The Supreme Court’s Big Catch: The Probable Demise of Chevron Deference

After nearly a decade of avoiding application of the two-step deferential analysis with respect to administrative agency interpretations of statutes first articulated in Chevron U.S.A., Inc. v. NRDC, 467 U.S. 837 (1984), the U.S. Supreme Court has recently been asked in Relentless, Inc. v. Dept. of Commerce, Docket No. 22-1219 and Loper Bright Enterprise v. Raimondo, Docket No. 22-451, to overrule Chevron and do away with so-called Chevron deference, or at a minimum reduce its application.

The petitioners in both cases, several small commercial fishing ventures, challenged a rule promulgated by the National Marine Fisheries Service (NMFS), per its authority under the Magnuson-Stevens Fishery Conservation and Management Act (referred to in the remainder of this article as “the act”) that requires commercial herring-fishing vessels to host observers to collect conservation data. The act capped the amount such entities would have to pay for observers at 2 to 3 percent of the value of its catch; however, under the NMFS rule, 50 percent of all herring-fishing operations would be required to host an observer, which in the aggregate could amount to as much as a 20 percent of the herring-fishing industry’s annual returns. The D.C. Circuit, in a split decision, upheld the District Court’s affirmance of NMFS’s rule relying on Chevron deference, holding the act ambiguous on this issue, and siding with the agency interpretation to resolve the ambiguity.

At argument in Loper Bright, petitioners’ counsel, Paul Clement, solicitor general for President George W. Bush from 2004 to 2008, advocated for overruling Chevron on separation of powers grounds because Chevron deference, also referred to as Chevron step two, results in an unconstitutional usurpation of the article III function of the federal judiciary by article II executive agencies. According to Clement’s oral argument, agencies are constitutionally granted discretion, when, for instance, implementing capacious statutory language, such as when Congress uses terms such as “reasonable” in relation to regulatory standards, and there are multiple reasonable answers to questions of statutory construction. When, however, the answer to an interpretative question is reasonably only binary, there must only be one “right” answer; it cannot change (despite under Chevron that regulatory definitions have changed); and it must be for the courts, and not agencies, to answer such binary questions. The term “ambiguous” to Clement, thus, is itself hopelessly ambiguous, and therefore Chevron fails to delineate clearly when an agency is operating with proper constitutional authority versus stretching a congressional mandate beyond its proper constitutional authorization.

Clement lamented that the world that Chevron has wrought has supplied Congress political cover from having to do its job. Congress seems all too happy to churn out ambiguous statutes, leaving it to executive agencies to bury the political costs of rendering unpopular interpretations of statutes and sanctioning executive agencies to flip-flop from administration to administration. Clement posited that stability and uniformity (and, thus, stare decisis reliance interests) would be best served by jettisoning Chevron.

Clement’s arguments leaned into the Court’s supermajority’s recent skepticism for Chevron. Clement characterized Chevron as “completely whiffing” on section 706 of the Administrative Procedures Act, and Chevron as a mere interpretive rule, as reasons why stare decisis interests are at their nadir in this case.

Solicitor General Elizabeth Prelogar, representing the Respondent Secretary of Commerce Raimondo, in contrast, focused on the broad agreement that Congress may constitutionally confer discretion on executive agencies, including, implicitly, by the use of capacious language. Ultimately, General Prelogar reframed the issue as one of line drawing; Chevron itself does not violate separation of powers. To assist courts, Chevron may need refinement and clarification so that courts can with greater uniformity and ease determine when Congress has delegated interpretative authority to executive agencies.

In particular, General Prelogar advocated for “Kisorizing” Chevron, in reference to Kisor v. Wilke, 204 L. Ed. 2d 841 (2019), which clarified so-called Auer deference in review of agencies’ interpretations of their regulations, without abandoning the doctrine. However, the Justices grappled with what “Kisorizing” Chevron would look like, culminating in Justice Kagan simply asking, “What does it mean?” General Prelogar provided a step-by-step response: (1) add greater clarity on the ambiguity question; (2) delineate when an agency’s interpretation exceeds congressional authorization; (3) appreciate the context of the agency’s interpretation and whether that interpretation is within a realm Congress sought to authorize; and (4) emphasize situations in which the statutory question itself indicates Congress did not intend to authorize agency interpretation on the matter.

If argument is predictive, the Court will either overrule or substantially limit Chevron. However, even the conservative supermajority of the Court appeared committed to a substantial measure of agency discretion and authority (and something akin to deference under Skidmore v. Swift & Co., 323 U.S. 134 (1944)). Time will tell whether the Court upholds Chevron deference as a workable doctrine, with more strings attached and exhortations against judicial abdication of its legal interpretative function, or else casts it out to sea.