In February of 2020, a small Atlantic herring fishing company, Loper Bright Enterprises, sued the US Secretary of Commerce over the actions of the National Marine Fisheries Service, a federal agency in the Commerce Department. NMFS has authority to regulate fisheries under a 1976 federal law, the Magnusen-Stevens Fisheries Conservation and Management Act. The law requires fishing companies to host federal observers on their boats, but is silent about who has to pay their salaries. Because of falling budgets, NMFS worked with the industry to enact a new rule requiring the fishing companies to pay the observers. Loper Bright Enterprises sued NMFS, claiming that the rule is unlawful, but lost in federal trial and appeals courts. Undaunted, the family-owned company took its complaint to the Supreme Court, which accepts only a very small fraction of the petitions it receives. But in May of this year, the Court agreed to hear the case. As the new term opens next week, Loper Bright Enterprises v. Raimondo occupies center stage in the legal community, with environmental advocates warning that a victory for the fishing company could have huge consequences for the US’s ability to meet its healthy climate targets, and many experts submitting friend-of-the-court briefs to support that claim.
Wait, what? Why did the Supreme Court agree to weigh in on this apparently minor dispute, and what do herring fisheries have to do with climate change?
Let’s begin with last week’s ProPublica exposé of Clarence Thomas, the latest in its remarkable sequence of stories revealing the ethical lapses of Supreme Court justices. ProPublica’s report exposed that the associate justice has attended at least two Koch donor events in the last few years. The brothers Charles and David Koch inherited the fortune that their father Fred Koch made in the petroleum industry, and deployed it to fund a far-right political influence network that has promoted misinformation about climate science for decades. The Koch brothers have not limited their efforts to the climate arena, but are also active in a wide range of libertarian activities to promote low taxes, business deregulation, and cutting government social service programs. Crucially, the Koch network also uses its riches to support the Federalist Society, the conservative legal organization promoting an originalist meaning of the Constitution. The Federalist Society works to identify cases in the lower courts that are useful vehicles to overturn legal precedents standing in the way of its deregulatory agenda. No fewer than five conservatives on the current Supreme Court are past or present Federalist Society members, including Thomas. This brings us back to Loper Bright Enterprises.
Loper Bright Enterprises posed two questions in its Supreme Court petition. First was the sort of boilerplate administrative law question that comes up frequently and is usually handled well by the lower courts. A law delegates administration of its provisions to an agency, and the agency writes regulations in accordance with the law. The regulations then provide all the specific details that the regulated parties, here the fisheries, have to pay attention to. Congress doesn’t know much about fisheries, so it makes sense for it to delegate the details to a team of experts that the agency hires. Since the Magnusen-Stevens law doesn’t explicitly say who has to pay the observers, the question is whether it implicitly grants the NMFS the power to decide. This is not exactly an issue of overriding national importance, and, in fact, the Supreme Court declined to decide it.
All the fuss is about the second question, which the Supreme Court is taking up this Fall. It is phrased as follows: “Whether the Court should overrule Chevron or at least clarify that statutory silence concerning controversial powers expressly but narrowly granted elsewhere in the statute does not constitute an ambiguity requiring deference to the agency.” That’s a mouthful, but let’s unpack it with the goal of understanding why this case is ringing climate alarm bells all over the country.
In this second question, Chevron refers to the celebrated 1984 Supreme Court case, Chevron U.S.A., Inc. v. Natural Resources Defense Council. This is an administrative law case addressing agency powers. When President Reagan took office in 1981, he installed regulators at the Environmental Protection Agency that shared his conservative views. The EPA administers the Clean Air Act, the nation’s preeminent law controlling air pollution. The law sets strict standards for smokestack emissions, but Reagan’s industry-friendly EPA decided that it should be okay for individual smokestacks to exceed standards as long as the entire factory was in compliance, a practice called “netting.” The NRDC, a prominent environmental protection group, didn’t agree with this approach, so it sued, claiming that the EPA rule about netting was impermissible under the law. As you can probably guess, the Clean Air Act says nothing about netting one way or the other. The question in Chevron was how much deference should be given to the agency rule in cases like this. Should a rule like this be valid, just because the agency says so? This is of huge general importance, because agency delegation is the norm for all complex laws that require science and engineering expertise to administer.
