SCOTUS: Down Goes Chevron!

AP Photo/J. Scott Applewhite, File

And finally, the other shoe has dropped on regulators. 

Yesterday, the Supreme Court ruled that the Seventh Amendment requirement for jury trials applied to all civil and criminal charges under common law, ending the Securities and Exchange Commission's kangaroo courts for fraud charges from regulators. And today, in Loper Bright v Raimondo, the court ruled 6-3 that courts should no longer give deference to regulators' interpretations on ambiguous rules, ending 40-plus years of enforcement uncertainties.


Chief Justice John Roberts made it explicit in his majority opinion: "Chevron is overruled." In reaching this decision, the majority leans heavily on the Administrative Procedure Act (APA) that Congress passed, which made clear that the judiciary had the role it had traditionally held all along before the court adopted a different approach in Chevron:

The APA thus codifies for agency cases the unremarkable, yet elemental proposition reflected by judicial practice dating back to Marbury: that courts decide legal questions by applying their own judgment. It specifies that courts, not agencies, will decide “all relevant questions of law” arising on review of agency action, §706 (emphasis added)— even those involving ambiguous laws—and set aside any such action inconsistent with the law as they interpret it. And it prescribes no deferential standard for courts to employ in answering those legal questions. That omission is telling, because Section 706 does mandate that judicial review of agency policymaking and factfinding be deferential. See §706(2)(A) (agency action to be set aside if “arbitrary, capricious, [or] an abuse of discretion”); §706(2)(E) (agency factfinding in formal proceedings to be set aside if “unsupported by substantial evidence”).

In a statute designed to “serve as the fundamental charter of the administrative state,” Kisor v. Wilkie, 588 U. S. 558, 580 (2019) (plurality opinion) (internal quotation marks omitted), Congress surely would have articulated a similarly deferential standard applicable to questions of law had it intended to depart from the settled pre-APA understanding that deciding such questions was “exclusively a judicial function,” American Trucking Assns., 310 U. S., at 544. But nothing in the APA hints at such a dramatic departure. On the contrary, by directing courts to “interpret constitutional and statutory provisions” without differentiating between the two, Section 706 makes clear that agency interpretations of statutes—like agency interpretations of the Constitution—are not entitled to deference. Under the APA, it thus “remains the responsibility of the court to decide whether the law means what the agency says.” Perez v. Mortgage Bankers Assn., 575 U. S. 92, 109 (2015) (Scalia, J., concurring in judgment).4 

The text of the APA means what it says. And a look at its history if anything only underscores that plain meaning. ... 

Chevron defies the command of the APA that “the reviewing court”—not the agency whose action it reviews—is to“decide all relevant questions of law” and “interpret . . .statutory provisions.” §706 (emphasis added). It requires a court to ignore, not follow, “the reading the court would have reached” had it exercised its independent judgment as required by the APA. 


 Roberts then addresses the dissent's argument for keeping Chevron, noting that it doesn't actually do anything to clarify the application of interpretation. It is an exercise in futility, Roberts argues:

The dissent proves the point. It tells us that a court should reach Chevron’s second step when it finds, “at the end of its interpretive work,” that “Congress has left an ambiguity or gap.” Post, at 1–2. (The Government offers a similar test. See Brief for Respondents in No. 22–1219, pp. 7, 10, 14; Tr. of Oral Arg. 113–114, 116.) That is no guide at all. Once more, the basic nature and meaning of a statute does not change when an agency happens to be involved. Nor does it change just because the agency has happened to offer its interpretation through the sort of procedures necessary to obtain deference, or because the other preconditions for Chevron happen to be satisfied. The statute still has a best meaning, necessarily discernible by a court deploying its full interpretive toolkit. So for the dissent’s test to have any meaning, it must think that in an agency case (unlike in any other), a court should give up on its “interpretive work” before it has identified that best meaning. But how does a court know when to do so? On that point, the dissent leaves a gap of its own. It protests only that some other interpretive tools—all with pedigrees more robust than Chevron’s, and all designed to help courts identify the meaning of a text rather than allow the Executive Branch to displace it—also apply to ambiguous texts. See post, at 27. That this is all the dissent can come up with, after four decades of judicial experience attempting to identify ambiguity under Chevron, reveals the futility of the exercise.

