Does Loper Bright Revive Pre-Chevron Standards of Review? (11/28/24)

The key Loper Bright holding is summarized near the end of the opinion addresses Chevron (Loper Bright Ent. v. Raimondo, ___ U.S. ___, 144 S. Ct. 2244, 2273 (2024)):

Chevron is overruled. Courts must exercise their independent judgment in deciding whether an agency has acted within its statutory authority, as the APA requires. Careful attention to the judgment of the Executive Branch may help inform that inquiry. And when a particular statute delegates authority to an agency consistent with constitutional limits, courts must respect the delegation, while ensuring that the agency acts within it. But courts need not and under the APA may not defer to an agency interpretation of the law simply because a statute is ambiguous.

As I understand the holding it is that agency interpretive authority for the states they administer cannot arise from the “fiction” Chevron created that statutory ambiguity is an implicit delegation of interpretive authority that justifies deference to the agency interpretation. Phrased this way, the Court may have left open whether any other form of pre-Chevron deference survives Loper Bright. After all, the Court is careful to base its rejection on deference from ambiguity alone, which is the key innovation of Chevron. Before Chevron, the Court had developed bases other than ambiguity to justify deference. For example, in National Muffler Dealers Ass’n v. United States, 440 U.S. 472 (1979), a tax case, the Court applied traditional features from cases going to the early period of the administrative state to justify deferring to agency interpretations. (Tax and administrative law fans will recall that, in Mayo Found. for Med. Educ. & Rsch. v. United States, 562 U.S. 44, 52 (2011), authored by Chief Justice Roberts (who apparently experienced a Eureka moment in Loper Bright), the Court held that, for consistency among agencies, appellate review of the deference accorded tax interpretations should be tested under Chevron based on statutory ambiguity rather than the traditional features applied in National Muffler.)

In a recent article (highly recommended), Professor Thomas W. Merrell asks under “Matters of Speculation” the following question: “Does Loper Bright Revive Pre-Chevron Standards of Review?” (At pp. 269-270.)  Thomas W. Merrell, The Demise of Deference — And the Rise of Delegation to Interpret?, 138 Harv. L. Rev. 227, 269-279 (2024), here. I don’t want to review the pre-Chevron law of deference, but the key is that is that pre-Chevron deference was not justified on implicit delegation of interpretive authority arising from statutory ambiguity alone. In that pre-Chevron law, such as National Muffler, features such as contemporaneity of the interpretation, long-standingness, and other features might add gravitas to the agency interpretation permitting deference. To be sure, pre-Chevron deference applied only where the statute was ambiguous and the interpretation was reasonable (key features of Chevron deference), but ambiguity alone did not justify deference.

Thus, because the Court in Loper Bright was careful to limit rejection of deference to deference arising from ambiguity, one could craft an argument that the Court’s pre-Chevron jurisprudence survives Loper Bright. Professor Merrell warns (p. 270): “So courts should probably exercise caution in resurrecting pre-Chevron standards of review like National Muffler, but some intrepid litigator will no doubt claim that this has happened.”

I think Loper Bright may be confusing as to its precise holding. Loper Bright might be read as two holdings:

1. The APA requires courts to interpret de novo the statutes the agency has interpreted and defer only where Congress explicitly or implicitly delegated interpretive authority to the agency.

2. Chevron, requiring ambiguity as implicit delegation of interpretive authority, is overruled.

If that is the way to read Loper Bright, the first holding covers the deference turf (other than explicit or implicit delegations). On the question considered here, the state of pre-Chevron deference, the first holding would reject both Chevron deference (based on delegation by ambiguity) and pre-Chevron deference (based on features other than explicit or implicit delegation). Read this way, the second holding as to Chevron's demise is surplusage; all deference on bases other than statutory ambiguity is rejected. However, if those holdings are read as conjunctive (as the Syllabus does), then Loper Bright may leave open the possibility of pre-Chevron deference.

On my first reading of  Loper Bright, I did not see any room for pre-Chevron deference. However, Professor Merrell’s article raises an issue that one or more “intrepid litigators” may raise. Presumably, at least in a tax controversy setting, only the IRS would raise the issue since it will usually litigate agency interpretations in regulations that, under the Chevron regime, could have given rise to Chevron deference. I am not sure that the IRS or DOJ Tax will have the temerity to assert pre-Chevron deference.

I think one possibility is that the features of such pre-Chevron deference based on factors other than statutory ambiguity alone may now be subsumed in the Court’s Loper Bright approval of Skidmore “deference,” which is either not deference or a very weak form of deference that may be enhanced after Loper Bright.

As mentioned earlier, Professor Merrell’s article is excellent. While it is certainly not the only article that those interested in Loper Bright and its permutations should read, it is one of them. I may have other posts that are inspired by the article.