//  6/21/18  //  Quick Reactions

Updated: Jonathan Adler has written a response to this post; at the end, I offer a few thoughts on his analysis

One of the most important doctrines in administrative law—indeed, arguably in all of law—is known as “Chevron deference.” Arising from the Supreme Court’s decision in Chevron USA Inc. v. NRDC, 467 U. S. 837 (1984), this doctrine provides that courts must defer to reasonable agency interpretations of ambiguous statutes. Today, Justice Kennedy may have signed Chevron's death warrant. As I'll explain in this post, that's bad news.

Although Chevron may sound technical, it has major practical implications. Federal agencies issue regulations addressing a wide array of extremely important issues, from environmental and immigration policy to healthcare and education. In so doing, they are governed by statutes that define the scope of their power. Agency actions must be consistent with applicable statutes. But in many cases, the relevant statutes speak imperfectly, ambiguously, or in highly general terms about what an agency is allowed (or required) to do. As a result, when agency actions are challenged in court, it may be difficult to decide whether they have followed the law.

That’s where Chevron comes in. It creates a strong presumption in favor of the validity of agency action, so long as the agency’s interpretation of its statutory authority is reasonable. Without Chevron, agencies would act in the shadow of far greater uncertainty about whether federal courts will obliterate their handiwork. In that world, courts would exercise far greater authority over the meaning of federal law—and, by implication, far greater control over the scope and substance of federal policy in virtually every significant field of regulatory activity. Chevron’s importance is attested to by the fact that it is arguably the most cited case in modern public law.

Chevron has long been contested. Over time, courts have elaborated a complex series of rules governing when, where, and how it applies. Scholars, in turn, have argued over how many steps there are to Chevron analysis and whether it works properly. I won’t recount the many battles over Chevron’s justifications, history, and practical consequences, but rest assured there are hundreds of articles on the subject.

In recent years, conservative judges and Justices have opened fire on Chevron. Invoking an exceptionally aggressive view of the separation of powers, and decrying the perils of the administrative state, they have pictured Chevron as an open door to judicial abdication and agency lawlessness. Often, they have linked these criticisms to overt hostility to economic regulation and their skepticism of progressive policies. (It may not be a coincidence that some of the most dynamic calls on the Court for overturning Chevron emerged during the Obama Administration.)  

Before this Term, Chevron was already under siege. Chief Justice Roberts, as well as Justices Thomas, Scalia, Alito, and Gorsuch, had assailed and narrowed the doctrine in published opinions, concurrences, and dissents. Moreover, in several landmark opinions, the Court either explicitly refused to apply Chevron (e.g., King v. Burwell, the second Obamacare case) or ignored Chevron where the government properly sought to rely on it (e.g., Texas Department of Housing v. Inclusive Communities, which upheld disparate impact liability under the Fair Housing Act).

Things only got worse throughout this Term. Before today, Chevron had been cited by the Court four times:

  • Digital Realty Tr., Inc. v. Somers, 138 S. Ct. 767, 772 (2018), where the Court rejected the government’s request for Chevron deference in a case about the scope of Dodd-Frank’s anti-retaliation provisio
  • Encino Motorcars, LLC v. Navarro, 138 S. Ct. 1134 (2018), where the Court interpreted the Fair Labor Standards Act without any deference to the Department of Labor (in accordance with a prior opinon on that point)
  • SAS Inst., Inc. v. Iancu, 138 S. Ct. 1348, 1358 (2018), where the Court rejected the government’s request for Chevron deference to a decision by the Patent & Trademark Office—and where Justice Gorsuch’s majority opinion ominously warned, “Whether Chevron should remain is a question we may leave for another day.”
  • Epic Sys. Corp. v. Lewis, 138 S. Ct. 1612, 1629 (2018), where the Court rejected a request for Chevron deference to the National Labor Relation Board’s conclusion that collective bargaining agreements cannot include an arbitration class precluding class actions. In this opinion, too, Justice Gorsuch emphasized that “No party to these cases has asked us to reconsider Chevron deference,” and instead offered a wide array of reasons for refusing to defer to the NLRB’s decision under Chevron.   

Following these four decisions, it seemed clear that Chevron was in rough shape. But notably, Justice Kennedy—the key vote on such matters—had not expressly signaled any desire to revisit or overrule the doctrine. He had joined opinions narrowing Chevron; he had criticized its application; and he had gone along with decisions that emphasized the absence of a call to reject Chevron. Yet he had not personally repudiated it.

