The End of Chevron: Judicial Review and Agency Deference

When the United States Congress passes laws, it regularly delegates authority to federal agencies to enforce and administer the law’s provisions.  For example, the Department of Education enforces Title IX of the Education Amendments of 1972, the Department of Labor enforces the Fair Labor Standards Act and the Environmental Protection Agency enforces the Clean Air Act.  Oftentimes, Congress will pass a law and intentionally leave provisions broad, explicitly providing the agency with authority to “fill in the blanks.”  This is based on the belief that agencies are “experts” in their respective field and are therefore, in the best position to effectuate Congress’s statutory objectives.

Occasionally, however, Congress will leave a statute ambiguous, failing to provide the agency with clear direction on how to enforce and administer the law.  This leaves the administering agency the task of interpreting the statute in order to conduct its regulatory functions.  In the American legal system, however, the principle of separation of powers provides that statutory interpretation is a job for the judicial system.  Congress passes laws, the President administers laws, and the judicial system interprets laws.  This separation can create tension when courts are asked to review an agency’s interpretation of an ambiguous statute.  In 1984, the United States Supreme Court, faced with this issue in Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc. (herein referred to as Chevron), answered the question of who is in the best position to interpret ambiguous statutes when it delegated the roll to administrative agencies.

The Chevron court reasoned that agency personnel are most familiar with enforcing a particular law and have the technical knowledge necessary to understand it.  As “experts” in their field, agencies are in the best position to interpret ambiguous statutes.  Coined the “Chevron Deference,” courts have been reviewing challenges to agency action by conducting the following 2-step analysis: 

1. Is the statute clear? (i.e., is there only one possible reasonable interpretation?).  If the answer is “no”, then the court asks itself the second question, below.
2. Is the agency’s interpretation reasonable? If the answer is “yes”, then the court must defer to the agency’s reasonable interpretation.

Since 1984, courts have been required to defer to an agency’s reasonable interpretation of an ambiguous statute and overruled only unreasonable agency interpretations.  Over the last several decades, however, federal courts have slowly weakened Chevron, and the Supreme Court itself has not provided deference in strict accordance to Chevron since 2016.

On June 28, 2024, the Supreme Court decided Loper Bright Enterprises v. Raimondo, Secretary of Commerce, finally overturning Chevron completely.  Relying on the Administrative Procedure Act (APA), which was passed in 1946 to govern the regulatory process, the Court held that federal agencies have no authority to interpret ambiguous statutes without an express delegation from Congress.  Because the APA states, “the reviewing court is to decide all relevant questions of law” and “interpret…statutory provisions” the Supreme Court found Chevron’s mandatory application untenable.  Under Loper, Courts are no longer required to adhere to an agency’s reasonable interpretation and may now exercise their independent judgement to ascertain what Congress would have wanted.

The true extent of this holding is unclear.  Yes, Loper overrules Chevron.  But, as a practical matter, administrative agencies necessarily deal with highly technical matters and judges may need and choose to rely on agency findings and decisions to make sense of a particular statute.  In the end, the decision is significant and raises questions for agencies as they consider whether to redefine their roles under Federal law and for litigants as they seek to define their rights pursuant to the same.