As the Supreme Court Reconsiders “Chevron Deference,” Will Its Ruling Be Monumental or “Meh”?

Last month, the Supreme Court heard two cases—Loper Bright Enterprises v. Raimondo and Relentless, Inc. v. Department of Commerce—each widely anticipated because the Court’s ruling on them could significantly reshape the federal judiciary’s relationship to the federal administrative bureaucracy.

The issue in both is whether the Court should overrule, or at least narrow, a 40-year-old precedent, Chevron v. Natural Resources Defense Council. Chevron grants federal agencies significant leeway in interpreting the scope of their own powers—a stance known to administrative lawyers as “Chevron deference.”

In the current cases, neither side shrinks from portraying the stakes as dramatic. At oral argument, Roman Martinez, the attorney arguing for Relentless, a Rhode Island firm that owns a herring boat, said Chevron “violates the Constitution” and “threatens individual liberty.” In her brief, Solicitor General Elizabeth R. Prelogar wrote: “[O]verruling Chevron would be a convulsive shock to the legal system.” As it happens, the Koch brothers have “provided millions of dollars in grants to law professors making the case to overturn” Chevron. Yet, as Nicholas Bagley, professor of law at the University of Michigan Law School, recently observed, “nobody really knows” “what a world without Chevron would look like.” What the Court says now about Chevron may have greater symbolic value than actual operational impact within agencies or courtrooms.

A perfect example of how Chevron deference works is the 1984 case for which it is named. The issue was the scope of EPA’s authority to define the term “new stationary source” in the Clean Air Act. States that failed to achieve pollution levels consistent with EPA’s “national ambient air quality” standards were required to impose significant limits on construction permits for any “new stationary source” of pollution. Specifically, a new stationary source of pollution could only be licensed if equipped to achieve the “lowest available emissions rate,” given state-of-the-art technology. The issue was whether “new stationary source” had to refer to each discrete source of pollution within an industrial plant, such as a single smokestack, or whether it could refer instead to the entire industrial plant, containing all of the plant’s contiguous sources of pollution—that is, all the smokestacks as if they were one combined source under a metaphorical “bubble.” If the latter, the EPA could allow individual smokestacks to be updated with improved technology, that would nonetheless not be the best antipollution technology on the market.

The Reagan Administration EPA thought the second interpretation would facilitate a better policy. The D.C. Circuit, however, thought the bubble approach too lenient and invalidated it. The Supreme Court reversed the D.C. Circuit. The justices treated Congress’s ambiguity in referring to “new stationary source” as effectively a delegation of discretion to the agency to decide how the term should best be understood to accomplish the purposes of the act. So long as Congress had not precluded the bubble concept, the lower court should have upheld it if reasonable.

Chevron fell out of favor with conservatives, however—though long defended by the late Justice Antonin Scalia—because agencies would receive Chevron deference not only when regulating more flexibly under the Reagan administration but also when regulating more stringently. To take but a couple of illustrations out of hundreds of examples, the D.C. Circuit, citing Chevron, allowed the Federal Aviation Administration to interpret its authority to “prescribe air traffic regulations … [to] protect[ ] individuals and property on the ground” as including authority to reduce noise pollution. Likewise, the Tenth Circuit similarly affirmed a reading of the EPA’s statutory authority to create guidelines for the states “on appropriate techniques and methods for implementing” the Clean Air Act as giving the EPA power to second-guess Oklahoma’s proposed limits for sulfur dioxide pollution by power plants and to impose more stringent limits on its own. Due to such decisions, justices in the Supreme Court’s right-wing supermajority have long signaled a willingness to reconsider Chevron—now considered a bête noire to industry and many conservative-libertarian academics.

Any non-lawyer stumbling into the January 17 oral argument in Loper Bright, which has been called a “blockbuster,” a “quiet blockbuster,” and the “most important case on the docket so far,” might be forgiven for thinking they had wandered into an abstruse law school faculty workshop—or perhaps a Federalist Society debate—by mistake. The arguments would seem academic in an unhelpful sense because, divorced from the context of any concrete case or a specific statute, the question of how much judicial deference to afford agencies seems so abstract as to be ethereal.

To follow the dispute over Chevron deference, consider the complexity that attends the interpretation of federal statutes. Most statutes are not like recipes, instructing agencies how many eggs to break and how much milk to add to make an omelet. They are usually like general directions, such as, “Make a tasty breakfast.” Lawyers call an agency’s authority to fill in the details of its general assignment “discretion.” So long as the agency exercises its discretion reasonably and within legal limits, its action will be upheld. This framework has been well settled, at least since the 1970s, and no Justice or attorney in Loper Bright or Relentless, Inc. questioned its soundness in the recent argument.

The difficulty Chevron addressed is in interpreting those legal limits in the first place. In some cases, Congress signals unmistakably that it means to give an agency power to define the scope of its statutory authority. When an agency is told to set “reasonable” rates, Congress uses a word— “reasonable”—that demands the agency apply reasoned decision-making to determine what “reasonable” means in the circumstances presented. Congress may even say that an agency’s decision should reflect what is best “in the judgment of the Administrator.”

Very often, however, Congress uses words that may or may not be legally vague and thus may or may not delegate decision-making discretion to the agency. And here is an often befuddling level of complexity. In ordinary conversation, semantically vague or ambiguous words are not necessarily legally vague, and vice versa. In everyday usage, for example, we know that “stationary” means “not moving,” and “source” means point of origin. But, such semantic clarity is not enough to settle what “stationary source” means in the Clean Air Act. That is because, as Chevron recognizes, an agency may adjust its understanding of “source” to accommodate either of two very different policies. It could follow the ordinary semantic understanding of “new stationary source” to force plant owners to invest in the best available technology. Or it could adopt the bubble approach, giving plant owners the flexibility to improve their technology somewhat, even if they are unwilling to invest most ambitiously in the state of the art.

