By Tierra Jones on November 2, 2017

courthouseSince the Supreme Court’s 1984 holding in Chevron USA v. Natural Resources Defense Council (“Chevron”), courts have looked to federal administrative agencies in interpreting regulatory statutes.  Under this doctrine, commonly referred to as “Chevron deference,” courts adopt the reasonable interpretation of the relevant federal agency when application of statutory provisions is uncertain and the agency’s interpretation is reasonable.  The Supreme Court went further in National Cable & Telecommunications Ass’n, holding that when the Chevron test is satisfied, “an agency’s interpretation should prevail even when a court has adopted a contrary interpretation in the past.”

Though Chevron deference has been consistently applied over the last three decades, its reign may be nearing an end. Neil Gorsuch, the newest Supreme Court Justice, has been vocal in opposing Chevron deference, arguing that the doctrine is inconsistent with Constitutional separation of powers.  Even before Gorsuch was appointed to the Supreme Court, he expressed his view in Gutierrez-Brizuela v. Lynch, asserting that allowing executive agencies to interpret law “seems no less than a judge-made doctrine for the abdication of the judicial duty” and that Chevron deference amounts to using legislative power to “perform a quasi-judicial function” that is not rooted in the Constitution.

Separation of powers between the three branches of government is fundamental to the Constitutional scheme in which the legislative branch enacts laws, the judicial branch interprets them, and the executive branch enforces them. For Gorsuch, Chevron deference permits “executive bureaucracies to swallow huge amounts of core judicial and legislative power and concentrate federal power in a way that seems more than a little difficult to square with the Constitution of the framers’ design.”  And he has made it clear that he will not hesitate to vote to overrule the long-standing doctrine if the opportunity presents itself.

Gorsuch is not alone in advocating this position. In January 2017, the House of Representatives passed H.R. 5, the Regulatory Accountability Act of 2017. The Act would require courts to adopt a de novo standard of review for questions of law when interpreting statutory provisions, without deferring to federal agency interpretations.  If this legislation  passes the Senate, it will effectively eliminate Chevron deference.

Those favoring Chevron deference believe that it is essential to ensuring that statutory and regulatory interpretation is free from partisan politics. One commentator argues that, “if the judicial branch were to overturn Chevron and begin interpreting statues de novo, they might in a real sense be thwarting legislative intent and aggrandizing their own power at the expense of the legislature.” Without Chevron deference, judges would be tasked with deciding issues requiring agency expertise. In the products liability realm it could affect automotive standards adopted under the Federal Motor Vehicle Safety Standards and Regulations (49 C.F.R. 571), what constitutes “hazardous waste” for the purposes of implementing the Resource Conservation and Recovery Act (42 U.S.C. §6901, et seq. (1976)), and very specific compliance and enforcement procedures in the aftermath of waste and chemical cleanup.

Eliminating Chevron deference could create uncertainties for businesses, giving rise to the possibility that well-established and long relied-upon interpretations might be overturned by courts in the future. But it could also present the potential for reducing regulatory burdens by challenging agency action based on the agency’s interpretation of its governing statutes. Given the uncertain future of Chevron deference, companies and their lawyers should prepare for the opportunities and challenges its demise could present.