SCOTUS: Big Fight; Small Fish

Jan 19, 2024

On Wednesday, a pair of cases regarding federally mandated observers on fishing vessels (and who pays for them) was argued in tandem before the United States Supreme Court.

The cases, focus on a small subset of a small fishery (herring), but the decision has the potential to change how federal regulations are made. The real issue in these cases concerns “Chevron deference.”

Chevron (in lawyer talk) is based on a 1984 case between Chevron and the Environmental Protection Agency. Essentially, it established a two-step process to determine if a law is unambiguous -and then establish clarification of any ambiguity that isn’t an obvious legal question. Simple, right?

Under Chevron unclear portions of laws defer to the regulators/bureaucrats for interpretation.

The plaintiffs in this case make the case that “Chevron” is actually unconstitutional and should be tossed.

As you can imagine, the federal government disagrees. Chevron, after all, has been used as an underpinning on thousands of federal regulations and decisions.

On Wednesday, Solicitor General Elizabeth Prelogar actually made the assertion that Chevron was used in so many cases it was “too big to change.”

This big question is the result of two relatively small cases (22-1219 Relentless, Inc. V. Department of Commerce and 22-451 Loper Bright Enterprises V. Raimondo). Their complaint focuses on fees levied on commercial fishermen by the National Marine Fisheries Service (NMFS) division of the National Oceanic and Atmospheric Administration (NOAA).

Under the NOAA/NMFS rule, observers are mandated on fishing vessels “for the purpose of collecting data necessary for the conservation and management of the fishery.” Sounds solid, right? But…in three instances: “foreign fishing vessels operating within the exclusive economic zone of the United States,” fishing vessels in the Alaskan fisheries managed by the North Pacific (Fisheries) Council, and vessels participating in “limited access privilege program(s)” established by one of the eight regional fisheries management councils,” the costs for the government’s “eyes and ears on the water” are required to be paid by the vessels, not the government.

Those costs are capped at two or three percent of the “value of fish harvested” on/by the vessels. Impacted commercial fishermen objected to the rule and the levy. Despite their protests and subsequent lawsuit, lower courts upheld the “reasonableness” of the regulation-and subsequent fees- using Chevron deference. Hence the appeal to the high court.

The Chevron U.S.A., Inc. v. Natural Resources Defense Council ruling from 1984 that says in cases of “ambiguous statutes” courts should defer to the agency interpretation as long as the judge finds the ruling to reasonable.

“Reasonable,” the commercial fishermen argue, is the rub. The two-step Chevron deference to decide their case, they say, isn’t reasonable.

In fact, they say Chevron isn’t just unreasonable, it’s unconstitutional. Their argument is that it allows regulators and not the courts, to say what a law actually means.

They don’t argue that agency may has the authority to regulate the fishermen under the Magnuson-Stevens Act, but they say application of Chevron deference in regards to the fees and who pays them, grants the agencies too-much authority.

That, they argue, is unreasonable. They say it moves them from intent-- clarifying inexact statutory language - to having the ultimate authority to interpret a law via regulations the agency created.

That, they argue, overrules the Constitution by gives agencies the ability to ignore judicial opinions. The ability to make their opinion the law, sans judicial oversight.

The authority to make laws, they argue (correctly), resides solely in Congress.

Interpretation of the law lies solely with the courts and must not be ceded (ala the Chevron deference) to executive branch/bureaucratic authorities.

The Supreme Court’s ruling has the potential to limit the authority of regulators and defang federal agencies’ interpretation -and enforcement - of rules bureaucrats create.

As originally created, plaintiffs argue, Chevron deference was to help government agencies use internal expertise to create responsible guidance, not set policy according to a current administration’s desires.

Many of the rules that structure government today aren’t spelled out by the statues (laws) passed by Congress. They’re general guidelines.

While that might not sound like a big distinction, it most assuredly is.

Interpretation and enforcement of those laws -along with filling in the gaps left by legislation - is largely done by regulators via internal guidelines. Guidelines created by the agencies via their “subject-matter-experts”.

Those are supposed to be based on facts, not politics or ideology.

