Implications of the Supreme Court Overturning the Chevron Decision, with Daniel Farber

Notable Quotes

• Dissent in Loper Bright argues that courts lack the expertise that agencies have: “Applying ambiguous statutes often requires a policy judgment about what will work best for implementing a statute, and policy judgments belong to agencies rather than judges. The court also stressed that agencies have more expertise than courts, and many regulatory issues are extremely technical, involving things like genetic engineering, modeling of air pollution, or a variety of other things that judges just don’t have any background in.” (8:28)
• Executive branch may lose power: “One thing that we’re going to see that the court really missed is a shift of power away from the White House and away from the president to make domestic policy. We’ve had a situation where the president could say, ‘This is good policy,’ and then the agency only had to come up with a reasonable argument in favor of it, but that’s not going to cut it anymore. Presidents are going to have less room, like when a new administration comes in, to change the playbook. The court thinks that they’re shifting power away from bureaucrats, but I actually think, to some extent, it’s the opposite.” (16:10)
• Future of regulatory law looks murky: “The real question is going to be, What does it mean to respect a precedent that was decided under Chevron? I think it means, at least, that the specific regulation upheld by that court remains valid, even in the Loper Bright era, but judicial opinions do more than say, ‘Thumbs up’ or ‘Thumbs down.’ They have discussions about what the statute means, what’s reasonable, why the agency’s interpretation makes sense to the court, and how much those are considered to be binding law. What happens when the agency modifies the old regulation or passes a new regulation that’s somewhat similar and somewhat different? How does this idea of giving respect to the older decision play out in those situations?” (27:29)

Top of the Stack

• “Après Chevron, Judges Rule” blog post by Alan Krupnick, Joshua Linn, and Nathan Richardson
• The Regulatory Review blog
• Legal Planet blog

The Full Transcript

Kristin Hayes: Hello, and welcome to Resources Radio, a weekly podcast from Resources for the Future. I'm your host, Kristin Hayes. My guest today is Dan Farber, the Sho Sato Professor of Law at the University of California, Berkeley, and the faculty director of the Center for Law, Energy, and the Environment. Professor Farber is a graduate of the University of Illinois, where he earned his bachelor's, master's, and Juris Doctor degrees. (I’m proudly giving a shout-out to my home state there.)

Today, Dan and I are going to be talking about a Supreme Court decision that was released at the end of June—June 28, 2024, to be precise. That decision is officially known as Loper Bright Enterprises v. Raimondo, but it's often referred to simply as Loper Bright. That decision overturned decades of precedent set under a previous decision from back in 1984, named Chevron USA v. Natural Resources Defense Council. You’ll probably hear the word “Chevron” several times in our conversation.

That earlier case, the 1984 case, led to a legal principle, or a doctrine, referred to as “Chevron deference,” and that's a wonky but very legally consequential principle, which now, of course, no longer stands. We'll be reviewing what these cases and doctrines are all about, why they matter, and what we've learned in the six weeks since Loper Bright was decided. Stay with us.

Hi, Dan. Thank you so much for joining me today on Resources Radio.

Daniel Farber: Thanks for having me on.

Kristin Hayes: It's a pleasure. Before we talk about these court cases—which are, again, quite consequential—we do like to start with an introduction for our listeners to our guests. Tell us a little bit more about yourself.

Daniel Farber: It's not a very eventful story, I suppose. I was a law clerk for Justice John Paul Stevens, who later wrote the Chevron decision, and most of the time since then, I've been a law professor, working on constitutional law; statutory interpretation; administrative law; and, increasingly, environmental law. I'm one of the relatively small number of observers who was around and following these issues before the Chevron decision came down, and I've been here to see how things have evolved in the meantime. Today, a lot of my work focuses on climate change, and that's what our center here at Berkeley is focused on.

Kristin Hayes: Just like us here at Resources for the Future (RFF).

Daniel Farber: Yeah.

Kristin Hayes: It sounds like you're basically the best candidate we could have asked for to be talking with us today about these topics. Let's dive in.

