Chevron Deference Running On Fumes?

• Jurisdiction: United States,Federal
• Law Firm: Holland & Knight
• Subject Matter: Corporate/Commercial Law, Litigation, Mediation & Arbitration, Corporate and Company Law, Trials & Appeals & Compensation, Securities
• Author: Evan Nelson, Allison Kernisky and Scott Mascianica
• Published date: 30 May 2023

Recently, the U.S. Supreme Court agreed to revisit one of its most significant rulings affecting administrative rules and regulations by granting cert in the matter Loper Bright Enterprises v. Raimondo. The court's decision in Loper Bright will likely determine the fate of the court's landmark ruling in Chevron v. Natural Resources Defense Council, a nearly 40-year-old decision that serves as the seminal opinion on the level of deference federal courts afford to interpretations of certain statutes by executive branch administrative agencies. Supporters of "Chevron deference" argue that it reflects Congress' intent to delegate interpretive authority to agencies that have greater expertise in complex administrative matters. Opponents have sharply criticized the level of deference it affords administrative agencies, arguing it is an unconstitutional limit on judicial oversight and perpetuates the "administrative state."

In this post, we explore Chevron and some potential implications if the Supreme Court overturns it.

Chevron Background

Chevron is a bedrock 1984 Supreme Court decision that established the test for judicial deference to government agencies' interpretations of certain agency-related statutes. The question ultimately considered by the Supreme Court nearly four decades ago was how to assess statutory interpretations by agencies when Congress left a gap concerning rulemaking.

In Chevron, the Clean Air Act (Act) required states below certain air quality standards to create a permitting program that regulated sources of air pollution such as industrial plants.¹ However, the U.S. Environmental Protection Agency (EPA) passed a regulation that allowed states to treat all pollution-emitting devices at an entire facility as a "bubble," concluding any modifications to a single piece of equipment at the plant did not need a permit so long as the total emissions did not increase.² Several environmental groups sued, challenging the bubble provision as contrary to the Act, and the U.S. Court of Appeals for the District of Columbia Circuit agreed, setting aside the EPA regulation and finding it was inappropriate under the Act, which was enacted to improve air quality.³ The Supreme Court granted review and unanimously reversed,⁴ reasoning that the EPA's policy choice was reasonable and the agency was better suited to decide than Congress, which "did not have a specific intention on the applicability of the bubble concept in these cases, . . . [therefore,] the EPA's use of that concept here is a reasonable policy choice for the agency to make."⁵ The so-called "Chevron deference" was born.

Since the court's decision in Chevron, federal courts across the country have used the opinion as the guidepost to determine if an agency's interpretation of a statute ought to be upheld. As summarized in Chevron:

When a court reviews an agency's construction of the statute which it administers, it is confronted with two questions.

First, always, is the question whether Congress has directly spoken to the precise question at issue. If the intent of Congress is clear, that is the end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress.

If, however, the court determines Congress has not directly addressed the precise question at issue, the court does not simply impose its own construction on the statute, as would be necessary in the absence of an administrative interpretation. Rather, if the statute is silent or ambiguous with respect to the specific issue, the question...