Updated at 12:45pm Eastern
In a major ruling announced Friday morning by the Supreme Court of the United States, the power of the executive branch of the federal government in carrying out regulatory policies placed into effect by agencies such as the Federal Communications Commission has been diluted, giving more power to the courts.
The 6-3 decision essentially erases the “Chevron deference” doctrine, established in 1984, and is a move one prominent Washington, D.C., attorney told RBR+TVBR in January could be beneficial for those challenging the Commission on its rulemaking decisions.
What is the “Chevron deference”?
In short, it gave judges a blueprint as to when they could defer to a federal agency’s view of a law in a rulemaking. For agencies such as the Federal Trade Commission and the FCC, this gave them the power to implement a wide range of regulations, including “net neutrality” and the elimination of noncompete agreements.
The ability to enforce regulatory policies as law stems from the landmark 1984 case Chevron v. NRDC.
As explained by Wilkinson Barker Knauer LLP Partner David Oxenford in a January 2024 interview, this established the so-called “Chevron deference,” in which the Courts will defer to the decision of an administrative agency such as the FCC when interpreting an ambiguous Congressional statute unless the agency’s decision is arbitrary and capricious or contrary to law.
“What that basically means is that, if a policy adopted by Congress is capable of many different interpretations, the Courts will defer to the interpretation of the expert agency that is supposed to enforce that statute, unless the interpretation cannot be squared with the language of the statute or the record before the agency,” Oxenford explained.
The 6-3 ruling on ideological lines favoring conservatives on the highest court in the land all but ends that practice. Instead, the judicial branch will be empowered to rule based on their own interpretation of the law, ending the 40-year belief that agency “experts in the field” were better than a judge to determine the outcome of a legal challenge.
This could make it more difficult for an agency such as the FCC to implement regulatory policies that are potentially divisive, such as its Title II broadband classification. And, it could open lawsuits against the FCC seeking looser local ownership rules to judicial decision-making, rather than a remand to the agency and an order to re-write the rules.
The likelihood that the Supreme Court would discard the “Chevron deference” increased in January, when the nation’s highest judicial body heard oral arguments in Relentless Inc. v. Department of Commerce. The Court combined its consideration of this case with Loper Bright Enterprises et. al. v. Raimondo. That would be Gina M. Raimondo, who serves as the 40th Secretary of Commerce and was sworn in by Vice President Kamala Harris on March 3, 2021.
With a decision reached, Chief Justice John Roberts delivered the opinion, in which he was joined by Justices Alito, Thomas, Gorsuch, Kavanaugh and Barrett. He wrote, “The Administrative Procedure Act requires courts to exercise their independent judgment in deciding whether an agency has acted within its statutory authority, and courts may not defer to an agency interpretation of the law simply because a statute is ambiguous; Chevron is overruled.”
In particular, the majority declared:
Chevron has proved to be fundamentally misguided. It reshaped judicial review of agency action without grappling with the [Adminstrative Procedure Act], the statute that lays out how such review works. And its flaws were apparent from the start, prompting the Court to revise its foundations and continually limit its application.
Justices Kagan, Sotomayor and Jackson dissented. In her dissent, Kagan explained, “Under Chevron, a court uses all its normal interpretive tools to determine whether Congress has spoken to an issue. If the court finds Congress has done so, that is the end of the matter; the agency’s views make no difference. But if the court finds, at the end of its interpretive work, that Congress has left an ambiguity or gap, then a choice must be made. Who should give content to a statute when Congress’s instructions have run out? Should it be a court? Or should it be the agency Congress has charged with administering the statute? The answer Chevron gives is that it should usually be the agency, within the bounds of reasonableness. That rule has formed the backdrop against which Congress, courts, and agencies—as well as regulated parties and the public—all have operated for decades. It has been applied in thousands of judicial decisions. It has become part of the warp and woof of modern government, supporting regulatory efforts of all kinds—to name a few, keeping air and water clean, food and drugs safe, and financial markets honest.”