There's a lot to cover here, and it's always good to start with background, I think, particularly on legal terminology—subject matter that is pretty wonky. Let me start by asking you if you can remind us or tell us in more detail what “Chevron deference" refers to and how it came under question in this new case, Loper Bright Enterprises v. Raimondo, in 2024.

Daniel Farber: Courts are often faced with the problem of interpreting statutes, and there are disputes about the best way of doing that and so forth that aren't really part of today's discussion. Today's discussion involves situations where before a court ever gets to interpret a law, an administrative agency, like the US Environmental Protection Agency, is faced with the task of interpreting a law. Then, the question is, How should that figure into the court's later interpretation of the law? What Chevron said is that if the statute is unambiguous, then that's the answer, regardless of what the agency said. But if it's ambiguous, the court should defer to the agency interpretation as long as the agency interpretation is reasonable. It doesn't have to be the interpretation that the court would've independently picked, it just has to be a reasonable interpretation.

Kristin Hayes: How did that long-standing deference principle come into question?

Daniel Farber: It's an interesting story, because when Chevron was first decided, the people who were really enthusiastic about the decision were conservative judges. This was during the Reagan administration, which might've been a relevant factor, but also, I think, they were enthusiastic under the unitary executive theory and so on about moving some more authority to the executive branch to implement the law. That remained true for quite a long time, I'd say, until 2008, 2010, when conservatives started having some real second thoughts. Of course, there had always been some scholars who were critical, but starting about 15 years ago, we started seeing conservative judges and scholars being more and more outspoken in criticism of Chevron, and some of them talking about overruling it.

In this case, the court actually reached out to make it clear that the only issue it was interested in was whether to overrule Chevron. In particular, the court did not want the parties to address the underlying question of how this particular law applies, which was a fisheries regulation, and whether the government agency in question is valid. They just wanted to hear about overruling Chevron. That was a red flag about where things were going to be heading.

Kristin Hayes: That is very interesting. I had not heard that context before. That is an intriguing piece of information and a good lead into talking about the deeper specifics of this case. It was Loper Bright Enterprises v. Raimondo. Gina Raimondo, of course, is the US Secretary of Commerce, which oversees a lot of the fisheries work.

Tell us a little bit more about the case that came forward in 2024 and what arguments were made on each side, knowing that the Chevron deference was ultimately the real question at hand here.

Daniel Farber: The case itself involved fisheries rule, applying on the West Coast, that required fishing boats to pay for an independent observer to police whether they were complying with fisheries regulations, and I think everyone agreed that the statute allows the government to require the independent observer. The question was, "Who is going to pay?," and the statute doesn't directly address that. The lower courts applied Chevron, saying the statute was ambiguous and that the government's interpretation was reasonable.

There were actually two cases. It was Loper Bright, and there was a companion case from a different court of appeals. The court asked for an argument about whether to overrule Chevron. The government had a number of arguments against overruling, which I personally found persuasive, but I also have no vote.

First of all, it's about as well settled a precedent as you could imagine. There were literally thousands—I think 8,000 lower court decisions—that cite the Chevron case, and the court had applied it in 70 cases, or some number like that. It is the case that has been cited the most often of any Supreme Court opinion. So, the government relied on that. They said, "There would be chaos if you overrule Chevron, because there's so many decisions relying on it."

The court also made a couple of points that the dissent picked up on. One is that applying ambiguous statutes often requires a policy judgment about what will work best for implementing a statute, and policy judgments belong to agencies rather than judges. The court also stressed that agencies have more expertise than courts, and many regulatory issues are extremely technical, involving things like genetic engineering, modeling of air pollution, or a variety of other things that judges just don't have any background in.

The other side argued several things. Their core argument, which the court didn't reach, was that Chevron was unconstitutional, because the constitution requires courts rather than agencies to have the final word about all legal issues. That's an argument that attracts some of the most conservative justices, but it wasn't what the majority opinion said.

A related argument was that Chevron was inconsistent with the Administrative Procedure Act, and there was a dispute about whether the Administrative Procedure Act really did preclude Chevron or didn’t really preclude Chevron. Something else that clearly has bothered the judges is that one result of Chevron is that when you get a new White House, you can have a new interpretation of the statute. You had the Obama White House that interpreted a lot of laws one way, and then Trump came in and interpreted the opposite way. Biden came in; we flipped back again. I think the court considered that too unstable. These were really the arguments at play, and as we know, the arguments against Chevron were what ultimately prevailed.

