Chevron Overturned: Now What?

SCOTUS overturns decades old Chevron case, and businesses will get some reprieve from regulators.

July 1, 2024

By: Bobby Casey, Managing Director GWP

Chevron When people say they witnessed an accident, their accounting of it might differ in accuracy, but that doesn’t negate the fact that an accident happened.

The same is true when people talk of a “deep state” or a “shadow government”. It’s not that it doesn’t exist. It clearly does. How else would everything continue to run with a total vegetable at the helm?

The issue isn’t whether the deep state exists. It’s to what degree it does. That some people have unbelievable accounts of it, doesn’t negate its existence.

Anyone who knows me, knows I’m no fan of government, but all American children are instructed from their elementary years that the US government is set up into three branches: Legislative, Executive, and Judiciary. (School House Rock offered an early civics course on Saturday mornings!)

The theory was, by designating different powers to different branches, there would be balance. The premise for this theory was each branch would be precious about their role and responsibilities, rather than eager to abdicate it or worse still collude it away.

Ideally, this is how the responsibility breaks down:

  • Legislative Branch (Congress) – Writes the laws.
  • Executive Branch (President) – Enforces the laws.
  • Judiciary Branch (Courts) – Interprets the laws.

What actually happened is:

  • The legislative branch punted their responsibility to write laws to bureaucrats.
  • The executive writes “Executive Orders”.
  • And until about five days ago, the judiciary was deferring to the bureaucrats.

Back in 1984, there was a Supreme Court ruling Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc. whereby the energy and oil giant was disputing the Clean Air Act. The SCOTUS ruled that the interpretation of that law should defer to the Environmental Protection Agency.

Since then, the doctrine of deference to the federal agency who wrote the regulation to provide the proper interpretation, was known as Chevron.

For the past forty years, the US congress has deferred to the bureaucrats to write the laws, while the courts deferred to the same bureaucrats to interpret it.

It’s like when the police do a no-knock raid on the wrong house, and then investigate themselves to find there was no wrong-doing.

There’s also something called the APA, or the Administrative Procedure Act, which was passed in 1946. This law prescribes the actual duties of the courts, which Justice John Roberts says, “incorporates the traditional understanding of the judicial function, under which courts must exercise independent judgment in determining the meaning of statutory provisions.”

Reason goes on to capture Justice Robert’s assessment and opinion:

The Chevron doctrine “defies the command of the APA that ‘the reviewing court’—not the agency whose action it reviews—is to ‘decide all relevant questions of law’ and ‘interpret…statutory provisions,'” Roberts writes. “It requires a court to ignore, not follow, ‘the reading the court would have reached’ had it exercised its independent judgment as required by the APA…. It demands that courts mechanically afford binding deference to agency interpretations, including those that have been inconsistent over time. Still worse, it forces courts to do so even when a pre-existing judicial precedent holds that the statute means something else—unless the prior court happened to also say that the statute is ‘unambiguous.’ That regime is the antithesis of the time honored approach the APA prescribes.”

What does this mean, though, for businesses subjected to these regulations?

While the original case was between an energy Goliath, Chevron, and a government agency, the ones who bore the brunt of it were not:

  • The case that brought this before the SCOTUS this time around were two family-owned herring fishery businesses out of Rhode Island and New Jersey who were assessed fees the fishermen claim were never authorized by congress. The fees would’ve amounted to 20% of their annual revenues.
  • The Department of Veterans Affairs took advantage of the same doctrine to deny a disabled veteran three years of benefits it owed him, relying on an arbitrary rule it invented for its own convenience.
  • There was a case where an immigrant who was fighting deportation under an executive board ruling that contradicted the appeals court’s prior interpretation of U.S. immigration laws.
  • [It] allowed the Drug Enforcement Administration to keep marijuana in Schedule I of the Controlled Substances Act, a classification that President Joe Biden rightly says “makes no sense.” As the Department of Health and Human Services implicitly conceded last August, that policy was based on a highly implausible reading of the statute.

The concern is the regulators would have no say in the interpretation of the laws. But if they are in fact experts, they would naturally be called to testify and give their insights by one side or another. Theirs just wouldn’t be the final word.

Further, there is concerns that the reversal of the Chevron Doctrine would make regulations toothless, but that’s also not true. It would make the regulations consistent rather than some moving goalpost.

The Sierra Club thinks we’re descending into anarchy and chaos apparently. The headline and subheading are overstating things considerably:

The Supreme Court Overturns Chevron Doctrine, Gutting Federal Environmental Protections

Scrapping the legal precedent could send a “convulsive shock” to decades of federal environmental, financial, and healthcare regulations

It goes on to quote some environmentalists:

“Today’s ruling sidelines the role of agency expertise, and instead shifts power to judges who do not have the expertise of agency staff who live and breathe the science, financial principles, and safety concerns that federal agencies specialize in,” Kym Meyer, the litigation director for the Southern Environmental Law Center, said in a statement.

Vickie Patton, general counsel for the Environmental Defense Fund, said the decision “undermines vital protections for the American people at the behest of powerful polluters.”

To be fair, the overturning of Chevron didn’t sideline anyone. It relegated agency members to testimony and witnessing to impart their knowledge, such as it is. It can still be heard. They aren’t silenced at all. In most cases, the regulators aren’t experts in the fields they are regulating anyway. If they were we wouldn’t be living in a sea of their well-crafted moral hazards.

As for undermining vital protections for the people, that seems an odd take considering the Chevron Doctrine literally defers to unelected bureaucrats to do the job of the courts. I don’t see bureaucrats anywhere in the constitution, whereas I do see the courts.

The small businesses and individuals adversely affected by this doctrine will be glad to see it go just as much as the large corporations.

It’s important to note: no previous rulings are affected by this ruling. The other cases where this deference was applied won’t be overturned. So nothing is actually undone.

While the regulatory state continues to bog down the US economy, I’m hopeful that this ruling will take at least some of the wind out of the sails of federal bureaucrats.

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