What SCOTUS just did to broadband, the right to repair, the environment, and more

The Death of Chevron Deference: How a Supreme Court Ruling Will Shape Our Future

Since the New Deal era, the administrative state, comprised of agencies like the EPA, FCC, FTC, FDA, and others, has become a cornerstone of the US government. It’s the administrative state that often delivers immediate solutions to problems, filling the void when Congress and the courts move at a pace too slow to address modern needs. For over four decades, the administrative state relied upon a single Supreme Court precedent: Chevron USA, Inc. v. Natural Resources Defense Council (NRDC), known as Chevron deference. This doctrine guided courts to defer to federal agencies’ interpretations of ambiguous language in legislation.

But on June 28th, 2024, the Supreme Court overturned Chevron deference. This decision is no mere legal footnote; it touches everything around us: net neutrality, climate change, clean air and water, consumer protections, and more. While the full impact of this ruling remains unseen, this is a turning point. We are now left wondering, "Why isn’t anyone doing anything?" about issues ranging from trivial to life-threatening.

What is Chevron deference?

The central tenet of Chevron deference is that courts should defer to subject matter experts within federal agencies, who are better equipped to interpret ambiguous laws than a judge assigned to the case. This principle of strong deference has prevented many regulations from getting bogged down in endless courtroom battles.

As David Doniger, senior advisor to the NRDC Action Fund and a litigant in the case that gave Chevron deference its name, stated: "The key point of Chevron was that laws like these are policy decisions, and those policy decisions should be made by the political branches responsive to the voters, Congress and the president, not by unaccountable judges with no constituents."

The conservative legal movement has long sought to disempower the administrative state, viewing Chevron deference as a symbol of government overreach. This sentiment culminated in the Supreme Court’s June 2022 decision in West Virginia v. EPA, which strengthened the "major questions" doctrine. This doctrine posits that agencies shouldn’t regulate issues of major national significance unless Congress explicitly allows them to do so in legislation.

The writing was on the wall. Two cases challenging Chevron deference, Loper Bright Enterprises v. Raimondo and Relentless, Inc. v. Department of Commerce, reached the Supreme Court this year. Both cases, ostensibly about fishing boat regulations, were interpreted as a direct confrontation with Chevron deference. Supported by a diverse coalition, including Gun Owners of America and e-cigarette companies, the cases exposed the long-standing desire within industry circles for less administrative oversight.

What does this mean for net neutrality?

The Federal Communications Commission (FCC) has repeatedly asserted its authority to regulate internet service providers (ISPs) as common carriers under Title II of the Communications Act, a policy known as net neutrality. This classification would permit the FCC to impose regulations prohibiting ISPs from unfairly blocking or throttling internet traffic, ensuring an open and level playing field for online users.

However, the Supreme Court’s decision could endanger the FCC’s latest effort to reimplement net neutrality, despite the FCC’s recent vote in support of the policy. Christopher Yoo, a professor at the University of Pennsylvania Carey Law School, argued that the overturning of Chevron deference could "change the tenor of the impending judicial challenge to the new net neutrality rules dramatically. "

The Supreme Court’s ruling in Brand X Internet Services v. National Cable & Telecommunications Association affirmed the application of Chevron deference to the FCC’s interpretation of the Communications Act. This previous precedent lent significant support to net neutrality. Now, with the demise of Chevron deference, the legal landscape has shifted. Matt Schettenhelm of Bloomberg Intelligence estimates an 80 percent chance of the FCC’s newest net neutrality order being blocked or overturned.

The environmental impact

The Environmental Protection Agency (EPA) has relied heavily on Chevron deference to address climate change, greenhouse gas emissions, and other complex environmental issues.

Lisa Heinzerling, a professor of law at the Georgetown University Law Center, emphasizes the significance of Chevron deference for the EPA: "It’s no coincidence that Chevron itself was an environmental case… Chevron was very important."

Overturning Chevron deference represents a power grab, removing technical experts from the equation when it comes to environmental protections. Experts like David Doniger believe the EPA is already navigating this altered landscape, as seen in its recent rule finalizing in April for cutting greenhouse gas emissions from power plants. The EPA anticipates the fall of Chevron deference and has formulated the rule to withstand legal challenges. However, former Trump administration EPA administrator Andrew Wheeler warns that despite the EPA’s proactive approach, the new rule remains “incredibly legally vulnerable” due to the demise of Chevron deference.

The FTC and regulating Big Tech

Lina Khan, chair of the Federal Trade Commission (FTC), has been vocal about her desire to enhance competition in digital markets and protect consumers, but Chevron deference’s demise makes it "about the worst possible time" for the FTC to assert new rulemaking authority. Particularly vulnerable are the FTC’s recent labor-friendly rulemaking banning noncompete agreements and its digital discrimination order, which could face increased judicial scrutiny without the protection of Chevron deference.

While the FTC has already been operating in a climate skeptical of agency deference, the overturning of Chevron deference could still exacerbate existing issues. Jack Beermann, an administrative law expert, notes that the major questions doctrine has effectively eroded Chevron deference in areas where agencies are venturing into previously uncharted regulatory territory.

Immigration law and tech workers on visas

Chevron deference has granted the Department of Homeland Security (DHS) and its agencies significant leeway in immigration policy, including decisions made by US Citizenship and Immigration Services (USCIS) regarding work-based visas.

Stephen Yale-Loehr, a professor of immigration law practice, points out that Chevron deference has made it challenging to overturn narrow interpretations of H-1B visa regulations by USCIS. This could now change, as employers may be more inclined to contest agency decisions deemed overly restrictive.

Jonathan Wasden, a former government attorney specializing in visa cases, predicts a patchwork system, with different courts interpreting regulations in disparate ways. This could lead to uneven application of immigration laws across the country, complicating the process for both agencies and applicants.

The impact on labor and workers’ rights

The overturning of Chevron deference could significantly impact labor agencies and their ability to enact workplace safety regulations. The Biden administration has implemented a number of new regulations, including extending overtime pay and allowing third-party worksite inspections. These regulations, including the overtime pay rule slated to take effect in July 2024, now face heightened legal challenges from industry groups.

Charlotte Garden, a professor of labor law, warns that the decision could be disruptive to workers’ rights. As courts will now have greater freedom to interpret labor statutes, different regulatory schemes could emerge across the country.

Intellectual property, copyright, and patent law

While intellectual property law is likely to see the least immediate impact from Chevron deference’s demise, the fact that the doctrine applied to this field at all showcases the expansive reach of the administrative state.

Mark Lemley, a professor at Stanford Law School, notes that the US International Trade Commission (ITC), which recently banned the Apple Watch for patent infringement, will no longer be entitled to deference in its interpretations of patent law.

Although the Patent and Trademark Office’s rulemaking is limited, Rebecca Tushnet, a professor at Harvard Law School, acknowledges that overturning Chevron deference will affect the DMCA Section 1201 exemptions, issued every three years by the Copyright Office. These exemptions cover critical areas like the right to repair and unlocking cellphones. With the appeals court ruling that these rulemakings are subject to the Administrative Procedure Act, their future is uncertain.

A shift in power

The demise of Chevron deference represents a fundamental shift in the balance of power between the administrative state and the judiciary. This shift will have far-reaching consequences, impacting both major policy issues like climate change and seemingly mundane aspects of daily life. While the full impact remains to be seen, the overturning of Chevron deference marks a significant moment in American governance, with the potential to reshape the regulatory landscape in profound ways.

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