Update: On June 28, 2024, the Supreme Court released its final decision in Loper Bright Enters. b. Raimondo, where it overturned Chevron deference, holding that “courts may not defer to an agency interpretation of the law simply because a statute is ambiguous[.]” Click here to read the Court’s decision.
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The United States Supreme Court has agreed to hear oral argument in a case challenging the authority granted to federal agencies under the legal doctrine known as Chevron deference. First established by the Supreme Court in the 1980s, Chevron deference has proven to be highly controversial. In Loper Bright Enters. v. Raimondo, No. 22-451 (2023), the plaintiffs have asked the Court to revisit Chevron and either clarify how the doctrine should be applied or overturn it entirely.
Background
The dispute at the center of Loper Bright Enters. v. Raimondo involves a regulation adopted by the National Marine Fisheries Service (“NMFS”) under its Magnuson-Stevens Act (“MSA”) authority. The regulation would require certain fishing boats to allow a federal observer to accompany them on fishing trips, and pay a portion of the observer’s salary. The plaintiffs argue that the regulation is beyond the scope of authority granted to NMFS by the MSA. They filed their lawsuit to challenge both the regulation itself, and the legal doctrine that lower courts relied on to uphold the regulation.
Magnuson-Stevens Act
The MSA is the primary statute regulating marine fisheries management in United States waters. The statute was passed by Congress and signed into law in 1976 in order to “conserve and manage the fishery resources found off the coasts of the United States” while also recognizing that “these fishery resources contribute to the food supply, economy, and health of the Nation[.]” 16 U.S.C. § 1801. Along with regulating foreign fisheries that operate within 200 nautical miles of the United States coast, the MSA also works to regulate overfishing and overcapacity.
Under the MSA, the United States’ federal fisheries are divided into eight regions, each of which is governed by a fishery management council made up of various federal and state employees. 16 U.S.C. § 1852. Each fishery management council is responsible for developing a fishery management plan for each fishery in its region. 16 U.S.C. § 1852(h). The purpose of these fishery management plans is to establish the “conservation and management measures” which are “necessary and appropriate for the conservation and management of the fishery[.]” 16 U.S.C. § 1853(a). Once a fishery management council finalizes a fishery management plan, it submits that plan to NMFS for approval. After NMFS reviews the plan to ensure that it is consistent with the requirements of the MSA, the plan is available for a period of public comment before becoming final. 16 U.S.C. § 1854(a). The same process is followed for amendments to fishery management plans.
The MSA lays out the various required provisions that fishery management plans must contain, as well as discretionary provisions that fishery management plans may contain. Relevant to the present case, one of the required provisions for fishery management plans involves the collection of data. Specifically, the MSA requires that fishery management plans include provisions on the collection of information regarding “the type and quantity of fishing gear used, catch by species in numbers of fish or weight thereof, areas in which fishing was engaged in, time of fishing, number of hauls, [and] economic information necessary to meet the requirements of [the MSA.]” 16 U.S.C. § 1853(5). While the required provisions do not speak directly to how this data should be collected, one of the discretionary provisions states that any fishery management plan may “require that one or more observers be carried on board a vessel of the United States engaged in fishing for species that are subject to the plan, for the purpose of collecting data necessary for the conservation and management of the fishery[.]” 16 U.S.C. § 1853(b)(8). The MSA also provides a catch-all provision which states that fishery management plans “may prescribe such other measures, requirements, or conditions and restrictions as are determined to be necessary and appropriate for the conservation and management of the fishery.” 16 U.S.C. § 1853(b)(14).
It is under the authority of those MSA provisions that NMFS adopted and finalized a proposal from the New England Fishery Council that would amend all the New England fishery management plans. The amendment, which became final in February, 2020, grants the option to require the fishing industry to pay the costs for monitoring and data collection when federal funding is unavailable. Specifically at issue in Loper Bright Enters. v. Raimondo is a portion of the rule that would require domestic vessels operating in the Atlantic herring fishery to notify NMFS prior to any trip within the herring fishery for monitoring coverage. If NMFS determines that an observer is required on the vessel, but no federal funds are available to accommodate the observer, the fishing vessel will be required to pay for the observer’s service which is estimated to be about $710 per day. The text of that regulation is available here.
