In this episode of “The Eyes on Washington Podcast,”
Public Policy & Regulation attorney Rich Gold is joined by
appellate litigation attorney Amit Agarwal and public policy
attorney Dimitrios Karakitsos to discuss the U.S. Supreme
Court’s impending decision related to Chevron
deference. Loper Bright Enterprises v. Raimondo and
Relentless v. Department of Commerce were consolidated and
presented to the high court. Attorneys essentially have asked the
justices to revisit its Chevron doctrine, which reviewing
courts use to defer to agency interpretations of the statutes
they’re charged with administering. Mr. Gold, Mr. Agarwal and
Mr. Karakitsos weigh the legal and political implications of the
Supreme Court’s decision ahead of its release.
See related Holland & Knight alert, “U.S. Supreme Court May Soon Discard or Modify
Chevron Deference,” May 20, 2024.
Holland & Knight has announced the formation of a Chevron Deference Working Team as
part of efforts to be prepared for upcoming regulatory changes and
evolving legal decisions surrounding the Chevron deference
doctrine. For more information or assistance regarding the
Chevron deference doctrine and related legal matters,
please reach out to the Chevron Deference Working Team.
Podcast Transcript
Rich Gold: Hello everybody. Thanks for joining
us today. This is Rich Gold with the Holland & Knight Public
Policy & Regulation Group here. We’re here to talk to you
today about one of the most important cases coming down at the end
of the term for the Supreme Court here, which we’ll review, the
concept of Chevron deference. That is the degree of
deference judges pay to agency interpretation of federal statutes
and what Congress intended. Here with me today, I’ve got Amit
Agarwal, who is co-chair of the Holland & Knight Appellate Team
and previously was a Supreme Court clerk for Justice Alito and
clerked for current Justice Kavanaugh when he was on the D.C.
Circuit. Most recently before joining Holland & Knight, he was
the Solicitor General for the state of Florida. Also here to look
at the legislative and regulatory implications with us today is
Dimitri Karakitsos. He is former counsel to the Senate Environment
and Public Works Committee about eight years ago under Senator
Inhofe, and many years of service on Capitol Hill, drafting
statutes, including the Lautenberg Act, which reauthorized TSCA,
and is generally considered a legislative drafting and
congressional expert. So thank you both for joining me today.
Let’s start out on the decision side. Why don’t you give us
a little background on the case that’s pending and what you
heard, Amit, in oral argument, what we should be looking for here,
coming down from the court and perhaps, any indication of what you
think timing is as we record this, just after Memorial Day.
Amit Agarwal: Sure. So we’re talking about
two cases that have been consolidated in front of the court:
Loper Bright v. Raimondo and Relentless v. Department
of Commerce. Both of them are essentially addressing the same
issue, and that is whether the Supreme Court should be revisiting
its Chevron doctrine that you laid out. That’s a kind
of familiar two-step process by which reviewing courts assess
agency interpretations of the statutes that they’re charged
with administering. Under step one of the Chevron
framework, the court would look to traditional tools of statutory
interpretation to decide if Congress has spoken to the precise
question at issue. And if the court determines that the issue is
kind of ambiguous, then it’s step two. They would defer to a
reasonable agency interpretation of that statute. So that’s
long been the law. It’s been 40 years. Chevron is
considered to be a bedrock decision in the field of administrative
law. And now we’re talking 40 years later about the possibility
of jettisoning that doctrine altogether. The court heard argument
in these consolidated cases back in January. And, in a nutshell, we
don’t really know what they’re going to do. It seems like
there’s three justices who are pretty firmly committed to
overruling the doctrine in its entirety. That would be Justices
Kavanaugh, Gorsuch and Thomas. It seemed like there were also three
justices on the other side who appeared to be committed to
retaining the doctrine, that would be Justices Sotomayor, Kagan and
Jackson. And there were three that were kind of in the middle: the
Chief Justice, Justice Barrett and, I would say, Justice Alito as
well, had asked some questions suggesting that he’s taking a
look at this pretty carefully. And so we don’t know exactly
what the court is going to do. What we do know is kind of broadly
speaking, there are three buckets of possibilities. Possibility one
is that the court could abandon the doctrine in its entirety. That
would be a sea change in the field of administrative law. You could
have vast implications for legislation, for regulatory process and,
of course, for litigation. And then there’s a second
possibility that came out at the argument, and that’s that the
court might, to kind of a lesser step of scaling the doctrine back,
maybe re-emphasizing that traditional tools of interpretation have
to really be exhausted — that’s step one of the
Chevron framework — but might not get rid of the
doctrine altogether. And then there’s possibility number three
as well, which is that the court could decide the case very
narrowly and could really not tamper with the existing
Chevron doctrine, and could instead just kind of apply the
doctrine to the particular facts of this case and say what the
agency did in this case is, for example, not permissible under step
one of the Chevron framework because the statute just
doesn’t allow that. So we have kind of three buckets of
possibilities. I’m happy to talk about those different
possibilities and the practical implications more.
