A World Without Chevron? U.S. Supreme Court Hears Oral Arguments in Cases that Could Overturn 40-Year-Old Doctrine of Statutory Interpretation

On January 18, 2024, the United States Supreme Court heard oral arguments in two cases challenging the Chevron doctrine of statutory interpretation, Loper Bright Enterprises, et al., v. Gina Raimondo, Secretary of Commerce (Loper-Bright) and Relentless, Inc. v. Department of Commerce (Relentless). Under the Chevron doctrine, courts are supposed to grant deference to an agency's reasonable interpretation of an ambiguous statute.

Chevron Deference

Chevron, U.S.A., Inc. v. NRDC, Inc. established a two-step framework for courts to apply when reviewing an agency's construction of a statute, commonly known as "Chevron Deference." Since its decision nearly 40 years ago, Chevron Deference has been applied in over 70 Supreme Court cases.

The doctrine requires courts to do the following:

1) Question "whether Congress has directly spoken to the precise question at issue. If the intent of Congress is clear, that is the end of the matter."

2)  If the statute is silent or ambiguous with respect to the specific issue, question "whether the agency's answer is based on a permissible construction of the statute."

Chevron, U.S.A., Inc. v. NRDC, Inc., 467 U.S. 837, 842-43 (1984).

Case Backgrounds

In Loper-Bright, the U.S. Court of Appeals for the D.C. Circuit, relying on the principles set forth in Chevron, upheld a final rule of the National Oceanic and Atmospheric Administration (NOAA) and the National Marine Fisheries Service (NOAA Fisheries) that required fishing companies to pay for government monitoring of their catch.

The First Circuit Court of Appeals came to a similar conclusion in Relentless, which closely mirrored Loper-Bright, challenging the same NOAA rule. Petitioners in both cases requested that the Supreme Court determine whether the court should overrule Chevron entirely or, in the alternative, narrow the Chevron framework to clarify that statutory silence pertaining to certain agency powers does not constitute an ambiguity requiring deference to the agency.

Arguments for Overturning Chevron

In both oral arguments, petitioners focused on several key arguments for overturning Chevron.

Petitioners argued that Chevron should be overturned for the following reasons:

1) Chevron violates section 706 of the Administrative Procedures Act (APA) because section 706 mandates de novo review;

2) Chevron violates Article III of the U.S. Constitution by undermining the duty of judges to interpret federal statutes using independent judgment; and

3) the Chevron framework is unworkable because it "facilitates agency flip-flopping."

In response to Loper-Bright's Article III argument, Solicitor General Elizabeth Prelogar, arguing on behalf of the Department of Commerce, said that Chevron does not violate Article III of the Constitution because the framework recognizes Congress's Article I authority to delegate filling statutory gaps to federal agencies and aligns with their Article II authority to fill in those statutory gaps. Under Article III, judges must give effect to the acts of Congress.

General Prelogar also addressed Chevron's failure to mention Section 706. Prelogar argued that this section was never understood to prescribe de novo review for questions of statutory interpretation and, therefore, was not at odds with the framework of review prescribed by Chevron.

In both the Relentless and Loper-Bright oral arguments, the Justices questioned the petitioners' consideration of stare decisis principles. In response to Justice Sotomayor's focus on the significant Chevron precedent of 77 cases, Roman Martinez, attorney for Relentless, argued that the "bottom-line holdings in those cases…would get stare decisis" preventing "convulsive change of the law."

Justice Sotomayor was not convinced by this argument, responding, "I don't understand how that happens…[o]nce you have a new approach, I'm not sure." Justice Kagan in Loper-Bright highlighted this point when she challenged petitioners' argument, stating, "You're saying blow up [the Chevron doctrine], blow up [stare decisis], and then expect anybody to think that the courts are acting like courts."

Justice Alito questioned whether Paul Clement, attorney for Loper-Bright, believed that the rationale for the Chevron framework, "taking judges out of the business of making […] policy decisions," was incorrect. Mr. Clement stated that while he believed the Justices were "partially right" in Chevron, since then, he said, statutory interpretation has "come a long way" and cited case law from the past decade in which Justices were able to determine the purpose of a statute without deferring to the respective agencies.

Several of the Justices also homed in on the petitioners' position that the Chevron framework created ambiguity in the law. Justice Kavanaugh posed the question to General Prelogar: "[h]ow would you define ambiguity or how would you, if you were a judge, say, yes, this is ambiguous or no, that's not ambiguous?" General Prelogar responded that pursuant to the Court's holding in Kisor v. Wilkie, 139 S. Ct. 2400 (2019), courts would find a statute ambiguous "when the Court has exhausted the tools of interpretation and hasn't found a single right answer."

Throughout the oral arguments, both the Justices and the parties recognized the importance of the outcome of these cases. General Prelogar observed that overturning Chevron would be a "shock to the legal system," although Justice Kavanaugh challenged this view, saying that, under Chevron, there are "shocks to the system every four or eight years when a new administration comes in[,]" and that Chevron is "at war with reliance."

Significance of These Cases

The Court's decision could trigger the following crucial questions, amongst others:

1) If silence in a statute is no longer considered to be ambiguous, will there be an onslaught of litigation questioning agency interpretation of statutes?

2) If Chevron is completely overruled, how, if at all, will judicial appointments change?

3) How, if at all, will agencies alter their rule-making processes?