That changed today. In Pereira v. Sessions, an otherwise minor case in immigration law, he wrote a concurrence that appears to call  for Chevron’s demise:

This separate writing is to note my concern with the way in which the Court’s opinion in Chevron U. S. A. Inc. v. Natural Resources Defense Council, Inc., 467 U. S. 837 (1984), has come to be understood and applied. The application of that precedent to the question presented here by various Courts of Appeals illustrates one aspect of the problem . . . .

The type of reflexive deference exhibited in some of these cases is troubling. And when deference is applied to other questions of statutory interpretation, such as an agency’s interpretation of the statutory provisions that concern the scope of its own authority, it is more troubling still. See Arlington v. FCC, 569 U. S. 290, 327 (2013) (ROBERTS, C. J., dissenting) (“We do not leave it to the agency to decide when it is in charge”). Given the concerns raised by some Members of this Court, see, e.g., id., at 312–328; Michigan v. EPA, 576 U. S. ___, ___ (2015) (THOMAS, J., concurring); Gutierrez-Brizuela v. Lynch, 834 F. 3d 1142, 1149–1158 (CA10 2016) (Gorsuch, J., concurring), it seems necessary and appropriate to reconsider, in an appropriate case, the premises that underlie Chevron and how courts have implemented that decision. The proper rules for interpreting statutes and determining agency jurisdiction and substantive agency powers should accord with constitutional separation-of-powers principles and the function and province of the Judiciary. See, e.g., Arlington, supra, at 312–316 (ROBERTS, C. J., dissenting).

This concurrence is remarkable not only because it was wholly unnecessary to the disposition of the case, but also because it cites (and thus embraces) many of the most aggressive criticisms of Chevron published by the Court’s more conservative members. There can be little doubt in light of this opinion that Justice Kennedy is open to revisiting and drastically revising fundamental principles of administrative law. Since we know he already has four other votes to achieve that goal, Chevron’s fate appears to be sealed. (It’s true that Justice Alito dissented in Pereira and would have relied on Chevron to vote in favor of the government’s position, but he offers no defense of that doctrine on the merits, does not retreat from his prior criticisms of it, and ultimately says only that Chevron requires the government’s position so long as Chevron continues to stand as a precedent.)

I expect some scholars will contend that Chevron’s demise is of little moment. They will insist that it doesn’t actual affect judicial decisionmaking in most cases; that there are ways to evade Chevron deference when necessary; and that the Supreme Court itself has already stepped far away from the doctrine in the disputes where it arguably matters most.

Fair enough. But in the district courts and Courts of Appeals, Chevron remains a vital doctrine. And even at the Supreme Court, there are times where it appears to have affected either reasoning or outcomes. If Chevron is overruled, federal agencies will face a far more treacherous terrain when their actions and regulations are challenged in court. Courts, in turn, will assume far greater control of the nation’s regulatory agenda. While they will do so in the name of interpreting statutes, and will inevitably insist that they are merely carrying out Congress’s will, those decisions will be rife with judgments truly of their own making. The consequences of this shift will ripple throughout every field of federal policy, and will almost certainly affect every American citizen, whether directly or indirectly.

Indeed, it is no coincidence that the assault on Chevron is coming from judicial conservatives, with support from the Republican Party and an endless stream of Federalist Society white papers. In the name of a technical change to rules governing administrative law, these groups hope to blast an enduring, expanding hole in federal regulatory power. Think of it as a form of administrative law Lochnerism; while the Constitution does not allow judges to review economic policies for consistency with a robust conception of laissez-faire capitalism, the demise of Chevron will allow them to review many federal economic policies for consistency with statutes that they will read with a strong Lochnerian gloss.

That thought might be comforting to those fiercely committed to deregulation, especially since President Trump’s wave of judicial appointees can be expected to take a painfully narrow view of permissible agency activity. In my view, though, Chevron’s demise should be disconcerting to most Americans. The Judiciary may be good at interpreting laws, but it is poorly suited to the kinds of value and policy judgments inherent to statutory interpretation in this field. That is particularly true when the courts approach their task with a strong commitment to deregulation and a myopic conception of how to interpret statutes. I am no fan of many policies emanating from this administration’s agencies—and would happily see them reviewed without the benefit of judicial deference—but in the long run Chevron deference is sound legal and public policy. More important, it is well justified by considerations of expertise, institutional competence, and political accountability.

