The Roberts Court’s Chevron Ruling and Darkening Clouds Over the Administrative State
Conservatives cheered the Court overturning the 40-year-old reasonable standard of deference to agencies. But other rulings may do more to hamstring both elected branches of government while aggrandizing the role of judges.
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With Loper Bright Enterprises v. Raimondo, the Supreme Court has finally interred the so-called Chevron doctrine, named for its 1984 decision, Chevron v. Natural Resources Defense Council. The Roberts Court’s ideologically predictable 6-3 decision garnered headlines as a victory for legal conservatives hoping to curb federal regulation. However, the difference Loper Bright will make in the win-loss rate of agencies challenged in court remains uncertain. Other Supreme Court decisions, usually far less celebrated, are likely to destabilize the administrative state more than Loper Bright.
What Loper Bright overruled, technically, is what is called “Chevron Step Two.” Virtually everything a federal agency does is based on the power Congress has granted via an authorizing statute. Chevron told lower courts that when an agency’s regulatory action is challenged, the reviewing court should first employ the customary tools for interpreting statutes to determine whether the law was or was not followed. A court that reached either conclusion would impose it, and the agency would win or lose. That’s Chevron Step One.
Should a court find, however, that a statute is ambiguous, the Supreme Court told judges to proceed to Chevron Step Two. Under Step Two, the reviewing court would consider whether the agency’s interpretation of the statute—that is, its understanding of Congress’s instructions and the scope of its discretion—was “permissible.” If the interpretation were reasonable, even if a judge might prefer a different interpretation, the court would be required to uphold the agency’s view. This is the feature of Chevron that Loper Bright jettisoned. The majority rejected the idea that judges must accept an agency’s reasonable statutory interpretation should the judge determine that another interpretation is sounder. Judges are now free to impose what they take to be the better reading of even ambiguous statutes.
There are cases in which this expansion of judicial interpretive freedom will make a difference. Loper Bright and its companion case, Relentless v. Department of Commerce, might or might not be among them. The Supreme Court instructed the lower courts to revisit whether the best reading of the Magnuson-Stevens Fishery Conservation and Management Act allows the National Fisheries Management Service to sign off on a fishery management plan requiring fishermen to pay for on-board observers. Given that the Chevron doctrine has been the conservative legal movement’s elusive white whale for decades, it seems poetic that the case that killed it off involves fishing boats. We won’t know how the lower courts will rule for some time.
However, Loper Bright’s incremental impact on circumscribing agencies’ regulatory authority may not be dramatic. Richard Pierce, a professor at George Washington University Law School and a long-time observer and leading scholar of the administrative process, estimates that agencies now will lose about 10 percent of the cases they would have won before Chevron’s demise.
Even that estimate may be too high. Loper Bright is less than revolutionary because the interpretive practice it endorses was already integral to Chevron Step One. Regulation-skeptical judges have regularly found that Chevron Step One allows them to read administrative statutes as narrower than agencies have imagined. As the Loper Bright majority recognized, the Court has not referred to the Chevron framework in reviewing agency statutory interpretations in eight years.
Even before the 1984 Chevron ruling, courts reviewing agencies’ legal interpretations had been instructed to respectfully consider their views thanks to the Court’s 1944 decision in Skidmore v. Swift & Co. As the Loper Bright majority summarized and endorsed Skidmore:
[I]n Skidmore v. Swift & Co., 323 U. S. 134 (1944), the Court explained that the “interpretations and opinions” of the relevant agency, “made in pursuance of official duty” and “based upon . . . specialized experience,” “constitute[d] a body of experience and informed judgment to which courts and litigants [could] properly resort for guidance,” even on legal questions. “The weight of such a judgment in a particular case,” the Court observed, would “depend upon the thoroughness evident in its consideration, the validity of its reasoning, its consistency with earlier and later pronouncements, and all those factors which give it power to persuade, if lacking power to control.”
“Respectful consideration” for agency views—as the Court prescribed in Skidmore—falls short of mandatory “deference.” But it is hard to imagine cases in which a court would second-guess an agency if it found its deliberations thorough and its reasoning valid or its interpretation informed by the agency’s professional knowledge of matters beyond the judiciary’s expertise. On July 2, the Supreme Court sent nine cases back to the lower courts for reconsideration in light of Loper Bright. It will be interesting to see how many agency victories judges overturn.
While Loper may turn out to be tame in its impact, the Court has rendered other decisions likely to give agency lawyers greater anxiety. West Virginia v. EPA, the Court’s 2022 decision that scuttled regulations governing carbon emissions, gave birth to the now infamous “major questions doctrine” (MQD). The MQD is its own two-step dance. Under Step One, a court determines whether an agency initiative raises a “major question” about its legality. The Court has yet to define this inquiry precisely. Still, it appears to turn on the “economic and political significance” of the challenged action and whether the agency is using a statute in an unanticipated but ambitious new way or attributing more expansive meaning to a provision it had interpreted narrowly. If the answer to Step One is affirmative, Step Two requires that the agency show that a statute authorizes its initiative “clearly.” The MQD thus places a thumb on the scale against agency interpretations, giving courts a potentially undisciplined license to set them aside.