Kristin Hayes: You mentioned that one of the concerns raised by advocates for keeping Chevron deference was this possibility for chaos, if it were, in fact, overturned. I've heard a lot of commentary on the decision or read a lot of commentary on the decision since it's release using similar words like, “landmark,” “seismic,” and then more dramatically, “imperiling,” but also there have been a number of commentaries that have downplayed the truly transformative nature of the decision.

We've now had about six weeks between the decision release and when we're recording to start to test those theories. Given what you've seen, where is that sense of import really valid, and where do you see more incremental change based on this ruling?

Daniel Farber: I think, even though we have had some time, it's really too early to tell, and I think a lot of what we're seeing in the lower courts is confusion about exactly what the decision does. We know it overrules Chevron, but what are courts supposed to do instead? There've been a flurry of rulings that basically ignore what the agency did, coming from courts that are very antiregulatory. Those courts and judges are happy to have any additional reason they can find to overrule an agency, but I don't think they've looked at the opinion very carefully. I think they just said, "Chevron's overruled," and that's the message, and I think other courts are still trying to work out exactly what's going on. I can talk about that later.

The problem is almost all of the Supreme Court's decision is about why to overrule Chevron, and there's only about one page about what courts are really supposed to do instead, now that Chevron is gone. I think one question is, How much do you focus on that one page, and how much do you focus on the rest of the opinion?, and what it says about the need for judges to have the final word.

Kristin Hayes: I will note—one of my colleagues flagged for me, in terms of what courts actually should do—that the Supreme Court induced something called the Skidmore doctrine. You can correct my terminology, but the Skidmore doctrine is the proper approach to this statutory interpretation, rather than Chevron. What is that Skidmore doctrine? How does it compare to Chevron, and is that part of the plan that you anticipate lower courts taking moving forward?

Daniel Farber: Yes. I think the court really emphasized Skidmore. Skidmore is a 1940s decision about the same issue of how courts should look at interpretations of the law by agencies. I don't think we called it Skidmore deference, but that was basically the approach courts were using when I started teaching law before Chevron. The argument is that, yes, courts have the final word, but first of all, agencies know a lot.

Some of these laws are very complicated. The agency is an expert. Agencies are often involved in actually helping Congress draft laws. They work with Congress during the process so they know more about what the law is trying to do. Then, if an interpretation has been in place for a long time, it's sort of like a judicial precedent in that people rely on it.

Industries make big investments based on long-established agency interpretations. You don't want to upset the apple cart. Instead of this reasonableness test, it's this more amorphous standard about how much weight the court should give the agency. The Supreme Court really emphasized in Loper Bright that since almost the first time this issue arose almost 200 years ago in the US courts, courts have been giving serious attention to what agencies think about statutes. I think some of the lower courts, especially with some of those early antiregulatory decisions, just kind of missed or failed to pay enough attention to that message from the Supreme Court. I think to the extent that courts take that seriously, especially with interpretations that have been around for a while, as opposed to kind of flip-flops, that should really give agencies some breathing space.

Kristin Hayes: I'd love to come back to that question around expertise and expertise that lives in various places. Before I do that, I want to ask you about the changing balance of power that this Loper Bright decision might lead to between courts, agencies, and Congress itself. I can ask you, in this case, to give us an example of how you can see the policy-development process looking different moving forward. There's a lot of talk about how Congress may have to write legislation in different ways to reflect this decision or take account of this decision if they're looking to avoid the court's involvement. How do you see that balance of power overall? I would welcome any kind of specifics that you might want to share to illustrate that.

Daniel Farber: I think one thing that we're going to see that the court really missed is a shift of power away from the White House and away from the president to make domestic policy. We've had a situation where the president could say, "This is good policy," and then the agency only had to come up with a reasonable argument in favor of it, but that's not going to cut it anymore. Presidents are going to have less room, like when a new administration comes in, to change the playbook. The court thinks that they're shifting power away from bureaucrats, but I actually think, to some extent, it's the opposite. The bureaucrats are the experts, and they're the ones with the deep knowledge of the statute and how it works. So, that's one change.

