Loper Bright Remand Is Early Test for Agency Rules Post-Chevron

A challenge to a federal rule on fishing observers that sparked a landmark US Supreme Court decision overturning the Chevron doctrine is back before the D.C. Circuit for review under the new standard.

Eight Atlantic herring fisheries will try to convince a US Court of Appeals for the District of Columbia Circuit panel during oral arguments Nov. 4 that Congress didn’t intend for the Magnuson-Stevens Fishery Conservation and Management Act’s broad mandate to require boat operators to cover the $710 daily wage of government-approved observers on their vessels.

The case tests if the law’s “necessary and appropriate” provision for fishery conservation allows regional fishing councils to classify observers’ pay as compliance costs the industry must cover.

It’s also an opportunity for the appeals court to take a fresh look at the 2020 Commerce Department regulation requiring the payments using the Supreme Court’s Loper Bright Enterprises v. Raimondo decision, which held that courts no longer should defer to federal agencies’ reasonable interpretations of ambiguous laws.

How the D.C. Circuit interprets such terms under the Magnuson-Stevens Act could set a precedent for agencies’ reach in a post-Chevron era, said Holly Doremus, a professor of environmental regulation at the University of California Berkeley School of Law.

“It will be important how the courts interpret the necessary and appropriate language,” Doremus said. “If they read that as providing quite broad discretion, that would bring deference right back.”

Commerce approved the rule as part of a broader government effort to conserve the US Atlantic herring fishery stretching from North Carolina to Maine. The rule effectuates an amendment by the New England and Mid-Atlantic Fishery Management Councils, as federal assessments continued to show a decline in the herring population as a result of overfishing.

The councils, congressionally designated to set catch limits and manage fisheries from Virginia to the Canadian maritime border, aimed to expand the number of observers on herring vessels, adding the industry-funding requirements after budget cuts scrapped funds for wages.

The observers document a vessel’s operations, logging all species caught and thrown back—including protected species such as sea turtles and marine mammals—to ensure management plans are being followed.

These federal monitors are “fairly unusual” enforcement mechanisms, Doremus said . Fishing is decentralized and remote in nature, and onboard monitors are one of the few tools the Commerce Department has to ensure vessels limit bycatch or report discard properly, she said.

Authority by Omission?

Fishery operators, which said they welcome the monitors, have yet to pay observers’ wages and consider paying for government oversight to be regulatory overreach.

The D.C. Circuit previously relied heavily on Chevron deference when ruling in favor of the agency.

But the court said it’s “doubtful that Congress intended implicitly” to bar the agency from requiring domestic industry-funded monitoring under the Magnuson-Stevens Act, even though lawmakers only explicitly included observer cost mandates for foreign vessels.

The law directs fishery councils to draft domestic conservation measures to prevent overfishing and rebuild depleted stocks. The Atlantic regional councils maintained that the monitors play a vital role in implementing this mandate.

Ben Robbins, a senior staff attorney at the New England Legal Foundation, says the law’s omission of compliance cost mandates for domestic vessels won’t withstand court review now that Chevron deference no longer exists.

“The silence in the relevant section can only mean that Congress did not intend to authorize the federal government to shift the cost—the daily wages—onto the industry,” said Robbins, who submitted an amicus brief at the Supreme Court on behalf of the fisheries.

‘Necessary and Appropriate’

The Supreme Court declined to rule on whether the law allows the agency to require industry-funded monitoring, instead kicking the case back to the lower court.

However, Chief Justice John Roberts, who wrote the majority opinion, left the door open for the agency to make the case that observers’ pay counts as a compliance cost under the statute.

Citing a 2015 high court decision in Michigan v. EPA, Roberts said it “may well be that the agency is authorized to exercise a degree of discretion,” as some statutes direct agencies to regulate with flexibility under terms such as “appropriate” or “reasonable.”

Still, conservationists are concerned that the D.C. Circuit’s decision under the new legal framework has the potential to upend efforts to mitigate overfishing.

“I’m very concerned about what the end of Chevron deference is going to mean for the councils and the work that they do,” said Gib Brogan, a campaign director at the ocean conservation advocacy group Oceana. “We need the councils to be able to continue to make those decisions and solve the problems that are popping up in their fisheries.”

Chief Judge Sri Srinivasan and Judges Patricia Millett and Robert L. Wilkins sit on the panel.

The fishermen are represented by the Cause of Action Institute. The Commerce Department is represented by the Department of Justice.

The case is Loper Bright Enters. v. Raimondo, D.C. Cir., No. 21-05166, oral arguments scheduled 11/4/24.