Pending Supreme Court decision could strip power from federal agencies

The U.S. Supreme Court soon will decide on a case that could weaken federal agencies’ power to interpret statutes, upending 40 years of precedent that has shaped the regulatory landscape.

On Wednesday, Jan. 17, the Supreme Court heard oral arguments in a case that is challenging what is known as the Chevron doctrine. Established in a Supreme Court decision in 1984, the doctrine gives federal agencies the power to interpret ambiguous statutes when they are challenged, taking the issue out of the hands of federal judges.

Chevron doctrine opponents, which include business interest groups, argue that it puts too much power in the hands of agencies that are politically motivated.

On the other hand, supporters contend that federal agencies, not some random judge, are the experts on issues addressed in regulations.

The Supreme Court is expected to reach a decision this summer. There is consensus among experts that the high court will dismantle the Chevron doctrine.

There is a lot to unpack here, so let’s take a look at how the Chevron doctrine came about. After we have that context, we’ll take a look at how the Supreme Court’s pending decision could affect the trucking industry using a hypothetical, but realistic, scenario.

Chevron doctrine background

This whole thing stems from a 1977 amendment to the Environmental Protection Agency’s amendment to the Clean Air Act of 1963.

In that amendment, Congress required any industrial facility that built a new “stationary source” of air pollution to undergo an extensive EPA review process before receiving a permit. That review looked at how much pollution that one source emitted.

In 1981, the Regan administration’s EPA changed the definition of “source” to include the entire facility, not just the standalone addition or modification. This allowed a facility to bypass the lengthy review process if the net increase in pollution of a new source was zero when factory-wide modifications were made.

The Natural Resources Defense Council challenged that interpretation. The U.S. Court of Appeals for the District of Columbia Circuit ruled in favor of the environmental group. Specifically, the court ruled that since Congress did not define “stationary source,” it must revert to similar court cases. Those cases found that including a facility as a whole was appropriate for maintaining air quality but not for improving air quality.

Chevron intervened in the case and appealed to the Supreme Court, which unanimously overturned the D.C. Circuit decision.

In its 1984 decision, the high court established a two-step guide (the Chevron doctrine) for federal courts to follow in cases involving federal regulation interpretation:

1. Determine if Congress directly addressed the issue at hand, and if so, whether the statute was ambiguous. If the intent is clear, the matter is resolved accordingly. If the intent is ambiguous, then go to step two.
2. Determine if the agency’s interpretation is permissible, i.e. rational or reasonable. If so, the court must defer to the agency’s interpretation.

Since then, questions of regulatory ambiguity have been answered by the relevant agency. Nearly 40 years later, that is being challenged.

Chevron doctrine and trucking

Since we’re dealing with federal regulations, let’s do a thought experiment on how this could apply to the trucking industry.

Let’s say, for example, Congress passes a law requiring the testing and treatment of sleep disorders for CDL medical certification. The text of the bill does not clearly define “sleep disorder.” In its subsequent regulation, the Federal Motor Carrier Safety Administration interpreted the term “sleep disorder” to include the occasional workday nap. Consequently, thousands of drivers are forced to undergo expensive sleep tests simply for taking naps. Sounds crazy, but this was attempted in 2013.

Concerned about the heavy and undue burden this puts on truckers, in this hypothetical, the Owner-Operator Independent Drivers Association files a petition for review in the U.S. Court of Appeals for the District of Columbia Circuit. The petition argues that Congress intended to address significant health concerns like chronic insomnia, restless leg syndrome or narcolepsy, not the typical midday drowsiness that most people feel during the workday. Consequently, the court must vacate that loose interpretation of “sleep disorder.”

Per the Chevron doctrine, the federal court rules in favor of FMCSA. Specifically, the court states that, assuming it is reasonable, the federal agency holds the power to make that interpretation. The logic is that FMCSA, not some random judge, is more equipped and knowledgeable in making such decisions.

If the Chevron doctrine did not exist, then the court could possibly rule in favor of the truckers. The argument against Chevron is that such challenges to regulations are a matter of interpreting the law, which is under the jurisdiction of courts, not federal agencies. In our hypothetical, the court could decide that Congress intended to address severe disorders, using a list published by the Centers for Disease Control and Prevention as guidance.

Arguments against Chevron doctrine

Ironically, the same demographic that made the Chevron doctrine happen – business interest groups – is the same demographic that wants to end it.

Although the doctrine worked in favor of businesses in the context of the Chevron case, interest groups today are claiming the reverse is now true.

One problem is uncertainty. As explained by Justice Brett Kavanaugh during oral arguments, interpretations of regulations are subject to change every four or eight years as new administrations enter the White House. Using the above example, a more liberal administration may side with FMCSA’s interpretation in the name of safety. When a more conservative administration comes in, it can remove naps from “sleep disorders,” using a cost-benefit analysis to determine an undue burden.

That raises another point against the Chevron doctrine: political motivation. Opponents argue the doctrine turns regulatory interpretation into a politically biased decision.

Furthermore, the doctrine gives Congress an excuse to ignore difficult issues when writing legislation. Rather than try to fill in the gaps themselves, lawmakers have an incentive to be ambiguous and kick that can down the road to the agencies.

Arguments for the Chevron doctrine

Dozens of advocacy groups representing a variety of issues filed amicus briefs supporting the Chevron doctrine.

The most common argument is that no one is better equipped to interpret regulatory language than the agencies overseeing it. Advocates claim decision makers at the agency have the knowledge required to make the right choices when making such interpretations. Judges, on the other hand, do not have the expertise required to make those decisions.

In an argument similar to those opposed to the Chevron doctrine, supporters claim that overturning the doctrine would lead to politically motivated decisions. A liberal Ninth Circuit will interpret things differently than the Seventh Circuit, as we saw in broker liability cases. Consequently, judges will be turned into policymakers.

In the same vein, supporters of the doctrine argue that reversing it would flood the federal courts.

This would cause two problems. First, it could take years for a court to reach a decision, whereas a federal agency can clarify regulations within a few months. Second, it would lead to a patchwork of a single federal regulation. There are nearly 700 district court judges, 94 district courts and 13 circuit courts. Imagine naps being considered a sleep disorder only in some states.

Lastly, ambiguity may be intentional and necessary. Lawmakers cannot predict the future but are pressured to pass legislation that addresses emerging issues. Justice Elena Kagan used artificial intelligence as an example. Since that technology is evolving at a rapid rate, Congress couldn’t possibly address issues that may pop up in the future but are not on anyone’s radar today.

A lot is at stake here. According to a University of Chicago Law Review article, Chevron v. Natural Resources Defense Council is the most frequently cited case in administrative law. Overturning it likely would have sweeping consequences. That could be good in some cases and bad in others. LL