Supreme Court likely to weaken Biden’s regulatory framework soon

The future of the administrative state hangs in the balance. Supreme Court justices will soon decide in a pair of cases whether to reverse a decades-old precedent known as the Chevron deference that would curb federal agencies’ power to regulate everything from Wall Street to the stove in your kitchen. This Washington Examiner series will look at how a departure from this precedent could rip up the regulation nation. Part one will focus on the underlying court case.

The Supreme Court will soon issue a ruling that could reshape the balance of power between federal agencies and the judiciary, give small litigants due process leverage, and ultimately disrupt President Joe Biden‘s progressive regulatory agenda.

The nearly 40-year-old precedent known as the Chevron doctrine tells courts to defer to federal agencies’ reasonable interpretations of ambiguous statutes, which many business and industry groups say has led to stifling regulations. Conversely, the federal government contends the precedent respects courts’ authority to interpret law while also respecting Congress’s ability to delegate power to agencies in the executive branch, according to Justice Department legal briefs.

Major industry groups encouraging the high court to diminish or toss out Chevron include oil giants such as Chevron and Exxon Mobil. Agriculture giants such as the North American Meat Institute have also urged the Supreme Court to move away from broad agency deference, as have trade groups representing e-cigarette companies.

Conservative interest groups that are sympathetic to the industry groups describe Chevron as a legal framework that typically gives more favor to “experts” within executive agencies, such as in cases where industry groups challenge climate change rules or other environmental regulations.

Carrie Severino, president of the conservative JCN (formerly the Judicial Crisis Network), told the Washington Examiner that Chevron essentially “gives the regulators a thumb on the scale in any court case.”

“That’s a huge disadvantage for any person challenging the federal government,” Severino said.

The cases before the high court, Loper Bright Enterprises v. Raimondo and Relentless, Inc. v. Department of Commerce, were brought by two fishing companies challenging a National Marine Fisheries Service mandate that forces their fishing companies to pay and house at-sea herring monitors. But the core dispute provides a stage for the Supreme Court’s conservative majority to reassess Chevron. The fishing companies argue that Congress never authorized the NMFS to require commercial fishermen to pay for at-sea monitors, highlighting a central issue of the Chevron debate: the extent of agency authority.

After the 6-3 Republican-appointed Supreme Court heard oral arguments in January over the case, the majority of justices gave no indication they would bolster or reaffirm Chevron. Annie Talley, former deputy assistant to then-President Donald Trump, said the only uncertainty is how far the justices will pare back the 1984 doctrine.

“The question is, what guidance do they give to the lower courts going forward? Is it that you can’t use Chevron at all? Is it, you can use some type of deference that’s not Chevron?” Talley said of how the justices may rule.

The primary complaint by industry groups and businesses is that Chevron makes it too easy for each new administration, whether it’s Republican or Democratic, to change their interpretation of federal law and introduce “systematic bias into the adjudication of cases.”

“[[Chevron]makes the government a towering behemoth and it makes it hard for anybody to fight it. So one of the things that makes this case so unique and so powerful is that the people on the other side of the case are real-life fishermen, whose lives are in a real way made worse by the government acting this way,” Talley said.

These challenges to Chevron also come as the high court has seemingly moved away from the 1984 doctrine, not having relied on it since 2016 to make any of its key decisions. Lower courts have inconsistently applied the doctrine in cases concerning regulation. If the justices are poised to limit or overturn the precedent, it could ultimately result in forcing lawmakers in Congress to write clear and concise laws rather than vague or undefined measures.

Cary Burke, a partner at Seyfarth Shaw LLP, told the Washington Examiner the high court’s decision may come down to two choices. The justices could “either 1) change the way in which it analyzes whether a statute is ambiguous, or 2) limit Chevron’s applicability to instances in which Congress has given an agency authority to act with the force of law.”

