Chevron deference has ended, and with it the significant judicial deference to federal agency interpretations of silences or ambiguities in Congressional statutes.

It is straightforward enough to say, as the Loper Bright majority does, that the federal Administrative Procedure Act (“APA”) is a Congressional directive that requires this result, that Chevron and its progeny never grappled with the APA, and that in such a contest (between Chevron and the APA) the APA must be upheld.  The Loper Bright majority opinion indeed relied primarily on § 706 of the federal APA, which requires the reviewing court to “decide all relevant questions of law [and] interpret . . . statutory provisions[.]”  In fact, the Loper Bright majority read Chevron as (at worst) requiring the reviewing court to violate the APA by yielding this express judicial responsibility to a federal agency: as Chief Justice Roberts wrote, “Chevron was a judicial invention that required judges to disregard their statutory duties.”  For the majority, reliance on the APA was necessary and necessarily resulted in overruling Chevron.

To be sure, the dissenting Justices found the majority’s reliance on the APA to be a poor basis for being rid of Chevron deference.  Justice Kagan, authoring the dissent, highlights that the APA and its § 706 preceded Chevron by nearly forty years, and thus that § 706 is not a new statute requiring a new approach (such as lawyers may often find in other contexts).  The dissenting Justices also call out the harmony between § 706 and Chevron that existed until Loper Bright—even down to citing Chief Justice Roberts’ 2013 dissenting opinion in City of Arlington v. FCC, where the Chief Justice concluded that Chevron deference is aligned with § 706.  As the Chief Justice then said, “[w]e do not ignore [Section 706’s] command when we afford an agency’s statutory interpretation Chevron deference; we respect it.”[1]  Further, the dissenting Justices describe a pre-APA history of the relationship between federal courts and federal agencies that afforded real, substantive deference to federal agencies, all of which was unchanged (as the majority agreed) by the enactment of § 706. 

Regardless of the strengths and weaknesses of the rationale for overruling Chevron, Chevron is overruled.  What remains now is determination of the contours of judicial review of federal agencies.  Those contours are critical.  Justice Kagan’s dissent ably describes the various benefits that Chevron provided and the difficulties that erasing Chevron creates, but some readers may be concerned that such benefits or difficulties ultimately depend on federal agencies doing the right (read: lawful) thing, which may not always happen, and which therefore requires judicial guardrails.  Finding those guardrails in part requires plumbing the depths of historical U.S. Supreme Court opinions on degrees and variants of deference, but Loper Bright, and the interplay between its majority and dissenting opinions, gives us insights into how courts will police federal agencies in this new era.

We cannot discuss agency guardrails after Loper Bright without beginning with Skidmore, cited fourteen times across the several Loper Bright opinions.  Skidmore is a 1944 U.S. Supreme Court case involving the federal Fair Labor Standards Act (“FLSA”) and its application to on-call firefighting employees at the defendant’s packing plant.  The issue in Skidmore was whether the time spent by those on-call employees waiting for a fire was “working time” entitling those employees to overtime compensation under the FLSA.  Though the case did not directly involve a federal agency, the Court attended closely to the amicus brief of the Administrator of the Wage and Hour Division of the U.S. Department of Labor.  The Court understood from the Administrator’s position that “the problems presented by inactive duty require a flexible solution, rather than the all-in or all-out rules respectively urged by the parties in this case . . . .”  Accordingly, the Court concluded that it could not “lay down a legal formula” for determining when waiting time was or was not “working time,” but concluded that making such a determination “is a question of fact to be resolved by appropriate findings of the trial.”

The Skidmore rule that lawyers know today—and which is poised to be a post-Chevron standard—is that courts can look to agency opinions and give those opinions weight in a particular case, depending on “the thoroughness evident in [the agency’s] consideration, the validity in [the agency’s] reasoning, its consistency with earlier and later pronouncements, and all of those factors which give it power to persuade.”  Thus agency opinions, “while not controlling upon the courts by reason of their authority, do constitute a body of experience and informed judgment to which courts and litigants may properly resort for guidance.” 

