This special episode features two Berkeley Law experts discussing the fallout from the U.S. Supreme Court’s Loper Bright Enterprises v. Raimondo decision, which overruled the longstanding doctrine of the Chevron v. Natural Resources Defense Council case, which was decided in 1984.
The decision sent shock waves through the field of administrative law and is expected to have a particularly large impact on climate and energy policy. In this episode, Center for Law, Energy & the Environment Executive Director Louise Bedsworth leads a conversation with Berkeley Law Professors Daniel A. Farber and Sharon Jacobs about the decision, its reasoning, and what might happen looking forward.
Farber is the center’s faculty director and a leading scholar in Constitutional, administrative, and environmental law. His most recent book is Contested Ground: How to Understand the Limits on Presidential Power and he’s been on the Berkeley Law faculty since 2002.
Jacobs, who joined the faculty in 2022, teaches and writes in the areas of energy law, environmental law, and administrative law.
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About:
“Berkeley Law Voices Carry” is a podcast hosted by Gwyneth Shaw about how the school’s faculty, students, and staff are making an impact — in California, across the country, and around the world — through pathbreaking scholarship, hands-on legal training, and advocacy.
Production by Yellow Armadillo Studios.
Episode Transcript
[MUSIC PLAYING] GWYNETH SHAW: Hi, listeners. I’m Gwyneth Shaw and this is Berkeley Law Voices Carry, a podcast about how our faculty, students, and staff are making an impact through pathbreaking scholarship, hands on legal training, and advocacy. This special episode features two Berkeley Law experts discussing the fallout from the US Supreme Court’s Loper Bright Enterprises v. Raimondo decision which overruled the long standing doctrine of the Chevron v. Natural Resources Defense Council case, decided in 1984.
The so-called policy of Chevron deference essentially required courts to uphold the federal agency’s reasonable interpretation of a statute if Congress has not directly addressed the question at the center of a dispute. The decision sent shock waves through the field of administrative law last summer and is expected to have a particularly large impact on climate and energy policy.
In this episode, Center for Law, Energy, and the Environment executive director Louise Bedsworth leads a conversation with Berkeley Law Professors Daniel A. Farber and Sharon Jacobs about the decision, its reasoning, and what might happen looking forward.
Farber is the Center’s Faculty Director and a leading scholar in constitutional administrative and environmental law. His most recent book is contested ground how to understand the limits on presidential power. And he’s been on the Berkeley Law faculty since 2002. Jacobs, who joined the faculty in 2022, teaches and writes in the areas of energy law, environmental law, and administrative law. I hope you enjoy this discussion. I’ll tell you how to learn more at the end of the episode.
LOUISE BEDSWORTH: So for today, we are going to dive in on one of the Supreme Court’s final decisions this term. The Supreme Court voted 6 to 3 in the Loper Bright decision to overturn the Chevron doctrine. And so just as a way of background to orient everyone to this conversation, the Chevron doctrine was established about 40 years ago in Chevron versus NRDC.
And in that case, the court established a test to determine when the courts should defer to an administrative agency setting two criteria, really, whether or not a statute is ambiguous and whether the agency’s action in face of that ambiguous statute was reasonable. So legally, this Chevron doctrine has been critically important and has been cited in thousands of court decisions, including 70 Supreme Court decisions.
So in the Loper Bright decision, the majority of the justices argued that the Chevron doctrine was inconsistent with the Administrative Procedures Act and provided too much authority to unelected public officials. But Chevron deference has been particularly important in areas of law and policy that are evolving and changing fairly rapidly, and especially also where statutes that were relying on were established and been in place for quite some time, especially those for environment and climate and energy.
It’s also been important for emergent issues where the status of issues are changing. For instance, climate change, where we have a changing climate condition that we are managing, and also where topics are fairly technical and require a fair amount of expertise. So this Loper Bright decision is likely to have far reaching consequences, especially in the areas of climate change and environmental law.
In her dissent, Justice Kagan wrote that the majority today gives itself exclusive power over every open issue, no matter how expertise-driven or policy-laden involving the meaning of regulatory law. So luckily, today we are joined by two experts to help us unpack what this means, how worried should we be, where do we see glimmers of hope, and how they are both thinking about this Loper Bright decision.
So we have Sharon Jacobs, Professor of Law at Berkeley. She’s an expert on administrative, environmental, and energy law. She joined Berkeley fairly recently after being an associate professor at University of Colorado. And then also we were joined by Dan Farber, who is the faculty director for CLEE and is the Sho Sato Professor of Law.
He is an expert in environmental, administrative, and constitutional law, and his most recent book is Contested Ground, How to Understand the Limits of Presidential Power. So Sharon and Dan are going to share their perspectives. And I think in conversation and with one another. And then we will leave time to open it up for questions. And so with that, I will turn it over to Sharon and Dan, and I think Sharon are going to start, is that right?
SHARON JACOBS: Yes, it is. And thanks so much, Louise, and to CLEE, and also the Berkeley climate change network for putting this together today. I want to start with just a few higher level observations about the decision and then I want to tee up a few questions the decision raises along with my thoughts before turning things over to Dan.
