July 2024
By a vote of 6-3, Justices of the Supreme Court struck down the landmark 1984 decision in Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 468 U.S. 837 (1984), which gave rise to the doctrine known as the Chevron doctrine. In overruling Chevron, the U.S. Supreme Court in Loper Bright Enterprises v. Raimondo, No. 22-451, 603 U.S. __ (2024), stated that “[t]he deference that Chevron requires of courts reviewing agency action cannot be squared with the [Administrative Procedure Act (APA)][,]” and that rather than deferring to an agency’s interpretation of an ambiguous statute, “[c]ourts must exercise their independent judgment in deciding whether an agency has acted within its statutory authority, as the APA requires.” Id. at 18, 35. With the fall of the Chevron doctrine, the Justices emphasized the Court’s embracing of the “Framers’ understanding of judicial function early on,” calling back to “the foundational decision of Marbury v. Madison,” in which “Chief Justice Marshall famously declared that “[i]t is emphatically the province and duty of the judicial department to say what the law is. 1 Cranch 137, 177 (1803).”
Under the Chevron doctrine, which has been precedent for 40 years, courts have sometimes been required to defer to “permissible” agency interpretations of the statutes those agencies administer—even when a reviewing court reads the statute differently. A court faces two questions when reviewing a federal agency’s interpretation of a statute that the agency administers. First, the court must assess whether Congress has directly spoken to the precise question at issue. If the intent of Congress is clear, the court must give effect to the unambiguously expressed intent of Congress, that is the end of the matter. If, however, the court determines that Congress has not directly addressed the precise question at issue, the court will “defer” to the agency’s interpretation as long as that interpretation is based on a permissible construction of the statute. The idea behind such deference is that agencies, accountable to an elected president, are purportedly better suited than federal judges to make the policy choices that Congress left open.
Chevron was challenged in a pair[1] of cases, which involved a rule issued by the National Marine Fisheries Service (NMFS), a federal agency within the U.S. Department of Commerce, under the purported authority of the Magnuson-Stevens Act. The Act gives the Secretary of Commerce and the NMFS the authority to “implement a comprehensive fishery management program” and further provides that fishery-management plans “may require that one or more observers be carried on board a vessel … for the purpose of collecting data necessary for the conservation and management of the fishery.” Pursuant to the Act, the NMFS issued a regulation that requires the fishing industry to pay for the costs of these observers, which is typically around $710 a day.
In each respective case, the U.S. Courts of Appeals for the District of Columbia Circuit and for the First Circuit upheld the regulation as a reasonable interpretation of a federal statute under Chevron. The plaintiffs then appealed to the Supreme Court, which granted certiorari in these cases limited to the question of whether Chevron should be overruled or clarified.
The Supreme Court issued its opinion for the two cases together on June 28, 2024, in Loper Bright Enterprises v. Raimondo, No. 22-451, 603 U.S. __ (2024). It held that the Administrative Procedure Act (5 U.S.C. §551 et seq.), a federal law that sets out the procedures that federal agencies must follow, requires courts to exercise their independent judgment in deciding whether an agency has acted within its statutory authority. As such, courts may not defer to an agency’s interpretation of the law simply because a statute is ambiguous, thus overruling Chevron.
The Supreme Court’s recent ruling may have far reaching effects, as the Chevron case has been cited by federal courts more than 18,000 times since its issuance in 1984. Under Loper Bright, courts have more leeway to interpret statutes contrary to an agency’s interpretations and courts can use this to cabin agency authority. However, the Loper Bright decision does not necessarily signal the end of the administrative state. Notably, the decision seems to affirm the continuing validity of Skidmore v. Swift & Co., 323 U.S. 134 (1944), where courts grant a degree of deference to an agency’s statutory interpretation based on its “power to persuade.”
Skidmore deference considers factors such as the agency’s thoroughness, consistency over time, and the soundness of its reasoning. Thus, the ongoing applicability of Skidmore may offer some protection to longstanding agency rules and interpretations, especially in noncontroversial areas where the agency has significant expertise.
For more information on the potential effects of this Supreme Court ruling, please contact us at: [email protected].
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[1] Relentless, Inc. v. United States DOC, 62 F.4th 621 (1st Cir. 2023); Relentless, Inc. v. United States DOC, 62 F.4th 621 (1st Cir. 2023).