The 40-year-old Chevron holding is a framework for how courts should react when an agency interprets a statute that might be legally vague. Courts are told, first, to make their own assessment of whether legal ambiguity exists. Lawyers call this “Chevron Step One.” In making this determination, courts are counseled not just to consult dictionaries, although they can help. Jurists are to interpret the critical language using what the Court refers to as “traditional rules of statutory interpretation.” These tools are guideposts developed over the centuries to enable judges to discern whether statutes that seem linguistically ambiguous are unambiguous in their legal meaning. Often enough, however, judges using the tools thoughtfully will arrive at a plausible conclusion about what the statute unambiguously means. If a court decides that a law is not ambiguous, then, under Chevron, a court’s Step One job is to ensure the agency has followed the statute.

Chevron deference enters the picture, however, when a court agrees with an agency that a statute is legally ambiguous—for example, that its language leaves room for an agency to decide whether “breakfast” is necessarily the first meal of the day, whether it must partake of each food group, and so on. The Court said it did not matter whether the ambiguity was intended by Congress or simply a consequence of its draftsmanship. Chevron instructs courts to accept any reasonable agency interpretation of the language if a statute is legally ambiguous. This is “Chevron Step Two.” Some judges demand—and this is likelier the sounder approach—that the agency’s interpretation survives genuinely close scrutiny to determine if its reasoning is “arbitrary and capricious.” Other judges, however, seemingly demand only that agency reasoning not be fanciful.

The two cases argued in January—Loper Bright Enterprises v. Raimondo and Relentless, Inc. v. Department of Commerce—are disputes, at base, about the relatively obscure Magnuson-Stevens Fishery Conservation and Management Act. May the commerce secretary and the National Marine Fisheries Service require not only that fishing vessels carry federal inspectors to track how many fish are caught and with what equipment but also compel the boats’ owners to pay these inspectors’ salaries? In these two cases, a split panel of the D.C. Circuit Court of Appeals and a unanimous panel on the First Circuit found the act legally ambiguous. That is its language neither commanded nor foreclosed the possibility that fishers could be charged for their federal monitoring. Having found the statute legally ambiguous, the judges reviewed the agency’s defense and found it reasonable.

Given the dispute, the fishers might have prevailed in the Supreme Court by persuading a majority that the dissenting D.C. Circuit judge was correct. A majority might have read the Magnuson-Stevens Act as simply not granting the Commerce Department the authority to impose its fees. The Court, however, did not agree to review that question but only to review the issue of whether the Chevron framework is still good law—in other words, whether the lower courts erred when they granted the department too much power to interpret its own statute.

For all the drama, the chances that a Supreme Court majority will decisively reshape administrative litigation seem remote. To begin with, during January’s oral argument, the justices could not agree on the precise meaning of Chevron Step One or Step Two. There was even disagreement as to what “ambiguity” means. Based on their questioning, Justices Clarence Thomas, Samuel Alito, Brett Kavanaugh, and Neil Gorsuch seemed unsurprisingly hostile to Chevron. But Chief Justice John Roberts and Justice Amy Coney Barrett asked questions arguably more in the “mend it, don’t end it” mode. During the argument, the parties and most justices seemed to concede that, even in the absence of Chevron, agency interpretations of law are entitled to “respect” based on a host of factors that the Court has identified in yet other cases. In a thoughtful Twitter thread, Kristin Hickman of the University of Minnesota Law School pointed out that “there isn’t a lot of daylight for outcomes” between “respecting” versus “deferring to” an agency’s reasoning. If she is correct, Roberts and Barrett may think there is little to be gained if they can induce lower courts to be less deferential to agencies by offering a new Supreme Court “clarification” of Chevron rather than overruling it.

Solicitor General Prelogar outlined for the Court how a clarifying opinion might read: It would emphasize that Chevron Step One is “rigorous”—that is, she said, courts should not “wave the ambiguity flag too readily.” The opinion would underscore, at Step Two, that “reasonableness is not just anything goes”; a reviewing court must ensure that an agency is not violating the “outer bounds” of its discretion. Then, the Court could reinforce that Chevron is the appropriate framework only if a judge first deduces that Congress empowered an agency to “speak with the force of law” through an appropriately formal process. And finally, judges should be alert to any indications that Congress has indicated that Chevron is not the right approach to a specific statutory provision. A “clarifying” opinion in Loper Bright and Relentless, Inc. might note that properly implemented, Chevron does not represent an unconstitutional usurpation of Congressional power. Instead, it embodies a judicial determination not to usurp policy decisions that should be made in the elected branches. As Justice Elena Kagan said, it is a doctrine of judicial “humility.”

But even if a majority discards Chevron, it is difficult to see how “convulsive” this shift would be because greater forces reshaping administrative law are already in place. The newly crystallized “major questions doctrine,” for example, effectively authorizes courts to all but ignore statutory language supporting an agency’s exercise of power in “extraordinary” cases. This court-made “doctrine” makes it easy to evade Chevron and avoid the close reading of statutes altogether. And the most important force, of course, in shaping the future of the administrative state is the membership of the federal judiciary itself—including the composition of a pro-business Supreme Court. The conservative justices often seem either oblivious to or disingenuous about their anti-regulation biases. But that outlook, as much as any specific doctrine, will shape the future of administrative governance.