The Supreme Court overrules Chevron

The Supreme Court just issued one of its biggest decisions in recent memory.  In Loper Bright Enterprises v. Raimondo, No. 22-451 (2024), the Court overruled Chevron U. S. A. Inc. v. Natural Resources Defense Council, Inc., 467 U. S. 837 (1984).  Even though this case has not received much media attention, its impact will be monumental.  An enormous amount of power has just shifted from the executive branch to courts. 

Legal Background

The executive branch is charged with executing statutes passed by Congress.  But, as anyone who has ever read a statute knows, they aren’t always model examples of clarity.  That isn’t completely Congress’s fault, though; language is inherently ambiguous and vague.  So, any statute will include some uncertainty in its application.

To take a famous example, if Congress passed a law which said “no vehicles are allowed in parks,” does that mean that bicycles aren’t allowed in parks?  What about ambulances?  What about decommissioned tanks from World War II that are displayed as art?  It’s impossible to make a statute cover every single edge case because language doesn’t work that way.  What this means, then, is that every statutory provision will have three levels of scope concerning its application: (1) the unambiguous scope of the statute, (2) the unambiguous scope that is not covered by the statute, and (3) areas that the statute may or may not cover.  The below diagram illustrates this in reference to the vehicle-in-the-park law.  The dark blue circle is the plain scope of the statute, the light blue circle is the unclear scope of the statute, and the area outside both circles is the clear non-scope of the statute.

This may seem incredibly abstract, but it does help illuminate the issue here.  The fundamental question is this:  Who gets to interpret the scope of the gray area of the statute? 

Under Chevron, the Supreme Court determined that courts should defer to an executive agency’s interpretation of a statute if (1) the statute is ambiguous, and (2) the agency’s interpretation is reasonable.  So, in the vehicle example, the scope of the term “vehicle” is probably ambiguous, meaning that courts would then need to decide whether the agency’s interpretation is reasonable.  The level of scrutiny required at this level is disputed by courts and scholars, but the upshot is that courts should defer to an agency interpretation even if a court personally disagrees with the interpretation.

Loper Bright Background

Loper Bright concerns a statute (the Fishery Act) which established fishery management councils that develop fishery management plans.  The National Marine Fishers Service (NMFS) approves and promulgates final rules regarding these plans.  Among other things, these plans may require that “one or more observers be carried on board” domestic vessels “for the purpose of collecting data necessary for the conservation and management of the fishery.” 16 U.S.C. § 1853(b)(8).  The Fishery Act specifies three groups that must cover costs for these observers, but does not contain any terms concerning whether Atlantic herring fishermen can or must bear costs for observers.  Nonetheless, the NMFS promulgated a rule that would, in some instances, require Atlantic herring fishermen to pay for the costs of an observer.   

Petitioners (Atlantic herring fishermen) challenged this rule under the Administrative Procedure Act, arguing that the Fishery Act does not allow the NMFS to require them to pay for observers required by a fishery management plan.  Below, the First Circuit applied Chevron and deferred to NMFS’s interpretation of the Fishery Act. 

The Majority Opinion

In a 6-3 decision, the Supreme Court overturned the First Circuit, and in so doing, overturned Chevron.  The opinions span over 110 pages, so I won’t provide an in-depth analysis, but I want to lay out the framework for readers. 

The Court (in an opinion by Chief Justice Roberts) held that Chevron cannot be reconciled with the text of the Administrative Procedure Act (APA).  Specifically, the APA says that “the reviewing court shall decide all relevant questions of law, interpret constitutional and statutory provisions, and determine the meaning or applicability of the terms of an agency action.”  5 U.S.C. § 706.  According to the Court, to afford binding deference to an agency interpretation would contradict this statutory command.  An ambiguity is not a delegation of law-interpreting power; that power still resides with the courts.

