Courts Skeptical of ‘Chevron’ May Stymie Biden’s Agenda

(Bloomberg Businessweek) -- Late on the second day of Amy Coney Barrett’s U.S. Supreme Court confirmation hearings in October, after hours of questions about abortion and health care, Republican Senator Mike Crapo of Idaho abruptly switched gears—to the minutiae of regulatory law. “The interpreter in our system should not be the agency that is enforcing the statute,” Crapo declared. “The courts should oversee this.”

Crapo was criticizing an arcane but highly influential legal precedent known as Chevron deference, or the Chevron doctrine—from the 1984 Supreme Court decision in Chevron v. NRDC—in which the justices give federal agencies the benefit of the doubt when a regulation is challenged in court. The decision, which grants agencies broad authority to interpret laws that are written ambiguously, has been cited tens of thousands of times.

Barrett declined to offer an opinion on Chevron, which has become a valuable tool for agencies looking to institute aggressive environmental rules. Her exchange with Crapo was little more than a footnote in a hearing that focused largely on the abortion precedent in Roe v. Wade. But ultimately, the Supreme Court’s posture toward Chevron could become a defining theme of President-elect Joe Biden’s first term, with the new administration poised to face a grinding series of legal battles over the scope of its regulatory authority.

Democrats have long hoped that unseating President Trump would usher in a period of political transformation. But if Republicans maintain control of the Senate after Georgia’s Jan. 5 runoffs, Biden won’t be able to push broad legislation through Congress. He may have to use federal agencies’ rulemaking powers to advance much of his agenda, relying on the Environmental Protection Agency to craft policies limiting emissions and the Consumer Financial Protection Bureau to regulate Wall Street.

He’ll inevitably face opposition in the judicial system, which has grown increasingly hostile to government regulation. President Trump and Senate Majority Leader Mitch McConnell have stacked the federal appeals courts with conservative judges, many of them handpicked by groups intent on dismantling regulations. And with Barrett confirmed, the 6-3 conservative majority on the Supreme Court is likely to chip away at Chevron and other legal doctrines that give deference to agencies.

“It’s a big threat,” says Patrick Parenteau of Vermont Law School, an expert on environmental regulations. Courts are “going to demand a whole lot more justification for what the agencies are doing.”

Already, libertarian groups such as the Pacific Legal Foundation are gearing up for fights with the Biden administration over financial regulations, environmental rules, and new policies to combat the pandemic. They’ll be joined by a familiar cast of characters: Republican state attorneys general, who fought Obama’s regulatory agenda in the courts. Challenges to Chevron are likely to be front and center.

“More regulatory activity means more opportunities for courts to defer to agencies,” says Steve Simpson, a senior attorney at the Pacific Legal Foundation. “And more opportunities for people like us to challenge that deference. That will happen across the board.”

The roots of Chevron deference lie in a battle environmentalists lost—a 1984 Supreme Court case in which the Natural Resources Defense Council sued to prevent the Reagan-era EPA from letting the energy company Chevron USA Inc. dodge anti-pollution requirements. The court ruled that the EPA had legal authority to interpret the text of the Clean Air Act in a way that effectively defanged environmental protections.

The historical ironies of that decision abound. The EPA administrator at the time was Anne Gorsuch, the mother of Justice Neil Gorsuch, who’s now the Supreme Court’s most vocal critic of Chevron. And in the 1980s, the late Justice Antonin Scalia, a conservative icon, championed the decision, declaring that it “accurately reflects the reality of government.”

“It eventually evolved into a huge decision that really required courts to defer if agencies’ interpretations were reasonable,” says Lisa Heinzerling, a former EPA lawyer who teaches administrative law at Georgetown University. “The way Chevron became the Chevron we know today is actually with the help of Justice Scalia.”

Toward the end of his career, however, Scalia turned against Chevron, as conservatives increasingly argued that government agencies were using the doctrine to strip Congress of its legislative authority. But by then, Chevron had become one of the most cited decisions in law. In 2014, the Supreme Court rejected a utility industry challenge to the EPA’s interpretation of the Clean Air Act, citing the agency’s regulatory authority under Chevron. Scalia dissented.

In recent years, the Supreme Court has shown a willingness to reconsider Chevron, or at least to limit its reach. Writing for the majority in a 2015 decision, Chief Justice John Roberts ruled that Chevron does not apply to regulatory questions with “deep economic and political significance.”

“The current Supreme Court majority is killing Chevron through disuse,” says Joshua Matz, a Supreme Court litigator at the law firm Kaplan Hecker & Fink. “Judges are neutering Chevron by taking an extremely narrow view of the circumstances in which a statute leaves any ambiguities. You can kill the doctrine by narrowing it to the vanishing point.”

Under the Biden administration, that process would almost certainly accelerate, as libertarian groups and Republican attorneys general sue to block regulations. Lower courts are bound by Supreme Court precedent, but judges at various levels could still rule that the text of a law is insufficiently ambiguous for Chevron to apply. And in theory, the Supreme Court could overturn the decision entirely, creating a whole new framework for administrative law.

Trump’s appointees to the Supreme Court have expressed skepticism of Chevron. As an appeals judge, Gorsuch denounced it as “a judge-made doctrine for the abdication of the judicial duty.” Barrett’s record on regulatory law is less substantial, but court watchers say her strict adherence to textual analysis might make her unwilling to punt an interpretive question to agencies. And Justice Brett Kavanaugh has criticized Chevron over the years, complaining about the “culture of ambiguity” in American law.

In the end, large portions of Biden’s policy agenda could hinge on the ability of the EPA and other agencies to establish policies that pass muster with at least one of those conservative justices. “You better have a bobblehead doll of Kavanaugh on your desk when you’re writing these rules,” says Parenteau of Vermont Law School. “And ask the bobblehead: ‘Will you vote for this?’”
 
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