Since 1984, lower courts have applied “Chevron deference” in deciding if the executive branch’s interpretation of unclear rules/regulations were reasonable. In case of a tie, deference would lean to the government’s interpretation.

But not every judge agrees. One outspoken critic is Supreme Court Justice Clarence Thomas.

Thomas believes “Chevron” creates separation-of-powers questions. Questions, Thomas has written, that prevent judges from exercising their independent judgement.

That, Thomas has written, cedes judicial authority to the agencies. That decidedly doesn’t pass Justice Thomas’ test of “reasonableness”.

A similar objection to Chevron’s “deference” is the reason a variety of groups, from the Gun Owners of America to the trade group for electronic cigarette makers, have supported the fishermen.

The high court’s ruling should more clearly delineate -or rebalance- (depending on your position) the separation of powers.

The division of opinion on the high court was obvious during two-plus hours of occasionally “spirited” debate Wednesday. The justices are decidedly not in agreement as to a need to adjust -much less toss- Chevron deference.

While they may have differed on semantics with Solicitor General Prelogar, Justices Kagan, Sotomayor and Brown agreed with her assessment that eliminating of Chevron could deliver a “convulsive shock to the legal system.”

But Justices opposed to Chevron were quick to point out the fact while elimination might raise future legal questions, Chevron does nothing to resolve existing significant legal issues. In fact, they say, it raises them.

As the country’s designed to work, they pointed out, the legislative branch (Congress) passes the laws. The executive branch carries them out.

Then, as necessary, the courts - ultimately the U.S. Supreme Court- decide disputes over what the laws mean and if they’re being properly enforced.

Critics -including the fishermen and Justices Thomas, Kavanaugh and Gorsuch, think Chevron has given too-much latitude to the agencies-and the executive branch to decide those questions.

Consequently, the Supreme Court has the opportunity to take act. Their action could range from a significant tightening of the existing guidelines - thereby clarifying and limiting the reach “Chevron doctrine” - or striking it down entirely.

Supporters say Chevron prevents legal and administrative chaos by using agencies’ “subject-matter experts” to clarify unclear portions of broadly-written laws. They argue some laws may be intentionally vague to allow “subject-matter experts” to decide how best to implement them.

Chevron deference, the plaintiffs argue, has allowed agencies to use “ expert interpretations” to ideologically shade laws toward the viewpoint held by the current administration.

They say it expands the “administrative state” - and gives agencies the power to slant interpretations to suit their current purposes.

Neither party is entirely incorrect.

Chevron isn’t based on a legal statute. It’s derived from the Administrative Procedures Act. That Act says “a reviewing court shall decide all relevant questions of law” and “interpret constitutional and statutory provisions.”

It still says very clearly that Congress invested the courts not the agencies with authority to interpret the law.

As Justice Brent Kavanaugh pointed out, a lot has changed since the APA’s passage.

“One thousand or more circuit judges have written,” he told Solicitor General Elizabeth Prelogar, “asking us to overturn Chevron.”

Their protests were primarily due to their belief that many agency decisions were based on political or ideological positions, not findings of “subject matter experts.” Today, he said, many regulatory decisions appear to be primarilypolitical or ideological, putting some aspect of the “greater public good” ahead of economics -or science- or “reasonableness.”

Simply looking at flip-flops by the BATFE regarding the legality of a number of firearms components by a criterion that appears to be driven by the current administration’s position on “the gun issue” certainly strengthens that position. And virtually all government agencies have some area where political expedients appear to trump solid science.

Justice Thomas is a longtime critic of Chevron, but Justices Kavanaugh and Gorsuch also questioned continuation of the Chevron deference.

In Wednesday’s arguments, Justices Kagan, Sotomayor and Jackson seemed to be working to find common ground where it would be reasonable to preserve at least portions of Chevron. Their opinions seemed more interested in how heavy their caseload could become if the “thousands of cases that applied Chevron deference” were to reappear on federal dockets.

In hearing the case, Chevron’s supporters and detractors agreed on one thing: if the high court decides it’s time for Chevron to be changed -or set aside entirely, things in “the administrative state” will change.

All that from a fight over who pays for observers on fishing boats in Cape May, New Jersey.

A ruling is expected sometime this summer.

We’ll keep you posted.

—Jim Shepherd