Supreme Court Case Could Disrupt Agency Authority

​The U.S. Supreme Court recently agreed to hear a case that could significantly alter the power of federal agencies.

The justices will weigh whether to overturn the longstanding Chevron precedent, which holds that when Congress wrote a statute without a clear meaning, courts should defer to the federal agency applying the law, unless its directives were unreasonable. Departments and agencies that enforce employment laws, such as the U.S. Department of Labor and the U.S. Equal Employment Opportunity Commission, could be impacted.

For example, "the entire structure for overtime pay and tips relies on Chevron," said Tim Taylor, an attorney with Holland & Knight in Tysons, Va.

Likewise, "many executive orders have enacted employment policy through government contracting— [regarding] minimum wage, vaccine requirements, unionization rules, discrimination rules—based on obscure presidential authority. If Chevron is overruled, those rules become harder to justify by the agencies tasked with implementing presidential directives," he said.

"The court overruling or limiting Chevron would constitute a watershed decision in administrative law, greatly increasing the prospects of businesses, organizations and individuals successfully challenging administrative action in court under the Administrative Procedure Act," said Misha Tseytlin, an attorney with Troutman Pepper in Chicago.

The case, Loper Bright Enterprises v. Raimondo, challenges whether the federal government can force fishing companies in New Jersey to pay for a program that provides federal monitors for their operations. The program is overseen by the National Marine Fisheries Service.

The government is relying on Chevron deference, established in 1984, to argue that it had the authority to require the fishing companies to pay for the monitors.

Arguing For Chevron

It's not unusual or extraordinary for Congress to require regulated parties to bear the cost of compliance, U.S. Solicitor General Elizabeth Prelogar said in a friend-of-the-court brief.

The Chevron doctrine relies on a presumption that a statute's ambiguity constitutes an implicit delegation from Congress to the federal agency to fill in the statutory gaps, she explained. Broadly speaking, it "promotes political accountability, national uniformity and predictability, and it respects the expertise agencies can bring to bear in administering complex statutory schemes," she added.

The U.S. Court of Appeals for the District of Columbia Circuit agreed with the government's argument that it had statutory authority to adopt an industry-funded monitoring program.

Arguing Against Chevron

The fishing companies said Chevron deference poses a threat to reining in government overreach.

In recent years, Republican lawmakers and conservative legal strategists have opposed the Chevron doctrine, as well. Eighteen Republican-led states said in a friend-of-the-court brief that the Supreme Court should "limit Chevron in a way that is consistent with the separation of powers and the principles of federalism. Otherwise, it's time to toss it." The states argued that Chevron hasn't been applied consistently, and lower courts uphold "even highly burdensome, novel and textually suspect rules." They expressed concerns about the impact of costly regulations on individuals and the economy.

A brief from the Cato Institute, a libertarian think tank in Washington, D.C., said, "Chevron deference is unconstitutional and ahistorical. Over the past 40 years and counting, it has wreaked havoc in the lower courts upon people and businesses."

In another brief, the Center for Constitutional Jurisprudence, part of the Claremont Institute, a conservative think tank in Claremont, Calif., said the court should "put an end to deference doctrines that allow the executive [branch] to usurp both congressional and judicial power and to rule that Congress cannot delegate its power of the purse to an executive agency."