Excellent Article on Practical Effects the Administrative Law World Awaits Supreme Court Opinion(s) on Chevron (5/5/24)

The flood of Chevron comments seems to have slowed down while the Supreme Court is considering Chevron for what further havoc it will wreak in pursuit of its conservative agenda. Readers will certainly know that Chevron is a favorite bogeyman (real or feigned) in the conservative community.

I write to point readers to an article that I found very good about what might happen with the much-anticipated opinion. The article is James Downing, Energy Lawyers Debate the Impact of Losing the Chevron Deference (RTO Insider 4/29/24), here. The article reports on a discussion among “energy lawyers” which are perhaps not as nerdy as tax lawyers because of energy’s long-standing reputation of being major risk-takers. One of my favorite memories from moving to Houston in 1977 was an ad from a local entrepreneur, Eddie Chiles, proclaiming “If you don't have an oil well, get one,” see Wikipedia entry here. Tax lawyers are not identified with any particular risk-taking community and have long been thought as so nerdy as to be risk-averse (that reputation was challenged as tax lawyers forayed into bullshit tax shelters in relatively recent memory).

At any rate, the article reports interesting comments from the lawyers serving in energy regulator roles. I quote excerpts from the article:

          Chevron makes sense as a legal doctrine and provides judges with an easy way of affirming an agency’s decision-making when there is ambiguity in the law, FERC General Counsel Matthew Christiansen said at the EBA’s Annual Meeting. But underlying those decisions is some basic common sense being applied by the judges.

          “Because I think that Chevron is largely deployed as a way of providing a compelling path to affirm an agency action, I’m not convinced that the loss of Chevron in many cases, if that is indeed what happens, is going to lead to wildly different outcomes,” Christiansen said. “I’m sure it’s going to lead to different outcomes on the margins. But at the end of the day, I’m a big believer in agencies’ ability to still put forth compelling justifications.”

          Chevron has provided a lot of value over the decades, but the politics have reversed completely since it was first decided, DOE General Counsel Samuel Walsh noted. The late Justice Antonin Scalia, a textualist, was a big fan of the doctrine, and Justice Clarence Thomas authored the Brand X decision in 2005 that extended deference to the Federal Communications Commission and kept internet service providers from being regulated as common carriers.

          “Some of the most important Chevron cases were cases where agencies were using the flexibility afforded by deference to regulate in a more light-handed way, or maybe not at all,” Walsh said.

          The biggest area where DOE might be affected by the change in precedent would be on its ability to set efficiency standards for electric appliances, he said.

          “But to my knowledge, we’ve only been upheld at Chevron Step 2 once,” Walsh said; Step 1 is deciding whether the law’s intent is clear from the text. “We’ve done hundreds of rules over the last four decades, and I think we’ve only benefited from it in a clear and explicit way once.”

          DOE has benefited from the law more in its other functions such as litigation around nuclear waste storage in the 1990s and in litigation against the federal power marketing administrations it oversees. The law that governs sales from federal dams specifically calls “municipalities” preferred customers, so in the early 1990s, some “clever” city governments asked the Western Area Power Administration to sell them cheap electricity, Walsh said. WAPA argued that the term “municipalities” meant municipal utilities, and Chevron helped it carry the day in court.

*  * * *

          While the combination of polarized courts and the lack of deference to agencies could create significant issues for some parts of the government, Christiansen downplayed the risks in the electric and natural gas markets. Many of the major regulations FERC has issued have vastly influenced the industries it oversees.

          “Maybe I’m overly optimistic, too sanguine,” Christiansen said. “I’m not terribly concerned those foundational precedents that I think are the bedrock for the way the industry operates now are at great risk.”

JAT Comments:

1. If the comments are true that real Chevron deference has not been a major factor in energy cases, is energy different than other administrative areas. Is there "energy exceptionalism?" I think that Mayo rejected such exceptionalism. So, if there is no energy exceptionalism, is the phenomenon of limited Chevron application as outcome-determinative an indication that there is less than meets the eye in the hyperblown claims about Chevron deference?

2.  As I have argued, I think the claims of Chevron deference as being outcome-determinative in many cases are overblown. E.g., Chevron Deference: Much Ado About Not Much (Federal Tax Procedure Blog 8/15/21), here; Is Chevron on Life Support; Does It Matter? (Federal Tax Procedure Blog 4/2/22; 4/3/22), here; Chevron Step Two Reasonableness and Agency Best Interpretations in Courts of Appeals (Federal Tax Procedure Blog 2/9/23), here; and Overlap Between Chevron Deference and Skidmore Respect; Chevron Deference Masking Skidmore Respect (Federal Tax Procedure Blog 3/25/23), here. I think Chevron hyperbole started off as political claims, cheered on by the Federalist Society, requiring some liberal bogeyman to vent about and then adopted by many judges of the Federalist Society stripe.

3. As they say, stay tuned. It won't be long now.