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The Demise of Deference? Chevron’s and Auer’s Uncertain Future

May 5, 2017
By Modrall Sperling

Introduction: President Trump’s recent executive orders and ongoing commitment to regulatory reform are finding complimentary provisions in the form of a number of bills being considered in Congress. One of those bills, the Regulatory Accountability Act of 2017,¹ includes a provision that seeks to repeal both the Chevron²and Auer³ doctrines, established by the United States Supreme Court in 1984 and 1997, respectively. The doctrines establish the deference due to an agency, either when it is interpreting its organic statute or when it is interpreting its implementing regulations. The doctrine has an enhanced role in Indian country because of the central responsibilities of federal agencies in Indian country.

Background: The Supreme Court in Chevron established what is referred to as the “Chevron Two-Step” test. Pursuant to this test, a federal court reviewing an agency’s interpretation of a statute will first determine if Congress has addressed the precise question at issue, and if so, then the reviewing court must give effect to that intent.⁴ If not, then the reviewing court must defer to the agency’s interpretation of the statute so long as that interpretation is reasonable.⁵ This concept, commonly known as Chevron deference, instructs courts to defer to an agency’s reasonable interpretations of statutes it administers that are silent or ambiguous on a specific issue. Similar to Chevron deference, under the Auer doctrine, if an agency’s regulations are ambiguous, courts will defer to the agency’s interpretation of its own regulations, even if the agency’s own view of the regulation has changed over time and the interpretation in question has never been subject to notice-and-comment or other regulatory procedures.⁶

Both doctrines have critics and supporters. Critics largely argue that these deference principles operate in tension with the Constitution’s separation of powers mandate, because the concept of deference combines law-drafting and law-exposition in administrative agencies. Defenders of the doctrines stress that administrative agencies are experts and are in the best position to interpret the laws that they apply and interpret.

Deference’s Demise: With the introduction of the Regulatory Accountability Act of 2017, Congress has entered the fray. The Regulatory Accountability Act seeks to eliminate these two doctrines by amending, in part, the Administrative Procedure Act, 5 U.S.C. § 706. The proposed legislation inserts a “de novo” review standard for “questions of law, including the interpretation of constitutional and statutory provisions, and rules made by agencies.” With respect to ambiguous statutes or gaps in statutory language, the proposed legislation prohibits the court from interpreting the gap or ambiguity “as an implicit delegation to the agency of legislative rule making authority and shall not rely on such gap or ambiguity as a justification either for interpreting agency authority expansively or for deferring to the agency’s interpretation on the question of law.”

Congress targeted the Chevron doctrine under the prior administration, but no bills ever made it to President Obama for approval. Since the inauguration of President Trump, many in Congress who support the legislation see a path forward. On January 11, 2017, the United States House of Representatives passed the Regulatory Accountability Act of 2017 by a vote of 238-183. The proposed Regulatory Accountability Act of 2017 was received in the United States Senate and referred to the Committee on Homeland Security and Governmental Affairs on January 12, 2017.

Recently, the Supreme Court declined to reconsider Auer deference when it denied the petition for a writ of certiorari in United Student Aid Funds v. Bible.⁷However, President Trump’s Supreme Court nominee, Judge Neil Gorsuch, has previously expressed interest in reconsidering the Chevron doctrine. In a concurring opinion in Gutierrez-Brizuela v. Lynch, Judge Gorsuch wrote “the fact is Chevron . . . permit[s] executive bureaucracies to swallow huge amounts of core judicial and legislative power and concentrate federal power in a way that seems more than a little difficult to square with the Constitution of the framers’ design. Maybe the time has come to face the behemoth.”⁸ Judge Gorsuch opined on “a world without Chevron”:

Surely Congress could and would continue to pass statutes for executive agencies to enforce. And just as surely agencies could and would continue to offer guidance on how they intend to enforce those statutes. The only difference would be that courts would then fulfill their duty to exercise their independent judgment about what the law is.⁹

Judge Gorsuch, like the drafters of the Regulatory Accountability Act of 2017, advanced a de novo review standard to avoid agency ability to alter or amend existing law.¹⁰

Take-Away: The judicial landscape of administrative law could greatly change in the future should Congress pass the proposed Regulatory Accountability Act of 2017 or should the Supreme Court, perhaps with Judge Gorsuch, choose to revise the Chevron and Auer deference doctrines.
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