So my higher level observations or observation with some subparts is that I think this opinion is very on brand for this Supreme Court and I think that’s true for four reasons. One is it shows a lack of respect for precedent that we’ve come to expect from this court. It’s overruling here a 40-year-old decision by reinterpreting an 80-year-old statute.
And as Justice Kagan says in her dissent, this is a decision that’s really been a cornerstone of administrative law for those four decades, she says it’s been part of the warp and woof of modern government. Now had to look that one up, it turns out that warp and woof means the basic fabric, it’s a term that comes from weaving. But this is clearly not a court that is afraid of overruling important precedent, and I’ll just direct you to the Dobbs decision as an example of that.
And another signature of this court that I think is present in this decision is that before overruling precedent, this is a court that undermines sometimes the precedent itself in subtle ways and then points to the sad state of the precedent as a reason to overturn it. So the court in this opinion says Chevron has become unworkable and is therefore unworthy of stare decisis effect. That is what Justice Kagan, in her dissent calls self-help on the way to reversing precedent.
And the question there, of course, is who made the doctrine unworkable in the court’s mind. The second reason I think this is a very onbrand decision is the selective use of history in the majority opinion. So suggesting that Chevron represented a sharp break from pre- and post-APA practice when it comes to judicial deference. Justice Kagan, again, in her dissent, pushes back on this.
You’ll hear me referencing Justice Kagan’s dissent quite a bit, both because of what I think are the strength of her arguments, but also because it includes just a large number of zingers. The third reason I think this is a very onbrand opinion is because it’s part and parcel of what I see as a larger project of rolling back the authority of administrative agencies or if we don’t want to ascribe that motive to the court, maybe just another opinion that shows the court’s understanding of agencies.
And that understanding of agency’s place in government is different from the understanding that some other Supreme Courts have had. So if you look at this decision in the context of Jarkesy and Corner Post and Ohio versus EPA and the earlier decision in West Virginia versus EPA, you start to see a pattern emerging. And the final reason I think this is an onbrand decision for the court is that it demonstrates what Justice Kagan calls in her dissent, judicial hubris, and the process of rolling back the authority of agencies.
The court is actually accruing more power to itself. This is what people have taken to calling judicial aggrandizement. I think the decision shows this is a court that thinks very highly of itself in particular and of the judiciary in general. And one of the examples of that, that I see is that this is a court that is very clear. It thinks there’s a best interpretation of statutory language, no matter how ambiguous we might have found it under Chevron, and that courts, not agencies, are best situated to determine what that best interpretation is.
Now, Justice Kagan calls house blend of self-confidence that statutes have a clear meaning and that the Chevron court got this particular decision wrong. Initially, hubris squared and here are some more zingers, she says the court turns itself into the country’s administrative czar and the majority grasps at power. So that’s a larger set of takeaways.
But I want to raise briefly four important questions the decision raises, and then I’ll offer some quick thoughts about each. I’m really glad, by the way, that I get to go first here today because I think I’m going to be playing the role of alarmist and that Dan will hopefully calm everyone down when I’m done. But the first big question here is how much did Loper Bright change things?
So in other words, as Adrian Vermeule, who teaches at Harvard Law School, has asked, have we simply swapped out what we knew as Chevron Deference for something called Loper Bright delegation? And the reason that he asked that question is the majority made clear here that Congress can still delegate interpretive authority to agencies. All the court’s doing here is overruling the presumption that it does so in all cases of textual ambiguity.
So this may end up being a statute by statute inquiry to see if Congress gave the agencies interpretive discretion in any given case. So then the question becomes, well, what does Congress have to do to show that it’s delegated that interpretive authority? How do we know when a statute gives agencies some discretion and when it doesn’t? And the court gives us three examples of when we can read discretion in.
One is where Congress expressly says the agency here has authority to interpret this word or phrase. That does happen, but it’s not terribly common, at least it hasn’t been under Chevron. The second category is where Congress empowers the agency to make rules to quote, “fill up the details of a statutory scheme.” It’s not exactly clear what constitutes a detail.
This is language that echoes some of the opinions we’ve had around the nondelegation question, Justice Gorsuch’s dissent in Gundy, for example. And in Gundy, Justice Gorsuch gave us a couple of examples of what this detail filling up looks like. So he cited a case where the agency was given the discretion to design tax stamps for margarine packages, that’s truly in the weeds.
But also gave an example of an agency having to decide what would protect national forests from, quote, “destruction” or depredations. So there’s a range of possibilities here in terms of how many statutes the court will read as delegating this authority to agencies, given this Supreme Court and its jurisprudence on the major questions doctrine. I think it’s likely they’ll define this details field quite narrowly.
The third example they give of the exception from their decision is where Congress empowers an agency to regulate subject to limits imposed by a term or phrase that leaves the agencies with some flexibility. So these are broad terms like appropriate or reasonable. And I’m going to argue that we shouldn’t be fooled by how broad that exception sounds. I don’t think the court will find it applies in very many cases.
And one of the reasons for that is that even in cases that examine statutory language that uses those broad terms, courts have already found that those terms have some pretty important limitations. And I’m thinking here of cases like Michigan versus EPA, where the Supreme Court said that EPA must consider costs in deciding whether regulation of hazardous pollutants from power plants was, quote, “appropriate” or necessary under the Clean Air Act.
