Over the past several years, the Supreme Court’s balance has unquestionably shifted quite heavily in the direction of justices possessing a more conservative, small government-minded judicial philosophy. This transformation is the consequence of multiple elections, strategic maneuvering by a savvy (some might say, unscrupulous) Senate leader, and the inherent risks of lifetime appointments when the life of a justice ends at an inopportune moment in history. In addition to a rash of many other conservative-leaning rulings over the past few years, these dynamics recently culminated in last week’s landmark decision to overrule Chevron deference, a judicial principle established way back in 1984 in the Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc. ruling.
Chevron required courts to defer to a federal agency’s interpretation of ambiguous statutes it administers, as long as the interpretation was reasonable. Overturning this long-standing precedent will undoubtedly have far-reaching implications. Indeed, it may fundamentally alter how regulatory agencies operate and how industries and other stakeholders engage with the federal administrative agency rulemaking process, including before the Federal Communications Commission (FCC). In the opinion of the author and as explained in this article, when the dust settles and we look back in five or ten years, the decision to abandon Chevron deference is likely to prove to be a net positive for stakeholders and those who serve their interests.
The Loper Bright Enterprises Decision
In the recent Supreme Court case, Loper Bright Enterprises v. Raimondo, the Court addressed the principle of Chevron deference head-on. While the specific facts of the case involved a dispute over the interpretation of federal regulations governing the fishing industry, the Court’s decision to overturn Chevron deference was based on broader judicial principles. The Court held that deferring to agency interpretations of ambiguous statutes undermines the judiciary’s role in interpreting the law and effectively allows agencies to legislate without accountability. The majority opinion emphasized that it is the judiciary’s responsibility to say what the law is, not unelected bureaucrats.
Increased Industry Participation in Rulemaking
Over the next several years, we can expect to see a significant uptick in industry participation in the regulatory sausage-making process. With Chevron deference no longer in play, the record of the rulemaking proceeding and the establishment of standing to appeal through participation will become central to a wave of appeals to the appellate courts. Industry stakeholders will be more incentivized to engage actively and thoroughly in the rulemaking process to build a solid record and safeguard their interests.
Implications for the FCC and Other Agencies
Federal agencies, including the FCC, will no longer be able to base decisions solely on policy preferences. Historically, agencies have sometimes taken in comments from the industry and the public but largely ignored them or selectively used those that supported their preordained policy preferences. Moving forward, agencies will need to give significant weight to the evidence presented during rulemaking processes. The risk of being overturned by the courts will be too high if they fail to do so, leading to a scenario where everything could be overturned, and nothing would stick.
These changes will not happen overnight, but they are inevitable byproducts of a system where federal agencies are no longer given judicial deference. When I first entered the practice of law in 1998, Chevron deference was effective. Federal agencies had not yet adapted their practices to a judicial system that handed them victories in the majority of appeals. Over time, as more appeals of FCC actions to the courts ended in losses for the industry, the FCC became emboldened, and the industry became gun-shy. Why spend money appealing to the Courts of Appeals if the issue isn’t worth taking to the Supreme Court, knowing that 9 out of 10 times the appellant would lose at the Appellate level, and also knowing that very few appeals ever make their way to SCOTUS?
A New Approach to Rulemaking
If there’s a glimmer of optimism underlying the Court’s decision to overturn Chevron deference, it’s not that we can now expect Congress to write laws more clearly, leaving less room for ambiguity. That’ll never happen. No law would ever pass if the linguistic requirements required avoidance of all ambiguity! The hope lies in the potential for federal agencies to approach their rulemaking processes from less partisan perspectives, driven by evidence rather than desired policy outcomes.
Federal agencies will need to give weight to the evidence presented by all sides of an issue and produce rules and regulations built on a solid evidentiary foundation. If they do not, they risk having their rules overturned by the Courts of Appeals. This knowledge and awareness about the increased importance of evidence-based decision-making will permeate throughout the universe of stakeholders. Ultimately, this will lead to greater participation, more in-depth participation, and more evidence-driven participation in the rulemaking process.
The Legal and Economic Implications
For lawyers and law firms, this shift represents both a challenge and an opportunity. Clients will be more willing to invest in comprehensive legal support when the odds of winning on appeal are no longer stacked against them. This could result in a more dynamic and robust legal market, where the quality of legal and regulatory advocacy plays a more significant role in determining outcomes.
In conclusion, the Supreme Court’s decision to overrule Chevron deference is set to redefine the relationship between federal agencies, the courts, and the industries they regulate. While the immediate effects will take time to materialize, the long-term implications promise a regulatory environment where evidence and thorough participation play critical roles. This change could foster a more balanced and equitable regulatory process, benefiting industries, regulators, and the broader public.
*DISCLAIMER: The views and opinions expressed in this Article are solely those of the author, Jonathan Marashlian, and do not necessarily reflect the official policy or position of our law firm, Marashlian & Donahue, PLLC, The CommLaw Group; this Article is intended for informational purposes and aims to provoke thoughtful discussion on the subject.
