乱伦短视频

Setting the Table

On June 28, 2024, the U.S. Supreme Court (the 鈥淪upreme Court鈥�), in a pair of cases styled as听, overruled its 1984 landmark decision in听, 467 U.S. 837 (1984). The听Chevron听case, which was decided exactly 40 years ago, had established a foundational framework in federal administrative law regarding how federal courts and agencies should interpret federal laws that govern those agencies and the rules and regulations that they promulgate (we refer to rules and regulations as just rules in this note).听Chevron听was one of the most important cases in federal administrative law and has been cited by federal courts over 19,000 times.

In broad strokes,听Chevron听generally applied when Congress delegated authority to an agency “to make rules carrying the force of law.” For context, many federal agencies in the United States鈥攊ncluding, for example, the Environmental Protection Agency (EPA), the Food and Drug Administration (FDA), and the Federal Communication Commission (FCC)鈥攑romulgate rules all the time. These rules carry out Congressional mandates set forth in the federal statute that governs a particular agency. But Congressional mandates are sometimes written in vague and open-ended terms, so federal agencies often have flexibility with respect to rules in order to fulfill those mandates. Stakeholders who may not like the rules鈥攍ike businesses, industries, trade associations, and local governments鈥攐ften challenge them in court.

So, What Exactly is听Chevron?

Chevron听is a Supreme Court case that established something known as the 鈥�Chevron听deference doctrine,鈥� which is a two-step framework that federal courts applied when evaluating a challenge to an agency鈥檚 rule. The听first听step required the reviewing court to determine whether Congress spoke to the specific issue at hand (for example, was there a clear mandate?). If the reviewing court found that Congress spoke clearly on the issue, the court was required to give effect to the legislative intent and the inquiry ended. If, however, the reviewing court found the governing statute to be silent or ambiguous on the particular issue at hand, the听second听step of听Chevron听required that the court defer to the agency鈥檚 interpretation of the statute as long as it was a 鈥減ermissible construction of the statute,鈥� even if the reviewing court would have reached a different conclusion.

This framework, understandably, is a bit academic and hard to understand in the abstract. We get it. It is therefore helpful to illustrate how this framework might work in the real world. Helpfully, the facts of these cases, styled as听Loper Bright Enterprises v. Raimondo, provide a helpful, albeit esoteric example.

The Facts of These Cases Illustrate the听Chevron听贵谤补尘别飞辞谤办

These cases involve the legality of a rule promulgated by the National Marine Fisheries Service (鈥淣MFS鈥�), which administers the Magnuson-Stevens Fishery Conservation and Management Act (鈥淢SA鈥�). The MSA is a federal law that was enacted by Congress in 1976 to prevent overfishing off the coastlines, and it contains various directives to the NMFS in furtherance of that objective. One of the directives requires the development of 鈥渇ishery management plans.鈥� The MSA provides that certain fishery management plans听may听require that 鈥渙ne or more [human] observers be carried on board鈥� domestic vessels 鈥渇or the purpose of collecting data necessary for the conservation and management of the fishery.鈥澨�See听.

As is relevant to the dispute, the MSA also specified certain types of vessels that must pay for the costs associated with these human observers. Critically, though, the statute was silent on whether Atlantic herring fishermen were required to pay for the cost of human observers if the fishery management plan required them. The NMFS therefore adopted a rule that required vessels (including for Atlantic herring fishermen) to pay for the cost of an observer (up to $710/day) if NMFS determined that one was required by the fishery management plan and there was no government-paid observer otherwise available. Stated succinctly, we have a federal law (the MSA) that has given rule making authority to an agency (the NMFS), which made a rule (the requirement to pay for an observer) that was not otherwise expressly spelled out in the law (the MSA) that directs the agency (the NMFS) to prevent overfishing.

Different groups of family businesses and small vessel owners that fished in the Atlantic herring fishery challenged the NMFS鈥檚 rule in different federal courts. They argued that the MSA does not authorize the NMFS to issue a rule requiring them to pay for the cost of an observer. Both of the lower courts applied some version of the听Chevron听framework when they reviewed the rule: one federal appellate court noted that there was some ambiguity as to Congress鈥檚 intent (step one of听Chevron) and concluded that the NMFS鈥檚 interpretation of the statute authorizing the rule requiring Atlantic herring fisherman to pay for the cost of the observer was reasonable (step two of听Chevron); the other federal appellate court reached the same result but jumbled the听Chevron听two-step framework.

The Supreme Court then agreed to hear these cases for the purpose of deciding whether it should overrule听Chevron听altogether.

