As it would be irresponsible not to speculate, this quarter’s column is mostly devoted to reading tea leaves from oral arguments in Loper Bright Enterprises v. Raimondo, No. 22-451, and Relentless, Inc. v. Dept. of Commerce, No. 22-1219, as to whether the Supreme Court will overrule our dear, middle-aged friend of these last forty years, the Chevron doctrine. We will also add a few observations regarding Ohio v. Environmental Protection Agency, No. 23A349, scheduled for oral argument on February 21, in which the Court takes up the question of whether to stay operation of the EPA’s “Good Neighbor Plan” during the pendency of challenges in the lower courts.
Although it is likely superfluous for this audience, let’s start with some Chevron review to set the stage. The Clean Air Act Amendments of 1977 imposed a stringent permitting regime on “new or modified stationary sources” of pollution. Implementing this program raised the problem of determining whether an entire plant should count as a “stationary source,” or whether pollution-emitting components within the plant should count. The former construction left room to apply the “bubble concept.” On this approach, a firm could increase emissions from a component within a plant without permitting so long as overall emissions from the plant did not increase. Near the end of the Carter Administration, the EPA adopted a rule rejecting the application of the bubble concept in nonattainment areas. Early in the Reagan Administration, the EPA changed course, issuing a rule that allowed states to apply the bubble concept in both attainment and nonattainment areas. In its justification for this rule, the EPA explained that this change would streamline administration and incentivize efficient equipment upgrades. The Supreme Court, in a 6-0 decision that no justice thought was doctrinally significant at the time, affirmed the agency’s flip-flop and inadvertently gave us Chevron deference. Chevron U.S.A., Inc. v. Natural Resources Defense Council, 467 U.S. 837 (1984).
Takeaways from Chevron include:
In Chevron itself, after peering at statutory language and legislative history, the Court concluded that Congress had intended both to protect the environment and to preserve reasonable economic growth. Congress had not expressed its intent regarding the granular problem of whether to allow application of the bubble concept in construing “stationary source.” The EPA’s choice in favor of the bubble concept rested on policy judgments regarding which approach would make the world a better place, not on the agency’s judgment regarding what Congress had commanded. The Court concluded this policy determination should be upheld, as the agency had struck “a reasonable accommodation of manifestly competing interests” in “a detailed and reasoned fashion” for a regulatory scheme that was “technical and complex.” Id. at 865.
As of this writing, Westlaw says that Chevron has been cited in 18,493 cases. Its core insight has blossomed into a remarkably complex doctrine. Courts have developed various “step zero” doctrines to determine when the Chevron framework should apply in the first instance. They have struggled to determine the relationship between step-two rationality review and arbitrary-and-capricious review. Commentators debate whether Chevron has anywhere from one to five steps.
About a decade or so ago, conservative voices began to grow stridently critical of Chevron. Justice Thomas insists that Chevron “wrests from Courts the ultimate authority to say ‘what the law is.’” Michigan v. EPA, 576 U.S. 743, 761 (2015) (Thomas, J., concurring). Justice Gorsuch, while still sitting on the Tenth Circuit, condemned Chevron for “swallow[ing] huge amounts of core judicial and legislative power.” Guitierrez-Brizuela v. Lynch, 834 F.3d 1142, 1149 (10th Cir. 2016) (Gorsuch, J., concurring).
Responding to this growing chorus, the Supreme Court this Term granted certiorari on whether to overrule the Chevron doctrine in Loper Bright Enterprises v. Raimondo, No. 22-451, and Relentless, Inc. v. Dept. of Commerce, No. 22-1219. Among other charges, petitioners in these cases contend that the Chevron doctrine trounces separation of powers principles by shifting legislative and judicial power to the executive branch, violates due process, ignores the purported statutory command of the Administrative Procedure Act to conduct de novo review of questions of law, distorts operations of the political branches, and enables agencies to victimize the citizenry.
