The Supreme Court's Decision Overruling Chevron is Important—But Less so than You Might Think

Today’s Supreme Court decision in Loper Bright Enterprises v. Raimondo overturns the important 1984 precedent of Chevron v. Natural Resources Defense Council, which required federal judges to defer to administrative agencies’ interpretations of federal laws, so long as Congress has not addressed the issue in question, and the agency’s view is “reasonable.” It’s an important reversal, and I think the Court was right to do it. Chief Justice John Roberts’ majority opinion lays out a compelling critique of Chevron, including explaining why it should not be retained out of respect for precedent. But, contrary to the hopes of some and fears of others, today’s ruling will not end the administrative state or even greatly reduce the amount of federal regulation.

I summarized some key reasons why in a post written last year when the Court decided to hear Loper Bright:

While I would be happy to see Chevron overturned, I am skeptical of claims it will make a huge difference to the future of federal regulation. I explained why in two previous posts, (see here and here). To briefly summarize, my reasons for skepticism are 1) we often forget that the US had a large and powerful federal administrative state even before Chevron was decided in 1984, 2) states that have abolished Chevron-like judicial deference to administrative agencies (or never had it in the first place) don’t seem to have significantly weaker executive agencies or significantly lower levels of regulation, as a result, 3) a great deal of informal judicial deference to agencies is likely to continue, even in the absence of Chevron, and 4) Chevron sometimes protects deregulatory policies as well as those that increase regulation (it also sometimes protects various right-wing policies that increase regulation, in an age where pro-regulation  “national conservatives” are increasingly influential on the right); the Chevron decision itself protected a relatively deregulatory environmental policy by the Reagan administration.

In addition, as Chief Justice John Roberts notes in his majority opinion, the Supreme Court had previously issued a series of decisions significantly limiting Chevron, creating “a byzantine set of preconditions and exceptions” restricting the range of situations where agencies get deference. Those rulings don’t seem to have led to any major reduction in the overall prevalence of federal regulation, though they did constrain some types of agency actions.

Overruling Chevron doesn’t even completely eliminate all precedent requiring judicial deference to agencies. As Justice Elena Kagan notes in her dissent, there is still Skidmore deference:

[T]he majority makes clear that what is usually called Skidmore deference continues to apply. See ante, at 16–17. Under that decision, agency interpretations “constitute a
body of experience and informed judgment” that may be “entitled to respect.” Skidmore v. Swift & Co., 323 U. S. 134, 140 (1944). If the majority thinks that the same judges who argue today about where “ambiguity” resides… are not going to argue tomorrow about what “respect” requires, I fear it will be gravely disappointed.

Like Fredo Corleone, federal agencies are smart and they want respect!

And federal judges will still often want to give it to them, especially in cases that aren’t ideologically charged. Justice Kagan is right that the degree of “respect” required by Skidmore is often far from completely clear.

Despite the likely limited scope of its impact, I still think today’s ruling is a valuable step. While it won’t lead to large-scale deregulation, it can help strengthen the rule of law. It could also limit the aggrandizement of power by the executive. Liberals who lament Chevron’s demise may be happier about it if Donald Trump returns to power and his appointees try to use statutory ambiguities to advance his ends.

A traditional rationale for Chevron is that courts should defer to agencies in situations where there are statutory ambiguities because the agencies have superior expertise. Justice Kagan repeatedly invokes expertise in her dissent.

Sometimes agencies really do have relevant specialized expertise. But expertise is far from the only factor influencing agency decisions. Partisan and ideological agendas also have a big impact.

If Trump returns to power, do left-liberal Chevron fans believe his appointees will scrupulously “follow the science” when they interpret statutes? Or will they have a political agenda that will usually trump (pun intended!) science when the two conflict? The answer seems pretty obvious, at least to me.

The same question can be posed in reverse to the dwindling band of conservative defenders of Chevron. Even if they think GOP administrations will “follow the science,” they probably don’t have equal confidence in Democratic ones.

Partisan and ideological bias aside, many issues handled by agencies are simply impossible to resolve through technical expertise alone. They also involve questions of values. And even the most expert of government planners have severe limits to their knowledge, which is one reason why it’s usually best to rely on markets, which aggregate information better than planners do.

In sum, Chevron’s demise doesn’t entail that of the regulatory state. Far from it. But it’s still a useful step forward.

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