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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--As he makes his way to federal prison, Steve Bannon probably has a smile on his face. The Trump administration's advocate for "dismantling the administrative state" got his wish last Friday when the U.S. Supreme Court voted 6-3 to overturn Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., a case initially decided 40 years ago that has served as a foundational element in federal regulatory practice and law.
In 1984, in the original Chevron case, the court ruled that when Congress enacted a law that included some ambiguity, regulatory agencies were allowed to exercise their expert judgment to write implementing regulations. The 40-year-old decision has been cited in thousands of federal administrative cases across many industries since then.
Now, apparently, the technical experts in federal administrative agencies are on the outside looking in when it comes to setting or revising regulatory standards. No longer will their expertise automatically be given deference by the courts.
Friday's 6-3 decision to overturn Chevron was written by Chief Justice John Roberts. The majority opinion drew separate concurrences from Associate Justices Clarence Thomas and Neil Gorsuch. The court's three liberal members--Associate Justices Elena Kagan, Sonia Sotomayor and Ketanji Brown Jackson--joined in a lengthy, pointed dissent authored by Kagan.
The 114-page decision came down amid a flurry of late decisions on numerous hot-button issues, including abortion, gun rights, opioids, social media, the rights of homeless people, the January 6 insurrection at the Capitol and whether Donald Trump was immune from criminal prosecution.
In overturning Chevron Friday, the court continued its recent practice of overturning precedent it found disagreeable, shown most notably in its 2022 decision in Dobbs v. Jackson Women's Health Organization, which overturned 49 years of settled law. The Dobbs decision held that the constitution does not provide women with a right to an abortion.
In Friday's decision overturning Chevron, the court combined two cases, Loper Bright Enterprises, et al., v. Gina Raimondo, Secretary of Commerce, et al. and Relentless, Inc. et al. v. Department of Commerce, et al., that concerned maritime disputes settled by a federal regulatory agency. The oral arguments were held six months ago, on January 17.
In his majority opinion, Chief Justice Roberts wrote, "The Administrative Procedure Act (APA) requires courts to exercise their independent judgment in deciding whether an agency has acted within its statutory authority, and courts may not defer to an agency interpretation of the law simply because a statute is ambiguous."
Apparently, the court's conservative majority now feels the judicial branch can make federal law through interpretation. This is reversal of longtime conservative arguments against "judicial activism": that courts exist not to make federal law--that right is given to Congress alone--but to play a neutral role, akin to a baseball umpire who is responsible for calling balls and strikes, whatever the consequences.
The Supreme Court's longtime respect for stare decisis, Latin for "to stand by things decided," now seems to be more of a general recommendation and not a hard and fast principle.
In the majority's decision, Roberts wrote, "The deference that Chevron requires of courts reviewing agency action cannot be squared with the Administrative Procedure Act (APA). ... Congress in 1946 enacted the APA "as a check upon administrators whose zeal might otherwise have carried them to excesses not contemplated in legislation."
The 1984 Chevron decision, Roberts continued, "triggered a marked departure from the traditional judicial approach of independently examining each statute to determine its meaning." In its Chevron decision four decades ago, the court said it had to defer to an agency if it had offered "a permissible construction of the statute" if the statue in question did not have the necessary level of specificity." Thus was born what came to be known as the "Chevron deference."
Roberts continued: "Chevron cannot be reconciled with the APA by presuming that statutory ambiguities are implicit delegations to agencies. That presumption does not approximate reality. A statutory ambiguity does not necessarily reflect a congressional intent that an agency, as opposed to a court, resolve the resulting interpretive question. Many or perhaps most statutory ambiguities may be unintentional."
"Because Chevron's justifying presumption is, as Members of the Court have often recognized, a fiction," the majority decision continued, "the Court has spent the better part of four decades imposing one limitation on Chevron after another. .... The (Supreme) Court, for its part, has not deferred to an agency interpretation under Chevron since 2016. But because Chevron remains on the books, litigants must continue to wrestle with it, and lower courts--bound by even the Court's crumbling precedents--understandably continue to apply it. At best, Chevron has been a distraction from the question that matters: Does the statute authorize the challenged agency action?"
