House Passes HR5 to Redress Judicial "Deference"

Judicial Oversight of Federal Regulatory Bureaucrats
House Passes HR5 to Redress Judicial "Deference" To Agencies' Interpretation of Law - When Will Senate Send Bill to New President?

Regulatory Accountability Act of 2017 [1]
https://congress.gov/bill/115th-congress/house-bill/5/
https://www.congress.gov/bill/115th-congress/house-bill/5/text

In a package of regulatory reforms just passed by the Federal House of Representatives, one stands out to me: legislative reversal of what is called "Chevron Deference" -- the deference Federal Judges were supposed to give to Federal Agencies when the bureaucrats "interpreted the law..." where the congressional statute is "ambiguous," thereby making it very difficult to have standing to sue to challenge regulatory restrictions. 

Now, however, judges will have to make a positive legal determination and not just rely on Agency positions as to the meaning of the law.

Here is how Wikipedia describes the Chevron case.

"Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984), was a landmark case in which the United States Supreme Court set forth the legal test for determining whether to grant deference to a government agency's interpretation of a statute which it administers. Chevron is the Court's clearest articulation of the doctrine of "administrative deference," to the point that the Court itself has used the phrase "Chevron deference" in more recent cases." [2]

Under HR5 Congress tells judges that Federal Agencies cannot rely on their own interpretations of the law, but must now defer to the judges, who may consider, but are not bound by, agency positions on the meaning of even ambiguous statutes.  This is especially powerful with regard to FDA overreaching -- for example, when they try to ignore the Dietary Supplement Protection provision in the 2010 "Food Safety [sic] Modernization Act" by their restrictive interpretation of what is a "grandfathered" ingredient under DSHEA, the Dietary Health and Education Act of 1994.

Federal judges, often in dissent, have expressed misgivings about Chevron Deference. Circuit Judge Gorsuch*, defending the rule of law, expressed it this way last August:

"There’s an elephant in the room with us today. We have studiously attempted to work our way around it and even left it unremarked. But the fact is Chevron and Brand X permit 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." [3]

As is often the case in Federal statutory changes, where one is dealing with very complex provisions, one must be careful to find the operative language. It appears the actual statutory language that accomplishes the reversal of Chevron Deference is here:

"Agency guidance... is not legally binding and may not be relied upon by an agency as legal grounds for agency action..." Bill Section 104.

Other provisions of the Bill as adopted by the House change some of the steps in the Administrative Procedures Act structure for the establishment of new Federal Regulations, making more effective the right of "stake holders" to challenge proposed regulations in Court.

The Republican Party maintained control of Congress with the promise that the party would sponsor a roll-back of the regulatory state. The party's successful presidential candidate made this one of his primary promises. The House has acted; now the Senate must consider how to further redress the imbalance between business and the bureaucracy, sending the matter to the new president for rapid final approval.

With HR5 and its several provisions changing the way in which Regulations are developed and adopted, significant changes in the balance between entrapreneurs and bureaucrats may be taking place.

The possibility is certainly worth watching...

Ralph Fucetola JD

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[1] "The Regulatory Accountability Act of 2017, which passed 238-183 Wednesday evening, rolled together a series of previously passed bills to repeal the Chevron deference standard and require mandatory litigation stays for new rules, among other reforms. "

https://www.law360.com/publicpolicy/articles/879235/house-passes-bill-ending-chevron-deference?nl_pk=9625454e-8a7f-4722-b1cd-d5f9ee160756&utm_source=newsletter&utm_medium=email&utm_campaign=publicpolicy

[2] https://en.wikipedia.org/wiki/Chevron_U.S.A.,_Inc._v._Natural_Resources_Defense_Council,_Inc.

[3] These excerpts from Judge Gorsuch's concurring opinion in a 2016 Tenth Circuit immigration case discuss the way Chevron Deference works, or rather, doesn't work, in actual judicial practice, calling upon Congress to act to change the case law. Congress is doing just that.

"No. 14-9585, Gutierrez-Brizuela v. Lynch

GORSUCH, Circuit Judge*, concurring.

There’s an elephant in the room with us today. We have studiously attempted to work our way around it and even left it unremarked. But the fact is Chevron and Brand X permit 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.

In enlightenment theory and hard won experience under a tyrannical king the founders found proof of the wisdom of a government of separated powers. In the avowedly political legislature, the framers endowed the people’s representatives with the authority to prescribe new rules of general applicability prospectively. In the executive, they placed the task of ensuring the legislature’s rules are faithfully executed in the hands of a single person also responsive to the people. And in the judiciary, they charged individuals insulated from political pressures with the job of interpreting the law and applying it retroactively to resolve past disputes. This allocation of different sorts of power to different sorts of decision makers was no accident...

Even more importantly, the founders considered the separation of powers a vital guard against governmental encroachment on the people’s liberties, including all those later enumerated in the Bill of Rights...

When the political branches disagree with a judicial interpretation of existing law, the Constitution prescribes the appropriate remedial process. It’s called legislation. Admittedly, the legislative process can be an arduous one. But that’s no bug in the constitutional design: it is the very point of the design...

But acknowledging this much only brings the colossus now fully into view. In the Administrative Procedure Act (APA), Congress vested the courts with the power to “interpret . . . statutory provisions” and overturn agency action inconsistent with those interpretations. 5 U.S.C. § 706. Congress assigned the courts much the same job in the immigration field where we happen to find ourselves today. 8 U.S.C. § 1252(a)(2)(D). And there’s good reason to think that legislative assignments like these are often constitutionally compelled. After all, the question whether Congress has or hasn’t vested a private legal right in an individual “is, in its nature, judicial, and must be tried by the judicial authority.” Marbury v. Madison, 5 U.S. (1 Cranch) 137, 167 (1803)...

All of which raises this question: what would happen in a world without Chevron? If this goliath of modern administrative law were to fall? 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. Of course, courts could and would consult agency views and apply the agency’s interpretation when it accords with the best reading of a statute. But de novo judicial review of the law’s meaning would limit the ability of an agency to alter and amend existing law. It would avoid the due process and equal protection problems of the kind documented in our decisions...."

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* Subsequent to this Blog Entry, now Justice Gorsuch became a member of the US Supreme Court, so perhaps we should now call his views on this matter "The Gorsuch Doctrine."