Supreme Court rejects Chevron-deference, altering administrative law forever

The Supreme Court has overruled one of its most important cases in the last 50 years, holding that courts cannot defer to the judgment of administrative agencies on the meaning of federal statutes. The Chevron precedent, the centerpiece of the modern administrative state, and the lodestar every time a federal agency issues regulations under the Administrative Procedure Act, is gone.

The case is Loper Bright Enterprises v. Raymond, issued on June 28. The case centers on federal regulations involving fishery in the ocean. The industry challenged particular regulations. But the precise issues raised by the parties are not the main event. The story is the future of administrative law in the United States.

The Supreme Court devised Chevron-deference in 1984. That was not a particularly liberal court, but it adopted Chevron-deference by a 6-0 vote (three Justices did not participate in the case), and of those six Justices, five of them were appointed by Republican presidents. 

One of the most valuable things I learned in law school was administrative law. Not because I practice administrative law, but because administrative law is important and complex, and the only way to really understand how it works is through formal instruction. Many non-lawyers are familiar with the concept of Chevron-deference, but this may be the most important below-the-radar issue in American law.

Administrative law is where public policy is formulated, as specialists, experts, scientists, and economists draft regulations to assist in the enforcement of federal statutes that are not always clear about how they apply in specific situations. Environmental policy, along with health and safety, consumer protection, education, etc., is largely formulated by the administrative agencies, part of the Executive Branch and derisively referred to as the "bureaucracy" when it issues rules that people don't like or want to enforce. The idea behind Chevron deference is that, if the regulations are consistent with the statutes they were intended to enforce, then the courts must respect those regulations if someone sues to block their enforcement. If the regulations go too far afield from the legislative intent, then the courts need not enforce them.

Writing for the usual 6-3 majority, Chief Justice Roberts draws from a fundamental constitutional principles: only the courts may interpret the laws, not the Executive Branch. The reasoning in Chevron delegates that authority to the administrative agencies, Roberts holds, and for that reason, Chevron was wrongly decided is no longer binding on any court. The Chief says, in part:

delegating ultimate interpretive authority to agencies is simply not necessary to ensure that the resolution of statutory ambiguities is well informed by subject matter expertise. The better presumption is there- fore that Congress expects courts to do their ordinary job of interpreting statutes, with due respect for the views of the Executive Branch. And to the extent that Congress and the Executive Branch may disagree with how the courts have performed that job in a particular case, they are of course always free to act by revising the statute.

Justice Kagan writes the dissent for Justices Sotomayor and Jackson, stating that Chevron simply reflects the reality of how government works in the modern era, "as Congress knows that it does not—in fact cannot—write perfectly complete regulatory statutes," and that Congress "knows that those statutes will inevitably contain ambiguities that some other actor will have to resolve, and gaps that some other actor will have to fill." Congress, Justice Kagan writes, "would usually prefer that actor to be the responsible agency, not a court." She adds:

Some interpretive issues arising in the regulatory context involve scientific or technical subject matter. Agencies have expertise in those areas; courts do not. Some demand a detailed understanding of complex and interdependent regulatory programs. Agencies know those programs inside-out; again, courts do not. And some present policy choices, including trade-offs between competing goods. Agencies report to a President, who in turn answers to the public for his policy calls; courts have no such accountability and no proper basis for making policy. And of course Congress has conferred on that expert, experienced, and politically accountable agency the authority to administer—to make rules about and other- wise implement—the statute giving rise to the ambiguity or gap. Put all that together and deference to the agency is the almost obvious choice, based on an implicit congressional delegation of interpretive authority. We defer, the Court has explained, “because of a presumption that Congress” would have “desired the agency (rather than the courts)” to exercise “whatever degree of discretion” the statute allows. 

If Roe v. Wade (now overturned) was the crown jewel of abortion law, then Chevron was the Mount Everest of administrative law. Chevron-related issues do not get the public attention that abortion does, but for government employees, non-profits, and the business community, administrative law is the most important thing in the world. In this case, the structure of administrative law has changed forever, and my prediction is that overturning Chevron will result in fewer environmental, health and safety, consumer protection, and related rules and regulations, and many of them are now vulnerable and will be the subject of a slew of legal challenges over the next few years.