The plaintiffs in Loper Bright Enters. v. Raimondo challenged both the regulation itself and the authority of NMFS to issue it.
Chevron Deference
The doctrine of Chevron deference arises from the landmark Supreme Court case, Chevron U.S.A., Inc. v. Natural Resources Defense Council. Inc., 468 U.S. 837 (1984). In that case, the Supreme Court established a legal test for courts to determine when a judge should defer to an agency’s statutory interpretation. Most often, Chevron deference is applied to cases challenging an agency regulation.
To apply Chevron deference, courts must follow the two-step framework outlined by the Supreme Court. First, the court will consider “whether Congress has directly spoken to the precise question at issue.” In other words, the court determines whether the relevant statute directly addresses the specific issue targeted by the agency’s regulation, or whether the statutory language is “ambiguous.” For example, if the United States Fish and Wildlife Service (“FWS”) passed a regulation adopting a definition of “endangered species” under the Endangered Species Act (“ESA”), the regulation likely would not pass the first step of Chevron deference because the text of the ESA already defines “endangered species.” However, if FWS passed a regulation to define the term “habitat” under the ESA, that regulation likely would pass step one of Chevron because while the ESA frequently uses the term throughout its text, it does not include a formal definition. Therefore, the definition of “habitat” under the ESA is ambiguous for purposes of Chevron deference.
If a court determines that the first step of the Chevron framework is satisfied, it will move on to the second step which asks the court to determine whether the agency’s statutory interpretation is “reasonable.” If the court finds that the interpretation is reasonable, then it must defer to the agency even if the court would have adopted a different interpretation. If the court determines that the agency’s interpretation is not reasonable, then it may overturn the agency’s regulation. Courts may use a variety of judicial tools to determine whether an agency’s statutory interpretation is “reasonable.” For example, some courts may interpret “reasonableness” according to the Administrative Procedure Act’s “arbitrary and capricious” standard which directs courts to find agency actions unlawful if they are “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law[.]” 5 U.S.C. § 706(2)(A). Courts may also rely on traditional tools of statutory interpretation when applying step two of Chevron, such as examining the legislative history of a statute or considering the commonly understood meaning of a particular statutory term. While the methods that courtd use to determine “reasonableness” can differ, ultimately step two of Chevron deference asks a court to decide whether an agency’s statutory interpretation is “rationally related to the goals” of the statute.
In Loper Bright Enters. v. Raimondo, the plaintiffs have challenged not only NMFS’s interpretation of the MSA, but the doctrine of Chevron deference itself.
Current Lawsuit
Prior to reaching the Supreme Court, Loper Bright Enters. v. Raimondo was argued in the federal D.C. Court of Appeals. There, the court applied Chevron deference to determine whether the challenged regulation was a reasonable interpretation of the MSA. The D.C. Circuit determined that the regulation was reasonable under Chevron and upheld the rule. It is this decision that the plaintiffs appealed to the Supreme Court.
Pathway to the Supreme Court
At the D.C. Circuit, the plaintiffs in Loper Bright Enters. v. Raimondo argued that the NMFS regulation that would require fishing vessels operating in the Atlantic herring fishery to pay around $710 per day for a federal observer if federal funds were unavailable was not a reasonable interpretation of the MSA. The plaintiffs claimed that three provisions of the MSA create monitoring programs that require vessels to pay for federal observers. Section 1821(f) of the MSA provides that foreign fishing vessels are required to pay a surcharge to cover the costs of carrying a United States observer onboard the vessel. Section 1853a(e) provides that anyone fishing under a type of permit known as a “limited access privilege” permit may be required to pay fees to cover the cost of data collection and analysis. Finally, section 1862 provides that the North Pacific Council may establish a fee system to cover the cost of a federal observer. Because none of these programs directly address the monitoring program established in NMFS’s Atlantic herring fishery regulation, the plaintiffs argued that the regulation was contrary to the language of the MSA and outside the scope of NMFS’s authority.
