Navigating the Post-Chevron Era
Skidmore Deference
In the aftermath of Chevron’s demise in Loper Bright, a new legal debate is brewing over an 80-year-old judicial precedent: Skidmore v. Swift. The Supreme Court, led by conservative justices, signaled during arguments January 17 in Loper Bright that if Chevron is overturned, it prefers a doctrine known as “Skidmore deference” to govern in the future. While the 1984 Chevron ruling requires judges to defer to agencies for interpretation of a statute, 1944’s Skidmore holds that an agency’s interpretation of a statute is only entitled to deference from courts if it is persuasive.
With the overruling of Chevron, Skidmore deference is now restored as the standard for evaluating agency interpretations of statutes and regulations, allowing courts to defer to agency interpretations when they meet the threshold of persuasiveness—a principle the majority in Loper Bright explicitly affirmed. This raises an important question about the role of Skidmore in a post-Chevron world: Will Skidmore serve as a replacement for Chevron, or does it simply provide judges with a suggestive framework for evaluating an agency’s expertise and reasoning, reflecting considerations they would likely take into account anyway? Ultimately, the distinction between Skidmore as a form of deference versus a call for respect remains to be clarified.
In Skidmore v. Swift, firemen sued the Swift & Company packing plant in Fort Worth for back wages under the Fair Labor Standards Act (FLSA). Despite spending several nights per week at their firehall, crew members were paid only for the time that they spent responding to emergency calls. An FLSA administrator determined that the time the firemen spent waiting did not constitute compensable “work.” The Court reversed, unanimously holding that the time the firemen spent waiting was, in fact, “work.” The Court reasoned that while the administrator’s rulings and opinions were not legally binding, they represent a body of expertise and informed judgment that courts and litigants could appropriately consult for guidance. The weight a judge gives to an administrator’s opinion depends on factors like “the thoroughness evident in its consideration” and “the validity of its reasoning.” While Chevron requires courts to defer to a reasonable agency determination, Skidmore requires only that a court treat it as “guidance,” thus making it a much lower threshold. In short, executive agencies have the power to persuade, but (unlike Chevron) not the power to control. In so doing, the Loper Bright Court stated that courts may pay careful attention to the judgment of the Executive Branch to inform statutory interpretation. Hence, deference will now occur on a case-by-case basis and will be based on various factors and assessments of an agency’s interpretation of a statute.
In the Loper Bright majority opinion, the Chief Justice referenced the administrative law precedent Skidmore five times, emphasizing its continued relevance. Some argue that Skidmore provides a weaker yet still meaningful alternative to judicial deference, with consensus across the political spectrum that it is less favorable to agencies than Chevron. Experts note that if Chevron deference is removed, the Supreme Court should clarify how Skidmore should apply: Should agencies receive minimal consideration or substantial respect for their interpretations?
The justices debated just how much lower that threshold truly is in Loper Bright. The opposing views reflect the ongoing discussion about the weight courts should give to an agency’s interpretation of ambiguous laws.
In her dissent, Justice Kagan argued Skidmore offers minimal help to agencies. When the Supreme Court heard challenges to Chevron, Justice Kagan, unconvinced with falling back on Skidmore, says, “Skidmore means if we think you’re right we’ll tell you you’re right […] Skidmore has always meant nothing.” Essentially, she argued, Skidmore lacks any binding power and leaves agencies without much deference.
Justice Gorsuch, on the other hand, argued that under the Constitution, the Administrative Procedure Act, and longstanding precedents, courts—not agencies—must have the final say in interpreting the law. Gorsuch criticizes Chevron deference, arguing that it has for years undermined fundamental principles of the American legal system, particularly judicial independence, due process, and the separation of powers. By overruling Chevron, Gorsuch sees the Court as restoring its proper role of independently interpreting laws without favoring the government’s view. Ultimately, Gorsuch's concurrence calls attention to a shift toward greater judicial scrutiny of agency actions.
In conclusion, the Supreme Court Justices have made it clear that Skidmore emphasizes respect for agency interpretations rather than traditional deference. This distinction is underscored by Chief Justice Roberts, who notably avoided using the term “Skidmore deference” in the majority opinion of Loper Bright, despite referencing it during oral arguments. This shift signifies a critical change in how courts may approach agency interpretations in the future.
Predictions and Strategic Recommendations
In many ways, the framework that courts use to analyze statutes will remain unchanged. As previously explained, under Chevron, “step zero” requires the court to determine whether a statute is ambiguous, and if it is found to be unambiguous, the court should apply its plain meaning. Arguably, when a statute is “clear and unambiguous,” a court using “every tool at their disposal to determine the best reading of the statute” should reach the same result under Loper as it did under Chevron because even under Chevron, agency interpretations of an unambiguous statute get no deference. Likewise, as noted in the Loper Bright decision, Chevron does not apply if the question at issue is one of “deep economic and political significance.” Consequently, the impact of the Loper decision on such matters of “deep economic and political significance” should be minimal.”
However, Loper Bright could create a more complex and uncertain regulatory environment, making it harder to predict and comply with regulations. Some experts express pessimism regarding the integrity of federal judges, warning that certain judges may seize the opportunity presented by Loper Bright to completely disregard an agency’s well-established responses to complex policy issues in favor of their own highly politicized interpretations of the law, potentially leading the most problematic judges to issue nationwide injunctions based solely on personal opinions, thereby creating significant chaos in the legal and regulatory landscape.