"Chevron has proved to be fundamentally misguided," the majority opinion said. "It reshaped judicial review of agency action without grappling with the APA, the statute that lays out how such review works. And its flaws were apparent from the start, prompting the Court to revise its foundations and continually limit its application. Experience has also shown that Chevron is unworkable."
Regarding stare decisis, Roberts wrote the principle "does not require the Court to persist in the Chevron project. The stare decisis considerations most relevant here--the quality of [the precedent's] reasoning, the workability of the rule it established, ... and reliance on the decision--all weigh in favor of letting Chevron go."
That's not the way the three liberal dissenting justices saw things. Associate Justice Kagan wrote, "For 40 years, Chevron has served as a cornerstone of administrative law, allocating responsibility for statutory construction between courts and agencies. Under Chevron, a court uses all its normal interpretive tools to determine whether Congress has spoken to an issue. ... If the court finds, at the end of its interpretive work, that Congress has left an ambiguity or gap, then a choice must be made. Who should give content to a statute when Congress's instructions have run out? Should it be a court? Or should it be the agency Congress has charged with administering the statute?"
"The answer Chevron gives is that it should usually be the agency, within the bounds of reasonableness," the dissent continued. "That rule has formed the backdrop against which Congress, courts, and agencies--as well as regulated parties and the public--all have operated for decades. It has been applied in thousands of judicial decisions. It has become part of the warp and woof of modern government, supporting regulatory efforts of all kinds--to name a few, keeping air and water clean, food and drugs safe, and financial markets honest."
"And the rule is right," Kagan wrote. "This Court has long understood Chevron deference to reflect what Congress would want, and so to be rooted in a presumption of legislative intent. Congress knows that it does not--in fact cannot--write perfectly complete regulatory statutes. It knows that those statutes will inevitably contain ambiguities that some other actor will have to resolve, and gaps that some other actor will have to fill. And it would usually prefer that actor to be the responsible agency, not a court."
Some interpretive issues arising in the regulatory context necessarily involve scientific or technical subject matter, she continued. "Agencies have expertise in those areas; courts do not. Some demand a detailed understanding of complex and interdependent regulatory programs. Agencies know those programs inside-out; again, courts do not. And some present policy choices, including trade-offs between competing goods. Agencies report to a President, who in turn answers to the public for his policy calls; courts have no such accountability and no proper basis for making policy."
"And of course Congress has conferred on that expert, experienced, and politically accountable agency the authority to administer--to make rules about and otherwise implement--the statute giving rise to the ambiguity or gap. Put all that together and deference to the agency is the almost obvious choice, based on an implicit congressional delegation of interpretive authority."
But today, Kagan wrote, "the Court flips the script: It is now the court, rather than the agency, that will wield power when Congress has left an area of interpretive discretion. A rule of judicial humility gives way to a rule of judicial hubris. In recent years, this Court has too often taken for itself decision-making authority Congress assigned to agencies. The Court has substituted its own judgment on workplace health for that of the Occupational Safety and Health Administration; its own judgment on climate change for that of the Environmental Protection Agency; and its own judgment on student loans for that of the Department of Education."
"But evidently that was, for this Court, all too piecemeal. In one fell swoop, the majority today gives itself exclusive power over every open issue--no matter how expertise-driven or policy-laden--involving the meaning of regulatory law. As if it did not have enough on its plate, the majority turns itself into the country's administrative czar. It defends that move as one suddenly required by the nearly 80-year-old APA. But the APA makes no such demand. Today's decision is not one Congress directed. It is entirely the majority's choice."