Based on oral arguments held on January 17, Chevron’s fate is poised on a knife’s edge. Justices Thomas, Gorsuch, Alito, and Kavanaugh look ready to give the Chevron doctrine the heave-ho. Justices Kagan, Sotomayor, and Jackson will do their best to save the Chevron doctrine in some form. The Chief Justice and Justice Barrett will likely have the dispositive votes.
If the majority favors overruling Chevron, it would not mean the end of all deference. It seems common ground that Skidmore deference (or, as some prefer, Skidmore respect) would remain applicable, allowing courts to give agency explanations of statutory constructions whatever persuasive weight they may deserve. Hearst-style deference for mixed questions of law and fact would likely make a comeback. Also, the justices and litigants accepted as given that Congress can grant policymaking discretion to agencies by using especially capacious statutory terms—e.g., instructing an agency regulate in a “reasonable” or “appropriate” manner. So, we may soon be debating which terms are broad enough to constitute delegations.
If Chevron escapes death, it will likely be in a Kisorized form. The verb “to Kisor” is a recent addition to a sort of English that refers to Justice Kagan’s transformation of Auer deference for agency regulatory interpretations in Kisor v. Wilkie, 139 S. Ct. 2400 (2019). As a price for preserving Auer deference, Kisor identified strict conditions limiting its application. Most notably for the present purpose, Justice Kagan stressed that, “[f]irst and foremost, a court should not afford Auer deference unless the regulation is genuinely ambiguous.” Id. at 2415. To make this determination, a court must, a la Chevron’s note 9, “exhaust all the ‘traditional tools’ of construction.” Id. (citing Chevron, 467 U.S. at 843 n.9).
Below, we overread some of the justices’ questions and remarks from oral argument.
Justice Thomas kept fairly quiet. His questions suggest he may be contemplating writing an opinion insisting that the Chevron doctrine is unconstitutional. One potential obstacle to such an opinion is the long tradition of mandamus practice. During the Loper Bright oral argument, Justice Thomas asked Paul Clement to comment on “mandamus as a basis for a sort of deference,” as his “understanding of mandamus is that duty has to be clear before it actually lies.” Loper Bright Tr. at 5. Cooperating, Clement responded by suggesting that the restricted availability of mandamus is not a function of deferential review of legal questions, but instead a function of remedial limits. Id. at 6.
Justice Gorsuch had a lot to say. Loading the dice, he observed that his understanding of Chevron, “at least in coming here today,” is that “[i]t’s ambiguous and, therefore, the agency always wins.” Relentless Tr. at 22. Picking up on a theme pressed by the petitioners, he also strongly criticized the ability of agencies to invoke Chevron deference to flip back and forth on their statutory constructions. Id. at 24, 131. He focused special ire on the flexibility afforded by the Brand X doctrine. Id. at 24, 93. Under this doctrine, if a court determines that a particular construction of an agency’s enabling act is reasonable under Chevron step two but not compelled by Chevron step one, an agency can displace the construction approved by the court with a new one so long as it, too, is reasonable. Nat’l Cable and Telecommunciations Ass’n v. Brand X Internet Services, 545 U.S. 967 (2005) (Thomas, J.). Justice Gorsuch also indicated that he thinks that abandoning Chevron would not require judges to make policy decisions. Relentless Tr. at 50.
Justice Alito, another likely vote against Chevron, scored the win for best World War II analogy. Perhaps a little exasperated with the petitioners’ characterization of the judicial decisionmaking process, he queried:
Do you think that the canons of interpretation that we have now and all of the other tools that we have in our statutory interpretation toolkit are like the Enigma machine and so we have these statutes and they’re sort of written in code and we run them through the Enigma machine and, abracadabra, we have the best interpretation? Do you really think that’s how it works?
Id. at 36-37. Justice Alito seemed to tip his hand later in the argument by indicating that he thought that Solicitor General Prelogar could not define “ambiguity” in a way that would provide sufficient guidance to courts in applying Chevron. Id. at 115-16. The idea that ambiguity is what is left over after exhaustion of “traditional tools” of statutory construction is a non-starter, according to Justice Alito, because courts can always use these tools to find an answer in cases that do not involve agencies. Id.