In Chevron v. NRDC, the Supreme Court made the law defining how courts must defer to agencies, which has been followed in the federal courts for the past four decades. It set out what is commonly known as the “Chevron two-step.” In the first step, a court faced with the task of deciding the validity of an agency rule reads the law and asks whether Congressional intent on the issue is clear. If it is, the job is easy: the court simply orders compliance. But if the law is ambiguous or silent on the issue, then the court has to decide whether the agency rule is based on a “permissible” interpretation of the law. The court might think it could come up with a better rule, but that is not the test: the agency construction just has to be good enough. In practice, this has led to a great deal of deference to the agencies, known as “Chevron deference.” In 1984, the Supreme Court decided that the EPA rule about netting passed this new test, and the NRDC lost its case.
On its face, the Chevron approach looks neutral. When a Republican administration writes agency rules with a conservative spin, as in Chevron v. NRDC, Chevron deference means that the conservative viewpoint usually wins. When a Democratic president is in office, it tends to go the other way. But the reason that the Federalist Society has targeted Chevron is that the number of laws that impose new regulations dwarfs the number that are deregulatory. Indeed, since it came into force in 1984, Chevron deference has been crucial in validating rules under a large number of complex federal statutes. In the environmental area, this includes the Clean Air Act, Clean Water Act and Resource Conservation and Recovery Act, which respectively regulate air, water and solid waste pollution. Laws that preserve natural resources also benefit, including the Endangered Species Act, National Forest Management Act and Federal Land Policy and Management Act. Private industry often feels handcuffed under these laws, but their popularity makes it almost impossible for even a Republican Congress to abolish them. Defanging the application of these laws in the courts, however, can go a long way toward accomplishing industry objectives. It is not hard to see why overturning Chevron has long been a holy grail of the Federalist Society.
Getting back to the current Supreme Court case, it looks like Paul Clement, the lead lawyer for Loper Bright Enterprises and (of course) a friend of the Federalist Society, is hedging his bets. He would doubtless like to overturn Chevron outright, and almost certainly has three votes to do that in Associate Justices Thomas, Alito and Gorsuch. But Amy Coney Barrett’s view is uncertain, while Chief Justice Roberts and possibly Associate Justice Kavanaugh may want to preserve a veneer of respectability by issuing a narrower decision that covers only the “statutory silence” mentioned in that second question. One factor that could favor a narrower ruling is a 2022 Supreme Court decision, West Virginia v. EPA, that invalidated the Obama administration’s Clean Power Plan. That case limited CO2 emissions regulation under the Clean Air Act by imposing a “major questions doctrine,” which (in this context) meant that ambitious EPA rules with potential to remake the energy industry are invalid because Congress could not reasonably be presumed to have authorized such an outcome when it passed the law. With that doctrine already in place, even partial overturning of Chevron would be enough to cause substantial additional harm to the Biden administration’s efforts in environmental regulation.
If Chevron is overturned, an important aspect of the US government’s ability to promote healthy climate policy through regulations will be threatened. For example, new rules for forest management that target atmospheric carbon removal, or rules under the Clean Air Act that target other greenhouse gases, could be at risk whenever the precise text of the law does not explicitly address what the regulation is trying to accomplish. Jeff Turrentine, a senior writer for NRDC, points out that overturning Chevron would effectively amount to a judicial power grab, because judges in the federal courts would no longer be bound by the need to defer, and could decide complex issues on their own volition. It would no longer matter that federal agencies like the EPA have amassed tremendous expertise and employ many experts to craft science-based rules that take the complexity of the environment into account. That process could be easily undermined by an ideological judge who concludes that the text of the law insufficiently supports the new regulation. Indeed, it is reasonable to worry that not only the healthy environment but also the proper separation of powers in the federal government is at risk here.
In their zeal for deregulation, the proponents of overturning Chevron seem to be overlooking the fact that Congress itself makes the agency delegations, effectively telling the courts that it lacks the time and expertise to deal with the complex issues. Chevron already strikes the proper balance between agency expertise and judicial review with its guideline that agency rules only need to reflect a permissible interpretation of the law. But most observers see little hope that the current Supreme Court will refrain from at least limiting the reach of Chevron, if not overturning it altogether. If this happens, though, all is not lost. The ball will be in Congress’s court to preserve the integrity of science-based agency rulemaking, and give the Chevron standard itself the force of law.