There’s a U.S. Supreme Court case that might soon undo one of the most basic rules-of-the-road about how our federal government works. If it does, all kinds of government regulations would be much easier for courts to overturn. And if that happens, unpredictability will be the new rule-of-the road for your business and life.
Although the past year brought many consequential Supreme Court decisions, this one, likely to emerge next year, could have perhaps the biggest effects on packagers of any decision in decades.
The case is called Loper Bright Enterprises v. Raimondo, and you can examine it for its specific details or its general themes. Specifically, it involves a challenge to regulations made by the Biden administration’s National Marine Fisheries Service that require fishing boats to pay for onboard monitors to make sure they don’t over-fish. The challengers said the law told the agency to require monitors, but didn’t say the agency could require the fishing boats to pay for them.
However, its more interesting general theme is this: The case also raises the question of whether the courts should continue to follow the doctrine from the 1984 “Chevron” case. That case, which involved EPA air pollution rules, established the concept that when courts review agency rules or other actions that involve interpretation of a law, and that law is silent on a topic or ambiguous in some way, the court will only check to make sure the agency’s interpretation was “reasonable.” If the agency’s interpretation was reasonable—that is, not nutty or clearly beyond the scope of Congress’s instructions—it would be upheld. In a word, the Chevron case says the court should “defer” to agency interpretations unless they’re not reasonable. (And by the way, if the law Congress made was clear, the court would simply check to see if the agency did what Congress instructed.)
What a judge should not do, according to the Chevron case, is substitute the judge’s own judgment for that of the agency about what should be the right interpretation of a law.
By telling courts to defer to an agency interpretation unless the interpretation is unreasonable, the Chevron doctrine meant courts almost always upheld regulations when they were challenged in court for being wrong-headed or unconstitutional in some way. Many judges and other observers say that a big reason to defer to agencies is that those agency folks have the subject matter expertise you’d want them to have if they’re going to make rules on a particular topic. Regulatory agencies have people in them, ideally, with training and education and experience that makes them appropriate folks to decide how to limit air or water pollution, or decide whether a new drug is safe and effective enough to go to market, or choose where to build an interstate highway, or where to store nuclear waste, or how to prevent over-fishing of the oceans, and so on.
The Chevron case has been cited by 19,000 other cases, according to the San Francisco Chronicle, and more importantly, it’s been a fixture in legal doctrine for almost 40 years, relied on by industry and regulatory officials alike.
Clearly, when you defer to agency decisions most of the time, you give those agencies, rather than Congress or judges, lots more power.
(This discussion might bring to mind the recent judge’s ruling that invalidated FDA’s approval decades ago of a drug used in abortions. That ruling didn’t mention the Chevron case, oddly, and I predict the Supreme Court will find the plaintiff doctors in that case didn’t have standing—the legal right to sue—to bring the case in the first place.)
Several current Supreme Court justices have expressed displeasure with a system that allows so much power to be given to agencies, and some of the Court’s recent decisions have created workarounds from the doctrine. The most notable is the Court’s creation of a “major question doctrine” that says the Court need not defer to agency interpretations, even if they’re reasonable, if the decision implicates far-reaching matters. Their objections to it include the empowerment of agency officials who voters have no control over, as well as the fact that giving agencies so much power to decide things and fill in details about policy issues is giving them legislative power that is Constitutionally supposed to stay with Congress.
This is really just a debate over the old “three branches of government” idea that you probably learned in school. The idea is that the U.S. Constitution requires the legislative, executive and judicial branches to stay in their respective lanes, with the legislative (the House and Senate) making laws, the executive (headed by the President) implementing and enforcing laws, and the judicial (the Supreme Court and lower federal courts) interpreting laws.
If Chevron is overturned and you won’t be able to expect most regulations to be upheld, predictability for business goes way down, and the costs go up of adapting to regulations that come and go more often and more quickly.
There are echoes in this case of the kind of blind anti-expertise bias that seems to infect too many public policy issues these days—“The purpose of the regulations doesn’t matter to me, and all I know is that your alleged expertise restricts my freedom.” Well, maybe, but how else would a complex society address issues that affect everyone’s safety and fairness?
Sez me, the solution to the problem of agencies having too much discretion is that Congress should make its laws less ambiguous. The solution shouldn’t be to take discretion away from regulatory officials and give it to judges for gosh sakes, over whom voters really have no recourse (we don’t vote for them), and who may or may not have even the slightest expertise in the relevant area. Since several Supreme Court justices have already expressed exasperation about the Chevron doctrine, the good advice for all packagers is to keep an eye on this new case. But, if the common prediction is correct that the doctrine will be undone, be ready next year for a rupture in the foundation of our regulatory system, and a huge increase in unpredictability.
INFORMATIONAL ONLY, NOT LEGAL ADVICE.