Supreme Court Dismantles Chevron Doctrine, Reshaping Regulation
The US Supreme Court, in a 6-3 decision, has overturned the "Chevron Deference" doctrine, which had allowed federal regulators to interpret ambiguous laws. This landmark ruling significantly constrains the authority of federal agencies, including those overseeing environmental, consumer, and financial regulations.
The Chevron Doctrine, named after the 1984 Supreme Court case Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., established that courts should defer to reasonable agency interpretations of unclear statutes when Congress had not directly addressed the issue. This principle became a cornerstone of administrative law, providing a foundation for numerous regulations over the past four decades. Originally, Chevron was viewed as a deregulatory measure, but over time it became a tool for enacting broad regulatory policies, leading to conservative opposition.
The Supreme Court's recent ruling emerged from a case involving a federal requirement for certain herring boats to host government-approved observers at their own expense. Two groups of fishing companies challenged this rule, arguing that Congress had not authorized the National Marine Fisheries Service to impose such costs. While two federal appeals courts upheld the rule as a reasonable interpretation of the Magnuson-Stevens Act, the Supreme Court majority disagreed. They did not explicitly invalidate the regulation but sent the case back to the appeals courts for reevaluation, underscoring that judges must independently determine whether an agency has acted within its statutory authority.
Chief Justice John Roberts, writing for the majority, criticized Chevron as a judicial invention that improperly transferred the power to interpret laws from the judiciary to federal agencies. He emphasized that judges "must exercise their independent judgment in deciding whether an agency has acted within its statutory authority." The court maintained that past rulings based on Chevron remain intact under the principle of statutory stare decisis, despite the shift in interpretive methodology.
This decision is seen as a significant victory for opponents of expansive government regulation. It signals potential challenges for recent and future regulations that do not have clear and explicit authorization from Congress. Some of the key regulations potentially impacted by this ruling include:
Auto Pollution Limits: Standards that effectively compel automakers to sell electric vehicles.
Power Plant Emissions: The Biden administration's rule limiting greenhouse gas emissions from power plants, already facing lawsuits from coal advocates and utility groups.
Net Neutrality: The FCC's efforts to regulate broadband services under a 1934 communications law.
Health Care Regulations: The FDA's authority to expedite the approval of "breakthrough" drugs and devices, a practice that has significantly shaped the modern U.S. healthcare system.
Non-Compete Agreement Ban: The FTC's near-total ban on non-compete clauses, impacting a substantial portion of the workforce.
Independent Contractor Rules: The Labor Department's efforts to reduce the number of workers classified as independent contractors.
Student Debt Relief: Biden's student debt relief initiatives, which rely on novel interpretations of longstanding education laws.
USDA Industry Competition Rule: A proposed rule to revive the Packers and Stockyards Act, aimed at promoting industry competition and lowering food prices.
Overall, the Supreme Court's decision places greater responsibility on Congress and judges to address and keep up with evolving standards across various sectors, potentially reshaping the regulatory landscape in the United States.
Bloomberg Government's Law professionals conducted a question and answer session on the decision, below are some answers to the most commonly asked questions. For the full thread, click this link.
Question: In what ways can Congress shape future legislation to give regulatory agencies clear, specific guidelines and limitations for implementation and enforcement?
Answer: Prof. Aaron-Andrew Bruhl wrote a smart column for Bloomberg Law with some ideas. Here are a few of his suggestions:
Hire staff with policy expertise to write more detailed and specific legislation.
End the Senate filibuster to make it easier to move legislation.
Pass a law creating special fast-track procedures for legislation that responds to Supreme Court decisions.
Question: Thoughts on how Congress can make sure that courts can’t twist their legislation?
Answer: Many laws are intentionally written so their grant of power to agencies isn’t super specific, which allows agencies to adapt to issues that were unforeseen at the time the laws were minted. Agency rulemaking tends to be much faster and more certain than the legislative process. That’s how the modern administrative state has operated for like 80 years. And that’s arguably more important now, when Congress appears to be broken. But even if Congress actually functions, the problem remains. If Congress writes laws more specifically, then agencies will lose the ability to act (relatively) quickly to respond to new issues. But if legislative language remains looser, then agencies could get whacked in court. It’s a tough one.
Question: Do you see any plans to expand the federal judiciary (i.e. add district judges to the busiest districts) to handle increased caseload from the Loper Bight and Jarkesy decisions?
Answer: Adding more trial court judges has bipartisan support in the Senate -- and that was before the recent Supreme Court decisions you mention. The Senate Judiciary Committee last month *unanimously* advanced a bill to create 63 additional judgeships at federal trial courts where caseloads have outgrown the size of the bench. (If you know that committee, you know a unanimous vote is rare.) We're waiting to see if the full Senate will take up the legislation.