In responding to the 6-3 decision, Kagan commented, “Today, the Court flips the script: It is now ‘the courts (rather than the agency)’ that will wield power when Congress has left an area of interpretive discretion. A rule of judicial humility gives way to a rule of judicial hubris … A longstanding precedent at the crux of administrative governance thus falls victim to a bald assertion of judicial authority. The majority disdains restraint, and grasps for power.”
By overruling Chevron, though, the Court does not call into question prior cases that relied on the Chevron framework. “The holdings of those cases that specific agency actions are lawful” —including the Clean Air Act holding of Chevron itself in 1984— the court ruled. Thus, they are still subject to statutory stare decisis despite the Court’s change in interpretive methodology.
The full opinion of the court can be read here.
WHAT’S NEXT FOR THE FCC?
How the Supreme Court’s decision to overrule the “Chevron deference” will impact the FCC was addressed by Oxenford earlier this year. He pointed to the Communications Act Section 307(b), which says the FCC, in determining how it will distribute broadcast frequencies, “shall make such distribution of licenses, frequencies, hours of operation, and of power among the several States and communities as to provide a fair, efficient, and equitable distribution of radio service to each of the same.”
To interpret this statute, the FCC has made all sorts of rules adopting FM and TV allotment procedures, and policies for other services, that include favoring applicants providing service to areas having no other service, or to underserved areas. “The Courts will generally defer to the FCC’s decisions on issues like these interpretations as the FCC is presumed to be the expert agency,” Oxenford says. “Even if the Judges on the Court may think that a particular decision is not the best way of doing things, if the agency decision is a reasonable interpretation of the statute, the Court will not substitute its own judgement for the agency decision.”
Now that Chevron has been overturned, don’t expect a panic in the offices of FCC Chairwoman Jessica Rosenworcel or Media Bureau Chief Holly Saurer. “Many of the headlines that this would gut the ability of agencies to regulate are overstated,” Oxenford said. Rather, the Courts now have greater discretion to question the decision of an agency and to substitute the decisions of the judges for that of the agency as to the correct interpretation of an ambiguous statute.
Yes, this could lead to more agency decisions being overturned. But, Oxenford said, “It could also lead to more conflicting Court decisions as to what the best interpretation is when an agency is asked to interpret and implement an ambiguous statute as different courts may have differing opinions of what is the best interpretation of an ambiguous statute.”
In the plainest terms, Oxenford believes the decision empowers those challenging agency rulings more ammunition to challenge an agency decision. “They can argue that the agency did not make the right decision, and not be limited (as a challenger is now) to simply arguing that the agency decision that was unreasonable as it was contrary to the statute or lacking a basis in the administrative record. It would not stop agency actions, it would just subject them to more scrutiny.”
HOUSE E&C LEADER CHEERS SCOTUS RULING
In response to the Supreme Court’s 6-3 decision ending forty years of the Chevron deference, House Energy and Commerce Committee Chair Cathy McMorris Rodgers (R-Wash.), who is not seeking reelection, commented, “Article I of the Constitution established Congress’s role to write the laws of the land—not the Executive Branch. The Supreme Court’s ruling today will help restore the proper balance of power as the Founders envisioned it. Moving forward, major decision-making authority will no longer automatically be deferred to unelected, unaccountable bureaucrats. Power has been placed back in the hands of the American people and their elected representatives, as the Constitution prescribes.”
To demonstrate the ideological divide on the Supreme Court decision, Democratic California Senator Alex Padilla said in a statement that today’s ruling “once again shamefully overturns decades of precedent, stripping regulatory authority from federal subject matter experts with substantial experience and handing it over to judges with no previous training or expertise on complex regulatory matters. This decision is severely misguided and will move us further from governing decisions that are rooted in facts and science. With rules governing environmental protection, health care, public safety, and much more at stake, there is far too much on the line to hand these consequential determinations to judges who lack the technical expertise to make these critical decisions.”
