The U.S. Supreme Court has scheduled oral argument for January 17, 2024 in the two cases in which the question presented is whether the Court should overrule its 1984 decision in Chevron, U.S.A., Inc. v. Nat. Res. Def. Council, Inc.  That decision produced what became known as the “Chevron framework”–the two-step analysis that courts typically invoke when reviewing a federal agency’s interpretation of a statute.

The two cases are Loper Bright Enterprises v. Raimondo and Relentless, Inc. v. U.S. Department of Commerce.  In May 2023, the Supreme Court granted the certiorari petition filed in Loper and briefing in that case is now complete.  The Supreme Court granted the certiorari petition in Relentless in October 2023 and briefing in the case is ongoing, with the petitioners having filed their merits brief last week.  Respondents’ brief must be filed by  December 15 and the reply brief must be filed by January 5.  (It has been suggested that the Supreme Court granted the certiorari petition in Relentless to allow Justice Jackson to participate in the decision in that case.  Justice Jackson recused herself from Loper because it arose out of the D.C. Circuit, on which she previously served before becoming a Supreme Court Justice.)

Both cases involve a regulation of the National Marine Fisheries Service (NMFS) that requires certain vessels to pay the salaries of the federal observers that they are required to carry.  The regulation implements the Magnuson-Stevens Act (MSA) which authorizes the NMFS to require fishing vessels to carry federal observers.  In both cases, the petitioners are owners of fishing vessels who challenged the NMFS regulation as exceeding the agency’s authority under the MSA.  The district court in each case, applying the Chevron framework, upheld the NMFS regulation.  In Loper, a divided D.C. Circuit panel affirmed the district court and in Relentless, a unanimous First Circuit panel affirmed the district court.

In their merits brief, the petitioners in Relentless make the following principal arguments:

  • Chevron violates the Constitution by compromising judges’ independence when interpreting the law.  Article III vests the judicial power exclusively in the federal courts.  Inherent in this judicial power is the duty of federal judges to apply their own independent judgment when determining what federal statutes mean.
  • The Administrative Procedures Act reinforces the judicial duty to exercise independent judgment by providing that “the reviewing court shall decide all relevant questions of law, interpret constitutional and statutory provisions, and determine the meaning and applicability of the terms of an agency action.”
  • Chevron directly contradicts the duty of Article III courts to exercise independent judgment when interpreting federal law by telling judges “to defer to inferior-but-tenable” agency interpretations of ambiguous federal statutes.  By requiring judges to accept an agency’s interpretation so long as it “falls within an ill-defined zone of reasonableness—even if the judge believe the agency’s interpretation is wrong, Chevron forces judges to abdicate their duty to faithfully apply the law.
  • Chevron violates the Fifth Amendment due process guarantee.  By requiring courts to resolve ambiguities in favor of the government, Chevron introduces systemic bias in the adjudication of cases.
  • Stare decisis does not support Chevron because Chevron provides an interpretive method and such methods, as distinct from substantive holdings applying those methods to particular statutes, are not entitled to stare decisis effect.  Chevron is also incompatible with the “rule-of-law values” that the doctrine of stare decisis is supposed to protect because while stare decisis seeks to settle the meaning of federal law, Chevron leaves the meaning of federal law perpetually unsettled.  Chevron allows agencies to change their minds about what statutes mean and requires courts “to flip flop along with them,” thus creating uncertainty about the law.
  • Whether or not the Court overrules or narrows Chevron, the judgment below should be reversed because the NMFA regulation violates any sensible reading of the MSA. 

In June 2023, we released an episode of our Consumer Finance Monitor Podcast, “A Look at the current challenge to judicial deference to federal agencies and what it means for the consumer financial services industry.”  Our special guest for the episode was Craig Green, Professor, Temple University School Of Law.  To listen to the episode, click here.

On September 7, 2023, at the ABA Business Law Section Fall Meeting in Chicago, I moderated a program, “U.S. Supreme Court to Revisit Chevron Deference: What the SCOTUS Decision Could Mean for CFPB, FTC, and Federal Banking Agency Regulations.”  A recording of the program is now available on the ABA’s website at no charge to members of the ABA Business Law Section and a modest charge for others.