Supreme Court to Reconsider Chevron

This case law update was written by Michael J. Sgarlat, an attorney at the law firm of Shaw Bransford & Roth, where he has practiced federal personnel and employment law since 2015. Mr. Sgarlat works with federal employees to respond to proposed disciplinary and adverse actions, and has experience litigating cases before the U.S. Merit Systems Protection Board.

On Monday, May 1, 2023, the Supreme Court agreed to reconsider the 40-year holding in Chevron v. Natural Resources Defense Council, a case that requires courts to defer to agency interpretations on ambiguous statutes so long as the interpretation is reasonable.

In short, Chevron imposes a two-step analysis. When reviewing a statute, Chevron requires a court to ask first whether the statute is unambiguous. If the statute is unambiguous, then the court applies the clear meaning. If the statute is ambiguous, the court moves to the next step and defers to the agency’s interpretation so long as it is reasonable.

The case at hand, Loper Bright Enterprises v. Raimondo, stems from a petition for writ of certiorari filed on November 10, 2022, by four family-owned fishing vessel companies due to a requirement in the Magnuson-Stevens Act (MSA), which requires fishing vessel owners to make room onboard for federal observers who can oversee operations to ensure compliance with federal regulations, and a requirement by the National Marine Fisheries Service for vessel owners to pay the salaries of government-mandated monitors who aboard the vessels and oversee operations.

The MSA was adopted in 1976 to “promote domestic commercial and recreational fishing under sound conservation and management principles.” The MSA divides the country’s fisheries into eight regions, governed by a “fishery management council” that comprises an assortment of federal and state officials and federal appointees. The council prepares a fishery management plan, then seeks approval from NMFS. If the NMFS approves, the agency promulgates it as a final regulation.

The MSA includes required provisions and discretionary provisions. Among the discretional provisions, the management plans “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.” It also contains a catch-all provisions that 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.”

According to the petitioners, these vessels are tight, with room for five to six persons. So, displacing someone engaged in active fishing for a federal observer is “an enormous imposition.” Then, for NMFS to make the vessel “foot the bill for that imposition adds insult to injury.” Petitioners take issue with these “impositions” because the MSA is silent with respect to forcing the fishing industry to pay for the cost of inspectors.

With respect to this case, the New England Council develops fishery management plans for the fisheries in the Atlantic Ocean. One of those fisheries is the herring fishery. In 2013, the Council began developing an amendment to all its management plans that would give the Council the power to force the fishing industry to pay its costs for additional monitoring when federal funding is unavailable. The proposal drew opposition from most commenters. Still, the Council submitted its amendment to NMFS, which opened a comment period before promulgating a final rule approving it. In February 2020, NMFS published the final rule, establishing a standardized process to introduce forced industry-funded monitoring across all New England fisheries.

In February 2020, petitioners, involved in herring fishing, filed suit alleging the MSA did not authorize NMFS to mandate industry-funded monitoring in the herring fishery. Both parties moved for summary judgment, and the district court awarded summary judgment to NMFS. The district court noted the analysis is governed by Chevron. The court ended its inquiry under step one of Chevron, and found that the statute unambiguously authorizes industry-funded monitoring because it says that management plans “may require” fishing vessels to “carr[y]” observers and that it contains two sections authorizing such plans.

Petitioners brought this case to the D.C. Circuit, and a divided panel affirmed. The court of appeals found that Chevron applied. But unlike the district court, the court of appeals found that the statute is not “wholly unambiguous” and leaves “unresolved” whether NMFS “may require industry to bear the costs of at-sea monitoring mandated by a fishery management plan.” Applying a deferential stand of review under the second step of Chevron, the court of appeals found that NMFS’s interpretation of the MSA is a “reasonable” way of resolving the “silence on the issue of cost of at-sea monitoring.”

Petitioners therefore petitioned the Supreme Court for writ of certiorari to consider whether Chevron should be overruled, or at least clarify whether statutory silence about a matter constitutes an ambiguity requiring deference to an agency. The Court has now granted that petition. We will monitor this case as it moves forward.

Read the Petition for Writ of Certiorari

Read the Short Order