This week, the Supreme Court delivered two decisions that severely curtail the federal government's authority, including the capacity of agencies to enact laws and carry out specific enforcement actions.
The majority in the Loper Bright Enterprises et al. v. Raimondo decision on June 28 struck down the Chevron deference concept, a 40-year-old precedent. In cases where legislation are ambiguous, courts were obligated by this judgment to give weight to the reasonable interpretations made by agencies.
More than 18,000 federal courts have referenced Chevron, which the Congressional Research Service describes as "unquestionably one of the foundational decisions in administrative law."
The high court overruled Chevron, holding that courts must use the "best" interpretation of the statute and must employ their conventional instruments of statutory interpretation. This sparked a number of inquiries about the legislative process and the interpretation of legislation by agencies.
In a different decision on June 27, the majority in Securities and Exchange Commission (SEC) v. Jarkesy reinforced the judiciary while weakening agency power in a similar manner.
According to the majority, the SEC erred in applying civil fines via internal tribunals. The court determined that the SEC, which was established in 1934 and granted permission to employ internal processes during the 2008 financial crisis, must instead seek civil fines via jury trials in Article III courts in accordance with the Seventh Amendment.
Here are a few key conclusions drawn from each case's ramifications and views.
Justices Clarence Thomas and Neil Gorsuch submitted concurring opinions in Loper Bright, with Chief Justice John Roberts writing the majority decision.
Justice Gorsuch wrote, "Today, the Court places a tombstone on Chevron no one can miss." "By doing this, the Court restores judges to the interpretive guidelines that have guided federal courts since its Founding," the speaker said.
In their decisions in Chevron, both sides stated that the court's ruling was a significant break from established practice. Time may be the sole indicator of the long-term effects on the federal government, even while their choices provide hints about the consequences.
The ruling on June 28th is probably going to force agencies to reevaluate how they apply a number of legislation.
When the court reverses precedents, like Roe v. Wade, it usually takes into account arguments pertaining to "stare decisis," a Latin expression that translates to "let the decision stand." Reliability, or the notion that Americans have and will continue to rely their judgments on the court's precedent, is one of those considerations.
Even as a well-established precedent, Chevron has become less reliable for most people.
The majority said, "It is hard to see how anyone could reasonably expect a court to rely on Chevron in any particular case or expect it to produce readily foreseeable outcomes given the Court's constant tinkering with and eventual turn away from Chevron." "And Chevron affirmatively destroys reliance interests by allowing agencies to change course even when Congress has given them no power to do so, rather than protecting reliance interests."
The opposition, on the other hand, contended that by abdicating the authority of courts, the majority rendered stare decisis a farce.
Referring to Chevron deference and stare decisis, Justice Elena Kagan said in the dissent that "the majority cannot destroy one doctrine of judicial humility without making a laughing-stock of a second." "If opinions had titles, Hubris Squared would be a good candidate for today's," she said.
"Pulling a rug out from under Congress without even acknowledging that its decision upends over two centuries of settled Government practice," Justice Sonia Sotomayor also blasted the majority in Jarkesy.
Both Jarkesy and Loper Bright moved some administrative authority to Article III courts. According to Jarkesy, the court gave jurors the authority to decide cases as part of the Article III procedure, and judges often uphold their verdicts.
This implies that the SEC must include traditional courts in its enforcement procedure rather than avoiding them, but it is uncertain how this will work out in the coming years. The commission had the option to employ its own internal tribunal or an Article III court to hear matters prior to Jarkesy.
Chief Justice Roberts pointed out that while judicial review of the internal judgment is allowed, "such review is deferential" to the agency's factual conclusions in the case.
Justice Gorsuch’s concurrence suggested the agency’s powers “stacked” the odds against defendants and cited data from The Wall Street Journal.
“The numbers confirm as much: According to one report, during the period under study, the SEC won about 90 percent of its contested in-house proceedings compared to 69 percent of its cases in court,” he said.
The opinions in Loper Bright and Relentless Inc. et al. v. Department of Commerce et al.—which were decided concurrently—focused more on judges’ discretion and their ability to interpret laws in light of complex subject matter involved in regulation.
“Courts ... understand that such statutes, no matter how impenetrable, do—in fact, must—have a single, best meaning,” Justice Roberts wrote for the majority. “That is the whole point of having written statutes; ‘every statute’s meaning is fixed at the time of enactment,’” he added, quoting the court’s decision in Wisconsin Central Ltd. v. United States.
He added that “at best, our intricate Chevron doctrine has been nothing more than a distraction from the question that matters: Does the statute authorize the challenged agency action?”
Justice Kagan’s dissent outlined worries about how judges would handle that deference and cited several laws that she indicated courts would have trouble interpreting. She questioned, for instance, whether "an alpha amino acid polymer" falls within the Public Health Service Act's definition of a "protein."
“I don’t know many judges who would feel confident resolving that issue,” she said. She also argued that “in each case, a statutory phrase has more than one reasonable reading.”
Justice Thomas’ majority 7–2 opinion in Consumer Financial Protection Bureau (CFPB) v. Community Financial Services Association of America may have offered court watchers hope of compromise on administrative authority.
In that case, Justice Thomas joined six other justices in upholding the constitutionality of the CFPB’s funding mechanism. Justices Samuel Alito and Neil Gorsuch dissented.
For both Jarkesy and Loper Bright, however, he joined Justices Gorsuch and Justice Alito—the lone dissenters in CFPB—in warning about the power of the administrative state. Both he and Justice Gorsuch did so in stark terms.
“Chevron compels judges to abdicate” their judicial power, Justice Thomas said in his concurrence. He also warned: “Although the Court finally ends our 40-year misadventure with Chevron deference, its more profound problems should not be overlooked.” The decades-old doctrine, he said, “violates the Constitution.”
Justices Kagan and Sotomayor and Justice Ketanji Brown Jackson each joined dissents in Jarkesy and Loper Bright. In her dissent, Justice Kagan praised Chevron and the regulation that followed.
“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,” she said.
Statutes, she argued, will “inevitably contain ambiguities that some other actor will have to resolve, and gaps that some other actor will have to fill.”
“And it would usually prefer that actor to be the responsible agency, not a court,” she wrote. “Some interpretive issues arising in the regulatory context involve scientific or technical subject matter. Agencies have expertise in those areas; courts do not.”
