May 12, 2023
The United States Supreme Court has agreed to consider a challenge to a long-standing precedent set in Chevron USA, Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984) (Chevron) that requires courts to defer to a federal agency’s interpretation of a statute it administers when that statute is ambiguous or leaves a gap for the agency to fill (known as “Chevron deference”). The Court’s decision could impact how federal agencies, including the Federal Communications Commission (FCC), conduct rulemakings, as well as the types of issues addressed in those rulemakings.
Loper Bright Enterprises Case
In Loper Bright Enterprises. v. Gina Raimondo, Docket No. 22-451, fishing companies have asserted that rules issued by the National Marine Fisheries Service that require fishers to pay for required federal inspectors are not authorized by the Magnuson-Stevens Act, a statute that requires fishers to allow such inspectors onboard but does not address who is responsible for paying the inspectors. Although the Supreme Court declined to hear the substantive question of how to interpret the Magnuson-Stevens Act, it accepted the question regarding deference to agencies. Specifically, the Supreme Court will consider the following question during its next term, which commences in October 2023: “Whether the court should overrule Chevron or at least clarify that statutory silence concerning controversial powers expressly but narrowly granted does not constitute an ambiguity requiring deference the agency.”
This case sets up a challenge to Chevron that has been anticipated over the last few years, as several Justices have expressed concern with the doctrine. Whether the Court is willing to overturn Chevron entirely is a question to be watched. Even if the Court takes a more measured approach, the Supreme Court’s decision regarding the meaning of “ambiguity” within a statute could substantially limit Chevron deference because “ambiguity” is an essential element for that deference.
Chevron Deference and the Major Questions Doctrine
In Chevron, the Supreme Court held that a federal court does not need to defer to an agency’s interpretation of a statute if the plain language of that statute provides guidance. However, if the statute is ambiguous or silent on an issue, then a federal court must defer to an agency’s interpretation of a statute so long as it is “permissible” (which courts generally have found to mean reasonable or rational). Lower court cases applying this second step under Chevron generally upheld the agency’s decision.
Subsequent decisions have explained that Chevron deference is only applicable when an agency has issued a rule after a formal rulemaking proceeding (see United States v. Mead Corp., 533 U.S. 218 (2001)). Even if an agency does not merit Chevron deference, it may be accorded Skidmore deference whereby courts defer to the agency to the extent that its interpretation of a statute has the “power to persuade” (see Skidmore v. Swift & Co., 323 U.S. 134 (1944)).
More recently, however, signals that at least some members of the Court are uncomfortable with Chevron have increased. Last Term, the Supreme Court, without specifically addressing Chevron deference, issued a decision regarding the major questions doctrine, which is an exception to Chevron deference. The major questions doctrine holds that federal courts should not defer to an agency’s decisions when they concern an issue of “vast economic and political significance” and the agency does not have “clear congressional authorization” to act (see West Virginia v. EPA, 597 U.S. ___ (2022) (citations omitted)). In West Virginia v. EPA, the Supreme Court held that the EPA did not have clear congressional authorization under the Clean Air Act to regulate emissions from existing power plants.
Several Supreme Court Justices have expressed concerns with the Chevron doctrine in concurrences and dissents. Perhaps most vocal has been Justice Neil Gorsuch. For example, in November, Justice Gorsuch dissented from a denial of certiorari in Buffington v. McDonough, a case involving applications for veterans’ benefits. His dissent was peppered with citations to and quotations from decisions of his fellow Justices and called the lower courts’ application of Chevron “judicial abdication.” He argued for a “tombstone” for Chevron, asserting, “We should acknowledge forthrightly that Chevron did not undo, and could not have undone, the judicial duty to provide an independent judgment of the law’s meaning in the cases that come before the Nation’s courts.” If enough of his colleagues agree, Loper Bright Enterprises could provide the vehicle for doing so.
Potential Impact on FCC Actions
The Supreme Court’s decision in the Loper Bright Enterprises case, to the extent that it narrows or eliminates federal courts’ deference to agencies’ decisions, could substantially affect the agenda the FCC can pursue. The FCC’s current agenda supports restrictions on robocalling and robotexting, prohibitions on the use of certain Chinese manufacturers in the telecommunications supply chain, and broad authority to oversee the Universal Service Fund (USF). The FCC’s ability to execute and enforce these policies by issuing rules may be limited if it no longer has the protection of Chevron deference in the event its actions are challenged. Regarding the USF, for example, decisions to expand the E-rate program to include cybersecurity support or off-campus broadband after the expiration of the Emergency Connectivity Fund (a $7 billion fund that was established to remote learning during the COVID-19 emergency period) could face a tougher review. Similarly, the conundrum of USF contributions reform would also be subject to broader challenge if the Court’s action in Loper Bright Enterprises narrows or overturns Chevron.
In addition, significant new initiatives, such as increased scrutiny of telecommunications service provider privacy practices or increased regulation of broadband service providers, could be more difficult to introduce.
A decision also could affect how the FCC manages its rulemaking proceedings. For example, the FCC will need to develop a strong and detailed record to support its exercise of rulemaking authority and the content of the rules it promulgates. This would give increased significance to participation in rulemaking proceedings by interested parties and encourage more challenges to FCC action.
For these reasons, the Loper Bright Enterprises case is worthy of tracking.
Established in 1897, Nelson Mullins is an Am Law 100 firm of more than 1,000 attorneys, policy advisors and professionals with 33 offices in 17 states and Washington, D.C. For more information, go to www.nelsonmullins.com.
These materials have been prepared for informational purposes only and are not legal advice. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. Internet subscribers and online readers should not act upon this information without seeking professional counsel.