Lobbyists Brace for ‘Earth-Moving’ Change After Chevron Ruling

Lobbyists are expecting a major transformation in the way Washington works, and how they influence Congress and the executive branch, after the court’s landmark decision to overturn the Chevron deference doctrine.

“This is an earth-moving event,” said Rich Gold, who runs the lobbying practice at Holland & Knight. “Chevron underpins all of modern policymaking from Congress to the executive branch.”

The longstanding doctrine, overturned Friday in a 6-3 decision, meant that lower courts gave deference to executive branch agencies when they issued the regulations to implement laws Congress wrote while leaving plenty of room for interpretation.

Congress, and the lobbyists who seek to influence what it does, will now need to craft much more detailed and specific legislative text and not leave the details to federal agencies, lobbyists said.

The decision will “fundamentally transform how Washington functions,” said Reggie Babin, a former chief counsel to Senate Majority Leader Charles E. Schumer (D-N.Y.) and now a lobbyist with the firm Akin.

It will require a “different type of engagement from K Street,” Babin said, with greater specificity and precision in the legislative text, giving clear directives to executive agencies.

For lobbyists, “I would expect a much more intensive level of engagement with the Congress,” said Babin, whose registered clients include Adobe Inc. and Nippon Steel Corp. “It shifts a lot more focus on the Congress, with the understanding that agencies will be more constrained.”

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Weighing In

Big lobbying groups, such as the US Chamber of Commerce and the National Federation of Independent Business, weighed in on the case with briefs, urging the Supreme Court to overturn Chevron deference.

“All the federal agencies rely on Chevron to support their interpretation of laws,” said Beth Milito, executive director of NFIB’s small business legal center. “What it has meant, in many instances, is that the federal agencies’ interpretation wins.”

Under the court’s decision, “judges are going to have more power to decide whether or not the agency’s interpretation is correct.”

While that could spur more legal challenges to regulations, Milito and others who represent business interests said their hope is that federal agencies will take a more cautious, less sweeping approach to their regulations.

“Chevron deference has really allowed agencies to run roughshod over small businesses,” Milito said. “Overturning Chevron will be very important in reigning in the federal agencies.”

The onus will be on the lawmakers, not regulators, she said.

Lawmakers will need to write statutes “in a way that there’s not a way for an agency to claim ambiguity,” she said. “This is going to require Congress to do what it is supposed to do: write clear laws that everybody knows what the agency needs to do to carry them out.”

Holland & Knight’s Gold agreed.

“Broad delegations of authority are not going to survive judicial review under the new standard,” said Gold, whose registered lobbying clients include the American Chemistry Council and Occidental Petroleum Corp.

“For those of us who consider ourselves as drafting legislation for a living, that’s a whole different way of solving problems as you draft going forward,” he said. “If we think 1,000 page omnibuses are annoying, wait until they’re 5,000 pages because staff have to be clear.”

Shifting Power

The new protocol may tilt power toward congressional committees and away from leadership, lobbyists said, relying more on subject expertise in a way Congress has not. That would trickle onto the lobbying sector where advocates with policy and legal expertise would be sought after, some lobbyists predicted.

Lobbyists at law firms say they expect to pitch clients on their proximity to legal expertise.

Steve Elmendorf, a partner at Avoq, a lobbying and messaging firm, said he didn’t expect the court decision would impact the lobbying business in a major way but said it would likely have more implications for law firm regulatory practices.

“People are still going to want to go up to Capitol Hill and the administration,” he said.

Still, lobbyists at other shops say they are bracing for change, at least for clients in heavily regulated sectors such as health care and financial services.

“It’s an earthquake,” said Stewart Verdery, founder of Monument Advocacy, whose registered clients include PepsiCo, Microsoft Corp., and Amazon.com. “Policymaking is like the iceberg: 10% above the water, 90% under the water what the agencies do. It brings much more uncertainty to how policy is made.”

Many of the fights over regulations will be in the courts, Verdery said. Big clients that have on retainer law firms with regulatory practices are turning to those teams, he said, but with smaller clients he said his firm is “trying to educate them” that the way you’re used to the world working may change.