The D.C. Circuit disagreed. In applying the Chevron two-step framework, the court first determined that the MSA was ambiguous as to whether NMFS could approve amending a fishery management plan to allow for a monitoring fee program because the text of the statute provides that such plans may “prescribe such other measures, requirements, or conditions and restrictions” as are “necessary and appropriate for the conservation and management of the fishery[.]” 16 U.S.C. § 1853(b)(14). While the MSA did not specifically grant NMFS authority to establish an industry-funded monitoring program, it also did not specifically prevent NMFS from establishing such programs. Finding the MSA ambiguous on the question of industry-funded monitoring programs, the court moved on to step two. Under step two of the Chevron framework, the court found that NMFS’s interpretation of the MSA was reasonable. Because section 1853(b)(8) of the MSA states that fishery management plans may require fishing vessels to carry federal observers for the purpose of collecting necessary data, and section 1853(b)(14) of the MSA allows fishery management plans to include any other measures “necessary and appropriate” for the management of a fishery, the D.C. Circuit concluded that NMFS’s approval of the Atlantic herring fishery monitoring program was a reasonable interpretation of the MSA.
Before the Supreme Court
The plaintiffs appealed the D.C. Circuit’s decision, presenting two questions to the Supreme Court. First, the plaintiffs ask the Supreme Court to consider “whether, under a proper application of Chevron, the MSA implicitly grants NMFS the power to force domestic vessels to pay the salaries of the monitors they must carry.” Second, the plaintiffs ask the Court to consider “whether the Court should overrule Chevron or at least clarify that statutory silence concerning controversial powers expressly but narrowly granted elsewhere in the statute does not constitute an ambiguity requiring deference to the agency.” In essence, the plaintiffs in Loper Bright Enters. v. Raimondo make two arguments. First, the plaintiffs argue that the D.C. Circuit misapplied Chevron deference. Second, the plaintiffs argue that if the D.C. Circuit did not misapply Chevron, the doctrine should be either narrowed or overturned.
In making their first argument, the plaintiffs raised the same claims they did at the lower court. While the plaintiffs agree that the MSA does give NMFS the authority to require federal observers on board fishing vessels, only three provisions of the MSA outline specific instances in which NMFS could require vessels to cover the cost of such observers. Because the Atlantic herring fishery is not included in any of those three provisions, the plaintiffs argue that a correct application of Chevron would find that the MSA unambiguously does not allow NMFS to approve an industry-funded monitoring program in the Atlantic herring fishery, and the lower court’s decision should be overturned.
The plaintiffs’ second argument goes a step further. According to the plaintiffs, if the Supreme Court finds that the D.C. Circuit did appropriately apply Chevron, then the Court should either clarify the boundaries of Chevron deference by explaining that lack of statutory language on its own does not create ambiguity, or overturn the doctrine entirely. The plaintiffs claim that the doctrine of Chevron deference has inappropriately increased the role of federal agencies in interpreting statutes and statutory grants of authority, while simultaneously reducing the role of the judiciary. According to the plaintiffs, either overturning Chevron or clarifying its limits would require courts to engage in their own statutory interpretation instead of deferring to federal agencies.
Looking Forward
The Supreme Court is expected to hear oral arguments in Loper Bright Enters. v. Raimondo in January 2024. Recently, the Court announced that it would hear the case in tandem with Relentless, Inc. v. U.S. Dep’t of Commerce, No. 22-1219 (2023), a case challenging the same NMFS regulation and making the same legal arguments as the plaintiffs in Loper Bright Enters. v. Raimondo. Ultimately, however the Court rules in either of these cases, the outcome is likely to impact both federal agencies and courts tasked with reviewing agency regulations.
To read the plaintiffs’ brief in Loper Bright Enters. v. Raimondo, click here.
To read the defendants’ brief in Loper Bright Enters. v. Raimondo, click here.
To read the D.C. Circuit’s decision, click here.
To read the text of the MSA, click here.
To read the Supreme Court’s decision in Chevron U.S.A., Inc. v. Natural Resources Defense Council. Inc., click here.
For more National Agricultural Law Center resources on administrative law, click here.