So that’s the first big question, are we in a different world or not? The second question is, are we actually back in a world of Skidmore deference to agencies when it comes to their interpretations of text? And if so, what does that mean? And the court does say agency interpretations still get due respect from courts and it does cite to Skidmore.
Skidmore, of course, being the case before Chevron that set out a list of factors that might give agency interpretations of law, the power to persuade a court, even if the court was not required to defer to the agency’s interpretation. The court cites to Skidmore, doesn’t say explicitly that Skidmore factors are going to govern, which may mean the courts are free to rely on some of those factors or not in calculating how the agency’s interpretation should inform the court’s judgment.
And the Skidmore factors are things like the thoroughness of the agency’s own reasoning, the validity of the agency’s own reasoning, the consistency with earlier and later pronouncements. The court in Loper emphasizes two factors, one that’s clearly within Skidmore and one that is not at least within the original formulation of Skidmore.
The first is, has the agency stuck with one interpretation or changed its mind over time? So clearly giving preference to agency interpretations that the agency has stuck to across administrations over time. And the second is this question of whether or not the interpretation from the agency is roughly contemporaneous with the passage of the statute or came very early in the statute’s history. And the court hits those two pretty hard even before it gets to the Skidmore factors.
So again, my view is that the court seems to be interested here in the idea of freezing agency interpretations in time, which is going to limit the class of cases where agencies are going to get deference for their interpretations under Skidmore. Agencies have to take the number of times that a statute has been interpreted as they receive it.
And so there’s very little they can do to go back and change the history now. I think this is consistent with the court’s overall approach to interpretation of law generally, especially constitutional originalism, this idea of freezing interpretations in time. And then the final two questions and I’ll try to be quicker on these, the third is how vulnerable are interpretations of law from prior cases where the court deferred to an agency under Chevron? So under Chevron, step 2.
And I think here it’s not quite open season on all of those early interpretations, but it’s not quite not open season. So let me see if I can explain what I mean by that. And the court does say that they’re not calling into question prior cases that relied on the Chevron framework. It says those holdings are still subject to statutory stare decisis.
And for those of you who are interested in taking a deeper dive into statutory stare decisis, there is a law review article by one Amy Coney Barrett prior to her appointment to the Supreme Court. It’s the idea that interpretations of statutes should get a stronger precedential value, in part to avoid lots of shifting meaning, in part because of Congress disagreed with the court’s interpretation. They can always come in and amend the law.
Now, interestingly, Justice Barrett’s law review article says that her view is that this is fine for the Supreme Court, but not for the lower courts necessarily. So I thought that, that was interesting. I just think when I read this passage about statutory stare decisis and the court not calling all these prior cases into question, the court still hints that these decisions can be challenged.
Just that the reliance on Chevron’s demise is not a special justification for overruling the earlier holdings, you can still argue that those cases were wrongly decided. Super strong precedential value is not ironclad precedential value. So I think at the very least, we’re going to see a lot of challenges. And the question is then of course, how many of those will be successful?
I’m going to leave the last one as just a question so I can turn things over to Dan, but the question is, what impacts will Loper Bright have in the context of the other major administrative law decisions that the Supreme Court handed down this term?
So that includes Jarkesy, which is the case where the Supreme Court held that some internal agency adjudications violate the Seventh Amendment right to a jury trial that includes corner post, where the Supreme Court held that the default six year statute of limitations for challenging agency rules only starts ticking when the cause of action accrues, which is when the plaintiff suffers an injury and not when the rule was final or the action was final.
And then Ohio versus EPA, which was really about the application for a stay, but hinted and gestured at how searching the arbitrary and capricious standard of review should be for agency action. So I think we have a lot of open questions at this point. I hope I haven’t been too alarmist, but I’d like to turn things over to Dan Farber.
DANIEL A. FARBER: Thanks, Sharon, that was great. So I guess my self-assigned task today is to try to talk Sharon off the ledge, but I’m not sure how successful I’m going to be. My views are probably influenced by the fact that I was around before Chevron, so it’s not really central to my view of the administrative state.
I’ve actually always had mixed feelings about the case because it can sideline a Congressional goals in favor of White House policy. That’s great when it’s President Biden, from my perspective, but not so great when it’s Trump.
I think that we fall pretty easily into saying that Chevron and Loper Bright are about agency power, but in pretty much every environmental case at least, except for maybe some of those decided by the Federal Energy Regulatory Commission, we’re really talking about presidential power.
It’s not EPA on its own that decides that they’re going to tackle carbon emissions from vehicles or power plants, or that they’re going to try to define the scope of cost benefit analysis and what they’re doing or something like that, that’s all coming from the White House. So it seems to me if anyone is losing power here, it’s probably more the president and presidential staff than agencies as such.
The question is, where are we going from here? And for agencies and the rest of us, that’s as important as whether they should have overruled Chevron. I don’t think they should have, but that’s where we are right now. I’d also like to say that I think Kagan’s dissent in some ways is very unhelpful.
One of the risks when you write a dissent that accuses the majority of devastating the law and eliminating the power of agencies and so forth, is that lower court judges may take you at your word and you may actually drive more extreme interpretations of the majority opinion in a direction that you really don’t want to go.
