When Deference is Due to Federal Agencies: A Review of the Chevron Case

Roughly 40 years ago, the Supreme Court created what is known as the "Chevron doctrine,” requiring judicial deference to reasonable agency decision-making, where a statute is ambiguous or is invoked in ambiguous situations. But things may be about to change, and the FDA, for one, isn’t happy.
Fishing Trawler

The Court’s ruling in Chevron U.S.A., Inc. v. NRDC was clear:

 “A government agency must conform to any clear legislative statements when interpreting and applying a law, but courts will give the agency deference in ambiguous situations as long as its interpretation is reasonable.”

Chevron, one of the most cited cases in judicial history, is slowly being whittled down. In January, the Supreme Court heard two cases signaling a “sea-change” is in sight. Both cases pertained to interpretations of the federal fishery law, and while the cases, factually, don’t directly affect the FDA, the reasoning is scary and ominous.

“Pick a Little- Take a Little”:

Two years ago,  Am. Hosp. Ass'n v. Becerra provided a harbinger of things to come. There, Medicare costs triggered judicial scrutiny. The Supreme Court unanimously held that HHS exceeded its statutory authority by varying reimbursement rates for a group of hospitals that catered to low-income individuals. Because these hospitals procured medications at discounted rates, HHS reasoned that the commensurate reimbursement should be lower than hospitals paying higher drug prices. No matter how reasonable HHS argued their determination was, they hadn’t complied with clear procedural prerequisites for rate-setting as specified in the applicable statute (i.e., conducting “‘a statutorily mandated survey of hospitals' acquisition costs”). And so, the court nixed their rate determination; Chevron and its required deference to Agency powers wasn’t even mentioned, let alone considered.

Overruling Chevron Spells Trouble with a Capital T

 FDA Commissioner Robert Califf worries that judges are more willing to overrule FDA’s scientific judgments, and any weakening of Chevron's deference would be dangerous. We’ve seen this judicial incursion in thumbing their noses at HHS policy where judges fearlessly overrode recommendations on masking and vaccines, even allowing Ivermectin administration when prescribed by physicians without hospital privileges. Before we get to why FDA Commissioner Califf is so concerned and determine if that concern is warranted, a review of the Chevron case itself is in order.

Capital C Rhymes with P, and that Spells Pollution

Chevron concerns the 1977 Clean Air Act and its amendments, and its focus on states that hadn’t achieved the national ambient air quality standards established by the EPA. In 1981, to facilitate and encourage compliance, the EPA promulgated regulations that permitted “stationary-source” pollution-emitting devices that exceed standards – if offset by reductions in other areas of the plant, such that the total plant emissions met permit standards. This is known as the "bubble concept" because it allows a state to treat all devices within a plant as though they were encased within a single "bubble."

Because the Clean Air Act does not explicitly define what Congress envisioned as a "stationary source," and the issue was not squarely addressed in the legislative history, the situation qualified as “ambiguous.” The question before the Court was whether the EPA's "bubble concept" was based on a reasonable construction of the statutory term: "stationary source" and whether the EPA’s determination would prevail.

The National Resources Defense Council (NRDC), an environmental advocacy group, claimed the "bubble concept" was contrary to law. Although admitting ambiguity in the statute, they argued that the program's purpose was to improve, rather than merely maintain, air quality standards. Hence, a plant-wide definition was "inappropriate."

Most defenses of Chevron focus on the substantial scientific and technological resources possessed by the various agencies, in terms of staff and resources, to which courts (and legislatures) cannot avail themselves, contending that courts are not equipped to second-guess professionally-based agency determinations.  But this was not the rationale used in Chevron. The Chevron court overrode the NRDC's purely environmental claims, using a mixed economic-environmental balancing test, and held that “The EPA's plant-wide definition is a permissible construction of the statutory term "stationary source."

“The legislative history of the portion of the 1977 Amendments dealing with non-attainment areas plainly discloses that, in the permit program, Congress sought to accommodate the conflict between the economic interest in permitting capital improvements to continue and the environmental interest in improving air quality.”

Trouble in River City (i.e., Fishing for Economic Freedom)

The two January cases attacked Chevron head-on. Under scrutiny is the 1976 Magnuson-Stevens Fishery Conservation and Management Act and its interpretation by the National Marine Fisheries Service, a sub-agency charged with assuring fishing sustainability. In Loper Bright Enterprises v. Raimondo, a group of New England fisheries claims they aren’t required to pay salaries of statutorily mandated observers who collect data to prevent overfishing. (The Act is ambiguous on the funding mechanism).

The Agency countered that to promote the Act’s intent [1], these salaries must be paid by individuals engaged in the regulated activity. In Relentless, Inc. v. Department of Commerce, similar arguments allege that the funding component relies on a faulty interpretation of the Act. These herring-fishing claimants, targeted by their business practices, go further, claiming:

“that Chevron deference … is an unconstitutional violation of separation of powers and an abdication of interpretive responsibility by the judiciary.”

Lower courts ruled in favor of the Agency, relying on Chevron. And now the matter is before the Supremes.

The claimants contend that the Chevron deference unfairly biases the court in favor of the government, which is usually one of the parties. “Since the court must defer to the policy decisions of an executive agency, a citizen cannot obtain a fair trial like due process requires,” they claim, advocating that determining objectionable agency decisions should be left entirely to the courts.

The opponents, here the Department of Commerce, contend that the Chevron doctrine:

  • respects agency expertise,
  • promotes national uniformity in administrative law’s application and
  • makes agency regulations more politically accountable. 

Without Chevron, they argue federal courts across the country could interpret statutory language in disparate ways, which would hinder national agency action, in turn disrupting legal stability, eviscerating stare decisis [2], corrupting government expectations (and by implication insert uncertainty, thus disrupting insurability of various enterprises).

The elephant in the room is whether political perspectives should be included in the evaluation and, if so, who makes these determinations. Those who say politics count claim that Congress is that voice. Those who say politics has no bearing on the issue argue the Court alone should rule, forgetting that Judicial appointments are, themselves, political and permanent. [3]

Reading Tea Leaves - What’s Next?

These cases aren’t purely environmental, fish-driven, or even health-driven; an economic component is present in all, and the “expertise” needed isn’t solely possessed by the Agency involved. This “red” herring makes a difference.

Most anticipate the Supreme Court will roll back the Chevron deference in a manner that may impact FDA drug-approval decisions. And a slew of cases have been raised to support this concern. But I’m not as convinced. The court may be less swayed where more is at stake than money versus environmental stewardship.


[1] According to the applicable act: “Fishery management plans must also comply with ten "National Standards" set out in the MSA that identify broad goals and priorities such as minimizing cost, taking communities into account, prioritizing efficiency, and using the best scientific information available. Id. § 1851(a).

[2] Stare decisis is the power of precedent, meaning prior decisions enjoy immense persuasive powers and are rarely overturned.  ChatGPT gives a succinct definition: “Stare decisis is the legal principle that courts should follow precedents established by previous decisions when ruling on cases with similar facts or legal issues. This principle promotes consistency and predictability in the law, ensuring that similar cases are treated similarly across time”.

[3] As an aside, one oft-cited case is brought against Gorsuch, the then EPA commissioner. Will Justice Gorsuch recuse himself?

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