Management

What the Supreme Court decision overturning Chevron deference means to you

The Supreme Court last week overturned a 40 year precedent. In a case brought by New England fisherman, the court reversed the Chevron deference.

Tom Temin@tteminWFED

July 1, 2024 3:19 pm

9 min read

The Supreme Court last week overturned a 40 year precedent. In a case brought by New England fisherman, the court reversed what’s been know as Chevron deference. In the 1984 case, the courts said judges should generally defer to federal agencies when rules they make are reasonable, and the enabling law was ambiguous. Last week’s decision reverses that thinking. For what this may mean for agency rulemaking operations, the Federal Drive with Tom Temin turned to the chair of the Administrative Conference of the United States, Andy Fois.

Interview Transcript:

Andy Fois Thanks, Tom. It’s a pleasure to be with you. Thanks for inviting me. I remember when we talked about this case a few months ago, you were very prescient thinking that it was going to be a big deal. And it turns out that it has been, it’s a big day for herring fishermen. And it’s a big day for a lot of law professors who are, you know, already drafting their law review articles and their books. And that’s true in both administrative law and constitutional law, because this case is important in both those fields.

Tom Temin And agencies that make rules in this case, it was a unit of the Commerce Department, which forced the fishermen to pay the salaries and costs of having a federal overseer aboard their fishing boats. That’s kind of an odd one. But that’s what the case was. How will this affect federal rulemaking? Do you think?

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Andy Fois Well, I think you have to look at it backwards from how it’s going to affect the courts. And you know, and then look at the agencies, or you could look at from the agencies to the courts, but as you said, this is a sea change for what courts do when they’re reviewing agency actions, in this case enforcement actions. But the Supreme Court said, it’s really getting back to what courts have always done and should do, and that is to interpret the law, and not leave that to administrative agencies, it’s going to wind up probably in in more enforcement action is being reversed by federal courts. So that will have the downstream impact of agencies looking at what they do a little bit differently. And if they find that the statute is ambiguous or unclear in any way, they’re not going to push it, they’re not going to stretch, stretch it or push the envelope, they’re going to take actions that they are pretty sure fall within the ambit of the statute, and that courts are going to uphold on that basis.

Tom Temin So this has been bubbling up in some ways here and there over the years. For example, I think the EPA lost in court a few years ago, on whether it actually has the statutory authority to regulate carbon and carbon dioxide, even though it seemed natural, but it wasn’t really in the law. Same thing for the FDA to try to ban tobacco, or cigarettes and so forth. They can regulate it, but they can’t ban it. I mean, so there have been some limits bubbling up. So therefore, does this put the courts in the regulatory oversight business case by case? I mean, will this result in 1000s of cases coming to the courts? Do you think?

Andy Fois I certainly think that if agencies don’t, don’t heed the direction that they’re being given by the Supreme Court that it will, in fact, it may wind up in many more actions and an increased workload for the courts. And you’re quite right to cite those two other cases that the smoking was a while back, but the EPA case was just a few years ago. And like this one, it’s another case where the balance of power shifts a little bit. In the EPA case, the court said that agencies can’t take actions that stress, stretch things, if it’s a major question. So, if it’s a big regulation of big rulemaking, the agencies can’t take the action or have the power Congress should have done that. And if they’re not clear in the statute, then the agencies can’t act. So that’s shifted the balance a little bit more towards Congress, in this one in local, bright and relentless and all the other herring fishermen plaintiffs, the Supreme Court is affecting the balance in two ways. One, it’s between agencies and the courts. And the other like the EPA case is between agencies and the Congress, where this court is saying, as you previewed the if the law that the Congress has passed is clear, then fine agencies take action based on that. But if you find that it’s unclear, the Chevron two step doctrine kicks in, is it unclear isn’t ambiguous, then if so, you look at and defer to the courts due to the agency’s interpretation of its own statute of its own powers. If that interpretation is just reasonable or based on a suitable record. But so that gives the agencies you know, a lot of power more power than then they would allow that they will be having when courts will take a fresh look at De Novo look at what they think of the statute, because under Chevron, you know, the court is forced to defer if the interpretation is reasonable, even if the court disagrees with it and thinks it’s wrong. But if it’s reasonable, reasonable people can come to that conclusion original agency can then the court is forced to allow it.

Tom Temin We’re speaking with Andrew Fois. He’s chair of the Administrative Conference of the United States, ACUS. And this is probably speculation, but Will Congress do you think write laws that are more specific?

Andy Fois I like to think they have it in them? I like to think they pay attention to the to the Supreme Court and what’s going on? So, I, you know, I don’t know, but I hope they do.

Tom Temin And just again, getting back to an agency rule maker or program person who thinks they need to act, and they do need to act, if Congress passes a law about something that has regulatory implication, then agencies can’t sit there and do nothing. Sometimes it takes them a while to get around to the regulations. But that’s a different issue, then what should regulators how do they need to think differently now? Do you think?

Andy Fois They have to realize that they don’t only have to be reasonable that they have to be right? And that that can be or was under the chevron doctrine, a significant difference?

Tom Temin Because the original Chevron doctrine was actually brought about by a conservative administration sought a lock suit? In the chevron case? I think it was against the Natural Resources Defense Fund versus capital. Yeah. And this was the Reagan administration, which wanted to administratively or rulemaking manner change a lot of what had been going on. But now it’s the more conservative groups that have wanted the reversal of Chevron, because of how, I guess more liberal interpretations have come into it. So, there’s a little bit of politics behind here too. Well, I don’t want to comment directly on the I’m not saying who’s right or wrong, but it seems to have changed points of view, reverse the points of view from 1984. Yeah, ACUS is a nonpartisan agency, as you know. So, we’ll put that aside. But you’re right, the, you know, the goose was cooked, or, you know, in a conservative administration, and then the gander. The Gander gets cooked up, when things flip, they might very well flip again, if the controls of the branches change, which gets to the question of what’s been going on now for so many years, and that is the first day of an administration, the first week of an administration, you get a complete slew of executive orders, changing what the prior administration did. And this somehow devolves down to the agency, different orders, and effects they had in place. So, there’s this back and forth, this yo yo effect, could that be evened out? Now, do you think long term?

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Andy Fois You know, I think it’ll still happen, you know, executive orders can be undone pretty quickly. Regulations are and you know, rules are a little harder, they take a little longer, you have to get views of everyone, you have to put out initial rules. And then final rules and appeals enforcement actions are not quite the same as this was under an interloper. This was that the fishing companies failed to pay for the inspectors and observers who are on there. So, what the agency with the Commerce Department added to the law was the sanction the penalty. The statute called for the observers, but the Commerce Department added the statute added the sanction. And that can be done more quickly than a whole new rule or regulation.

Tom Temin But what’s your best advice for rulemaking agencies to think about now? What should they be planning on doing?

Andy Fois I think they need to look at proposed actions pretty carefully more carefully than perhaps they were used to. And this is also a big day for agency General Counsels, you know that they are going over this opinion with a fine-tooth comb to, you know, to figure out, what are we doing now that may be in danger? How do we look at this in the future? As I said, they have to be right now, not just reasonable. And that puts it makes it harder, you know, it puts more challenges ahead for agencies and their General Counsels.

Tom Temin And final question, the Office of Information and Regulatory Affairs at the White House through which all regulations and theory are the big ones pass.

Andy Fois Right.

Tom Temin They’ll have to have a slightly different point of view to maybe?

Andy Fois Yeah, you know, different than before, but they’re going to be you know, I think a useful backstop, you know, you know, another pair of eyes and how the agencies have acted, and whether, whether that’s right or not.

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