said about Skidmore deference being hard to wrap yourself around, I think this is going to trigger more litigation over agency action now, on robust litigation, on both the fact-based front with State Farm and the legal interpretation front with the Skidmore deference.

Other than that, because I have a different view of Chevron, I didn't see it as anti-regulatory or pro-regulatory, I think a loser in this in some ways is each presidential term. They're going to have to grapple with a lot less flexibility in their statutes and a lot less ability to respond to emerging issues on the ground without having to go to Congress.

And then Congress is going to have to change some things because as pessimistic as I was in my first recount, they do have to step up at this point in some ways. And at least, responding to big emergencies that come up, they will need to.

And that's already been true in some ways with the major questions doctrine, but they will need to do a lot more and schedule a lot more time for legislation.

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