Overturning 40 Years of Precedent, SCOTUS Moves on from Chevron

Washington, DC (WorkersCompensation.com) -- As is usually the case, the U.S. Supreme Court has wrapped up its most recent term with a bang, and big SCOTUS-related headlines have been all over the place.

In two cases that come together as one to be a game-changer for legal nerds but also has the potential to impact workers on the job, Loper Bright Enterprises v. Raimondo, 2024 WL 3208360 (U.S. 06/28/24) wiped out a 40-year precedent, doing away with the standard of "Chevron deference."

What Happened?

Back in 1984, the Court handed down a ruling in Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984) that set up a test for a case involving a federal agency, such as OSHA, the EPA, or the EEOC, and the agency's interpretation of a statute. Under that test, courts faced with reviewing an agency's construction of a statute that it administered had to go through two questions:

(1) Had Congress directly spoken to the precise question at issue? If the answer was yes, the court and the agency had to give affect to the "unambiguously expressed intent of Congress."

(2) But if the answer was "no," the question was whether the agency's interpretation of the statute was based on a permissible construction of the statute.

In Loper, six of the Supreme Court justices said that rule was wrong, and the court overturned Chevron. How did the case get there?

The case sat hand involved the National Marine Fisheries Service and the Magnuson-Stevens Fishery Conservation and Management Act. The case came up because businesses challenged an NMFS regulation issued pursuant to the act.

The District Court and Circuit Court both applied the Chevron standard to reject the businesses' argument that the NMFS didn't have the authority it asserted.

The businesses appealed and SCOTUS took up the case just to address whether Chevron should go down.

What's the Law?

Section 706 or the Administrative Procedure Act details that "to the extent necessary to decision and when presented, the 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."

What Did the Court Say?

The APA requires courts to exercise their independent judgment in deciding whether an agency has acted within its statutory authority, and courts may not defer to an agency interpretation of the law simply because a statute is ambiguous.

According to the Court, the APA directs that "to the extent necessary to decision and when presented, the 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," without deference to an agency's interpretation.

"Courts decide legal questions by applying their own judgment," the Court phrased it. "The APA, in short, incorporates the traditional understanding of the judicial function, under which courts must exercise independent judgment in determining the meaning of statutory provisions."

Finding that Chevron was incompatible with the APA, the Court, declared the doctrine "nothing more than a distraction from the question that matters: Does the statute authorize the challenged agency action?"

Stare Decisis

A foundational principle of the judicial system is the concept of stare decisis, under which precedent cases become a source of law for deciding future cases. The Court explained that stare decisis could not salvage Chevron.

Finding that Chevron "has proved to be fundamentally misguided," the Court held that stare decisis could not prevent the overruling of the case as one that "required judges to disregard their statutory duties."

However, the Court did not that the stare decisis that emerged out of the Chevron line of cases was still good law.

"We do not call into question prior cases that relied on the Chevron framework," the Court explained. "The holdings of those cases that specific agency actions are lawful ... are still subject to statutory stare decisis ... despite our change in interpretative methodology."

The Court sent the cases back to Circuit Courts to reconsider without Chevron's standards.

A dissenting opinion, written by Justice Elena Kagan, raised concerns about the limitations of what courts know versus the expertise housed in federal agencies.

As examples, Justice Kagan noted that in previous cases, courts have faced questions like the following.

(1) Under the Public Health Service Act, which the Food and Drug Administration regulates, when does an alpha amino acid polymer qualify as such a “protein”? Must it have a specific, defined sequence of amino acids? 

(2) The Endangered Species Act directs the Fish and Wildlife Service to designate endangered “vertebrate fish or wildlife” species, including “distinct population segment[s]” of those species. "What makes one population segment 'distinct' from another?" Kagan wrote. "Must the Service treat the Washington State population of western gray squirrels as 'distinct' because it is geographically separated from other western gray squirrels?"

(3) How should the Department of Health and Human Services measure a "geographic area" under the Medicare program?

(4) How should the Department of the Interior and the Federal Aviation Administration "provide for substantial restoration of the natural quiet" in reducing noise from aircraft flying over Grand Canyon National Park?

(5) Under the Clean Air Act, does the term "stationary source" refer to each pollution-emitting piece of equipment within a plant or does it refer to the entire plant?

For Kagan, inspiration came from the Chevron decision itself: "Judges are not experts in the field, and are not part of either political branch of the Government."

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