SCOTUS Repudiates Doctrine That Gave Agencies a License To Invent Their Own Authority

The Court says Chevron deference allows bureaucrats to usurp a judicial function, creating "an eternal fog of uncertainty" about what the law allows or requires.

In two cases that the Supreme Court decided today, herring fishermen in Rhode Island and New Jersey challenged regulatory fees they said were never authorized by Congress. They asked the Court to reconsider, or at least clarify, a doctrine based on its 1984 decision in Chevron v. Natural Resources Defense Council, which required that judges defer to a federal agency's "permissible" or "reasonable" interpretation of an "ambiguous" statute.

Critics have long complained that Chevron deference allowed bureaucrats to usurp a judicial function and systematically disadvantaged "the little guy" in disputes with an overweening administrative state. The Supreme Court endorsed that critique by a 6–3 vote today, repudiating the idea that agencies, rather than judges, should resolve ambiguities in the statutes under which they operate.

Writing for the majority in Loper Bright Enterprises v. Raimondo and Relentless v. Department of Commerce, Chief Justice John Roberts notes that the Administrative Procedure Act (APA) "incorporates the traditional understanding of the judicial function, under which courts must exercise independent judgment in determining the meaning of statutory provisions." He says "the deference that Chevron requires of courts reviewing agency action cannot be squared with the APA."

The Chevron doctrine "defies the command of the APA that 'the reviewing court'—not the agency whose action it reviews—is to 'decide all relevant questions of law' and 'interpret…statutory provisions,'" Roberts writes. "It requires a court to ignore, not follow, 'the reading the court would have reached' had it exercised its independent judgment as required by the APA….It demands that courts mechanically afford binding deference to agency interpretations, including those that have been inconsistent over time. Still worse, it forces courts to do so even when a pre-existing judicial precedent holds that the statute means something else—unless the prior court happened to also say that the statute is 'unambiguous.' That regime is the antithesis of the time honored approach the APA prescribes."

The idea that statutory ambiguities implicitly authorize federal agencies to resolve questions about their own powers, endorsed by the three dissenters, is "misguided," Roberts says. "As Chevron itself noted, ambiguities may result from an inability on the part of Congress to squarely answer the question at hand, or from a failure to even 'consider the question' with the requisite precision. In neither case does an ambiguity necessarily reflect a congressional intent that an agency, as opposed to a court, resolve the resulting interpretive question."

Roberts notes that courts "routinely confront statutory ambiguities in cases having nothing to do with Chevron" but "do not throw up their hands because 'Congress's instructions have' supposedly 'run out,' leaving a statutory 'gap.'" Instead they "use every tool at their disposal to determine the best reading of the statute and resolve the ambiguity." Roberts says "it makes no sense to speak of a 'permissible' interpretation that is not the one the court, after applying all relevant interpretive tools, concludes is best." While "agencies have no special competence in resolving statutory ambiguities," he says, "courts do." And when "the ambiguity is about the scope of an agency's own
power," that is "perhaps the occasion on which abdication in favor of the agency is least appropriate."

As Roberts notes, the concept of "ambiguity" is itself ambiguous. "The defining feature of [Chevron's] framework is the identification of statutory ambiguity, which requires deference at the doctrine's second step," he writes. "But the concept of ambiguity has always evaded meaningful definition." That puzzle, he says, has made Chevron "unworkable," leading to widely diverging understandings of ambiguity in the lower courts.

Contrary to the claim that adhering to Chevron promotes "stability," Roberts writes, it is
"hard to see how anyone—Congress included—could reasonably expect a court to rely on Chevron in any particular case," given "our constant tinkering with and eventual turn away from Chevron" and "its inconsistent application by the lower courts." Because of the doctrine's "sheer breadth" and unpredictable use, he says, "Chevron fosters unwarranted instability in the law, leaving those attempting to plan around agency action in an eternal fog of uncertainty."

Addressing the concern that rejecting Chevron "is likely to produce large-scale disruption," as Justice Elena Kagan warns in a dissent joined by Justices Sonia Sotomayor and Ketanji Brown Jackson, Roberts says "we do not call into question prior cases that relied on the Chevron framework." The holdings of those cases that "specific agency actions are lawful—including the Clean Air Act holding of Chevron itself—are
still subject to statutory stare decisis despite our change in interpretive methodology."