While the argument about the potential for nationwide legal “chaos” is compelling, its actual likelihood depends on how judges, agencies, and the broader legal community navigate the implications of Loper Bright. Continuous monitoring of judicial behavior and agency responses will be essential for understanding this dynamic over time. Although it is unlikely that judges will pursue personal agendas through overly broad interpretations (due to established rules of statutory construction), there remains a risk that decisions perceived as politically or ideologically motivated could undermine public trust and institutional legitimacy, ultimately hindering public health initiatives like vaccination campaigns and emergency responses to health crises.
In this context, the Supreme Court, through Loper Bright, has not only clarified the roles of federal courts but has also ensured that these courts have the final say on federal laws. This shift is particularly significant because, under Skidmore, the standard for evaluating agency interpretations does not require deference, allowing for potentially more rigorous judicial scrutiny of agency actions and opening new pathways for challenging them. Thus, rather than simply reverting to a pre-Chevron standard, the legal landscape has evolved, presenting fresh opportunities to contest agency actions while simultaneously requiring vigilance against potential ideological bias.
Some judges are likely to implement the approach that aligns with the core principles of Chevron (without explicitly invoking it since Chevron is no longer law) because it is a more practical approach, especially if an agency’s process and outcome fits within legal boundaries and appears rational. If these conditions are met, judges are likely to support the agency’s actions by citing Skidmore deference to reach a conclusion consistent with the agency’s determination. In essence, judges may avoid formally endorsing Chevron but will effectively implement an agency’s sound record and reasoning under Skidmore, or they might frame their decisions as their independent interpretations of the law, which ultimately still align closely with the agency’s conclusions, particularly when the agency’s decision is supported by a sound record and reasoning. It is not implausible for judicial decisions to remain informed by agency expertise, even in a post-Chevron legal landscape.
There is no doubt that the overruling of Chevron will significantly alter how courts review federal agency-related litigation for years to come. Especially with expected shifts in agency authority, challenges to agency actions will have far-reaching implications for healthcare entities, requiring immediate reassessment of strategies.
Besides working with legal counsel to identify vulnerabilities in agency interpretations and planning for increased litigation opportunities, healthcare organizations should consider strategic forum selection, such as filing cases in jurisdictions like the Fifth Circuit, where a more conservative judicial composition may increase the likelihood of favorable outcomes. Healthcare entities should exercise caution and discretion regarding compliance with rules likely to face judicial challenges while also getting involved with industry-specific lobbying groups to stay informed and proactive in the changing legal environment. Congress should also amend the Medicare and Medicaid statutes to expand the scope of agency authority and address any existing ambiguous language by memorializing the agencies’ interpretations. That solution, of course, hinges on timely action by a unified congressional majority.
After Loper Bright, policy evidence will drive progress, as courts will likely rely on the policy evidence developed in the policy record when struggling to find a “legal answer” in a case. This means that federal agencies must enhance their efforts to generate and share comprehensive, compelling evidence with the public, such as through public comments, to support optimal health policy; if this information is made widely accessible and becomes common knowledge, courts would not need to be convinced of its validity, as it will already be recognized as established fact.
Agencies must now ensure their regulatory actions are clearly justified within statutory language. This heightened scrutiny can make agencies more cautious in their rulemaking processes, leading to delays in the approval and implementation of new regulations, particularly regarding emerging technologies like artificial intelligence in medical research. Additionally, the potential for legal challenges may discourage agencies from pursuing innovative regulatory approaches for fear of costly litigation or unfavorable court rulings.
Agencies should take the required steps to enhance Medicaid while the policy community develops and promotes the evidence supporting the policy rationale for those actions. The policy community in health law includes stakeholders such as government agencies like CMS, healthcare providers like physicians and hospitals, advocacy groups representing patients and public health interests, researchers and academics, as well as legal experts who analyze the implications of health policy decisions.
When all stakeholders fulfill their responsibilities, the courts will need to—and generally will—navigate around Loper Bright to uphold the most effective policy solutions, whether through Skidmore deference or independent interpretation.
Conclusion
The post-Chevron legal landscape introduces challenges for healthcare providers, who may face increased litigation as they challenge agency decisions on reimbursement, coverage, and compliance. The potential for varied judicial interpretations could create inconsistencies across jurisdictions, complicating the regulatory environment. Moreover, federal agencies may adopt a more cautious approach to rulemaking, leading to delays in implementing policies critical for public health.
In navigating the post-Chevron era, healthcare organizations and their legal counsel must reassess their strategies. This includes identifying vulnerabilities in agency interpretations, planning for heightened litigation risks, and strategically selecting favorable jurisdictions for legal challenges. Continuous monitoring of judicial behavior will be essential to understanding the evolving dynamics in administrative law. Although some argue that Skidmore offers minimal support for agencies, the distinction between mere respect for agency interpretations and meaningful judicial deference is yet to be clarified. The risk of ideologically motivated judicial decisions could undermine public trust and hinder public health initiatives. In this context, the Supreme Court’s ruling not only clarifies the role of federal courts but also opens new avenues for contesting agency actions while demanding vigilance against potential biases.
Ultimately, the end of Chevron deference signifies a critical change in the regulatory landscape, requiring healthcare stakeholders to adapt quickly to a more complex and uncertain environment. The need for agencies to provide clear and compelling justifications for their regulatory actions is paramount, especially as courts may increasingly rely on established policy evidence in their decisions. Engaging with industry groups and lobbying for legislative changes to clarify agency authority may be necessary steps for healthcare organizations to thrive in this new era. As we move forward, the evolution of health law will depend on how effectively stakeholders can navigate these changes to ensure that public health and safety remain paramount in the face of changing judicial standards.