Justice Kavanaugh’s many questions and comments signal a vote to ditch Chevron. A world without Chevron need not be too rigid because Congress can grant State Farm-style discretion to agencies by delegating to them power to take “reasonable” or “appropriate” actions. Id. at 57. Chevron is internally inconsistent because “[i]f you use all the traditional tools of statutory interpretation, you’ll get an answer, and we know that because, in cases where we don’t have an agency involved and we use those same traditional tools, we get an answer.” Id. at 82. Contrary to a core premise of Chevron, the law never “run[s] out.” Id. at 109. Justice Kavanaugh thinks that judges forgo adopting the statutory interpretations that they think best in favor of less persuasive agency interpretations “all the time.” Id. at 86. Chevron “ushers in shocks to the system every four or eight years when a new administration comes in” that are so disruptive that even Professor Pierce doesn’t like Chevron anymore. Id. at 96. Some states have gotten rid of Chevron deference, and they have not fallen apart. Id. at 63.
Justice Kagan came out swinging, querying whether petitioners really wanted courts to make the call on issues implicating expertise, such as whether “[a] new product designed to promote healthy cholesterol levels … is a dietary supplement … or a drug.” Id. at 11. She seemed incredulous at petitioners’ answer that this would be “a legal question for a court.” Id. She pressed the theme that “sometimes law runs out. Sometimes there’s a gap. Sometimes there’s a genuine ambiguity. … In that case I would rather have people at HHS telling whether this new product was a dietary supplement or a drug.” Id. at 13. Judges, she maintains, “should know what they don’t know.” Id. at 19. She observed that, when Congress gets around to doing its best to regulate artificial intelligence, it will necessarily leave interpretive gaps. She doubts that Congress will want “this Court to decide those questions, policy-laden questions, of artificial intelligence.” Id. at 45.
Justice Sotomayor raised the concern that overruling Chevron would call into question the results of 77 cases in which the Court had used the Chevron doctrine. Id. at 38. She also suggested that Chevron’s interpretive flexibility allows agencies to alter course as “things change on the ground.” Loper Bright Tr. at 11.
Justice Jackson, who is recused from Loper Bright but not Relentless, declared that she saw “Chevron as doing the very important work of helping courts stay away from policymaking.” Relentless Tr. at 25. She also sought to defuse the objection that Chevron enables policy changes to occur as one administration shifts to another as reflecting “a democratic structure where we have the new administration being elected by the people on the basis of certain policy determinations.” Id. at 99.
From reading the transcript, it seems like Chief Justice Roberts would just as soon not spend his time resolving this particular administrative law culture war. He queried: “How much of an actual question on the ground is this? I saw some study that said we haven’t relied on Chevron for 14 years.” Id. at 33. Judges are used to coming up with what they think is the “best answer,” which doesn’t leave that much room for Chevron. Id. at 34. The Chief Justice also engaged in one of the very few discussions of the particular issue of statutory interpretation raised by Loper Bright and Relentless in nearly 250 pages of transcript—i.e., whether the agency had authority to require fishing vessels to pay for monitors. He remarked, “I guess I don’t understand how you [petitioners] even get to the Chevron issue, because Chevron step one, you give the same answer.” Loper Bright Tr. at 14. Maybe we can look forward to Chief Justice Robert’s separate opinion explaining that, because the petitioners’ preferred statutory construction is clearly correct, he need not reach the issue of overturning Chevron.
We come last, but certainly not least, to Justice Barrett. She indicated that it would be appropriate for courts to defer to policy-laden applications of law to fact. Relentless Tr. at 30-31. She also suggested “that an agency could be tasked with deciding what was the most feasible, most useful, most reasonable.” Id. at 32. Perhaps with a mind to minimizing the downsides of keeping Chevron, she posed a question to the Solicitor General suggesting that Kisorizing the Chevron doctrine might require repudiation of the Brand X doctrine allowing agencies to displace judicial precedents. Loper Bright Tr. at 59. The Solicitor General declined this invitation.
