For nearly four decades, the Chevron deference has been a hallmark of administrative law. This doctrine, under which federal courts defer to an agency’s interpretation of an ambiguous statute that the agency is charged with administering, has been criticized as an insurmountable obstacle to those wishing to challenge an agency action.1
However, as currently constituted, the United States Supreme Court appears poised to walk back—or even eliminate—the doctrine with recent appointees generally appearing to disfavor expansive exercises of power by the administrative state. Two forthcoming decisions, Loper Bright Enterprises v. Raimondo and Relentless Inc. v. Department of Commerce,2 which will be argued on January 17, 2024, potentially provide avenues for the Supreme Court to settle the question once and for all.
Loper and Relentless arrive at the Court following a series of cases in which the Justices have either limited doctrines giving deference to administrative action or ignored such doctrines entirely. For instance, in 2019, the Court in Kisor v. Wilkie revisited the status of a closely-related deferential doctrine—known as Auer deference—in which the Court defers to an agency’s interpretation of its own regulations. Although the Court did not overrule Auer, it reminded lower courts that this doctrine incorporates real limits and can only be applied in certain circumstances. In another case, American Hospital Association v. Becerra, the Court completely ignored Chevron when rejecting an agency’s interpretation of a statute, instead using ordinary principles of statutory analysis in its analysis. Despite discussion of the case in briefing and oral argument, the Court did not provide a single Chevron citation.
Also of note, accompanying Loper and Relentless are several cases presenting the opportunity to further limit the administrative state. SEC v. Jarskey, a case argued late last year, asks, among other things, whether the SEC’s power to bring enforcement actions violates the non-delegation doctrine.3 And Corner Post v. Board of Governors of the Federal Reserve contemplates whether the statute of limitations to challenge administrative actions should begin to run from the issuance of the final rule (as the majority of courts have held) or when the rule first injures the plaintiff. A ruling against the government in either of these cases could make administrative action more susceptible to challenge.
Given the ongoing trend, it is not surprising that the Court’s review of Loper and Relentless is seen by many to portend the final nail in Chevron’s coffin. Both cases concern fisheries challenging the agency interpretation of a National Marine Fisheries Service rule. The fisheries argue not only that deference to the agency interpretation was improper, but also that Chevron inappropriately transferred power from Congress and the judiciary to the executive branch. The Supreme Court agreed to hear the cases, but only as to the issue of whether the court should overrule Chevron.
Of course, eliminating Chevron does not necessarily mean that challenges to agency action will be simple or easy, going forward. Courts may still accord weight to an agency’s interpretation of an ambiguous statute based on factors like the agency’s thoroughness in its consideration, the validity of its reasoning, consistency with prior interpretations, expertise, and experience. So, while eliminating Chevron might mean that an agency’s reasonable interpretation of an ambiguous statute will no longer prevail by default, those challenging agency action will still have to think critically about how to attack an agency’s reasoning and should consider seeking advice from legal counsel.
Still, an opinion overruling Chevron will very likely lighten the load businesses and individuals have to challenge agency action. This ranges from the EPA’s implementation of the Clean Air Act, the Department of the Interior’s regulation of mining companies, and the ATF’s regulations on certain firearms—all cases that recently relied on Chevron deference to insulate the agency’s regulation from attack.4 This will be especially true where the assertion of agency power involves an issue of “vast economic and political significance.” As exemplified by West Virginia v. EPA, and other recent cases, the Supreme Court has greeted such assertions with skepticism if Congress has not given clear authority over the issue to the agency.
Outside of litigation, there may be practical consequences too. One example might be less frequent attempts by the federal government to implement policy through rules that are not sufficiently tethered to the agency’s enabling legislation, forcing the government down the more difficult path of enacting traditional legislation that needs to pass both houses of Congress and be signed by the President.
Arizona is already familiar with this potential new reality. Arizona enacted a specific statute, A.R.S. § 12 910(F), designed to eliminate Chevron deference in Arizona courts for all administrative agencies, with only one exception for the Arizona Corporation Commission. Therefore, Arizona courts and the lawyers practicing before them already have some familiarity with this changing landscape and how it presents potentially fertile ground for challenging governmental action.5
As the legal landscape that once facilitated the rise of the so-called administrative state continues to change, businesses and individuals regulated by those agencies may want to work with legal counsel if they have questions about the validity of those regulations, especially in a post-Chevron world, and revisit past court challenges deferring to agency expertise. Further, legislators and agencies should also be prepared for the potential challenges that may arise if Loper and Relentless spell the end for broad deferential administrative law doctrines. Finally, when administrative agencies issue new proposed regulatory rules, stakeholders should consider reviewing and providing comment on the rules as to the real effects of the proposal. It is even more beneficial to provide specific data point to insert in the record that may eventually be reviewed by a court to offset the data points pushed by the agencies.
Footnotes
1. For example, in a 2015 concurrence, Justice Thomas opined that Chevron deference “wrests from Courts the ultimate interpretative authority ‘to say what the law is,’ and hands it over to” the executive branch. And Justice Gorsuch has argued that the Court “should acknowledge forthrightly that Chevron did not undo, and could not have undone, the judicial duty to provide an independent judgment of the law’s meaning in the cases that come before the Nation’s courts.”
2. The Court’s subsequent grant of certiorari to Relentless allows Justice Ketanji Brown Jackson to participate in this landmark decision, as she originally recused herself from Loper because of her previous involvement in the case as a D.C. Circuit judge.
3. For Snell & Wilmer’s prior analysis of Jarkesy, see: https://www.swlaw.com/publications/legal-alerts/a-constitutional-shakeup-in-administrative-law-the-fifth-circuits-new-decision-revisits-the-application-of-the-nondelegation-doctrine.
4. Bahr v. Regan (giving deference to the EPA’s construction of the Clean Air Act), Grand Canyon Trust v. Provencio (deferring to the Department of the Interior’s interpretation of the Mining Act of 1872), and Gun Owners of America, Inc. v. Garland (finding that the Bureau of Alcohol, Tobacco, Firearms and Explosives’ statutory construction warranted deference).
5. See, e.g., Roberts v. State (holding that state agency regulations purporting to incorporate federal wage laws were not binding, in part because of A.R.S. § 12 910(F)).