Rich Gold: That’s great. Thanks for laying
out that groundwork in an easily understandable way. So how did we
get here? Kind of what’s leading to the court being in this
position? Not from the particular cases, but from the perspective
of why judges and this court in particular are looking at
Chevron as something that needs to be revisited.
Amit Agarwal: So I think it’s been a long
time coming. You’ve had some of the conservative justices in
particular, over the years, expressing the view that
Chevron kind of represents a massive shift in power from
the legislative branch to the executive branch. And the argument is
that it’s really Congress that should be making policy
decisions and making laws, and instead, under the Chevron
doctrine, Congress doesn’t have to do what it’s supposed to
be doing. Instead, it passes these kind of vaguely worded statutes,
lets the agency take it from there, and the agencies kind of do
whatever they want, and they’re not being constrained
adequately by the courts. So that’s one criticism. The other
criticism is that this is really taking away a core judicial power
that, under our constitutional separation of powers — it is,
you might remember, from Marbury v. Madison —
that’s emphatically the province and the duty of the judicial
department to say what the law is. That could be considered to be
maybe the core proposition of American jurisprudence for the last
200 years. There are some people, especially I’d say on the
conservative side, who think that the Chevron doctrine is
in substantial tension with that core proposition of American
jurisprudence. And then you have kind of concerns about just
practically, how is this working? Is it a formula for stability?
Does it really kind of cultivate the kind of reasonable reliance
that we want regulated entities and the citizenry to be able to
have? And so one thing that came out of the oral argument is that
there’s a lot of concern about Chevron enabling agency
flip-flopping. So the agencies will take one position on an
ambiguous statute in one administration, then you’ve got an
election, a new administration comes in, and all of a sudden the
entire regulatory framework kind of changes overnight. And you
definitely heard a lot of concern from the justices about that. And
whether that’s kind of a formula that is, you know, is where
you have agencies doing what they’re supposed to be doing,
which is executing the law under our separation of powers instead
of making the law. So I’d say those are some kind of the big
picture concerns that some of the justices have expressed that
might be animating this willingness to revisit the Chevron
doctrine.
Rich Gold: So Chevron came in the
wake, in the early ’80s, of the major, kind of, bedrock
lawmaking, and increase in authority of the executive branch
agencies in a way that they didn’t preexist. We had, you know,
agencies like the Environmental Protection Agency and Occupational
Safety and Health Administration sort of pop up overnight in the
’70s and be staffed out over a period of time with tens of
thousands of employees who were, in essence, creating new standards
for the American public, for industry and for all of us to live by,
and arguably benefit in some way, shape or form, writ large.
We’re at a point now where if the authority of those agencies
is in question and revisited, we are going to see the shift of
power. How do you see it, from a legal perspective, impacting
agencies on a daily basis? And, frankly, the structure and
authority of the executive branch.
