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Winter 2024: Environmental Health & Safety

The Demise of Chevron, or Another Red Herring?

Thomas J Grever


  • In 2024, SCOTUS may overturn Chevron, upending 40 years of judicial deference and redefining judicial oversight of federal agencies.
  • On May 1, 2023, the Supreme Court granted certiorari to hear Loper Bright Enterprises, Inc. v. Raimondo.
  • The Chevron doctrine arguably has had the most lasting and profound impact on the world of federal environmental regulation and federal agency regulatory power generally than any other Supreme Court decision.
  • Chevron deference is one of the modern foundational principles of administrative law, applicable to all federal agency notice-and-comment rulemakings and adjudicatory actions.
The Demise of Chevron, or Another Red Herring?
John Baggaley via Getty Images

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The year 2024 marks the 40th anniversary of the U.S. Supreme Court decision that arguably has had the most lasting and profound impact on the world of federal environmental regulation and federal agency regulatory power generally. In the world of environmental regulation, when a federal agency issues a new regulation, it is a virtual certainty that the rule will be challenged in court, whether by those who will have to comply or by those who think the rule does not go far enough, or sometimes by both. Courts reviewing the regulation are generally reluctant to question or overrule an agency’s evaluations and conclusions, especially when rooted in technical or scientific analysis within the agency’s statutory charge. This general tendency toward deference to an administrative agency is rooted in the U.S. Supreme Court case Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 468 U.S. 837 (1984), commonly known as Chevron deference. It is one of the modern foundational principles of administrative law, applicable to all federal agency notice-and-comment rulemakings and adjudicatory actions. However, in a case to be decided in the 2023 term, the U.S. Supreme Court is poised to reconsider and possibly overturn Chevron, potentially redefining the balance between the executive and the judiciary and opening the door to a more substantial judicial role in overseeing and determining the outcome of federal agency actions.

On May 1, 2023, the Supreme Court granted certiorari to hear Loper Bright Enterprises, Inc. v. Raimondo, cert. granted, No. 22-451 (May 1, 2023). Loper presents what many practitioners might view as a fairly typical rulemaking challenge: an appeal by a regulated entity of a new regulation that requires compliance monitoring to be undertaken by, and at a cost to, the regulated entity. In this case, the regulated entity is in the commercial fishing industry. Specifically, as part of its mission under the Magnuson-Stevens Fishery Conservation and Management Act of 1976 (the Act), 16 U.S.C. sections 1801–1884, in furtherance of its goal “to conserve and manage the fishery resources . . . of the United States,” id. § 1801(b)(1), the National Marine Fisheries Service (Service) promulgated a rule that requires the on-board presence of “monitors” during fishing trips on a certain percentage of commercial fishing vessels. The monitors are government-approved third-party observers who must be directly hired by the fishing vessels. 85 Fed. Reg. 7,414 (Feb. 7, 2020). A vessel that refuses to hire a monitor is “prohibited from fishing for, taking, possessing, or landing any herring.” Id. at 7,418.

A group of herring fishing companies challenged the rule, contending inter alia that the Act does not specifically allow the Service to require industry to bear the monitoring costs, which could comprise up to 20 percent of a company’s fishing income. (Film buffs may recall the impacts of federal fishing monitors on small, family-owned fishing companies as a subplot in the 2021, Academy Award–winning movie Coda.) Despite the potential costs to the regulated industry, the district court ruled in the government’s favor, upholding the regulations as a reasonable interpretation by the agency of its authority to implement the Act, even though the Act nowhere explicitly states that regulated entities must bear the monitor costs. Loper Bright Enters. v. Raimondo, 544 F. Supp. 3d 82, 127 (D.D.C. 2021). The U.S. Court of Appeals for the D.C. Circuit affirmed this ruling, finding that “although the Act may not unambiguously resolve whether the Service can require industry-funded monitoring, the Service’s interpretation of the Act as allowing it to do so is reasonable.” Loper Bright Enters., Inc. v. Raimondo, 45 F.4th 359, 365 (D.C. Cir. 2022).

The fishing companies appealed to the Supreme Court. In granting certiorari, the Court agreed to review one question: “Whether the Court should overrule Chevron or at least clarify that statutory silence concerning controversial powers expressly but narrowly granted elsewhere in the statute does not constitute an ambiguity requiring deference to the agency.” Petition for Writ of Certiorari at ii, Loper Bright Enters., Inc. v. Raimondo, Case No. 22-451 (Nov. 10, 2022). The case has understandably attracted significant interest from all stakeholders in the federal regulatory process; over 60 amicus briefs have been filed by supporters of both sides, including trade organizations, state governments, religious organizations, legal scholars, and federal legislators.

At stake in Loper Bright is not only the potential viability of the commercial herring industry in the Atlantic, but the future of federal executive power. Indeed, the U.S. House of Representatives itself filed a brief supporting the petitioners, “to explain how this Court’s affirmance of the decision below would negatively impact the separation of powers between the Legislative Branch and the Executive Branch.” Brief for the U.S. House of Representatives as Amicus Curiae in Support of Petitioners at 2, Loper Bright Enters., Inc. v. Raimondo (July 24, 2023).

That Chevron itself has more recently become the target for those who oppose federal regulations generally, and who view executive agencies as long exceeding their constitutional powers, is somewhat surprising if not ironic given Chevron’s origins. In hindsight, the decision itself was not a particularly controversial or groundbreaking shift in the constitutional balance of powers among the three branches of government. See Buffington v. McDonough, 143 S. Ct. 14, 21 (2022) (“If Chevron amounted to a revolution, it seems almost everyone missed it.”) (Gorsuch, J., dissenting).

