The federal courts deference to government agencies expertise and discretion (called Chevron deference) may well be at an end. Wednesday's oral arguments on January 17, 2024, before the United States Supreme Court in Loper Bright Enterprises, Inc. v. Raimondo and Relentless, Inc. v. Department of Commerce appear to signal that Chevron may well be on the chopping block. We previously wrote about the odds that the high court might eliminate the long-standing deferential doctrine and how it might even the playing field when it comes to lawsuits challenging assertions of administrative authority. Wednesday's oral arguments echoed some of our predictions and provided a potential window into what might come next.
Some justices expressed favor for Chevron’s opponents. Justice Brett Kavanaugh, for one, pointed out the doctrine’s “internal inconsistency,” asking why courts should ever conclude a statute is ambiguous enough to defer to an agency’s interpretation since traditional interpretive tools should always give an answer. Others, like Justice Neil Gorsuch, emphasized that in nearly every instance “Chevron is exploited against the individual and in favor of the government,” resulting in a disparate impact on groups with little political capital — “the immigrant, the veteran seeking his benefits, the social security disability applicant.” Most notable of all, and strongly indicative that Chevron may not be on the books much longer, is the argument for narrower grounds (rather than outright overturning the doctrine), which was advanced by Chevron’s challengers that took up next to no air time during oral argument.
Meanwhile, some Justices wrestled with what a future without Chevron might look like. As we wrote about in our preview of these cases, overruling Chevron does not mean that the administrative state will come crashing down automatically. As both counsel for the parties and the Justices acknowledged, an agency’s interpretation may still carry the “power to persuade” and should be given potentially “great weight” in any analysis. Moreover, while some have voiced a concern that overruling Chevron would open the floodgates of litigation, some of the Justices appeared satisfied with the assurance that the prior precedents will not be overturned just because they relied on Chevron. Rather, the challenger would have to conclude that the “bottom line” conclusion was wrong in those cases. This further illustrates the need to review prior applications of Chevron deference and determine what may have changed in the interim.
Finally, in an interesting exchange that might preview what is to come next, Justice Elena Kagan asked whether Congress could codify Chevron. When pressed, counsel for Relentless, Inc. answered that such a statute would be unconstitutional: “In the same way that Congress couldn’t tell the president how to exercise the veto power or the pardon power, it can’t tell courts how to do interpretation and to defer to someone else.” So, while today’s courtroom battleground involves rules of statutory interpretation, tomorrow’s argument might involve more weighty constitutional principles such as the separation of powers.
With Chevron’s seemingly likely demise will come many challenges to agency interpretation authorities. Although a decision is expected in June 2024, companies may consider taking into account the impact of Chevron deference on existing regulations. To the extent new regulations are subject to public comment, a company may consider submitting such comment to ensure that its position is in the record during any judicial review because the objective review will take such comments into account in deciding the legality of a technical regulation and how it supports the applicable implementing statute.
