What Happens After Chevron?

It’s a sad day for the regulatory state. On Friday, the Supreme Court struck down a 40-year-old precedent that deferred to agencies’ interpretations of their own mandates where the statutory guidance was incomplete or ambiguous, otherwise known as Chevron deference, after the losing side in the original case. Not only has it been cited in more than 19,000 federal opinions, it’s the one congressional aides — the ones actually writing the laws — are most familiar with, as Lisa Heinzerling, a professor of environmental law at Georgetown Law, told me.

“So there’s a way in which Congress has been relying on Chevron for decades, right?” she said. “If Congress banked on Chevron, banked on the idea that if they didn’t make things clear the agency would take care of it, then that reliance is not being honored.”

This is not the first time the court has come for regulators. Two years ago, in West Virginia v. Environmental Protection Agency, the court held that the authority to resolve questions of interpretation involving high-stakes political and economic questions, a.k.a. “major questions,” rests with Congress, not the agencies, raising the threat of legal nightmares should regulators attempt to take any kind of big swings. This explicitly concerns only “extraordinary cases,” and yet regulators already appear to be reining in their own ambition to gird against potential challenges.

Friday’s decision comes the day after the court struck down a provision of the Dodd-Frank Act giving certain enforcement powers to the Securities and Exchange Commission and granted a stay on enforcement of the Environmental Protection Agency’s “good neighbor” rule, aimed at preventing harmful pollution from crossing state lines.

The two cases decided this week — Loper Bright Enterprises et al. v. Raimondo, Secretary of Commerce, et al. and Relentless, Inc. v. Department of Commerce — turned on whether private commercial fishing companies could be compelled to pay for federal monitors to ride along and ensure they were complying with applicable fishing rules. Or at least they did initially. “The court decided to decide only the question whether to overrule Chevron, the case that establishes deference for agencies legal interpretations,” Heinzerling explained the day before the ruling came down. Our conversation has been edited for length and clarity.

Without Chevron, are we going to get completely bogged down in revising statutes? Are our courts going to be clogged up with nuisance suits from people who simply don’t want to have to follow the rules?

I think there will be a lot of efforts to undo other precedent that relied on Chevron — and especially paired with the Corner Post case, which has to do with the timing of challenges to agency action. You know, realistically, if that case comes down, accepting a longer period of time in which to sue people could go nuts, challenging all sorts of agency interpretations from the past. So that’s disruptive.

The Supreme Court is constantly saying, well, go and get a new statute. Well, okay, we saw what happens when Congress passes a new statute: The court holds it unconstitutional. The Dodd-Frank Act. Look what happened to the Affordable Care Act. These major pieces of legislation, major, major political stakes, and the court has not respected those. So I feel like we’re kind of in a shell game, something that’s not quite honest. That in all of these cases, actually, Congress did pass a law, but the court either rules it unconstitutional, says it’s not clear enough. And so I don’t think they’re respecting Congress’s handiwork as it exists now.

You mentioned Corner Post, could you talk about that case?

It came to the court kind of quietly. It’s got rich backers. It’s just a little truckstop, just like the commercial fisherman, that wants to challenge a rule on credit cards. They were incorporated after the rule went into effect, and they want to say, we weren’t injured when it first passed, so we should get the benefit of a longer period of time in which to sue. And amazingly, the justices seemed willing to accept that. That just adds to the stakes of overruling Chevron.

The Chevron deference is a big part of how agencies do their job. But after West Virginia, does it still matter? I’m not a lawyer, but I’m going to pretend I am one when I ask: Does the major questions doctrine effectively invalidate Chevron anyway?

No. They said that the major questions idea was for extraordinary cases, to see how it turns out over the years, but it’s not every case. Where Chevron applied, theoretically, in every case. At least it was a mix.

What recent regulatory decisions would be most vulnerable in a post-Chevron world? 

It is complicated to know because it has to be a question about a statute, a question about a statute that a court finds ambiguous, right? That’s where Chevron would have helped. And I think it depends on what court you’re in. If you’re in the Fifth Circuit, there’s a good chance — I mean, they’ve just stopped using Chevron, period.

Is there a world in which courts develop more subject matter expertise as a result of being forced to decide on questions of statutory interpretation?

Over the years people have offered the possibility of science courts or environmental courts — specialized courts where adjudicators have expertise. That’s never really taken off — never really at all taken off. Certainly the D.C. Circuit judges handle administrative cases all the time. Cases go exclusively to them, and I think the judges do develop some expertise. But it doesn’t turn them into ecologists or engineers. And the thing is that the structure of a judicial chambers is both tiny and insular: you have one judge; on the Supreme Court four clerks, but elsewhere two to three. It’s just not that much. Whereas EPA, they have teams of people on these rules from all over the agency, and then the rule gets reviewed by others.

We’re obviously focused on climate-related regulations, but is there an area of policy that you think will be most vulnerable immediately without Chevron?

The hallmarks of where Chevron has been really important: complicated statutes; technical and/or scientific subject matter; places where the language is either vague or just broad enough, it’s not clear how to fill it in. That’s environmental law, but there’s a lot of other law that’s also … I mean, it’s just OSHA, FDA, the FTC. Looking for those signature traits, that’s going to be a place where it pinches particularly hard. I think the agencies now are sort of bracing for this, but they still have a lot of rules in the works, and this is going to come down in the middle of that in election year.

Chevron started with Reagan wanting to change the way the EPA interpreted its mandate. Would removing it potentially make things more difficult for an incoming Trump administration?

I mean, it should. Chevron was supposed to work that way. But certainly the major questions doctrine, at least as it’s been practiced, so far cuts only against ambitious regulation. It doesn’t cut in favor of it.

The thing that worries me is the anti-regulatory skew that’s in some of the court’s other recent rulings. So for example, in West Virginia itself, the Supreme Court struck down Obama’s Clean Power Plan but upheld — without even explaining why — Trump’s plan. They were the same question under the same statute with the same evidence, the same costs and benefits. Everything was the same except for the direction. If one was a major question, the other should have been a major question. And so if you want to put it in the terms of these two possible administrations, they will go after Biden rules more than they’ll go after Trump rules, at least on the major questions idea.