One motivating force behind Chevron deference has always been an agency’s expertise in implementing a statute they administer, but the Court rejected this conventional wisdom.  Even if agencies have technical expertise, statutory interpretation more naturally falls within a judge’s bailiwick than an agency’s.  And, even when an ambiguity does implicate a technical matter, the Court did not see why that would mean that Congress has shifted interpretive power from courts to agencies.  After all, Congress often expects courts to interpret complex statutes.

Because this decision involved overruling precedent, the Court ended its opinion by considering stare decisis principles.  It determined that Chevron is unworkable because “ambiguity” is itself ambiguous, meaning that one judge may see it everywhere while another sees it nowhere.  Further, the fact that the Court has been consistently reworking Chevron for decades means that it could not have sparked any significant reliance interests.  For these reasons, the Court concluded that stare decisis did not stand in the way of overruling Chevron. 

The Dissent

Justice Kagan wrote the dissent in Loper Bright, joined by Justices Sotomayor and Jackson.  The dissent can be summed up by this sentence: “A rule of judicial humility gives way to a rule of judicial hubris.”  (Dissent at 3.)   To make her point, Justice Kagan provided a long list of cases in which courts have faced a statutory ambiguity involving highly technical issues (e.g., alpha amino acid polymers and stationary sources for air pollution).  (Id. at 5-6).  These cases illustrate the motivating force behind Chevron: Congress knows that uncertainties in a statute will arise, and the Court has long assumed that Congress will want agencies to have a say in choosing a reasonable read of the statute.  This is because resolving statutory ambiguity is more often a question of policy, rather than law.

The dissent was not persuaded by the majority’s reading of the APA.  Rather than requiring courts to have sole interpretive authority, the dissent pointed out that the APA provides specific standards of review for agency actions, but says nothing about statutory construction, meaning that Chevron deference is neither mandated nor forbidden. 

The dissent also took issue with the majority’s treatment of stare decisis.  According to the dissent, if Congress had issues with Chevron, it could have amended the APA—but it chose not to.  Moreover, Chevron is well-established law, as courts have applied Chevron in thousands of cases (in one article cited by Justice Kagan, the authors claimed that it was cited by over 18,000 federal court decisions).  And the dissent did not appreciate the majority’s contention that Chevron is unworkable because the concept of ambiguity is itself ambiguous, given that there are numerous ambiguity triggers in the law (like an ambiguous contract allowing for extrinsic evidence, or the canon of constitutional avoidance).  In sum, the dissent appears to read the majority’s stare decisis analysis as a weak front for its desire to overrule Chevron. 

Takeaways

1. The obvious question on everyone’s mind is: What now?  Do courts afford no deference to agencies at all?  I wouldn’t take the opinion that far, personally.  The majority appears to embrace Skidmore deference, which predated Chevron.  This would mean that courts may “seek aid from the interpretations of those responsible for implementing particular statutes,” based on an agency’s “body of experience and informed judgment.”  (Op. at 12.)  So, courts should not take an entirely fresh look at statutes without any regard for the agency’s interpretation.  If agencies can explain their expertise and give good reasons for their reading of a statute, courts should still take that into account.  But this is nonetheless a far cry from Chevron deference. 

2. Going forward, agencies should expect their regulations to be defeated in court with much more frequency.  To be fair, Chevron has been quietly dying for the past eight years in many courts, so perhaps the effect of this ruling will be less significant in that regard.  Yet, the D.C. Circuit (i.e., the main agency court of appeals), still heavily relies on Chevron.  I expect that we’ll see the most blowback from this decision in that court. 

3. As Justice Kagan notes at the end of her dissent, the Court has overturned landmark decisions in multiple cases over the past few years.  I take this as a signal that stare decisis does not carry anywhere near the weight it once did.  To be sure, it carries enough weight that the Court still feels compelled to include an explanation about why they are not abiding by it.  But this pattern is significant, and it should signal to litigants that they are free to continue challenging well-established precedent.