If not for the presidential race dominating the news, the Supreme Court’s recent reversal of its 1984 Chevron doctrine — and the hand-wringing and morbid predictions surrounding it — might have become the issue of the moment. After all, it concerns the authority of government officials that have the most direct impact over the day-to-day lives of Americans.
There are over 250 federal agencies, with more than 2 million employees. In 2023, they flooded the Federal Register with 3,000 new rules. They are experts in the regulation of consumer products, financial services, technology and natural resources, among other issues.
Courts naturally struggle to keep up with this blizzard of regulatory dos and don’ts and how they affect businesses. After all, they only encounter them sporadically. So the Supreme Court invented the Chevron doctrine, allowing federal courts to defer to the experts and adopt an agency’s interpretation when it is not clear how a law is intended to apply to the facts of the case.
This is not an entirely bad idea. But the Chevron doctrine was never meant to become, as it sometimes has over time, an invitation for agencies to implement an agenda extending beyond the law.
Having litigated cases for and against the government under the Administrative Procedure Act both before and after the birth of the Chevron doctrine, I am confident that the country will not devolve into chaos because unelected regulators can no longer color outside the lines of ambiguous statutes and expect judges to agree.
Businesses — Big Tech, in particular — may be a bit more inclined to go to court to limit agencies to the authority they were given by Congress. But the Supreme Court did not endow them in the Loper decision with new superpowers that allow them to bob and weave outside the reach of regulators.
Loper Bright Enterprises v. Raimondo has returned administrative law to its pre-1984 condition where, for better or worse, judges — not regulators — are the final interpreters of laws enacted by Congress. Agencies won’t be able to use the “it’s true because I said it” defense anymore. They will have to present a compelling record to the court to support their actions. And that record will have to correlate directly to the authority Congress gave them. That doesn’t sound bad or unfair.
Challengers to agency rules will likely be given more oxygen to demonstrate that the rules are inconsistent with the law. But in the end, the law still applies. The Loper ruling should means the courts will once again have to evaluate and balance the true underlying interests and issues in the case, rather than listen to lengthy arguments about whether an agency’s interpretation is entitled to deference.
That seems like a much fairer and more effective use of judicial time. At the same time, agencies will have to be more selective about where they try to stretch the law, because losses in court chip away at the breadth of the authority they jealously protect.
As for Congress, the disappearance of Chevron should encourage lawmakers to be more precise about what they are authorizing, requiring or restricting and avoid broad delegations that allow regulators to fill in the blanks. That type of legislating only encourages interpretive creativity and a back-and-forth brand of regulation as the law shifts with each new presidential administration.
But asking Congress to be precise about very technical issues that evolve over time is clearly not the answer.
Time will tell whether the Loper decision levels the playing field or makes regulation less effective. In the meantime, I have always thought there was a third way to address the knowledge advantage that regulators have and avoid the need for agency deference or other creative workarounds.
Chevron’s death should spur the birth of more specialized federal courts to handle different areas of the law that are tightly regulated. For example, we already have federal bankruptcy, patent, tax and claims courts where the judges are experts in their fields. Similar courts in the areas of financial services, technology, antitrust and natural resources, to name a few, would go a long way toward solving the expertise problem that Chevron attempted to address.
Look around. Everything seems to be getting more specialized these days. The courts need to conform to that trend to mete out justice effectively. If a more knowledgeable and effective judicial branch is the result of the death of Chevron, the Supreme Court will have hit a home run for everyone.
Thomas P. Vartanian is executive director of the Financial Technology and Cybersecurity Center. He has served as special assistant to the chief counsel of the Office of the Comptroller of the Currency and general counsel of the Federal Home Loan Bank Board and the FSLIC. He is the author of “200 Years of American Financial Panics” (2021) and “The Unhackable Internet” (2023).