Understanding Loper, the APA and Chevron Deference

Administrative Agencies: What they are and what they do

There are several agencies that exist in the government that help the executive branch of government (the president) execute the laws on the books. These places can be called administrative agencies. Many of them are things that you know about or are easy to understand:  The Social Security Administration, the Federal Trade Commission, NASA, Department of Justice, Department of Education, Health and Human Services, etc. Anything other than congress, the courts and the military. These agencies have the power to carry out and enforce law via the Administrative Procedure Act of 1946.

Administrative Agency Decisions and Chevron Deference:

From time to time, these agencies were challenged in the way that they came up with their rules and their procedures. Since 1984 the test for how those things were challenged was in Chevron U. S. A. Inc. v. Natural Resources Defense Council, Inc., 467 U. S. 837 (1984):

“Our Chevron doctrine requires courts to use a two-step framework to interpret statutes administered by federal agencies. After determining that a case satisfies the various preconditions we have set for Chevron to apply, a reviewing court must first assess “whether Congress has directly spoken to the precise question at issue.” If, and only if, congressional intent is “clear,” that is the end of the inquiry. Ibid. But if the court determines that “the statute is silent or ambiguous with respect to the specific issue” at hand, the court must, at Chevron’s second step, defer to the agency’s interpretation if it “is based on a permissible construction of the statute.”

This is called “Chevron Deference.”  Important to note is that the reviewing court had to give that deference to the agencies even if the reviewing court had a different understanding of how the statute should play out.

So administrative agencies are permitted Chevron Deference. Which means that if an administrative agency is basing a regulation of theirs on a provision of the law and their interpretation is based on a permissible construction of the statute then they were most likely to be able to keep doing what they were doing pursuant to Chevron. This covers a wide array of behavior and regulations.

The Loper Case

Loper combined two cases into one Supreme Court ruling and opinion. Loper dealt with the National Marine Fisheries Service (who was acting under the Department of Commerce) (just call them the fishing board) and how they enforced the Magnuson-Stevens Fishery Conservation and Management Act (MSA).  Fishing companies sued once changes required things like observers onboard domestic vessels (which the fishing companies would have to pay for) and fees to be paid by fishing companies that were subject to these rules. The argument that the fishing companies made was that the MSA does not authorize the “Fishing Board” to order that the fishing companies had to pay for those observers. The lower courts sided with the government, applying the Chevron Deference principle.

Similarly, in a companion case, a group of boats that could stay out in the water longer were told that if they caught fish for certain fisheries the MSA and the rules of the “fishing board” meant that they had to have (and pay for) observers on board for the whole trip. Again, the government won based on Chevron Deference. The fishing company appealed to the supreme court.

The Supreme Court noted that while the courts were to give respect to agency decisions that only goes so far. Before Chevron, the rules were that the courts must decide all relevant questions of law. Agency deference was only given to facts.

Later, the Administrative Procedure Act, or APA, prescribed procedures for agency action and explained how judicial review of that action was to be applied. The APA state that courts were to decide legal questions as well as “interpret[ing] constitutional and statutory provisions, and determin[ing] the meaning or applicability of the terms of an agency action.”  The APA indicated that it “remains the responsibility of the court to decide whether the law means what the agency says.”  Courts could seek aid “from the interpretations of those responsible for implementing particular statutes.”

The court went on to indicate that Chevron and the Deference that Chevron provides cannot be squared with the text of the Administrative Procedure Act. The court noted that the Chevron case did not mention the APA or acknowledge any doctrinal shift before coming up with the second step, that when Congress had not addressed the precise question at issue that the court had to defer to the agency if it had offered a permissible construction of the statute. The court noted that Chevron did not reconcile its framework with the APA.  The court also noted that Chevron’s presumption is misguided “because agencies have no special competence in resolving statutory ambiguities. Courts do.”

The Majority opinion indicated that they “do not call into question prior cases that relied on the Chevron framework.”

Finally the Majority indicated the way forward:

"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.

The ruling in Loper is sweeping and handles a great many administrative agencies. But it does not cover everything. We need to discuss a couple of places where Loper does not apply:

1. Things that are expressly governed by statute do not apply.

If it is explicitly covered by statute or if a statute says that something is unavailable, then that is not covered by Loper. An example is the portion of the FSA that says that persons who have 924(c) convictions are unable to receive time credits for classes. That is covered in the text of the FIRST STEP Act:

(D) INELIGIBLE PRISONERS.—A prisoner is ineligible to receive time credits under this paragraph if the prisoner is serving a sentence for a conviction under any of the following provisions of law:

‘‘(xxii) Section 924(c), relating to unlawful possession or use of a firearm during and in relation to any crime of violence or drug trafficking crime.

2. Sentencing commission things might not apply.

The Sentencing Commission is different from other boards or agencies. The commission’s rules of practice and procedure, Rule 1.1 indicate that:

“The Commission, an agency within the judicial branch of government, is subject to only that provision of the Administrative Procedures Act, section 553 of title 5, United States Code, relating to publication in the Federal Register and a public hearing procedure, with regard to proposed sentencing guidelines or amendments thereto. See 28 U.S.C. § 994(x). The Commission is not subject to a variety of other statutes, such as the Federal Advisory Committee Act (5 U.S.C. App.), the Government in the Sunshine Act (5 U.S.C. § 552b), and the Freedom of Information Act (5 U.S.C. § 552), typically applicable to rulemaking agencies in the executive branch.”

Further, the definitions in the APA indicate that courts are not an agency. See 5 USC 551. However there is considerable questioning by legal scholars and legal professors on this issue. The best thing here I believe would be to wait and see.

3. Other things may be on the table.

Other things may be on the table. The question thereof is “whether an agency has acted within its statutory authority, as the APA requires.”  It also matters whether this issue has been ruled on before. The Supreme Court indicated that “The holdings of those cases that specific agency actions are lawful—including the Clean Air Act holding of Chevron itself—are still subject to statutory stare decisis despite our change in interpretive methodology.”