Last week, the Supreme Court heard oral arguments in Loper Bright Enterprises v. Raimondo and Relentless, Inc. v. Department of Commerce, two cases that challenge the Chevron framework.
Although the federal regulation being challenged in these cases deals with herring fishing, the underlying issue in both cases has broad implications, as previously discussed. The Court will determine the fate of the nearly 40-year-old Chevron framework, through which courts defer, in certain circumstances, to agencies’ reasonable interpretation of the statutes they administer. Overturning Chevron will allow judges, who are generalists, to second-guess the specific, highly nuanced policy choices made by agency subject-matter experts. Overturning Chevron will not only significantly disrupt how federal agencies engage in rulemaking — including those that regulate and implement major health policy programs — but also limit how Congress meaningfully tasks agencies with implementing and achieving broad legislative goals. Doing so will also increase uncertainty amongst stakeholders that rely on agency rulemaking.
Loper and Relentless, along with several other cases pending before the Supreme Court this term, are part of an ongoing deregulatory attack on administrative agencies and their ability to effectively implement the law. For instance, in Consumer Financial Protection Bureau v. Community Financial Services Association of America, Limited, the Court will decide whether the Consumer Financial Protection Bureau’s (CFPB’s) funding is unconstitutional — a finding that could not only upend the CFPB’s regulatory authority but also jeopardize the existence of several other independent agencies. Relatedly, Securities and Exchange Commission v. Jarkesy challenges how the Securities and Exchange Commission (SEC) combats securities fraud through administrative and judicial processes. Jarkesy argues that the flexibility granted to the SEC to enforce securities laws violates the right to a jury trial and the nondelegation doctrine. Likewise, in Corner Post, Inc. v. Board of Governors of the Federal Reserve System — a case challenging the timeframe within which an agency action may be challenged in court — if the Court were to expand the timeframe for challenging agency actions, settled regulatory actions will become vulnerable to fresh challenges.
This Expert Column provides a brief background on Loper and Relentless, discusses the main themes raised during oral arguments, and highlights the stakes of the impending decision.
The Cases Challenging Chevron
Both Loper and Relentless were brought by commercial fishing groups challenging a federal regulation that requires herring fishing boat operators to pay for third-party, private observers to conduct federally required compliance checks. The lawsuits argue that the regulation is inconsistent with the fishery conservation statute, as the statute does not explicitly state that fishers must pay for monitors. While the named parties in these suits are small businesses, these lawsuits are backed by interest groups seeking to undermine the role of federal agencies through litigation.
Applying the Chevron framework, all the lower courts found that the agency regulation was reasonable and upheld it. The fishing companies have now asked the Supreme Court to either overrule the Chevron framework or limit circumstances in which Chevron may apply. The lawsuits advance various theories for overturning Chevron. They argue that Chevron violates the Constitution, because it gives federal agencies, not the courts, the power to interpret the law. Additionally, they argue that Chevron violates the Administrative Procedure Act, the federal law authorizing courts to resolve statutory ambiguities. They urge the Supreme Court to adopt a new approach requiring courts to determine the “best interpretation of the statute” rather than deferring to agency expert interpretations.
Major Themes in the Supreme Court Oral Arguments
The justices convened to hear oral arguments in both Loper and Relentless with Justice Jackson recused from and not participating in the Loper portion of the argument. Over the nearly three-and-a-half-hour session, the justices focused on the role that Chevron plays in judicial decision-making, alternative approaches if Chevron is overruled, and the potential consequences of overturning Chevron. Concerns about the health policy effects of overruling Chevron featured prominently during the oral arguments, with issues raised related to Medicare, Medicaid, the Food and Drug Administration (FDA), and the Clean Air Act. This section will unpack the major themes discussed in greater detail.
