Bills to Approve Deference - Stop Corporate Capture Act (7/26/24)

The Supreme Court rejected Chevron deference based on implied delegated authority from statutory ambiguity or silence as a matter of statutory interpretation of APA 5 U.S.C. § 706. Loper Bright Enterprises v. Raimondo, 603 U. S. ____, 144 S.Ct. 2244 (2024). I covered that development in a prior blog. The Supreme Court Pronounces the Demise of Deference (Federal Tax Procedure Blog 6/29/24; 7/26/24), here. Loper Bright recognizes that, since the demise of deference is a matter of statutory interpretation of APA 5 U.S.C. § 706, Congress may legislatively delegate interpretive authority to agencies (although some read Chief Justice Roberts’ Loper Bright rhetoric as suggesting constitutional overtones). The delegation may be explicit or implicit, but it can’t be by ambiguity or silence alone. I discuss the possibility an implied delegation of interpretive authority in Can § 7805(a) & (b) Be Read as Delegating to Treasury/IRS Interpretive Authority with Deference (7/14/24), here.

Senator Warren has introduced the Stop Corporate Culture Act in the Senate. See Press Release titled Warren Leads Senate Response to End of Chevron Doctrine (7/23/24), here. The Press Release has links at the top to: Bill Text (PDF), Section-by-Section (PDF), and Bill Two-Pager (PDF). 

The Senate “Stop Corporate Culture Act” is the Senate version of a similar House Bill introduced in the House in 2023, Stop Corporate Capture Act, H.R. 1507, 118th Cong., see links to the bill and related material here.

I haven’t compared the two bills, but suspect that there may have been some tweaking in Senator Warren’s version to address specific issues raised by the recent Supreme Court decisions since the introduction of the House bill. However, below, I compare provisions in the two bills on deference and found no differences.

Both bills go substantially beyond the deference issue to address certain administrative law problems raised by decided cases and otherwise in the public discussion. These are suggested by the following from Senator Warren’s description of the bill in the press release:

The Senate version of the Stop Corporate Capture Act would (copy and paste from Senator Warren's Press Release):

• Protect Chevron Doctrine

• Codify Chevron deference, allowing expert agencies to conduct rulemaking in line with their reasonable interpretation of their authorizing statutes.

• Modernize and Reform the Regulatory Process

• Streamline the White House’s review period for regulations, creating a 120-day time limit for review.

• Authorize agencies to reinstate rules that are rescinded by Congress through the Congressional Review Act.

• Reform agencies’ cost-benefit analysis to emphasize public benefits of a rule, including non-quantifiable benefits like promoting human dignity, securing child safety, and preventing discrimination.

• Empower and Expand Public Participation in Rulemaking

• Create an Office of the Public Advocate to help members of the public participate more effectively in regulatory proceedings.

• Strengthen agency procedures for notifying the public about pending rulemakings.

• Provide the public with greater authority to hold agencies accountable for unreasonable delays in completing rules.

• Require agencies to respond to citizen petitions for rulemaking that contain 100,000 or more signatures.

• Increase Transparency and Protect Independent Expertise in Rulemaking

• Require all rulemaking participants to disclose industry-funded research or other related conflicts of interest.

• Require any submitted scientific or other technical research that raises a specified corporate conflict of interest be made available for independent public review.

• Bring transparency to the White House regulatory review process by requiring disclosure of changes to draft rules during that process and the source of those changes.

• Require agency officials to provide justification when the regulatory review process ends with a rule being withdrawn. 

• Establish financial penalties for corporate special interests that knowingly submit false information during the rulemaking process.

I focus briefly on the Chevron provision in both bills. The relevant text of Senator Warren’s bill (§ 12. Scope of Review) would add the following to § 706 (same as the House bill):

If a statute that an agency administers is silent or ambiguous as to the proper construction of a particular term or  provision or set of terms or provisions, and an agency has followed the applicable procedures in subchapter II of chapter 5, has otherwise lawfully adjudicated a matter, or has followed the corresponding procedural provisions of the relevant statute, as applicable, a reviewing court shall defer to the agency’s reasonable or permissible interpretation of that statute, regardless of the significance of the related agency action or a possible future agency action.’’

This language would reinstate deference in the same words as Chevron deference without mentioning Chevron.

The language relatedly also eliminates the Major Questions Doctrine (“MQD”) that the Supreme Court created to pre-empt deference under the Chevron regime. Presumably under Loper Bright, MQD was mooted by eliminating Chevron deference, except that, in theory, the Supreme Court might raise a variant MQD for delegated interpretive authority; with Chevron-like deference legislatively approved in the bill, the text says that the courts cannot use MQD to end-run the agency interpretation otherwise entitled to deference. Remember in this regard that MQD was an assumption (that Congress did not intend to delegate interpretive authority from ambiguity or silence on matters of major public importance), so this bill would make clear that Congress did intend to delegate that authority on ambiguity or silence.

I have no expectation of the passage of the Stop Corporate Culture Act before the next Congress and even then, barring some major shifts in the players, particularly Congress, it is not likely to pass anytime soon after the next election. That might mean, however, that if the Democrats take both Houses the presidency, some variation of the Bills, including deference, might pass and be signed into law. (Unfortunately, deference which should be politically neutral, has not proven to be so.)