Amit Agarwal: A great question. And what we
know is that there’s a lot at stake, and that this decision
could have a really big impact on the way that agencies do their
job. It could have a really big impact, potentially, on the
legislative process, and certainly a big impact in terms of the
ways that courts assess cases or challenging the legality of agency
action. But the real answer is we don’t know exactly what
impact the case is going to have. Because in part, we don’t
know what the decision is at this point, but also because there are
just kind of empirical questions that came out of the oral argument
that we don’t know the answers to. So, for example, let’s
assume for the sake of argument that the court decides that
it’s going to overrule the Chevron doctrine in its
entirety. Well, one question then is how will reviewing courts
respond if you get rid of Chevron deference and you
replace it with what used to be the law, and that is what’s
called Skidmore deference. Skidmore deference
basically says, well, you know, the reviewing court should take a
careful look at what the agency says because the agency consists of
experts and they know how this statute works. So you should take a
close look at what the agency says. And if you find what the agency
is saying persuasive, then you go with that. And that would place a
lot of emphasis on the agency to come up with a consistent, and
maybe even a contemporaneous, interpretation of the statute. So
that would be kind of the, you know, the fallback if
Chevron is overruled. Now, we do have some empirical
evidence that courts rule in favor of the government about 20
percent more of the time when they purport to be applying
Chevron than when they purport to be applying
Skidmore. So that will give you some sense of this could
make a substantial difference in the litigation and litigation
involving agencies. But we also don’t know how courts are going
to respond to a change in the analytical framework. And let me give
you an example that that suggests why. Courts for 40 years have
really gotten in the habit of deferring to reasonable agency
interpretations of the statutes that agencies are charged with
administering, especially when you’re talking about really kind
of technical questions that seem to call for expertise, and where
there’s just not kind of a clear answer in the statute. So one
thing we don’t know is how will courts respond if you change
the analytical framework? We know that they’re going to
nominally be applying a different analytical framework, but is it
possible that you’re going to have judges who say, look, this
is a really tough question, it’s a question the statute just
doesn’t seem to speak to directly, and so I’m going to
reach the same bottom line conclusion, and that is I’m going to
go with the agency interpretation, but I’m slapping a different
analytical label on it. And the truth is that we just don’t
know kind of how big the proportion of cases it is, where the
change in the framework is going to make a really substantial
difference. I think what we do know for sure is that if the court
abandons the Chevron doctrine, then it will be easier to
challenge agency interpretations of statutes. We don’t know
exactly how much. And then, you know, another example in terms of
like, how does this affect the ways that agencies do their work, do
their business? Well, you know, one thing that we might see is
agencies might start to rely more heavily on statutory text and
other indicia of congressional intent, because they want to make
sure that their decisions survive judicial review. And those would
be the types of things that courts would be paying more attention
to in a post-Chevron world. So that’s something that
you could probably predict. On the other hand, it’s also
possible that your agencies might respond by saying we no longer
get a lot of benefit by resorting to these complex, burdensome,
protracted processes like rulemaking. And so maybe we don’t
resort to those processes as much as we otherwise would, because
it’s just not worth it from a practical standpoint.
Rich Gold: So let me ask you, sort of, the
man-in-the street question on this: Skidmore versus
Chevron. Explain to me, with you as judge, the question
effectively you’re asking in one versus the other, and sort of
how you think that that changes your view of a particular rule.
Amit Agarwal: Yeah. So under Chevron,
bottom line, we defer to a reasonable agency interpretation of an
ambiguous statute. Under Skidmore, you really, as a
reviewing court, as a judge, they’re going to go with what you
think is the right answer. And you only go with your agency if you
think the agency’s view is persuasive. Justice Kagan, at the
oral argument said, you know, that’s not really deference. That
basically means zero deference. And you pretty much do what you
want to do anyways. And so it’s not really a deference
doctrine, it’s more a way of saying be respectful and take a
close look at what the agency says. And I do think that’s a
substantial difference.
