Court’s New Chevron Analysis Likely to Follow One of These Paths

In Loper Bright Enterprises v. Raimondo, the US Supreme Court will decide whether to overrule one of its most frequently cited precedents—its 1984 opinion in Chevron v. NRDC. The decision in Loper may change the language that lawyers use in briefs and professors use in class, but is unlikely to significantly affect case outcomes involving interpretation of the statutes that agencies administer. In practice, it’s the court’s new major questions doctrine announced in 2021 that could fundamentally change how agencies operate.

In Chevron, the Supreme Court instructed courts to apply a deferential test to agency interpretations of agency-administered statutes. The test first requires the court to analyze whether Congress spoke directly on the question, which would determine the answer.

“If, however, the court determines that Congress has not directly addressed the precise question at issue, the court does not simply impose its own construction on the statute, as would be necessary in the absence of an administrative interpretation,” the Chevron court wrote. “Rather, if the statute is silent or ambiguous with respect to the specific issue, the question for the court is whether the agency’s answer is based on a permissible construction of the statute.”

After the oral argument in Loper, it’s clear that a majority of the justices will make one of two decisions. They will either “Kisorize” Chevron and leave it in effect or they will overrule Chevron and replace the Chevron test with the test the Supreme Court announced in its 1944 opinion, Skidmore v. Swift & Co. I’ll explain each of the court’s likely paths.

‘Kisorizing’ Chevron

The term “Kisorize” is a reference to the Supreme Court’s 2019 opinion in Kisor v. Wilkie. In that case, a five-justice majority decided not to overrule the highly deferential test for deciding whether to uphold an agency’s interpretation of one of its own rules that the court had announced in its 1997 opinion in Auer v. Robbins. The majority noted it had already qualified the deferential Auer test in several ways.

A court shouldn’t uphold an agency’s interpretation when it is “plainly erroneous or inconsistent with the regulation.” It shouldn’t defer to an agency’s interpretation when deferring “would seriously undermine the principle that agencies should provide parties fair warning of the conduct a regulation prohibits or requires or results in unfair surprise.”

And, a court shouldn’t uphold an agency’s interpretation “when there is reason to suspect that the agency’s interpretation does not reflect the agency’s fair and considered judgment on the matter in question,” such as “when the agency’s interpretation conflicts with a prior interpretation” and “when it appears that the interpretation is nothing more than a convenient litigating position” or when it appears that the interpretation is a “post hoc rationalization advanced by an agency seeking to defend past agency action against attack.”

The court cited opinions that support each of those qualifications, so the Kisor opinion didn’t actually change the law. It cataloged in one place the qualifications the court had previously added to the Auer test. There is no reason to believe that Kisor changed the outcome of any post-Kisor case in which a court applied the Auer test in the process of reviewing an agency’s interpretation of an agency rule.

Kisorizing Chevron would have little if any effect on the outcome of any case. It is already clear that most, perhaps all, of the qualifications that the court added to Auer deference apply equally to Chevron deference. Kisorizing Chevron would just place all the pre-existing limits on Chevron deference in a single opinion.

Skidmore Deference

The only other plausible outcome of Loper is a majority holding that overrules Chevron and replaces Chevron deference with Skidmore deference. Skidmore deference is generally considered to be somewhat weaker than Chevron deference.

In Skidmore, the Supreme Court said that in reviewing agency interpretations of agency-administered statutes as “not controlling” but litigants and courts “can resort to them for guidance.” The weight of the agency’s judgment “will depend upon the thoroughness evident in its consideration, the validity of its reasoning, its consistency with earlier and later pronouncements, and all those factors that give it power to persuade, if lacking power to control.”

A decision replacing Chevron deference with Skidmore deference would have no effect on the outcome of any case in the Supreme Court. The Supreme Court hasn’t applied Chevron in any case since 2016 even though it has decided many cases in which it reviewed agencies’ interpretations of statutes during that period.

The court has never applied Chevron on a consistent basis. It ignored Chevron far more often than it applied Chevron over the past 40 years. If the court doesn’t overrule Chevron, it will continue to ignore it.

A decision replacing Chevron deference with Skidmore deference probably would change the outcome of some cases in circuit courts. In a 2017 law review article, two scholars found that circuit courts upheld agency interpretations of statutes 21% more often when they cited Chevron than when they cited Skidmore.

There are reasons to be cautious about using that finding as the basis for an expectation that a decision replacing Chevron deference with Skidmore deference would have a large effect on the outcome of circuit court decisions today, however. The 2017 study looked at circuit court opinions issued between 2003 and 2013. The court added many important qualifications of Chevron deference after many of those cases were decided. An empirical study of more recent decisions would yield a more modest difference in outcomes depending on whether a court cited Chevron or Skidmore.

I am much more concerned about the court’s 2021 decision to create the “major questions doctrine” and to apply it in four other cases than I am about the effects of a potential reversal of Chevron in Loper. Lower courts are beginning to rely on the major questions doctrine as the basis to overturn scores of agency decisions. That doctrine has potential to make it impossible for any agency to take any significant action.

The cases are Loper Bright Enterprises, et al., Petitioners vs. Gina Raimondo, Secretary of Commerce, et al., U.S., No. 22-451 and Relentless, Inc., et al., Petitioners vs. Department of Commerce, et al., U.S., No. 22-1219

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.

Author Information

Richard J. Pierce Jr. is professor of law at George Washington University Law School. He has written over 20 books and 130 articles on administrative law and regulatory practice.

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