Legal Docket: Chevron on the line

NICK EICHER, HOST: It’s The World and Everything in It for this 22nd day of January, 2024. We’re so glad you’ve joined us today. Good morning! I’m Nick Eicher.

MARY REICHARD, HOST: And I’m Mary Reichard. It’s time for Legal Docket.

The Supreme Court heard two oral arguments back to back last week that could limit the power of federal agencies.

The possibility has liberals concerned and conservatives hopeful about a change in legal doctrine that’s 40 years old. Back in the 1980s the Supreme Court handed down its decision in Chevron v Natural Resources Defense Council.

NICK EICHER, HOST: What came from that ruling is known as Chevron Deference.

It allows executive branch agencies to take an ambiguous law and write unambiguous rules. It’s what prevents the courts from checking the power of the administrative state.

The key word in Chevron deference is deference, and courts give that deference so long as the agency’s interpretation is considered “reasonable.”

REICHARD: Plenty of fudge words there. And over the decades since Chevron, agency power has grown to the point that conservative critics cry foul. Those critics include justices on the high court, like Clarence Thomas, Neil Gorsuch, and Samuel Alito.

Here are the facts of these two disputes. A federal law called the Magnuson-Stevens Act passed in 1976. Its mandate was to regulate American fisheries and prevent overfishing. Part of that required placement of federal monitors on board fishing vessels to ensure regulations were adhered to.

EICHER: No one disputes that part. What is disputed is a rule the National Marine Fisheries Service passed decades later during the Trump administration. It requires fisheries to pay for those on-board federal monitors. The cost comes to about $700 per day, and represents about 20% of annual profits for some businesses.

In the text of the Magnuson-Stevens Act you’ll find nothing about payments.

Yet the agency decided that because Congress said nothing about it, that was ambiguity it could exploit. So the agency claimed authority to shift the cost of enforcement directly onto the fishermen.

REICHARD: So the fishermen sued and then landed a formidable advocate, former Solicitor General Paul Clement.

Clement brought the fight to the Supreme Court and argued Chevron’s got to go.

PAUL CLEMENT: Commercial fishing is hard. Space onboard vessels is tight, and margins are tighter still. Therefore, for my clients, having to carry federal observers on board is a burden, but having to pay their salaries is a crippling blow.

Nonetheless, the court below deferred to the agency because it viewed the statute as silent on the "who pays" question. There is no justification for giving the tie to the government or conjuring agency authority from silence.

On the other side representing the Biden administration, U.S. Solicitor General Elizabeth Prelogar.

PRELOGAR: The Chevron framework is a bedrock principle of administrative law with deep roots in this Court's jurisprudence. Overruling a precedent is never a small matter, but overruling a precedent as foundational as Chevron should require a truly extraordinary justification, and Petitioners don't have one.

The liberal justices seemed keen to follow Prelogar. Justice Elena Kagan mentioned Chevron’s use across industries, not just fisheries. Here she is addressing another lawyer for the fishermen, Roman Martinez.

JUSTICE KAGAN: You think that the court should determine whether this new product is a dietary supplement or a drug without giving deference to the agency, where it is not clear from the text of the statute or from using any traditional methods of statutory interpretation whether in fact the new product is a dietary supplement or a drug?

Sometimes law runs out. Sometimes there’s a gap. there’s a genuine ambiguity. And I, I don’t know. In that case, I would rather have people at HHS telling me whether this new product was a dietary supplement or a drug.

EICHER: Besides that, Justice Kagan suggested it’s up to Congress to do something about problems applying Chevron.

Clement for the fisheries argued too many in Congress have no incentive to fix it—because Chevron allows them to duck difficult legislative issues. And bureaucrats don’t have to face voters. So there’s no political accountability.

CLEMENT: But my point is it's really convenient for some members of Congress not to have to tackle the hard questions and to rely on their friends in the executive branch to get them everything they want.

I also think Justice Kavanaugh is right that even if Congress did it, the president would veto it. And I think the third problem is, and -- and fundamentally even more problematic, is if you get back to that fundamental premise of Chevron that when there's silence or ambiguity, we know the agency wanted to delegate to the Agency. That is just fictional, and it's fictional in a particular way, which is it assumes that ambiguity is always a delegation.

But ambiguity is not always a delegation. And more often, what ambiguity is, I don't have enough votes in Congress to make it clear, so I'm going to leave it ambiguous, that's how we're going to get over the bicameralism and presentment hurdle, and then we'll give it to my friends in the agency and they'll take it from here.

And that ends up with a phenomenon where we have major problems in society that aren't being solved because, instead of actually doing the hard work of legislation where you have to compromise with the other side at the risk of maybe drawing a primary challenger, you rely on an executive branch friend to do what you want. And it's not hypothetical. When I hear you talk about...