Similarly, the Court decided three other cases this term that will surely trigger agency challenges. Securities and Exchange Commission v. Jarkesy bars administrative agencies from relying on administrative adjudication—instead of jury trials—to impose damages remedies for statutory violations akin to common law wrongs. Corner Post, Inc. v. Board of Governors of the Federal Reserve System allows regulated parties subject to the Administrative Procedure Act’s six-year statute of limitations more time before challenging an agency rule. The Court allows parties to count the six years not from the publication of a final rule but rather from when the rule first burdened the plaintiff. In Corner Post, for example, a convenience store that opened in 2018 could challenge a 2011 Federal Reserve rule on credit card interchange fees, even though it went into effect over six years earlier. Finally, Ohio v. EPA stayed EPA’s rule to control ozone pollution that crosses state lines. As Dan Deacon, the University of Michigan law professor, has written, Justice Neil Gorsuch’s opinion overturning this “good neighbor” policy “seems to bend over backward to extend grace to the objecting commenters while holding the government to a higher standard of clarity.” (Ironically, Gorsuch’s vote helped to undo the Chevron decision that was a victory for the justice’s late mother, Ronald Reagan’s first EPA administrator.) Gorsuch’s opinion in Ohio v. EPA might presage the conservative majority’s willingness (without Justice Amy Coney Barrett, who dissented) to deploy the APA’s “arbitrary and capricious” standard with yet greater stringency when examining an agency’s reasoning and analysis in support of a regulatory action.
What is most troubling about Loper Bright is its implicit procrustean view of the separation of powers, accompanied by the Court’s hubristic valorization of the judicial process. Hostility to impactful agency policymaking within the broadly defined statutory powers underlies many decisions affecting the administrative state issued during the tenure of Chief Justice John Roberts. The prevailing doctrine on Congress’s authority to convey authority broadly has not led the Court to invalidate a statute for excessive delegation since the 1930s. Yet, even as a current majority has been unable to coalesce around a more potent nondelegation doctrine, the upshot of its jurisprudence makes it harder for Congress to legislate and for agencies to implement reasonable understandings of the discretion they have been given.
Ironically, the Roberts Court often positions itself as defending Congress’s legislative role. Yet it rejects Justice Elena Kagan’s common-sense accounting of why Congress may want to delegate broadly and why it prefers agencies over courts as resolvers of statutory ambiguity. As Kagan explains, some interpretive issues involve scientific or technical subjects about which agencies have greater expertise than courts. Some implicate “complex and interdependent regulatory programs” that agencies know better than judges. Many involve policy choices—“trade-offs between competing goods”—and agencies that report to the president must answer to Congress and are more accountable for their policy judgments than judges. At bottom, like West Virginia v. EPA, Loper Bright threatens to limit Congress’s ability to employ administrative agencies as first responders, which sometimes meet new challenges and unforeseen circumstances under broad, even ambiguous, statutory terms.
The majority’s explanation for elevating the role of judges in interpreting statutes is based largely on a set of fictions—fictions about the nature of law, the line between law and policy, and judicial superiority in the legal order. Statutes, according to Chief Justice Roberts, “no matter how impenetrable, do—in fact, must—have a single, best meaning.” He writes that “resolution of statutory ambiguities involves legal interpretation,” not “policymaking.” And “agencies have no special competence in resolving statutory ambiguities. Courts do.” It is as if a movement called Legal Realism never occurred. Policy often affects interpretation because interpretive questions arise not in the abstract but in applying a statute to a concrete problem. What the statute “means” is intertwined with what solution is most compelling as a matter of policy. Instead of just “calling balls and strikes,” as the Chief Justice said with famous modesty in his confirmation hearing, he’s rewritten the rules of the game, empowering judges over agencies on matters as technical as the safety of airplane doors and toxic chemicals.
The majority insists that the APA requires judges to avoid deference because that Act provides that a “reviewing court shall decide all relevant questions of law.” As Kagan points out, however, that language does not dictate the standard of review. Moreover, contemporaneous commentary reveals that the drafters of the APA did not believe its provisions were inconsistent with agency deference. As for the modern era, the most thorough empirical study on congressional drafters underscores that they not only know Chevron but understand the doctrine and have anticipated that statutory ambiguities would fall to agencies to resolve. Interestingly, research has also shown that Chevron’s deferential approach fostered agreement among judges without regard to partisanship—a contribution to the rule of law.
In an influential 1951 Supreme Court decision, the late Justice Felix Frankfurter described one statutory rule regarding judicial review as intending to set a “mood.” Interpretation is so multifaceted that any rule regarding the judicial role would strain to do more. The Chevron mood was rhetorically deferential. The Loper Bright mood is imperial. In a Loper Bright mood, enhanced by other Roberts Court agency-curtailing rulings, judges may feel encouraged to hamstring federal regulation, knowing the Supreme Court has their back.
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