Justice Kennedy’s concurrence today may well signal Chevron’s imminent demise. If so, we will all be worse off, at least in the long run. That includes the Judiciary, which at this fraught moment will have needlessly seized a leading role in resolving still more of the nation’s most profound policy disagreements. I can but hope that judges, even without Chevron, recognize the wisdom of policies supporting deference and approach economic regulations with humility concerning their role in defining the rules by which we live.

Disclaimer: This is an immediate reaction to Justice Kennedy's opinion and my views might well evolve over the coming weeks and months.

Updated: Jonathan Adler has written a response to this post. Here are a few quick reactions:

1. Adler devotes the bulk of his original post to downplaying the significance of Kennedy's separate writing. Perhaps Kennedy just wants to make sure Chevron's limits are respected, he wonders. That could be true. But I doubt it. Justice Kennedy rarely writes separately. It's often a big deal when he does so. Indeed, today's major decision overturning Quill followed most immediately from a concurrence he wrote a few years ago in Direct Marketing Association v. Brohl (2015). Moreover, Justice Kennedy embraces a sweeping assault on Chevron by citing Justices Thomas and Gorsuch, and by referencing "constitutional separation-of-powers principles and the function and province of the Judiciary." Nothing about that formulation suggests a limited concern with misplaced application of Chevron deference. The bottom line isi that Justice Kennedy knows how to wrote narrowly and made a conscious decision not to do so here.

2. Adler notes that Chevron has been used to uphold conservative agency actions, too. Fair enough: Chevron deference can cut both ways, and so can eliminating such deference. But for the reasons noted above, I think eliminating it will cut much more sharply in a deregulatory direction. To be sure, progressives may cheer the abandonnment of deference to the government in some fields of law (including immigration), but I suspect they'll hold the short end of the stick in many other fields they care a lot about (including healthcare, the environment, labor, education, civil rights, housing, consumer protection, and more). More important, my concern isn't solely or even primarily with Chevron's political orientation. Ending Chevron would shift power from executive agencies to the Judiciary -- and courts, though claiming to be merely interpreting statutes, would in fact end up making more policy and value judgments beyond their capacity, competence, or democratic prerogative. That development might well be plenty objectionable on its own terms.

3. Adler suggests that I overstate the consequences of Chevron's demise. Here, I think he misreads my post. As I note above, I don't think Chevron has been a vital force at the Supreme Court in recent years: skepticism of Chevron, particularly among right-leaning justices, has already undercut its role (though that doesn't mean Chevron deference is inherently pointless; it just means it's been dying for a while now). Moreover, it is perhaps unsurprising that deference doctrines like Chevron have a weaker hold at SCOTUS, which can devote substantial energy to every case before it, receives fulsome briefing, often grants only the hardest cases, and is well aware of its status as "Supreme." In the Courts of Appeals, in contrast, I do think Chevron deference affects outcomes -- and there is at least some empirical evidence supporting the clam that Chevron "seems to matter markedly in the circuit courts" (though even this article acknowledges that lack of clarity or consensus about how to apply Chevron is a source of uncertainty for its own findings). 

4. Adler notes that without Chevron, courts would apply Skidmore deference. That's a curious point. It is widely understood that Skidmore deference isn't really "deference" at all; in practice, Skidmore may require a court to consider an agency's views, but it doesn't require deference to them apart from their inherent power to persuade. To the extent Adler suggests that the possibility of widespread Skidmore deference addresses the concerns I raise, he is mistaken. And to the extent Adler suggests that other deference doctrines are sufficient on their own, I can't help but wonder how many of those doctrines will retain vitality when Chevron -- one of the leading doctrines in this field -- has been dethroned.

5. I don't think the sky will fall because of Justice Kennedy's concurrence in Pereira. But there is a major change in the law emerging -- one championed almost exclusively by conservative Justices, leaders of the Republican Party, the Federalist Society, and scholars with libertarian leanings (including Adler). That alignment may be a coincidence. I don't think it is, though. If Chevron deference falls, courts will have greater power to invalidate federal agency action across the board, including in the realm of economic regulation. That power will most often operate negatively (to strike down regulations) rather than positively (to require agency action). Further, some of President Trump's most prominent judicial appointees are open advocates of a legal war on the administrative state, and will surely welcome the demise of a leading doctrine commanding deference. Ultimately, if Chevron goes down, judicial review of agency action may look very different. A whole generation of lawyers will come of age learning that courts used to defer to agencies, but don't do that any more. And for the reasons given above, I think that change would be an unwelcome and largely imprudent one. 


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