Chevron Questions Answered: What’s Next After High Court Ruling

The Supreme Court on Friday eliminated a 40-year-old precedent known as Chevron deference, a doctrine that empowered federal regulators to interpret unclear laws. Reporters Robert Iafolla and Courtney Rozen offer insight into what comes next for the administration, the courts, regulated industry, and their lawyers.

During an Ask-Me-Anything (AMA) conversation on Reddit, Iafolla and Rozen talk about how the decision fundamentally will reshape the power of future presidents to regulate the environment, the financial sector, and the workplace. For President Joe Biden, the decision will affect his plans to pardon student debt, crack down on so-called “junk fees,” and curb climate change, among other priorities.

Iafolla is a senior legal reporter covering labor and employment law, including court review of regulations and other agency actions. Rozen covers President Biden and often writes about constraints on the power of the presidency. This is an edited and condensed version of the AMA.

Is the combination of Loper Bright and Corner Post a 1-2 punch that will flood the federal judiciary with never-ending challenges to federal regulations?

Iafolla: It seems reasonable to me to look at the two rulings and say it’s open season on all regulations, and that the challengers can keep trying until they find a set of judges who agree with them.

But there are a few brakes on things. The Corner Post decision remade the limitations period for a subset of cases brought under the Administrative Procedure Act. That’s not all laws. The Hobbs Act, for example, requires plaintiffs challenging rules from the Federal Communications Commission, Department of Agriculture, and Department of Transportation to file their lawsuits within 60 days after the regulation in question is issued. That’s a world of difference than Corner Post‘s six years after a plaintiff suffers an alleged harm from the agency action at issue.

Another big potential limiter is the piece in Loper Bright about old Chevron rulings having statutory stare decisis. But we won’t know what that means until courts start interpreting it.

The Supreme Court invokes “stare decisis” 38 times in its opinion, and there are tens of thousands of cases that cite Chevron. Does that mean all those precedents will hold up?

Iafolla: Good question! On its face, it looks like part of the opinion was specifically intended to protect all that old case law. But the devil’s in the details, and here are a few reasons to be concerned:

One, that portion of the decision was what’s known as “dicta,” which is basically non-binding commentary in the opinion. That’s in contrast to the “holding,” which other courts must apply.

Two, the Chevron doctrine called for an agency’s interpretation of an ambiguous law to be upheld if it was reasonable. So the holdings of some of those old cases might be that a rule or other agency action was reasonable, not that it’s valid. That’s a meaningful difference.

A really smart law prof told me he expects to see the Supreme Court weigh in on what exactly that statement about statutory stare decisis means.

What has been the most compelling argument in support of the SCOTUS overturning Chevron?

Rozen: I spoke with Linda Jellum, a University of Idaho administrative law scholar, ahead of the decision. She said that overturning the doctrine would force agencies to prove they have the authority to issue regulations that match the laws passed by Congress, rather than searching for ways to justify the president’s preferences. That will make regulation more predictable.

“We should require agencies to really explain why their policy choices are correct and not just be the product of, we have a new president who wants conservative approaches or we have a new president that wants liberal approaches,” Jellum said ahead of the decision.

In what ways can Congress shape future legislation to give regulatory agencies clear, specific guidelines and limitations for implementation and enforcement?

Rozen: Aaron-Andrew Bruhl, who teaches legislation and statutory interpretation at William and Mary Law School, wrote a smart column for Bloomberg Law with some ideas. Here are a few of his suggestions:

• Hire staff with policy expertise to write more detailed and specific legislation.
• End the Senate filibuster to make it easier to move legislation.
• Pass a law creating special fast-track procedures for legislation that responds to Supreme Court decisions.

Here’s his full take on the topic if you’re interested: Congress Needs to Take These Steps to Shore Up Chevron Response

What deference will courts give to agency arguments? Will it be the same as amicus briefs, or more deference than that?

Iafolla: The Supreme Court majority that decided Loper Bright said that courts must exercise their “independent judgment” when assessing whether agencies acted outside their authority and shouldn’t defer to regulators in areas where the law is ambiguous. I’ve talked to some folks who think courts will use a form of what’s called Skidmore deference (these deference regimes are named after the cases that create them). Skidmore deference basically says agency interpretations get deference according to how persuasive they are. Put another way, agencies will have the power to persuade courts.

Is likely to negatively impact innovation in healthcare?

Iafolla: If the end of agency deference makes it more expensive and time consuming for companies to win FDA approval, and if that approval is forever subject to legal challenge, then yes, it’s very likely that the SCOTUS rulings rolling back agency power will negatively affect innovation in health care.

Can the Chevron deference be codified into law? For example, can a law simply state that the responsible department has the authority to resolve any ambiguities?

Iafolla: That’s a good question. I think there’s a strong argument that it can be, because the Supreme Court appeared to decide Loper Bright based on a reading of the Administrative Procedure Act, which governs a lot about how agencies operate. That would mean that killing Chevron was based on the justices’ read of what Congress did, so it would make sense that Congress could do something different—like codify judicial deference to reasonable interpretations of ambiguous law, AKA Chevron deference.

Congress wouldn’t be able to act if the court primarily decided the case based on a read of the Constitution. You can’t legislate around that. That’s why Congress never passed laws to restore campaign finance laws after the Supreme Court tore them down in Citizens United, for example.

To read the AMA in its entirety, click here.