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Doomsday Report for March 28, 2019: SCOTUS hearing in Kisor: Conservative Courts Poised to Occupy the Regulatory Field.

On March 27, 2019 SCOTUS held oral argument in the case of Kisor v. Wilke, involving a benefits determination by the Department of Veterans Affairs, and the justices’ primary debate concerned the so-called doctrine of Auer deference, while is related to the issue of Chevron deference, a key topic in confirmation proceedings on Trump’s two nominees, Gorsuch and Kavanagh, each of whom forcefully denounced it. Chevron [Chevron USA Inc. v. Natural Resources Defense Council, 467 U.S. 837 (1984)], as well as Auer, deference is a core tenet of administrative law, long legitimized as serving the interests of administrative agency expertise, institutional competence and political accountability.  The doctrine of Chevron deference creates a strong presumption in favor of the validity of administrative agency action, so long as the agency’s interpretation of its statutory authority is reasonable; Auer deference applies the same presumption to agency interpretation of the agency’s own regulations.

Consistent with precedent, Justice Breyer in the March 27th proceedings recognized that administrative agencies have “unique and valuable expertise on the issues they regulate” and that doing away with deference “would put judges in the position of deciding issues about which they know comparatively little.”

Worthy of full quotation here, Breyer cautioned the Court:

“What you’re doing is saying, instead of paying attention to people who know about that, but rejecting it if it’s unreasonable, the judges should decide….I mean, I want to parody it, but I mean, this sounds like the greatest judicial power grab since Marbury v. Madison [ 5 U.S. 137 (1803)]…”

Justice Breyer’s sobering remarks are well-taken, insofar as, without Chevron, “courts would exercise…far greater control over the scope and substance of federal policy in virtually every significant field of regulatory activity.”  Jonathan Matz, “The Imminent Demise of Chevron Deference?” 6/21/18 takecare blog.  “If Chevron is overruled, federal agencies will face a far more treacherous terrain when their actions and regulations are challenged in court” and while courts will contend they are merely interpreting statutes, their decisions “will be rife with [value and policy] judgments truly of their own making.”  Matz, Ibid.

While SCOTUS’s Chevron decision itself upheld a decision of the Environmental Protection Agency during the Reagan Administration, over time the decision became an “important source of authority for regulators looking to crack down on abuses by industry.” Pema Levy, “How Brett Kavanaugh Could Cripple the Next Democratic President,” 7/24/18.

During the Obama administration, Republicans ramped up their attacks on Chevron deference, targeting those administrative agencies charged with implementation of the Affordable Care Act, as well as the Obama Administration’s “net neutrality” rule and limits on carbon emissions. These attacks, joined in by a conservative judiciary, linked their criticism of deference “to overt hostility to economic regulation and…skepticism of progressive policies.”  Matz, Ibid.  In several decisions during the Court’s 2018 term, SCOTUS in 5-4 partisan divides rejected deference to agencies, including the Department of Labor in Encino Motorcars v. Navarro, 138 S.Ct. 1134 (Thomas majority decision refused to defer to agency rule excluding auto service advisors from the category “salesman,” thereby denying them overtime; Ginsburg wrote the dissent) and Epic Systems Corp. v. Lewis, 138 S.Ct. 1612 in which Gorsuch’s majority decision denied deference to the National Labor Relations Board’s conclusion that mandatory arbitration agreements precluding class actions are unenforceable; dissent by Ginsburg, Breyer, Sotomayor and Kagan).  In both Epic Systems and also SAS Inst. v. Ianco, 138 S.Ct. 1348 from the same term, Gorsuch invited reconsideration of Chevron deference.

As noted by Levy in the above cited article from Mother Jones, the impact of abandonment of Chevron deference would be magnified due to the fact that in recent times Congress “has largely gotten out of the business of clarifying and amending statutes.” While acknowledging that, historically, “the politics of Chevron have varied depending on which party is in power,” Levy contends that “on balance, the doctrine does appear to favor Democratic priorities.” Citing in her Mother Jones article a study by constitutional scholar Michael Dorf, Levy notes his conclusion that Chevron deference “will more often lead to green-lighting new regulations than removing or weakening regulations- evidence for the conclusion that Chevron skews liberal” in that it “supports robust governance.”

Already employer defense firms are vaunting their clients’ foreseeable increased opportunities to challenge and/or limit their regulatory burden, whether from the NLRB, the DOL, OSHA, or EEOC, in the absence of Chevron deference.  As they say, the overruling of Chevron deference will represent “a fundamental change about how the fourth branch of government operates.”