Introduction
The administrative state refers to the network of administrative agencies created by Congress to implement and enforce laws, regulations, and policies. Its purpose is to efficiently manage complex regulatory frameworks and address specialized issues beyond the scope of legislative action alone. They derive their authority from statutes and regulations enacted by Congress, which define their jurisdiction, powers, and functions. As the U.S. Constitution does not formally mention these agencies, the courts have embraced functionalism, or an interpretation of the Constitution that views the separate powers of the three branches of government as not intended to operate with absolute independence, but with some degree of interdependence.
However, they remain independent in their specific rules. In ALA Schechter Poultry v. US, for example, the Supreme Court ruled that Congress is not permitted to abdicate or transfer to others the essential legislative functions with which it is vested by Article I of the Constitution of the United States. On the flip side, McCullough v. Maryland states that the existence of a national bank is justified, as the bank serves as an agent of Congress and falls under the necessary and proper clause. This has been interpreted to mean what are conventional, reasonable, and crucial expressions of power. When dealing with the administrative state, the central issue becomes how does the Constitution balance the necessity of efficient government while maintaining a limited federal power.
Unsurprisingly, this has also occurred under not just the roles of the executive or the legislature, but with the judiciary as well. Until recently, as ruled in Chevron v. Natural Resource Defense Council, agencies were given deference to statutory interpretation where Congress could not properly interpret the statutes they created and/or voted on. The reasoning behind this has been that any statute will be open to some degree of interpretation, and agencies - as intended to enact and enforce the law - will inevitably come across edge cases. This approach remained very much in line with the functionalist approach the court normally takes when dealing with agencies. It has also granted agencies a lot of deference to grant themselves a great deal of power.
On June 28, however, the court overturned Chevron and has formally given the power of interpreting statutes back to Congress as the drafters, and the judiciary as the supreme interpreters of the law. Before we discuss the impact, we need to look at…
How did we get here?
Our story begins with three fishing companies: Relentless Inc., Huntress Inc., and Seafreeze Fleet LLC. Collectively, they owned two boats: the F/V Relentless and the F/V Persistence; both of which use small-mesh bottom trawl gear to catch more species of fish for longer trips. For these trips, they were required to carry an observer from the National Marine Fishery Service (NMFS). Historically, these observer’s costs were paid for by the NMFS, but in recent years had deferred the cost to the fishermen, interpreting the Administrative Procedure Act (APA) to say that they didn’t have to bear the cost themselves. When they declared a series of fishing expeditions and were charged for the observers, the fishing companies were unwilling to pay for their regulation, citing the Magnuson-Stevens Fishery Conservation and Management Act (MSA) that created the NMFS and claims that only in the following instances do fisheries have to cover the cost of observers:
Foreign fishing vessels operating within the exclusive economic zone (which must carry observers), see §§1821(h)(1)(A), (h)(4), (h)(6);
Vessels participating in certain limited access privilege programs, which impose quotas permitting fishermen to harvest only specific quantities of a fishery’s total allowable catch, see §§1802(26), 1853a(c)(1)(H), (e)(2), 1854(d)(2)
the MSA expressly caps the relevant fees at two or three percent of the value of fish harvested on the vessels.
Vessels within the jurisdiction of the North Pacific Council, where many of the largest and most successful U.S. commercial fishing enterprises operate, see §1862(a).
the MSA expressly caps the relevant fees at two or three percent of the value of fish harvested on the vessels.
None of these applied here. In February 2020, they challenged the rule under the MSA, which incorporates the Administrative Procedure Act (APA). In relevant part, they argued that the MSA does not authorize NMFS to mandate that they pay for observers required by a fishery management plan. Meanwhile, NMFS argued that even if there was ambiguity in the text, its interpretation is at deference to the agency under Chevron.
What did SCOTUS have to say and why?
