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High Court Could Take First Step to Chevron Doctrine’s Demise

March 28, 2019, 8:56 AM

The U.S. Supreme Court justices appear primed to curtail administrative agencies’ regulatory power, but the court’s ultimate decision could lead to a much bigger conservative target: overturning the oft-maligned Chevron doctrine.

Based on their comments in yesterday’s argument in Kisor v. Wilkie, it seemed likely that the justices—along party lines—would eventually overturn the Auer deference doctrine, which allows government agencies, not the courts, to determine the meaning of their own disputed regulations.

And though the case didn’t formally address Chevron and other deference doctrines, “Kisor could be a step along the path toward a more assertive, less deferential judicial attitude toward federal agencies,” administrative law professor Nicholas Bagley said prior to yesterday’s argument.

Ensuring that an independent judge decides the law, rather than a partisan agency, “seems to me a significant promise,” Justice Neil Gorsuch said during Wednesday’s argument. “Especially to the least and most vulnerable among us, like the immigrant, like the veteran, who may not be the most popular or able to capture an agency the way many regulated entities can today,” he said.

If the court is indeed headed in that direction, its next target could be Chevron deference, which requires that courts also defer to agency interpretations of statutes passed by Congress—rather than Auer’s focus on agency interpretation of regulations.

Chevron has been a flash point for conservatives who see it as aggrandizing unelected bureaucrats. The issue featured prominently in the confirmation hearings of both Justices Gorsuch and Brett Kavanaugh.

If Chevron were overturned, it could have far-reaching implications for legislation—from environmental laws to immigration to financial regulation.

It could limit the authority that Congress can hand over to executive agencies and risk transferring power to courts where legislation isn’t crystal clear.

Special Expertise

At issue in Kisor is whether federal courts must defer to the Department of Veterans Affair’s determination of when it can reconsider a denial of disability benefits. Citing Auer, the courts below deferred to the VA’s narrow construction for reconsideration of benefits.

The Auer and Chevron doctrines rest on the understanding that agencies have special expertise in certain areas of the law, administrative law professor Peter Strauss said. While courts might deal with a particular area of the law infrequently and in irregular cases, agencies deal with those same legal issues all the time and in various kinds of cases, Strauss said.

“Its underpinning is an idea that judges are far less suited to make these kind of minute decisions of agency policy than agency decision-makers are,” said Justice Elena Kagan during arguments Wednesday.

In the court’s 1984 ruling in Chevron, for example, the court blessed the EPA’s interpretation of the Clean Water Act by emphasizing the “technical and complex” nature of the statute and the agency’s “great expertise.”

Separate Sideshow

Conservatives have increasingly attacked these doctrines in service of a grander plan to curb the administrative state. The current regime gives bureaucrats broad power to interpret laws, power which conservatives think should rest with Congress and the courts.

And in recent years a number of the current justices have been skeptical of these doctrines, too, Corbin Barthold, of the Washington Legal Foundation, who filed a friend-of-the-court brief in support of overturning Auer deference.

Chief Justice John Roberts, along with Justices Clarence Thomas, Samuel Alito, Gorsuch, and even Kavanaugh have all expressed frustration, or a sense of unease, regarding the agency deference in some form, Barthold said.

Yesterday, several justices expressed concerns with Auer that could equally apply to Chevron.

Both Auer and Chevron only apply after a court determines that the underlying law is “ambiguous.”

“Judges disagree all the time, though, on the threshold question of whether something’s ambiguous to begin with,” Kavanaugh said. “And that creates a whole sideshow,” he added.

Moreover, a judge may subsequently determine that the agency’s interpretation is just wrong, Kavanaugh said. But “because there’s some ambiguity in it,” the judge has to defer to that incorrect interpretation, he said.

“Doesn’t that trouble you?” he asked Solicitor General Noel Francisco.

Gorsuch noted that Auer has been nipped and tucked so many times by the court such that “nobody left before us alive is willing to take Auer literally.”

He questioned whether the court should continue in that vein or cut its losses. “I guess I’m just wondering, at what point does this whole edifice just fall upon itself?” Gorsuch asked Francisco.

The same can be said of Chevron, which has been limited by the court recently.

In 2015, for example, the Supreme Court rejected another challenge to Obama’s landmark health care legislation, the Affordable Care Act. In doing so, the court refused to base its decision on Chevron, saying the issue was too important to assume that Congress silently delegated it to an administrative agency.

Proper Incentives

There are logical ways for the court to reject Auer but still accept Chevron, Barthold said.

But there was little discussion yesterday of the concerns underpinning the distinctions between Auer and Chevron.

One of those is the incentives the deference doctrines create.

Congress has an incentive to be as precise as possible in drafting statutes where Chevron will come into play because once an agency interprets the statute, it’s difficult for Congress to take back that authority without passing another law.

On the other hand, the Auer doctrine incentivizes agencies to game the system by drafting ambiguous regulations that they can easily change.

When an agency acts in this way, “it acts, in effect, as both lawmaker and judge,” Barthold said.

This contrasts with the Chevron context, where an agency interprets an ambiguous statute. There, it’s Congress making the law, and the agency that’s interpreting it.

Targeting Chevron

Reading oral argument tea leaves is always dangerous, and especially so when trying to determine where the court will go in a future case.

Still, the concerns raised by the justices during oral argument yesterday suggest that they could use Kisor as a first step to undo Chevron as well and further curtail agency power.

As Justice Antonin Scalia wrote of a 2013 dissent critical of a tangential deference doctrine: “Make no mistake—the ultimate target here is Chevron itself.”

To contact the reporter on this story: Kimberly Strawbridge Robinson in Washington at krobinson@bloomberglaw.com

To contact the editor responsible for this story: Jessie Kokrda Kamens at jkamens@bloomberglaw.com