N.J. fishing company at center of case before U.S. Supreme Court challenging agency powers

The U.S. Supreme Court heard arguments Wednesday in two cases that could severely weaken the power of administrative agencies to set regulations.

The cases, coming from New Jersey and Rhode Island-based herring fishing enterprises, initially challenged a Commerce Department rule requiring fishermen to pay for federal monitors aboard their boats.

But the arguments Wednesday dealt almost entirely with “Chevron deference,” a principle giving wide latitude to federal agencies to write regulations that the high court established in the 1984 case Chevron v. Natural Resources Defense Council.

That ruling has for decades restricted federal courts from deciding questions of policy unless there is a clear breach of the law or the Constitution.

Overturning Chevron would mark a radical shift in the judiciary’s role in approving regulations in a way that would make it more difficult for the federal government to enforce regulations related to the environment or other complex policy areas, advocates for the principle say.

But such a shift is warranted, Roman Martinez, an attorney for one of the groups of fishing companies, said, because Chevron improperly robs the judiciary, a coequal branch of government, from implementing its own constitutional powers.

“For too long, Chevron has distorted the judicial process and undermined statutory interpretation,” he said in an opening statement. “It should be overruled.”

Some of the court’s conservatives appeared ready to dispense with Chevron, noting some perceived shortcomings of the approach, including that it disadvantages individuals and small businesses in favor of the government.

The court’s three liberal justices, Elena Kagan, Sonia Sotomayor and Ketanji Brown Jackson, meanwhile, sharply questioned the need to overturn Chevron, which they said allows people who are experts in subject matter to make decisions where Congress has left the law ambiguous.

“The best option is to listen carefully and defer — if it’s reasonable and consistent with what Congress has actually said — to defer to people who actually know things about these things,” Kagan said.

Chevron on the ‘chopping block’?

Four hours of questioning from the justices in the two related cases indicate the court’s conservative majority was poised to at least severely limit Chevron deference, said Tina Van Bockern, an appellate lawyer with Holland & Hart in Denver.

“If I was going to have to put a bet on it, I’d say Chevron deference is going to hit the chopping block,” she said in a phone interview after listening to the oral arguments. “It could just be severely limited. But there’s a good chance it could be eliminated.”

Though such a decision could be seen as part of a trend of a conservative Supreme Court in recent years stripping powers away from the federal government, the practical impact might be less than some observers have expected, Van Bockern said.

In recent years, perhaps expecting a weakening of Chevron deference, agencies have moved away from it as a legal strategy and instead relied more on their subject-matter expertise, she said.

Separation of powers argument

Paul D. Clement, the attorney for the fishermen in the one of the cases, Loper Bright Enterprises Inc. v. Raimondo, also said the framers of the Constitution wanted courts to have authority to interpret the law.

“From that standpoint, Chevron is a fundamental, egregiously wrong decision,” Clement, who was the U.S. solicitor general under George W. Bush, said.

The Constitution empowers judges to interpret the law according to their independent judgment, Martinez, who represents fishing operations in the other case, Relentless Inc. v. Department of Commerce, said.

“Chevron undermines that duty,” he said. “It reallocates interpretive authority from courts to agencies, and it forces courts to adopt inferior agency constructions that are issued for political or policy reasons.”

If Chevron was eliminated, agencies would retain plenty of influence over policy he said. Agency staff often have a hand in writing legislation. Agencies would use their expertise to implement laws — and, if needed, to argue in court that their interpretation of the law is correct, Martinez said.

But by subjecting their regulations to more judicial review, Chevron would force agencies to meet a higher standard, he said.

“The agency ultimately has to bring its expertise to bear in a way that’s persuasive,” he said. “And if the court isn’t persuaded or if the court thinks that the law means X, even though the agency thinks the law means Y, then the court needs to go with the best interpretation of the statute, just like it does in every other area of statutory or constitutional interpretation.”

Government argues to keep deference in place

But that argument ignores that Congress can delegate authority to federal agencies, U.S. Solicitor General Elizabeth Prelogar, who argued for the federal government, told the court.

“If Congress can expressly vest an agency with authority to interpret the law through an express delegation, then it can do the same thing implicitly,” she said.

The role of the courts is to ensure that the agencies act within their authority, she said. The Administrative Procedure Act, which requires that agency actions are not arbitrary and capricious, has existed easily with Chevron deference, she said.

Chevron simply allows agencies, which have subject-matter expertise, to write rules even when Congress has left some issues ambiguous in legislative language, Prelogar said.

Several conservative justices appeared unconvinced by this argument, with Justices Brett Kavanaugh, Neil Gorsuch and Samuel Alito questioning Prelogar about the definition of “ambiguous.”

Overturning the principle would also create unnecessary confusion, she added.

The Supreme Court has relied on Chevron in more than 70 cases. All those cases could be open to reversal if Chevron is dropped, she said.

“The Chevron framework is a bedrock principle of administrative law with deep roots in this court’s jurisprudence,” she said. “Overruling a precedent is never a small matter, but overruling a precedent as foundational as Chevron should require a truly extraordinary justification, and petitioners don’t have one.”

Individual rights

Gorsuch raised an issue with Chevron that it curtails individual rights — and leaves judges powerless to address wrongs.

While some have argued that Chevron makes agencies more vulnerable to “regulatory capture” by industries with specific policy goals, Gorsuch said his issue was with how the doctrine put individuals at a disadvantage in cases against the government.

“The immigrant, the veteran seeking his benefits, the Social Security Disability applicant, who have no power to influence agencies, who will never capture them,” Gorsuch said. “I didn’t see a case cited, and perhaps I missed one, where Chevron wound up benefiting those kinds of people.”

Judges relying on Chevron can be forced to rule not in a way they believe is fairest, but that is simply in line with what an agency has determined, he said.

Prelogar replied that decisions that rely on Chevron reach their conclusion in a way that Congress intended by delegating rulemaking authority to agencies.

“If it does that, it does that in accordance with Congress’ intent and wishes,” she said. “There are certain delegations that Congress can make to agencies and certain gap-filling that agencies can do.”

Case began with commercial fishermen in New Jersey

The cases being heard Wednesday were related to a rule from the National Marine Fisheries Service office requiring commercial fisherman to pay for federal observers aboard their vessels. A group of herring fishermen from New Jersey argued the rule, which they said forced them to hand over up to 20% of their profits, was unlawful.

A lower appeals court relied on Chevron deference to rule in favor of NOAA Fisheries and against the fishermen.

Conservative billionaire and activist Charles Koch reportedly bankrolled the Supreme Court appeal.

Justice Ketanji Brown Jackson participated in oral arguments Wednesday in Relentless Inc. v. Department of Commerce, the Rhode Island case, but not in Loper Bright Enterprises v. Raimondo, the New Jersey case. Secretary of Commerce Gina Raimondo, the former governor of Rhode Island, was sued in her official capacity as the head of the federal department that includes NOAA Fisheries. The court heard the cases together because they deal with the same issue.

Jackson, the newest member of the court, was on the D.C. Circuit panel that heard the Loper Bright Enterprises case in 2021, though she had left the court by the time the remaining judges issued an opinion in 2022.