Ruling Promotes Federal Deregulation, Legal Gridlock
The Supreme Court drastically cut the power of federal agencies to interpret the laws they administer and ruled that courts should interpret ambiguous laws. The decision will impact all federal regulatory agencies.
The decision ends the “Chevron deference,” also known as the Chevron doctrine. It compelled federal courts to defer to a federal agency to interpret unclear statutes delegated to the agency by Congress. Chevron deference is the latitude federal judges give agencies over how to interpret the statutes they administer when a dispute arises.
The principle derives its name from the 1984 U.S. Supreme Court case Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc. regarding a change in the Environmental Protection Agency’s interpretation of a provision in the Clean Air Act.
Now, instead of deferring to the expertise of agencies to interpret ambiguous language in laws pertaining to their work, federal judges can interpret laws for themselves.
Federal judges are now part of the policymaking process–a move that clearly breaches the separation of powers. This policymaking role violates the intent of the Constitution.
“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,” wrote Supreme Court Justice Elena Kagan in her dissent from the ruling. “As if it did not have enough on its plate, the majority turns itself into the country’s administrative czar.”
The decision has profound consequences, not only for the country’s rule of law but also for how agencies function. The Chevron doctrine helped courts review, approve, and reject regulations in the context of statutory intent. It also maintained a strict rule of deference to federal agencies’ interpretations of federal laws, having given regulators broad authority to make rules related to the environment, health care, immigration, and other subjects of public policy.
Initially, Chevron was a deregulatory decision that allowed the Environmental Protection Agency in the Reagan administration to interpret the Clean Air Act in favor of business. At the time, the decision was embraced by conservatives and considered a stinging loss for environmentalists. But that view has evolved. Lately, Chevron has been seen as a symbol of government excess and overreach.
For years, Chevron deference was supported by conservative-leaning legal authorities including Justices Antonin Scalia and Clarence Thomas. Over time, the doctrine began to see a shift in ideological thinking with some individuals, such as Thomas, reversing their views.
The Trump administration was open about its desire to nominate judicial appointees who would challenge the broad power federal agencies have to interpret laws and enforce regulations, often without being subject to judicial oversight. That philosophy secured the nomination of Justice Neil Gorsuch to the U.S. Supreme Court. Gorsuch declared Chevron to be “no less than a judge-made doctrine for the abdication of the judicial duty.”
On June 24th, the Supreme Court overturned the Chevron deference doctrine. Now, federal courts may not defer to an agency’s interpretation of an ambiguous statute, which means that the judicial system has consolidated even more power over the commercial regulatory framework. Courts could see historic backlogs over the legal interpretations of regulations.
The demise of Chevron provides new avenues for regulated industries to challenge their regulators. At the same time, the Court offered minimal guidance to lower courts in a post-Chevron world. Reversing this precedent will encourage more challenges to agency interpretations of statutes even in situations where courts have previously upheld agency positions.
“This decision is another form of constitutional warfare,” said Gary Chandler, CEO of Crossbow Communications. “Attacks on the Constitution and the truth are eroding our democracy.”
The Supreme Court’s decision will change the landscape for agencies, Congress and the federal courts. Although much depends on the details, potential implications include:
- Agencies may find it more difficult to promulgate and defend regulations that go beyond explicit statutory authority and new administrations may hesitate to alter interpretations of governing statutes, except to the extent that they can argue that previous interpretations based on Chevron deference should be altered in favor of interpretations that hew more closely to statutory text. Within agencies, we might also see an increase in the influence of the general counsel’s office over policy offices when it comes to developing regulatory programs, as agencies anticipate judicial review of their interpretations based on legal rules of statutory interpretation that will be most convincing to judges.
- Congress will face more pressure to clearly articulate agency authority and delegate fewer details to administrative agencies. Looking at the political reality, Members of Congress may no longer be able to rely on party-aligned executive and independent agencies to engage in policymaking that conforms to political priorities if those priorities have not first been passed into law, or, avoid political debate by pushing agencies to instead address certain questions.
- Courts may see an increase in their dockets as potential parties anticipate a greater chance of success from litigation challenging agency statutory interpretations. Judges may face increased scrutiny of their decisions and pressure to justify their construction of statutes as impartial interpretations of legislation rather than based on their own policy preferences.
This decision will affect future challenges to federal agencies and the development and implementation of the regulatory framework.
“The Supreme Court says individual judges around the country should decide the best reading of a statute,” said Kym Meyer, the Litigation Director for the Southern Environmental Law Center. “That’s a recipe for chaos, as hundreds of federal judges — who lack the expertise of agency personnel — are certain to reach inconsistent results on the meaning of federal laws as applied to complex, technical issues.”
Justice Roberts rejected any suggestion that agencies, rather than courts, are better suited to determine what ambiguities in a federal law might mean. Even when those ambiguities involve technical or scientific questions that fall within an agency’s area of expertise, Roberts emphasized, “Congress expects courts to handle technical statutory questions” – and courts also have the benefit of briefing from the parties and “friends of the court.”
Will this ruling impact the regulatory framework around issues such as forever chemicals and biosolids? Could a judicial review have prevented these public health catastrophes? How will the reversal of the Chevron doctrine impact EPA liability, for example, for past negligence? How will it impact PRPs? Cases are moving through the courts now.
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