Friday's decision not only calls into question how future federal agency actions will be developed and judged, it may also lead to the reopening of 40 years of regulatory and judicial decisions involving, but not limited to, energy, the environment, pollution, workplace safety, food and drug safety, consumer protection and a wide swath of the U.S. economy.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
In 1984, in the original Chevron case, the court ruled that when Congress enacted a law that included some ambiguity, regulatory agencies were allowed to exercise their expert judgment to write implementing regulations. The 40-year-old decision has been cited in thousands of federal administrative cases across many industries since then.
Now, apparently, the technical experts in federal administrative agencies are on the outside looking in when it comes to setting or revising regulatory standards. No longer will their expertise automatically be given deference by the courts.
Friday's 6-3 decision to overturn Chevron was written by Chief Justice John Roberts. The majority opinion drew separate concurrences from Associate Justices Clarence Thomas and Neil Gorsuch. The court's three liberal members--Associate Justices Elena Kagan, Sonia Sotomayor and Ketanji Brown Jackson--joined in a lengthy, pointed dissent authored by Kagan.
The 114-page decision came down amid a flurry of late decisions on numerous hot-button issues, including abortion, gun rights, opioids, social media, the rights of homeless people, the January 6 insurrection at the Capitol and whether Donald Trump was immune from criminal prosecution.
In overturning Chevron Friday, the court continued its recent practice of overturning precedent it found disagreeable, shown most notably in its 2022 decision in Dobbs v. Jackson Women's Health Organization, which overturned 49 years of settled law. The Dobbs decision held that the constitution does not provide women with a right to an abortion.
In Friday's decision overturning Chevron, the court combined two cases, Loper Bright Enterprises, et al., v. Gina Raimondo, Secretary of Commerce, et al. and Relentless, Inc. et al. v. Department of Commerce, et al., that concerned maritime disputes settled by a federal regulatory agency. The oral arguments were held six months ago, on January 17.
In his majority opinion, Chief Justice Roberts wrote, "The Administrative Procedure Act (APA) requires courts to exercise their independent judgment in deciding whether an agency has acted within its statutory authority, and courts may not defer to an agency interpretation of the law simply because a statute is ambiguous."
Apparently, the court's conservative majority now feels the judicial branch can make federal law through interpretation. This is reversal of longtime conservative arguments against "judicial activism": that courts exist not to make federal law--that right is given to Congress alone--but to play a neutral role, akin to a baseball umpire who is responsible for calling balls and strikes, whatever the consequences.
The Supreme Court's longtime respect for stare decisis, Latin for "to stand by things decided," now seems to be more of a general recommendation and not a hard and fast principle.
In the majority's decision, Roberts wrote, "The deference that Chevron requires of courts reviewing agency action cannot be squared with the Administrative Procedure Act (APA). ... Congress in 1946 enacted the APA "as a check upon administrators whose zeal might otherwise have carried them to excesses not contemplated in legislation."
The 1984 Chevron decision, Roberts continued, "triggered a marked departure from the traditional judicial approach of independently examining each statute to determine its meaning." In its Chevron decision four decades ago, the court said it had to defer to an agency if it had offered "a permissible construction of the statute" if the statue in question did not have the necessary level of specificity." Thus was born what came to be known as the "Chevron deference."
Roberts continued: "Chevron cannot be reconciled with the APA by presuming that statutory ambiguities are implicit delegations to agencies. That presumption does not approximate reality. A statutory ambiguity does not necessarily reflect a congressional intent that an agency, as opposed to a court, resolve the resulting interpretive question. Many or perhaps most statutory ambiguities may be unintentional."
"Because Chevron's justifying presumption is, as Members of the Court have often recognized, a fiction," the majority decision continued, "the Court has spent the better part of four decades imposing one limitation on Chevron after another. .... The (Supreme) Court, for its part, has not deferred to an agency interpretation under Chevron since 2016. But because Chevron remains on the books, litigants must continue to wrestle with it, and lower courts--bound by even the Court's crumbling precedents--understandably continue to apply it. At best, Chevron has been a distraction from the question that matters: Does the statute authorize the challenged agency action?"
