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Is SCOTUS About to Overturn Chevron?

By Vaidehi Mehta, Esq. | Last updated on

If you’re an attorney, you’ve almost certainly heard a lot of buzz around the Chevron doctrine in the past few months. The U.S. Supreme Court has taken up a case that could decide the future of this important legal principle. We’ve covered the Chevron doctrine at length in another blog, which you can read here. Here, we’ll talk about the current case that’s got legal minds arguing everywhere: Loper Bright Enterprises v. Raimondo. Let’s break down the fishy facts underlying this new challenge to Chevron before we summarize the arguments for and against, and tell you what you can expect from SCOTUS in the spring.

Agency’s Audacious Audit Ask

Imagine you're a small fishing company like Loper Bright Enterprises. You catch herring off the coast of New England, and your livelihood depends on keeping costs low. But just like the government decides whether it’s duck season or wabbit season, they have an interest in regulating fishing. Specifically, a federal agency called the National Marine Fisheries Service (NMFS) likes to make sure that no one fishery hauls in too much and that there's still plenty of herring left in the sea.

Here's the rub: the NMFS says you need to have a government monitor on your boat to watch how much herring you catch. On its face that seems no different from restaurants being required to host health inspectors — except in one very important way. Restaurant owners don’t pay health inspectors — it would probably be a conflict of interest if they did! The inspectors are on the government’s payroll.

Not so in the case of the NMFS. They never set up monitors on their payroll, and instead, left it to the fishing companies themselves to fund them (we’ll leave aside the whole conflict of interest thing for now, but that’s ... fishy). A monitor comes with a hefty price tag – around $700 each day you go fishing. That’s no chum change for a fishing company — according to their brief, the yearly total cost of paying for a monitor makes up about 20% of their annual profits. Loper Bright thinks that's unfair.

Perhaps more importantly, they argue that the statute requiring the monitors doesn’t make it at all clear that the companies themselves are supposed to cough up the money. The argument over the vagueness of the statute came from the part where it authorized NFMS to “require that one or more observers be carried on board.” NFMS says that since the statute isn’t totally clear, they get to decide how to interpret “carry,” and ultimately, the answer of who has to pay for the monitor.

Now, there are of course countless herring boats out there, and a lot of variety in how they operate. Some trips are longer than others. NMFS allowed certain exemptions for fishing boats that went on shorter trips. But another fishing company called Relentless didn’t qualify for those exemptions because their trips were too long. For this reason, they also took issue with NMFS trying to shift the cost of monitors onto them. Relentless sees it as an unfairness issue: they had to spend a lot of money paying for a monitor when other boats that took shorter trips were exempt.

Chevron Called Into Question

In each instance the companies took issue with the fact that the agency, NMFS, got to decide on its own who paid for the monitors — even though the answer wasn’t in the statute, and therefore, it was not clear who Congress intended to pay for the monitors. Though the two companies had slightly different bones to pick, they shared this issue in common. And this wasn’t just any issue: this was a question on the continued legitimacy of the Chevron doctrine.

If you read our blog on the origins and principles behind the Chevron doctrine, you’ll probably see what the issue in the fisheries’ case has in common with the issue facing the gas company in the namesake case 40 years ago. In both cases, the agency involved is, without express authority from Congress, deciding how to read a statute that is otherwise not perfectly clear.

To no one’s surprise, the agency is reading it in a way that’s most beneficial to them. Is NMFS just conveniently twisting the law to save themselves some money, in turn resulting in a financial blow to the fishing companies? Maybe, maybe not.

What is clear is that this case is about a lot more than the David-and-Goliath picture that many news sources are painting. Sure, this particular case affects fisheries and gives a windfall to Uncle Sam and their expense. But ultimately, the outcome will have ripple effects for countless agencies, companies, and individuals, in a way that doesn’t fall into an easy pattern.

Oral Arguments Get Heated

Oral arguments for the case were heard on Wednesday and lasted three and a half hours. The U.S. Solicitor General, representing the Biden administration, argued that Chevron should be preserved. She reminded the Justices of the extensive jurisprudence that the doctrine has been entrenched in throughout the last 40 years, and that based on stare decisis, they’d need a “truly extraordinary justification” to overturn it.

Generally, conservative justices are known to oppose Chevron, while liberal justices usually advocate for keeping it. This hasn't always been the case; conservative justices originally supported Chevron deference. After all, it was a conservative presidential administration under Raegan that introduced the doctrine.

Current justices asked the questions you would expect based on their respective philosophies. The three liberal justices expressed support for keeping Chevron. They brought up one of the most common refrains around the doctrine: that federal agencies, unlike courts, have the scientific and technical expertise to make them better suited to resolve any ambiguities in statutes. They also pointed out that it’s an impossible task for a court to come up with a “best” interpretation of the law, especially when justices routinely disagree about the meaning of statutes.

The conservative justices pointed out the downsides of Chevron deference. They argued that every four to eight years when a new federal administration comes in, it causes “shocks to the system” with “massive change” in various areas of the law. Justice Gorsuch added that Chevron is particularly harmful to “the little guy” because individuals affected by changes in agency policies to do with immigration, Social Security benefits, and veterans affairs are less powerful, unlike big businesses who are better equipped to advocate for themselves or suffer the blow.

Overruling on the Horizon?

There was also discussion on what has been one of the most controversial potential SCOTUS upshots for some time now: the impact of overruling Chevron. The conservatives alleged that the effect would be pretty minimal, seeing as the Court has not applied Chevron in a few years. Some pointed out that the problem comes up a lot more frequently in lower federal courts. It was also debated whether overruling the doctrine would undo previous rulings or at least call prior cases relying on the doctrine into question.

The attorney for the government, who is arguing against scrapping Chevron completely, urged the Justices in her argument to keep the doctrine but confine it. She suggested that they articulate limits on the doctrine and dial down the overall deference to agencies. Her opponent painted the doctrine as fundamentally flawed and needed an all-out overhaul. By the end of it, the majority of the Justices seemed more inclined to agree with him, against keeping Chevron.

The opinion is expected about four months out from now if the court sticks to its usual timeline. Attorneys on both sides of the divide will be holding their breath.

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