WASHINGTON (CN) — Small government idealists will see their best opportunity to limit the touch of regulators at the Supreme Court next week, as the justices review a decades-old precedent giving federal officials deference to interpret the country’s laws.
The high court has been asked to overrule Chevron USA Inc. v. NRDC, a 1984 ruling that has become the backbone of federal government operations.
Congress creates rules for federal agencies to follow, but officials have to make judgment calls on how to enforce those rules. Chevron allows agencies to use their expertise to fill in the gaps not specified in legislation.
“Most of the rules that structure government action are not in statutes,” Thomas Wolf, deputy director with the Brennan Center’s Democracy Program, said. “They're in regulations and internal guidance that agencies create.”
For four decades, courts have used Chevron to decide if the executive branch is correctly interpreting laws passed by Congress. However, some members of the high court have soured on the ruling,
Justice Clarence Thomas is among Chevron’s most vocal critics. He has said Chevron raises serious separation-of-powers questions, preventing judges from exercising their independent judgment in favor of the agencies.
This thinking is at the heart of Wednesday’s doubleheader challenging the authority of the National Marine Fisheries Service to place federal observers on fishing vessels. Commercial fishing companies say the court’s reliance on Chevron has undermined the political process, allowing government agencies to seize authority that belongs to lawmakers and the citizens they represent.
"Chevron encourages the executive branch (whichever party controls it) to be extremely aggressive in seeking to squeeze its policy goals into ill-fitting statutory authorizations and restraints," Paul Clement, an attorney with Clement & Murphy representing Loper Bright Enterprises, wrote.
Distaste for Chevron on the high court has been evident in not only the justices’ writings but also their reluctance to apply agency deference. This was no clearer than when the conservative supermajority ruled that there was an exception to Chevron in cases involving “major” agency actions.
Only a year after the court endorsed the major questions doctrine in West Virginia v. EPA, the justices utilized the ruling to shoot down President Joe Biden’s student loan forgiveness program.
Although the major questions doctrine dealt a blow to agency deference — particularly at the Supreme Court — the lower courts still rely heavily on Chevron because, as with the Magnuson-Stevens Act, the majority of agency interpretation happens on smaller issues.
“It has always been the case that Chevron is about the Supreme Court telling lower courts, 'Hey, as a kind of a general rule, you should be deferring to agencies when you can't figure out what the statute means,'” Daniel Walters, a law professor at Texas A&M University School of Law, said.
Chevron requires courts to follow a two-step test when examining whether an agency's actions fall within a statute. When a lower court examined the fisheries challenge, it first had to decide if the Magnuson-Stevens Act allowed the agency to require fisheries to pay for mandatory third-party monitoring. The court found it did.
The second step of Chevron was applied by a divided panel on the D.C. Circuit to uphold the ruling. The panel found that the Magnuson-Stevens Act suggests that the agency can impose monitoring but that the law was silent on whether fisheries must bear the costs of such monitoring. Since Chevron requires courts to defer to agency interpretation, the court ruled that the National Marine Fisheries Service rule would prevail.
Loper Bright and Relentless petitioned the Supreme Court, claiming Chevron is wrong and should be overruled. Their reasoning stems from the idea that the authority granted in Chevron needs to be given back to Congress and the courts.
“The genius of our Constitution is its separation of government powers to the end of protecting individual liberty,” Clement wrote. “By reallocating power away from the courts and Congress and concentrating it in the executive, Chevron has tinkered with that basic framework.”
Historians are critical of how the fisheries have characterized of the founders’ views of administrative authority, arguing the companies have cherry-picked examples to fit their narrative without regard for the federal government’s functions during this period.
“When people are making originalist arguments to get rid of Chevron … it's all because they think what they're doing is pushing us back into an era of small government when agencies were nonexistent and did nothing and federal courts tightly controlled them, but that's a deeply anachronistic way of thinking about things,” Wolf, who represented the historians in their brief before the court, said.
Pointing to the collection of taxes or the establishment of the Postal Service, historians say the federal government was fairly robust during the founding era. In comparison, the judiciary had far less power.
“Turning the clock back several centuries would not just shrink the administrative state, but also effectively eliminate the federal courts’ role in superintending it,” Wolf wrote in the historians’ brief. “Petitioners would revert the contemporary courts to the practices of a long-gone judiciary that was relatively underdeveloped and positively anemic. Doing so would diminish the court’s own status vis-à-vis federal agencies.”
Critics of Chevron argue that without agency deference, judges would get to exercise their independent judgment over agency action. But this reality could leave the justices with a heavier load.
“You take the bitter with the sweet,” Walters said. “If the Supreme Court wants to unleash the lower courts to disregard agency interpretations of statutes and to substitute their own best interpretation of the statutory language, that's going to lead to a lot of circuit splits and uncertainty, frankly, for regulated industries.”
Defenders of Chevron say this micromanaging of federal agencies would be the historical outlier, not agency deference. Some suggest this could stem from a misunderstanding of how the government works.
“They're really kind of driving the government in a direction that's not realistic,” Wolf said. “We need to give the agencies leeway to make judgment calls about how to apply statutes.’
Although some members of the Supreme Court have shown skepticism toward Chevron, the disintegration of agency deference isn’t a foregone conclusion. It’s possible the justices use their review of Chevron to amend the ruling.
The court could require lower courts to take additional steps before deferring to agency interpretation. There’s also the possibility that courts would be forced to review prior agency decisions to decide if the rule follows agency expertise.
Follow @KelseyReichmann
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