Rekubit Exchange:Supreme Court Weighs Overturning a Pillar of Federal Regulatory Law

The Rekubit ExchangeSupreme Court on Wednesday heard arguments for overturning the so-called Chevron doctrine, one of the most important principles guiding federal regulation for the past 40 years.

The doctrine, named for a 1984 court case involving Environmental Protection Agency air pollution rules, has been high on the agenda of right-wing groups for years. It holds that when the meaning of a law is disputed, the federal agency’s interpretation should be given deference as long as it is reasonable. Environmental groups fear that overturning the precedent will make it easier for courts to block new pollution regulations, especially those addressing climate change.

The cases heard on Wednesday, Loper Bright Enterprises v. Raimondo, and  Relentless, Inc. v. Department of Commerce, take on rules put into place in 2020 that require industry-funded federal observers aboard vessels in the northern Atlantic fishing for herring. 

The small school fish are key to the northern Atlantic’s food web and fishing economy. The federal rules to monitor and prevent overfishing of Atlantic herring have been bolstered in recent years, in part to address the strain on the fishery due to warming waters.

Paul Clement, a titan among conservative appellate litigators, and lawyers from the Cause of Action Institute, one of the nonprofit groups in the large libertarian advocacy network built by petrochemical billionaire Charles Koch, portrayed the fight over the Chevron doctrine in this case as a David vs. Goliath battle.

“This case well illustrates the real-world costs of Chevron, which do not fall exclusively on the Chevrons of the world, but injure small businesses and individuals,” Clement told the court. “For my clients, having to carry federal observers on board is a burden, but having to pay their salaries is a crippling blow.”

In fact, as the federal government noted in its briefs, the National Oceanic and Atmospheric Administration was able to reimburse the fishing operations for 100 percent of monitoring costs in the two years since the rules went into effect, an amount totaling about $30,000. But such details did not come up in the arguments before the high court, nor were they likely to; the justices decided last year to limit their consideration of the cases to the sole question of whether the Chevron precedent should be limited or overturned.

Potential Shock to the Legal System

Chevron is probably the most important, and certainly the most-cited precedent, in all of administrative law, according to scholars on both sides of this dispute. The Biden administration’s chief litigator before the Supreme Court, Solicitor General Elizabeth Prelogar, argued that Chevron should be upheld and predicted grave consequences if it is overturned.

There are “thousands of decisions that could stand to be displaced and create chaos if Chevron is overruled,” Prelogar told the court. She said it would cause “an unwarranted shock to the legal system.”

While environmental groups fear that overturning the Chevron precedent will make it easier for courts to block new pollution regulations, history has shown the standard has cut both ways. In fact, the 1984 decision setting the precedent was a defeat for environmentalists, with the Supreme Court upholding a narrow interpretation by President Ronald Reagan’s EPA on how to enforce the Clean Air Act at big industrial plants like those of Chevron.

Associate Justice Neil Gorsuch, Trump’s first appointee to the Supreme Court, has long been a vocal opponent of the Chevron standard, despite the fact that his mother, Anne Gorsuch, was the EPA administrator whose decision was upheld in the original case.

During oral arguments, Gorsuch made clear he continues to view agency deference as problematic.

“The cases I saw routinely on the courts of appeals … 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,” Gorsuch said. “I didn’t see a case cited … where Chevron wound up benefiting those kinds of people.”

But Associate Justice Elena Kagan, an Obama appointee, focused on how the safety and health regulations protecting broad swaths of the American public could be upended if the idea of agency deference is overturned. She gave a slew of examples of regulatory disputes she said would be better decided by agency experts than judges who know nothing of the subject matter: whether a cholesterol-reducing agent is a drug or dietary supplement; whether power production capacity refers only to AC power sent to the grid or also to DC power produced by solar panels; and, from the original Chevron dispute, what is the definition of a stationary source of air pollution.

“It’s best to defer to people who do know, who have had long experience on the ground who have seen thousands of these kinds of situations,” she said. “You know, judges should know what they don’t know.”

As has been the case with so many recent disputes, the Supreme Court appears sharply divided along ideological lines on the issue. And with conservatives in the majority, most observers expect at least some limitation of the Chevron doctrine, if not the more radical move—which Associate Justice Clarence Thomas previously endorsed—of ruling that it was unconstitutional.

“We’re looking at probably the biggest administrative law case in decades, and it’s going to create a broad pro-business, anti-government precedent that will last a generation, hurting public policy, national governance and risking American lives,” said Craig Green, a professor at Temple Law School, speaking at a forum last week organized by the Center for American Progress.

Green believes that because Chevron was rooted in even earlier court precedents, the current cases could change the way federal regulators have operated since most of the agencies were established. “These cases, on the one hand, are really tiny, about whether a particular agency can make fishers pay for monitors at sea. But it’s also about the enormous question whether federal agencies can function as they have done since FDR, the New Deal or the ’30s.”

Roman Martinez, another lawyer representing the fishing operations, told the court that the Chevron doctrine actually promoted greater instability in the law, because it holds that the agency’s interpretation of the law is due deference even if it changes from Republican to Democratic administrations and back again, as has happened with numerous policy issues before the court.

“Chevron, by design, creates this world in which … the agency can kind of flip-flop and then force courts to flip-flop with it,” Martinez said.

But the timing of the challenge to Chevron clearly means greater peril, at least for the time being, for progressive policy, especially around climate change. While conservatives have a commanding 6-3 majority at the Supreme Court, federal agencies are setting up a wide array of complex regulations to implement President Joe Biden’s climate policy, including vehicle emissions standards, rules for carbon pollution at power plants and IRS rules on clean energy tax credits.

“The scary thing is that precisely at the moment when we need ambitious, scientifically driven, technologically sound regulation, the Supreme Court is poised to overrule a case that was centrally about agency expertise,” said Lisa Heinzerling, professor at Georgetown Law School who specializes in environmental and administrative law.

The Supreme Court is expected to decide the cases before July.