Time to Reconsider Chevron Deference?

Date: November 06, 2017

The NFIB Research Foundation’s Small Business Problems and Priorities Report (released once every four years) confirms that government regulation is a top concern for the small business community. But, of course, the greatest regulatory problem facing small business is not any one regulatory mandate or restriction. The problem with the modern administrative state is that it inflicts death by a thousand cuts. As such, over-regulation must be viewed as a systemic problem in need of a systemic solution.

Of course, it is encouraging for small business that the present Administration has made a priority of slowing the growth of the regulatory state. For that matter, NFIB Small Business Legal Center has weighed in with other concerned industry groups to defend the President’s Executive Order requiring the elimination of two regulations for every new one promulgated. But for those who understand the scope of the problem, it is plain that these efforts—as laudable and ambitious as they may be—will only temporarily abate the rising tide of regulation.

The unfortunate reality is that ever since the Supreme Court’s controversial decision in Chevron v. Natural Resource Defense Council, we’ve seen unprecedented growth and power in what we call the Fourth Branch of Governmenti.e., the Leviathan that is Washington’s federal bureaucracy. But this aggrandizement of executive branch power should come as little surprise because, in Chevron, the Supreme Court told courts to essentially abdicate their judicial independence to say what the law is. Instead, of allowing judges to determine the best interpretation of ambiguous statutory language, Chevron requires courts to defer to “reasonable” interpretations advanced by the federal government—even on questions of the agency’s jurisdictional powers.

Plainly this has lead to a breakdown in the separation of powers—and the ballooning of centralized power in the hands of unelected and unaccountable bureaucrats. To be sure, Chevron comes into play whenever statutory language is deemed “ambiguous.” And goodness knows, crafty lawyers make a living finding ambiguity in language that everyone else would think perfectly clear. Then to boot, federal agencies have a very low bar to make a case that their preferred interpretation is “reasonable.” To be sure, when applying Chevron, the courts place a thumb on the scale in favor of the agency—which means we’re not playing on a level playing field.

With the game rigged in this manner, it should come as no surprise that we’ve seen such a radical increase in federal regulation over the past three decades—often with agency’s blatantly seeking to change regulatory standards in frustration with Congressional inaction on their policy priorities. But of course, the Founding Fathers believed that only Congress should make law. So, from an originalist perspective, there are grave problems with the Chevron doctrine.

For all of these reasons, NFIB Small Business Legal Center has consistently urged the Supreme Court to curb agency deference, and to rethink Chevron. And the opportunity may now be at hand. Recently the Supreme Court’s official blog listed Berninger v. FCC as the “petition of the day.” This is promising because Berninger not only raises a question as to whether Chevron was properly applied, but may serve as an ideal vehicle for the Supreme Court to reconsider Chevron altogether.

While Chevron is a recurrent issue before the Supreme Court, this case highlights the absurdity of reflexively deferring to agency interpretations because in this case the Federal Communications Commission invokes Chevron to justify an interpretation that the agency squarely rejected previously. In fact, the Supreme Court upheld FCC’s prior interpretation as reasonable in National Cable & Telecommunications Association v. Brand X Internet Services. As such, it is remarkable that the DC Circuit now holds that FCC is entitled to Chevron deference now that it has changed its statutory interpretation 180 degrees. This only underscores the reality that Chevron vests lawmaking powers in the executive branch—all because Chevron requires juridical abdication.

Related Content: Legal - Blog | Regulations

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