The recent Supreme Court decision undercutting the executive state’s ability to regulate Americans’ lives and businesses has been celebrated by conservatives and libertarians and condemned by progressive detractors for making it harder for federal agencies to achieve health, labor and environmental policy goals.
In reality, the end of so-called "Chevron deference" changes little.
In Loper Bright Enterprises v. Raimondo, the Supreme Court found that the National Marine Fisheries Service had wrongly interpreted a gap in a fisheries regulation as allowing that agency to charge fishermen for the wages of government monitors policing their vessels.
Lower courts previously ruled in the agency's favor under the Chevron doctrine, which stipulates that courts should defer to executive agencies' interpretations of ambiguities in the laws it applies, so long as the interpretation is “reasonable.”
In overruling Chevron, the Supreme Court now holds that judges must independently interpret the law and can only automatically defer to agency interpretation where Congress asks them to.
Theoretically, agencies and bureaucrats must now work harder to persuade courts that they have applied the law correctly and to contest alternative interpretations from judges, plaintiffs challenging executive actions and experts outside the agency. This could mean more legal challenges from those adversely impacted by government actions, forcing bureaucrats to more narrowly interpret laws they work with.
However, Chevron’s end won’t stop courts from considering agencies' interpretations of legal ambiguities.
Though tasked with interpreting laws and applying them to novel situations, judges are often reluctant to be perceived as “making laws,” as this is the legislature’s job. Courts accord agency interpretations of ambiguous terms considerable weight due to agencies’ internal expertise and experience and will continue to do so.
For instance, Supreme Court Justice Elena Kagan cites a law directing federal agencies to reduce aircraft noise over the Grand Canyon to restore the “natural quiet,” noting that this law’s best reading is that it entrusts the specialized agencies rather than courts with determining what level of noise constitutes “natural quiet.”
If the agencies lack leeway to set these standards, then the law becomes unworkable. Its silence on quietness standards implies that Congress delegated that responsibility to the agencies.
The Supreme Court’s 1944 Skidmore ruling held that courts should defer to an agency’s interpretation of the statute it applies based on the degree of care, formality and thoroughness it took to reach that conclusion, consistency in its interpretations over time, the persuasiveness of their reasoning and their relative expertise. Skidmore remains valid as precedent even after Chevron’s overturning.
Unlike judges, executive agencies and their political appointee leadership are committed to policy goals even if it means stretching statutory language. And unlike private plaintiffs who challenge agency actions, agencies’ litigation costs are passed to taxpayers. Even when their actions and legal interpretations are likely to be rejected or blocked by courts, agency leadership can use court losses to highlight policy goals and pressure Congress.
For instance, the National Institute of Standards and Technology recently proposed that the Bayh-Dole Act allows them to require holders of patents developed partially through taxpayer funding to license these to other parties if the agency subjectively decides the resulting product’s price is too high.
This unprecedented interpretation is part of the Biden administration’s wider policy goal of lowering drug prices, even though the act’s legislators reject it as a misreading that defeats their purpose of encouraging more public-private partnerships to create valuable inventions and make them available to the public.
Elsewhere, Federal Trade Commission chair Lina Khan recently admitted that her agency was waging costly legal challenges against high-profile corporate mergers even though these are likely to fail. Failures in court could pressure Congress to change the law to make blocking mergers easier. The court’s decision does not change these incentives.
This is not to say that the paradigm won’t shift in specific cases, such as where an agency’s legal interpretation was upheld purely because the court deferred to them under Chevron’s now-invalidated rationale. The agency attorneys will now have to make a stronger case.
Conversely, however, judges must consider consistency in the law’s prior application as part of whether to defer to an agency’s judgment, and this could sometimes favor the agencies.
Chevron’s overturning won’t stop executive agencies from pushing tenuous legal interpretations granting them more power. It won’t stop judges sympathetic to their policy goals from siding with them. And it won’t stop Congress from passing vaguely-worded laws.
But it’s still a moral victory that more appropriately balances our system’s judicial, executive and legislative checks and balances.
Satya Marar is a visiting postgraduate fellow at the Mercatus Center at George Mason University, specializing in competition law, innovation and governance.