So Skidmore, as a decision, has covered a lot of actions despite Chevron, because of a 2001 case called Mead. So we’re not in totally unknown territory. Agencies apparently went about 60% of Skidmore cases at present, which at least suggests that agencies are not necessarily at a huge disadvantage. Now, Sharon’s right, the court was a little coy about whether Skidmore was applying or something, like Skidmore or whatever.
But the court seems to make it clear that it’s returning to pre-Chevron understandings of judicial review. That’s the whole point, that Chevron was a brake and that we need to go back to that old time approach. And that makes me reluctant to put huge weight on very subtle shift in phrasing at one point in the opinion.
Another factor that the court talks about earlier in terms of deference, although not in that particular passage, is the technical nature of the issue before the agency. I think they were responding to some of Justice Kagan’s examples of there’s one about alpha proteins and how they should be classified under something or another, and who even knows what that means. And I think the court was trying to respond to that issue. But of course, we’ll have to see what they do.
I’m also more optimistic about pre-Loper precedents. Now, it’s true this court has not always been respectful of precedents and that it has not necessarily been unwilling to overrule past decisions. But on the other hand, that would be true with or without Chevron. They can always go back and overrule things that they really don’t like them.
I think lower courts, by and large, are going to be very reluctant to do that because it will start them down the road having to reconsider 7,000 or 10,000 previous decisions and who wants that. One thing that at least as a practical matter makes me feel a little better is that many of the major pollution regulations really can’t be reopened because they have to be challenged within six months or so of when they’re issued.
And that’s not affected by that statute limitations decision corner post that we’ve been talking about. So it’ll be really more difficult, I think, to reopen those decisions. In terms of what’s going to happen with this discretion business, I guess I read the language to be a little broader.
And when I look at recent EPA rulemakings, I’ve looked at the climate regulations for new cars and trucks and also the climate regulations for power plants, and one thing that’s clear is that, at least for the last year, EPA hasn’t been relying on Chevron anyway. Instead, in justifying its regulations, EPA stresses the discretion it’s given by the statute. The factors that the statute tells us to apply in what is usually a very broad standard, like the best available technology.
What does best mean? How their basic approach has been used pretty much the same in different factual settings since the Clean Air Act was passed and has been upheld by the court, and that using the same setting, the remaining issues are all super technical. They’re about various technologies and their economics and how the industry will develop and that therefore they’re especially within EPA’S expertise.
I don’t know if this will work, but it seems to me it’s just what the court is calling for in Loper. And at least if the court means what it says, these arguments ought to work. So a few quick closing thoughts. Actually, I think I have four of them mirroring Sharon.
So obviously overruling Chevron is a big jolt. There’s an old saying that you never know what a Supreme Court opinion means until the next opinion explains it, that’s true here. I think one of the big problems with the overruling is it creates a big period of uncertainty and confusion that we really don’t need. Sharon’s right that the court’s tone has been skeptical of regulations.
But on the other hand, so far the rulings have been pretty incremental. Maybe the court’s building up to something really big. But on the other hand, maybe this is pretty much its agenda. They’ve made some incremental adjustments, they might make some more later, but they may not have some secret plan to eliminate the administrative state.
Third observation is that although there are nine justices, it’s really, for most purposes, a three judge court, Roberts, Kavanaugh, and Barrett. So we don’t really care what the more bomb throwing members of the court are thinking. Thomas, Alito, and Gorsuch, because that’s only three judges. They need at least two out of the center, what you might call the three amigos of Roberts, Kavanaugh, and Barrett.
And so the real question is, how far those three judges are willing to go? We don’t really know, but I don’t think any of them are really radical by inclination, they’re not bomb throwers. And so I’m hopeful, at least until proven otherwise, that they’re going to behave in some reasonably responsible manner.
So bottom line, time will tell whether this is just a course correction or a straw in the wind of radical changes to come. But in the meantime, I think we should avoid jumping to any conclusions. Thanks.
LOUISE BEDSWORTH: Great. Thanks so much, Dan and Sharon. I don’t know Sharon if you have any response you want to say or any other thoughts, otherwise, we can open it up for questions.
SHARON JACOBS: I feel better.
LOUISE BEDSWORTH: You feel better.
DANIEL A. FARBER: Let’s stop right now.
LOUISE BEDSWORTH: Maybe we should stop right now. Give everyone another 30 minutes back. Well, maybe just encourage folks to put some questions. I see some questions coming in. Maybe as I go through those ask you all if there are particular areas of environmental law or topics that you’re particularly concerned about with regards to this decision or that you see being particularly susceptible to being changed or prevented?
DANIEL A. FARBER: I don’t have anything right now. I mean, I do think that the biggest issue is when agencies feel the need to get really creative to deal with really new problems or really big shifts in philosophy. So in energy law and Sharon knows a lot more about this than I do, the Federal Energy Regulatory Commission, FERC, used to regulate prices of wholesale transactions and act very much like a traditional utility regulator.
And then they decided that this approach wasn’t effective or efficient and that they really needed to move to a more competitive market type situation. In doing that, they really changed their way of doing business. They called for establishing transmission organizations that would organize the grid on a regional basis. It was a really big move.
I would be more worried about an agency’s ability to do something like that after Loper. Now that was really a very big shift. You could argue that I don’t know, Sharon may be able to tell me why that might still be OK. But I do worry about that major thing. And I especially worry about it when big new problems come up.
