OPINION:
For bureaucrats and administrative lawyers, the term Chevron does not mean a gas company. Rather, it is a Supreme Court case, Chevron U.S.A. Inc. v. Natural Resources Defense Council (1984), which gave the federal government — the agencies specifically — considerable power and control.
On Monday, the Supreme Court took up a case that is perhaps one of the most important cases in recent memory, because it could lead to the overturn of Chevron. This is extremely significant news for anyone wanting to reduce the size and power of federal agencies.
So, what is Chevron? The Clean Air Act of 1977 required that the states establish “new or modified major stationary sources” of air pollution. There became a dispute as to what a “stationary source” means. The law did not define the term. Congress’ legislative history also did not define the term. As a result, the Environmental Protection Agency, which enforces the Clean Air Act, took it upon itself to interpret the term. And later, after a change in administrations, the EPA changed that interpretation.
In this landmark decision, the Supreme Court stated that federal agencies can impose their own interpretations of laws that are not sufficiently defined by Congress. Most notably, the Supreme Court stated that courts are to defer to the agency’s interpretation when a statute is ambiguous and the agency’s interpretation is reasonable. Interestingly, this is true even if the agency changes its position, meaning the interpretation of the statute can change.
The end result is a legal principle that has become known as Chevron deference. Under Chevron deference, courts cannot interfere with a bureaucrat’s interpretation of ambiguous statutes. But it gets worse. In practice, as creative bureaucrats have realized the power of this authority, their lawyers have crafted ever more clever arguments to turn the most straightforward statute into an ambiguous one.
This development has been significant. The courts, by ceding constitutionally created authority to the executive branch, are not performing their designed role. The Constitution vests “judicial power” to the Supreme Court and the lower courts, not the executive and its agencies. But under Chevron deference, the courts play little role in the interpretation of ambiguous statutes. The end result, at times, is that bureaucrats know the courts do not serve as a check on their power, so they are emboldened to exercise that power.
This is why Monday’s Supreme Court news is so significant. The court could upend this entire system, which has lasted nearly 40 years.
The case itself is a great case study as to why Chevron deference is a problem. In Loper Bright Enterprises v. Raimondo, the National Marine Fisheries Service issued a rule that would require fishing companies to pay for those who observe their fishing practices for compliance. This rule is seemingly self-serving, in that it keeps the government from bearing those costs.
The statute does require fishing boats to carry these compliance monitors, but it is silent on who bears the cost. The lower court held that the law is silent and ambiguous as to the question of cost. And it also ruled that requiring the fishing company to bear that cost is a “reasonable” interpretation.
Because of Chevron, the fishing companies have had no recourse because the courts deferred right back to the government. The end result is a cost imposed upon the fishing industry, despite there being no congressionally passed law requiring them to bear that cost.
Supreme Court decisions can take many unpredictable paths by creating new tests or criteria. Given the current court’s tendency to revert to historical applications of the law, however, an end to Chevron deference would likely mean that courts would ultimately interpret the law and defer to the agencies only for factual application of the law.
This was the courts’ practice before Chevron. This checks-and-balances approach to administrative law is more consistent with the Constitution and is necessary to prevent too much power being in any one branch of government. Indeed, Loper Bright Enterprises could and should change the administrative state for the better.
• Curtis Schube is executive director of the Council to Modernize Governance, a think tank committed to making the administration of government more efficient, representative and restrained. He is formerly a constitutional and administrative law attorney.
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