This morning the United States Supreme Court struck down the Chevron Doctrine, you can read that decision HERE. Since 1984 the case of Chevron v.NRDC has been the cornerstone of American administrative law. The case set a high bar for overruling formally promulgated agency rules.
For the record, as an attorney I sued the federal government for a living. My job for 20 years was to get around, past or through the Chevron Doctrine standard. I was obviously able to sometimes do so. However, from my perspective, Chevron was always a barrier, a big barrier, to my success in court and achieving my clients goals.
My experience, I feel, makes me better situated than most in understanding what the demise of Chevron means. So let’s first understand what the Chevron Doctrine is. As stated it established a high bar for overturning properly promulgated agency regulations. In Chevron the Supreme Court established a two step evaluation by courts.
Step 1: Does the statute speak directly to the question or is it ambiguous? If the statute speaks directly to the question, and is contrary to the agency rule, the statute must be given effect over the agency rule. If the court finds the statute ambiguous to the question the court must go to the second step.
Step 2: If the statute is ambiguous the court must defer to the agency’s interpretation, even if the court interprets the statute differently, so long as the agency’s interpretation is reasonable, (i.e. not “arbitrary and capricious).” The agency’s interpretation is presumed valid unless the challenging party successfully demonstrates that interpretation is so devoid of reason as to be “arbitrary and capricious.”
In today’s decision the majority ruled: “Chevron’s presumption is misguided because agencies have no special competence in resolving statutory ambiguities. Courts do.”
With the elimination of Chevron courts will take a different approach when addressing challenges to federal agency regulations when the statute is ambiguous, which (frankly) statutes often are. The court will be free to interpret the statute, itself, without concern for the agency’s interpretation. The court will apply its interpretation, over the agency’s interpretation, even if the the agency’s interpretation is reasonable, so long as the court deems its interpretation more reasonable.
This will profoundly change the standard by which the agency’s decision making is reviewed when challenged. Put simply, agencies must now show their interpretation of the statute (as reflected in the agency’s regulation) is not merely an acceptable interpretation of the statute, but the best interpretation, or at least better than the interpretation advanced by the party challenging the regulation.
And they will be challenged more. For those still working in my former field this decision will be a boon. Call today’s decision the Administrative Lawyers Support Act of 2024, for its impact. Virtually every regulation will now be challenged because the bar for a successful challenge has just been substantially lowered.
For those who followed this issue closely today’s decision was not surprising. For me alarms went off while I was still working in 2013 based on dissents in the case of City of Arlington v. FCC. In that case three justices openly called demise of Chevron. Justice Roberts wrote that dissent and wrote the majority decision today. In 2013 three justices calling for the death of Chevron prompted me to write a firm wide memo forecasting the end of the Chevron era and one more favorable to our business, and the interests of our clients.
The core argument in the City of Arlington dissent was the core argument in the Loper Bright decision today. The conservatives on the Supreme Court believe Chevron’s mandate of court deference to agency interpretation of law encroached on the Constitutionally conferred power and duty of courts to interpret law.
The floodgates have just been opened for further challenges of environmental regulations, and every other regulation published by the federal government. Even regulations previously endorsed by courts as meeting the Chevron standard will be challenged again as impacted businesses test whether the regulation can survive under a standard more favorable to them.