So, like, Kagan gives an example of artificial intelligence. That may require an agency to do something quite different than it did in the past in order to fulfill its mission. And I do think that thing will be harder, but I think it would be harder even without this decision given this court.
SHARON JACOBS: Yeah, that’s what I was going to say, is I think that under the major questions doctrine, some of these more ambitious interpretations that Dan was talking about, we’re going to be problematic anyway. So we were already going to see a retrenchment from agencies at the outer limits of their jurisdiction. And you may think that’s a good thing or a bad thing, depending on your position and your understanding of government and the way it works.
But I think the major questions doctrine was already going to take care of a lot of that. I do think that there is at least one case that we’re following in energy law right now that’s clearly going to be affected because shortly after the Supreme Court issued the decision in Loper, it sent this opinion back to the DC Circuit in light of Loper. So this is a decision, again, that’s not being reopened. It’s currently sort of was pending before the Supreme Court.
It’s in the Solar Industries Association versus FERC case sent back to the DC Circuit. And this was a case where the DC Circuit had relied on Chevron to conclude that a solar plus battery storage facility qualified for preferential rate treatment under a 1978 statute called PURPA. And the DC Circuit found that the facility met the size threshold in the statute.
It was only for smaller facilities because even though the solar array and the battery together had more output that they potentially could be putting onto the grid, there was an inverter, a piece of equipment that only allowed for a smaller amount of output. And it was a very technical case, as you can probably tell. And I think the problem here was that the court, the DC Circuit was very clear that this was a Chevron decision. And that this was complicated, the case got deep into the weeds of statutory interpretation.
And this case involved terms like facility and capacity, which one might think fell within the carve out in the Loper decision for terms that show Congress meant to delegate interpretive authority to the agency. I think the decision from the Supreme Court to send this right back to the DC Circuit shows that might not be the case, that these might be the terms where the court wants the federal judiciary to decide what they mean.
So this was on a list of nine cases at the Supreme Court reversed without opinion and remanded in light of Loper. It’ll be interesting, it’s an early opportunity to see how the Courts of Appeal are going to deal with Loper’s application. It’s really hard to know I think how this will go on remand. There are some red flags under the new Loper standard, namely that FERC had previously found this facility didn’t meet the size limitation, and then it changed its mind under the Biden administration and decided that it did.
But it’s also a very technical case which the court as Dan, very rightly said, flagged as one reason potentially to continue deferring to an agency interpretation, not deferring, but to give weight to an agency interpretation. I think there are a few other energy statutes to keep an eye on under the EPCA, Energy Policy and Conservation Act, consumer appliance standards. There are sometimes cases involving interpretations of whether certain consumer appliances fall within that statute or not.
I agree with Dan that this big phrase, what is just and reasonable for rate regulation under the Federal Power Act is a potential target here, not just thinking back to whether FERC could have done what it did in order 888, but also thinking forward to people have been pushing FERC to require regional markets to consider climate implications in setting rates and to say that not to do so would not be just and reasonable. FERC hasn’t taken the bait so far on that one.
But again, I think that’s a decision that would run into problems under the major questions doctrine had we not gotten to a post-Chevron world. I will say that Moody’s, which is a credit ratings company, has taken Loper into account and says that it has introduced new uncertainty around EPA regulations, which in turn creates uncertainty for regulated utilities. I think Dan’s given us some reasons to think that might not be so much of a problem.
But Moody’s did think the effects wouldn’t be too severe because there are other factors that have more of an impact on utility investments. But there may be some risk there that Moody’s at least is identifying.
DANIEL A. FARBER: The one thing just following up on what Sharon said, we’re not going to have to wait forever at least for lower courts to have to figure this out because there’s a reason Chevron is cited so often. The lower courts decide a lot of statutory interpretation cases involving agencies. They used to have a rubric that they could cut and paste about the standard of review.
They’re going to have to decide what the new rubric is going to be, and they’re going to have to do it fairly quickly. And I think the Supreme Court also is going to have to at least confront some of this because they’re almost sure to have agency statutory cases in front of them next year. Now maybe they can finesse and say, regardless of exactly how it’s interpreted, the agency would stand or not stand.
But I don’t think they’re going to be able to dodge this one very long. They have managed to avoid returning to the major question doctrine to define its meaning and lower courts maybe I should do a quick aside about that. We’re just assuming everybody knows what that is.
So to make a very long story short, in a case involving Obama’s Clean Power Plan, the Supreme Court said that basically when an issue is big enough in terms of its political and economic footprint, the court strongly presumes that Congress meant to keep that issue for itself and not give it to the agency. And therefore, the agency needs to have very clear statutory language to support doing that and that’s a major question.
Now, the problem is the court was not very clear at all about what makes something a major question. I can give you an optimistic view of that. That is, I think there’s a way of reading the opinion based on the factors the court talks about that could keep it fairly narrow. But really, nobody knows for sure and lower court judges have adopted a bunch of different positions.
But the major question doctrine doesn’t come up in every case, and the Chevron, Loper issue does. So the court really, I think, is going to have to start telling us a bit more about what its thinking.