"Chevron has proved to be fundamentally misguided," the majority opinion said. "It reshaped judicial review of agency action without grappling with the APA, the statute that lays out how such review works. And its flaws were apparent from the start, prompting the Court to revise its foundations and continually limit its application. Experience has also shown that Chevron is unworkable."
Regarding stare decisis, Roberts wrote the principle "does not require the Court to persist in the Chevron project. The stare decisis considerations most relevant here--the quality of [the precedent's] reasoning, the workability of the rule it established, ... and reliance on the decision--all weigh in favor of letting Chevron go."
That's not the way the three liberal dissenting justices saw things. Associate Justice Kagan wrote, "For 40 years, Chevron has served as a cornerstone of administrative law, allocating responsibility for statutory construction between courts and agencies. Under Chevron, a court uses all its normal interpretive tools to determine whether Congress has spoken to an issue. ... If the court finds, at the end of its interpretive work, that Congress has left an ambiguity or gap, then a choice must be made. Who should give content to a statute when Congress's instructions have run out? Should it be a court? Or should it be the agency Congress has charged with administering the statute?"
"The answer Chevron gives is that it should usually be the agency, within the bounds of reasonableness," the dissent continued. "That rule has formed the backdrop against which Congress, courts, and agencies--as well as regulated parties and the public--all have operated for decades. It has been applied in thousands of judicial decisions. It has become part of the warp and woof of modern government, supporting regulatory efforts of all kinds--to name a few, keeping air and water clean, food and drugs safe, and financial markets honest."
"And the rule is right," Kagan wrote. "This Court has long understood Chevron deference to reflect what Congress would want, and so to be rooted in a presumption of legislative intent. Congress knows that it does not--in fact cannot--write perfectly complete regulatory statutes. It knows that those statutes will inevitably contain ambiguities that some other actor will have to resolve, and gaps that some other actor will have to fill. And it would usually prefer that actor to be the responsible agency, not a court."
Some interpretive issues arising in the regulatory context necessarily involve scientific or technical subject matter, she continued. "Agencies have expertise in those areas; courts do not. Some demand a detailed understanding of complex and interdependent regulatory programs. Agencies know those programs inside-out; again, courts do not. And some present policy choices, including trade-offs between competing goods. Agencies report to a President, who in turn answers to the public for his policy calls; courts have no such accountability and no proper basis for making policy."
"And of course Congress has conferred on that expert, experienced, and politically accountable agency the authority to administer--to make rules about and otherwise implement--the statute giving rise to the ambiguity or gap. Put all that together and deference to the agency is the almost obvious choice, based on an implicit congressional delegation of interpretive authority."
But today, Kagan wrote, "the Court flips the script: It is now the court, rather than the agency, that will wield power when Congress has left an area of interpretive discretion. A rule of judicial humility gives way to a rule of judicial hubris. In recent years, this Court has too often taken for itself decision-making authority Congress assigned to agencies. The Court has substituted its own judgment on workplace health for that of the Occupational Safety and Health Administration; its own judgment on climate change for that of the Environmental Protection Agency; and its own judgment on student loans for that of the Department of Education."
"But evidently that was, for this Court, all too piecemeal. In one fell swoop, the majority today gives itself exclusive power over every open issue--no matter how expertise-driven or policy-laden--involving the meaning of regulatory law. As if it did not have enough on its plate, the majority turns itself into the country's administrative czar. It defends that move as one suddenly required by the nearly 80-year-old APA. But the APA makes no such demand. Today's decision is not one Congress directed. It is entirely the majority's choice."
Friday's decision not only calls into question how future federal agency actions will be developed and judged, it may also lead to the reopening of 40 years of regulatory and judicial decisions involving, but not limited to, energy, the environment, pollution, workplace safety, food and drug safety, consumer protection and a wide swath of the U.S. economy.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
