US deregulatory triage ranges from cars to drugs
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
By Gabriel Rubin
WASHINGTON, July 1 (Reuters Breakingviews) -After forty years of leeway, the U.S. Supreme Court has made regulatory agencies’ powers newly vulnerable to being checked by lawsuits. Like any middle-aged adult moving back in with their parents, the reimposition of boundaries and oversight will be a shock to both sides. A practical standard guiding how judges will review challenges - and how agencies should write new rules - requires time and painful evolution. For now, though, a host of industries face potential upheaval.
The court’s decision on Friday to end a major legal precedent known as “Chevron deference” means that the decades-old custom of deferring to agencies’ interpretations of the statutes empowering them is over. That opens up a lot of room for new legal challenges: Congress will often legislate entirely new programs with a minimum of details, sometimes simply instructing that they be designed “in the public interest.” Agencies are depended on to fill in the blanks. Those are the programs that will be most at risk from lawsuits in a post-Chevron world.
A full list of such vulnerabilities would run very, very long. Tax credits for electric vehicles could be in danger, say from plaintiffs arguing that Internal Revenue Service rules for claiming the credit are unnecessarily strict. After all, if Congress didn’t set hard limits, courts no longer have to take the agency’s word for it. Judges might look askance at the Food and Drug Administration’s procedures for approving new medicines, ruling that its interpretation of how to implement the scant explicit guidance in legislation is too far-reaching. The Federal Trade Commission’s rule banning employee non-competes, which leans on an already controversially broad reading of one section of statute, could face challenges.
Some industries might be spared from whiplash if, having seen the years of attacks aimed at Chevron deference, agencies tried to write their rules carefully enough to survive without. Judges have also previously insulated agencies by determining that Congress was not being ambiguous, and that it did in fact confer substantial rulemaking authority.
A new legal standard for determining that ambiguity would help, though. The court has even suggested a backup, known as “Skidmore deference,” which comes from a 1944 case that determined judges should give “respectful consideration” to agency interpretations of statutes — especially when Congress delegates authority to a specific agency. The alternative is hundreds of federal judges deciding that they can design a federal healthcare program or tax credit better than the experts.
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CONTEXT NEWS
The U.S. Supreme Court on June 28 overturned a precedent that had given deference to government agencies in interpreting laws they administer, a doctrine known as “Chevron deference.”
Editing by Jonathan Guilford and Pranav Kiran
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