LOUISE BEDSWORTH: Maybe I’ll follow up with a question that actually is reflected in several that have come in and was one I had as well and I’m going to combine a few things here which is, what impact do you see this decision having on state or local climate action and in particular, California’s waiver authority under the Clean Air Act and what it’s been able to do as a state with that special authority?
DANIEL A. FARBER: I don’t think it’s going to have much effect on the waiver issue, partly because this is one where the agency has flip flopped between administrations. So if you defer you would be turning on the waiver and turning it off again and turning it back on again, depending on who is in the White House, and that’s not very appealing.
But also because I think that the language and history in general of EPA’s approach, I think or actually fairly clear about what the answer ought to be. Now, obviously, there are going to be big disputes about that. But I think regardless of whether Chevron was there or not, I suspect that a court would not end up deferring very much to any one administration on that. And looking to the statutory language, then maybe deferring on the application of whatever the court thinks the test is.
SHARON JACOBS: I mean one really interesting larger point that grows out of Dan’s comments is what is the relationship between deference and preemption? And this was already a little bit of a mess in the Chevron era where some courts were employing this presumption against federal preemption of state law, a clear statement rule, rather than deferring to agencies under Chevron if they thought the state law should be preempted. But it was uneven and the Supreme Court hadn’t really clarified that relationship.
I mean, Loper Bright may have cleared that question up just by getting rid of Chevron, but it presents another quandary, so how does that presumption against preemption now interact with some Skidmore style deference? Do we still have agencies are shaping the ways in which statutes do or do not preempt state law? So I think we have to see how that all develops.
I also think that if Loper produces or continues a scaling back of federal regulatory ambition, then that means that subnational efforts like California’s become all the more important when it comes to environmental regulation. And an interesting point here is that California courts have never actually adopted anything like Chevron deference.
Instead, we have something like Skidmore, although there are some important distinctions. It’s called Yamaha deference, and it just says that agency interpretations, their bindingness is contextual, and it looks at some factors that the courts considered under Skidmore hasn’t led to the downfall of administration in California or the mass invalidation of agency rules. Of course, we have a separate provision that gives much more deference to quasi legislative rules here in California.
But it also does show that states have taken different approaches to this. And maybe now I’m making Dan’s argument for him, that the presence or absence of Chevron doesn’t necessarily mean the demise or not of administration.
DANIEL A. FARBER: I just like to take something that was implicit in what Sharon said and obvious to lawyers, I think, but not necessarily to everybody in the audience, which is that Loper really only applies to federal regulations. So the state of California, other states have their own approaches to dealing with these issues. Some of them may decide they should defer to the wisdom of the Supreme Court and maybe they’ll rethink their views.
But at the end of the day, that’s really up to the states. So the status of California’s efforts under California law is completely unaffected. The only thing that California has to worry about are places where what California wants to do might collide with federal law. And as Sharon was explaining, Loper could be an issue there, but we don’t really know how much.
LOUISE BEDSWORTH: Great. So another one, we unfortunately pushed someone onto the ledge through this conversation. So I’m going to pose their question so you can perhaps talk them off it or confirm that they should be there.
Says, too many statutes passed in the past 40 years were conscious of Chevron and thus papered over significant policy differences. When combined with West Virginia versus EPA, do you think that this decision will stall any new policy initiatives that can’t get out of Congress? So was Chevron kind of giving them an out to pass some of those differences on to agencies and now we’re going to be even more stuck?
SHARON JACOBS: I mean, I think that there are two ways of seeing what Congress does when it passes broadly worded statutes or at least two ways, and I’m to describe two of them. One is that it is punting difficult policy questions to agencies because members of Congress don’t want to be on record as having taken a strong stand one way or the other. That’s the cynical interpretation.
But there are some evidence that this might be true in at least some cases. There’s also then the view that Congress and this is, I think, embodied by the Kagan dissent, Congress simply doesn’t have the wherewithal to fill in all the details of these statutes. It needs agencies to do some of that work as it implements the statutes.
And so this is just a part of governance and an inevitable part of governance. Now, which of those two things is true and in which combination in any individual delegation I think is really, really hard to tell. So I guess, the premise of the question might be a little bit up in the air. Now, I will say in response that I do think we’re going to see a lot more from agencies after this decision to explain themselves and explain why they think their statutory language authorizes their particular actions.
They already do this, especially in rule making. And that becomes the record for review in the Supreme Court, but I think agencies are going to be even more conscientious about doing this, which means, of course, if the agency doesn’t have a good explanation and is just relying on Chevron, they might not make particular moves. But I think it’s much more likely that we’re just going to see more explanation, more involvement from the lawyers within agencies to try to explain why they think the statute permits or maybe in some cases dictates the actions that they’ve chosen to take.
DANIEL A. FARBER: I agree with that and I think my impression, at least, is that we’re already seeing that in the EPA regulations because they were anticipating that they could not rely on Chevron.
I basically feel like that’s a good thing because I think that what agencies should be about primarily is implementing the statutes that Congress passed and carrying out the purposes that Congress had in mind rather than thinking every day, first and foremost, about the president’s agenda, which is obviously going to hinder things anyway. But in the end, I think greater sense of responsibility to the statute is not a bad thing.
