The Supreme Court Decides to Revisit Chevron: Here's What it Could Mean for Future Deference to U.s. Government Agency Interpretations

• Publication year: 2023

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Ryan J. Strasser and Timothy L. McHugh ^*

In this article, the authors explain that the U.S. Supreme Court has agreed to decide whether to overturn or limit Chevron deference, and that a decision by the Court to overrule or to limit Chevron "would constitute a watershed decision in administrative law."

Chevron deference, announced by the U.S. Supreme Court in 1984, is a judge-made doctrine that generally requires a federal court when reviewing federal agency action to defer to the agency's reasonable interpretation of an ambiguous statute. ¹ It rests on the presumption that in many circumstances, "a statute's ambiguity constitutes an implicit delegation from Congress to the agency to fill in the statutory gaps." ² Practically speaking, the doctrine gives agencies wide latitude to define their own statutory authority, frustrating the ability of businesses, organizations, and individuals to successfully challenge agency action in the courts.

For these and other important reasons, the doctrine has come under intense scrutiny in recent years on statutory and constitutional grounds from individual justices of the Supreme Court, federal judges in lower courts, and academics.

To date, however, the Court has avoided the question of whether to overrule the Chevron doctrine altogether, going so far as to ignore it in recent administrative law cases. That may soon change.

On May 1, 2023, the Court granted review in Loper Bright Enterprises v. Raimondo, No. 22-451, on the sole question of whether to overturn or limit Chevron deference. The Court overruling or limiting Chevron would constitute a watershed decision in administrative law.

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This article examines the import of the Court's review of the Chevron doctrine in three parts.

In the first section, this article briefly discusses the history of judicial review of federal agency action and the emergence of the Chevron doctrine.

In the second section, it identifies several of the most-pointed criticisms that have been lodged against the doctrine, from the likes of then-Judge Gorsuch, among others.

In the next section, this article explores Loper Bright—the vehicle the Court has chosen for review of the Chevron doctrine—and the question presented in that case.

This article then concludes with some predications about the practical implications of a potential change or abandonment of the Chevron doctrine on a go-forward basis.

The History of Judicial Review of Agency Action and the Chevron Doctrine

Judicial Review Before the Administrative Procedure Act

Before the New Deal and the rise of the administrative state, Article III courts used traditional sources of statutory interpretation and policy assessments to create a body of judge-made regulatory principles that applied equally to the executive branch. During this period, Article III courts would generally defer to a statute's interpretation if it was in line with long-standing interpretations of the statute; that is, if the interpretation was "customary" or announced "contempora[neous]" with the enactment of the statute. ³ The New Deal ushered in a new era in the administration of federal laws and, in doing so, created a conflict regarding the deference that should be afforded to executive agency interpretation of agency-administered statutes.

The deference Article III courts afforded executive interpretation of federal statutes between the New Deal era and the Supreme Court's watershed decision in Chevron cannot be described as a coherent doctrine. Rather, between the rise of the administrative state and the mid-1980s, courts considered various factors in assessing the level of deference to be afforded to agency interpretations. The question was one of degree. The more factors leaning in favor of deference, the greater the deference afforded. The fewer factors

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in favor of deference, the lesser the deference afforded. The most important considerations during this period were the degree of deference Congress intended courts to give the agency, the expertise of the agency to interpret certain statutes, and Congress' explicit or implicit consent to agency interpretation. ⁴

One of the most noteworthy Supreme Court decisions from this era regarding judicial deference to agency interpretation solidified the judiciary's multifactor consideration approach in 1944. Skidmore v. Swift & Company held that the level of deference due to agency interpretation was dependent on "the thoroughness evident in its consideration, the validity of its reasoning, its consistency with earlier and later pronouncements, and all those factors which give it power to persuade, if lacking power to control." ⁵ The Court's decision in Skidmore reflects the highly flexible nature of the doctrine at this point. Not only were the factors considered manipulable, the weight those factors were given was also mutable. The judiciary's multifactor approach during this period was thus marked with extreme uncertainty regarding the level of deference due to agency interpretations.

Judicial Review After the Administrative Procedure Act

As the Court struggled to determine the correct level of judicial deference due to agency interpretation, Congress also debated the question. This debate culminated in the enactment of the Administrative Procedure Act (APA) in 1946. Section 706 of the APA provides that a "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." ⁶ The full meaning of this language is understood through an analysis of pre-APA cases because the language of the APA was tailored to the case law that preceded it. ⁷ In fact, many scholars now agree that Section 706 of the APA merely codified the existing case law on judicial deference up until that point. ⁸ In part, that is because the APA codified the standard of reviewing statutory interpretations as still de novo while still permitting a reviewing court to defer to an agency's interpretation if the traditional canons of statutory interpretation counseled in favor of doing so. ⁹ This doctrine prevailed until 1984.

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The Emergence of the Chevron Doctrine

Virtually no one believed that the Supreme Court would reconsider the level of deference to be applied to agency interpretation of ambiguities in federal statutes administered by the agency when it decided Chevron in 1984. But that is just what the Court did. The case considered whether the Environmental Protection Agency could permissibly define a "stationary source of air pollution" to include power plants containing multiple pollution-emitting devices under the Clean Air Act. Such a definition would empower state governments to allow plants with multiple emitting devices to add new emitting devices or modify existing emitting devices without obtaining a permit, so long as the alteration did not increase total emissions. ¹⁰

Instead of considering the case on the merits, Justice Stevens, writing for a unanimous majority, established Chevron's now-famous two-step process for determining when, if at all, reviewing courts should defer to agency interpretations. The first step of the framework instructs courts to determine initially whether Congress has explicitly provided its unambiguous intent on the provision at hand, based on the plain language of the statute and the traditional tools of statutory construction. If it has not, the court can then deem the statute ambiguous and next must consider whether the agency's interpretation is reasonable. If the agency's interpretation is reasonable, it is entitled to deference. Applying this framework in the Chevron case itself, the Court ultimately deferred to the EPA's interpretation because Congress had been sufficiently ambiguous by not defining the term, and the agency's interpretation was reasonable given the context of the case. ¹¹

The holding in Chevron revolutionized the doctrine of judicial deference. Before Chevron, courts had balanced competing factors to determine whether an agency interpretation should receive some sort of deference. But after Chevron, the deference issue is no longer one of degree. Rather, Chevron provided a definitive framework that required the courts to afford maximum deference to agency interpretation if Congress had assigned the...