metamitya ·
It goes without saying that the actions of federal regulatory agencies greatly affect many essential aspects of our daily lives, among them the delivery of medical services, medicines, and therapeutic devices and the availability of insurance to cover them; the safety of our workplaces; the quality of the environment; and relations between employers and employees.
Where these agencies, of what is known colloquially as the “Administrative State,” have acted under clearly stated legislative authority, their conduct has been evaluated by the federal courts under a well-established set of strictures defined in the Administrative Procedure Act (APA). For the past 40 years, where agencies’ statutory authority is ambiguous, these agencies, not the courts, have been given broad authority to act. This deference to agencies had been embodied in the doctrine of Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984). But no longer.
On June 28, 2024, the Supreme Court of the United States categorically overturned Chevron and its doctrine of agency deference in Loper Bright Enterprises, et al. v. Raimondo, No. 22-451, and Relentless, Inc., et al. v. Department of Commerce, No. 22-1219. Strongly asserting that the Chevron doctrine was inconsistent with the constitutional separation of powers and the APA, the Chief Justice, writing for himself and Justices Thomas, Alito, Gorsuch, Kavanaugh, and Barrett, opined that courts are to exercise their independent judgment in deciding if an agency has acted within the scope of its statutory authority, and are not bound to defer to any agency just because the relevant statute is ambiguous. This ruling will have a broad impact on federal departments and agencies, Congress, courts, and those individuals and entities challenging agency regulations, orders, and guidances.
The Chevron Doctrine: 1984–June 28, 2024
From 1984 until June 28 of this year, the bedrock formulation for resolving challenges to agency interpretations of their enabling statutes through rulemaking has been the two-part inquiry embodied in the Chevron doctrine. The first part of the formulation looks to the underlying statute to determine if Congress has made its intent unambiguously clear; if so, the inquiry ends, and both the agency and the reviewing court must give effect to Congress’s intent. This has become known by the shorthand phrase “Step One.”
However, if Congress’s intent is not clear, either because it did not address a specific point or used ambiguous language, then Chevron required the court to defer to the agency’s construction if it is based on a permissible reading of the underlying statute, with an understanding that a court should not substitute its own construction for a reasonable agency construction.[1] This has become known as “Step Two.”
Chevron ranks among the most cited Supreme Court decisions of all time and has been cited more often in administrative law cases than any other decision. Nevertheless, Chevron’s significance has waned over time as courts have focused more on a strict reading of the text of the relevant statute that authorized the agency’s rulemaking authority. Indeed, the Supreme Court itself has not relied on a Chevron analysis to decide a case since 2016.[2]
The Court’s Loper and Relentless Decision—and Why It Changes the Administrative State
The Chevron doctrine came to an abrupt end on June 28, 2024, when the Supreme Court overruled it. The Chief Justice described Chevron as a “fiction” and “fundamentally misguided.”[3]
The underlying dispute in both the Loper and Relentless cases involved a regulation issued by the National Marine Fisheries Service in 2020 that requires certain commercial herring fishing vessels to bear the costs of observers to help ensure compliance with fishery management plans. In both cases, the lower courts had upheld the regulation but on slightly different grounds. The lower-court decision in Loper applied a Chevron-based deference analysis, while the Relentless decision rested on an analysis of the statutory text and a holding that Congress had authorized the regulation and that regulated parties are expected to bear the costs of compliance with a regulation.[4] The Supreme Court agreed to review both cases and heard oral arguments on the same day.
The Supreme Court concluded that deference to agency determinations cannot be automatic or authoritative. Lower courts must exercise their independent judgment to determine if an agency has acted within the scope of its delegated authority from Congress, and courts cannot “defer to an agency interpretation of the law simply because a statute is ambiguous.”[5]
The Supreme Court relied on several concepts to reach this result. It determined that Chevron deference cannot be reconciled with the statutory provisions in the APA that govern judicial review of agency action.[6] In the Court’s view, the APA does not provide for any deference to agency interpretations of law. By c…