To the extent I’m wrong, and that Sharon was right to be on the ledge in the first place, which could happen. I’ve been wrong before, a lot more often than I would like to admit. But to the extent that happens, I think that builds the case for getting rid of the filibuster in Congress.
If agencies can’t deal with this stuff, we just have to make Congress more nimble so that they can take action more easily and maybe completely abolishing the filibuster, maybe limiting it in some way, I don’t know. Maybe changing some of the other rules in Congress. But if we can’t rely on agencies to do this work, then I think the Congressional gridlock becomes that much more intolerable than it already is.
SHARON JACOBS: And maybe I’ll just add that I’m certainly sympathetic to the questioner’s premise that it would be helpful if Congress would do more. I agree with Dan that the primary job of agencies in these circumstances is to implement the statutes passed by Congress. That can be challenging when the statutes are not updated and the agencies are faced with new scenarios.
I will say that it’s not like Chevron left the door open to totally outrageous agency interpretations of statutes, there were limitations. So one of the key limitations was if there’s a clear meaning of the statute or a clear range of meanings, the courts would enforce that clear range of meanings. So the agency couldn’t use as just and reasonable interpretation under the Federal Power Act to require utilities to provide free ice cream to everybody in Iowa.
I mean, there are just some things that are always going to be outside the bounds of an agency’s statutory authority. So I think the guardrails were already there. The question is, what happens in the gray areas, at the margins and agencies, can they do slightly less now? And if so, does that mean we want Congress to do more?
DANIEL A. FARBER: Let me give an example. I totally agree with that, but let me give an example of at least a perspective that I think is undermined by this decision and should be undermined, which is the view that the White House has taken, that unless a statute clearly precludes that all agency decisions have to be based on cost benefit analysis.
And the reason that because of Chevron allows you to do that. And what I think is wrong about that is that I think Congress and certainly in many of the environmental statutes, did not have anything like cost benefit analysis in mind and wanted more environmentally protective standards without necessarily having a dollar to dollar balancing test. I would rather get back to what Congress wanted rather than thinking all agencies should make their decisions exactly the same way because that’s the way the White House likes it.
LOUISE BEDSWORTH: So another set of questions that’s come in has to do with the potential implications of this decision on NEPA review, environmental permitting. And then in a related question, does science maybe play a larger role here in terms of how we’re documenting and justifying decisions that are being made? And I think that could be in the permitting case or even more broadly.
DANIEL A. FARBER: I hope Sharon won’t mind if I jump in, but I’ve publishing an article about the 2023 amendments to NEPA and what they mean and how badly written they are, and so forth. And so I had a section on the regulations that the Council of Environmental Quality, CEQ, puts out, and I had to leave a big blank there because we didn’t know what the Supreme Court was going to do in Chevron.
And it actually turns out to be quite complicated because Congress has never, at least in so many words given CEQ to the power to make regulations of any kind. So it’s always been unclear what status the CEQ’s regulations have. The court has actually referred to them once as being binding on agencies, but not clear how the court had really based that.
And the general rule of deferring to CEQ heavily in interpreting NEPA actually precedes the Chevron case by number of years. So it’s really hard to know, looking at the new guidelines that the court gives for how to apply deference. This is a case that doesn’t really fit neatly because we’re not really quite sure what CEQ’s powers are.
And so we just don’t know how much they’ll defer. I think it’s probably true after Loper that the long-standing interpretations by the agency are likely to get greater deference. And I think that’s largely a good thing because the biggest attempt to change those was under the Trump administration and to my mind, it went in really the wrong direction.
I’d also point out that the new CEQ regulations are contemporaneous with the new amendments, and so maybe they get an extra boost under Loper.
SHARON JACOBS: Maybe the only thing I would add to that is just on that last piece of the question about the role of scientists in agencies. I mean, I think that scientists and technical experts, certainly when I said that, I think lawyers are going to have an enhanced responsibility to justify interpretations of statutes, that’s not lawyers in isolation. That’s lawyers working with the other expert communities within the agency.
And right to the extent that we do see a shift or a lot of argument that certain statutory phrases or terms should be seen as implicit congressional interpretive delegations to agencies or should be seen within the context of an implicit delegation to agencies. This is the Loper Bright delegation line of arguments. It’s unclear then how that becomes different from a State Farm analysis, which is under APA 706.
The standard of review that says that an agency action shall not be arbitrary and capricious or an abuse of discretion. And then the question is, well, what does that analysis look like? And who helps support the agencies understanding in that type of review scenario? And there I think, again, technical experts, scientists, economists, others can be very helpful to an agency in explaining what evidence it focused on and reaching its interpretation and how it drew a line from that information to its interpretation.
LOUISE BEDSWORTH: So one other question that came up here is how you see the implications of this playing out. Do you think it will play out differently under a Trump administration rather versus a Biden or a Democratic administration?
SHARON JACOBS: One thing that I’ve been thinking about that it gets at this question is, what is Congress’s response going to be to all of this? And I think, the presidential election will have some impact on this, but certainly elections for members of Congress and what happens in the House and the Senate in the fall is going to have a big impact on this.
