The Demise of Chevron Deference: How Should Federal Agencies Respond?

In this article, I explain the background and reasoning of Loper Bright. Next, I address its implications for future federal agency litigation. What does the decision mean for judicial review of agency decisions? How can agencies position themselves to defend rules and regulations successfully despite the loss of Chevron deference? Finally, how can agencies address difficult statutory drafting or interpretation issues so that they can convince reviewing courts that the agencies’ interpretation of an ambiguous federal law is the reasonable one?

The Loper Bright Decision

In Loper Bright, fishing companies challenged an agency rule that required fishing vessels to defray the costs of on-vessel observers who monitored against overfishing. The companies argued that the applicable statute did not authorize the vessels to defray such costs. Two circuit courts determined that the agency’s contrary interpretation of the statute was reasonable or permissible.

Splitting 6-3, however, the Supreme Court held that the lower courts had improperly applied Chevron deference in upholding the rule and remanded the cases for further proceedings. Prospectively, reviewing courts “must exercise their independent judgment in deciding whether an agency has acted within its statutory authority, as the APA requires.”

The Court emphasized that Article III of the Constitution assigns to the federal courts the “responsibility and power” to decide cases and recognized that the law that the judges would apply “would not always be clear.” The “final” interpretation of the laws would be “the proper and peculiar province of the Courts.” History demonstrated that, although courts did accord “due respect to Executive Branch interpretations of federal statutes,” particularly when the interpretation “was issued roughly contemporaneously with enactment of the statute and remained consistent over time,” a court was not bound by the interpretation.

Even with the expansion of agency powers during the New Deal of the 1930s, the Court “continued to adhere to the traditional understanding that questions of law were for courts to decide, exercising independent judgment.” It cited its 1944 decision in Skidmore v. Swift & Co., in which it observed that an agency’s “interpretations and opinions,” made “in pursuance of official duty,” and “based upon . . . specialized experience,” constituted “a body of experience and informed judgment” to which the courts and litigants could “properly resort for guidance,” including on legal questions. Skidmore had explained that the “weight of such judgment in a particular case . . . would depend upon the thoroughness evident in its consideration, the validity of its reasoning, its consistency with earlier and later pronouncements, and all those factors that give it power to persuade, if lacking power to control.” But the Court’s deferential review during that time period also “was cabined to factbound determinations” and did not purport to alter the “longstanding judicial approach to questions of law.”

The Court explained that Congress enacted the APA “as a check” on overzealous agency administrators; the statute, more importantly, reaffirmed the principle that “courts decide legal questions by applying their own judgment,” and that courts, not agencies, will decide “all relevant questions of law” arising on review of agency decisions, “even those involving ambiguous laws.” Evaluated against this backdrop, Chevron’s deference principle “cannot be squared with the APA.”

The Court characterized Chevron as a “marked departure” from the “traditional approach” of independent court review of agency interpretations of law, and Chevron neither mentioned the APA nor acknowledged any “doctrinal shift” from the traditional approach. Chevron “defies the command of the APA” for judicial review of laws and statutory interpretation and “demands that courts mechanically afford binding deference to agency interpretations, including those that have been inconsistent over time.” The Court rejected the argument that deference could be founded on agency expertise, reasoning that agencies have no “special competence” in resolving statutory ambiguities, and a reviewing court could have the “benefit” of the agency’s perspective but would resolve the issue itself. The Court acknowledged that Congress could delegate to an agency the authority to articulate the meaning of the statute, but the court’s role remained that of independent review.

In her dissent, Justice Elena Kagan, joined by Justices Sonia Sotomayor and Ketanji Brown Jackson, replied that Chevron had been a “carefully calibrated framework” under which a statutory ambiguity meant that the agency with “subject-matter expertise” or “regulatory experience” would merit deference, the choice “best suited to ensure that Congress’s statutes work in the way Congress intended.” Justice Kagan expressed concern that the decision would empower courts “to make all manner of scientific and technical judgments” and also “policy calls, including about how to weigh competing goods and values.”

Where Do Agencies Go from Here?

Loper Bright poses what could be a significant challenge for agencies that propose rules or regulations or apply or enforce them as to specific regulated entities. In the absence of Chevron deference, will the challenge be insurmountable? I conclude that agencies can adjust to this altered legal landscape and continue to advocate successfully for their interpretation of federal statutes. But this project could require some reorientation. I provide some specific recommendations—a three-pronged approach that includes interaction with Congress, internal agency review, and advocacy to the court.

The Agency and Congress

First, agencies should work with congressional staff to craft laws that minimize ambiguous language. Recognizing that some statutory ambiguities ultimately may be inevitable as a bill proceeds to enactment (e.g., members of Congress may not even agree on the precise meaning of specific language), agencies should work toward clarity and, for example, focus on a bill’s definitional sections to craft precise language. Allowing ambiguities to persist in a new or amended law is not in anyone’s interest—the regulated entities’ or the agency’s. If Congress intends to delegate to the agency the authority to promulgate rules and define the applicable terms and provisions, it should do so explicitly.

Second, to the extent that a reviewing court later will consult the legislative history of the law in question, the respective Congressional committee reports should explain the meaning of otherwise unclear text. That could be an opportunity for the agency staff knowledgeable about the program to educate the committee staff on the meaning and practical effects of the language so that the final, enacted wording, as explained in the committee reports or on the floor of Congress, reflects that understanding. One implicit “message” from Loper Bright is that Congress can reassert its legislative function by expressing its intent in clearer language and no longer should rely on an agency to “fill in the gaps” in statutory text; legislative intent should not be discerned later in light of the agency’s implementation or enforcement of a law.

Within the Agency

Much of the agency’s work to persuade a reviewing court must begin “in house” and at the very beginning of the agency’s rulemaking process. The agency will need to focus on the preambles of both proposed and final rules to express the agency’s understanding of the relevant statutory text, with the objective of a cogent explanation of Congressional intent. To the extent that the regulation depends on statutory interpretation rather than policy judgments, the agency must determine how it can persuade the court that later may review the validity of the regulation as to the reasonableness of its position. As Loper Bright acknowledged, Skidmore observed that an agency may have “specialized experience” and “informed judgment,” but now, going forward, the agency process must articulate how that experience and judgment provide the correct interpretation of the statute. That task could be particularly difficult if the agency interpretation is either new or novel or if it differs from previous interpretations. The agency must explain why its position has changed; a mere change in its opinion about the wisdom of the underlying policy may be insufficient. Timing is also important. If an agency drafts statutory language or comments on a committee draft, it should explain any ambiguities at that time—so that a court will have the benefit of a “contemporary” understanding of the language, not one crafted several years after the enactment.

Advocacy in Court

If an agency rule is challenged in court, either “on its face” or as applied to a regulated entity, the agency should emphasize Skidmore’s language that the agency’s interpretation is entitled to “considerable” or even “decisive weight.” The agency needs to share its expertise and explain what the language means. This may be more successful in situations involving scientific or technical terms.

Agencies as Active Participants

Agencies must move carefully and constructively in the wake of Loper Bright. The end of Chevron deference should not paralyze their efforts to advance reasonable arguments on the interpretation of ambiguous laws, but the task may not be an easy one. Congress must become an active participant in this process, which is intrinsically law-making.