Supreme Court Eyes World War II Era Doctrine for Agency Rules

The future of the Chevron doctrine appears more precarious than ever after Supreme Court arguments, but questions remain about what might replace the bedrock administrative law principle.

The court, controlled by conservative justices, signaled during arguments Jan. 17 in Loper Bright Enterprises v. Raimondo and Relentless, Inc. v. Department of Commerce that if Chevron goes, that they want a doctrine known as Skidmore to govern in the future, even as consensus eluded them about what that could mean.

“If Skidmore is going to occupy a more prominent role going forward, I’d like to know exactly what your understanding of that principle is,” Chief Justice John Roberts told advocate Paul Clement, who was challenging Chevron.

While 1984’s ruling in Chevron v. Natural Resources Defense Council often requires judges to defer to agencies when they offer a reasonable interpretation of a statute, 1944’s Skidmore v. Swift generally says an agency’s interpretation of a statute is only entitled to deference from courts if it is persuasive.

Several conservative justices appear primed to ditch or at least severely limit Chevron in the Relentless case, and the potential impact of Skidmore after that would depend in large part on “how much explicit guidance they give to lower courts,” said the Cato Institute’s Thomas Berry.

A Question of Meaning

Conservatives for years have been after the Supreme Court to do away with Chevron, saying it distorts the branches of government and gives executive agencies too much power at the expense of the judiciary.

There’s agreement among those on the right and the left that Skidmore is less friendly to agencies than Chevron.

It “employs the common-sense notion that agency actions and interpretations ‘constitute a body of experience and informed judgment to which courts and litigants may properly resort for guidance,’” Carrie Severino, president of the conservative Judicial Crisis Network, said in citing that decision.

So while Chevron requires courts to defer to a reasonable agency determination, Skidmore requires only that a court treat it as “guidance,” said Dorsey & Whitney partner Erin Bryan. It’s “a much lower threshold.”

How much lower was a point of contention among the justices.

Justice Elena Kagan, a former Harvard Law School administrative law professor, said Skidmore doesn’t really do any work for administrative agencies even though they often have expertise.

“Skidmore means, if we think you’re right, we’ll tell you you’re right,” Kagan said. It “has always meant nothing.”

Justice Neil Gorsuch offered a different view.

Under Skidmore, courts must give “special weight” to administrative agencies as a “coequal branch” of government, Gorsuch said. An agency’s views about the law should “be considered great weight in arriving at the best answer” of what an ambiguous statute really means, he said.

Ultimately, the best answer is going to be up to the court, Gorsuch said. “Is the judge persuaded at the end of the day?”

Skidmore can really be applied both ways, said Covington partner Kevin King. And if the Supreme Court gets rid of Chevron, it might need to give clarity to lower courts on which is the proper view going forward, he said.

New Tools

Replacing Chevron with Skidmore should make a difference when courts are considering challenges to agency regulations—at least in theory, said Boies Schiller partner Jesse Panuccio. Agencies should win less under the latter, he said.

But Holland & Hart partner Tina Van Bockern noted that the Supreme Court has already cut back on Chevron and its applications in recent years.

“Courts and litigants have seen the writing on the wall,” Van Bockern said, and so there’s “been a stark decline in reliance” on Chevron.

In the Supreme Court, the change may mean very little, Bryan said.

“But most agency litigation is in the circuit courts where chevron is alive and well,” she said.

Regardless of the impact in federal courts, attorneys who litigate administrative law cases should change the calculation for agencies.

Greater Pressure

Agencies, knowing they’’ face a less deferential court, “will be under greater pressure to engage in careful, thoughtful reasoning to support their actions,” said Seyfarth attorney Joshua Ditelberg.

They are going to have to “show their work,” Van Bockern said.

As a result, there will be “fewer chances for broad policy changes,” Berry said, particularly when a new administration wants to change a previous administration’s understanding of the law. It “will give agencies pause when want to take most aggressive interpretation.”

That’s going to have “a chilling effect on agency action,” said Ivy Fredrickson, an attorney at Ocean Conservancy, a nonprofit advocacy group. Expert “agencies who are tasked with protecting and serving the public will become less likely to solve problems.”

Panuccio warned against overstating the impact for agencies and their ability to enact major policy initiatives. “Agencies can still regulate in other ways,” he said, like enforcement actions, funding mechanisms, and pressure to outside groups.

“Agencies still have lots of tools to get desired results,” Panuccio said.