The Supreme Court’s evolving approach to administrative law, along with hints it could soon retire Chevron, has brought increased attention to two key doctrines: the nondelegation doctrine and the major questions doctrine. The major questions doctrine arises when the court rejects Chevron by arguing Congress wouldn’t have delegated a question of high significance to an agency. But under both nondelegation and the major questions doctrine, the high court has in the past utilized those standards to minimize agency power and relocate lawmaking power to the legislative branch.

A significant decision that foreshadowed the Supreme Court’s growing reliance on the major questions doctrine came in the 2022 West Virginia v. Environmental Protection Agency case, which limited the extent to which the EPA can regulate carbon dioxide emissions related to climate change.

Burke said under the nondelegation doctrine and major questions doctrine, the Supreme Court “has already hemmed in Chevron’s influence.”

“Regardless of the outcome in Loper, I expect that courts will continue to try and use these mechanisms to sidestep the Chevron analysis where possible,” Burke added.

During the Supreme Court’s oral arguments on Jan. 17 in the fishermen’s cases, several justices appointed by Republican presidents expressed skepticism about Chevron. Justice Neil Gorsuch, a vocal critic, pointed to confusion among lower courts and the disruptive nature of Chevron deference on “different classes of people.”

“The cases I saw routinely on the courts of appeals — and I think this is what niggles at so many of the lower court judges — are the immigrant, the veteran seeking his benefits, the Social Security Disability applicant, who have no power to influence agencies, who will never capture them, and whose interests are not the sorts of things on which people vote, generally speaking,” Gorsuch told U.S. Solicitor General Elizabeth Prelogar, who was arguing on behalf of the Biden administration to keep Chevron intact.

Prelogar’s main argument relied on the idea that agencies are filled with experts in their field, and that it makes far less sense for a judge to be interpreting ambiguous statutes when there are designated experts in agencies such as the EPA or the Equal Employment Opportunity Commission who might be better suited to interpret statutes.

But Justice Brett Kavanaugh underscored the instability Chevron brings, such as allowing new administrations to reinterpret laws differently, thereby shifting regulatory landscapes dramatically. He framed the issue as a constitutional one, arguing that the judiciary must ensure the executive does not overstep its bounds and act “as a king.”

While some conservative justices appeared open to overturning Chevron entirely, others, including Chief Justice John Roberts, hinted at the court’s gradual distancing from the doctrine. Roberts queried whether Chevron had already been effectively sidelined by the court’s recent reliance on the major questions doctrine, which demands explicit congressional authorization for significant regulatory actions.

On the other side, the court’s Democratic-appointed justices defended Chevron, stressing the importance of agency expertise in navigating complex, ambiguous statutes. Justice Elena Kagan highlighted the challenges Congress faces in foreseeing future issues, such as those posed by artificial intelligence, where detailed statutory guidance might be lacking.h

Justice Ketanji Brown Jackson raised concerns about the judiciary’s role if Chevron were overturned, cautioning against courts becoming “uber legislators.” She pointed out the potential burden on agencies to seek judicial approval for new rules, a sentiment echoed by Prelogar, who warned of the “unwarranted shock to the legal system” that overturning Chevron could cause.

The concerns by Jackson and other members of the liberal bloc, which includes Justices Sonia Sotomayor and Kagan, aligned more closely with the government’s position. The solicitor general also stoked concerns that “litigants” would “come out of the woodwork” in response to a weakening of Chevron. Kagan and Sotomayor agreed that it would be difficult for judges to make the “best” interpretation of the law when the justices already “routinely disagree” about a law’s meaning.

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The high court’s decision, expected by the end of June, could go several ways. It might limit Chevron’s application without fully overturning it, or it could replace Chevron with a new standard altogether. Justice Amy Coney Barrett’s position remains pivotal, as her questions during arguments indicated a nuanced view between the majority and the minority, making her a potential wild card in the final decision.

As legal scholars and practitioners await the ruling, the implications are profound. Overruling Chevron could significantly curtail the power of federal agencies, shifting more interpretive authority to the judiciary and potentially altering the landscape of administrative law.

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