Skidmore’s approach to the agency’s (the Administrator’s) position is exceedingly interesting today following Loper Bright.  One rationale given in Skidmore was consistency between the judicial and executive branches of government, such that litigants can expect the same treatment from federal courts as they would from federal agencies.  For the Skidmore Court, “[g]ood administration of the [FLSA] and good judicial administration alike require that the standards of public enforcement and those for determining private rights shall be at variance only where justified by very good reasons.”  Notably, however, Skidmore was a dispute between two private parties, rather than a dispute between a private party and a federal agency, and so such a rationale is no salve for regulated parties seeking relief from an agency position.  When applied in cases against federal agencies, Skidmore and its rationale could very well mean that federal courts will continue to rule consistently with federal agencies absent “very good reasons”—a degree of deference which may emulate Chevron even if not so-named.

Skidmore’s deference to facts found at the trial level is also now interesting in light of Loper Bright, and provides a portal into what this author believes will be an important battleground in agency litigation going forward: namely, the determination of whether issues are questions of fact, or questions of law.  Chief Justice Roberts’s majority opinion, and Justice Kagan’s dissent, forecast this precise battleground in their discussions of two U.S. Supreme Court cases from the 1940s, Gray v. Powell and NLRB v. Hearst Publications, Inc.  For Chief Justice Roberts and the majority, agency determinations of whether or not someone is a “coal producer” (Gray) or whether or not someone is an “employee” (Hearst) were examples of “fact-bound determinations” by an agency which are entitled to deference, as opposed to “pure legal question[s]” reserved only for the courts.  Justice Kagan in dissent, however, believed Gray and Hearst to be exemplary cases describing the state of judicial deference before enactment of the APA, where (even then, nearly forty years before Chevron) the Court deferred to agency interpretations of statutory terms.  Ultimately, Justice Kagan highlights the issue at play in the majority and dissent’s competing views of Gray and Hearst, and what this means for the end of Chevron:

If in drawing that distinction [between pure legal questions and mixed questions of fact and law], the majority intends to confine its holding to the pure type of legal issue—thus enabling courts to defer when law and facts are entwined—I’d be glad.  But I suspect the majority has no such intent, because that approach would preserve Chevron in a substantial part of its current domain.[2]

Thus there lies the battleground: whether agency determinations are matters of fact, matters of law, or intertwined matters of application of law to fact.  The Loper Bright era is poised to defer to agencies on factual determinations, and will certainly not provide deference to agencies on legal interpretation.  But where deference lies in mixed questions of fact and law will (this author expects) come down to lawyers’ arguments on whether the agency is interpreting a statute (a legal determination where no deference will be allowed), or is making fact-bound determinations like the Loper Bright majority found in Gray and Hearst (where there can be deference if supported by the evidence).

Though it may take another forty years of judicial, executive, and legislative experimentation, Loper Bright’s progeny will fine-tune these contours and more clearly define the battleground.  In that interim, able attorneys will carve out the contours in particular cases and build the Loper Bright lineage.  Counsel to regulated parties will see questions of legal interpretation everywhere, and agency counsel will see nothing but determinations of fact supported by record evidence.  Indeed, other federal judicial principles and key U.S. Supreme Court cases on agency power can remain tools in the litigants’ toolbox throughout, perhaps resulting in an array of judicial principles and legal history when Loper Bright cases reach their highest level.  At any level, however, policing federal agency authority will require close attention to the relevant statutes, the relevant facts, and the effect Loper Bright has on how federal courts set guardrails on administrative powers.

[1] The quote here is taken exactly as found in Justice Kagan’s dissent.  The original text in Chief Justice Roberts’s dissent in City of Arlington follows his quotation of the commands of Marbury v. Madison and § 706, and then states “We do not ignore that command when we afford an agency’s statutory interpretation Chevron deference; we respect it.”  Citing U.S. v. Mead, the Chief Justice in dissent continues that “[w]e give binding deference to permissible agency interpretations of statutory ambiguities because Congress has delegated to the agency the authority to interpret those ambiguities ‘with the force of law.’”

[2] Bracketed language is inserted by the author and does not appear in the original text of Justice Kagan’s dissent.