The dispute at the center of these cases illustrates how vulnerable Americans are to the whims of federal agencies empowered to invent their own authority. The plaintiffs are family-owned businesses that cannot easily bear the financial burden imposed by the requirement that they not only make room on their cramped boats for observers monitoring compliance with fishery regulations but also pay for that dubious privilege.

That cost, which amounts to about a fifth of the money these businesses earn each year, adds insult to injury. "The framing generation was vexed enough by being forced to quarter British soldiers," wrote Paul D. Clement, a former U.S. solicitor general who  represented the New Jersey plaintiffs, "but not even the British forced the unlucky homeowner to personally pay the redcoat's salary."

Worse, Clement noted, the relevant statute says nothing about collecting such fees from operators of herring boats in New England waters, although it does authorize them, within specified limits, for "certain North Pacific fisheries, limited access privilege programs, and foreign fishing." Two federal appeals courts, the D.C. Circuit and the 1st Circuit, nevertheless ruled that the unauthorized fees fit within the leeway required by Chevron deference. Today's ruling overturns those decisions.

In a concurring opinion, Justice Neil Gorsuch, a longtime Chevron critic, notes that "the scales of justice are tilted systematically in favor of the most powerful" when executive agencies are free to resolve questions about their own statutory authority. "Legal demands can change with every election even though the laws do not," he writes, and "people are left to guess about their legal rights and responsibilities."

Gorsuch illustrates that point by describing a bewildering series of reversals concerning regulation of broadband internet services. Initially, he notes, "the Court upheld an agency rule adopted by the administration of President George W. Bush because it was
premised on a 'reasonable' interpretation of the statute." Later, "President Barack Obama's administration rescinded the rule and replaced it with another." And "later still, during President Donald J. Trump's administration, officials replaced that rule with a different one, all before President Joseph R. Biden, Jr.'s administration declared its intention to reverse course for yet a fourth time." Instead of "promoting reliance by fixing the meaning of the law," Gorsuch says, "Chevron deference engenders constant uncertainty and convulsive change even when the statute at issue itself remains unchanged."

That "constant uncertainty," Gorsuch adds, is especially burdensome for people like the plaintiffs in these cases. "Sophisticated entities and their lawyers may be able to keep
pace with rule changes affecting their rights and responsibilities," he writes. "They may be able to lobby for new 'reasonable' agency interpretations and even capture the agencies that issue them. But ordinary people can do none of those things. They
are the ones who suffer the worst kind of regulatory whiplash Chevron invites."

Those "ordinary people," Gorsuch notes, include veterans seeking disability benefits and immigrants fighting to remain in the United States, as illustrated by cases he heard as an appeals court judge. Under "the Constitution, the APA, and our longstanding precedents," he says, "agencies cannot invoke a judge-made fiction to unsettle our Nation's promise to individuals that they are entitled to make their arguments about the law's demands on them in a fair hearing, one in which they stand on equal footing with the government before an independent judge."

In short, Gorsuch says, Chevron "represents a grave anomaly when viewed against the sweep of historic judicial practice" and "undermines core rule-of-law values ranging from the promise of fair notice to the promise of a fair hearing. Even on its own terms, it has proved unworkable and operated to undermine rather than advance reliance interests, often to the detriment of ordinary Americans. And from the start, the whole project has relied on the overaggressive use of snippets and stray remarks from an opinion that carried mixed messages. Stare decisis's true lesson today is not that we are bound to respect Chevron's 'startling development,' but bound to inter it."

Timothy Sandefur, vice president for legal affairs at the Goldwater Institute, welcomed that burial. "Today's ruling overturning the Chevron rule is a game-changer—more accurately, it makes the game more fair for the American people," he says in an emailed press release. "Our constitutional system of separation of powers was designed to protect our freedoms. Yet administrative bureaucracies ignore that principle by making rules, prosecuting alleged violations, and putting people into so-called 'hearings' where the rules that protect us in the courtroom don't apply….By pushing back against that principle and saying judges should exercise their own independent judgment, the Supreme Court today has taken a step toward leveling the playing field between government bureaucrats and citizens."