REICHARD: Justice Sonia Sotomayor interrupted him.

JUSTICE SOTOMAYOR: You said you end up in gridlock, which we have now.

CLEMENT: No. What I'm saying is Chevron is a big factor in contributing to gridlock.

That led Justice Samuel Alito to ask Clement about the legal landscape in which Chevron arose four decades ago, and what’s changed in the years since:

JUSTICE ALITO: People who were very sophisticated and had a deep understanding of how judges decide what a statute means and a deep understanding of how administrative agencies work thought that Chevron would be an improvement because it would take judges out of the business of making what were essentially policy decisions. Now were they wrong then? And if they weren't wrong then, what, if anything, has changed since then?

CLEMENT: So, Justice Alito, I think they were partially right then. So let me say what's changed and what hasn't changed, i.e., what the Court missed back in Chevron. What has changed is we've come a long way in statutory interpretation. And, you know, if Chevron was a response to some of the excesses of the D.C. Circuit in the freewheeling days of the late '70s and the use of legislative history and, oh, by the way, the text of the statute appears in the margin of my opinion, and I'm not going to talk about it again because I'm off to the races. We now, I think, are all textualists. The focus is much greater on the text of the statute. And once you recognize that, you recognize the problem with deferring at a certain point to the agencies.

And let's look at the track record of the agencies before this Court. If they are so expert, they should be able to persuade you in case after case that they're getting these statutes right. By my count and by the Cato Institute in their amicus brief, since the Court last cited Chevron, the administration is batting about 300 in these cases. So expertise is not all what it's cracked up to be.

EICHER: Clement is a nimble Supreme Court advocate. He’s argued more than 100 cases before the court. And so he had at hand a ready example of congressional dereliction of duty:

CLEMENT: I would think that the uniquely 21st Century phenomenon of cryptocurrency would have been addressed by Congress, and I certainly would have thought that would have been true in the wake of the FTX debacle. But it hasn't happened. Why hasn't it happened? Because there's an agency head out there that thinks that he already has the authority to address this uniquely 21st Century problem with a couple of statutes passed in the 1930s. And he's going to wave his wand and he's going to say the words "investment contract" are ambiguous, and that's going to suck all of this into my regulatory ambit, even though that same person, when he was a professor, said this is probably a job for the CFTC.

REICHARD: The government does not want to disturb the status quo. If it does, Prelogar argued, litigants will come out of the woodwork.

PRELOGAR: There are agency regulations out there that have been on the books for decades. People have made investment decisions on the basis of that. People have decided what contracts to enter into on the basis of that.

And all of that could be thrown into disarray if now it can be subject to renewed challenge...

Disarray or not, Justice Neil Gorsuch worried more about the Average Joe:

GORSUCH: The cases I saw routinely on the courts of appeals -- and I think this is what niggles at so many of the lower court judges -- are the immigrant, the veteran seeking his benefits, the Social Security Disability applicant, who have no power to influence agencies, who will never capture them, and whose interests are not the sorts of things on which people vote, generally speaking. And, there, Chevron is almost always and, in fact, I -- I didn't see a case cited, and perhaps I missed one, where Chevron wound up benefiting those kinds of peoples.

EICHER: Justice Brett Kavanaugh picked up on something else to counter the Solicitor General’s warning that chaos will ensue if Chevron is overturned:

JUSTICE KAVANAUGH: You say don't overrule Chevron because it would be a shock to the system. But the reality of how this works is Chevron itself ushers in shocks to the system every four or eight years when a new administration comes in, whether it's communications law or securities law or competition law or environmental law, and goes from pillar to post, like Professor Pierce wrote, and he had been a fan of Chevron. Now he's not because he says it's a source of extreme instability in the law. You just pay attention to what happens when a new administration comes in at EPA, at SEC, at FTC, you name it. It's just massive change. That is at war with reliance. That is not stability.

REICHARD: One of the amicus briefs filed in support of the fishermen caught my eye. It’s from Little Sisters of the Poor, an organization that cares for the elderly poor. You might remember them as repeat challengers to contraceptive mandates imposed upon them in the name of Obamacare.

So I called up William Haun of the Becket Fund, co-counsel for the Sisters. He explained that herring fishermen, Catholic nuns, and Americans from all walks of life have a stake in the outcome:

WILLIAM HAUN: And the Little Sisters of the Poor are in this case because for the past 10 years, they have been the prime example of what happens when regulators get to tell the federal courts the scope of your religious liberty. This is why the Little Sisters have had what one Supreme Court justice called a legal odyssey because an administration after administration, when one administration's in power, the Little Sisters get a religious protection. When another administration is in power, that protection is withdrawn.

And that, say the herring fishermen, is what a written constitution is supposed to protect against.

And that’s this week’s Legal Docket!

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