Rich Gold: So this really comes in a space, and
I want to get to the impact on Congress and rule writers in a
minute with Dimitri, but this really puts not only an immense
amount of power in a judge hearing a case in a way that is
different than Chevron. Right? Not that you’re phoning
it in on Chevron, but, you know, you definitely are in the
role of reviewing, for instance, as a clerk, I’m sure,
reviewing all the comments and trying to see whether the agency
conclusion is supported by the comments and reviewing, obviously,
the black letter of what Congress said, but also other legislative
intent and including conference reports to follow the trail through
and basically ask the question at the end, do I end up where the
agency ended up?
Amit Agarwal: Yeah, absolutely, absolutely.
And, you know, I think that that reminds me of one of the important
points that came out in the argument, which is the justices who
were more in defense of Chevron, saying, look, there might
be some problems with the Chevron framework. Maybe
it’s hard to decide when a statute is so ambiguous that you say
that the law has sort of run out and that it’s proper to defer
to a reasonable agency interpretation. But you also need to compare
the Chevron doctrine to what is the real-world practical
alternative to Chevron. And the practical alternative may
not be Congress being super clear about what it wants, and there
not being gridlock, and you have kind of more congressional
legislation that carefully resolves these policy issues. Instead,
what you might have is unelected and politically unaccountable
courts being tasked with deciding all kinds of questions that are
nominally presented as questions of statutory interpretation. But
for all practical purposes, they’re just kind of straight up
questions of policy to which Congress has not clearly spoken. And,
you know, I think that’s one of the things that the court is
going to have to take a careful look at, is what are the real-world
practical alternatives that, specifically in the context of here
we’re dealing with statutory story sizes, because this is not a
constitutional holding that the court is revisiting, it’s
really a question of statutory interpretation.
Rich Gold: So Dimitri, let me go to you now as
somebody who, as a committee counsel, has a lot of words and a lot
of statutes that have gone through the process at this point. As
you’re sort of hearing what Amit is saying, in terms of what
Chevron versus Skidmore could mean — and
again, we’re just using that as a stalking horse as a potential
for change, I’m not saying that’s where the court is going
— how does that change how you operate in terms of drafting,
if you’re on the Hill right now? And how do you think the
process changes for the daily sausage making in the House and the
Senate?
Dimitri Karakitsos: Yeah, I think Amit did a
great job of laying out this on the forefront. But I think you have
to change both how you’re thinking about advocating, you know,
for Congress as well as federal agencies. Oftentimes, you know,
what you see in Congress is, for a number of reasons, often
you’ve got a very difficult negotiation going on that you kick
some issues down the road, and you let agencies make some of the
tough calls, through that kind of legislative ambiguity. You know,
I think under Chevron, Congress could rely on the
agency’s reasonable interpretation to hold up in court. And, of
course, as we’re discussing, depending on what happens, you
know, maybe incumbent on Congress to draft statutory language that
is just much more specific and explicit. You know, I think from an
advocacy perspective, you know, when you’re lobbying the Hill
on specific policy issues in a post-Chevron world,
you’re probably going to have to be much more explicit in
working with offices to ensure the language, kind of, clearly
states what the intention is. And then I think one other aspect of
it, you know, we used to kind of chuckle at or ignore congressional
findings, or things like committee reports and floor speeches from
bill managers. I think in a post-Chevron role, those
things can become much more relevant and important in guiding
agencies and really in a way that a court reviews a statute or
agency decision making.
Rich Gold: On the agency front, it seems to me,
or at least I think, we often feel sometimes agencies know the
result they want and pick and choose from, you know, comments in a
proposed rule, in terms of what supports that result at the end of
the day. It seems to me where you’re in a lesser degree of
deference, whether it’s Skidmore or something else,
that all of a sudden comments become this, sort of like golden
level of, of intent, both congressional intent, where you can cite
that as a commenter, but also, sort of impact of regulations and
what agencies need to consider, the judges when they’re
reviewing the regulation can kind of seize on and say, you know,
agency, this makes more sense to me than what you said.
