The Supreme Court holds oral arguments Jan. 17 on a challenge to the legal standing of regulatory agencies that could significantly alter the balance of power between regulators and federal courts.
The justices are being asked to overturn or restrict a 1984 Supreme Court ruling, known as Chevron deference, in which the court said judges should defer to regulators’ expertise in interpreting or administering laws that are ambiguous or unclear as long as the interpretation is reasonable.
“Overruling Chevron could be a seismic shift in the relationship between courts and agencies,” said an October report by the Congressional
Research Service, a nonpartisan provider of analysis to federal legislators.
“We’re not in the center of this battle, but I imagine we could be dragged in if we end up with a major doctrine,” said ERISA attorney Carol I. Buckmann, founding partner of Cohen & Buckmann, referring to the regulatory agencies that affect the retirement industry.
The complex, highly technical ERISA “is a good argument” for letting the regulatory experts interpret the law, she said. “Congress doesn’t have the expertise. There are gaps in the law. Somebody has to fill them in.”
The Chevron deference challenge is coming via two lawsuits involving the regulation of fisheries, but plaintiffs say the justices should overrule or restrict Chevron deference across the board — a prospect that would affect every acronym from EPA to NLRB, from SEC to IRS, from DOL to PBGC.
Among the approximately 90 amicus briefs filed with the justices, a large majority calls for eliminating or eviscerating Chevron deference, the product of the 6-0 Supreme Court decision Chevron U.S.A. Inc. et al.vs. Natural Resources Defense Council Inc. et al.
Critics include business groups, red state politicians and advocacy groups representing such issues as gun ownership, workers’ rights to refuse union membership, conflicts between religion and secular law, and limited government and taxation.
Critics say Chevron deference allows legislation via regulation, permitting regulatory overreach beyond the scope of the laws that regulators administer.
“Modern Chevron doctrine has distorted the separation of powers for too long,” said a July 2023 amicus brief from the U.S. Chamber of Commerce. “The result is bad for free enterprise.”
Supporters say Chevron deference is necessary to prevent a single judge from overturning public policy and to avoid giving judges responsibility for highly technical issues for which they have little or no expertise.
“Overturning Chevron would unsettle decades of precedent, increase the workload of the federal courts, and dramatically increase partisan division in judicial decisions, thus further eroding public confidence in the courts,” said a September amicus brief by the AFL-CIO.
In the middle of the pro and con extremes is the retirement industry, which takes a more nuanced view of Chevron deference.
“Personally, I would be nervous with a wholesale revocation,” said Kent Mason, a partner at Davis & Harman.
“I would preserve Chevron deference where agencies are using their technical expertise, but I would not apply it regarding rules that are driven by a political or policy agenda,” he said. “It’s not an easy line to draw.”
There is a degree of comfort in dealing with regulators who have expertise in technical matters. “Chevron deference produces some stability,” Mason said, ”We deal primarily with the IRS, DOL and PBGC. In many cases, we like the stability even though I don’t agree with some of it.”