Chevron Deference Is No More

The bureaucrats of the administrative state have enjoyed much discretion under the Supreme Court’s 1984 decision in Chevron U. S. A. Inc. v. Natural Resources Defense Council, Inc. (1984). In that case, the Court developed the following test when dealing with agency interpretations of statutes they administer:

First, always, is the question whether Congress has directly spoken to the precise question at issue. If the intent of Congress is clear, that is the end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress. If, however, the court determines Congress has not directly addressed the precise question at issue, the court does not simply impose its own construction on the statute, as would be necessary in the absence of an administrative interpretation. Rather, if the statute is silent or ambiguous with respect to the specific issue, the question for the court is whether the agency’s answer is based on a permissible construction of the statute. (italics added)

So, the crux of the Chevron doctrine is that if a statute is ambiguous, the Court defers to the agency so long as the agency has adopted a reasonable construction. In the mid-1980s, the decision was not seen as a landmark decision. Those who did pay attention saw it as part of judicial restraint—the Court deferring to experts in executive branch agencies. But as the administrative state grew, the impact of Chevron grew. The agencies enjoyed more and more discretion in the realm of regulation. Those desiring to curtail the administrative state argued that Chevron had to go. In Loper Bright Enterprises v. Raimondo, decided last week, Chevron opponents got their wish.

The vehicle used by the majority was the Administrative Procedures Act, which requires that a “reviewing court shall decide all relevant questions of law, interpret constitutional and statutory provisions, and determine the meaning or applicability of the terms of an agency action.” The Loper Bright majority reasoned that “agency interpretations of statutes—like agency interpretations of the Constitution—are not entitled to deference. . . . The text of the APA means what it says.”

The majority also argued that courts are better suited than agencies to interpret statutes. Courts frequently employ the tools of statutory construction in their everyday work and are thus accustomed to grappling with the best interpretation.

The Court concluded its analysis as follows:

The experience of the last 40 years has thus done little to rehabilitate Chevron. It has only made clear that Chevron’s fictional presumption of congressional intent was always unmoored from the APA’s demand that courts exercise independent judgment in construing statutes administered by agencies. At best, our intricate Chevron doctrine has been nothing more than a distraction from the question that matters: Does the statute authorize the challenged agency action? And at worst, it has required courts to violate the APA by yielding to an agency the express responsibility, vested in “the reviewing court,” to “decide all relevant questions of law” and “interpret . . . statutory provisions.”

While Loper Bright is a setback for the administrative state, it is not a silver bullet. In a sense, we have traded unelected bureaucrats for unelected judges in construing certain statutes. While a judicial review of agency interpretations is welcomed, we fool ourselves if we believe salvation is found in unelected judges. The modern judiciary—with its love for policymaking rather than declaration of preexisting law—is a problem itself. While a more rigorous judicial review might be an ingredient in the recipe for reform, it is not the answer.

We must always remember that the very existence of the administrative state raises structural problems.

The benefits of separation of powers and bicameralism are lost with the administrative state. When the power, for example, to regulate securities is concentrated in a federal agency, this one entity exercises all legislative, executive, and judicial power. Such a concentration, the Framers recognized, was the very definition of tyranny. Restraint of government is rejected for empowerment of government. Moreover, the benefits of bicameralism are lost. An agency rule does not have to pass through two different bodies (the House and Senate) where compromise or a flat-out refusal are possibilities. The agencies are echo chambers bereft of the limitations and the purposeful push toward deliberation found in the tri-partite design.

The administrative state is also contrary to popular sovereignty. Since the people have never transferred power to a fourth branch of government, the administrative state is ultra vires. The principals (the people) have never authorized the administrative state (the agent) to act on their behalf. Under acknowledged concepts of agency law, arrangements made by an agent are binding on the principal only if it is within the authority actually granted or reasonably apparent. In the American case, we look in vain at the Constitution of 1787 and its amendments for a grant of power or a reasonable implication. It is simply not there. Thus, the claims that the experts in the bureaucracy can bind the people are false. The first principles of the American Revolution counsel against this usurpation.

While there is much to cheer in Loper Bright, the administrative state remains a constitutional problem. Loper Bright is a nice first step but is not a panacea for what ails us.