Supreme Court To Review Chevron Deference Impact

 June 11, 2024

The Supreme Court is set to make a pivotal decision that could reshape the regulatory landscape across the United States.

According to the Washington Examiner, the Court will determine whether to overturn the Chevron deference, a legal doctrine that grants federal agencies the power to interpret ambiguous statutes.

Origins And Controversies Surrounding Chevron Deference

Established in 1984, the Chevron deference originated from the landmark case Chevron U.S.A., Inc. v. Natural Resources Defense Council. This doctrine allows federal agencies to interpret ambiguous laws, a power that many business and industry groups argue has led to overly restrictive regulations. The federal government, however, maintains that Chevron deference respects judicial authority and the legislative delegation of power.

The legal challenge to the Chevron doctrine began with a group of fishers disputing a National Marine Fisheries Service mandate. The mandate required fishing companies to fund at-sea herring monitors, a move the companies argued was unauthorized by Congress.

Potential Impacts On Various Federal Regulations

Should the Supreme Court choose to overturn or limit Chevron deference, the impact could be significant. We can anticipate a rise in litigation as various parties contest established regulations.

This could influence rules enforced by agencies like the Consumer Financial Protection Bureau (CFPB), the Occupational Safety and Health Administration (OSHA), and the National Labor Relations Board (NLRB). Notably, regulations such as the CFPB's rules on credit card late fees and bank "junk fees" could be especially at risk.

A Texas federal court recently upheld the Labor Department's minimum salary requirements for overtime exemptions, relying on Chevron's deference. Conservatives argue that eliminating the doctrine will reduce regulatory overreach, and smaller businesses may benefit from a shift in economic policy away from larger corporations.

Broader Economic And Legal Repercussions

The potential reversal of Chevron deference has sparked considerable debate. Karen Harned, a legal expert, highlighted the case as a prime example of the problems associated with the doctrine, saying it essentially forces the regulated to pay for the regulators. Marc Wheat, another critic, described the possible reversal as "one of the most important decisions probably in our lifetime," emphasizing that it affects every federal agency.

Wheat further noted that without Chevron deference, federal agencies might no longer push the boundaries of statute interpretation as freely. The Center for American Progress cautioned that eliminating Chevron could leave CFPB protections vulnerable and increase administrative burdens on businesses. He added:

Chevron has done a lot of violence to our constitutional order. Once Chevron goes away, we will see a lot of overreaching regulations fall by the wayside, and I think that will show up in economic performance numbers.

Perspectives On Regulatory And Economic Shifts

Devin Watkins argued that limiting Chevron deference would likely shift economic policy to benefit smaller businesses and individuals rather than large corporations. O.H. Skinner stated that reversing Chevron could benefit consumers by curbing agency overreach. Skinner also pointed out that the Biden administration has used efficiency standards to promote electric vehicles and discourage fossil fuels, reinterpreting existing statutes and rules.

Legal scholar Joel Zinberg discussed the potential for a flurry of litigation challenging existing regulations if Chevron is weakened or overturned. Zinberg suggested that a ruling to undo Chevron could lead to more regulatory certainty, preventing frequent changes with new presidential administrations. He also noted that Congress might respond by drafting more specific statutes, thereby reducing administrative discretion.

Conclusion And Future Implications

The Supreme Court's impending decision on the Chevron deference could lead to significant changes in the regulatory framework governing various sectors. Established in 1984, the Chevron doctrine has allowed federal agencies to interpret ambiguous statutes, a power that has sparked considerable debate among businesses, legal experts, and government officials. Overturning Chevron could result in increased litigation, affect numerous federal regulations, and potentially shift economic policies to benefit smaller businesses.

Critics argue that eliminating Chevron will reduce regulatory overreach, while supporters believe it respects judicial authority and legislative intent. The outcome of the Supreme Court's decision could bring more clarity to regulatory practices and potentially reshape the economic landscape in the United States.

About Robert Cunningham

With years of experience at the forefront of political commentary, Robert Cunningham brings a blend of sharp wit and deep insight to his analysis of American principles at the Capitalism Institute.

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