Because Chevron in its original, two-step form was so indeterminate and sweeping, we have instead been forced to clarify the doctrine again and again. Our attempts to do so have only added to Chevron’s unworkability, transforming the original two-step into a dizzying breakdance.  


And as Roberts says, forcing courts to adopt agency interpretation of ambiguous statutes and regulation does not provide the kind of stability that stare decisis would normally produce. Thanks to this deference, federal agencies can adopt widely different interpretations and enforcement policies depending on who's in power, and that makes the legal/regulatory environment inherently unstable for Americans. 

Also, as Justice Clarence Thomas adds, it's also flat-out unconstitutional. Chevron makes the judiciary subservient to the other two branches as a matter of structure and not just judgment:

To provide “practical and real protections for individual liberty,” the Framers drafted a Constitution that divides the legislative, executive, and judicial powers between three branches of Government. Perez, 575 U. S., at 118 (opinion of THOMAS, J.). Chevron deference compromises this separation of powers in two ways. It curbs the judicial power afforded to courts, and simultaneously expands agencies’ executive power beyond constitutional limits. ...

By tying a judge’s hands, Chevron prevents the Judiciary from serving as a constitutional check on the Executive. It allows “the Executive . . . to dictate the outcome of cases through erroneous interpretations.” Baldwin, 589 U. S., at ___ (opinion of THOMAS, J.) (slip op., at 4); Michigan, 576 U. S., at 763, n. 1 (opinion of THOMAS, J.); see also Perez, 575 U. S., at 124 (opinion of THOMAS, J.). Because the judicial power requires judges to exercise their independent judgment, the deference that Chevron requires contravenes Article III’s mandate. 

Chevron deference also permits the Executive Branch to exercise powers not given to it. “When the Government is called upon to perform a function that requires an exercise of legislative, executive, or judicial power, only the vested recipient of that power can perform it.” Department of Transportation v. Association of American Railroads, 575 U. S. 43, 68 (2015) (THOMAS, J., concurring in judgment). Because the Constitution gives the Executive Branch only “[t]he executive Power,” executive agencies may constitutionally exercise only that power. Art. II, §1, cl. 1. But, Chevron gives agencies license to exercise judicial power. By allowing agencies to definitively interpret laws so long as they are ambiguous, Chevron “transfer[s]” the Judiciary’s “interpretive judgment to the agency.”


The three dissenting justices, led by Justice Elena Kagan, decry Loper Bright as the end of regulatory effectiveness. However, that's not at all true. As Justice Neil Gorsuch writes, it simply restores the status quo ante of court review from 40 years ago, as well as bringing the court into compliance with the APA. The regulatory state operated effectively enough at that time to still represent a technocratic state-within-a-state.

What Loper Bright does is remove the Rule of Whim from regulatory activity. It will eventually put an end to the interpretive dances by presidents and their administrations to warp ambiguous statutes and regulations to keep changing the ground rules for Americans in their daily lives. It will also force Congress to do its work to deal with new regulatory issues rather than passing the buck to the executive branch to dream up new definitions and interpretations of laws so that Congress won't have to take difficult votes.

In other words, it restores constitutional self-governance -- or at least puts us back on the road to restoring the founders' vision of America.

Update: The court handed down four opinions today, but not the rulings on cases involving presidential immunity for Trump. The most notable of the other three opinions is Fischer v US, where the court narrowed the use of the obstruction statute to January 6 prosecutions. That may require courts to order new trials, a lot of them, and to rethink the indictment against Trump too. CBS' Jan Crawford gives a good assessment of the impact this decision might have.


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