The Supreme Court ruled in Chevron v. Natural Resource Defense Council, that if a statute is ambiguous and Congress cannot sufficiently interpret the statute, then agencies have deference to interpret it as they see fit. This time, however, the court reviewed the reasoning behind the Chevron ruling and concluded that it was based on the understanding that Congress deliberately allowed for ambiguities to grant some discretion to agencies for them to navigate potential edge cases. However, this assumption does not consider when statutes may contradict each other as was the case with MSM and the APA; especially, since the APA requires the court to review its text. Additionally, such discretion granted by the Chevron Deference Doctrine was concluded to not approximate reality because ambiguity is not the same as delegation to interpretive power. Further, it assumes that such ambiguities are intentional, which is not often the case. As Chief Justice John Roberts stated in his official opinion:
“As the Framers recognized, ambiguities will inevitably follow from “the complexity of objects … the imperfection of the human faculties,” and the simple fact that “no language is so copious as to supply words and phrases for every complex idea.” (The Federalist No. 37, at 236). Courts, after all, routinely confront statutory ambiguities in cases having nothing to do with Chevron — cases that do not involve agency interpretations or delegations of authority. Of course, when faced with a statutory ambiguity in such a case, the ambiguity is not a delegation to anybody, and a court is not somehow relieved of its obligation to independently interpret the statute…Courts instead understand that such statutes, no matter how impenetrable, do — in fact, must — have a single, best meaning…So instead of declaring a particular party’s reading “permissible” in such a case, courts use every tool at their disposal to determine the best reading of the statute and resolve the ambiguity…It therefore makes no sense to speak of a “permissible” interpretation that is not the one the court, after applying all relevant interpretive tools, concludes is best. In the business of statutory interpretation, if it is not the best, it is not permissible…Perhaps most fundamentally, Chevron’s presumption is misguided because agencies have no special competence in resolving statutory ambiguities. Courts do. The Framers, as noted, anticipated that courts would often confront statutory ambiguities and expected that courts would resolve them by exercising independent legal judgment.”
While the dissent was written by Justice Elana Kagan and joined by justices Ketanji Brown Jackson and Sonia Sotomayor, it is argued that this reasoning is flawed in that courts and their judges are not experts in everything. To this Chief Justice Roberts recognized some truth to this point, but the courts have been trusted in legal interpretation for centuries because it has been established that they do have expertise in that field. Accordingly, Roberts, and Justices Amy Coney Barrett, Samuel Alito, and Brett Kavanaugh ruled that agencies do not have the authority to interpret statutes.
Justices Clarence Thomas and Neil Gorsuch concurred with the majority opinion on separate grounds. Thomas concurred on the grounds that the Chevron Deference Doctrine violated the separation of powers. Gorsuch claimed the Chevron ruling violated the doctrine of Stare Decisis, specifically stating that “Chevron deference runs against...centuries-old interpretive rules that fortify those constitutional commitments.”
What Now?
As this is a case that concerns itself with the role of the administrative state, this will likely have an effect on every branch of government and potentially even state governments. Accordingly, it should be looked at separately for each branch.
Judiciary
The immediate fallout of this for the court will be probably a lot more administrative state cases. This is similarly tied to the court’s noticeable departure from the functionalist approach that the court usually uses when interpreting the constitution for administrative state issues. Under the Chevron rule, the agency’s interpretation meant that the federal court system could reliably defer to them without having to worry about interpretive issues going unaddressed. However, without the Chevron rule, the interpretive power vacuum demands that federal courts take center stage.
Does this mean we’ll see the Supreme Court take on entirely administrative agency cases regularly? Possible, but likely not. One of the things that Kagan mentioned in her dissent is that many of these interpretive issues are a matter of policy. Neither Kagan nor Roberts acknowledges something in Constitutional Law called The Political Question Doctrine. Under this doctrine, the Supreme Court grants itself the discretion to not take on cases that may be more political in nature. The most notable example of this comes from Vieth v. Jubelirer, where the court refused to hear a case regarding gerrymandering because a lot of the Supreme Court’s power is derived from the perception of the court being an apolitical body. Many of these interpretive cases that are political in nature would not even be heard in front of the court, as Kagan notes. Even if they do, however, then the court could cite Chicago v. Morales and declare the statute void for vagueness where the interpretations lend themselves to overly political rulings and provides too much discretion for the agency in question.