The Role of the Courts
The justices raised concerns about how reversing Chevron would affect the courts. Several justices indicated that the Chevron framework resulted in courts surrendering their interpretative role to agencies, leading to deference to an ever-changing executive branch. Justice Kavanaugh criticized Chevron for producing unstable results, stating that the framework “ushers in shocks to the system every four to eight years when a new administration comes in.” Pushing back against this sentiment, Solicitor General Prelogar noted that there will be greater instability without Chevron, since statutory ambiguities and gaps will still exist, and lower court judges will have less guidance in making difficult policy interpretations. Relatedly, the justices were concerned about the impact on cases decided over the last 40 years using Chevron. Justice Barrett noted that, even if nothing happens immediately to those cases, “the door [is] then open for litigants to come back” potentially “inviting a flood of litigation” that could overwhelm the judicial system. The prospect of a floodgate of litigation in a post-Chevron regulatory landscape is even more likely if the Supreme Court expands the time limits within which regulations can be challenged when it decides Corner Post. Recognizing the potential uncertainty that would result from overruling Chevron, the justices considered alternatives, such as limiting the deference courts give to agencies or finding that Chevron does apply in this specific instance.
Justice Jackson voiced concerns about the courts encroaching on the policy role of agencies, highlighting the difficulties judges face in distinguishing between legal and policy disputes. Overturning Chevron, Justice Jackson observed, would transform the Supreme Court into “a policymaker by majority rule,” given that the hardest cases that Chevron addresses are about policy issues, not legal questions. Justice Kagan cited artificial intelligence (AI) to show the practical consequences of overturning Chevron, emphasizing that Chevron ensures that experts in regulatory agencies (instead of generalist judges) can nimbly respond to ever-changing policy needs and technology advancements. She noted that, in line with Chevron‘s original purpose, Congress would want those “who actually know about AI to decide those [policy] questions,” not the courts who do not “even know what the questions are…let alone the answers to them.” Justice Kagan questioned whether courts would “be able to decide these issues as to things they know nothing about,” since judges are neither policy experts nor politically accountable.
Chevron and Health Care
Issues related to health care and public benefit programs were raised several times during the oral arguments. As an example of how overruling Chevron would play out in the health care space, Justice Kagan asked whether, under the law that empowers the FDA to approve drugs, “a new product designed to promote healthy cholesterol levels [would be] a dietary supplement or a drug.” The difficulties borne out by resolving that question show the impracticalities of courts relying on traditional legal methods of interpretation to solve technical issues. As Justice Kagan stated, “sometimes the law runs out,” and, where there is a genuine ambiguity, experts in the U.S. Department of Health and Human Services are better positioned make these policy determinations.
The solicitor general also emphasized the need for Chevron to ensure stability and political accountability in health programs, stating that “one of the basic justifications for Chevron…[is] because agencies can provide that kind of uniform rule for the nation” and, without Chevron, there would “be wide disputes among the lower courts…[on] things like Medicare and Medicaid” — resulting in “regulated parties [being] subject to different rules in different parts of the country.”
Conclusion
After nearly four hours of oral arguments, only a limited amount of time was spent discussing the federal fishery conservation statute at issue in both Loper and Relentless. The majority of the discussion centered on the utility and legitimacy of the Chevron framework. A decision by the court to overrule Chevron will substantially impair how federal agencies conduct their work and limit Congress’s ability to rely on agency expertise when implementing complex programs. If the Supreme Court overrules Chevron, it will upend policy decision-making by politically accountable expert agencies and concentrate greater power in the judicial branch — thus unleashing further waves of litigation and increasing regulatory uncertainty.
Over the years, the Supreme Court has narrowed the authority of federal agencies through different legal schemes, such as the major questions doctrine, which skirts Chevron deference when an agency speaks to an issue of “economic and political significance.” Additionally, several justices and lower court judges have signaled an interest in reviving the nondelegation doctrine — further limiting how Congress may rely on federal agencies to implement legislative goals.
By late June, the Court will issue a decision in Loper and Relentless. Any resulting shift in the Chevron framework will build on recent trends by the courts that seek to weaken the administrative state and stall various regulatory initiatives.
DISCLAIMER: The views and opinions expressed in this piece are those of the author and do not reflect the views of the O’Neill Institute.