But the main theme of Justice Barrett’s questions was concern that overruling Chevron would be too disruptive. She noted that in Chevron step-two cases, a court, if it affirms, merely holds that an agency construction is reasonable. Relentless Tr. at 59. She queried whether overruling Chevron would invite a “flood of litigation” challenging such precedents on the ground that the statutory terms, properly construed, “really mean” something else. Id. at 60. Petitioners attempted to evade this problem by contending that the “bottom-line” of such holdings was that agency actions were lawful, and that litigants would have a tough time persuading courts that these holdings were so wrong as to justify overcoming stare decisis. Id. at 60-61; see also Loper Bright Tr. at 21 (“[A]ll you have to do is” characterize the question as whether “the agency’s interpretation of the statute lawful?”). Justice Barrett’s comments suggested that she was not persuaded that the Court had authority to rewrite every application of Chevron upholding an agency statutory construction as reasonable. Relentless Tr. at 61 (noting that petitioners’ characterization of the “bottom-line holdings … kind of changed the level of generality, right?”); Loper Bright Tr. at 21 (responding that “[t]his would be different because the Court would just be saying may not be the best, but the agency’s interpretation is reasonable”).
So, the best hope for a Kisorized Chevron is that the Chief Justice and Justice Barrett would find overturning it to be too disruptive.
In the Summer issue of this column, we expect to summarize the opinions in Relentless and Loper Bright and discretely ignore all the ways in which this summary of the oral argument got things wrong.
The Clean Air Act (CAA) requires the Environmental Protection Agency (EPA) to set ambient air quality standards for certain pollutants, including ozone. The primary responsibility for complying with those standards lies with the states, which must submit implementation plans to EPA for approval. The CAA’s “good neighbor provision” requires state plans to consider the downwind effects of their pollution practices. If the EPA determines that a state implementation plan does not comply with statutory requirements, including the good neighbor provision, it must reject the state plan and implement a national plan of the agency’s own design.
In 2015, the EPA issued revised standards for ozone emissions. In 2023, it rejected 23 states’ implementation plans on the grounds that they failed to meet statutory obligations under the good neighbor provision, thus triggering the requirement that EPA adopt a federal plan. The EPA’s plan, called the “good neighbor plan,” was promulgated in 2023. It required the reduction of ozone emissions from various industrial pollution sources, including power plants, and relied on an existing cap-and-trade program for polluters to reduce upwind ozone pollution to compliant levels under the 2015 standards.
The good neighbor plan was challenged in multiple circuits, resulting in it being stayed pending judicial review in 12 of the 23 states it covers. Ohio, Indiana, and West Virginia challenged the new plan in the D.C. Circuit, but were denied a stay pending review (merits briefing in the D.C. Circuit case opened January 26). They appealed the denial of the stay to the Supreme Court, arguing, inter alia, that the fact that the good neighbor plan is currently in effect in less than half of the states for which it was designed renders it arbitrary and capricious under the Administrative Procedure Act because it depends for its success on a coordinated effort among all 23 upwind states.
The EPA responded by arguing that its rejection of the state implementation plans is not at issue in this case, nor are the decisions by other appellate courts to stay implementation of the good neighbor plan pending review. By remaining in effect pending review by the D.C. Circuit, the agency argues, the plan can still achieve some of its goals of reducing ozone pollution without creating an undue burden for the challengers.
Based on its recent history, the Court could have either addressed the states’ petition for a stay as part of its “shadow docket” (without oral argument and, often, without a detailed explanation of its reasoning) or granted certiorari without review and decided the challenge on the merits without waiting for the D.C. Circuit’s decision. Instead, the Court in Ohio v. EPA, No. 23A349, broke from recent practice and ordered oral argument on the stay petition. The matter is scheduled for oral argument on February 21, and will address “(1) whether the court should stay the Environmental Protection Agency’s federal emission reductions rule, the Good Neighbor Plan; and (2) whether the emissions controls imposed by the rule are reasonable regardless of the number of states subject to the rule.”
