Some See SCOTUS Opinion in Healthcare Case as Further Undermining Chevron Doctrine
The Supreme Court appeared to raise questions about the future of the Chevron doctrine Wednesday, under which agencies like the FCC and FTC are afforded deference by the courts in their decisions as expert agencies. The unanimous court ruled in American Hospital Assn. v. Becerra that the Department of Health and Human Service’s decision to reduce yearly Medicare payments to hospitals as part of the 340B program was unlawful. The government raised Chevron deference, but the decision by Justice Brett Kavanaugh never addresses the doctrine. The case had been decided by the U.S. Court of Appeals for the D.C. Circuit.
“While not addressing the continuing vitality of Chevron, I believe the Court’s total silence portends that, one way or the other, Chevron’s deference domain is shrinking and, going forward, Chevron will play a less prominent role in review of agencies’ own interpretations of their enabling statutes,” emailed Free State Foundation President Randolph May.
Other court watchers said the court’s silence could be significant, but the importance remains to be seen. SCOTUS has been expected to further restrict the deference given agencies under the doctrine (see 2101220056).
Daniel Deacon, lecturer at the University of Michigan Law School, told us it’s “a bit odd that the court would decide the case without reference to the Chevron doctrine, which was invoked by the government and used to frame the question presented.” Kavanaugh “uses some language at the end of the opinion that indicates that what matters is whether the court agrees with the agency’s interpretation,” he said: “That doesn’t sound like Chevron, which requires courts to defer even to agency interpretations with which the court disagrees as long as the statute is ambiguous and the agency interpretation reasonable. I think it’s possible that this was a deliberate choice of words by Kavanaugh, who has written critically of making so much turn on findings of statutory ambiguity.”
More to Come
Deacon said more will be revealed in future decisions. “It seems that a majority of justices probably just thought the statute unambiguously foreclosed the agency’s interpretation,” he said. “It’s less essential to make use of Chevron in such cases because Chevron only has work to do where statutes are ambiguous,” he said.
“It is important to remember that the D.C. Circuit majority had tested this as a Chevron case, saying that there competing arguments had to be resolved at step two,” emailed Gus Hurwitz, professor at the University of Nebraska College of Law. He called the decision “a strong, if implicit, rebuke of the D.C. Circuit's use of Chevron and, therefore, the use of Chevron in this case.”
AHA “is a bit of a Rorschach decision,” since SCOTUS’ not mentioning Chevron could be seen as having no Chevron implications or that silence could be part of a court move toward abandoning it, said Cory Coglianese, administrative law professor and director of Penn State’s Program on Regulation. The decision reads as if it were based on Chevron step one, he said. Near the end of the decision, the court said "after employing the traditional tools of statutory interpretation,” it disagrees with the government's read of the statute. That particular phrase is one that's associated with Chevron, but it’s not a direct quotation and there’s no citation he said.
Coglianese said there have been some instances, such as SCOTUS’ decision on the Occupational Safety and Health Administration’s vaccine-or-testing mandate, where one might have expected the court to refer to Chevron, but it didn’t. SCOTUS not addressing Chevron might be a strategy, as overturning it -- when it has been cited and relied on so much in the past -- “would really create a tremendous amount of legal uncertainty” about legions of administrative decisions made under policies upheld under Chevron grounds, Coglianese said. He said ignoring it could thus be a court option, with AHA being the next in a line of cases where Chevron gets ignored.
“What is interesting is that [Justice Neil] Gorsuch and others were opposed by Democrats because they were viewed as hostile to Chevron,” tweeted Jonathan Turley, professor of law at George Washington University: “This decision further undermines the Chevron doctrine but it is on behalf of a unanimous court. While not lethal, the case goes against agency deference.”
USF Case
Consumers’ Research challenge of the FCC USF contribution factor is more of a question about the non-delegation doctrine than Chevron despite having a similar impact, said New Street’s Blair Levin (see 2110050056). Congress has “already reduced the influence of the FCC on universal service” by giving authority to the Commerce Department and states on broadband deployment, Levin said, “but for a court to say … the FCC does not have authority to raise universal service funds would be a rather traumatic shock to the system.” The non-delegation doctrine issue is “far more problematic,” he said.
The decision signals to industry that courts will be encouraged to take a more detailed dive into statutes and regulatory agencies’ statutory interpretations, said healthcare lawyer Bryan Murray of Dismore. He said as a result there could be more industry challenges to federal regulations based on the argument the statute is less ambiguous than agencies claim, and that industry might be less fearful of appealing adverse rulings by lower courts. While avoiding Chevron altogether, SCOTUS is signaling that in any challenges to agency authority, the court will put that authority under a microscope, Murray said. However, there likely won’t be a sea change among District and Circuit courts regarding Chevron, he said.
“The opinion really just decides that the HHS decision failed Chevron step 1, because the statute in question was not ambiguous,” emailed Joe Kane, Information Technology and Innovation Foundation director-broadband and spectrum policy. The opinion “studiously omits” any mention of Chevron and “it's also a unanimous opinion, and I could envision Justice Kavanaugh keeping everyone on his opinion by toning down any anti-Chevron ire in a case where it wasn't needed to reach his preferred result,” he said: “This case does represent a marker that the Court is perhaps becoming more willing to flunk agency interpretations at step one, and there very well could be a majority on the Court to overrule Chevron at some point. But I'd be wary of reading too much into this particular case.”
The absence of references to Chevron in the unanimous AHA v. Becerra opinion is a sign the court isn’t seeking to do away with the doctrine, said Penn State Law assistant professor Daniel Walters in an interview. “That Justice Gorsuch didn’t take the opportunity to complain about Chevron is really telling,” Walters said. He said it's common for justices to lay the groundwork for big decisions by presaging them with dissents and opinions in related cases, and this case would have been an ideal venue to do so if Gorsuch was taking aim at Chevron. The court will likely still take up cases on deference to regulatory agencies, but will likely rule narrowly without expressly overturning the Chevron framework, he said. Gorsuch and other justices seen as opposed to deference to regulatory agencies have shown they don’t need to knock down the Chevron doctrine to rule against agency decisions, Walters said.
Not everyone agrees that AHA v. Becerra was a natural place to raise the issue of Chevron. “It is a supremely un-useful case for taking down Chevron,” said Corbin Barthold, Internet Policy Counsel for Tech Freedom. Barthold doesn’t think the majority opinion's lack of Chevron mentions signifies much. AHA v. Becerra’s briefs mention Chevron, but as an afterthought, he said.