Rather, Chevron purported to merely expound upon existing administrative review doctrines and practice. The case addressed interpretation of the federal Clean Air Act, related to a regulation the Reagan-administration U.S. Environmental Protection Agency (EPA) promulgated to give greater flexibility to regulated industry to comply with the Act; the rule was viewed by environmentalist organizations as an impermissible relaxation of the mandates of the Act. The Supreme Court sided with EPA and upheld the rule. The decision was a unanimous, 6–0 decision (three justices recused themselves); five of the six ruling justices were appointed by Republican presidents. The Court ruled that the text of the Act did not specifically prohibit the regulation, and that the EPA reasonably interpreted the statute to allow for providing greater flexibility to regulated industry in controlling emissions from industrial air pollution sources.

In addressing a court’s role in evaluating the legality of an agency’s regulations, the Court found that where “Congress has not directly addressed the precise question at issue, the court does not simply impose its own construction on the statute. . . . Rather, if the statute is silent or ambiguous with respect to the specific issue, the question for the court is whether the agency’s answer is based on a permissible construction of the statute.” Chevron, 468 U.S. at 844. The Court viewed this approach to agency oversight as fully consistent with its “long recognized . . . principle of deference to administrative interpretations [that] has been consistently followed by this Court whenever decision as to the meaning or reach of a statute has involved reconciling conflicting policies, and a full understanding of the force of the statutory policy in the given situation has depended upon more than ordinary knowledge respecting the matters subjected to agency regulations.” Id. at 845. The Court chided the court of appeals below for assuming the role of determining the overall wisdom of the rule of regulating air pollution generally, as opposed to limiting its role to deciding whether the agency’s decision was a “reasonable choice within a gap left open by Congress.” Id. at 866.

This deference to agency decision-making in the gaps of congressional authorization has become the bedrock approach to judicial review of the exercise of executive agency powers, with results heavily favoring the agencies. In the nearly 40 years since Chevron was decided, federal courts evaluating agency regulations have applied the Chevron doctrine to uphold regulations against challengers in the vast majority of cases. One study found that in over 1,300 regulatory challenges decided from 2003 to 2013, courts applied Chevron to uphold agency rulemaking in over 71 percent of the cases. Kent Barnett & Christopher J. Walker, Chevron in the Circuit Courts: The Codebook Appendix, 116 Mich. L. Rev. Online 1 (2017).

Critics of the Chevron doctrine argue that it has led courts to cede excessive and unchecked authority to the agencies, and that the ambiguity inherent in determining the “reasonableness” of an agency’s interpretation of its own powers leads to inconsistent results across agencies and appellate circuits. Critics further argue that the federal Administrative Procedures Act itself shows that Congress intended that the courts conduct a de novo review of agency actions, with no deference to the agency. See 5 U.S.C. § 706 (“[T]he 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.”). Those seeking to maintain Chevron’s vitality argue that Article III courts lack the technical and substantive expertise that executive agencies possess, that congressional “silence” in a statute signifies congressional intent for agencies to interpret the statute utilizing this expertise, and that congressional control over agency authorizations and funding are a sufficient assurance that agency action is consistent with legislative intent.

The Court’s rulings in major administrative law cases in the last several years suggest that the Court has already tacitly disavowed Chevron. In the most significant regulatory opinions, the Court has ignored Chevron and relied on other doctrines to reject agency rulemaking. For example, the Court sidestepped Chevron in striking the Obama-era Clean Power Plan regulating utility plant greenhouse gas emissions, instead finding that under the “major questions doctrine,” the regulation amounted to a “transformative expansion” of regulatory authority. West Virginia v. EPA, 142 S. Ct. 2587 (2022); see also King v. Burwell, 576 U.S. 43 (2015) (refusing to apply Chevron to questions that are of “deep economic and political significance,” and instead applying the Court’s own interpretation of the underlying Affordable Care Act to uphold the agency action). Setting aside the arguments for and against Chevron, the uncertain applicability of Chevron in any case undermines the predictability and consistency sought by litigants seeking review of administrative decisions.

Nonetheless, lower courts of appeal continue to apply Chevron with regularity. The Biden administration’s major environmental initiatives will undoubtedly be subject to its application, unless and until the Court overturns Chevron. Among the major initiatives are rules to reduce greenhouse gas emissions from utility plants by up to 90%, rules intended to convert the nation’s automobile supply to be two-thirds electric vehicles by 2032, rules to streamline and expedite major project reviews under the National Environmental Policy Act and include consideration of climate impacts; rules restoring blanket protections under the Endangered Species Act to newly classified threatened species, and rules to define federal jurisdiction under the Clean Water Act in response to the Supreme Court’s recent decision in Sackett v. Environmental Protection Agency, 143 S. Ct. 1322 (2023). Each of these is certain to be subject to challenges and appellate court review; less certain at the moment are the standards that judges will apply to determine their legality.

The Court has several options in Loper Bright other than a complete overturn of Chevron. One option is, of course, to uphold the D.C. Court of Appeals’ application of Chevron to the specific facts raised by the fishing industry petitioners and find that given the silence of the statute, the Service made a reasonable policy choice worthy of the Court’s deference. On the opposite end, the Court could completely overturn and renounce Chevron, perhaps resulting in a return to a less-defined rule of deference as in pre-Chevron days, where judges are more free to question the wisdom and reasonableness of an agency’s legal interpretation. Or the Court could take a middle ground, such as by articulating clear and specific methods and tests for lower courts to apply in determining whether a statute is truly “silent” and subject to agency interpretation in the first instance. Either way, Loper presents a unique opportunity for the Court to clearly and unambiguously state its intentions regarding the future of Chevron and the judiciary’s role in overseeing the authority of executive agencies effectuating their congressional charges.