If we have, say, a Democratic landslide in the House and the Senate, I’m not saying that that’s what’s going to happen or likely, but if we did, this is Congress can basically overturn this case. By rewriting the APA, by rewriting statutes, by amending existing statutes and say, no, no, no, you got this wrong Supreme Court. Actually what we meant in the APA was for courts to defer to agencies just like you were doing under Chevron, unless their interpretation is clearly wrong.
The majority opinion here gestured briefly at a constitutional problem with Chevron deference under Article 3 and Marbury versus Madison, but didn’t rest this decision on that ground. So I think the great disappointment of Justices Thomas and Gorsuch who do think there’s a constitutional problem with Chevron deference. But that means a sympathetic Congress could come in and walk this back.
So I think the Congressional elections in the fall will tell us whether that’s likely or not. In terms of the presidential election, there’s a lot to talk about there.
DANIEL A. FARBER: I agree that Congress can do something about this. I also think they could finesse the constitutional issue entirely instead of telling courts what interpretation of a statute to apply, what they could do is modify the remedy provision and say they can only set it aside if it’s an unreasonable interpretation by the agency.
And that has the advantage of actually returning to the law of the founding era, just as a matter of remedies law, the agency had to be not only acting illegal, but well outside the bounds of legality before the court could intervene. So just thought I’d throw that in. Also be fascinating to see if Trump is elected, what are the various Fifth Circuit judges going to do about deference.
Are they going to be the ones who say, oh, no, Loper wasn’t that big a change? We think he’s reasonable, that’s fine. Who knows, it really scramble up the existing alignments on this issue.
SHARON JACOBS: Two very quick points. I mean, agree with that completely. I think that it’s not just the presidential election matters both because the president is the head of the executive branch and has a lot to do with the policies that at least executive agencies put out there, but also because the president nominates judges, federal judges. And think the way in which this doctrine evolves as hopefully Dan and I have made clear today, we have ideas about what it’s going to look like, we don’t have a crystal ball.
We don’t exactly how courts are going to apply these factors and how they’re going to apply Loper, and the composition of the federal bench there, I think matters a lot. Quick plug for our colleague John Gould’s piece on the politics of Chevron. I mean, it’s really interesting the way the politics of Chevron have evolved over time.
And right now at this moment, it seems to be the Democrats that are more in favor of deference to agencies and the Republicans who are not, it hasn’t always been that way. But at least right now, at this political moment, it seems like a more conservative federal bench may perhaps produce decisions that give less leeway to defer to agencies or provide less deference to agency interpretations. And just another way in which this election season matters actually quite a bit for the future of statutory interpretation.
DANIEL A. FARBER: And not just statutory interpretation.
SHARON JACOBS: Trying to focus everyone on administrative law because that’s what I do. But I understand there are other issues at stake here.
LOUISE BEDSWORTH: Well, I know we have a lot more questions. We will compile them and so I’m sure they will provide some inspiration for Dan and Sharon to continue to ponder, but I want to be respectful of everybody’s time. We’re coming to the end of our hour.
And so maybe we’ll ask Dan and Sharon for each of you for a little closing thought. And we went back and forth on this, I’m going to leave the choice up to you, which is to leave us all with something optimistic and hopeful that we can look forward to after this decision or what your biggest fear of what might happen after this decision.
SHARON JACOBS: So I think for those who believe in the importance of federal agencies and society, one way or the other, whether they are problematic institutions or institutions that can help us further our vision of the good, this term was a call to attention. And so as someone who teaches administrative law, I’m obliquely referenced one of the questions in the chat here, which is how do we teach administrative law after this term and after Loper Bright?
I think that this term was a call to action, increases the salience of this part of government in a way that I think is helpful. I borrow a line from Justice Scalia on the first day of my administrative law class where I tell students, the only thing boring about this course is the name and I think we need a new vocabulary for talking about the importance of actually administering the law because without administration, our laws are simply aspirational.
And so I do think that this decision and all the conversation around it does focus us on this question of what role we think administration of the law should play in our society, in particular, at the level of the federal government? And I do think that salience can be helpful.
DANIEL A. FARBER: I agree with that. I guess what I would say is that I do think the court’s going in the wrong direction. I think its conception of what the regulatory state ought to look like is misguided and is more ideological than maybe some of the justices themselves realize. So at that level, I’m unhappy about these decisions, and I may even be more unhappy in the future.
On the other hand, as lawyers who are by and large interested in supporting environmental regulation and so forth, I think what we have to say is, well, this wasn’t the decision we wanted, but how do we make it work? How do we find a way to go forward with the things we need to do? And I do think, at least at this point, that that’s doable.
Maybe those doors will be shut later on. But at least right now, I think that agencies by and large can find ways to do their job of protecting the public interest, despite a court that sometimes doesn’t seem to quite understand what it is that agencies are here for.
LOUISE BEDSWORTH: Well, thank you both so much. Thank you to everyone who joined us today. This was a really, really interesting conversation and really appreciate you both taking the time and for your thoughtfulness and I think for leaving us on a note of hope. So thank you both so much, I really appreciate it.
GWYNETH SHAW: Thanks for giving this a listen. To learn more about the Center for Law, Energy and the Environment, including their newsletters and other publications, check out the links in the show notes. If you enjoyed this episode, please share it and be sure to subscribe to Voices Carry wherever you get your podcasts. Until next time, I’m Gwyneth Shaw.
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