The History of the Chevron Doctrine

There are some iconic legal case names that lawyers everywhere still remember years after they’ve forgotten the underlying facts. “Chevron” is one of them, a household name among law students and arguably the most important case in American administrative law. The “Chevron doctrine” has for a long time been a word known to only the legal community, but recently, with the Supreme Court hearing a case that could overturn the doctrine, the name has been making national headlines for non-lawyers alike.

For those of us that have been out of law school, or never went, we could probably do with a quick-and-dirty refresher of the doctrine ahead of the big SCOTUS ruling to come. FindLaw’s got you covered.

The Landmark Namesake Case

If the name of the doctrine brings to mind Big Oil, you’re on the right track. The doctrine is so called because it was first established in the 1984 Supreme Court case Chevron v. Natural Resources Defense Council.

The Chevron case stands as a pivotal landmark in U.S. administrative law, famous for establishing a principle of significant deference (on the part of courts) to administrative agencies. The facts of the case itself are frankly not that important. It involves a lot of back-and-forth over the reading of the text of the Clean Air Act, but the facts aren’t essential to the takeaway. If the debate over agency deference didn’t arise with this case, it would have come up through countless others.

A Source by Any Other Name

In Chevron, SCOTUS grappled with what the term "stationary source" within the Clean Air Act meant. Why did this term matter so much? The Act required states to regulate major pollution sources from "stationary sources" like factories, but it didn’t explicitly define what constituted a "stationary source."

The Chevron oil company wanted to change things around and install new equipment at one of its refineries. But it wasn’t clear from the Act if “stationary source” referred to each individual piece of combustion equipment that emits a pollutant, or if it referred to the entire plant as a whole. If it meant the latter, Chevron wouldn’t need a permit, because the total pollution after the change wouldn’t exceed the limits; but if it meant the former, Chevron would be in violation without a permit because some of the individual pieces of equipment would be polluting more than allowed.

Bubble, Bubble, Toil and Trouble

To avoid needing a permit, Chevron argued that the new equipment could be considered part of an existing "bubble" of emissions at the refinery, effectively keeping total emissions constant. This interpretation relied on the EPA's "bubble policy" allowing flexibility in regulating multiple pollution sources within a facility as a single unit.

The Natural Resources Defense Council (NRDC), an environmental group, challenged Chevron's interpretation, arguing that a "stationary source" meant each individual pollution source, not a collective bubble. They claimed the EPA overstepped its authority by creating the bubble policy.

Everybody One, Two Step

The Supreme Court’s decision was unanimous; siding with Chevron, it upheld the EPA's bubble policy.

Justice Stevens wrote for the majority. First, he agreed with the EPA (and the lower court) that the statutory term “source” was ambiguous. He then went on to establish that the EPA's interpretation was a reasonable and permissible way to achieve the Act's environmental goals while providing flexibility for industry. These two steps were announced as the test to use for agency deference in the majority opinion and would become the famous “two-step” inquiry that is the hallmark of applying the Chevron doctrine.

The "two-step" refers to the two stages of the review process:

1. Determine whether Congress expressed clear intent on the specific issue at hand in the statute. If it did, the court simply applies that meaning. If it’s not clear, go on to Step 2.
2. If the statute is ambiguous, then the court defers to the agency's interpretation if it is "based on a permissible construction of the statute." This is the "Chevron deference" stage.

After announcing this new test, Justice Stevens applied it to the case at hand. They found the Clean Air Act ambiguous and concluded that the EPA's interpretation was a reasonable and permissible way to achieve the Act's environmental goals while providing flexibility for industry.

Chevron Effective But Controversial for 40 Years

Chevron deference saw wide application over the decades, empowering agencies to fill policy gaps in ambiguous statutes across various domains, from environmental regulations to healthcare rules. Proponents of the doctrine have argued that deference promotes regulatory efficiency, allows agencies to adapt to changing circumstances, and leverages their expertise. However, critics raised concerns about the doctrine's potential to undermine democratic accountability and legislative supremacy. They argue that courts often rubber-stamp agency interpretations, even if questionable, and that Chevron grants agencies undue power to make policy through interpretation.

The Chevron doctrine remains a potent force in administrative law, but its future is far from certain. The Supreme Court itself has engaged in a complex dance with Chevron, sometimes reaffirming its importance and other times narrowing its scope. Recent years have witnessed intensified scrutiny, with several high-profile cases challenging Chevron's continued dominance. The 2022 King v. Burwell decision, for instance, while upholding the Affordable Care Act, left open the question of Chevron's future, further fueling the debate.

2024 SCOTUS Puts Chevron on the Chopping Block

The Chevron doctrine remains a potent force in administrative law, but its future is far from certain. The current Supreme Court, with its conservative tilt, seems more likely to limit its application or even overturn it altogether. This possibility has ignited intense debate, with implications for agencies' regulatory power, the balance of power between branches, and ultimately, the effectiveness of government in addressing complex challenges.

Now, after 40 years, SCOTUS is set to decide the doctrine’s future. The court heard three and a half hours of oral arguments on Wednesday in a case that challenged the doctrine. The case is Loper Bright Enterprises v. Raimondo. You can find more extensive coverage of the facts of the case on this blog.

Related Resources:

• A Look Ahead at the Supreme Court’s Upcoming Term (FindLaw's Federal Courts)
• What is Administrative Law? (FindLaw's Learn About the Law)
• Skies Darken for the EPA's Authority (FindLaw's Federal Courts)