No More Deference to the Administrative State

Without quite overturning the 1984 Chevron case, the Supreme Court has limited its effect considerably.

By David B. Rivkin Jr. and Mark Wendell DeLaquil (WSJ) July 10, 2022

In a case last month upholding religious liberty, Justice Neil Gorsuch announced that an old precedent had ceased to be good law: “This Court long ago abandoned Lemon.” One day the Supreme Court may issue a similarly belated death notice for Chevron v. Natural Resources Defense Council, the 1984 ruling that vastly expanded the power of administrative agencies. If so, the beginning of the end will have come on the closing day of this year’s term, when the high court decided West Virginia v. Environmental Protection Agency.

In Chevron, the justices held that when Congress enacts an “ambiguous” statute, courts are obliged to defer to any “reasonable” interpretation offered by an executive-branch agency. The Chevron doctrine assumes that agency personnel have expertise that judges lack and that agencies are more democratic than courts because the former answer to the president. Chevron deference allowed the EPA to set national carbon-dioxide standards, the Transportation Department to prescribe automobile safety features and numerous other agencies and departments to regulate virtually every aspect of American life.

But this approach corroded democratic accountability by freeing lawmakers from the duty to legislate clearly. West Virginia is an important step in returning responsibility for solving the nation’s problems where it belongs, to Congress. It will shape resolution of the key policy issues in the remainder of the Biden administration and beyond.

Under Chevron, as Chief Justice John Roberts noted for the court in West Virginia, the absence of a political consensus to address difficult problems led to undertake extravagant regulatory efforts. Among them were the Centers for Disease Control and Prevention’s attempting to dictate housing policy, the Occupational Safety and Health Association’s driving vaccination policy, and, in this case, the Environmental Protection Agency’s creating national energy policy by updating the Obama administration’s anti-fossil-fuel Clean Power Plan.

In these cases, the agencies acted outside their expertise and certainly didn’t promote political accountability. The legislative process of political compromise was bypassed and democracy subordinated to government lawyers stalking dusty library shelves in search of vague and outmoded statutes. The West Virginia decision buttressed legislative authority yet led to strident criticism from legislators, dramatizing how comfortable Congress has become in abdicating its responsibility for difficult policy decisions.

Chevron also dramatically weakened the judiciary’s ability to check agencies’ regulatory overreach. Before 1984, the judiciary took a “hard look” approach in assessing the legality of federal regulations. Chevron was more of a rubber stamp. Judges blessed specific regulations and countenanced agency actions that Congress had never authorized. It made a mockery of Chief Justice John Marshall’s declaration in Marbury v. Madison (1803): “It is emphatically the duty of the Judicial Department to say what the law is.”

West Virginia limits Chevron by fleshing out the “major questions doctrine,” a longstanding judicial presumption that when an administrative agency asserts authority over questions of great economic and political significance, it may act only if Congress has clearly authorized it to do so. Or, as the Constitution puts it: “All legislative powers herein granted shall be vested in a Congress of the United States.

West Virginia’s critics focus on its policy impact because its legal merit is so compelling. By proscribing ambiguous congressional delegation where it matters most, the major questions doctrine re-establishes judicial authority and legislative responsibility. Absent a clear statutory delegation of the power to regulate, the executive branch can’t regulate at all. Where statutory language is clear enough to grant regulatory authority, it should eliminate substantial ambiguity about how that authority can be exercised. This effectively strips agencies of much of their regulatory willfulness, compelling them to regulate only as Congress intended. The domain of Chevron deference is limited to filling in the interstitial details of statutes in which Congress has decided the policy stakes.

West Virginia and the major questions doctrine are certain to surface again soon. Take the Securities and Exchange Commission’s proposed climate-change disclosure regulations. The SEC has a statutory directive to protect investors, facilitate capital formation, and maintain the efficient operation of capital markets. It has neither the expertise nor the statutory authority to regulate greenhouse-gas emissions. In light of West Virginia, the SEC ought to withdraw its proposal.

The Federal Trade Commission is contemplating a regulation that, without any clear statutory authority and departing from well-established FTC practices, purports to ban mergers even when no anticompetitive harms are visited on consumers. The Education Department proposes to eliminate basic mandatory procedural due-process requirements, such as a live hearing and cross-examination, in Title IX regulations that govern disciplinary procedures in universities.

Going forward, the first question in any important case concerning agency power is whether Congress actually intended for the agency to be regulating at all, not whether agency attorneys were clever enough to find a vague statute to justify a new rule. The power of the administrative state is certain to recede, bolstering democratic accountability, economic growth and liberty.

Mr. Rivkin was lead outside counsel in the case brought by 27 states challenging the Obama administration’s Clean Power Plan, in which the Supreme Court issued a 2016 stay. Mr. DeLaquil is lead counsel for Westmoreland Mining Holdings, a party to a case the court decided last month with West Virginia v. EPA.

Wonder Land: The U.S. system of government is mired in sludge after decades of 'doing something' to solve problems, only to make things worse. Images: AFP/Getty Images Composite: Mark Kelly