Legislature
Chevron’s elimination could incentivize Congress to have greater clarity in the statutory text. This is especially the case if the Supreme Court expands the rule in Chicago v, Morales in the near future to statutory interpretation for agencies– “write your bills clearly and with minimal interpretive issues or they’re going to be voided and their passage will have been pointless.” This would also incentivize members of Congress to actually read bills that establish or expand agency powers. We may see less of the “You have to vote on the bill, to know what's inside it” attitude that Congress has had for the last few decades.
However, this assumes Congress passively accepts this ruling without any plans to work around it. If they wanted to, what could the legislature do? Loper Bright’s reasoning means that interpretive powers belong to the federal courts. This, however, does not mean they have to be the district or supreme court(s). Potentially Congress could authorize and appoint administrative judges to agencies whose role would expressly be to interpret statutes as they pertain to their assigned agency. This would theoretically be in compliance, as the power is not within the agency, but their respective court. An argument would exist, as addressed in Kagan’s dissent, that no matter how well-defined a statute is, there will always be some ambiguity, and agencies as executors of Congress will always have edge cases that require their own discretion. If this could be achieved, then under Article III, Congress could then limit the Supreme Court’s jurisdiction to exclude such cases.
If Congress were to try this, however, there would be two precedential cases the Judiciary could use to discredit the administrative judges as unconstitutional. To begin, United States v. Klein established that while the legislature does have expressed power to limit the appellate jurisdiction of the Supreme Court, this is not a power that can be constitutionally abused. If Congresses use such limitation in a way that is not neutral, or effectively decides a case under the guise of limiting jurisdiction (i.e. using administrative judges as interpreters of their agency’s powers under statutory interpretation), then the Supreme Court will overrule them.
Secondly, and in a more damning fashion, would be Cohens v. Virginia, which historically vested the power of judicial review for criminal cases. The reasoning behind this particular decision was that because the courts of state governments are controlled by incentives at their legislature, they are insufficient in determining cases of constitutionality. When judges are appointed to an agency to interpret statutes surrounding the power of said agency, a similar line of reasoning may apply.
The Executive and the Administrative State
Regardless of how Congress reacts to this ruling, the president’s duty of appointing members to the agency is going to get a lot harder. If Congress accepts this ruling and takes the “clear as crystal statutes” approach, then they may become very critical of any and all appointments that the president nominates. Afterall, if they have to ensure their meaning so that the courts don’t have to, they will want to make sure that the head of any agency interprets the statutes similar to how they interpret it. It is imaginable such appointment hearings becoming as hostile as Supreme Court justice appointments can become. If Congress tries to delegate interpretive power to administrative judges, then the president will likely have to nominate people to those administrative courts. This will be a time consuming task and may take time from a president’s agenda depending on their specific management style.
The States
Many state constitutions model their own from the U.S. Constitution; often even using the same lines verbatim. Supreme Court cases like Loper Bright v. Raimondo could be used by state constitutional lawyers as persuasive tools to obtain similar ruling in regard to statewide agencies. If this occurs, then this could see Loper Bright’s impact not just on the federal level, but at the state level in many cases.
In the long term, however, we could see the states having more power over a variety of matter. Generally speaking, states are frequently preempted by federal laws that prevent them from dealing with the issues those laws are tackling in a way that states might approach said issues. As agencies inevitably diminish in their power and the scope of their authority weakens, the fall out could be used by state governments to reclaim authority to tackle issues that effect their state their own way. It is difficult to elaborate on this topic in specifics as how every state reacts to this opportunity will vary. Yet the opportunity will exist, and many states are going be taking some initiative with some interesting approaches to formerly preempted grounds.
Conclusion
Many on the right and the left have called this a blow to the administrative state. In many ways, they are correct. Courts have attempted a delicate balance between efficient yet limited and representative government. While Loper Bright v. Raimondo does definitely swing the pendulum closer to the latter; the administrative agency will live on and it may be able to work as normal even without the Chevron Deference Doctrine. What has truly changed is the role of interpreting administration has shifted more to the branches of power, and not their interdependent agents. Time will have to tell, however, if the approach will remain for limited and representative government; or if the court returns to its more functionalist approach.