The Beginning of the End for Chevron Deference?
The nomination of Judge Kavanaugh to fill the seat of the recently retired Justice Kennedy has set court watchers abuzz. Opinions have been written on the consequences of this change for abortion rights, gun rights, and presidential power. It would be unwise, however, to overlook a potential area of agreement between Justice Kennedy and potential Justice Kavanaugh: Their mutual skepticism of Chevron deference. Judge Kavanaugh’s elevation to the Supreme Court could add one more crucial vote to overturn or rework Chevron and mark a fundamental change in the Court’s deference to executive agencies.
Chevron deference, named after Chevron v. Natural Resources Defense Council, creates a two-step analysis of executive agency regulations. First, a court must determine whether the statute the agency is interpreting is ambiguous. If yes, then the court must determine whether the agency’s interpretation is reasonable. If the agency’s interpretation is reasonable, the court will defer to the agency. In extraordinary cases, courts have also applied a “major rules” test before engaging in Chevron analysis. The major rules test, or Chevron step 0, prevents agencies from issuing rules on major topics unless Congress clearly indicates the agency should resolve the issue. If Congressional intent to delegate to the agency on such a large question is absent or questionable, the Supreme Court will interpret the law itself without deferring to the agency.
Justice Kennedy, in one of his last opinions before announcing his retirement, expressed his skepticism of Chevron deference and how it was being applied in lower courts. Justice Kennedy wrote that “given the concerns raised by some Members of this Court it seems necessary and appropriate to reconsider, in an appropriate case, the premises that underlie Chevron and how courts have implemented that decision.” His concurrence indicates that he saw serious separation of powers concerns with the way lower courts were applying Chevron deference.
Judge Kavanaugh appears to share Justice Kennedy’s skepticism of Chevron. One potential way for him to limit Chevron deference is to expand the major rules doctrine, which he has indicated a willingness to do. When confronted with the FCC’s reinterpretation of the Communications Act of 1996 to allow it to regulate the internet as a utility, Judge Kavanaugh dissented. Writing for himself, he would have held that the FCC did not have the authorization to make such a wide-ranging reinterpretation of its own statute. Foreshadowing Justice Kennedy’s concurrence in Pereira, Judge Kavanaugh found it a violation of the separation of powers to allow the FCC to issue such a sweeping reinterpretation of their own regulatory authority without action by Congress. His analysis relied on a strong interpretation of the major rules doctrine. Because the FCC reinterpretation was a major rule, and because the FCC had not received clear Congressional authorization to issue the reinterpretation, the rule was invalid.
Another potential reworking of the Chevron standard is to redefine what the Court will accept as a “reasonable” interpretation of an agency’s statute. Judge Kavanaugh has also expressed a willingness to limit what agency interpretations a court will consider “reasonable.” Chevron deference allows agencies to interpret vague statutes as long as the agency interpretation is a reasonable construction of the statute. In White Stallion Energy Center, LLC, for example, the EPA interpreted a statute to allow them to regulate electrical utilities without consideration of costs. The statute made no mention of costs, only that the agency could do what was “appropriate.” The D.C. Circuit upheld the EPA regulation. Judge Kavanaugh, however, dissented. It was unreasonable for the EPA to adopt a regulation which cost $9.6 billion dollars by the EPA’s own estimates without taking those costs into account, contrary to what the EPA and the majority said. Redefining what is “reasonable” marks the other potential path for a future Justice Kavanaugh to push the Court to limit Chevron deference.
A future Justice Kavanaugh would likely be one more vote to alter Chevron deference. The two paths outlined here, an expansion of the major rules doctrine and a change in what agency interpretations courts will accept as reasonable, would limit the circumstances agencies are entitled to Chevron deference without completely eliminating it. A more aggressive Supreme Court could eliminate Chevron deference entirely, as some state courts have done. Given the role Chevron plays in judicial evaluation of agency regulation, however, alteration seems to be more likely than abolition.
 Pereira v. Sessions, 585 U.S. ___ (2018) (Kennedy, J. concurring).