The debate over ‘Chevron deference’ overlooks its history

A powerful challenge has emerged to the famously controversial 1984 Supreme Court decision Chevron v. NRDC, with huge implications for the workings of the administrative state.

In Loper-Bright vs. Raimondo, a group of fishing companies is challenging a decision by the National Marine Fisheries Service, which charged the companies for monitors it assigned to the ships.

The lawsuit was rejected at the district level based on the precedent in Chevron, which held that courts should generally defer to federal agencies’ own interpretations of their rules and regulations. Now the companies have asked the Supreme Court to overrule Chevron.

The watershed case pits liberal justices and the Biden administration’s solicitor general, Elizabeth Prelogar, against Justices Neil Gorsuch and Clarence Thomas, who have long argued against Chevron.

The original Chevron case involved a dispute over industrial pollution. The question was whether a polluting entity moving to a larger site had to meet rigorous “New Source” requirements called for by the Clean Air Act Amendments of 1977. The Reagan administration’s Environmental Protection Agency (EPA) had changed earlier EPA policy to allow the Chevron Oil Co. to avoid New Source review if the larger site met emission standards.

The National Resources Defense Council, an activist environmental organization, sued the EPA, and the Circuit Court of Appeals for the District of Columbia ruled in its favor. Chevron appealed to the Supreme Court, which overturned the ruling on the grounds that courts should not make government policy but defer to the expertise of agencies if their policy is reasonable.   

The larger implication of the Chevron case was that courts should defer to federal agency policies. The complexity and range of federal regulations it covers has expanded to encompass not only environmental issues, but also banking and finance, health and safety, transportation and infrastructure, education and criminal justice — all administered by federal agencies.

Today, environmentalists and Democrats tend to support Chevron. However, it has aroused increasing antagonism from the business community and conservatives, who associate it with ever-expanding federal government encroachment on American life. The controversy is ironic. A court case resolved in favor of a business-friendly EPA decision against environmentalists is now anathema to conservatives and dear to liberals.

A widely-overlooked historical development underlying the Chevron controversy is the transformation of Congressional lawmaking and federal agencies’ operations around 1970.

From the reform era of the Theodore Roosevelt administration to 1969, federal administrative laws rarely exceeded 20 pages in length, because Congress delegated operational policy to career service administrators of federal agencies. This was feasible then, because agencies were generally respected for their professional expertise and also lacked regulatory responsibilities. Regulatory functions were mostly exercised by states and local jurisdictions.

But then in 1969 and 1970, three laws responding to health and environmental concerns broke precedents with their national enforcement authority, length, and rigor. These were the Federal Coal Mine Health and Safety Act (62 pages), the Occupational Safety and Health Act (30 pages), and the Clean Air Act Amendments of 1970 (37 pages). 

The subsequent Clean Air Act Amendments of 1977 increased in length to 111 pages and contained a provision unique among advanced nations: It authorized private persons and organizations to enforce federal laws through lawsuits. It was this provision that had allowed the NRDC to launch its lawsuit against the EPA.

By the time of that lawsuit, the politicization of federal agencies had taken place President Jimmy Carter’s Civil Service Reform Act of 1978. It allowed the president to assign 10 percent of Senior Executive Service administrators to serve as temporary administrators under presidential appointees in agencies.

This gave presidents control of agency policies formerly exercised by career civil service administrators. The Reagan administration used the new law to “clean house” in key agencies, in its quest to roll back regulatory enforcement. Since then, agency leaders and policies have changed after each of the last five presidential elections. Presidents now have far greater ability and incentive to give agencies new or modified policies than they did before 1978, and these programs can also be more easily changed without congressional legislation.

In accepting the Loper-Bright appeal, the justices clearly recognized that the plaintiffs had a case for agency overreach. On the other hand, as SCOTUS Blog reported, Justice Elena Kagan “repeatedly suggested that federal agencies, with their scientific and technical expertise, are better suited to resolve ambiguities in federal statutes.”

This speaks to the rigidity of the regulatory system that emerged in the 1970s, with all-powerful federal agencies and courts that merely declare winners and losers. If the U.S. instead had special environmental courts as Canada does, they could have found that the NMFS’s rule for charging fishing boats was unreasonable.

Had a credible independent arbiter been available for such cases, NMFS itself would have had more incentive to recognize that its demands were unreasonable and reversed its charging rule without legal challenge. Now there is a chance that Chevron will be reversed, allowing easier court challenges to overreaching agency actions.

Frank T. Manheim is an affiliate professor at the Schar School of Policy and Government at George Mason University.