The Secretary of Commerce and the other respondents in Loper Bright Enterprises, et al. v. Raimondo have filed their merits brief in the U.S. Supreme Court urging the Court not to overrule its 1984 decision in Chevron, U.S.A., Inc. v. Nat. Res. Def. Council, Inc.  The petitioners filed their merits brief on July 17, 2023 and numerous amicus briefs in support of the petitioners have been filed.  The petitioners must file their reply brief by October 16, 2023.

The Chevron decision produced what became known as the “Chevron framework”–the analysis that courts typically invoke when reviewing a federal agency’s interpretation of a statute.  Under the Chevron framework, a court will typically use a two-step analysis to determine if it must defer to an agency’s interpretation.  In step one, the court looks at whether the statute directly addresses the precise question before the court.  If the statute is silent or ambiguous, the court will proceed to step two and determine whether the agency’s interpretation is reasonable.  If it determines the interpretation is reasonable, the court will ordinarily defer to the agency’s interpretation.

The petitioners are four companies that participate in the Atlantic herring fishery.  The companies filed a lawsuit in federal district court challenging a regulation of the National Marine Fisheries Service (NMFS) that requires vessels that participate in the herring fishery to pay the salaries of the federal observers that they are required to carry.  The Magnuson-Stevens Act (MSA) authorizes the NMFS to require fishing vessels to carry federal observers and sets forth three circumstances in which vessels must pay observers’ salaries.  Those circumstances did not apply to the Atlantic herring fishery.

Applying Chevron deference, the district court found in favor of NMFS under step one of the Chevron framework, holding that the MSA unambiguously authorizes industry-funded monitoring in the herring fishery.  The district court based its conclusion on language in the MSA stating that fishery management plans can require vessels to carry observers and authorizing such plans to include other “necessary and appropriate” provisions.  While acknowledging that the MSA expressly addressed industry-funded observers in three circumstances, none of which implicated the herring fishery, the court determined that even if this created an ambiguity in the statutory text, NMFS’s interpretation of the MSA was reasonable under step two of Chevron.

A divided D.C. Circuit, also applying the two-step Chevron framework, affirmed the district court.  The majority concluded that under step one of Chevron, the statute was not “wholly unambiguous,” and left “unresolved” the question of whether NMFS can require industry to pay the costs of mandated observers.  Applying step two of Chevron, the majority concluded that NMFS’s interpretation of the MSA was a “reasonable” way of resolving the MSA’s “silence” on the cost issue.  The dissenting judge concluded that Congress had unambiguously not authorized NMFS to require industry to pay the costs of mandated observers other than in the circumstances specified in the MSA.

The Supreme Court granted certiorari to consider the following question:

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.

In their brief, the respondents assert that “overruling Chevron would be a convulsive shock to the legal system” and argue that the Court should not overrule or limit Chevron for the following reasons:

• Chevron respects the unique expertise that federal agencies can bring to bear when adopting gap-filling measures or otherwise resolving a statutory ambiguity.
• Chevron promotes national uniformity in federal law by giving effect to a federal agency’s reasonable interpretation of a statute and avoiding the potentially conflicting views of the different courts in which review might be sought.  Chevron thus reduces the frequency of circuit conflicts and helps to ensure that federal law applies in a uniform manner across the country.
• Regulated parties and the public benefit from the notice and comment rulemaking procedures that agencies, but not courts, can use to interpret federal law.  Those procedures give the public greater and less costly opportunities to be heard than piecemeal litigation of the same issues in different courts.
• While the petitioners assert that Chevron represents an unjustified shift in policymaking power from Congress to the Executive, the alternative when a statute is genuinely ambiguous would be to shift policymaking power to the Judiciary.  When a court instead upholds an agency’s reasonable interpretation under Chevron, the court respects the policy judgment Congress made in vesting the agency with authority to implement the statute through rulemaking or adjudication.
• The Supreme Court has invoked Chevron to uphold an agency’s reasonable interpretation of a statute at least 70 times.  Petitioners would need to identify an extraordinary justification to dispense with that whole line of cases which they fail to provide.  All relevant stare decisis considerations weigh against overruling Chevron.  First, Chevron is entitled to the strongest form of stare decisis because Congress has legislated against the backdrop of the Chevron framework for 40 years and is free to alter that framework at any time but has declined to do so.  Second, overruling Chevron would threaten settled expectations of parties who have relied on agency rules or orders upheld under Chevron.  Third, the Chevron framework is workable and sound because it provides a consistent rule of decision that is more likely to  yield common ground among judges with diverse perspectives while also respecting the role of the political branches in making federal regulatory policy.
• Petitioners make the fallback argument that if the Court chooses not to discard Chevron entirely, it should at least narrow the doctrine to clarify that it does not apply merely because a statute is silent on a given issue.  That clarification would contravene Chevron’s holding that an agency’s interpretation should be reviewed for reasonableness “if the statute is silent or ambiguous with respect to the specific issue.” (emphasis added.)  While an agency cannot fill the interstitial silences in a statute except as authorized by Congress, Chevron generally applies only if Congress has authorized the agency to implement the statute through rulemaking or adjudication.  Petitioners fail to explain what more Congress must say.  They also offer no workable line to distinguish between statutory silence and ambiguity for Chevron purposes.

On September 7, 2023, at the ABA Business Law Section Fall Meeting in Chicago, I moderated a program, “U.S. Supreme Court to Revisit Chevron Deference: What the SCOTUS Decision Could Mean for CFPB, FTC, and Federal Banking Agency Regulations.” 

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