The U.S. Supreme Court on Monday agreed to review Loper Bright Enterprises v. Raimondo, a direct challenge to Chevron deference. A decision in the case could either overrule Chevron altogether, or alternatively narrow the doctrine to clarify that statutory silence is not the same as ambiguity and therefore an implied grant of virtually unfettered agency authority. Either way, a decision in the case is likely to constrain federal regulatory agency action going forward.
The case involves a challenge to a rule issued by the National Marine Fisheries Service (Department of Commerce) that requires the fishing industry to pay for the costs of government compliance observers on commercial fishing boats, even though the authorizing statute itself is silent on cost reimbursement. After the DC Circuit upheld the rule in the face of the statutory silence based on Chevron deference, the fishing companies challenging the rule asked for the Supreme Court to overrule and/or reevaluate the scope of Chevron.
One of the most important principles in administrative law, Chevron deference was coined after the landmark 1984 Supreme Court case, Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., and involves the level of judicial deference given to administrative actions, particularly rulemakings.
At its most basic level, the doctrine stands for the proposition that where there is ambiguity in the underlying statute, courts should defer to reasonable interpretations by the agency implementing the statute and adopting supporting regulations. In those circumstances, courts should not substitute their own preferred interpretations.
The question for a court is not whether the agency's action was correct or best but only whether the agency's action was reasonable. The permissiveness of the current doctrine has given administrative agencies wide berth when crafting administrative regulations, thereby making it a target for those critical of certain regulations or of the growth of the administrative state.
On Monday, the Supreme Court justices agreed to take up Loper to address the Chevron deference issue. The specific question to be addressed is "whether the Court should overrule Chevron or at least clarify that statutory silence concerning controversial powers expressly but narrowly granted elsewhere in the statute does not constitute an ambiguity requiring deference to the agency." Oral argument will likely occur next fall, with a decision by spring 2024.
The grant of certiorari here could be a harbinger of a major change in administrative law by this time next year, as there was little reason for the court to grant the case (there is no circuit split for example) other than to reevaluate Chevron. Indeed, most of the court's conservative justices have previously signaled a desire to curb the power of the administrative state by rolling back Chevron. While the writing was on the wall that something like that was coming, the timing right now in this case is a bit of a surprise.