The Supreme Court鈥檚 Decision

The Majority Decision

Chief Justice John Roberts, writing for the 6-3 majority (click听听for the opinion), vacated the lower court judgments and overruled听Chevron听in its entirety. In doing so, the majority reiterated the notion that it is for the federal courts鈥攏ot agencies鈥攖o say what the law is. This was equally true after the New Deal, which created many agencies and the administrative processes, but that all ended when听Chevron听was decided in 1984. While an agency鈥檚 interpretation of a statute could help aid courts in deciding questions of law, especially if the agency has specialized experience in the subject matter at issue, it is ultimately for the courts to make the legal determination about what the law is.

The majority cited to the Administrative Procedures Act (the 鈥淎PA鈥�), which is a federal statute enacted by Congress in 1946 that governs many aspects of federal agencies, including judicial review of agency action, to support overruling听Chevron. The majority said that while the text of the APA may instruct reviewing courts to give deference to听factfindings听made by agencies, the same is not true with respect to their听legal听conclusions. Specifically, the APA says that 鈥渢he 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.鈥澨�See听. The APA also requires a reviewing court to 鈥渉old unlawful and set aside agency action, findings, and听conclusions found to be . . . not in accordance with law.鈥澨�See听听(emphasis added).

The majority concluded that听Chevron听cannot be squared with the text of the APA. That is no problem, the majority says, because courts are called upon to decide statutory ambiguities all the time鈥攖hat is what judges do. Agencies have no special skill in interpreting statutes, and courts should not throw up their hands and defer to the executive branch. The majority readily acknowledges that an agency鈥檚 interpretation of a statute can be persuasive to courts, particularly if the agency has expertise in the relevant subject matter, but that interpretation cannot be dispositive and binding on judges like听Chevron听commands.听See, e.g.,听Skidmore v. Swift & Co., 323 U. S. 134 (1944). Finally, and perhaps most critically, the majority notes that its decision overruling听Chevron听does not provide a special justification under the doctrine of听stare decisis听for parties to re-litigate previous judicial decisions that relied on the听Chevron听framework.

The Dissent

By contrast, Justice Kagan authored a fiery dissent and forcefully argued that听Chevron听has been the law for decades and everyone鈥攊ncluding Congress, courts, agencies, regulated entities, and the public鈥攌nows how it works and how to apply it.

The dissent starts by a highlighting a series of real-world examples to demonstrate the absurdity of the majority鈥檚 reasoning that will now place complex subject matter issues in the hands of federal judges. One example the dissent highlighted was the specific legal question of whether an alpha amino acid polymer qualifies as a 鈥減rotein,鈥� and must it have a 鈥渟pecific, defined sequence of amino acids,鈥� for purposes of the Public Health Service Act, the Food and Drug Administration (FDA), which requires the FDA to regulate 鈥渂iological product[s],鈥� including 鈥減rotein[s]鈥�?听See听. The dissent argues that agencies have scientific expertise to answer these precise kinds of questions, yet the majority now mandates that courts make these kind of 鈥渟cientific and technical judgments.鈥� The dissent argues that overruling听Chevron, which has been pervasive in federal jurisprudence for decades, puts 鈥渃ourts at the apex of the administrative process as to every conceivable subject.鈥� In other words, the dissent argues, courts have been transformed into 鈥渁dministrative czars鈥� that will now lead to 鈥渓arge-scale disruption.鈥�

What Does This All Mean, Particularly For Investors?

The ultimate impact of the Supreme Court鈥檚 decision to overrule听Chevron听remains to be seen. Proponents of听Chevron听express concern that the decision will give federal judges鈥攚ho otherwise lack subject-matter expertise and who may be politically minded鈥攇reater power to interpret statutes, which could lead to inconsistent rulings. Opponents, on the other hand, argue that the decision will allow courts to return to traditional rules of statutory interpretation that have been in place since the nation鈥檚 founding. What is clear, though, is that overruling听Chevron听will be perceived as a victory for the conservative legal movement and its opposition to the so-called 鈥渁dministrative state.鈥� This outcome is unsurprising given the current composition of the Supreme Court, and it will certainly be the subject of ongoing debate among legal scholars for years to come.

In practical terms, for both companies and investors, many predict an increase in litigation challenging agency actions across various federal agencies. Notably, attempts to overturn cases that have already been decided based solely on their use of听Chevron听deference are unlikely to succeed, as the use of this framework alone does not warrant revising established precedent. But ongoing and new challenges, on the other hand, could significantly impact regulatory implementation across multiple sectors of the economy, including, but not limited to, health care, food, energy, transportation, labor, and the environment. The rationale behind such litigation is that federal courts may now be more inclined to substitute their own judgment for an agency鈥檚 interpretation of statutes, although agency interpretations will likely still hold at least some persuasive authority, especially if the agency has a high level of expertise. In the end, we believe that there is some truth to many of these predictions, and entities that may have been hesitant to challenge agency decisions might now feel emboldened to do so. But we would be surprised if this decision ultimately leads to a regulatory 鈥楢rmageddon,鈥� and we think that such concerns are probably a bit overstated. However, only time will tell, but this is certainly not the end of the debate.