Dimitri Karakitsos: Yeah, I would think from an
internal agency perspective, you have to look at every decision you
make on a totally different lens because it’s not necessarily
about what is a reasonable interpretation. You know, I think one
thing we didn’t talk about is some of the discussions within
the court now about there could be multiple reasonable
interpretations, right? And having this, kind of, Chevron
level of review means the agency could have one, but I could have
one and you could have one, and maybe ours are better or more
closely track some of the congressional intent and language around
it. But because the agency was also reasonable, it stands. I mean,
I think they will have to be much more cognizant and careful to
track the legislative language and the legislative attempts
surrounding and not be able to just say, well, this, you know, is,
is fairly reasonable of a decision so we’ll be OK here.
Rich Gold: You know, one of the things
we’ve seen in the Biden Administration has been somewhat short
shrift of stakeholder engagement process before proposed and final
rules were put out in order to get a lot of their major rules done
so that they couldn’t be subject to Congressional Review Act
consideration, if the presidency changes in the election in
November. And what that has meant is that the agency is doing, kind
of, more of what it wants with less impact from stakeholders here.
And yet, at the same time, while the agencies may have, you know,
avoided claw back under the Congressional Review Act, if they are
operating under a new standard of deference, where there were
really good arguments in the record, you know, commenting on the
proposed rules that they didn’t consider in finalizing the
rules, a judge looking at that with Skidmore, or some
lesser degree of deference, can say, well, agency you didn’t
even, you know, in your final rule, you didn’t even mention
these comments that are critical to me. I’m remanding to you
and telling you explain to me why those aren’t persuasive. So
it seems to me that the Biden Administration has chosen to elevate
the Congressional Review Act timeline as a very important thing
here, not taking into consideration the potential of less deference
in review of these rules, and the fact that judges may look at the
record and disagree with the agency conclusion and say, agency,
have it back again and, you know, explain to me what you did here,
why you didn’t agree with this commenter and whether you should
have done it differently, given that we’re no longer under
Chevron deference. So it’s going to be very
interesting to kind of watch how this all plays out with the
elections coming up in the fall. We have, I don’t know, a dozen
significant rule makings, you know, from the SEC rule out there on
climate disclosure, to the EPA rules on the auto industry and the
electric utility industry, to a number of others that are going to
all be, you know, going through judicial review here after the
court’s decision. So we’re going to see in real time, you
know, how agencies engage in the court system here, how judges take
whatever new authority they get here into consideration in
reviewing those rules. And, at least I think this, you know, this
is going to take a decade to settle out. I don’t know what you
to think in that space.
Dimitri Karakitsos: Well, I was going to say
don’t forget too that Congress can weigh in the judicial review
process, right? I mean, they can file briefs, and how impactful is
that? If you have the top name on the drafter of the legislation as
the top name on the, you know, the draft for filing a brief
too.
Amit Agarwal: Yeah. Rich, I think you hit the
nail on the head. There’s a lot that’s packed into this,
and we just don’t know how it’s all going to play out. And
it could very well take 10 years, maybe even longer, to figure out
what are the real-world practical impacts, especially if the court
goes with the nuclear option and abolishes Chevron
altogether. The Solicitor General, at argument, made a pretty
dramatic statement in her introduction when she said this would
introduce just a veritable shock to the legal system. So, you know,
I think everyone is well aware that this is a pretty foundational
doctrine in administrative law, and that we need to take a careful
look at this case, whatever the decision is, to figure out the
practical impacts for litigation, for legislation and for the
regulatory process.
Rich Gold: Well, there’s probably no better
place to end than right there, at least for now. And I
shouldn’t say “end,” I should say “pause,”
because we will be back with you when we all have a decision to
talk about in the next, you know, three to four to five weeks or
so. So thanks very much for joining us today. This is Rich Gold at
Holland & Knight with your Eyes on Washington update.
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