For Congress, it's ambiguous. Actually, one of the arguments for Chevron is it’s what Congress wants. Congress wants agencies to and assumes agencies will be the frontline interpreters of statutes. I always thought that was a clever argument, but not very strong. However, there's been empirical research, and it turns out that's actually true. One of the rules that the staff people who write laws in Congress knew was Chevron, so they based the laws they were writing on that assumption, and as a result of that, they're going to have to write laws a bit differently with that in mind.

One thing that the court talked about in that one page about what to do going forward involved laws that explicitly give discretion to agencies in implementing the law. One way that Congress can signal that is by using terms like “in the opinion of the agency” or “in the judgment of the agency.” There are actually quite a few places, like in the Clean Air Act, where the statute actually says language just like that, but it's kind of hit or miss, because I don't think anyone was really thinking that was crucial. Going forward, they need to make sure to put that in basically everywhere possible. They also need to go into more detail. I think about the range of choices—it's open to the agency.

Now, all of this sounds good if you're a law professor or a judge looking at the end product and saying, "Yes, we'd really like Congress to give it more guidance." The problem is, given the way Congress works, it's not always easy for them to do that. On the one hand, it gives them more of a push to make some of the decisions about agency power, but it also makes it more difficult for Congress to regulate in new areas where they don't have a clear sense of what's needed. In those areas, they're going to have to be really careful and try to give discretion. I think the biggest problem is all the laws that are on the books as of now, where Congress thought Chevron was the rule and that were written for the Chevron rules.

Kristin Hayes: I want to come back to that point, too. I think what this means retroactively for those rules is a really interesting question. I want to ask one follow-up to what you just mentioned and something else that a colleague here at RFF mentioned. Sometimes legislation is, in fact, purposefully written to be somewhat loose, vague, or flexible, in order to secure passage, and there's this concern that enforced specificity in a way that may have not been required previously, but may be required now, will actually slow down the process, scum up the works, and make policymaking much more challenging in a world in which policymaking is already fairly challenging.

I don't know if you have any feelings on that, too, but I'm curious for your reaction.

Daniel Farber: I think that's definitely a problem. There are things that Congress can do when it specifically wants to signal that they're being ambiguous on purpose. The court did refer to some laws that use broad terms, like “reasonable,” “in the public interest,” or “feasible,” as ways to say that Congress was giving agencies frontline authority to decide what is reasonable in that situation, what is the best technology, and so forth. Again, to the extent that people in Congress or their staff are aware of this issue, there are ways of signaling things.

The biggest problem may be that there are times when you write something and it seems quite clear that that's what's needed, but then, after the statute's passed, we learn more about the problem, and the agency discovers that what looked like a straightforward command is actually difficult to implement. Those are situations where we don't anticipate that there's going to be a need for flexibility, and in those situations, I think overruling Chevron could be a problem.

I think one of the issues is not just, What do you write in the initial statute?, but, Are we putting an unreasonable expectation on Congress to come back and fix things if reality turns out to be different? An example of that—not my area of expertise, but from colleagues—is telecommunications law, where the current statute is about 20 years old. It really predates the modern internet, and it's written in ways that don't really take that into account.

With the Clean Air Act, you have similar issues with climate change, which Congress was somewhat aware of, but it wasn't front and center, and then it turns out now we have to worry about greenhouse gas emissions. There were pieces of the statute that made a pretty good sense in dealing with other pollutants, but didn't work as planned for greenhouse gases. I think Chevron, especially if courts were really putting their weight behind Chevron, which they haven't been in the last few years, made a difference, because it gave agencies more ability to respond to new technologies, new science, or just big social changes.

Kristin Hayes: As opposed to actually having to rewrite legislation and sort of go back to the drawing board through Congress—is that what you mean?

Daniel Farber: Yeah, that's what I mean.

Kristin Hayes: Interesting.

