SCOTUS Deals Massive Blow to Administrative State, Overrules Deference Doctrine

SCOTUS Deals Massive Blow to Administrative State, Overrules Deference Doctrine

The U.S. Supreme Court handed down an opinion in a pair of cases with far-reaching implications for the administrative state. The Court had to decide whether to uphold a 40-year-old doctrine—Chevron deference—that required courts to defer to an agency’s interpretation of its own authority when its statutory mandate is ambiguous.

The Court overruled the doctrine 6–3, with the Chief Justice writing the opinion and Justice Kagan writing a dissent joined by Justices Sotomayor and Jackson. Justices Thomas and Gorsuch filed concurring opinions.

The Court held that the Administrative Procedures Act, which governs the operations of administrative agencies,

requires courts to exercise their independent judgment in deciding whether an agency has acted within its statutory authority, and courts may not defer to an agency interpretation of the law simply because a statute is ambiguous; Chevron is overruled.

Thomas agreed with the Court’s decision but wrote separately “to underscore a more fundamental problem: Chevron deference violates our Constitution’s separation of powers, as I have previously explained at length.”

The violation, Thomas elaborated, stemmed from Chevron‘s mandate that judges surrender their judicial responsibility “to exercise . . . independent judgment in interpreting and expounding upon the laws.”

Gorsuch wrote about how stare decisis, the doctrine that calls for respect for precedent, required the Court to overrule Chevron:

Proper respect for precedent . . . counsels respect for the written law, adherence to consistent teachings over aberrations, and resistance to the temptation of treating our own stray remarks as if they were statutes. And each of those lessons points toward the same conclusion today: Chevron deference is inconsistent with the directions Congress gave us in the APA.

Kagan highlighted a common argument in support of Chevron deference: crafting an unambiguous statute is difficult, if not impossible, and that interpretation of ambiguity should be left to the subject-matter experts, agencies themselves.

Background on the cases

Both cases concerned the Magnuson-Stevens Act (MSA), which empowers the National Marine Fisheries Service (NMFS) to manage fisheries in federal waters. Under the MSA, the NMFS may compel fishing vessels to carry federal observers to ensure regulatory compliance with conservation efforts. The challengers argued the NMFS exceeded its authority under the MSA by requiring the fishing vessels in New England waters to compensate these observers at great expense to the vessel operators.

The MSA explicitly empowers the NMFS to shift compensation responsibility to vessel owners in the North Pacific but is silent on whether vessels in New England must compensate mandatory observers.

NMFS argued the MSA was ambiguous because of its silence on observer compensation in New England. This silence, NMFS argued, coupled with a provision allowing it to take “necessary and appropriate” action, allowed it to shift compensation responsibility to New England vessels when congressional appropriations fell short.

The challengers argued that if the “necessary and appropriate” clause of the MSA allowed the NMFS to compel industry funding of observers, then the express grant of that power elsewhere was superfluous. This, the challengers argued, suggested Congress did not intend the “necessary and appropriate” clause to allow the NMFS to compel industry funding of observers in New England.

The challengers also argued that Chevron is an abdication of judicial responsibility because courts have the duty to interpret the law, but Chevron deference substitutes the agency’s interpretation. The challengers criticized Chevron for “upend[ing] basic principles of constitutional due process of law” because it required deference to an agency’s interpretation when that agency is a litigant before the court.

Background on Chevron deference

Chevron deference guided courts in determining whether an administrative agency action exceeded the agency’s authority granted by statute. Chevron deference is a two-step process.

First, the reviewing court asks whether the statute is ambiguous. If the statute is not ambiguous, then the court asks whether the agency’s action accords with the statute and rules accordingly. Second, if the statute is ambiguous, then the court asks whether the agency’s interpretation of the statute is reasonable and permissible. If the agency’s interpretation is reasonable and permissible, then the court must uphold the agency’s action.

Chevron started with a disagreement over what constitutes a “stationary source” of air pollution. Congress granted the EPA the authority to impose an approval process on any endeavor that would create a stationary air pollution source. The EPA initially interpreted “stationary source” as any additions to plants or factories but changed its interpretation to include only an entire plant or factory.

Under the changed interpretation, changes to an existing plant or factory only needed to go through the approval process if total air emissions for the plant or factory would increase. This allowed changes to plants and factories to skirt the approval process if simultaneous changes at the same plant or factory offset any increased emissions from other changes.

The opinion:

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