The Volokh Conspiracy
Mostly law professors | Sometimes contrarian | Often libertarian | Always independent
The majority opinion is entirely correct and should be uncontroversial. (The result was 9-0, and Justice Sotomayor's majority opinion was joined by almost 7 Justices—Justice Alito joined all but a small section, and also wrote separately. Justices Scalia and Thomas wrote concurrences in the judgment.)
When agencies promulgate rules, they often have to go through "notice-and-comment rulemaking" under the Administrative Procedure Act. But some kinds of rule are exempt from these requirements: this exemption includes "interpretative rules" (or, as we now call them, "interpretive rules"). So for example, if Congress passes a statute with an ambiguous term, an agency can issue a memo saying "We think this term means X," and it doesn't have to go through a round of notice-and-comment rulemaking. (At the same time, the memo has no binding force in court.) The same is true if an agency promulgates a notice-and-comment regulation with an ambiguous term, and later clarifies that term's meaning using a similar memo.
So far, so good. But the D.C. Circuit had its own special doctrine, which it developed in a 1997 case called Paralyzed Veterans. If an agency has an ambiguous regulation and clarifies a meaning via interpretive memo, no notice-and-comment rulemaking is required. On the other hand, if it later on changes its mind and issues a second interpretive memo that contradicts the first, then notice-and-comment rulemaking is required.
This doctrine is so clearly contrary to the APA that the Supreme Court had no trouble overruling it. (Why do they hate paralyzed veterans?)
Justice Alito's concurrence and Justices Scalia and Thomas's concurrences in the judgment make the separate point that, while the Paralyzed Veterans doctrine was legally wrong, it did address a real problem, which is that, thanks to judicial deference to agency interpretations of their own regulations (so-called Auer deference), agencies can radically change the meaning of regulations after the fact without much judicial review—and, if there's no notice-and-comment rulemaking, without much scrutiny on the front end either. As Jonathan Adler has written earlier, the Auer doctrine's days may be numbered; it's clear that several Justices are waiting for a proper case to arise. (Though Justice Scalia's opinion was primarily about Auer, I did find the tone unusually lukewarm toward Chevron as well; Scalia has always been a huge fan of Chevron, ever since his days on the D.C. Circuit.)
Justice Thomas's concurrence in the judgment is of extra interest because it goes together with his concurrence in the judgment in the Amtrak case, DOT v. Ass'n of American Railroads.
In this separate opinion, Justice Thomas writes that Auer deference is unconstitutional. The Founders' design was to leave all interpretation of the law in the hands of the judiciary, and this is why they designed the federal judiciary with tenure and salary protection, two measures to promote judicial independence. The judiciary is required to exercise its independent judgment; transferring the exercise of judgment to the executive branch is unconstitutional, and dilutes the judiciary's ability to operate as a check on the other branches. This part of the opinion is full of historical citations to Federalists, Anti-Federalists, and Chief Justice Coke and James I.
He goes on to say that, in practical effect, deference to agency interpretations allows agencies to change the substantive content of the law. This connects directly to Justice Thomas's Amtrak opinion: deference (particularly Chevron deference) has always been justified as an implicit delegation of gap-filling power to agencies. But if Justice Thomas is right that agencies lack the power to make substantive rules governing private conduct, then in many cases (but not all: only those involving substantive rules governing private conduct) such a delegation would be unconstitutional. So while Justice Thomas focuses primarily on Auer deference, his arguments here and in the Amtrak case seem to imply that he believes that Chevron deference is likewise invalid.
(Note that Thomas hasn't joined some of Scalia's Chevron-maximalist opinions, like Mead. [NOTE: He did join the big-Chevron opinion in Arlington v. FCC—thanks, commenter "Asher on Volokh."] Thomas did write Brand X, where Scalia dissented, and that could be characterized as somewhat pro-Chevron with Scalia's dissent being anti-Chevron, but that case had special considerations in it, like the finality of judicial interpretations, which make it hard to map onto a pro-/anti-Chevron spectrum.)
(Fun extra fact: Justice Thomas's footnote 5 suggests that he also disapproves of the widespread use of "informal" notice-and-comment rulemaking: he cites Florida East Coast Railway disapprovingly and suggests that formal rulemaking under §§ 556 and 557 should be the norm.)