Daniel Farber: Again—it would be nice if Congress were able to be nimble and respond to all these things, but we kind of know the opposite is true, especially in the current polarized world. It's really hard for Congress to come back to things. I think one thing that will happen is that either courts will decide that the law is just too inflexible or that it'll be courts making the decisions about when to add some flexibility to the law. They're not going to say that, but there may be situations where there's a new technology, and it seems obvious that Congress would have wanted the agency to deal with it, and some judges, at least, will try to figure out a way to make that work. We are moving power from agencies to courts.

Kristin Hayes: Interesting. Let me close by asking, as I mentioned, about the consequences of this ruling. Many who oppose the decision have suggested, in particular, that what may come to pass is that a lot of people may reopen old decisions that, as you mentioned, were based on Chevron deference, and try to relitigate those.

I believe that Justice John Roberts offered assurances that this new rule, Loper Bright, does not immediately, by any means, negate previous rulings based on Chevron deference, but Justice Elena Kagan argued differently. She said, "Of course, things are going to be reopened. That's, in some sense, the whole point.” I'm curious for your thoughts on that, what this means for cases that were previously passed—what have we learned over the past six weeks about whether those old decisions are likely to be relitigated in light of this Loper Bright decision?

Daniel Farber: I don't think we've necessarily learned that much, because it takes time. There's certainly going to be a lot of attempts, and you see a lot of law firms sending newsletters to their clients about how it is time to file more lawsuits. Of course, from the law firm point of view, that's all to the good. What we don't know is how courts will react. I think that Justice Kagan was maybe going a little overboard with her remarks.

I think that she and the other liberal justices are understandably very upset about the way the Supreme Court has been overruling some past landmark decisions, including things that are a lot better known than Chevron, like Roe v. Wade, and some of that bitterness was coming out in her dissent, in this case. I think there's some justices in the conservative supermajority who would be great with just declaring open season, but the balance of power is held by more moderate conservatives like Roberts, and I really don't think they want to have regulatory chaos. I think that they are aware of how destabilizing that would be, and they're also aware that if everything is up for grabs, their lives are going to become unmanageable, because it's all going to end up on their plate. At least, I hope so. I think there are some signs that they are serious about that.

Roberts, we know, is an institutionalist and is concerned about stability in the law. Despite being willing to overrule some landmark decisions, Justice Amy Coney Barrett seems to be showing signs of moderation that I think are helpful.

In some cases, the way you would challenge one of these precedents is by bringing a lawsuit in a different court, where a lower court precedent isn't binding. So the Fourth, Fifth, and Sixth Circuits have decided something, but now, you try the Third Circuit to see if you can have better luck there.

I think the real question is going to be, What does it mean to respect a precedent that was decided under Chevron? I think it means, at least, that the specific regulation upheld by that court remains valid, even in the Loper Bright era, but judicial opinions do more than say, “Thumbs up” or “Thumbs down.” They have discussions about what the statute means, what's reasonable, why the agency's interpretation makes sense to the court, and how much those are considered to be binding law. What happens when the agency modifies the old regulation or passes a new regulation that's somewhat similar and somewhat different? How does this idea of giving respect to the older decision play out in those situations? We really have no clue at this point.

Kristin Hayes: Well, as you noted, there's going to be a lot to watch and much written about this moving forward, but I really appreciate you taking the time to go through this with us and inform our audience about this very consequential decision.

Let me close with our regular feature, Top of the Stack. Dan, what would you want to recommend in terms of good content to our listeners? It could be on this topic or otherwise, but we'd love to hear some recommendations from you. What's on the top of your stack?

Daniel Farber: Well, apart from RFF, of course, I'd recommend two blogs. One of them is called the Regulatory Review, and when you look for it, you have to include “blog,” or you get a bunch of other stuff. It really specializes in these kinds of administrative-law issues like Chevron and so forth. The other blog that I would recommend is Legal Planet, which is a joint effort of Berkeley and the University of California, Los Angeles, that focuses on environmental issues; particularly, on climate change issues and regulation, both what the federal government is doing and what the states are up to.

Kristin Hayes: Those are great resources for folks who are intrigued by this conversation and looking for more. I really appreciate those recommendations, and I really appreciate the chance to talk.

Daniel Farber: Thanks. It was great talking.

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